8-K
United Community Banks Inc (UCB)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
April 19, 2022
UNITED COMMUNITY BANKS, INC.
(Exact name of registrant as specified in its charter)
| Georgia | 001-35095 | 58-1807304 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission file number) | (IRS Employer Identification No.) |
125 Highway 515 East
Blairsville, Georgia 30512 (Address of principal executive offices)
Registrant's telephone number,
including area code: (706) 781-2265
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written<br>communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting<br>material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ¨ | Pre-commencement<br>communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ¨ | Pre-commencement<br>communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered |
|---|---|---|
| Common<br> stock, par value $1 per share | UCBI | Nasdaq<br> Global Select Market |
| Depositary<br> shares, each representing 1/1000^th^ interest in a share of Series I Non-Cumulative Preferred Stock | UCBIO | Nasdaq<br> Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.02 | Results of Operations and Financial Condition. |
|---|---|
| On April 19, 2022, United Community Banks, Inc. (“United”)<br>issued a press release announcing financial results for the first quarter of 2022. The press release is furnished as Exhibit 99.1 to this<br>Current Report on Form 8-K. | |
| Item 7.01 | Regulation FD Disclosure. |
| On April 20, 2022, United will hold an earnings conference call and<br>webcast at 11:00 a.m. (Eastern Time) to discuss financial results for the first quarter of 2022. The press release referenced above in<br>Item 2.02 contains information about how to access the conference call and webcast. A copy of the slide presentation to be used during<br>the earnings call and webcast is furnished as Exhibit 99.2 to this Current Report on Form 8-K. The slide presentation also will be available<br>on our website, www.ucbi.com, under the “Investor Relations – Events and Presentations” section. | |
| Item 9.01 | Financial Statements and Exhibits. |
| (d) Exhibits | The following exhibit index lists the exhibits that are either filed<br>or furnished with the Current Report on Form 8-K. |
EXHIBIT INDEX
| Exhibit No. | Description |
|---|---|
| 99.1 | United Community Banks, Inc. Press Release, dated April 19, 2022 (furnished<br>only). |
| 99.2 | Slide presentation to be used during April 20, 2022 earnings call (furnished<br>only). |
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline<br>XBRL. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| UNITED COMMUNITY BANKS, INC. | ||
|---|---|---|
| By: | **/s/ Jefferson L. Harralson | |
| Jefferson L. Harralson | ||
| Executive Vice President and | ||
| Chief Financial Officer | ||
| Date: April 19, 2022 |
Exhibit 99.1
For Immediate Release
For more information:
Jefferson Harralson
Chief Financial Officer
(864) 240-6208
Jefferson_Harralson@ucbi.com
United Community Banks, Inc. Reports First QuarterResults
Strong Core Profitability, Loan Growth of9% and Deposit Growth of 7%
GREENVILLE, SC – April 19, 2022 - United Community Banks, Inc. (NASDAQ: UCBI) (United) today announced that net income for the first quarter was $48.0 million and pre-tax, pre-provision income was $83.5 million. Diluted earnings per share of $0.43 for the quarter represented a decrease of $0.39 or 48%, from the first quarter of 2021, and represented a decrease of $0.12 or 22% from the fourth quarter of 2021. The quarter was highlighted by strong 9% annualized core loan growth, 7% annualized deposit growth, 16 basis points of net interest margin expansion, a reserve build to 1.02% of loans and an improvement in the efficiency ratio to 57.4%, or 53.1% on an operating basis, which excludes the effect of merger-related and other charges.
A primary driver of the reduced earnings on a GAAP basis relative to prior quarters was a higher credit loss provision, as the acquisition of Reliant in the current quarter necessitated the establishment of an allowance for credit losses, often referred to as a “double dip” under CECL, as well as the wind down of the PPP program that resulted in significantly less fee accretion, which was down $8.7 million year over year. Excluding these items, our operating trends continue to improve with strong pre-tax, pre-provision income for the quarter of $83.5 million which was $17.9 million, or 27% higher, than the fourth quarter of 2021, and $1.9 million, or 2% greater, than the first quarter of 2021.
United’s first quarter return on assets (ROA) was 0.78% and return on common equity was 6.80%. On an operating basis, United’s ROA was 0.89% and its return on tangible common equity was 11.0%. On a pre-tax, pre-provision basis, operating ROA was 1.52% for the quarter.
Total loans increased by $2.6 billion during the quarter including $2.3 billion of loans acquired in the Reliant acquisition. Excluding the effect of PPP and the acquired Reliant loans, core organic loan growth was 9% annualized. Excluding deposits received from the Reliant acquisition, deposits grew by 7% annualized. United’s cost of deposits was flat at 0.06%.
Chairman and CEO Lynn Harton stated, “Core performance measures continue to be strong for the company. Organic loan and deposit growth were excellent. Mortgage production remained strong and comparable to fourth quarter levels and our SBA business also performed well in the quarter.” Harton continued, “From a strategic perspective, we are excited to have completed the acquisition of Reliant on January 1 and are proud to welcome their outstanding team of great bankers to the United franchise. Nashville is a dynamic market and we look forward to the growth and opportunities it will bring for years to come.”
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Mr. Harton continued “We have a very positive outlook for 2022 for United, supported by strong business growth across our markets and a balance sheet that is well-positioned for increasing interest rates. Additionally, we believe we have a balanced business mix with a focus on credit quality and risk management that will sustain our performance through economic and business cycles.”
Harton concluded “We are proud to announce we have once again ranked Highest in Customer Satisfaction in Retail Banking in the Southeast in 2022 according to J.D. Power. Our customers have given us this recognition for eight of the last nine years, and the third consecutive year. Service is at the core of our culture and the main focus and mission of our outstanding employees. Congratulations to each of them for this outstanding recognition!”
First Quarter 2022 Financial Highlights:
| · | Net income of $48.0 million and pre-tax, pre-provision income<br>of $83.5 million |
|---|---|
| · | EPS decreased by 48% compared to last year on a GAAP basis<br>and 40% on an operating basis; compared to fourth quarter 2021, EPS decreased by 22% on both a GAAP and an operating basis |
| --- | --- |
| · | Return on assets of 0.78%, or 0.89% on an operating basis |
| --- | --- |
| · | Pre-tax, pre-provision return on assets of 1.37%, or 1.52%<br>on an operating basis |
| --- | --- |
| · | Return on common equity of 6.80% |
| --- | --- |
| · | Return on tangible common equity of 11.00% on an operating<br>basis |
| --- | --- |
| · | A provision for credit losses of $23.1 million, $18.3 million<br>of which was attributable to the establishment of an initial allowance for credit losses for acquired Reliant loans, increased the allowance<br>for credit losses to 1.02% of loans from 0.97% in the fourth quarter |
| --- | --- |
| · | Net charge-offs of $2.98 million, or 8 basis points as a<br>percentage of average loans, up 7 basis points from the fourth quarter |
| --- | --- |
| · | Loan production of $1.3 billion, resulting in annualized<br>core loan growth of 9%, for the quarter, excluding the sale of $45.6 million in Reliant loans classified as held for sale on the acquisition<br>date |
| --- | --- |
| · | Core transaction deposits, excluding Reliant, were up $478<br>million, which represents a 13% annualized growth rate for the quarter |
| --- | --- |
| · | Net interest margin of 2.97%<br>was up 16 basis points from the fourth quarter, mainly due to the impact of the Reliant acquisition and the deployment of cash into securities |
| --- | --- |
| · | Mortgage closings of $462 million and mortgage rate locks<br>of $757 million, compared to $666 million and $993 million, respectively, a year ago |
| --- | --- |
| · | Noninterest income was up $1.8 million on a linked quarter<br>basis, primarily driven by a $6.4 million increase in the MSR valuation in the first quarter compared with a $775,000 increase in the<br>fourth quarter |
| --- | --- |
| · | Noninterest expenses increased by $10.1 million compared<br>to the fourth quarter, mostly due to an increase in salaries and employee benefits related to the acquisition of Reliant |
| --- | --- |
| · | Efficiency ratio of 57.4%, or 53.1% on an operating basis |
| --- | --- |
| · | Nonperforming assets of 0.17% of total assets, an increase<br>of 0.01% from December 31, 2021 |
| --- | --- |
| · | Quarterly common shareholder dividend of $0.21 per share<br>declared during the quarter, an increase of 11% year-over-year |
| --- | --- |
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Conference Call
United will hold a conference call on Wednesday, April 20, 2022, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. Participants can pre-register for the conference call by navigating to https://dpregister.com/sreg/10165183/f22437931b. Those without internet access or who are unable to pre-register may dial in by calling 1-866-777-2509. Participants are encouraged to dial in 15 minutes prior to the call start time. The conference call also will be webcast and available for replay for 30 days by selecting “Events & Presentations” within the Investor Relations section of United’s website at www.ucbi.com.
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UNITED COMMUNITY BANKS, INC.
Selected Financial Information
(in thousands, except per share data)
| 2021 | First Quarter | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fourth <br><br>Quarter | Third <br><br>Quarter | Second <br><br>Quarter | First <br><br>Quarter | 2022 - 2021 <br><br>Change | |||||||||||||
| INCOME SUMMARY | |||||||||||||||||
| Interest revenue | 171,059 | $ | 143,768 | $ | 147,675 | $ | 145,809 | $ | 141,542 | ||||||||
| Interest expense | 7,267 | 6,213 | 6,636 | 7,433 | 9,478 | ||||||||||||
| Net interest revenue | 163,792 | 137,555 | 141,039 | 138,376 | 132,064 | 24 | % | ||||||||||
| Provision for (release of) credit losses | 23,086 | (647 | ) | (11,034 | ) | (13,588 | ) | (12,281 | ) | ||||||||
| Noninterest income | 38,973 | 37,177 | 40,095 | 35,841 | 44,705 | (13 | ) | ||||||||||
| Total revenue | 179,679 | 175,379 | 192,168 | 187,805 | 189,050 | (5 | ) | ||||||||||
| Noninterest expenses | 119,275 | 109,156 | 96,749 | 95,540 | 95,194 | 25 | |||||||||||
| Income before income tax expense | 60,404 | 66,223 | 95,419 | 92,265 | 93,856 | (36 | ) | ||||||||||
| Income tax expense | 12,385 | 14,204 | 21,603 | 22,005 | 20,150 | (39 | ) | ||||||||||
| Net income | 48,019 | 52,019 | 73,816 | 70,260 | 73,706 | (35 | ) | ||||||||||
| Merger-related and other charges | 9,016 | 9,912 | 1,437 | 1,078 | 1,543 | ||||||||||||
| Income tax benefit of merger-related and other charges | (1,963 | ) | (2,265 | ) | (328 | ) | (246 | ) | (335 | ) | |||||||
| Net income - operating (1) | 55,072 | $ | 59,666 | $ | 74,925 | $ | 71,092 | $ | 74,914 | (26 | ) | ||||||
| Pre-tax pre-provision income (5) | 83,490 | $ | 65,576 | $ | 84,385 | $ | 78,677 | $ | 81,575 | 2 | |||||||
| PERFORMANCE MEASURES | |||||||||||||||||
| Per common share: | |||||||||||||||||
| Diluted net income - GAAP | 0.43 | $ | 0.55 | $ | 0.82 | $ | 0.78 | $ | 0.82 | (48 | ) | ||||||
| Diluted net income - operating (1) | 0.50 | 0.64 | 0.83 | 0.79 | 0.83 | (40 | ) | ||||||||||
| Cash dividends declared | 0.21 | 0.20 | 0.20 | 0.19 | 0.19 | 11 | |||||||||||
| Book value | 24.38 | 23.63 | 23.25 | 22.81 | 22.15 | 10 | |||||||||||
| Tangible book value (3) | 17.08 | 18.42 | 18.68 | 18.49 | 17.83 | (4 | ) | ||||||||||
| Key performance ratios: | |||||||||||||||||
| Return on common equity - GAAP (2)(4) | 6.80 | % | 9.32 | % | 14.26 | % | 14.08 | % | 15.37 | % | |||||||
| Return on common equity - operating (1)(2)(4) | 7.83 | 10.74 | 14.48 | 14.25 | 15.63 | ||||||||||||
| Return on tangible common equity - operating (1)(2)(3)(4) | 11.00 | 13.93 | 18.23 | 17.81 | 19.68 | ||||||||||||
| Return on assets - GAAP (4) | 0.78 | 0.96 | 1.48 | 1.46 | 1.62 | ||||||||||||
| Return on assets - operating (1)(4) | 0.89 | 1.10 | 1.50 | 1.48 | 1.65 | ||||||||||||
| Return on assets - pre-tax pre-provision (4)(5) | 1.37 | 1.21 | 1.70 | 1.64 | 1.80 | ||||||||||||
| Return on assets - pre-tax pre-provision, excluding merger- related and other charges (1)(4)(5) | 1.52 | 1.40 | 1.73 | 1.67 | 1.83 | ||||||||||||
| Net interest margin (fully taxable equivalent) (4) | 2.97 | 2.81 | 3.12 | 3.19 | 3.22 | ||||||||||||
| Efficiency ratio - GAAP | 57.43 | 62.12 | 53.11 | 54.53 | 53.55 | ||||||||||||
| Efficiency ratio - operating (1) | 53.09 | 56.48 | 52.33 | 53.92 | 52.68 | ||||||||||||
| Equity to total assets | 11.06 | 10.61 | 10.89 | 11.04 | 10.95 | ||||||||||||
| Tangible common equity to tangible assets (3) | 7.72 | 8.09 | 8.53 | 8.71 | 8.57 | ||||||||||||
| ASSET QUALITY | |||||||||||||||||
| Nonperforming assets ("NPAs") | 40,816 | 32,855 | 45,335 | 46,347 | 56,496 | (28 | ) | ||||||||||
| Allowance for credit losses - loans | 132,805 | 102,532 | 99,620 | 111,616 | 126,866 | 5 | |||||||||||
| Allowance for credit losses - total | 146,369 | 113,524 | 110,875 | 122,460 | 135,592 | ||||||||||||
| Net charge-offs | 2,978 | 248 | 551 | (456 | ) | (305 | ) | ||||||||||
| Allowance for credit losses - loans to loans | 0.93 | % | 0.87 | % | 0.89 | % | 0.98 | % | 1.09 | % | |||||||
| Allowance for credit losses - total to loans | 1.02 | 0.97 | 0.99 | 1.08 | 1.16 | ||||||||||||
| Net charge-offs to average loans (4) | 0.08 | 0.01 | 0.02 | (0.02 | ) | (0.01 | ) | ||||||||||
| NPAs to total assets | 0.17 | 0.16 | 0.23 | 0.25 | 0.30 | ||||||||||||
| AT PERIOD END ( in millions) | |||||||||||||||||
| Loans | 14,316 | $ | 11,760 | $ | 11,191 | $ | 11,391 | $ | 11,679 | 23 | |||||||
| Investment securities | 6,410 | 5,653 | 5,335 | 4,928 | 4,332 | 48 | |||||||||||
| Total assets | 24,374 | 20,947 | 19,481 | 18,896 | 18,557 | 31 | |||||||||||
| Deposits | 21,056 | 18,241 | 16,865 | 16,328 | 15,993 | 32 | |||||||||||
| Shareholders’ equity | 2,695 | 2,222 | 2,122 | 2,086 | 2,031 | 33 | |||||||||||
| Common shares outstanding (thousands) | 106,025 | 89,350 | 86,559 | 86,665 | 86,777 | 22 |
All values are in US Dollars.
^(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.
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UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information
(in thousands, except per share data)
| 2022 | 2021 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| First <br> Quarter | Fourth <br> Quarter | Third <br> Quarter | Second <br> Quarter | First <br> Quarter | |||||||||||
| Noninterest expense reconciliation | |||||||||||||||
| Noninterest expenses (GAAP) | $ | 119,275 | $ | 109,156 | $ | 96,749 | $ | 95,540 | $ | 95,194 | |||||
| Merger-related and other charges | (9,016 | ) | (9,912 | ) | (1,437 | ) | (1,078 | ) | (1,543 | ) | |||||
| Noninterest expenses - operating | $ | 110,259 | $ | 99,244 | $ | 95,312 | $ | 94,462 | $ | 93,651 | |||||
| Net income reconciliation | |||||||||||||||
| Net income (GAAP) | $ | 48,019 | $ | 52,019 | $ | 73,816 | $ | 70,260 | $ | 73,706 | |||||
| Merger-related and other charges | 9,016 | 9,912 | 1,437 | 1,078 | 1,543 | ||||||||||
| Income tax benefit of merger-related and other charges | (1,963 | ) | (2,265 | ) | (328 | ) | (246 | ) | (335 | ) | |||||
| Net income - operating | $ | 55,072 | $ | 59,666 | $ | 74,925 | $ | 71,092 | $ | 74,914 | |||||
| Net income to pre-tax pre-provision income reconciliation | |||||||||||||||
| Net income (GAAP) | $ | 48,019 | $ | 52,019 | $ | 73,816 | $ | 70,260 | $ | 73,706 | |||||
| Income tax expense | 12,385 | 14,204 | 21,603 | 22,005 | 20,150 | ||||||||||
| Provision for (release of) credit losses | 23,086 | (647 | ) | (11,034 | ) | (13,588 | ) | (12,281 | ) | ||||||
| Pre-tax pre-provision income | $ | 83,490 | $ | 65,576 | $ | 84,385 | $ | 78,677 | $ | 81,575 | |||||
| Diluted income per common share reconciliation | |||||||||||||||
| Diluted income per common share (GAAP) | $ | 0.43 | $ | 0.55 | $ | 0.82 | $ | 0.78 | $ | 0.82 | |||||
| Merger-related and other charges, net of tax | 0.07 | 0.09 | 0.01 | 0.01 | 0.01 | ||||||||||
| Diluted income per common share - operating | $ | 0.50 | $ | 0.64 | $ | 0.83 | $ | 0.79 | $ | 0.83 | |||||
| Book value per common share reconciliation | |||||||||||||||
| Book value per common share (GAAP) | $ | 24.38 | $ | 23.63 | $ | 23.25 | $ | 22.81 | $ | 22.15 | |||||
| Effect of goodwill and other intangibles | (7.30 | ) | (5.21 | ) | (4.57 | ) | (4.32 | ) | (4.32 | ) | |||||
| Tangible book value per common share | $ | 17.08 | $ | 18.42 | $ | 18.68 | $ | 18.49 | $ | 17.83 | |||||
| Return on tangible common equity reconciliation | |||||||||||||||
| Return on common equity (GAAP) | 6.80 | % | 9.32 | % | 14.26 | % | 14.08 | % | 15.37 | % | |||||
| Merger-related and other charges, net of tax | 1.03 | 1.42 | 0.22 | 0.17 | 0.26 | ||||||||||
| Return on common equity - operating | 7.83 | 10.74 | 14.48 | 14.25 | 15.63 | ||||||||||
| Effect of goodwill and other intangibles | 3.17 | 3.19 | 3.75 | 3.56 | 4.05 | ||||||||||
| Return on tangible common equity - operating | 11.00 | % | 13.93 | % | 18.23 | % | 17.81 | % | 19.68 | % | |||||
| Return on assets reconciliation | |||||||||||||||
| Return on assets (GAAP) | 0.78 | % | 0.96 | % | 1.48 | % | 1.46 | % | 1.62 | % | |||||
| Merger-related and other charges, net of tax | 0.11 | 0.14 | 0.02 | 0.02 | 0.03 | ||||||||||
| Return on assets - operating | 0.89 | % | 1.10 | % | 1.50 | % | 1.48 | % | 1.65 | % | |||||
| Return on assets to return on assets- pre-tax pre-provision reconciliation | |||||||||||||||
| Return on assets (GAAP) | 0.78 | % | 0.96 | % | 1.48 | % | 1.46 | % | 1.62 | % | |||||
| Income tax expense | 0.20 | 0.26 | 0.45 | 0.47 | 0.46 | ||||||||||
| (Release of) provision for credit losses | 0.39 | (0.01 | ) | (0.23 | ) | (0.29 | ) | (0.28 | ) | ||||||
| Return on assets - pre-tax, pre-provision | 1.37 | 1.21 | 1.70 | 1.64 | 1.80 | ||||||||||
| Merger-related and other charges | 0.15 | 0.19 | 0.03 | 0.03 | 0.03 | ||||||||||
| Return on assets - pre-tax pre-provision, excluding merger-related and other charges | 1.52 | % | 1.40 | % | 1.73 | % | 1.67 | % | 1.83 | % | |||||
| Efficiency ratio reconciliation | |||||||||||||||
| Efficiency ratio (GAAP) | 57.43 | % | 62.12 | % | 53.11 | % | 54.53 | % | 53.55 | % | |||||
| Merger-related and other charges | (4.34 | ) | (5.64 | ) | (0.78 | ) | (0.61 | ) | (0.87 | ) | |||||
| Efficiency ratio - operating | 53.09 | % | 56.48 | % | 52.33 | % | 53.92 | % | 52.68 | % | |||||
| Tangible common equity to tangible assets reconciliation | |||||||||||||||
| Equity to total assets (GAAP) | 11.06 | % | 10.61 | % | 10.89 | % | 11.04 | % | 10.95 | % | |||||
| Effect of goodwill and other intangibles | (2.94 | ) | (2.06 | ) | (1.87 | ) | (1.82 | ) | (1.86 | ) | |||||
| Effect of preferred equity | (0.40 | ) | (0.46 | ) | (0.49 | ) | (0.51 | ) | (0.52 | ) | |||||
| Tangible common equity to tangible assets | 7.72 | % | 8.09 | % | 8.53 | % | 8.71 | % | 8.57 | % | |||||
| Allowance for credit losses - loans to loans reconciliation | |||||||||||||||
| Allowance for credit losses - loans to loans (GAAP) | 1.02 | % | 0.97 | % | 0.99 | % | 1.08 | % | 1.16 | % | |||||
| Effect of PPP loans | — | — | 0.01 | 0.04 | 0.10 | ||||||||||
| Allowance for credit losses - loans to loans, excluding PPP loans | 1.02 | % | 0.97 | % | 1.00 | % | 1.12 | % | 1.26 | % |
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UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
| 2022 | 2021 | Linked | Year over | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions) | First <br> Quarter | Fourth <br> Quarter | Third <br> Quarter | Second <br> Quarter | First <br> Quarter | Quarter <br> Change | Year <br> Change | |||||||||
| LOANS BY CATEGORY | ||||||||||||||||
| Owner occupied commercial RE | $ | 2,638 | $ | 2,322 | $ | 2,149 | $ | 2,149 | $ | 2,107 | $ | 316 | $ | 531 | ||
| Income producing commercial RE | 3,328 | 2,601 | 2,542 | 2,550 | 2,599 | 727 | 729 | |||||||||
| Commercial & industrial | 2,302 | 1,822 | 1,729 | 1,762 | 1,760 | 480 | 542 | |||||||||
| Paycheck protection program | 34 | 88 | 150 | 472 | 883 | (54 | ) | (849 | ) | |||||||
| Commercial construction | 1,482 | 1,015 | 947 | 927 | 960 | 467 | 522 | |||||||||
| Equipment financing | 1,148 | 1,083 | 1,017 | 969 | 913 | 65 | 235 | |||||||||
| Total commercial | 10,932 | 8,931 | 8,534 | 8,829 | 9,222 | 2,001 | 1,710 | |||||||||
| Residential mortgage | 1,826 | 1,638 | 1,533 | 1,473 | 1,362 | 188 | 464 | |||||||||
| Home equity lines of credit | 778 | 694 | 661 | 661 | 679 | 84 | 99 | |||||||||
| Residential construction | 368 | 359 | 321 | 289 | 272 | 9 | 96 | |||||||||
| Manufactured housing | 269 | — | — | — | — | 269 | 269 | |||||||||
| Consumer | 143 | 138 | 142 | 139 | 144 | 5 | (1 | ) | ||||||||
| Total loans | $ | 14,316 | $ | 11,760 | $ | 11,191 | $ | 11,391 | $ | 11,679 | $ | 2,556 | $ | 2,637 | ||
| LOANS BY MARKET | ||||||||||||||||
| Georgia | $ | 3,879 | $ | 3,778 | $ | 3,732 | $ | 3,729 | $ | 3,754 | $ | 101 | $ | 125 | ||
| South Carolina | 2,323 | 2,235 | 2,145 | 2,107 | 1,997 | 88 | 326 | |||||||||
| North Carolina | 1,879 | 1,895 | 1,427 | 1,374 | 1,326 | (16 | ) | 553 | ||||||||
| Tennessee | 2,661 | 373 | 383 | 394 | 398 | 2,288 | 2,263 | |||||||||
| Florida | 1,208 | 1,148 | 1,113 | 1,141 | 1,160 | 60 | 48 | |||||||||
| Commercial Banking Solutions | 2,366 | 2,331 | 2,391 | 2,646 | 3,044 | 35 | (678 | ) | ||||||||
| Total loans | $ | 14,316 | $ | 11,760 | $ | 11,191 | $ | 11,391 | $ | 11,679 | $ | 2,556 | $ | 2,637 |
6
UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
(in thousands)
| 2022 | 2021 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| First <br> Quarter | Fourth <br> Quarter | Third <br> Quarter | ||||||||||||||||
| NONACCRUAL LOANS | ||||||||||||||||||
| Owner occupied RE | $ | 4,590 | $ | 2,714 | $ | 4,945 | ||||||||||||
| Income producing RE | 7,220 | 7,588 | 13,462 | |||||||||||||||
| Commercial & industrial | 6,227 | 5,429 | 8,507 | |||||||||||||||
| Commercial construction | 401 | 343 | 1,202 | |||||||||||||||
| Equipment financing | 2,540 | 1,741 | 1,845 | |||||||||||||||
| Total commercial | 20,978 | 17,815 | 29,961 | |||||||||||||||
| Residential mortgage | 13,024 | 13,313 | 13,222 | |||||||||||||||
| Home equity lines of credit | 1,183 | 1,212 | 1,364 | |||||||||||||||
| Residential construction | 212 | 420 | 260 | |||||||||||||||
| Manufactured housing | 2,507 | — | — | |||||||||||||||
| Consumer | 40 | 52 | 116 | |||||||||||||||
| Total nonaccrual loans held for investment | 37,944 | 32,812 | 44,923 | |||||||||||||||
| Nonaccrual loans held for sale | 2,033 | — | — | |||||||||||||||
| OREO and repossessed assets | 839 | 43 | 412 | |||||||||||||||
| Total NPAs | $ | 40,816 | $ | 32,855 | $ | 45,335 | ||||||||||||
| 2022 | 2021 | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| First Quarter | Fourth Quarter | Third Quarter | ||||||||||||||||
| (in thousands) | Net <br><br>Charge-Offs | Net Charge-Offs to Average Loans ^(1)^ | Net <br><br>Charge-Offs | Net Charge-Offs to Average Loans ^(1)^ | Net <br><br>Charge-Offs | Net Charge-Offs to Average Loans ^(1)^ | ||||||||||||
| NET CHARGE-OFFS BY CATEGORY | ||||||||||||||||||
| Owner occupied RE | $ | (45 | ) | (0.01 | )% | $ | (255 | ) | (0.04 | )% | $ | (93 | ) | (0.02 | )% | |||
| Income producing RE | (290 | ) | (0.04 | ) | (98 | ) | (0.01 | ) | 45 | 0.01 | ||||||||
| Commercial & industrial | 2,929 | 0.51 | 339 | 0.07 | (91 | ) | (0.02 | ) | ||||||||||
| Commercial construction | (373 | ) | (0.10 | ) | (354 | ) | (0.14 | ) | (123 | ) | (0.05 | ) | ||||||
| Equipment financing | 267 | 0.10 | 781 | 0.29 | 512 | 0.21 | ||||||||||||
| Total commercial | 2,488 | 0.09 | 413 | 0.02 | 250 | 0.01 | ||||||||||||
| Residential mortgage | (97 | ) | (0.02 | ) | (169 | ) | (0.04 | ) | 51 | 0.01 | ||||||||
| Home equity lines of credit | (81 | ) | (0.04 | ) | (118 | ) | (0.07 | ) | (102 | ) | (0.06 | ) | ||||||
| Residential construction | (23 | ) | (0.03 | ) | (17 | ) | (0.02 | ) | (37 | ) | (0.05 | ) | ||||||
| Manufactured housing | 164 | 0.25 | — | — | — | — | ||||||||||||
| Consumer | 527 | 1.48 | 139 | 0.39 | 389 | 1.11 | ||||||||||||
| Total | $ | 2,978 | 0.08 | $ | 248 | 0.01 | $ | 551 | 0.02 | |||||||||
| (1) Annualized. |
7
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets (Unaudited)
| (in thousands, except share and per share data) | December 31, <br><br>2021 | ||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Cash and due from banks | 175,175 | $ | 144,244 | ||
| Interest-bearing deposits in banks | 1,729,607 | 2,147,266 | |||
| Federal funds and other short-term investments | 1,882 | 27,000 | |||
| Cash and cash equivalents | 1,906,664 | 2,318,510 | |||
| Debt securities available-for-sale | 3,909,114 | 4,496,824 | |||
| Debt securities held-to-maturity (fair value 2,351,873 and 1,148,804) | 2,500,983 | 1,156,098 | |||
| Loans held for sale (includes 39,118 and 44,109 at fair value) | 75,191 | 44,109 | |||
| Loans and leases held for investment | 14,316,205 | 11,760,346 | |||
| Less allowance for credit losses - loans and leases | (132,805 | ) | (102,532 | ) | |
| Loans and leases, net | 14,183,400 | 11,657,814 | |||
| Premises and equipment, net | 283,561 | 245,296 | |||
| Bank owned life insurance | 297,220 | 217,713 | |||
| Goodwill and other intangible assets, net | 784,280 | 472,407 | |||
| Other assets | 433,787 | 338,000 | |||
| Total assets | 24,374,200 | $ | 20,946,771 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
| Liabilities: | |||||
| Deposits: | |||||
| Noninterest-bearing demand | 7,946,049 | $ | 6,956,981 | ||
| NOW and interest-bearing demand | 4,650,997 | 4,252,209 | |||
| Money market | 5,075,525 | 4,183,354 | |||
| Savings | 1,479,833 | 1,215,779 | |||
| Time | 1,704,657 | 1,442,498 | |||
| Brokered | 199,092 | 190,358 | |||
| Total deposits | 21,056,153 | 18,241,179 | |||
| Long-term debt | 324,230 | 247,360 | |||
| Accrued expenses and other liabilities | 298,802 | 235,987 | |||
| Total liabilities | 21,679,185 | 18,724,526 | |||
| Shareholders' equity: | |||||
| Preferred stock; 1 par value; 10,000,000 shares authorized; Series I, 25,000 per share liquidation preference; 4,000 shares issued and outstanding | 96,422 | 96,422 | |||
| Common stock, 1 par value; 200,000,000 shares authorized, 106,025,210 and 89,349,826 shares issued and outstanding, respectively | 106,025 | 89,350 | |||
| Common stock issuable; 574,139 and 595,705 shares | 11,311 | 11,288 | |||
| Capital surplus | 2,302,189 | 1,721,007 | |||
| Retained earnings | 354,409 | 330,654 | |||
| Accumulated other comprehensive loss | (175,341 | ) | (26,476 | ) | |
| Total shareholders' equity | 2,695,015 | 2,222,245 | |||
| Total liabilities and shareholders' equity | 24,374,200 | $ | 20,946,771 |
All values are in US Dollars.
8
UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income (Unaudited)
| (in thousands, except per share data) | 2021 | ||||
| Interest revenue: | |||||
| Loans, including fees | 146,741 | $ | 125,726 | ||
| Investment securities, including tax exempt of 2,655 and 2,150, respectively | 23,665 | 15,448 | |||
| Deposits in banks and short-term investments | 653 | 368 | |||
| Total interest revenue | 171,059 | 141,542 | |||
| Interest expense: | |||||
| Deposits: | |||||
| NOW and interest-bearing demand | 1,469 | 1,486 | |||
| Money market | 1,012 | 1,804 | |||
| Savings | 72 | 49 | |||
| Time | 578 | 1,880 | |||
| Deposits | 3,131 | 5,219 | |||
| Short-term borrowings | — | 2 | |||
| Long-term debt | 4,136 | 4,257 | |||
| Total interest expense | 7,267 | 9,478 | |||
| Net interest revenue | 163,792 | 132,064 | |||
| Provision for (release of) credit losses | 23,086 | (12,281 | ) | ||
| Net interest revenue after provision for credit losses | 140,706 | 144,345 | |||
| Noninterest income: | |||||
| Service charges and fees | 9,070 | 7,570 | |||
| Mortgage loan gains and other related fees | 16,152 | 22,572 | |||
| Wealth management fees | 5,895 | 3,505 | |||
| Gains from sales of other loans, net | 3,198 | 1,030 | |||
| Lending and loan servicing fees | 2,986 | 2,160 | |||
| Securities losses, net | (3,734 | ) | — | ||
| Other | 5,406 | 7,868 | |||
| Total noninterest income | 38,973 | 44,705 | |||
| Total revenue | 179,679 | 189,050 | |||
| Noninterest expenses: | |||||
| Salaries and employee benefits | 71,006 | 60,585 | |||
| Communications and equipment | 9,248 | 7,203 | |||
| Occupancy | 9,378 | 6,956 | |||
| Advertising and public relations | 1,488 | 1,199 | |||
| Postage, printing and supplies | 2,119 | 1,822 | |||
| Professional fees | 4,447 | 4,234 | |||
| Lending and loan servicing expense | 2,366 | 2,877 | |||
| Outside services - electronic banking | 2,523 | 2,218 | |||
| FDIC assessments and other regulatory charges | 2,173 | 1,896 | |||
| Amortization of intangibles | 1,793 | 985 | |||
| Merger-related and other charges | 9,016 | 1,543 | |||
| Other | 3,718 | 3,676 | |||
| Total noninterest expenses | 119,275 | 95,194 | |||
| Income before income taxes | 60,404 | 93,856 | |||
| Income tax expense | 12,385 | 20,150 | |||
| Net income | 48,019 | 73,706 | |||
| Preferred stock dividends | 1,719 | 1,719 | |||
| Earnings allocated to participating securities | 238 | 462 | |||
| Net income available to common shareholders | 46,062 | $ | 71,525 | ||
| Net income per common share: | |||||
| Basic | 0.43 | $ | 0.82 | ||
| Diluted | 0.43 | 0.82 | |||
| Weighted average common shares outstanding: | |||||
| Basic | 106,550 | 87,322 | |||
| Diluted | 106,677 | 87,466 |
All values are in US Dollars.
9
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended March 31,
| 2022 | 2021 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands, fully taxable equivalent (FTE)) | Average <br> Balance | Interest | Average <br> Rate | Average <br> Balance | Interest | Average <br> Rate | ||||||||||
| Assets: | ||||||||||||||||
| Interest-earning assets: | ||||||||||||||||
| Loans, net of unearned income (FTE) ^(1)(2)^ | $ | 14,234,026 | $ | 146,637 | 4.18 | % | $ | 11,432,908 | $ | 125,122 | 4.44 | % | ||||
| Taxable securities ^(3)^ | 5,848,976 | 21,010 | 1.44 | 3,686,405 | 13,298 | 1.44 | ||||||||||
| Tax-exempt securities (FTE) ^(1)(3)^ | 510,954 | 3,566 | 2.79 | 304,983 | 2,888 | 3.79 | ||||||||||
| Federal funds sold and other interest-earning assets | 1,910,411 | 1,020 | 0.22 | 1,357,890 | 1,222 | 0.36 | ||||||||||
| Total interest-earning assets (FTE) | 22,504,367 | 172,233 | 3.10 | 16,782,186 | 142,530 | 3.44 | ||||||||||
| Noninterest-earning assets: | ||||||||||||||||
| Allowance for credit losses | (113,254 | ) | (143,703 | ) | ||||||||||||
| Cash and due from banks | 166,005 | 140,292 | ||||||||||||||
| Premises and equipment | 277,216 | 221,411 | ||||||||||||||
| Other assets ^(3)^ | 1,369,301 | 1,023,275 | ||||||||||||||
| Total assets | $ | 24,203,635 | $ | 18,023,461 | ||||||||||||
| Liabilities and Shareholders' Equity: | ||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||
| NOW and interest-bearing demand | $ | 4,667,098 | 1,469 | 0.13 | $ | 3,331,043 | 1,486 | 0.18 | ||||||||
| Money market | 5,110,817 | 1,012 | 0.08 | 3,732,988 | 1,804 | 0.20 | ||||||||||
| Savings | 1,436,881 | 72 | 0.02 | 989,584 | 49 | 0.02 | ||||||||||
| Time | 1,758,895 | 534 | 0.12 | 1,642,423 | 1,588 | 0.39 | ||||||||||
| Brokered time deposits | 79,092 | 44 | 0.23 | 75,259 | 292 | 1.57 | ||||||||||
| Total interest-bearing deposits | 13,052,783 | 3,131 | 0.10 | 9,771,297 | 5,219 | 0.22 | ||||||||||
| Federal funds purchased and other borrowings | 611 | — | — | 12 | — | — | ||||||||||
| Federal Home Loan Bank advances | — | — | — | 3,333 | 2 | 0.24 | ||||||||||
| Long-term debt | 318,995 | 4,136 | 5.26 | 317,172 | 4,257 | 5.44 | ||||||||||
| Total borrowed funds | 319,606 | 4,136 | 5.25 | 320,517 | 4,259 | 5.39 | ||||||||||
| Total interest-bearing liabilities | 13,372,389 | 7,267 | 0.22 | 10,091,814 | 9,478 | 0.38 | ||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||
| Noninterest-bearing deposits | 7,666,635 | 5,594,394 | ||||||||||||||
| Other liabilities | 378,327 | 312,610 | ||||||||||||||
| Total liabilities | 21,417,351 | 15,998,818 | ||||||||||||||
| Shareholders' equity | 2,786,284 | 2,024,643 | ||||||||||||||
| Total liabilities and shareholders' equity | $ | 24,203,635 | $ | 18,023,461 | ||||||||||||
| Net interest revenue (FTE) | $ | 164,966 | $ | 133,052 | ||||||||||||
| Net interest-rate spread (FTE) | 2.88 | % | 3.06 | % | ||||||||||||
| Net interest margin (FTE) ^(4)^ | 2.97 | % | 3.22 | % | ||||||||||||
| ^(1)^ | Interest revenue on tax-exempt securities and loans has been<br>increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income<br>tax rate and the federal tax adjusted state income tax rate. | |||||||||||||||
| --- | --- | |||||||||||||||
| ^(2)^ | Included in the average balance of loans outstanding are loans<br>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<br>unrealized losses of $81.2 million in 2022 and pretax unrealized gains of $58.3 million in 2021 are included in other assets for purposes<br>of this presentation. | |||||||||||||||
| ^(4)^ | Net interest margin is taxable equivalent net interest revenue<br>divided by average interest-earning assets. |
10
About United Community Banks, Inc.
United Community Banks, Inc. (NASDAQGS: UCBI) provides a full range of banking, wealth management and mortgage services for relationship-oriented consumers and business owners. The company, known as “The Bank That SERVICE Built,” has been recognized nationally for delivering award-winning service. At March 31, 2022, United had $24.4 billion in assets and 198 offices in Florida, Georgia, North Carolina, South Carolina and Tennessee, along with a national SBA lending franchise and a national equipment lending subsidiary. In 2022, J.D. Power ranked United highest in customer satisfaction with consumer banking in the Southeast, marking eight out of the last nine years United earned the coveted award. United was also named one of the "Best Banks to Work For" by American Banker in 2021 for the fifth consecutive year based on employee satisfaction. Forbes recognized United as one of the top ten World’s Best Banks in 2022. Forbes also included United on its 2022 list of the 100 Best Banks in America for the ninth consecutive year. United also received ten (10) Greenwich Excellence Awards in 2021 for excellence in Small Business Banking and Middle Market Banking, including national awards for Overall Satisfaction and Likelihood to Recommend. Additional information about United can be found at www.ucbi.com.
Non-GAAP Financial Measures
This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations, such as “operating net income,” “pre-tax, pre-provision income,” “operating net income per diluted common share,” “operating earnings per share,” “tangible book value per common share,” “operating return on common equity,” “operating return on tangible common equity,” “operating return on assets,” “return on assets - pre-tax, pre-provision, excluding merger-related and other charges,” “return on assets - pre-tax, pre-provision,” “operating efficiency ratio,” and “tangible common equity to tangible assets.” These non-GAAP measures are included because United believes they may provide useful supplemental information for evaluating United’s underlying performance trends. These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.
Caution About Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In general, forward-looking statements usually may be identified through use of words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology, and include statements related to the accretive value of each of the Reliant acquisition to United’s earnings. Forward-looking statements are not historical facts and represent management’s beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are not guarantees of future performance. Actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements.
11
Factors that could cause or contribute to such differences include, but are not limited to (1) the risk that the cost savings and any revenue synergies from the Reliant acquisition may not be realized or take longer than anticipated to be realized, (2) disruption of customer, supplier, employee or other business partner relationships as a result of the Reliant acquisition, (3) the possibility that the costs, fees, expenses and charges related to the acquisition of Reliant may be greater than anticipated, (4) reputational risk and the reaction of the companies’ customers, suppliers, employees or other business partners to the acquisition of Reliant, (5) the risks relating to the integration of Reliant’s operations into the operations of United, including the risk that such integration will be materially delayed or will be more costly or difficult than expected, (6) the risk of potential litigation or regulatory action related to the acquisition of Reliant. Further information regarding additional factors which could affect the forward-looking statements contained in this press release can be found in the cautionary language included under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in United’s Annual Report on Form 10-K for the year ended December 31, 2021, and other documents subsequently filed by United with the United States Securities and Exchange Commission (“SEC”).
Many of these factors are beyond United’s ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, shareholders and investors should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this communication, and United undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for United to predict their occurrence or how they will affect United.
United qualifies all forward-looking statements by these cautionary statements.
# # #
12
Exhibit 99.2
1Q22 Investor Presentation April 19, 2022
Disclosures CAUTIONARY STATEMENT This communication contains “forward - looking statements” within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E 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 returns and other benefits of the merger with Reliant Bancorp, Inc . (“Reliant”) to shareholders, expected improvement in operating efficiency resulting from the merger, estimated expense reductions resulting from the transaction and the timing of achievement of such reductions, the impact on and timing of the recovery of the impact on tangible book value, and the effect of the merger on United’s capital ratios . 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 from the merger may not be realized or take longer than anticipated to be realized, ( 2 ) disruption from the merger with customer, supplier, employee or other business partner relationships, ( 3 ) the possibility that the costs, fees, expenses and charges related to the merger may be greater than anticipated, ( 4 ) reputational risk and the reaction of the companies’ customers, suppliers, employees or other business partners to the merger, ( 5 ) the risks relating to the integration of Reliant’s operations into the operations of United, including the risk that such integration will be materially delayed or will be more costly or difficult than expected, ( 6 ) the risk of potential litigation or regulatory action related to mergers , ( 7 ) the risks associated with United’s pursuit of future acquisitions, ( 8 ) the risk of expansion into new geographic or product markets, ( 9 ) the dilution caused by United’s issuance of additional shares of its common stock in mergers, and ( 10 ) general competitive, economic, political and market conditions . Further information regarding additional factors which could affect the forward - looking statements can be found in the cautionary language included under the headings “Cautionary Note Regarding Forward - Looking Statements” and “Risk Factors” in United’s Annual Report on Form 10 - K for the year ended December 31 , 2021 , and other documents subsequently filed by United with the SEC . Many of these factors are beyond United Community Banks, Inc . ’s (“United”) 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 . 2
Disclosures NON - GAAP MEASURES This Investor Presentation includes financial information determined by methods other than in accordance with generally accepted accounting principles (“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 measures include : “Earnings per share – operating,” “Diluted earnings per share – operating,” “Tangible book value per share,” “Return on common equity – operating,” “Return on tangible common equity – operating,” “Return on assets – operating ,” “Return on assets – pre - tax pre - provision, excluding merger - related and other charges,” “ Efficiency ratio – operating,” “Expenses – operating,” and “Tangible common equity to tangible assets . ” Management has included these non - GAAP measures because it believes these measures may provide useful supplemental information for evaluating United’s underlying performance trends . Further, management uses these measures in managing and evaluating United’s business and intends to refer to them in discussions about our operations and performance . Operating performance 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 GAAP measures can be found in the ‘Non - GAAP Reconciliation Tables’ included in the exhibits to this Presentation . 3
#2 Highest Net Promoter Score a mong all banks nationwide – J.D. Power TOP 10 WORLD’S BEST BANKS and #3 in the United States - Forbes 198 BANKING OFFICES ACROSS THE SOUTHEAST #1 IN CUSTOMER SATISFACTION i n 2022 with Retail Banking in the Southeast – J.D. Power United Community Banks, Inc. $24.4 BILLION IN TOTAL ASSETS $4.6 BILLION IN AUA $21.1 BILLION IN TOTAL DEPOSITS BEST BANKS TO WORK FOR i n 2021 for the fifth consecutive year – American Banker $0.21 QUARTERLY DIVIDEND – UP 11% Y OY 4 Regional Full Service Branch Network National Navitas and SBA Markets Premier Southeast Regional Bank x Metro - focused branch network with locations in the fastest growing MSAs in the Southeast x 188 branches, 10 LPOs, and 8 mortgage loan offices across six Southeast states x Top 10 market share in GA, SC and TN x Proven ability to integrate – 12 transactions completed over the past 10 years Committed to Service Since 1950 Extended Navitas and SBA Markets $14.3 BILLION IN TOTAL LOANS Company Overview 12.5 % TIER 1 RBC 100 BEST BANKS IN AMERICA i n 2022 f or the ninth consecutive year - Forbes x Offered nationwide x SBA business has both in - footprint and national business (4 specific verticals) x Navitas subsidiary is a technology enabled small - ticket, essential - use commercial equipment finance provider Banking Offices Note: See glossary located at the end of this presentation for reference on certain acronyms
$22.15 $23.63 $24.38 $17.83 $18.42 $17.08 1Q21 4Q21 1Q22 Book Value Per Share GAAP Tangible $0.43 Diluted earnings per share - GAAP $0.50 Diluted earnings per share - operating 0.78% Return on average assets - GAAP 0.89% Return on average assets - operating 1.52% PTPP return on average assets - operating 0.06% Cost of deposits 38% DDA / Total Deposits 6.8% Return on common equity - GAAP 11.0% Return on tangible common equity - operating 68% Loan to Deposit ratio Other 1Q notable items: $18.3 mm initial provision to establish reserve for Reliant loans ($0.13 EPS) $6.4 mm MSR write - up ($0.05 EPS) $3.7 mm securities losses ( - $0.03 EPS ) 1Q22 Highlights (1) See non - GAAP reconciliation table slides in the Appendix for a reconciliation of operating performance measures to GAAP performance $0.82 $0.55 $0.43 $0.83 $0.64 $0.50 1Q21 4Q21 1Q22 Diluted Earnings Per Share GAAP Operating (1) 1.62% 0.96% 0.78% 1.65% 1.10% 0.89% 1Q21 4Q21 1Q22 Return on Average Assets GAAP Operating 1.80% 1.21% 1.37% 1.83% 1.40% 1.52% 1Q21 4Q21 1Q22 PTPP Return on Average Assets PTPP Operating PTPP (1) (1) (1) (1) (1) (1) 9.4% Annualized 1Q EOP core loan growth (excluding Reliant) 6.8% Annualized 1Q EOP total deposit growth (excluding Reliant) (1) 5
Long - Term Financial Performance & Shareholder Return 6 (1) See non - GAAP reconciliation table slides in the Appendix for a reconciliation of operating performance measures to GAAP performance (1) (1) 0.98% 1.06% 1.09% 1.40% 1.51% 1.07% 1.42% 0.89% 2015 2016 2017 2018 2019 2020 2021 1Q22 ROA - Operating UCBI KRX 10.24% 11.86% 12.02% 15.69% 15.81% 12.24% 17.33% 11.00% 2015 2016 2017 2018 2019 2020 2021 1Q22 ROTCE - Operating UCBI KRX $417 $271 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total Shareholder Return $ UCBI Outperformance Performance for the period ended April 15, 2022 United Community Banks, Inc. KBW Nasdaq Regional Bank Index (KRX) 1 - YEAR - 5% - 4% 3 - YEAR 121% 60% 5 - YEAR 206% 110% 10 - YEAR 318% 175%
67.9 72.5 11.9% 12.1% 4.9% 3.2% '27 Proj. '22 - '27 Proj. Median Fastest Growing Pop. Growth '22 Household Southeast MSAs (1) % Population Income 1. Nashville, TN 6.10 2,015,914 $89,164 2. Orlando, FL 5.64 2,694,186 $78,749 3. Atlanta, GA 5.38 6,206,533 $88,792 4. Raleigh, NC 5.14 1,426,329 $99,125 5. Jacksonville, FL 4.82 1,613,916 $82,819 6. Tampa, FL 4.79 3,277,020 $73,066 7. Charlotte, NC 4.47 2,697,040 $82,505 8. Richmond, VA 4.46 1,328,751 $83,105 9. Birmingham, AL 4.25 1,120,659 $72,525 10. Washington, D.C. 4.05 6,441,102 $125,882 (1) Includes MSAs with a population of greater than 1,000,000 (2) Data by MSA shown on a weighted average basis by deposits United MSA Presence Footprint Focused on High - Growth MSAs in Southeast Projected Population Growth (2) 2022 – 2027 (%) Projected Household Income Growth (2) 2022 – 2027 (%) Median Household Income (2) ($ in thousands) National Avg. National Avg. National Avg. 7
38% 22% 25% 7% 8% DDA MMDA Savings Time NOW Outstanding Deposit Franchise 8 Note: Core transaction accounts include demand deposits, interest - bearing demand, money market and savings accounts, excluding public funds deposits x Total deposits were up $2.8 billion from 4Q21 and up $5.1 billion YOY • Excluding Reliant, 1Q22 total deposits grew $310 million, or 6.8% annualized • Excluding Reliant and Aquesta , total deposits were up $1.9 billion, or 11.9% YOY x Core transaction deposits were up $2.6 billion from 4Q21 and up $4.5 billion YOY • Excluding Reliant, 1Q22 core transactions deposits grew $478 million, or 13.4% annualized • Excluding Reliant and Aquesta , core transaction deposits were up $1.7 billion, or 13.8% YOY x Cost of deposits were flat from 4Q21 at 0.06% in 1Q22, despite the addition of Reliant and rate increases 1Q22 Total Deposits 21.1 billion Cost of Deposits Trend 0.56% 0.38% 0.25% 0.17% 0.14% 0.09% 0.07% 0.06% 0.06% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22
43% 10% 23% 1% 13% 5% 3% 2% Residential Mortgage Manufactured Housing Well Diversified Loan Portfolio 1 Q22 Total Loans $14.3 billion Note: C&I includes commercial and industrial loans, owner - occupied CRE loans and Navitas (equipment finance) loans Quarter Highlights x Loans, excluding PPP and Reliant loans, increased $277 million, or 9.4% annualized x Sold $45.6 million of out of market Reliant loans x Strong organic growth was driven by C&I and commercial construction, with 1Q22 growth of 4.3% and 2.3%, respectively x Added a $269 million manufactured housing portfolio from Reliant that makes up 2% of total loans Granular Loan Portfolio x Construction & CRE ratio as a percentage of total RBC = 77%/210% x Top 25 relationships total $723 million, or 5.0% of total loans x SNCs outstanding of $241 million, or 1.7% of total loans x Project lending limit of $25 million x Relationship lending limit of $40 million 9 C&I Commercial Construction CRE Other Consumer Home Equity Residential Construction
$10.8 $16.0 $10.9 $16.3 $11.0 $16.9 $11.8 $18.2 $14.3 $21.1 $0.9 $0.5 $0.2 $0.1 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 Loans Deposits Loans Deposits Loans Deposits Loans Deposits Loans Deposits 1Q21 2Q21 3Q21 4Q21 1Q22 Loans excluding PPP PPP Loans 73% 70% 66% 64% 68% 47% 57% 67% 77% 87% 97% Deposit Growth Creates Remix Opportunity Loans and Deposits 10 $ in billions Note: Loan growth excludes PPP loans and adjusts for the Aquesta acquisition that closed October 1, 2021 and the Reliant acquisition that closed January 1, 2022. Deposit growth also adjusts for the Aquesta and Reliant acquisitions. Loans / Deposits % 1Q21 2Q21 3Q21 4Q21 1Q22 Annualized Core Loan Growth % 3% 5% 4% 7% 9% Loan Yield % 4.44% 4.40% 4.54% 4.18% 4.18% Annualized Core Deposit Growth % 20% 8% 13% 17% 13% Deposit Cost % 0.14% 0.09% 0.07% 0.06% 0.06%
11 x Regulatory ratios declined as expected primarily due to closing the Reliant acquisition x Quarterly dividend of $ 0.21 per share, an increase of 11% YOY x Unrealized securities losses in OCI increased by $153 million to $177 million in 1Q22 x There were no share repurchases during 1Q22 *1Q22 regulatory capital ratios are preliminary Capital Common Equity Tier 1 Capital 12.3 % 12.6 % 12.6 % 12.5 % 12.0 % + 0.5 % 11.9 % Tier 1 Risk-Based Capital 13.1 13.3 13.4 13.2 12.2 + 1.0 12.5 Total Risk-Based Capital 14.9 15.1 14.9 14.7 14.2 + 0.5 14.3 Leverage 9.4 9.3 9.2 8.8 8.9 - 0.1 8.9 Tangible Common Equity to Tangible Assets 8.6 8.7 8.5 8.1 8.3 - 0.2 7.7 Tangible Book Value per share $17.83 $18.49 $18.68 $18.42 $17.08 Holding Company 4Q213Q212Q211Q21 1Q22* vs. KRX 4Q21 KRX Peer Median UCBI
$132.1 $137.6 $163.8 1Q21 4Q21 1Q22 Net Interest Revenue / Margin (1) $ in millions x Net interest margin increased 16 bps from 4Q21, primarily driven by the Reliant acquisition, increased interest rates and a s hif t from cash into securities x Core net interest margin of 2.90%, which excludes PPP fees and loan accretion, was up 24 bps in 1Q22 from 2.66% in 4Q21 x L oan accretion totaled $3.1 million and contributed 6 bps to the margin, down 2 bps from 4Q21 x PPP fees contributed 2 bps in 1Q22 compared to 8 bps in 4 Q21 x 49% of total loans are floating rate, but 9% are currently priced at their floors. With 50 bps of rate hikes, 46% of loans wi ll be floating x 23% of securities are floating rate 3.22% 2.81% 2.97% 2.85% 2.66% 2.90% Net Interest Revenue ($ in millions) Net Interest Margin Core Net Interest Margin (1) Net interest margin is calculated on a fully - taxable equivalent basis (2) Core net interest margin excludes PPP fees and loan accretion (1) 12 1Q22 NIM Expansion (2) 2.97% 2.81% 0.06% 0.03% ( 0.02% ) ( 0.06% ) 0.15% 4Q NIM Liquidity Investment Higher Interest Rates / Mix / Other Loan Accretion PPP Fees Reliant Acquisition 1Q NIM (%)
Noninterest Income $ in millions $7.6 $8.4 $9.4 $8.6 $9.1 $10.0 $8.4 $9.0 $7.8 $4.7 $3.5 $3.8 $5.5 $6.1 $5.9 $22.6 $11.1 $13.8 $10.9 $16.1 $1.0 $4.1 $2.4 $3.8 $3.2 1Q21 2Q21 3Q21 4Q21 1Q22 Service Charges Other Brokerage / Wealth Mgmt Mortgage Loan sale gains $35.8 Linked Quarter x Fees up $1.8 million • Mortgage fees up $5.2 million from 4Q21 primarily due to a $6.4 million increase in the mark on the MSR asset • Rate locks were up with $757 million compared to $695 million in 4Q21 • M ortgage closings of $462 million compared to $522 million in 4Q21 • 1Q22 mortgage production purchase/refi mix was 69%/31% • Gain on sale of SBA loans was $2.5 million on $28.3 million of loan sales • Gain on sale of equipment finance loans was $732 thousand on $23.4 million of loan sales • Reliant added approximately $3.2 million of noninterest income • The decline in other income reflects $3.7 million of securities losses Year - over - Year x Fees down $5.7 million • Mortgage rate locks down 24% compared to last year ($757 million in 1Q22 compared to $933 million in 1Q21) as volume and gain on sale have declined YOY 13 $44.7 $39.0 $40.1 $37.2
$95.2 $95.5 $96.7 $109.2 $119.3 $93.7 $94.5 $95.3 $99.2 $110.3 1Q21 2Q21 3Q21 4Q21 1Q22 53.6% 54.5% 53.1% 62.1% 57.4% 52.7% 53.9% 52.3% 56.5% 53.1% Efficiency Ratio Expenses Disciplined Expense Management $ in millions Linked Quarter x GAAP and operating expenses increased 9.2% and 11.2%, respectively • Primary reason for 1Q increase is due to the inclusion of Reliant expenses • Efficiency ratio improved to 53.1% as legacy UCBI expenses were improved on an absolute basis, full Aquesta cost savings were realized and a portion of the expected Reliant cost savings were realized Year - over - Year x GAAP and operating expenses increased 25.3% and 17.7%, respectively • The majority of the increase is driven by the Reliant acquisition, which closed on January 1, 2022, the Aquesta acquisition, which closed on October 1, 2021 and the FinTrust acquisition, which closed on July 6, 2021 (1) See non - GAAP reconciliation table slides at the end of the exhibits for a reconciliation of operating performance measures to GAAP p erformance measures 14 GAAP Operating (1) GAAP Operating (1)
Credit Quality x 1Q22 net charge - offs of $2.98 million, or 0.08% of average loans, annualized x The provision for credit losses was $23.1 million, including $18.3 million to establish the Reliant initial loan loss reserve Net Charge - Offs as % of Average Loans Provision for Credit Losses & NCOs ($ in millions) 15 0.09% 0.05% - 0.01% - 0.02% 0.02% 0.01% 0.08% -0.05% 0.00% 0.05% 0.10% 0.15% 0.20% 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 $21.8 $2.9 ($12.3) ($13.6) ($11.0) ($0.6) $23.1 $2.5 $1.5 ($0.3) ($0.5) $0.6 $0.2 $3.0 -$13.6 -$8.6 -$3.6 $1.4 $6.4 $11.4 $16.4 $21.4 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 Provision for Credit Losses $ Net Charge-Offs $
x Special mention loans decreased by 0.50% (from $304 million in 4Q21 to $298 million in 1Q22, a decrease of $6 million) x Substandard , but still accruing loans, declined 0.21% quarter over quarter as a % of total loans x Non - performing assets increased by $8.0 million during the quarter and stand at 0.29% of total loans Higher - Risk Loan Trends Special Mention & Substandard Accruing Loans as a % of Total Loans Non - Performing Assets as a % of Total Loans 16 0.48% 0.41% 0.41% 0.28% 0.29% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 1Q21 2Q21 3Q21 4Q21 1Q22 3.2% 3.2% 2.5% 2.6% 2.1% 1.5% 1.7% 1.6% 1.4% 1.2% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 1Q21 2Q21 3Q21 4Q21 1Q22 Special Mention (%) Substandard Accruing(%)
17 ACL Walk Forward Note: ACL includes the reserve for unfunded commitments ACL / Loans: 0.97% 1.02% $113,524 $146,369 $3,373 ( $552 ) ( $2,978 ) $116 $1,825 $12,737 $18,324 4Q21 ACL Loan Growth Reserve for Unfunded Commitments (net of Reliant) NCOs Specific Reserve Model / Forecast Changes Reliant Day 1 PCD Credit Allowance Reliant Day 2 Non PCD Double Dip 1Q22 ACL ($000)
1Q22 INVESTOR PRESENTATION Exhibits
Blended Cash and Securities Yield Cash and Securities 19 $ in billions $2.5 $2.4 $3.1 $3.6 $4.3 $4.9 $5.3 $5.7 $6.4 $0.4 $1.2 $0.9 $1.5 $1.2 $1.3 $1.7 $2.2 $1.7 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 Investments ($) Fed Funds & Interest Earning Cash ($) 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 Securities Yield % 2.77% 2.84% 2.68% 2.21% 1.83% 1.62% 1.58% 1.51% 1.46% 1.55% Blended Yield % 2.56% 2.63% 2.14% 1.61% 1.36% 1.30% 1.31% 1.19% 1.10% 1.24% Avg. 10 - Yr Treasury % 1.80% 1.38% 0.69% 0.65% 0.86% 1.31% 1.58% 1.32% 1.53% 1.95%
Interest Rate Sensitivity 20 x 4.47% asset sensitivity in +100 bps ramp x One 25 bps Fed rate hike is worth approximately 4 bps to net interest margin x 22% Beta assumed for discretionary non maturity deposits x Other relevant data points x Approximately $5.8 billion or 49% of loans are floating rate loans x Approximately $1 billion of loans are at their floor, $700 million of which would begin floating after 50 bps of rate hikes 1.30% 5.39% 11.06% 1.30% 4.47% 7.31% +25 bps +100 bps +200 bps Net Interest Income Sensitivity % Change - Shocks % Change - Ramps
x Navitas 8% of total loans x Navitas 1Q22 NCOs = 0.10% x Economic recovery and government intervention driving historically low loss rates x Navitas ACL - Loans equated to 1.68% as of 1Q22 Navitas Performance $ in millions 21 $126 $94 $134 $145 $148 $181 $186 $204 $213 8.9% 9.4% 22.6% 19.7% 22.9% 24.7% 19.7% 25.8% 24.3% 9.45% 9.39% 9.19% 9.12% 9.08% 9.08% 9.01% 8.89% 8.85% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% $0 $50 $100 $150 $200 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 Originations $ Loan Growth % (ann.) Portfolio Yield %
Expanding Mortgage Throughout the Footprint x Gain on sale % has declined to pre - pandemic levels x 1Q22 gain on sale understated due to unrealized hedging gains with the total economics closer to 3.5% x Purchase / Refi mix has shifted from 42% / 58% in 1Q21 to 69% / 31% in 1Q22 x Technology investments have also paid off as we have been able to better market to our existing customers and also have enabled us to cut processing costs and process times x We have added loan originators in both Florida and Tennessee markets 22 $ in millions $801 $802 $910 $792 $993 $702 $731 $695 $757 $259 $395 $402 $410 $336 $407 $320 $285 $207 2.8% 4.3% 5.4% 5.1% 4.4% 3.9% 4.8% 3.7% 2.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% $0 $200 $400 $600 $800 $1,000 $1,200 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 Mortgage locks $ Loans sold $ Gain on sale %
23 x Senior Care lending team are dedicated specialists with significant experience in the space x Senior Care portfolio outstanding for UCBI totaled $518 million as of 1Q22, or 4 % of total loans x As of March 31, $6.7 million of Senior Care loans were in nonaccrual x As of March 31, $144 million of Senior Care loans were special mention and $66 million were substandard accruing 1 % 20% 25% 49% 6% Selected Segments – Senior Care $ in millions $11 $7 $21 $46 $48 $64 $73 $73 $66 $13 $13 $34 $100 $172 $170 $170 $169 $144 $463 $486 $503 $511 $535 $537 $549 $520 $518 $0 $100 $200 $300 $400 $500 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 Nonaccruals $ Substandard Accruing $ Special Mention $ Pass $
Non - GAAP Reconciliation Tables $ in thousands, except per share data 24 1Q21 2Q21 3Q21 4Q21 1Q22 Expenses Expenses - GAAP 95,194$ 95,540$ 96,749$ 109,156$ 119,275$ Merger-related and other charges (1,543) (1,078) (1,437) (9,912) (9,016) Expenses - Operating 93,651$ 94,462$ 95,312$ 99,244$ 110,259$ Diluted Earnings per share Diluted earnings per share - GAAP 0.82$ 0.78$ 0.82$ 0.55$ 0.43$ Merger-related and other charges 0.01 0.01 0.01 0.09 0.07 Diluted earnings per share - Operating 0.83 0.79 0.83 0.64 0.50 Book Value per share Book Value per share - GAAP 22.15$ 22.81$ 23.25$ 23.63$ 24.38$ Effect of goodwill and other intangibles (4.32) (4.32) (4.57) (5.21) (7.30) Tangible book value per share 17.83$ 18.49$ 18.68$ 18.42$ 17.08$ Return on Tangible Common Equity Return on common equity - GAAP 15.37 % 14.08 % 14.26 % 9.32 % 6.80 % Effect of merger-related and other charges 0.26 0.17 0.22 1.42 1.03 Return on common equity - Operating 15.63 14.25 14.48 10.74 7.83 Effect of goodwill and intangibles 4.05 3.56 3.75 3.19 3.17 Return on tangible common equity - Operating 19.68 % 17.81 % 18.23 % 13.93 % 11.00 % Return on Assets Return on assets - GAAP 1.62 % 1.46 % 1.48 % 0.96 % 0.78 % Merger-related and other charges 0.03 0.02 0.02 0.14 0.11 Return on assets - Operating 1.65 % 1.48 % 1.50 % 1.10 % 0.89 %
Non - GAAP Reconciliation Tables $ in thousands, except per share data 25 1Q21 2Q21 3Q21 4Q21 1Q22 Return on Assets to return on assets- pre-tax pre-provision Return on assets - GAAP 1.62 % 1.46 % 1.48 % 0.96 % 0.78 % Income tax expense 0.46 0.47 0.45 0.26 0.20 (Release of) provision for credit losses (0.28) (0.29) (0.23) (0.01) 0.39 Return on assets - pre-tax, pre-provision 1.80 1.64 1.70 1.21 1.37 Merger-related and other charges 0.03 0.03 0.03 0.19 0.15 Return on assets - pre-tax, pre-provision, excluding merger-related and other charges 1.83 % 1.67 % 1.73 % 1.40 % 1.52 % Efficiency Ratio Efficiency Ratio - GAAP 53.55 % 54.53 % 53.11 % 62.12 % 57.43 % Merger-related and other charges (0.87) (0.61) (0.78) (5.64) (4.34) Efficiency Ratio - Operating 52.68 % 53.92 % 52.33 % 56.48 % 53.09 % Tangible common equity to tangible assets Equity to assets ratio - GAAP 10.95 % 11.04 % 10.89 % 10.61 % 11.06 % Effect of goodwill and other intangibles (1.86) (1.82) (1.87) (2.06) (2.94) Effect of preferred equity (0.52) (0.51) (0.49) (0.46) (0.40) Tangible common equity to tangible assets ratio 8.57 % 8.71 % 8.53 % 8.09 % 7.72 % Allowance for credit losses - total to loans Allowance for credit losses - total to loans (GAAP) 1.16 % 1.08 % 0.99 % 0.97 % 1.02 % Effect of PPP loans 0.10 0.04 0.01 0.00 0.00 Allowance for credit losses - total to loans, excluding PPP loans 1.26 % 1.12 % 1.00 % 0.97 % 1.02 %
Glossary 26 ACL – Allowance for Credit Losses MLO – Mortgage Loan Officer ALLL – Allowance for Loan Losses MTM – Marked-to-market AUA – Assets Under Administration MSA – Metropolitan Statistical Area BPS – Basis Points MSR – Mortgage Servicing Rights Asset C&I – Commercial and Industrial NCO – Net Charge-Offs C&D – Construction and Development NIM – Net Interest Margin CECL – Current Expected Credit Losses NPA – Non-Performing Asset CET1 – Common Equity Tier 1 Capital NSF – Non-sufficient Funds CRE – Commercial Real Estate OO RE – Owner Occupied Commercial Real Estate CSP – Customer Service Profiles PCD – Loans Purchased with Credit Deterioration DDA – Demand Deposit Account PPP – Paycheck Protection Program EOP – End of Period PTPP – Pre-Tax, Pre-Provision Earnings EPS – Earnings Per Share RBC – Risk Based Capital FTE – Fully-taxable equivalent ROA – Return on Assets GAAP – Accounting Principles Generally Accepted in the USA SBA – United States Small Business Administration KRX – KBW Nasdaq Regional Banking Index TCE – Tangible Common Equity LPO – Loan Production Office USDA – United States Department of Agriculture YOY – Year over Year