United Community Banks Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>United Community Banks Inc. filed its Q1 2024 10-Q, detailing financial positions and activities including acquisitions.</b>

AI Summary

UNITED COMMUNITY BANKS INC (UCB) filed a Quarterly Report (10-Q) with the SEC on May 9, 2024. Filing is a 10-Q for United Community Banks Inc. for the period ending March 31, 2024. The filing includes data for the periods January 1, 2024 to March 31, 2024, and January 1, 2023 to March 31, 2023. Key financial statement components such as common stock, preferred stock, retained earnings, and accumulated other comprehensive income are detailed for various dates including March 31, 2024, December 31, 2023, and March 31, 2023. The filing references specific entities such as First Miami Bancorp Inc. and Progress Bank Trust. It also mentions acquisition-related costs and mortgage banking activities.

Why It Matters

For investors and stakeholders tracking UNITED COMMUNITY BANKS INC, this filing contains several important signals. This 10-Q provides a quarterly update on United Community Banks' financial health and operational activities, crucial for investors to assess performance and strategic direction. The inclusion of specific entities and acquisition-related costs suggests ongoing M&A activity, which can significantly impact future growth and profitability.

Risk Assessment

Risk Level: medium — UNITED COMMUNITY BANKS INC shows moderate risk based on this filing. The filing is a standard quarterly report (10-Q) which provides a snapshot of financial health but lacks forward-looking guidance or significant event disclosures that would indicate immediate high risk or opportunity.

Analyst Insight

Monitor future filings for details on the impact of acquisitions and changes in key financial metrics like deposits and mortgage banking revenue.

Key Numbers

• 2024-03-31 — Report Period End Date (Conformed Period of Report)
• 2024-05-09 — Filing Date (Filed as of Date)
• 2024-01-01 — Quarter Start Date (Reporting period)
• 2023-03-31 — Prior Year Quarter End Date (Comparative period)

Key Players & Entities

• UNITED COMMUNITY BANKS INC (company) — Filer name
• UNION BANCSHARES INC /GA/ (company) — Former company name
• First Miami Bancorp Inc. (company) — Mentioned entity
• Progress Bank Trust (company) — Mentioned entity

FAQ

Risk Factors

• Acquisition Related Costs [medium — financial]: The filing mentions acquisition-related costs, indicating potential expenses associated with mergers and acquisitions.

Industry Context

United Community Banks Inc. operates within the commercial banking sector, a highly regulated industry sensitive to interest rate changes and economic conditions.

Regulatory Implications

As a commercial bank, the company is subject to regulations from various bodies including the Federal Reserve, FDIC, and state banking authorities, impacting its operations and capital requirements.

What Investors Should Do

1. Review the full 10-Q for detailed financial statements and management's discussion and analysis.
2. Analyze the impact of mentioned acquisitions on the company's balance sheet and income statement in subsequent filings.
3. Compare key metrics like deposit growth and net interest margin against industry peers.

Key Dates

• 2024-03-31: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-05-09: Filing Date — Date the 10-Q was officially filed with the SEC.

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC). (Provides a snapshot of the company's financial condition between annual reports.)

Year-Over-Year Comparison

This is the initial 10-Q filing for the period ending March 31, 2024, providing a comparison to the prior year's quarter.

Key Financial Figures

• $1 — ich Registered Common stock, par value $1 per share UCBI Nasdaq Global Select Mar

Filing Documents

• ucbi-20240331.htm (10-Q) — 4031KB
• ucbi3312410-qexhibit311.htm (EX-31.1) — 11KB
• ucbi3312410-qexhibit312.htm (EX-31.2) — 11KB
• ucbi3312410-qexhibit32.htm (EX-32) — 10KB
• ucbi-20240331_g1.jpg (GRAPHIC) — 88KB
• ucbi-20240331_g2.jpg (GRAPHIC) — 61KB
• ucbi-20240331_g3.jpg (GRAPHIC) — 79KB
• 0000857855-24-000017.txt (&nbsp;) — 21051KB
• ucbi-20240331.xsd (EX-101.SCH) — 74KB
• ucbi-20240331_cal.xml (EX-101.CAL) — 189KB
• ucbi-20240331_def.xml (EX-101.DEF) — 583KB
• ucbi-20240331_lab.xml (EX-101.LAB) — 1091KB
• ucbi-20240331_pre.xml (EX-101.PRE) — 827KB
• ucbi-20240331_htm.xml (XML) — 5241KB

- Financial Information

PART I - Financial Information

Financial Statements

Item 1. Financial Statements Consolidated Balance Sheets (unaudited) 5 Consolidated Statements of Income (unaudited) 6 Consolidated Statements of Comprehensive Income (unaudited) 7 Consolidated Statements of Changes in Shareholders' Equity (unaudited) 8 Consolidated Statements of Cash Flows (unaudited) 9

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 10 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 36 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 56 Item 4.

Controls and Procedures

Controls and Procedures 56

- Other Information

PART II - Other Information Item 1.

Legal Proceedings

Legal Proceedings 57 Item 1A.

Risk Factors

Risk Factors 57 Item 5. Other Information. 57 Item 6. Exhibits 57 2 Glossary of Defined Terms The following terms may be used throughout this report, including the consolidated financial statements and related notes. Term Definition 2023 10-K United's Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 23, 2024 ACL Allowance for credit losses AFS Available-for-sale ALCO Asset/Liability Management Committee AOCI Accumulated other comprehensive income (loss) ASU Accounting standards update Bank United Community Bank Board United Community Banks Inc., Board of Directors BOLI Bank-owned life insurance CECL Current expected credit loss CET1 Common equity tier 1 CME Chicago Mercantile Exchange CRE Commercial real estate Company United Community Banks Inc. (interchangeable with "United" below) CVA Credit valuation adjustment FASB Financial Accounting Standards Board FDIC Federal Deposit Insurance Corporation FDM Modification made to borrowers experiencing financial difficulty Federal Reserve Federal Reserve System First Miami First Miami Bancorp, Inc. and its wholly-owned subsidiary, First National Bank of South Miami FHLB Federal Home Loan Bank FOMC Federal Reserve's Federal Open Markets Committee FTE Fully taxable equivalent GAAP Accounting principles generally accepted in the United States of America GSE U.S. government-sponsored enterprise Holding Company United Community Banks, Inc. on an unconsolidated basis HTM Held-to-maturity LIHTC Low- income housing tax credit MD&A Management's Discussion and Analysis of Financial Condition and Results of Operations MBS Mortgage-backed securities NOW Negotiable order of withdrawal NPA Nonperforming asset OCI Other comprehensive income (loss) OREO Other real estate owned PAM Proportional amortization method PCD Purchased credit deteriorated Progress Progress Financial Corporation and its wholly-owned subsidiary, Progress Bank

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements UNITED COMMUNITY BANKS, INC. Consolidated Balance Sheets (Unaudited) (in thousands, except share data) March 31, 2024 December 31, 2023 ASSETS Cash and due from banks $ 203,932 $ 200,781 Interest-bearing deposits in banks 758,001 803,094 Cash and cash equivalents 961,933 1,003,875 Debt securities available-for-sale 3,393,399 3,331,084 Debt securities held-to-maturity (fair value $ 2,042,912 and $ 2,095,620 , respectively) 2,465,133 2,490,848 Loans held for sale 38,140 33,008 Loans and leases held for investment 18,374,844 18,318,755 Allowance for credit losses - loans and leases ( 210,934 ) ( 208,071 ) Loans and leases, net 18,163,910 18,110,684 Premises and equipment, net 386,052 378,421 Bank owned life insurance 342,486 345,371 Goodwill and other intangible assets, net 987,539 990,087 Other assets 626,296 613,873 Total assets $ 27,364,888 $ 27,297,251 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Deposits: Noninterest-bearing demand $ 6,409,659 $ 6,534,307 Interest-bearing deposits 16,922,350 16,776,304 Total deposits 23,332,009 23,310,611 Long-term debt 324,854 324,823 Accrued expenses and other liabilities 407,915 400,292 Total liabilities 24,064,778 24,035,726 Shareholders' equity: Preferred stock, $ 1 par value: 10,000,000 shares authorized; 3,662 shares Series I issued and outstanding; $ 25,000 per share liquidation preference 88,266 88,266 Common stock, $ 1 par value: 200,000,000 shares authorized, 119,136,518 and 119,010,319 shares issued and outstanding, respectively 119,137 119,010 Common stock issuable: 560,833 and 620,108 shares, respectively 11,923 13,110 Capital surplus 2,702,807 2,699,112 Retained earnings 614,612 581,219 Accumulated other comprehensive loss ( 236,635 ) ( 239,192 ) Total shareholders' equity 3,300,110 3,261,525 Total liabilities and shareholders' equity $ 27,364,888 $ 27,297,251 See accompanying notes to consolidated financial statements (unaudited)

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Note 1 – Basis of Presentation Basis of Presentation United's accounting and financial reporting policies conform to GAAP and reporting guidelines of banking regulatory authorities. The accompanying interim consolidated financial statements have not been audited. All material intercompany balances and transactions have been eliminated. A more detailed description of United's accounting policies is included in its 2023 10-K. In management's opinion, all accounting adjustments necessary to accurately reflect the financial position and results of operations on the accompanying financial statements have been made. These adjustments are normal and recurring accruals considered necessary for a fair and accurate presentation. The results for interim periods are not necessarily indicative of results for the full year or any other interim periods. The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes appearing in United's 2023 10-K. Note 2 – Accounting Standards Updates and Recently Adopted Standards Recently Adopted Standards In March 2023, the FASB issued ASU No. 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method . The update broadens the application of PAM and related disclosures to tax equity investments other than LIHTC, providing certain conditions are met. The election to apply PAM must be made on a tax-credit-program by tax-credit-program basis rather than at the reporting entity level or to individual investments. United adopted this update using a modified retrospective transition method as of January 1, 2024, with no impact to shareholders' equity; thus, no cumulative effect adjustment to retained earnings was recorded. Note 3 – Supplemental Cash Flow Information The supplemental schedul

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Merger-related costs related to the Progress acquisition of $ 7.49 million have been excluded from the three months ended March 31, 2023 pro forma information presented below. The actual results and pro forma information were as follows: Three Months Ended March 31, 2023 (in thousands) Revenue Net Income Actual Progress results included in statement of income since acquisition date $ 6,652 $ 1,810 Supplemental consolidated pro forma as if Progress had been acquired January 1, 2022 229,541 75,209 Note 5 – Investment Securities The amortized cost basis, unrealized gains and losses and fair value of HTM debt securities as of the dates indicated are as follows. (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value As of March 31, 2024 U.S. Treasuries $ 19,872 $ — $ 2,093 $ 17,779 U.S. Government agencies & GSEs 99,052 — 16,673 82,379 Residential MBS, Agency & GSEs 1,360,395 9 223,439 1,136,965 Commercial MBS, Agency & GSEs 678,578 — 124,464 554,114 Supranational entities 15,000 — 2,782 12,218 Total $ 2,465,133 $ 32 $ 422,253 $ 2,042,912 As of December 31, 2023 U.S. Treasuries $ 19,864 $ — $ 1,914 $ 17,950 U.S. Government agencies & GSEs 99,052 — 15,689 83,363 Residential MBS, Agency & GSEs 1,383,294 24 206,344 1,176,974 Commercial MBS, Agency & GSEs 680,933 — 118,539 562,394 Supranational entities $ 15,000 $ — $ 2,500 $ 12,500 Total $ 2,490,848 $ 195 $ 395,423 $ 2,095,620 11 UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) The amortized cost basis, unrealized gains and losses, and fair value of AFS debt securities as of the dates indicated are presented below. (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value As of March 31, 2024 U.S. Treasuries $ 411,640 $ 5 $ 12,865 $ 398,780 U.S. Government agencies & GSEs 312,408 259 15,241 297,426 Residential MBS, Agency & GSEs 1,337,504 250 132,233 1,205,521 Residential MBS, Non-agency 333,045 — 20,673 312,372 Commercial MBS, Agency & GSEs 693,011 100 39,653 653,458 Commercial MBS, Non-agency 20,165 — 542 19,623 Corporate bonds 213,371 130 17,601 195,900 Asset-backed securities 148,738 96 1,778 147,056 Total $ 3,651,711 $ 840 $ 259,152 $ 3,393,399 As of December 31, 2023 U.S. Treasuries $ 398,021 $ 39 $ 10,711 $ 387,349 U.S. Government agencies & GSEs 281,708 269 14,477 267,500 Residential MBS, Agency & GSEs 1,315,064 300 125,012 1,190,352 Residential MBS, Non-agency 339,330 — 22,084 317,246 Commercial MBS, Agency & GSEs 656,004 1,073 39,017 618,060 Commercial MBS, Non-agency 24,269 — 675 23,594 Corporate bonds 218,285 64 17,127 201,222 Asset-backed securities 164,728 — 3,016 161,712 Total $ 3,579,955 $ 1,750 $ 250,621 $ 3,331,084 Securities with a carrying value of $ 2.90 billion and $ 4.12 billion, respectively, were pledged, primarily to secure public deposits at March 31, 2024

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