United Community Banks, Inc. Reports Fourth Quarter Results

EPS of $0.66, Return on Assets of 1.30% and Return on Common Equity of 12.36%

GREENVILLE, S.C., Jan. 19, 2021 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NASDAQ: UCBI) (United) today reported fourth quarter financial results, including solid year-over-year loan and core deposit growth and strong profitability. For the quarter, United’s net income was $59.5 million and pre-tax pre-provision income was $80.3 million. Diluted earnings per share of $0.66 for the quarter represented an increase of $0.05 or 8%, from a year ago. Compared to the third quarter, diluted earnings per share were up by $0.14 or 27%. On an operating basis, which excludes merger-related and other charges, diluted earnings per share were $0.68, up $0.07 or 11% from last year and $0.13 per share or 24% compared to the third quarter. United’s GAAP return on assets (ROA) was 1.30% and its return on common equity was 12.4% for the quarter. On an operating basis, United’s ROA was 1.34% and its return on tangible common equity was 16.2%. On a pre-tax, pre-provision basis, and excluding merger-related and other charges, ROA was 1.82%.

Included in the quarter’s results was a discretionary $8.5 million contribution to the United Community Bank Foundation. This contribution lowered operating EPS by $0.07 and operating ROA by 15 basis points.

Chairman and CEO Lynn Harton stated, “While our markets continue to be impacted by the pandemic, I am proud of the ongoing commitment to service by our employees and am encouraged by the resilience of our customers. The strength of our balance sheet and the diversity of our business model enabled us to continue to post solid financial results in a challenging environment. Most importantly, our teams continued to exhibit outstanding leadership. During the year, we have been able to add new teams of bankers, expand our footprint into new, fast-growing markets, and increase our product offerings. Focused efforts by our teams have led to meaningful high-quality growth in loans, deposits, and fee income despite economic headwinds.”

Total loans decreased by $428 million during the quarter—primarily driven by the forgiveness of $671 million in SBA Paycheck Protection Program (PPP) loans. Excluding the effect of PPP loans, core organic loan growth was 8% annualized. Core transaction deposits grew by $369 million during the quarter, or 13% annualized, and United’s cost of deposits decreased by 8 basis points to 0.17%. The net interest margin increased 28 basis points from the third quarter due mainly to the accelerated recognition of PPP fees, as well as purchased loan accretion. Excluding these items, the net interest margin decreased by approximately 10 basis points from the third quarter due to a combination of factors, including lower overall market rates and increased liquidity.

Mr. Harton concluded, “I am pleased by our performance both this quarter and this past year despite the challenging circumstances. I am optimistic going into 2021 knowing that we are well positioned to take advantage of new business opportunities. In October, and for the fourth consecutive year, United was again named one of the Best Banks to Work for in 2020 by American Banker. This honor demonstrates our commitment to employee development and to fostering a strong culture. Our employees continue to lead in supporting our customers and communities, which is directly reflected in our performance and success.”

2020 Financial Highlights:

• Full year EPS of $1.91, a decrease of 17% compared to last year on both a GAAP and operating basis

• Return on assets of 1.04%, or 1.07% on an operating basis

• Pre-tax, pre-provision return on assets of 1.85%, or 1.90% on an operating basis

• Return on common equity of 9.3%

• Return on tangible common equity of 12.2% on an operating basis

• Completed the merger with Three Shores Bancorporation and its bank subsidiary Seaside National Bank & Trust (Seaside) on July 1

• A provision for credit losses of $80.4 million compared to $13.2 million in 2019, partly due to the adoption of the Current Expected Credit Losses (CECL) model in the first quarter

• Processed nearly 11,000 PPP applications, totaling $1.3 billion in new loans

• Loan growth of $2.6 billion with $1.4 billion attributable to loans acquired from Seaside and core loan growth (excluding PPP loans) of 8% for the year

• Core transaction deposits were up $4.0 billion with $1.3 billion attributable to Seaside and remainder in organic growth, which represents a 36% core growth rate for the year

• Net interest margin of 3.55%, which was down 52 basis points from last year due to a number of factors, including the low rate environment, the Seaside acquisition, and increasing balance sheet liquidity

• Record mortgage rate locks of $3.3 billion compared to $1.6 billion a year ago

• Noninterest income was up $49.6 million or 47%, excluding net securities gains; Seaside contributed nearly $4.7 million of the increase and mortgage loan gains and related fees were up $48.9 million, primarily driven by record mortgage rate locks and production

• Efficiency ratio of 55.7%, or 54.6% on an operating basis

• Net charge-offs of $18.3 million, or 17 basis points as a percent of average loans, up 3 basis points from 2019

• Completed a public offering of $100 million aggregate of 6.875% Non-Cumulative Perpetual Preferred Stock and $100 million aggregate principal amount of 5.000% Fixed-to-Floating Senior Notes due 2030

• Established the United Community Bank Foundation with $10.0 million

Fourth Quarter 2020 Financial Highlights:

• Net income of $59.5 million and pre-tax pre-provision income of $80.3 million

• EPS increased by 8% compared to last year on a GAAP basis and 11% on an operating basis; compared to third quarter, EPS increased by 27% on a GAAP basis and 24% on an operating basis

• Return on assets of 1.30%, or 1.34% on an operating basis

• Pre-tax, pre-provision return on assets of 1.77%, or 1.82% on an operating basis

• Return on common equity of 12.4%

• Return on tangible common equity of 16.2% on an operating basis

• A provision for credit losses of $2.9 million, which increased the allowance for loan losses to 1.20% (1.28%, excluding PPP loans) from 1.14% in the third quarter

• Loan production of $1.1 billion, resulting in core loan growth of 8%, annualized for the quarter, excluding the impact of $671 million in PPP loans being forgiven

• Core transaction deposits were up $369 million, which represents a 13% annualized growth rate for the quarter

• Net interest margin of 3.55% was up 28 basis points from the third quarter, mainly due to the impact of accelerated PPP fees during the quarter

• Record mortgage closings of $609 million and mortgage rate locks of $792 million, compared to $333 million and $411 million, respectively, a year ago

• Noninterest income was down $6.6 million on a linked quarter basis, excluding net securities gains, primarily driven by lower mortgage loan gains and related fees

• Noninterest expenses increased by $10.5 million compared to the third quarter mostly due to funding for the United Community Bank Foundation of $8.5 million

• Efficiency ratio of 56.7%, or 55.4% on an operating basis

• Net charge-offs of $1.5 million, or 5 basis points as a percent of average loans, down 4 basis points from the third quarter

• Nonperforming assets of 0.35% of total assets, up 6 basis points compared to September 30, 2020

• Total loan deferrals of $71 million or 0.6% of the total loan portfolio compared to $365 million or 3% in the third quarter

• $8.5 million of funding for the United Community Bank Foundation for charities and causes throughout the footprint, adding to a $0.5 million contribution in the third quarter

• Plan for operational conversion of Seaside in the first quarter of 2021

Conference Call

United will hold a conference call, Wednesday, January 20, 2021, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 5083638. The conference call also will be webcast and available for replay for 30 days by selecting “Events & Presentations” within the Investor Relations section of United’s website at www.ucbi.com.

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information
		2020																				2019					Fourth Quarter				For the Twelve Months Ended December 31,										YTD 2020-
(in thousands, except per share data)		Fourth Quarter					Third Quarter					Second Quarter					First Quarter					Fourth Quarter					2020- 2019 Change				2020					2019					2019 Change
INCOME SUMMARY
Interest revenue		$	156,071				$	141,773				$	123,605				$	136,547				$	136,419								$	557,996				$	552,706
Interest expense		10,676					13,319					14,301					17,941					19,781									56,237					83,312
Net interest revenue		145,395					128,454					109,304					118,606					116,638					25		%		501,759					469,394					7		%
Provision for credit losses		2,907					21,793					33,543					22,191					3,500									80,434					13,150
Noninterest income		41,375					48,682					40,238					25,814					30,183					37				156,109					104,713					49
Total revenue		183,863					155,343					115,999					122,229					143,321					28				577,434					560,957					3
Expenses		106,490					95,981					83,980					81,538					81,424					31				367,989					322,245					14
Income before income tax expense		77,373					59,362					32,019					40,691					61,897									209,445					238,712
Income tax expense		17,871					11,755					6,923					8,807					12,885									45,356					52,991
Net income		59,502					47,607					25,096					31,884					49,012									164,089					185,721
Merger-related and other charges		2,452					3,361					397					808					(74		)							7,018					7,357
Income tax benefit of merger-related and other charges		(552		)			(519		)			(87		)			(182		)			17									(1,340		)			(1,695		)
Net income - operating (1)		$	61,402				$	50,449				$	25,406				$	32,510				$	48,955				25				$	169,767				$	191,383				(11	)
Pre-tax pre-provision income (5)		$	80,280				$	81,155				$	65,562				$	62,882				$	65,397				23				$	289,879				$	251,862				15
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP		$	0.66				$	0.52				$	0.32				$	0.40				$	0.61				8				$	1.91				$	2.31				(17	)
Diluted net income - operating (1)		0.68					0.55					0.32					0.41					0.61					11				1.98					2.38					(17	)
Common stock cash dividends declared		0.18					0.18					0.18					0.18					0.18					—				0.72					0.68					6
Book value		21.90					21.45					21.22					20.80					20.53					7				21.90					20.53					7
Tangible book value (3)		17.56					17.09					16.95					16.52					16.28					8				17.56					16.28					8
Key performance ratios:
Return on common equity - GAAP (2)(4)		12.36			%		10.06			%		6.17			%		7.85			%		12.07			%						9.25			%		11.89			%
Return on common equity - operating (1)(2)(4)		12.77					10.69					6.25					8.01					12.06									9.58					12.25
Return on tangible common equity - operating (1)(2)(3)(4)		16.23					13.52					8.09					10.57					15.49									12.24					15.81
Return on assets - GAAP (4)		1.30					1.07					0.71					0.99					1.50									1.04					1.46
Return on assets - operating (1)(4)		1.34					1.14					0.72					1.01					1.50									1.07					1.51
Return on assets -pre-tax pre-provision (4)(5)		1.77					1.86					1.86					1.95					2.00									1.85					1.99
Return on assets -pre-tax pre-provision, excluding merger related and other charges (1)(4)(5)		1.82					1.93					1.87					1.98					2.00									1.90					2.04
Net interest margin (fully taxable equivalent) (4)		3.55					3.27					3.42					4.07					3.93									3.55					4.07
Efficiency ratio - GAAP		56.73					54.14					55.86					56.15					54.87									55.71					55.77
Efficiency ratio - operating (1)		55.42					52.24					55.59					55.59					54.92									54.64					54.50
Equity to total assets		11.29					11.47					11.81					12.54					12.66									11.29					12.66
Tangible common equity to tangible assets (3)		8.81					8.89					9.12					10.22					10.32									8.81					10.32
ASSET QUALITY
Nonperforming loans		$	61,599				$	49,084				$	48,021				$	36,208				$	35,341				74				$	61,599				$	35,341				74
Foreclosed properties		647					953					477					475					476					36				647					476					36
Total nonperforming assets (“NPAs”)		62,246					50,037					48,498					36,683					35,817					74				62,246					35,817					74
Allowance for credit losses – loans and leases		137,010					134,256					103,669					81,905					62,089					121				137,010					62,089					121
Net charge-offs		1,515					2,538					6,149					8,114					3,925					(61	)			18,316					12,216					50
Allowance for credit losses – loans and leases to loans		1.20			%		1.14			%		1.02			%		0.92			%		0.70			%						1.20			%		0.70			%
Net charge-offs to average loans (4)		0.05					0.09					0.25					0.37					0.18									0.17					0.14
NPAs to loans and foreclosed properties		0.55					0.42					0.48					0.41					0.41									0.55					0.41
NPAs to total assets		0.35					0.29					0.32					0.28					0.28									0.35					0.28
AVERAGE BALANCES ($ in millions)
Loans		$	11,595				$	11,644				$	9,773				$	8,829				$	8,890				30				$	10,467				$	8,708				20
Investment securities		3,326					2,750					2,408					2,520					2,486					34				2,752					2,647					4
Earning assets		16,394					15,715					12,958					11,798					11,832					39				14,226					11,609					23
Total assets		17,698					17,013					14,173					12,944					12,946					37				15,467					12,687					22
Deposits		15,057					14,460					12,071					10,915					10,924					38				13,135					10,579					24
Shareholders’ equity		1,994					1,948					1,686					1,653					1,623					23				1,821					1,556					17
Common shares - basic (thousands)		87,258					87,129					78,920					79,340					79,659					10				83,184					79,700					4
Common shares - diluted (thousands)		87,333					87,205					78,924					79,446					79,669					10				83,248					79,708					4
AT PERIOD END ($ in millions)
Loans		$	11,371				$	11,799				$	10,133				$	8,935				$	8,813				29				$	11,371				$	8,813				29
Investment securities		3,645					3,089					2,432					2,540					2,559					42				3,645					2,559					42
Total assets		17,794					17,153					15,005					13,086					12,916					38				17,794					12,916					38
Deposits		15,232					14,603					12,702					11,035					10,897					40				15,232					10,897					40
Shareholders’ equity		2,008					1,967					1,772					1,641					1,636					23				2,008					1,636					23
Common shares outstanding (thousands)		86,675					86,611					78,335					78,284					79,014					10				86,675					79,014					10

⁽¹⁾ Excludes merger-related and other charges. ⁽²⁾ Net income 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.
Selected Financial Information
For the Years Ended December 31,
(in thousands, except per share data)		2020					2019					2018					2017					2016
INCOME SUMMARY
Interest revenue		$	557,996				$	552,706				$	500,080				$	389,720				$	335,020
Interest expense		56,237					83,312					61,330					33,735					25,236
Net interest revenue		501,759					469,394					438,750					355,985					309,784
Provision for credit losses		80,434					13,150					9,500					3,800					(800		)
Noninterest income		156,109					104,713					92,961					88,260					93,697
Total revenue		577,434					560,957					522,211					440,445					404,281
Expenses		367,989					322,245					306,285					267,611					241,289
Income before income tax expense		209,445					238,712					215,926					172,834					162,992
Income tax expense		45,356					52,991					49,815					105,013					62,336
Net income		164,089					185,721					166,111					67,821					100,656
Merger-related and other charges		7,018					7,357				7,345					14,662					8,122
Income tax benefit of merger-related and other charges		(1,340		)			(1,695		)			(1,494		)			(3,745		)			(3,074		)
Impact of remeasurement of deferred tax asset resulting from 2017 Tax Cuts and Jobs Act		—					—					—					38,199					—
Impairment of deferred tax asset on cancelled non-qualified stock options		—					—					—					—					976
Release of disproportionate tax effects lodged in OCI		—					—					—					3,400					—
Net income - operating (1)		$	169,767				$	191,383				$	171,962				$	120,337				$	106,680
Pre-tax pre-provision income (4)		$	289,879				$	251,862				$	225,426				$	176,634				$	162,192
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP		$	1.91				$	2.31				$	2.07				$	0.92				$	1.40
Diluted net income - operating (1)		1.98					2.38					2.14					1.63					1.48
Common stock cash dividends declared		0.72					0.68					0.58					0.38					0.30
Book value		21.90					20.53					18.24					16.67					15.06
Tangible book value (3)		17.56					16.28					14.24					13.65					12.95
Key performance ratios:
Return on common equity - GAAP (2)		9.25			%		11.89			%		11.60			%		5.67			%		9.41			%
Return on common equity - operating (1)(2)		9.58					12.25					12.01					10.07					9.98
Return on tangible common equity - operating (1)(2)(3)		12.24					15.81					15.69					12.02					11.86
Return on assets - GAAP		1.04					1.46					1.35					0.62					1.00
Return on assets - operating (1)		1.07					1.51					1.40					1.09					1.06
Return on assets -pre-tax pre-provision (4)		1.85					1.99					1.84					1.60					1.61
Return on assets -pre-tax pre-provision, excluding merger related and other charges (1)(5)		1.90					2.04					1.89					1.74					1.69
Net interest margin (fully taxable equivalent)		3.55					4.07					3.91					3.52					3.36
Efficiency ratio - GAAP		55.71					55.77					57.31					59.95					59.80
Efficiency ratio - operating (1)		54.64					54.50					55.94					56.67					57.78
Equity to total assets		11.29					12.66					11.59					10.94					10.05
Tangible common equity to tangible assets (3)		8.81					10.32					9.29					9.14					8.77
ASSET QUALITY
Nonperforming loans		$	61,599				$	35,341				$	23,778				$	23,658				$	21,539
Foreclosed properties		647					476					1,305					3,234					7,949
Total nonperforming assets (NPAs)		62,246					35,817					25,083					26,892					29,488
Allowance for credit losses – loans and leases		137,010					62,089					61,203					58,914					61,422
Net charge-offs		18,316					12,216					6,113					5,998					6,766
Allowance for credit losses – loans and leases to loans		1.20			%		0.70			%		0.73			%		0.76			%		0.89			%
Net charge-offs to average loans		0.17					0.14					0.07					0.08					0.11
NPAs to loans and foreclosed properties		0.55					0.41					0.30					0.35					0.43
NPAs to total assets		0.35					0.28					0.20					0.23					0.28
AVERAGE BALANCES ($ in millions)
Loans		$	10,467				$	8,708				$	8,170				$	7,150				$	6,413
Investment securities		2,752					2,647					2,899					2,847					2,691
Earning assets		14,226					11,609					11,282					10,162					9,257
Total assets		15,467					12,687					12,284					11,015					10,054
Deposits		13,135					10,579					10,000					8,950					8,177
Shareholders’ equity		1,821					1,556					1,380					1,180					1,059
Common shares - basic (thousands)		83,184					79,700					79,662					73,247					71,910
Common shares - diluted (thousands)		83,248					79,708					79,671					73,259					71,915
AT PERIOD END ($ in millions)
Loans		$	11,371				$	8,813				$	8,383				$	7,736				$	6,921
Investment securities		3,645					2,559					2,903					2,937					2,762
Total assets		17,794					12,916					12,573					11,915					10,709
Deposits		15,232					10,897					10,535					9,808					8,638
Shareholders’ equity		2,008					1,636					1,458					1,303					1,076
Common shares outstanding (thousands)		86,675					79,014					79,234					77,580					70,899

⁽¹⁾ Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, 2019 executive retirement charges and termination of pension plan, the 2017 impact of remeasurement of United’s deferred tax assets following the passage of tax reform legislation, a 2017 release of disproportionate tax effects lodged in OCI, and a 2016 deferred tax asset impairment charge related to cancelled non-qualified stock options. ⁽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⁾ Excludes income tax expense and provision for credit losses.

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information- Quarterly		2020																				2019
(in thousands, except per share data)		Fourth Quarter					Third Quarter					Second Quarter					First Quarter					Fourth Quarter
Expense reconciliation
Expenses (GAAP)		$	106,490				$	95,981				$	83,980				$	81,538				$	81,424
Merger-related and other charges		(2,452		)			(3,361		)			(397		)			(808		)			74
Expenses - operating		$	104,038				$	92,620				$	83,583				$	80,730				$	81,498
Net income to operating income reconciliation
Net income (GAAP)		$	59,502				$	47,607				$	25,096				$	31,884				$	49,012
Merger-related and other charges		2,452					3,361					397					808					(74		)
Income tax benefit of merger-related and other charges		(552		)			(519		)			(87		)			(182		)			17
Net income - operating		$	61,402				$	50,449				$	25,406				$	32,510				$	48,955
Net income to pre-tax pre-provision income reconciliation
Net income (GAAP)		59,502					47,607					25,096					31,884					49,012
Income tax expense		17,871					11,755					6,923					8,807					12,885
Provision for credit losses		2,907					21,793					33,543					22,191					3,500
Pre-tax pre-provision income		$	80,280				$	81,155				$	65,562				$	62,882				$	65,397
Diluted income per common share reconciliation
Diluted income per common share (GAAP)		$	0.66				$	0.52				$	0.32				$	0.40				$	0.61
Merger-related and other charges		0.02					0.03					—					0.01					—
Diluted income per common share - operating		$	0.68				$	0.55				$	0.32				$	0.41				$	0.61
Book value per common share reconciliation
Book value per common share (GAAP)		$	21.90				$	21.45				$	21.22				$	20.80				$	20.53
Effect of goodwill and other intangibles		(4.34		)			(4.36		)			(4.27		)			(4.28		)			(4.25		)
Tangible book value per common share		$	17.56				$	17.09				$	16.95				$	16.52				$	16.28
Return on tangible common equity reconciliation
Return on common equity (GAAP)		12.36			%		10.06			%		6.17			%		7.85			%		12.07			%
Merger-related and other charges		0.41					0.63					0.08					0.16					(0.01		)
Return on common equity - operating		12.77					10.69					6.25					8.01					12.06
Effect of goodwill and other intangibles		3.46					2.83					1.84					2.56					3.43
Return on tangible common equity - operating		16.23			%		13.52			%		8.09			%		10.57			%		15.49			%
Return on assets reconciliation
Return on assets (GAAP)		1.30			%		1.07			%		0.71			%		0.99			%		1.50			%
Merger-related and other charges		0.04					0.07					0.01					0.02					—
Return on assets - operating		1.34			%		1.14			%		0.72			%		1.01			%		1.50			%
Return on assets to return on assets- pre-tax pre-provision reconciliation
Return on assets (GAAP)		1.30			%		1.07			%		0.71			%		0.99			%		1.50			%
Income tax expense		0.40					0.28					0.20					0.27					0.39
Provision for credit losses		0.07					0.51					0.95					0.69					0.11
Return on assets - pre-tax pre-provision		1.77					1.86					1.86					1.95					2.00
Merger-related and other charges		0.05					0.07					0.01					0.03					—
Return on assets - pre-tax pre-provision, excluding merger-related and other charges		1.82			%		1.93			%		1.87			%		1.98			%		2.00			%
Efficiency ratio reconciliation
Efficiency ratio (GAAP)		56.73			%		54.14			%		55.86			%		56.15			%		54.87			%
Merger-related and other charges		(1.31		)			(1.90		)			(0.27		)			(0.56		)			0.05
Efficiency ratio - operating		55.42			%		52.24			%		55.59			%		55.59			%		54.92			%
Tangible common equity to tangible assets reconciliation
Equity to total assets (GAAP)		11.29			%		11.47			%		11.81			%		12.54			%		12.66			%
Effect of goodwill and other intangibles		(1.94		)			(2.02		)			(2.05		)			(2.32		)			(2.34		)
Effect of preferred equity		(0.54		)			(0.56		)			(0.64		)			—					—
Tangible common equity to tangible assets		8.81			%		8.89			%		9.12			%		10.22			%		10.32			%

UNITED COMMUNITY BANKS, INC.
Non-GAAP Performance Measures Reconciliation
Selected Financial Information- Annual		For the Twelve Months Ended December 31,
(in thousands, except per share data)		2020					2019					2018					2017					2016
Expense reconciliation
Expenses (GAAP)		$	367,989				$	322,245				$	306,285				$	267,611				$	241,289
Merger-related and other charges		(7,018		)			(7,357		)			(7,345		)			(14,662		)			(8,122		)
Expenses - operating		$	360,971				$	314,888				$	298,940				$	252,949				$	233,167
Net income reconciliation
Net income (GAAP)		$	164,089				$	185,721				$	166,111				$	67,821				$	100,656
Merger-related and other charges		7,018					7,357					7,345					14,662					8,122
Income tax benefit of merger-related and other charges		(1,340		)			(1,695		)			(1,494		)			(3,745		)			(3,074		)
Impact of tax reform on remeasurement of deferred tax asset		—					—					—					38,199					—
Impairment of deferred tax asset on canceled non-qualified stock options		—					—					—					—					976
Release of disproportionate tax effects lodged in OCI		—					—					—					3,400					—
Net income - operating		$	169,767				$	191,383				$	171,962				$	120,337				$	106,680
Net income to pre-tax pre-provision income reconciliation
Net income (GAAP)		$	164,089				$	185,721				$	166,111				$	67,821				$	100,656
Income tax expense		45,356					52,991					49,815					105,013					62,336
Provision for credit losses		80,434					13,150					9,500					3,800					(800		)
Pre-tax pre-provision income		$	289,879				$	251,862				$	225,426				$	176,634				$	162,192
Diluted income per common share reconciliation
Diluted income per common share (GAAP)		$	1.91				$	2.31				$	2.07				$	0.92				$	1.40
Merger-related and other charges		0.07					0.07					0.07					0.14					0.07
Impact of tax reform on remeasurement of deferred tax asset		—					—					—					0.52					—
Impairment of deferred tax asset on canceled non-qualified stock options		—					—					—					—					0.01
Release of disproportionate tax effects lodged in OCI		—					—					—					0.05					—
Diluted income per common share - operating		$	1.98				$	2.38				$	2.14				$	1.63				$	1.48
Book value per common share reconciliation
Book value per common share (GAAP)		$	21.90				$	20.53				$	18.24				$	16.67				$	15.06
Effect of goodwill and other intangibles		(4.34		)			(4.25		)			(4.00		)			(3.02		)			(2.11		)
Tangible book value per common share		$	17.56				$	16.28				$	14.24				$	13.65				$	12.95
Return on tangible common equity reconciliation
Return on common equity (GAAP)		9.25			%		11.89			%		11.60			%		5.67			%		9.41			%
Merger-related and other charges		0.33					0.36					0.41					0.92					0.48
Impact of tax reform on remeasurement of deferred tax asset		—					—					—					3.20					—
Impairment of deferred tax asset on canceled non-qualified stock options		—					—					—					—					0.09
Release of disproportionate tax effects lodged in OCI		—					—					—					0.28					—
Return on common equity - operating		9.58					12.25					12.01					10.07					9.98
Effect of goodwill and other intangibles		2.66					3.56					3.68					1.95					1.88
Return on tangible common equity - operating		12.24			%		15.81			%		15.69			%		12.02			%		11.86			%
Return on assets reconciliation
Return on assets (GAAP)		1.04			%		1.46			%		1.35			%		0.62			%		1.00			%
Merger-related and other charges		0.03					0.05					0.05					0.09					0.05
Impact of tax reform on remeasurement of deferred tax asset		—					—					—					0.35					—
Impairment of deferred tax asset on canceled non-qualified stock options		—					—					—					—					0.01
Release of disproportionate tax effects lodged in OCI		—					—					—					0.03					—
Return on assets - operating		1.07			%		1.51			%		1.40			%		1.09			%		1.06			%
Return on assets to return on assets - pre-tax pre-provision reconciliation
Return on assets (GAAP)		1.04			%		1.46			%		1.35			%		0.62			%		1.00			%
Income tax expense		0.29					0.43					0.41					0.95					0.62
Provision for credit losses		0.52					0.10					0.08					0.03					(0.01		)
Return on assets - pre-tax pre-provision		1.85					1.99					1.84					1.60					1.61
Merger-related and other charges		0.05					0.05					0.05					0.14					0.08
Return on assets - pre-tax pre-provision		1.90			%		2.04			%		1.89			%		1.74			%		1.69			%
Efficiency ratio reconciliation
Efficiency ratio (GAAP)		55.71			%		55.77			%		57.31			%		59.95			%		59.80			%
Merger-related and other charges		(1.07		)			(1.27		)			(1.37		)			(3.28		)			(2.02		)
Efficiency ratio - operating		54.64			%		54.50			%		55.94			%		56.67			%		57.78			%
Tangible common equity to tangible assets reconciliation
Equity to assets (GAAP)		11.29			%		12.66			%		11.59			%		10.94			%		10.05			%
Effect of goodwill and other intangibles		(1.94		)			(2.34		)			(2.30		)			(1.80		)			(1.28		)
Effect of preferred equity		(0.54		)			—					—					—					—
Tangible common equity to assets		8.81			%		10.32			%		9.29			%		9.14			%		8.77			%

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End
	2020																2019				Linked					Year over
(in millions)	Fourth Quarter				Third Quarter				Second Quarter				First Quarter				Fourth Quarter				Quarter Change					Year Change
LOANS BY CATEGORY
Owner occupied commercial RE	$	2,090			$	2,009			$	1,759			$	1,703			$	1,720			$	81				$	370
Income producing commercial RE	2,541				2,493				2,178				2,065				2,008				48					533
Commercial & industrial	1,853				1,788				1,219				1,310				1,221				65					632
Paycheck protection program	646				1,317				1,095				—				—				(671		)			646
Commercial construction	967				987				946				959				976				(20		)			(9		)
Equipment financing	864				823				779				761				745				41					119
Total commercial	8,961				9,417				7,976				6,798				6,670				(456		)			2,291
Residential mortgage	1,285				1,270				1,152				1,128				1,118				15					167
Home equity lines of credit	697				707				654				668				661				(10		)			36
Residential construction	281				257				230				216				236				24					45
Consumer	147				148				121				125				128				(1		)			19
Total loans	$	11,371			$	11,799			$	10,133			$	8,935			$	8,813			$	(428	)			$	2,558
LOANS BY MARKET
North Georgia	$	955			$	945			$	951			$	958			$	967			$	10				$	(12	)
Atlanta	1,889				1,853				1,852				1,820				1,762				36					127
North Carolina	1,281				1,246				1,171				1,124				1,156				35					125
Coastal Georgia	617				614				618				604				631				3					(14		)
Gainesville	224				229				233				235				246				(5		)			(22		)
East Tennessee	415				420				433				425				421				(5		)			(6		)
South Carolina	1,947				1,870				1,778				1,774				1,708				77					239
Florida	1,435				1,453				—				—				—				(18		)			1,435
Commercial Banking Solutions	2,608				3,169				3,097				1,995				1,922				(561		)			686
Total loans	$	11,371			$	11,799			$	10,133			$	8,935			$	8,813			$	(428	)			$	2,558

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Year-End
(in millions)	2020				2019				2018				2017				2016
LOANS BY CATEGORY
Owner occupied commercial RE	$	2,090			$	1,720			$	1,648			$	1,924			$	1,650
Income producing commercial RE	2,541				2,008				1,812				1,595				1,282
Commercial & industrial	1,853				1,221				1,278				1,131				1,070
Paycheck protection program	646				—				—				—				—
Commercial construction	967				976				796				712				634
Equipment financing	864				745				565				—				—
Total commercial	8,961				6,670				6,099				5,362				4,636
Residential mortgage	1,285				1,118				1,049				974				857
Home equity lines of credit	697				661				694				731				655
Residential construction	281				236				211				183				190
Consumer	146				128				330				486				583
Total loans	$	11,371			$	8,813			$	8,383			$	7,736			$	6,921
LOANS BY MARKET
North Georgia	$	955			$	967			$	981			$	1,019			$	1,097
Atlanta	1,889				1,762				1,507				1,510				1,399
North Carolina	1,281				1,156				1,072				1,049				545
Coastal Georgia	617				631				588				630				581
Gainesville	224				246				247				248				248
East Tennessee	415				421				477				475				504
South Carolina	1,947				1,708				1,645				1,486				1,233
Florida	1,435				—				—				—				—
Commercial Banking Solutions	2,608				1,922				1,658				961				855
Indirect auto	—				—				208				358				459
Total loans	$	11,371			$	8,813			$	8,383			$	7,736			$	6,921

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality
		2020
(in thousands)		Fourth Quarter				Third Quarter				Second Quarter
NONACCRUAL LOANS
Owner occupied RE		$	8,582			$	11,075			$	10,710
Income producing RE		15,149				12,230				11,274
Commercial & industrial		16,634				3,534				3,432
Commercial construction		1,745				1,863				2,290
Equipment financing		3,405				3,137				3,119
Total commercial		45,515				31,839				30,825
Residential mortgage		12,858				13,864				13,185
Home equity lines of credit		2,487				2,642				3,138
Residential construction		514				479				500
Consumer		225				260				373
Total		$	61,599			$	49,084			$	48,021

		2020
		Fourth Quarter									Third Quarter									Second Quarter
(in thousands)		Net Charge- Offs					Net Charge- Offs to Average Loans (1)				Net Charge- Offs					Net Charge- Offs to Average Loans (1)				Net Charge- Offs					Net Charge- Offs to Average Loans (1)
NET CHARGE-OFFS BY CATEGORY
Owner occupied RE		$	(277	)			(0.05	)	%		$	(725	)			(0.14	)	%		$	(466	)			(0.11	)	%
Income producing RE		(1,718		)			(0.27	)			1,785					0.29				4,548					0.86
Commercial & industrial		2,294					0.33				(105		)			(0.01	)			(37		)			(0.01	)
Commercial construction		(129		)			(0.05	)			(171		)			(0.07	)			122					0.05
Equipment financing		1,595					0.75				1,993					0.93				1,665					0.87
Total commercial		1,765					0.08				2,777					0.12				5,832					0.31
Residential mortgage		(25		)			(0.01	)			(35		)			(0.01	)			(6		)			—
Home equity lines of credit		(151		)			(0.09	)			(125		)			(0.07	)			(98		)			(0.06	)
Residential construction		(47		)			(0.07	)			—					—				(5		)			(0.01	)
Consumer		(27		)			(0.07	)			(79		)			(0.22	)			426					1.39
Total		$	1,515				0.05				$	2,538				0.09				$	6,149				0.25
(1) Annualized.

UNITED COMMUNITY BANKS, INC.

Consolidated Balance Sheets (Unaudited)

(in thousands, except share and per share data)		December 31, 2020				December 31, 2019
ASSETS
Cash and due from banks		$	148,896			$	125,844
Interest-bearing deposits in banks		1,459,723				389,362
Cash and cash equivalents		1,608,619				515,206
Debt securities available-for-sale		3,224,721				2,274,581
Debt securities held-to-maturity (fair value $437,193 and $287,904, respectively)		420,361				283,533
Loans held for sale at fair value		105,433				58,484
Loans and leases held for investment		11,370,815				8,812,553
Less allowance for credit losses - loans and leases		(137,010		)		(62,089		)
Loans and leases, net		11,233,805				8,750,464
Premises and equipment, net		218,489				215,976
Bank owned life insurance		201,969				202,664
Accrued interest receivable		47,672				32,660
Net deferred tax asset		38,411				34,059
Derivative financial instruments		86,666				35,007
Goodwill and other intangible assets, net		381,823				342,247
Other assets		226,405				171,135
Total assets		$	17,794,374			$	12,916,016
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand		$	5,390,291			$	3,477,979
NOW and interest-bearing demand		3,346,490				2,461,895
Money market		3,550,335				2,230,628
Savings		950,854				706,467
Time		1,704,290				1,859,574
Brokered		290,098				160,701
Total deposits		15,232,358				10,897,244
Long-term debt		326,956				212,664
Derivative financial instruments		29,003				15,516
Accrued expenses and other liabilities		198,527				154,900
Total liabilities		15,786,844				11,280,324
Shareholders' equity:
Preferred stock, $1 par value: 10,000,000 shares authorized; Series I, $25,000 per share liquidation preference; 4,000 and no shares issued and outstanding, respectively		96,422				—
Common stock, $1 par value; 150,000,000 shares authorized; 86,675,279 and 79,013,729 shares issued and outstanding, respectively		86,675				79,014
Common stock issuable; 600,834 and 664,640 shares, respectively		10,855				11,491
Capital surplus		1,638,999				1,496,641
Retained earnings		136,869				40,152
Accumulated other comprehensive income		37,710				8,394
Total shareholders’ equity		2,007,530				1,635,692
Total liabilities and shareholders’ equity		$	17,794,374			$	12,916,016

UNITED COMMUNITY BANKS, INC.

Consolidated Statements of Income (Unaudited)

		Three Months Ended December 31,								Twelve Months Ended December 31,
(in thousands, except per share data)		2020				2019				2020				2019
Interest revenue:
Loans, including fees		$	141,351			$	118,464			$	494,212			$	476,039
Investment securities, including tax exempt of $2,055 and $1,155, and $7,043 and $4,564		14,507				16,846				62,074				74,484
Deposits in banks and short-term investments		213				1,109				1,710				2,183
Total interest revenue		156,071				136,419				557,996				552,706
Interest expense:
Deposits:
NOW and interest-bearing demand		1,495				3,382				7,735				13,665
Money market		2,196				4,883				13,165				18,983
Savings		48				34				169				149
Time		2,689				8,372				20,703				34,059
Deposits		6,428				16,671				41,772				66,856
Short-term borrowings		—				—				3				838
Federal Home Loan Bank advances		—				2				28				2,697
Long-term debt		4,248				3,108				14,434				12,921
Total interest expense		10,676				19,781				56,237				83,312
Net interest revenue		145,395				116,638				501,759				469,394
Provision for credit losses		2,907				3,500				80,434				13,150
Net interest revenue after provision for credit losses		142,488				113,138				421,325				456,244
Noninterest income:
Service charges and fees		8,508				9,368				32,401				36,797
Mortgage loan gains and related fees		18,974				9,395				76,087				27,145
Brokerage fees and wealth management fees		3,221				1,526				9,240				6,150
Gains from other loan sales, net		1,531				2,455				5,420				6,867
Securities gains (losses), net		2				(903		)		748				(1,021		)
Other		9,139				8,342				32,213				28,775
Total noninterest income		41,375				30,183				156,109				104,713
Total revenue		183,863				143,321				577,434				560,957
Noninterest expenses:
Salaries and employee benefits		61,824				50,279				224,060				196,440
Occupancy		7,082				5,926				25,791				23,350
Communications and equipment		7,687				6,380				27,149				24,613
FDIC assessments and other regulatory charges		1,594				1,330				5,982				4,901
Professional fees		4,029				5,098				18,032				17,028
Lending and loan servicing expense		2,468				1,907				10,993				9,416
Outside services - electronic banking		1,997				1,919				7,513				7,020
Postage, printing and supplies		1,793				1,637				6,779				6,370
Advertising and public relations		9,891				1,914				15,203				6,170
Amortization of intangibles		1,042				1,093				4,168				4,938
Merger-related and other charges		2,452				(74		)		7,018				6,907
Other		4,631				4,015				15,301				15,092
Total noninterest expenses		106,490				81,424				367,989				322,245
Net income before income taxes		77,373				61,897				209,445				238,712
Income tax expense		17,871				12,885				45,356				52,991
Net income		$	59,502			$	49,012			$	164,089			$	185,721
Preferred stock dividends		1,719				—				3,533				—
Undistributed earnings allocated to unvested shares		532				395				1,287				1,375
Net income available to common shareholders		$	57,251			$	48,617			$	159,269			$	184,346
Net income per common share:
Basic		$	0.66			$	0.61			$	1.91			$	2.31
Diluted		0.66				0.61				1.91				2.31
Weighted average common shares outstanding:
Basic		87,258				79,659				83,184				79,700
Diluted		87,333				79,669				83,248				79,708

Average Consolidated Balance Sheets and Net Interest Analysis

For the Three Months Ended December 31,

		2020												2019
(dollars in thousands, fully taxable equivalent (FTE))		Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) (1)(2)		$	11,595,484			$	140,687			4.83		%		$	8,890,272			$	118,262			5.28	%
Taxable securities (3)		3,039,275				12,452				1.64				2,306,065				15,691				2.72
Tax-exempt securities (FTE) (1)(3)		286,490				2,759				3.85				179,744				1,551				3.45
Federal funds sold and other interest-earning assets		1,472,668				1,132				0.31				456,055				1,586				1.39
Total interest-earning assets (FTE)		16,393,917				157,030				3.81				11,832,136				137,090				4.60
Noninterest-earning assets:
Allowance for loan losses		(138,313		)										(63,601		)
Cash and due from banks		143,694												120,936
Premises and equipment		218,349												219,487
Other assets (3)		1,080,180												836,586
Total assets		$	17,697,827											$	12,945,544
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand		$	3,281,984			1,495				0.18				$	2,398,396			3,382				0.56
Money market		3,698,734				2,196				0.24				2,321,352				4,883				0.83
Savings		918,623				48				0.02				704,454				34				0.02
Time		1,748,099				2,711				0.62				1,880,174				7,975				1.68
Brokered time deposits		83,750				(22		)		(0.10	)			85,781				397				1.84
Total interest-bearing deposits		9,731,190				6,428				0.26				7,390,157				16,671				0.89
Federal funds purchased and other borrowings		54				—				—				—				—				—
Federal Home Loan Bank advances		—				—				—				435				2				1.82
Long-term debt		327,236				4,248				5.16				232,726				3,108				5.30
Total borrowed funds		327,290				4,248				5.16				233,161				3,110				5.29
Total interest-bearing liabilities		10,058,480				10,676				0.42				7,623,318				19,781				1.03
Noninterest-bearing liabilities:
Noninterest-bearing deposits		5,325,858												3,533,746
Other liabilities		319,158												165,148
Total liabilities		15,703,496												11,322,212
Shareholders’ equity		1,994,331												1,623,332
Total liabilities and shareholders’ equity		$	17,697,827											$	12,945,544
Net interest revenue (FTE)						$	146,354											$	117,309
Net interest-rate spread (FTE)										3.39		%										3.57	%
Net interest margin (FTE) (4)										3.55		%										3.93	%

(1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.
(3) Securities available for sale are shown at amortized cost. Pretax unrealized gains of $72.6 million in 2020 and $36.0 million in 2019 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 Twelve Months Ended December 31,

		2020											2019
(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)		$	10,466,653			$	492,223			4.70	%		$	8,708,035			$	475,803			5.46	%
Taxable securities (3)		2,532,750				55,031				2.17			2,475,102				69,920				2.82
Tax-exempt securities (FTE) (1)(3)		219,668				9,458				4.31			171,549				6,130				3.57
Federal funds sold and other interest-earning assets		1,007,059				4,753				0.47			254,370				3,499				1.38
Total interest-earning assets (FTE)		14,226,130				561,465				3.95			11,609,056				555,352				4.78
Non-interest-earning assets:
Allowance for loan losses		(106,812		)									(62,900		)
Cash and due from banks		136,702											121,649
Premises and equipment		217,751											220,523
Other assets (3)		993,584											798,649
Total assets		$	15,467,355										$	12,686,977
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand		$	2,759,383			7,735				0.28			$	2,249,713			13,665				0.61
Money market		3,023,928				13,165				0.44			2,221,478				18,983				0.85
Savings		821,344				169				0.02			690,028				149				0.02
Time		1,832,319				20,146				1.10			1,791,319				28,313				1.58
Brokered time deposits		97,788				557				0.57			240,646				5,746				2.39
Total interest-bearing deposits		8,534,762				41,772				0.49			7,193,184				66,856				0.93
Federal funds purchased and other borrowings		1,220				3				0.25			33,504				838				2.50
Federal Home Loan Bank advances		749				28				3.74			106,973				2,697				2.52
Long-term debt		274,069				14,434				5.27			247,732				12,921				5.22
Total borrowed funds		276,038				14,465				5.24			388,209				16,456				4.24
Total interest-bearing liabilities		8,810,800				56,237				0.64			7,581,393				83,312				1.10
Noninterest-bearing liabilities:
Noninterest-bearing deposits		4,600,152											3,385,431
Other liabilities		235,120											164,550
Total liabilities		13,646,072											11,131,374
Shareholders’ equity		1,821,283											1,555,603
Total liabilities and shareholders’ equity		$	15,467,355										$	12,686,977
Net interest revenue (FTE)						$	505,228										$	472,040
Net interest-rate spread (FTE)										3.31	%										3.68	%
Net interest margin (FTE) (4)										3.55	%										4.07	%

(1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2) Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.
(3) Securities available for sale are shown at amortized cost. Pretax unrealized gains of $67.3 million in 2020 and $12.8 million in 2019 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) (United) is a bank holding company headquartered in Blairsville, Georgia, with executive offices in Greenville, South Carolina. United is one of the largest full-service financial institutions in the Southeast, with $17.8 billion in assets, and 160 offices in Florida, Georgia, North Carolina, South Carolina and Tennessee. United Community Bank, United’s wholly-owned bank subsidiary, specializes in personalized community banking services for individuals, small businesses and companies throughout its geographic footprint, including Florida under the brand Seaside Bank and Trust. Services include a full range of consumer and commercial banking products, including mortgage, advisory, treasury management, and wealth management. Respected national research firms consistently recognize United for outstanding customer service. In 2020, J.D. Power ranked United highest in customer satisfaction with retail banking in the Southeast, marking six out of the last seven years United earned the coveted award. United was also named "Best Banks to Work For" by American Banker in 2020 for the fourth year in a row based on employee satisfaction. Forbes included United in its inaugural list of the World’s Best Banks in 2019 and again in 2020. Forbes also recognized United on its 2020 list of the 100 Best Banks in America for the seventh consecutive year. United also received five Greenwich Excellence Awards in 2019 for excellence in Small Business Banking and Middle Market Banking, including a national award for Overall Satisfaction in Small Business Banking. 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.

For more information:

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