The opportunity for Paycheck Protection Program loan forgiveness is paying off — at least for United Community Bank clients.
In the company’s second quarter report, it noted that the bank’s total loan value decreased by $288 million, primarily due to the $411 million worth of forgiven PPP loans.
PPP loans aside, the Greenville bank’s core organic loan growth was 5% annualized, and core transaction deposits grew by $432 million or 14% annualized during the quarter.
“Core loan growth, excluding PPP loans, was solid and we continue to be optimistic about the remainder of the year, given the momentum in our markets,” United Community Bank CEO and Chair Lynn Harton said in the report. “Core deposit growth remains very strong. Credit results were excellent as well.”
The bank’s net income for the quarter added up to $70.3 million after taxes and pre-provision income, leading to $0.78 diluted earnings per share for the quarter — a 144% increase from 2020’s second quarter.
Three acquisitions were announced during the second quarter. FinTrust Capital Partners, a registered investment adviser brought $2.1 billion in assets under the United Community Bank umbrella in July, while United Community Bank is in the process of acquiring Aquesta Financial Holdings Inc. and Reliant Bancorp. Inc. along with more than $3.1 billion in assets.
“This has been an outstanding quarter for United,” he said in the release. “Our team once again was recognized by JD Power as having the Best Retail Customer Satisfaction in the Southeast. On July 6, we closed on the acquisition of FinTrust, accelerating our wealth management strategy. We announced expansion into two of the strongest markets in the Southeast, Charlotte and Nashville, via agreements to acquire outstanding community banks in those markets. In addition to these strategic accomplishments, our bankers continued to deliver strong performance results.”
The bank’s GAAP return on assets was 1.46% and its return on common equity was 14.1% for the quarter. On an operating basis, United’s return on asset was 1.48%, and its return on tangible common equity was 17.8%. The quarter benefited from an allowance release of $13.6 million, reflecting continued improvement in economic conditions and forecasts in United’s markets, according to the release.
Core transaction deposits grew by $432 million during the quarter, or 14% annualized, and United’s cost of deposits decreased by 5 basis points to 0.09%. The net interest margin decreased by 3 basis points from the first quarter due mainly to a change in the earning asset mix.