United Community Banks, Inc. Reports Fourth Quarter and Full Year Results

GREENVILLE, S.C., Jan. 22, 2025 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NYSE: UCB) (United) today announced net income for the fourth quarter of 2024 of $75.8 million and pre-tax, pre-provision income of $108 million. Diluted earnings per share of $0.61 for the quarter represented an increase of $0.50 from the fourth quarter a year ago and an increase of $0.23 from the third quarter of 2024. As previously reported, the fourth quarter of 2023 included a loss from restructuring our investment securities portfolio and the third quarter of 2024 included the loss from the sale of manufactured housing loans. For the full year of 2024, net income was $252 million and pre-tax, pre-provision income was $374 million, compared with $188 million and $322 million, respectively, for 2023. Diluted earnings per share of $2.04 for 2024 were up $0.50 from $1.54 in 2023.

On an operating basis, United's diluted earnings per share of $0.63 were up 19% from the year-ago quarter and up 11% from the third quarter of 2024. The primary drivers of the increased earnings per share year-over-year and for the third quarter were higher net interest income, higher noninterest income and a lower provision for credit losses, partly offset by a modest year-over-year increase in noninterest expense. For the full year of 2024, diluted operating earnings per share were $2.30, an increase of $0.19, or 9%, from the $2.11 reported in 2023.

United's return on assets was 1.06%, or 1.08% on an operating basis. Return on common equity was 8.4% and return on tangible common equity on an operating basis was 12.1%. On a pre-tax, pre-provision basis, operating return on assets was 1.55% for the quarter. At quarter-end, tangible common equity to tangible assets was 8.97%, up four basis points from the third quarter of 2024.

Chairman and CEO Lynn Harton stated, "We are excited to report strong fourth quarter results. Loan growth returned to historical levels with loans increasing $212 million, or 5% annualized. We funded the new loans with customer deposits, which grew $213 million from third quarter. This growth allowed us to increase net interest income while experiencing some minor expected net interest margin compression. Credit quality remained stable with net charge offs dropping to 0.21% of average loans, the lowest level in two years, resulting in a lower provision for credit losses. Expenses were flat with the third quarter and core noninterest income increased modestly. On the strategic front, in December we announced an agreement to acquire American National Bank headquartered in Oakland Park, Florida, which will expand our presence in this fast-growing part of South Florida. I am excited to welcome Ginger Martin, American National Bank's President and CEO, and her team of accomplished bankers to United.”

Harton continued, "These fourth quarter results reflect the efforts of our exceptional team, which I am very proud to be a part of. We ended 2024 with strong capital, ample liquidity, and momentum as we enter 2025.”

United's net interest margin decreased seven basis points to 3.26% from the third quarter. The average yield on interest-earning assets was down 22 basis points to 5.33%, while the cost of interest-bearing liabilities decreased 23 basis points, leading to a one basis point increase in the net interest spread. The seven-basis point reduction in net interest margin reflects the impact of funding a portion of our balance sheet with noninterest bearing deposits that are not sensitive to changes in interest rates. Also contributing to the reduction in the net interest margin was a seasonal increase in public funds deposits and the sale of our manufactured housing loans in the third quarter.

Net charge-offs were $9.5 million, or 0.21% of average loans, during the quarter, down 31 basis points from the third quarter of 2024 which included transaction-related losses resulting from the sale of our manufactured housing portfolio. Nonperforming assets were 42 basis points relative to total assets, unchanged from the third quarter.

Harton concluded, "In 2025, we celebrate United's seventy-fifth anniversary. We are proud of this milestone, and we are grateful for the trust and confidence our customers have placed in us for so many years. We are entering 2025 in a position of strength as we continue to pursue our goal of being a legendary bank to our customers, employees, and shareholders.”

Fourth Quarter 2024 Financial Highlights:

• Net income of $75.8 million and pre-tax, pre-provision income of $108 million
• EPS up $0.50 compared to fourth quarter 2023 on a GAAP basis and up $0.10, or 19%, on an operating basis; compared to third quarter 2024, EPS up $0.23 on a GAAP basis and up $0.06, or 11%, on an operating basis
• Return on assets of 1.06%, or 1.08% on an operating basis
• Pre-tax, pre-provision return on assets of 1.55% on an operating basis
• Return on common equity of 8.4%
• Return on tangible common equity of 12.1% on an operating basis
• Provision for credit losses was $11.4 million; allowance for credit losses coverage remained stable at 1.20% of total loans
• Net charge-offs of $9.5 million, or 21 basis points as a percent of average loans, benefitting from the absence of the manufactured housing portfolio
• Nonperforming assets of 0.42% of total assets, unchanged from September 30, 2024
• Loan production of $1.4 billion led to loan growth of $212 million, up 5% annualized, from third quarter
• Customer deposits were up $213 million from the third quarter, with most of the growth in NOW and money market deposits
• Net interest margin of 3.26% decreased by seven basis points from the third quarter, partly reflecting the sale of our manufactured housing portfolio in the third quarter and changing composition of our earning assets and interest-bearing liabilities
• Mortgage closings of $246 million compared to $204 million a year ago; mortgage rate locks of $285 million compared to $223 million a year ago
• Noninterest income was up $32.4 million on a linked quarter basis mostly due to the $27.2 million loss from the sale of manufactured housing loans in the third quarter. The remaining increase was primarily driven by the mark on our mortgage servicing rights asset.
• Noninterest expenses remained relatively flat compared to the third quarter on both a GAAP basis and operating basis
• Efficiency ratio of 56.1%, or 55.2% on an operating basis
• Maintained robust capital ratios with preliminary Common Equity Tier 1 increasing to 13.2% and opportunistically redeemed $60 million of subordinated debentures, which lowered total risk-based capital ratio by approximately 30 basis points from the third quarter
• Quarterly common dividend of $0.24 per share declared during the quarter, up 4% year-over-year

2024 Financial Highlights:

• Net income of $252 million and pre-tax, pre-provision income of $374 million
• EPS up $0.50 compared to 2023 on a GAAP basis and up $0.19, or 9%, on an operating basis
• Return on assets of 0.90%, or 1.02% on an operating basis
• Pre-tax, pre-provision return on assets of 1.49% on an operating basis
• Return on common equity of 7.1%
• Return on tangible common equity of 11.4% on an operating basis

United will hold a conference call on Wednesday, January 22 at 9:00 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/10195478/fe2fad701a. Those without internet access or unable to pre-register may dial in by calling 1-844-481-1970. Participants are encouraged to dial in 15 minutes prior to the call start time. The conference call also will be webcast and can be accessed by selecting "Events and Presentations” under "News and Events” within the Investor Relations section of the company's website, ucbi.com.