United Community Banks, Inc. (NASDAQ:UCBI)

Q3 2022 Earnings Conference Call

October 19, 2022 11:00 AM ET

Company Participants

Lynn Harton - Chairman and Chief Executive Officer

Jefferson Harralson - Chief Financial Officer

Rich Bradshaw - President and Chief Banking Officer

Rob Edwards - Chief Risk Officer

Conference Call Participants

Kevin Fitzsimmons - D.A. Davidson

Brad Milsaps - Piper Sandler

Michael Rose - Raymond James

Catherine Mealor - KBW

David Bishop - Hovde Group

Christopher Marinac - Janney Montgomery Scott

Presentation

Operator

Good morning, and welcome to United Community Banks Third Quarter 2022 Earnings Call. Hosting the call today are Chairman and Chief Executive Officer, Lynn Harton; Chief Financial Officer, Jefferson Harralson; President and Chief Banking Officer, Rich Bradshaw; and Chief Risk Officer, Rob Edwards.

United's presentation today includes references to operating earnings, pretax, pre-credit earnings and other non-GAAP financial information. For these non-GAAP financial measures, United has provided a reconciliation to the corresponding GAAP financial measure in the Financial Highlights section of the earnings release, as well as at the end of the investor presentation. Both are included on the website at ucbi.com. Copies of the second quarter's earnings release and investor presentation were filed last night on Form 8-K with the SEC, and a replay of this call will be available in the Investor Relations section of the company's website at ucbi.com.

Please be aware that during this call, forward-looking statements may be made by representatives of United. Any forward-looking statements [Technical Difficulty] filings with the SEC and included on its website.

At this time, I will turn the call over to Lynn Harton.

Lynn Harton

Good morning, and thank you for joining our call today. While I have concerns about the pace of the Fed tightening and the impact of a potential overshoot, our southeastern economies are performing well and we had a very strong quarter that demonstrated momentum in several key areas of our business. First, our net interest revenue grew at an annualized rate of 47% [Technical Difficulty] driven by loan growth at the upper end of our target range and a 38 basis point expansion in our margin.

While we did see deposit outflows, and we expect the pace of deposit rate increases to accelerate, the strength of our core deposits will continue to give us an advantage in this environment. Our loan to deposit ratio remains low at 73%, providing us ample liquidity to fund growth at reasonable cost. Our operating return on assets improved to 1.34%. Our return on tangible common increased to 15.6%. Our pretax, pre-provision return on assets reached 1.97% and our efficiency ratio reached an all-time low for us at 48%. Credit continues to perform well with very low net charge offs and only nominal increases in both non-performing assets and special mention credits.