United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q1 2018 Earnings Presentation
34 slides from United Community Banks's earnings presentation, Apr 24, 2018
Slide 1: First Quarter 2018 Investor Presentation
2018 INVESTOR PRESENTATION FIRST QUARTER 2018 April 24, 2018
Slide 2: Disclosures
ucbi.com | 2 Disclosures CAUTIONARY STATEMENT This investor presentation may contain forward - looking statements, as defined by federal securities laws, including statements about United and its financial outlook and business environment . These statements are based on current expectations and are
Slide 3: 1Q18 Overview
1Q18 Overview Ticker UCBI (NASDAQ) Market Cap $2.5Bn P/E (2018E) 14.3x P/TBV 244% Assets $12.3Bn Loans $8.2Bn Deposits $10.0Bn CET1 11.34% NPAs / Assets 0.24% ROA – GAAP 1.26% ROA – Operating (1) 1.33% ROCE – GAAP 11.11% ROTCE – Operating (1) 15.26% • Established in 1950 and headquartered in Blairsv
Slide 4: Focused on High-Growth MSAs in Southeast
Fastest Growing Southeast MSAs (1) 2018 - 2023 Proj. Population Growth 2018 Population 2023 Proj. Median Household Income 1. Myrtle Beach, SC 9.96% 470,010 $55,177 2. Cape Coral, FL 8.66% 740,553 $59,220 3. Charleston, SC 8.46% 785,518 $69,670 4. Orlando, FL 8.17% 2,518,915 $62,806 5. Raleigh, NC 8.
Slide 5: Cultural Pillars
Cultural Pillars Customer Service Is at Our Foundation High - Quality Balance Sheet » Underwriting conservatism and portfolio diversification » Top quartile credit quality performance » Prudent capital, liquidity and interest - rate risk management » Focused on improving return to shareholders with
Slide 6: The Bank That Service Built
Regional Bank with Community Bank – Level Service Recognized for Ranked #1 in Retail Banking Customer Satisfaction in the Southeast by J.D. Power … Being a great place to work …High levels of financial performance Who We Are The Bank That Service Built ucbi.com | 6 Regional Bank 1 United Community B
Slide 7: 1Q18 Highlights
1Q18 Highlights ucbi.com | 7 $17.02 $16.67 $15.40 $13.30 $13.65 $12.96 1Q17 4Q17 1Q18 Book Value Per Share (2) Book Value (GAAP) Tangible Book Value (non-GAAP) (1) $0.33 - $0.16 $0.47 $0.39 $0.42 $0.50 1Q17 4Q17 1Q18 Earnings Per Share GAAP Operating (1) 0.89% - 0.40% 1.26% 1.07% 1.10% 1.33% 1Q17 4Q
Slide 8: Net Interest Revenue / Margin
$83.6 $97.5 $103.3 1Q17 4Q17 1Q18 3.45% 3.63% 3.80% ucbi.com | 8 (1) Net interest margin is calculated on a fully taxable equivalent basis (2) E xcludes brokered deposits Net Interest Revenue / Margin (1) ucbi.com | 8 (1) Net interest margin is calculated on a fully - taxable equivalent basis $ in m
Slide 9: Low-Cost Deposit Base
0 10 20 30 40 50 82% 94% Low - Cost Deposit Base (1) Sufficient Liquidity to Support Future Growth Loans / Deposits (2) Cost of Total Deposits (bps) 39 bps 23 bps Deposits KRX Peer ucbi.com | 9 KRX Peer Note – Peer comparison banks comprise the KBW Regional Bank Index (ticker:KRX) (1) Source: S&P Gl
Slide 10: Loans
ucbi.com | 10 $2.7 $3.1 $3.0 $1.3 $1.6 $1.7 $0.7 $0.7 $0.7 $1.7 $1.9 $1.9 $0.6 $0.5 $0.5 $0.4 $7.0 $7.7 $8.2 1Q17 4Q17 1Q18 C&I (1) CRE Comml Construction Residential Other Consumer Equipment Finance 24.6% 9.6% 18.6% 39.0% 20.5% 37.1% 8.4% 23.1% 5.6% 20.6% 39.5% 9.2% 24.4% 6.3% 5.2% Loans ucbi.com |
Slide 11: Loan Growth Drivers
ucbi.com | 11 Loan Growth Drivers ucbi.com | 11 » Greater expansion in our metro markets, including our new Myrtle Beach and Raleigh markets » Expansion of our Commercial Banking Solutions (CBS) unit (i.e. deeper penetration and new verticals) » We estimate the Navitas acquisition adds about 200 bas
Slide 12: Fee Revenue
$10.6 $8.8 $8.9 $3.7 $4.1 $5.5 $1.4 $1.1 $0.9 $4.4 $4.9 $5.4 $2.0 $3.1 $1.8 1Q17 4Q17 1Q18 Service Charges Other Brokerage Mortgage SBA ucbi.com | 12 Fee Revenue ucbi.com | 12 in millions » Vs Last Year, fees up $0.3 mm to $22.4 mm » $2.7 mm lower service charges as Durbin impact more than offsets i
Slide 13: Expense Discipline
59.3% 63.0% 57.8% 57.4% 56.9% 55.8% 60.78% 59.27% 59.27% 57.79% 56.18% 56.18% $62.8 $75.9 $73.5 $60.8 $68.5 $70.8 1Q17 4Q17 1Q18 ucbi.com | 13 (1) Net interest margin is calculated on a fully taxable equivalent basis (2) E xcludes brokered deposits Expense Discipline ucbi.com | 13 GAAP Operating (1)
Slide 14: Credit Quality
Credit Quality ucbi.com | 14 (1) See non - GAAP reconciliation table slides at the end of the exhibits for a reconciliation of operating performance measures to G AAP performance measures ucbi.com | 14 0.10% 0.06% 0.08% 1Q17 4Q17 1Q18 Net Charge - Offs as % of Average Loans 0.23% 0.23% 0.24% 1Q17 4Q
Slide 15: Key Strengths
ucbi.com | 15 Key Strengths ucbi.com | 15 » Culture and business model that attracts both bankers and potential acquisition partners » Positioned well in many of the South's fastest - growing markets » Superior customer service helps drive great core deposit growth » Well - developed credit model to
Slide 16: Capital
ucbi.com | 16 Holding Company 1Q17 4Q17 1Q18 (1) Common Equity Tier I Capital 11.4% 12.0% 11.3% Tier I Risk - Based Capital 11.5 12.3 11.7 Total Risk - Based Capital 12.3 13.0 13.6 Leverage 8.6 9.4 9.1 Tangible Common Equity to Risk - Weighted Assets 12.1 12.1 11.3 Average Tangible Equity to Average
Slide 17: Acquisition of Navitas
17 ucbi.com Acquisition of Navitas Business Overview Notes 1. "Expected Financial Impact" discloses forward - looking statements that are subject to numerous assumptions, risks and uncertainti es that change over time and could cause actual results or financial condition to differ materially from th
Slide 18: Navitas Portfolio Strategy and Stratifications
18 ucbi.com Navitas Portfolio Strategy and Stratifications (1) » Multi channel origination strategy of developing and acquiring teams of highly experienced professionals with a track record of success in their respective market niche » These teams are supported by centralized corporate functions inc
Slide 19: 2018 Exhibits First Quarter 2018
2018 INVESTOR PRESENTATION Exhibits FIRST QUARTER 2018 April 24, 2018
Slide 20: Revenue and Fee Revenue Detail
$83.6 $97.5 $103.3 $60.8 $68.5 $70.8 $44.9 $50.9 $54.8 $22.1 $21.9 $22.4 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 1Q17 4Q17 1Q18 Net Interest Revenue Expenses - Operating (1) Pre-Tax, Pre-Credit Earnings (1) Fee Revenue ucbi.com | 20 1Q18 4Q17 1Q17 Overdraft Fees 3,652$ (79)$ 255$ Interchange F
Slide 21: Core Deposit Growth
2014 2015 2016 2017 1Q 2018 2014 2015 2016 2017 1Q 2018 Demand Deposit 161$ 618$ 334$ 487$ 117$ Non-Interest Bearing Core NOW 9 441 5 107 4 Demand Deposit 1,471$ 2,089$ 2,423$ 2,910$ 3,027$ MMDA 41 325 246 156 (7) Savings 41 177 79 101 25 Interest Bearing Core Growth by Category 252$ 1,561$ 664$ 851
Slide 22: High-Quality, Low-Cost Core Deposit Base
Note: Peer comparison banks comprise the KBW Regional Bank Index (ticker: KRX) ucbi.com | 22 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8% 0.9% 1.0% WABC COLB CVBF CBU CFR CBSH FFIN GBCI FMBI BOH ONB FCF UCBI UMPQ BOKF TRMK UMBF PB WAL PACW PFS WBS MBFI BPFH SNV FHN UBSI BPOP FULT EWBC HBHC FNB STL W
Slide 23: New Loans Funded and Advances
ucbi.com | 23 1Q18 4Q17 1Q17 4Q17 1Q17 Commercial & Industrial 220.7$ 135.4$ 106.8$ 85.3$ 113.9$ Owner-Occupied CRE 67.1 121.0 79.5 (53.9) (12.4) Income-Producing CRE 70.2 77.8 102.2 (7.6) (31.9) Commercial Constr. 145.6 130.8 116.3 14.8 29.3 Total Commercial 503.6 465.0 404.8 38.6 98.8 Residential
Slide 24: Loans by Region and Category
2014 2015 2016 2017 1Q18 North Georgia 1,163$ 1,125$ 1,097$ 1,019$ 1,004$ Atlanta MSA 1,243 1,259 1,399 1,510 1,513 North Carolina(1) 553 549 545 1,049 1,037 Coastal Georgia 456 537 581 630 635 Gainesville MSA 257 254 248 248 231 East Tennessee (2) 280 504 504 475 473 South Carolina (3) 30 819 1,233
Slide 25: Commercial Real Estate Diversification
Commercial Real Estate Diversification ucbi.com | 25 Residential CIP : SPEC 154$ 12.5 % 93$ 13.5 % Assisted Living/Nursing Home/Rehab Cntr 231 18.8 81 11.7 Other Properties 108 8.8 75 10.9 Residential Land Development -Builders 66 5.3 60 8.7 Raw Land - Vacant (Unimproved) 66 5.4 54 7.8 Office Buildi
Slide 26: Granular Portfolio and Disciplined Credit Processes
ucbi.com | 26 Granular Portfolio – Exposure and Industry Limits • Legal Lending Limit $ 314M • House Lending Limit 30M • Project Lending Limit 18M • Top 25 Relationships 579M Concentration limits set for all segments of the portfolio Disciplined Credit Processes ucbi.com | 26 STRUCTURE • Centralized
Slide 27: Credit Quality
Net Charge-offs 1.7$ 1.6$ 1.6$ 1.1$ 1.5$ as % of Average Loans 0.10 % 0.09 % 0.09 % 0.06 % 0.08 % Allowance for Loan Losses 60.5$ 59.5$ 58.6$ 58.9$ 61.1$ as % of Total Loans 0.87 % 0.85 % 0.81 % 0.76 % 0.75 % as % of NPLs 306 258 256 249 233 Past Due Loans (30 - 89 Days) 0.23 % 0.23 % 0.28 % 0.28 %
Slide 28: Excellent Credit Performance & Management
Note: Peer comparison banks comprise the KBW Regional Bank Index (ticker: KRX) Excellent Credit Performance & Management ucbi.com | 28 0.0% 0.5% 1.0% 1.5% 2.0% CBSH BOH UMPQ WABC CVBF BPFH PB CBU OZRK VLY UCBI UMBF CFR PNFP MBFI WAL FFIN EWBC WTFC COLB FCF FNB PFS BXS BKU FHN WAFD STL STBA CATY SNV
Slide 29: Growth Opportunities
ucbi.com | 29 (1) (2) (2) (2) (1) (1) North Georgia $ 7.6 $ 2.6 9 19 33 % 1 Atlanta, Georgia 70.4 2.7 10 34 4 7 Gainesville, Georgia 3.5 0.4 1 5 11 4 Coastal Georgia 8.9 0.4 2 7 4 8 Eastern North Carolina 29.0 0.6 1 12 2 11 Western North Carolina 7.4 1.1 2 19 14 3 East Tennessee 17.6 0.5 2 9 3 7 Ups
Slide 30: Acquisition of Four Oaks Fincorp
Transaction Overview • Closed November 1, 2017 • 90% stock (0.6178 shares of United) and 10% cash ($1.90) - $124 million transaction value (1) • 177% P / TBV • An excellent springboard to grow and attract top - quality bankers in the Raleigh market Company Snapshot • Assets: $737 million • Loans: $5
Slide 31: Acquisition of HCSB
19.3% 8.1% 7.8% HCSB UCBI South Carolina Rank Bank Branches Deposits ($MM) Mkt. Share (%) 1. BB&T 27 1,829 24.1 2. CNB Corp. 14 813 10.7 3. Wells Fargo 10 704 9.3 4. Bank of America 9 601 7.9 5. UCBI Pro Forma 10 452 5.9 Strong Demographics Myrtle Beach is the fastest growing MSA in the state Compel
Slide 32: Management Team
Jimmy C. Tallent Chairman & CEO Joined 1984 H. Lynn Harton Board, President & COO Joined 2012 Bill M. Gilbert President, Community Banking Joined 2000 Bradley J. Miller EVP, CRO & General Counsel Joined 2007 • Over 40 years in banking • Led company from $42 million in assets in 1989 to $12.3 billion
Slide 33: Non-GAAP Reconciliation Tables
1Q17 2Q17 3Q17 4Q17 1Q18 (1) (1) (1) Net Income Net income - GAAP 23,524$ 28,267$ 27,946$ (11,916)$ 37,658$ Merger-related and other charges 2,054 1,830 3,420 7,358 2,646 Tax benefit on merger-related and other charges (758) (675) (1,147) (1,165) (628) Impairment of deferred tax asset on canceled no
Slide 34: Non-GAAP Reconciliation Tables
1Q17 2Q17 3Q17 4Q17 1Q18 (1) (1) (1) Return on Tangible Common Equity Return on common equity - GAAP 8.54 % 9.98 % 9.22 % (3.57) % 11.11 % Effect of merger-related and other charges 0.47 0.41 0.75 1.86 0.60 Impairment of deferred tax asset on canceled nonqualified stock options - - - 11.44 - Release
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