CREDIT PERFORMANCE

In 2019, United Bank grew its loan portfolio by $45 million, or at a rate of slightly better than 11%. It is noted that growth was seen in almost every sector of the loan portfolio.

This growth was primarily fueled by strategic initiatives to deploy funds relating to the USDA Community Facilities Relending Program, as well as the CDFI awards like the CMF award and New Markets Tax Credits.

United Bank is always distinguished by our involvement in agriculture lending. The past year was no different in that we were able to assist farmers in South Alabama and the Florida panhandle by providing working capital to drive their operations. By and large, 2019 was a successful year in the agriculture portfolio with few areas of concern. At this time, United Bank’s loan portfolio remains well diversified with no areas of significant concentration.

Along with continued robust loan growth, United Bank is equally committed to maintaining sound credit quality. During 2019, non-accrual loans dropped by 41%, non-performing loans dropped by 45% and ORE dropped by 26%, placing each of these categories better than Alabama peer banks by comparison. At the same time, the Bank was able to increase the allowance for loan losses/total loans from 1.07% at December 31, 2018 to 1.16% at December 31, 2019, thus setting the Bank up nicely for 2020.

The Bank remains committed to the residential mortgage market. While reporting an 18.4% increase in secondary market fee income in 2019, we also reported a 2% increase in first lien residential mortgage loans held on the Bank’s balance sheet. We have invested in new mortgage originators in the Florida market and are looking to capitalize on the robust housing market in that area. We now have five mortgage originators serving the Baldwin County, Alabama and Santa Rosa County, Florida markets, which are considered two of the highest growth markets in either state.

We have continued our branch expansion and grown organically. We do this by identifying niche, under-served markets that offer an opportunity for success.

Our branches all have core deposit funding accountability, but their credit strategies are based on the specific areas. For example, the Daphne credit strategy focuses on mortgages and small business, while the Semmes branch has a credit emphasis on agrifinance.

We will stick with this proven approach going forward: expand into strategic areas, and build our deposit accounts while focusing on specific credit opportunities depending on the individual market.

Our new technology will also greatly enhance our lending efforts by improving the customer experience. For example, we recently closed the first mortgage refinance using the new system. What normally would take 45 days took just 15 days. That’s huge to a customer. We will be among the best in breed in technology and the customer experience going forward and that presents so many opportunities.