United Community Banks, Inc. · NYSE:UCB

United Community Banks — Q4 2019 Earnings Presentation

16 slides from United Community Banks's earnings presentation, Jan 21, 2020

  1. Slide 1: 4Q Investor Presentation

    4Q INVESTOR PRESENTATION January 21, 2020 Member FDIC. © 2020 United Community Bank

  2. Slide 2: Disclosures

    Disclosures CAUTIONARY STATEMENT This Investor Presentation contains forward-looking statements, as defined by federal securities laws, including statements about United Community Banks, Inc. (“United”) and its financial outlook and business environment. These statements are based on current expecta

  3. Slide 3: United Community Banks, Inc.

    United Community Banks, Inc. $12.9 $8.8 Committed to Service Since 1950 Billion in Assets Billion in Total Loans $2.4 $10.9 Billion in Total Deposits Billion Market Cap 186% Price / TBV 1.50% Return on average assets - 13.2x operating (1) Price / EPS (2020E) Full Service Branch Network Extended Navi

  4. Slide 4: 4Q19 Highlights

    12.1% Return on common equity - $0.61 Earnings per share - GAAP 15.5% 4Q19 Highlights GAAP Return on tangible common equity - operating (1) Earnings Per Share Return on Assets $0.63 $0.61 $0.61 1.58% $0.61 13% $0.56 $0.57 $0.60 1.51% 1.50% 1.50% Earnings per share - YOY growth in (1) 1.45% operating

  5. Slide 5: Net Interest Revenue / Margin

    (1) Net Interest Revenue / Margin $ in millions $119.3 $116.6 $114.9  Net interest revenue decreased $2.7 mm (2%) vs. 3Q19 and increased $1.7 mm (2%) vs. 4Q18  Net interest margin decreased 19 bps from 3Q19 and decreased 4 bps YoY  Approximately 10 bps of the decline in margin from 3Q19 was due t

  6. Slide 6: Valuable Deposit Mix

    Valuable Deposit Mix 4Q19 Total Deposits $10.9 billion  32% of deposits are Noninterest bearing Time deposits 18% DDA  UCBI cost of deposits down 2 bps to 0.61% 32% in 4Q19  UCBI cost of deposits significantly lower than Savings 6% KRX peer levels (0.63% in 3Q19 vs. KRX peers at 0.85%)  Total de

  7. Slide 7: Strong Core Transaction Deposit Growth

    Strong Core Transaction Deposit Growth $ in billions $7.503 $7.464 $7.399  Noninterest bearing deposits increased $266 mm from 4Q18, which drove the majority of core transaction growth  While core transaction deposits were down $39 mm from 3Q19, total core deposits increased $207 mm from 3Q19 to $

  8. Slide 8: Loans

    Loans 4Q19 Total Loans $8.8 billion  Linked-quarter loan growth was $41 mm, or 2% annualized, excluding indirect auto of $131 mm Residential Construction Home Equity 3%  Full year EOP loan growth excluding indirect 7% auto runoff and sale and the addition of First Residential Madison was 6% Mortga

  9. Slide 9: Noninterest Income

    Noninterest Income $ in millions $30.2 $29.0 $2.5 Linked Quarter $1.6  Fees up $1.2 mm  Mortgage fees up $0.7 mm from 3Q19 as originations and $23.0 loan sales continued at Q3’s pace despite weaker $8.7 $9.4 $2.5 seasonality and also benefitted from a $1.2 mm positive mark on the MSR asset $3.1 

  10. Slide 10: Expense Discipline

    Expense Discipline $ in millions $82.9 $81.4 $81.5 $80.3 $78.2 Linked Quarter $77.0  GAAP expenses decreased 1.8% while operating expenses increased 1.5% Year-over-Year  Market expansions and acquisitions drove GAAP 56.7% and operating expenses higher by 4.1% and 5.8%, respectively 55.6%  Continu

  11. Slide 11: Credit Quality

    Credit Quality Provision for Credit Losses Net Charge-Offs as % $ in millions of Average Loans $3.10 $3.50 $2.10 0.18% 0.12% 0.09% 4Q18 3Q19 4Q19 4Q18 3Q19 4Q19 Allowance for Loan Losses Non-Performing Assets as % of Total Assets 0.73% 0.70% 0.70% 0.28% 0.24% 0.20% 4Q18 3Q19 4Q19 4Q18 3Q19 4Q19 11

  12. Slide 12: Current Expected Credit Losses (CECL)

    Current Expected Credit Losses (CECL)  On January 1st, CECL replaces the current incurred loss methodology with a life-of-loan loss concept  We expect that the day one impact of adopting the new standard will increase our allowance for credit losses by approximately 13% to about $74 mm  The main

  13. Slide 13: Capital Ratios

    Capital Ratios Holding Company 4Q18 3Q19 4Q19* Common Equity Tier 1 Capital 12.2 % 12.4 % 13.0 % Tier 1 Risk-Based Capital 12.4 12.7 13.2 Total Risk-Based Capital 14.3 14.5 15.0 Leverage 9.6 10.2 10.3 Tangible Common Equity to 9.3 10.2 10.3 Tangible Assets  All regulatory capital ratios significant

  14. Slide 14: Exhibits

    4Q INVESTOR PRESENTATION Exhibits Member FDIC. © 2020 United Community Bank

  15. Slide 15: Non-GAAP Reconciliation Tables

    Non-GAAP Reconciliation Tables $ in thousands, except per share data 4Q18 1Q19 2Q19 3Q19 4Q19 (1) (1) (1) (1) (1) Expenses Expenses - GAAP $ 78,242 $ 76,084 $ 81,813 $ 82,924 $ 81,424 Merger-related and other charges (1,234) (739) (4,087) (2,605) 74 Expenses - Operating $ 77,008 $ 75,345 $ 77,726 $

  16. Slide 16: Non-GAAP Reconciliation Tables

    Non-GAAP Reconciliation Tables $ in thousands, except per share data 4Q18 1Q19 2Q19 3Q19 4Q19 (1) (1) (1) (1) (1) Return on Assets Return on assets - GAAP 1.43 % 1.44 % 1.40 % 1.51 % 1.50 % Merger-related and other charges 0.02 0.01 0.10 0.07 - Return on assets - Operating 1.45 % 1.45 % 1.50 % 1.58

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