United Community Banks, Inc. Announces Third Quarter Results
Staff Report From South Carolina CEO
Wednesday, October 24th, 2018
United Community Banks, Inc. realized strong third quarter results, with solid year-over-year loan and deposit growth, favorable efficiency levels and outstanding asset quality trends. Reported earnings per share were $0.54, an increase of 42 percent from a year ago. Excluding merger-related and other charges, earnings per share were $0.55, up 34 percent compared to last year. United also reported higher profitability ratios with increases in both return on assets and return on tangible equity.
During the quarter, United benefitted from strong core deposit growth, net interest margin expansion as well as strong mortgage and SBA production. Core transaction deposits were up $70 million and total customer deposits increased by $156 million during the quarter. Compared to last year, mortgage and SBA production increased 23 percent and 10 percent, respectively. Additionally, year-to-date SBA production is 39 percent higher than 2017. Navitas Credit Corporation, United’s equipment finance arm, continued to perform well and was a key growth driver for the quarter.
“I am pleased with our third quarter performance and continue to be optimistic about the balance of 2018,” said Lynn Harton, President and Chief Executive Officer of United. “Our new markets and investments continue to perform well and we have high expectations for the remainder of the year and beyond. We are pleased that we were able to exceed our return on assets target and are proud to have attained a 1.42 percent return on assets this quarter on an operating basis. I credit our outstanding team for this performance and am proud they were recognized for creating one of the “Best Banks to Work For” by American Banker for the second year in a row.”
Third Quarter 2018 Financial Highlights:
- Return on assets of 1.41 percent, or 1.42 percent, excluding merger-related and other charges
- Return on common equity of 12.0 percent
- Return on tangible equity of 15.8 percent, excluding merger-related and other charges
- Loan growth, excluding planned runoff of the indirect portfolio, of 2 percent on an annualized basis
- Loan production of $778 million, as compared to $617 million in Q3 2017
- Expansion of the net interest margin to 3.95 percent, up 5 basis points from the second quarter of 2018 and up 41 basis points from a year ago
- Efficiency ratio of 56.8 percent, or 56.4 percent, excluding merger-related and other charges
- Net charge offs of seven basis points, consistent with last quarter
- Nonperforming assets of 0.19 percent of total assets, compared with 0.20 percent at June 30, 2018 and 0.23 percent at September 30, 2017