United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q2 2023 Earnings Presentation
26 slides from United Community Banks's earnings presentation, Jul 19, 2023
Slide 1: 2Q23 Investor Presentation
2Q23 Investor Presentation July 18, 2023 Member FDIC. © 2023 United Community Bank | ucbi.com
Slide 2: Disclosures: Cautionary Statement
Disclosures CAUTIONARY STATEMENT This communication contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In general, forward-looking statements usually may be identified
Slide 3: Disclosures: Non-GAAP Measures
Disclosures NON-GAAP MEASURES This Investor Presentation includes financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). This financial information includes certain operating performance measures, which exclude merger-related and
Slide 4: United Community Banks, Inc. Company Overview
United Community Banks, Inc. Company Overview $26.1 $17.4 BILLION IN BILLION IN TOTAL ASSETS TOTAL LOANS Regional Full Service Branch Network National Navitas and SBA Markets $4.9* $22.3 BILLION IN BILLION IN AUA TOTAL DEPOSITS AMERICA’S BEST 12.7% BANKS TIER 1 RBC in 2023 for the tenth UCBI Banking
Slide 5: 2Q23 Highlights
$0.53 7.47% Diluted earnings per share Return on common equity – GAAP – GAAP $0.55 11.35% 2Q23 Highlights Diluted earnings per share Return on tangible common – operating(1) equity – operating(1) Diluted Earnings Per Share Return on Average Assets $0.66 1.17% $0.61 $0.58 1.08% 1.06% $0.55 1.00% 0.95
Slide 6: Long-Term Financial Performance & Shareholder Return
Long-Term Financial Performance & Shareholder Return ROA(1)(2) ROTCE(1)(2) 17.33% 1.99% 15.69% 15.81% 1.85% 1.84% 14.04% 1.72% 1.60% 1.58% 1.59% 12.24% 1.46% 1.58% 13.14% 1.35% 12.02% 11.63% 11.60% 11.89% 11.35% 1.13% 1.04% 1.37% 0.95% 9.54% 9.25% 0.95% 7.34% 7.47% 0.62% 5.67% 2017 2018 2019 2020 20
Slide 7: Footprint Focused on High-Growth MSAs in Southeast
Footprint Focused on High-Growth MSAs in Southeast Fastest Growing UCBI (3) ’23 – ’28 ’23 – ’28 ’22 Total Fastest Growing UCBI (3) ’23 – ’28 ’23 – ’28 ’22 Total Major Southeast Market (%) of Total Proj. Pop. Proj. HHI. Deposits Mid-Size Southeast Market (%) of Total Proj. Pop. Proj. HHI. Deposits MS
Slide 8: Outstanding Deposit Franchise
Outstanding Deposit Franchise 2Q23 Total Deposits $22.3 billion Strong Deposit Growth Time ✓ Total deposits were up $247 million in 2Q23, or 17% DDA 4.5% annualized from 1Q23 31% Savings 6% ✓ YTD total deposits, excluding Progress, were up $1.0 billion, or 9.8% annualized MMDA ✓ Total customer depos
Slide 9: Deposit Trends
Deposit Trends 2Q23 Total Deposits $22.3 billion $ in billions ✓ Deposits are granular with a $33 thousand average $1.3 account size and are diverse by industry and geography ✓ Business deposits of $8.3 billion and personal $22.3 $20.9 $20.3 $19.9 $20.7 deposits of $10.8 billion in 2Q23 2Q22 3Q22 4Q
Slide 10: Well-Diversified Loan Portfolio
Well-Diversified Loan Portfolio $ in billions 2Q23 Total Loans $17.4 billion Quarter Highlights Residential Manufactured ✓ Loans increased $270 million, or 6.3% Construction Housing annualized 2% Home Equity 3% ✓ Construction & CRE ratio as a percentage of 5% total RBC = 78% / 201% ✓ Top 25 relation
Slide 11: Balance Sheet Strength – Liquidity and Capital
Balance Sheet Strength – Liquidity and Capital Loans / Deposits % 86% ✓ Substantial balance sheet liquidity and above-peer capital ratios 77% 78% 78% ✓ $5.9 billion securities portfolio offers 70% 73% significant near- and medium-term cash 68% 64% flow opportunities ✓ FHLB borrowings declined to zer
Slide 12: Capital
Capital Risk-Based Capital Ratios* CET1 Non-common Tier 1 Tier 2 Total ✓ 2Q23 regulatory risk-based capital ratios 14.3% 14.5% 14.6% 14.8% 14.4% 14.6% increased an average of 16 bps from 1.9% 1.9% 1.9% 2.0% 1.8% 13.3% 1.9% 1Q23 0.6% 0.5% 1.7% 0.5% 0.6% 0.6% 0.5% 0.6% ✓ The leverage ratio increased 1
Slide 13: Net Interest Revenue / Margin
(1) Net Interest Revenue / Margin $ in millions Net Interest Revenue & Net Interest Margin $211.5 ✓ Net interest revenue decreased $11.2 million from 1Q23 $200.3 ✓ Net interest margin increased 18 bps compared to 2Q22, 4.0 0% $178.9 $20 0.0 3.61% but decreased 24 bps from 1Q23, primarily driven by 3
Slide 14: Noninterest Income
Noninterest Income Linked Quarter $ in millions ✓ Noninterest income was up $6.2 million • Service charges drove $1.1 million of the increase from 1Q23 $36.4 • A $655,000 increase in mortgage fees excluding $33.5 $33.4 the $1.4 million change in the mark on the MSR $31.9 $30.2 • $444,000 increase in
Slide 15: Disciplined Expense Management
Disciplined Expense Management Efficiency Ratio % 56.6% 57.2% 55.7% ✓ The GAAP efficiency ratio improved compared 53.7% to last quarter 53.2% 48.4% 53.7% 54.2% ✓ On an operating basis, the efficiency ratio 48.0% increased modestly as lower expenses were 47.7% 47.4% more than offset by the impact of
Slide 16: Credit Quality
Credit Quality Net Charge-Offs as % of Average Loans ✓ 2Q23 net charge-offs of $8.4 million, or 0.20% of average loans, 0.20% annualized 0.17% 0.17% 0.17% • 2Q23 Navitas net charge-offs of $2.5 million, or 0.69% annualized 0.08% ✓ Non-performing assets increased $30.3 million during the quarter and
Slide 17: Allowance for Credit Losses
Allowance for Credit Losses Allowance for Credit Losses (ACL) Walk-Forward $18,012 ✓ The provision for credit losses $4,003 $212,277 $738 was $22.8 million in 2Q23 as $197,923 ($8,399) compared to $8.4 million in net charge-offs ($000) ✓ Loan growth accounted for $4.0 million of the provision increa
Slide 18: Exhibits
2Q23 INVESTOR PRESENTATION Exhibits Member FDIC. © 2023 United Community Bank | ucbi.com
Slide 19: Navitas Performance
Navitas Performance $ in millions Navitas Portfolio $1, 600 9.08% 9.08% 9.01% 8.89% 8.85% 8.80% 8.79% 8.88% 8.99% 9.12% 10. 00% ✓ Navitas represents 8% of total $1, 400 9.0 0% loans ✓ Navitas 2Q23 NCOs of 8.0 0% $1, 200 7.0 0% $1, 000 6.0 0% 0.69%, or $2.5 million $80 0 $1,374 $1,447 $1,510 5.0 0% ✓
Slide 20: Mortgage Activity Shift to Saleable Production
Mortgage Activity Shift to Saleable Production $ in millions Mortgage Locks & Sales $70 0 5.5 % ✓ Rate locks were $305 million compared to $335 million in 1Q23 $60 0 4.5 % $597 3.7% $50 0 3.1% 2.9% 2.8% 2.7% ✓ 22% of locked loans were variable rate 3.5 % $40 0 $456 2.5 % $30 0 $364 $335 mortgages in
Slide 21: Selected Segments – Senior Care
Selected Segments – Senior Care $ in millions $537 $549 $520 $518 $465 $442 $4086% 1% $410 $394 20% 49% $170 $169 25% $170 $91 $108 $144 $135 $111 $124 $80 $80 $79 $106 $106 $71 $73 $65 $60 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 Substandard $ Special Mention $ Pass $ ✓ Senior Care lending team
Slide 22: Selected Segments – Office
Selected Segments – Office $ in millions Investment CRE – Office Exposure Outstanding $ $710 $722 $666 $683 $664 $661 1% $538 $541 6% $531 20% 49% 25% 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 ✓ Office portfolio is distributed across our Southeastern primary and secondary markets, with very few l
Slide 23: Uninsured Deposits
Uninsured Deposits $ in billions Total Insured Collateralized Uninsured & Uninsured & Deposit Type Deposits* Deposits Deposits Uncollateralized $ Uncollateralized % Retail $11.4 $9.6 - $1.8 16% Business $6.6 $3.4 - $3.2 48% Public $2.4 $0.1 $2.3 $0.0 0% Sweep $1.1 $1.1 - $0.0 0% Brokered $0.6 $0.6 -
Slide 24: Non-GAAP Reconciliation Tables
24 Non-GAAP Reconciliation Tables $ in thousands, except per share data 2Q22 3Q22 4Q22 1Q23 2Q23 Expenses Expenses - GAAP $ 120,790 $ 112,755 $ 117,329 $ 139,805 $ 132,407 Merger-related and other charges (7,143) (1,746) (1,470) (8,631) (3,645) Expenses - Operating $ 113,647 $ 111,009 $ 115,859 $ 13
Slide 25: Non-GAAP Reconciliation Tables
25 Non-GAAP Reconciliation Tables $ in thousands, except per share data 2Q22 3Q22 4Q22 1Q23 2Q23 Return on Assets to return on assets- pre-tax pre-provision Return on assets - GAAP 1.08 % 1.32 % 1.33 % 0.95 % 0.95 % Income tax expense 0.32 0.37 0.41 0.29 0.29 (Release of) provision for credit losses
Slide 26: Glossary
26 Glossary ACL – Allowance for Credit Losses MLO – Mortgage Loan Officer ALLL – Allowance for Loan Losses MMDA – Money Market Deposit Account AOCI – Accumulated Other Comprehensive Income (Loss) MTM – Marked-to-market AUA – Assets Under Administration MSA – Metropolitan Statistical Area BPS – Basis
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