United Community Banks, Inc. · NYSE:UCB

United Community Banks — Q2 2003 Earnings Presentation

41 slides from United Community Banks's earnings presentation, July 2003

  1. Slide 1: United Community Banks, Inc. Investor Presentation

    United Community Banks, Inc. Jimmy Tallent, President and Chief Executive Officer Investor Presentation Second Quarter 2003 For further information contact: Rex Schuette, Chief Financial Officer Office: (706) 781-2265 Email: rex_schuette@ucbi.com

  2. Slide 2: Cautionary Statement

    Cautionary Statement This presentation contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial outlook and business environment. These statements are provided to assist in the understanding of future financial performance and such performance

  3. Slide 3: United at a Glance

    ¾Who We Are – Our Company United at a Glance ƒ 3rd largest Georgia bank holding company ƒ $3.9 billion in assets, 67 banking offices ƒ Nasdaq symbol UCBI—6 analysts ƒ Market capitalization $625 million ƒ Unique footprint ƒ History of growth and profitability ƒ Management team depth 3

  4. Slide 4: Community-Focused Model

    ¾Who We Are – Our Company Community-Focused Model ƒ Nineteen community banks ƒ Local bank presidents and boards ƒ Simple block-and-tackle approach ƒ High quality, personal customer service ƒ Product line, convenience, and technology ƒ Best place to bank and work ƒ Family of 1,300 employees 4

  5. Slide 5: Unique Footprint

    ¾Who We Are – Our Company Unique Footprint Key: •Banking office 5

  6. Slide 6: A Leader in Our Traditional Markets

    ¾Who We Are – Our Franchise A Leader in Our Traditional Markets Market* Offices Counties Share Rank North Georgia 22 11 22% 1 Metro Atlanta 17 11 2 8 Coastal Georgia 6 2 14 2 Western North Carolina 14 9 14 3 East Tennessee 8 5 2 12 * Includes markets where UCBI has offices; deposit data as of 6/02 6

  7. Slide 7: North Georgia

    ¾Who We Are – Our Franchise North Georgia Hiawassee Rome 7

  8. Slide 8: Metro Atlanta

    ¾Who We Are – Our Franchise Metro Atlanta Atlanta 8

  9. Slide 9: Coastal Georgia

    ¾Who We Are – Our Franchise Coastal Georgia Savannah Brunswick 9

  10. Slide 10: Western North Carolina

    ¾Who We Are – Our Franchise Western North Carolina Cherokee Asheville Brevard 10

  11. Slide 11: East Tennessee

    ¾Who We Are – Our Franchise East Tennessee Nashville Knoxville Chattanooga 11

  12. Slide 12: Five-Year CAGR

    ¾Our Performance Record – Operating Results Five-Year CAGR Assets 18% Loans 19 Deposits 15 Total Revenue 18 12

  13. Slide 13: Sustainable Double-Digit EPS Growth

    ¾Our Performance Record – Operating Results Sustainable Double-Digit EPS Growth $1.50 AGR ar C Ye -5 1.00 16% .50 1998 1999 2000 2001 2002 EPS $.77 $.84 $1.03 $1.30 $1.48 (Excludes merger-related charges) 13

  14. Slide 14: Continuing Growth – Second Quarter 2003

    ¾Our Performance Record – Operating Results Continuing Growth – Second Quarter 2003 2003 Core Revenue $43.6 21% 9% Operating Expenses 27.7 19 7 Net Operating Income 9.9 22 22 Earnings Per Share (diluted) .42 17 17 Loans, end of quarter $2,861 26 12 ($ in millions, except per share data) 14

  15. Slide 15: Continuing Strong Profitability

    ¾Our Performance Record – Operating Results Continuing Strong Profitability Second Quarter 2003 2002 ROE 15.43% 16.67% ROE (Tangible) 19.54 18.05 ROA 1.06 1.12 Net Interest Margin 3.99 4.51 Efficiency Ratio 61.40 61.25 15

  16. Slide 16: Loans – Business Mix

    ¾Our Performance Record – Lending and Credit Quality Loans – Business Mix Commercial and Commercial Consumer - (Secured by Real Industrial Installment Estate) 7% 5% 25% Residential Mort. 34% Construction (Primarily Residential) 29% $2.9 billion as of 6/30/03 (26% growth) 16

  17. Slide 17: Loans – Commercial (Secured by RE)

    ¾Our Performance Record – Lending and Credit Quality Loans – Commercial (Secured by RE) Single Unit Retail 14% Office Bldgs. 11% Hotels/Motels 6% Small Strip Ctrs. 10% Other Small Small Businesses Warehouses/Storage 51% Farmland 3% 5% $714 million as of 6/30/03 (71% owner occupied) 17

  18. Slide 18: Loans – Markets Served (June 2003)

    ¾Our Performance Record – Lending and Credit Quality Loans – Markets Served (June 2003) Coastal Georgia East Tennessee 8% 3% North Georgia 50% Western North Carolina 18% Metro Atlanta Growth v. Q2 ’02 21% ($ in millions) North Georgia $95 Metro Atlanta 137 Coastal Georgia 226 North Carolina 44 East

  19. Slide 19: Strong Credit Quality

    ¾Our Performance Record – Lending and Credit Quality Strong Credit Quality 2000 2001 2002 Q2-03 Net Charge-Offs ($ millions) $3.0 $4.6 $3.1 $1.1 As a Percentage of Average Loans .18% .25% .14% .16% -National Peer Average* .21 .30 .42 .33 Non-Performing Assets ($ in millions) $6.7 $9.7 $8.0 $8.2 As P

  20. Slide 20: Allowance for Loan Losses

    ¾Our Performance Record – Lending and Credit Quality Allowance for Loan Losses 1.50% 1.50% 1.38% 1.35% 1.30% 1.31% 1.25 1.25 1.25% 1.00% 1.00 2000 2000 2001 2001 2002 2002 30-Jun Q2-03 % of Loansxxxxxx Allowance ($ millions) $24.7 1.38% $27.1 1.35% $30.9 1.30% $37.4 1.31% 20

  21. Slide 21: Growing Core Deposits

    ¾Our Performance Record – Deposits Growing Core Deposits NOW 22% Demand 14% Brokered CDs 10% Time > $100,000 15% MMDA & Savings 10% Time < $100,000 29% Deposits of $2.9 billion as of 6/30/03 (23% growth) 21

  22. Slide 22: Commitment to Our Shareholders

    ¾Our Strategies for Success – Growth Objectives Commitment to Our Shareholders ƒ Sustainable double-digit EPS growth ƒ Return on equity of 16% to 18% ƒ Expand franchise and shareholder value 22

  23. Slide 23: Executing Our Balanced Plan

    ¾Our Strategies for Success – Growth Objectives Executing Our Balanced Plan ƒ Organic growth ƒ De novo offices ƒ Selective mergers ƒ Disciplined expense controls 23

  24. Slide 24: Expanding Footprint

    ¾Our Strategies for Success – Growth Objectives Expanding Footprint Key: •Banking office 24

  25. Slide 25: Growth from Early Partnerships

    ¾Our Strategies for Success – Early Mergers Growth from Early Partnerships Asset Size Affiliates Date Acq. Q2-03 North Carolina Mar-90 $ 55 $ 823 N. GA – Blue Ridge Feb-92 52 304 Towns Oct-92 20 142 White Aug-95 71 193 Habersham Sep-96 33 134 Rabun Sep-97 72 166 N. GA – Gilmer Jan-98 23 151 25

  26. Slide 26: EPS Estimates – Analyst Consensus

    ¾Why Invest in United Community Banks– Performance Expectations EPS Estimates – Analyst Consensus Quarter / Year Consensus EPS High Low # of Estimates Q3-03 $ .42 $ .43 $ .42 5 Q4-03 .44 .45 .44 5 2003 1.66 1.68 1.65 6 2004 1.86 1.90 1.82 6 United’s guidance: • Net interest margin in low 4% range •

  27. Slide 27: Well-Positioned for Growth

    ¾Our Strategies for Success – Key Investments Well-Positioned for Growth ƒ Strengthened key staff and infrastructure ƒ Building customer relationships ƒ A $4 billion company with the resources of a much larger organization 27

  28. Slide 28: Attractive Investment

    ¾Why Invest in United Community Banks– Summary Comments Attractive Investment ƒ High-quality growth ƒ Track record of high performance ƒ Low risk profile ƒ “Family owned” 28

  29. Slide 29: High Return On Common Equity

    ¾Exhibit High Return On Common Equity 20% 18 16 14 12 10 1998 1999 2000 2001 2002 Q2-03 Tangible 16.72% 16.43% 16.70% 18.68% 17.88% 19.54% Actual 14.91 14.42 15.06 16.73 16.54 15.43 (Excludes merger-related charges and FAS 115) E1

  30. Slide 30: Loans – Business Mix (June 2003)

    ¾Exhibit Loans – Business Mix (June 2003) Commercial and Commercial Consumer - Industrial (Secured by Real Installment 7% Estate) 5% 25% Residential Mort. 34% Construction (Primarily Residential) 29% Loans ($ in millions) (98% secured) Loan Dec-01 Dec-02 Jun-03 Size (000's) Commercial $ 629 31 % $ 6

  31. Slide 31: Loans – Commercial (Secured by RE)

    ¾Exhibit Loans – Commercial (Secured by RE) Single Unit Retail Stores $ 98 Office Buildings 81 Hotels / Motels 44 Small Strip Centers 70 Small Warehouses / Storage Units 22 Farmland 38 Other Small Business Secured By RE 361 Total $ 714 E3

  32. Slide 32: Lending Limits

    ¾Exhibit Lending Limits ($ in millions) ƒ Legal lending limit $ 51 ƒ House lending limit 15 ƒ Top 25 relationships ƒ Largest loan 15 ƒ Total balance (8% of total loans) 227 ƒ Regional credit review E5

  33. Slide 33: Deposit Mix (June 2003)

    ¾Exhibit Deposit Mix (June 2003) NOW 22% Demand 14% Brokered CDs 10% Time > $100,000 MMDA & Savings 15% 10% Time < $100,000 29% Deposits ($ in millions) Dec-00 Dec-01 Dec-02 Jun-03 NOW $ 317 16 % $ 409 19 % $ 635 27 % $ 647 23 % Demand 257 13 279 13 298 12 397 14 MMDA and Savings 184 9 215 10 200 8

  34. Slide 34: Growth from Recent Partnerships

    ¾Exhibit Growth from Recent Partnerships Asset Size Affiliates Date Acq. Q2-03 West GA Nov-01 $ 85 $ 164 Metro Jul-00 153 236 Dawson Jul-00 119 126 Rome Aug-99 108 187 Adairsville Mar-99 38 56 E7

  35. Slide 35: First Georgia Bank – Brunswick, GA

    ¾Exhibit First Georgia Bank – Brunswick, GA ƒ $42.6 million transaction value – 70% stock, 30% cash ƒ 2.04 times book value ƒ Closed on May 1, 2003 ƒ Slightly accretive to GAAP earnings per share in 2003 ƒ 19 years old - $300 million in assets, $250 million in deposits ƒ 6 banking offices serving Gl

  36. Slide 36: First Central Bank – Lenoir City, TN

    ¾Exhibit First Central Bank – Lenoir City, TN ƒ $29.9 million transaction value – 70% stock, 30% cash ƒ 2.30 times book value ƒ Closed on March 31, 2003 ƒ Slightly accretive to GAAP earnings per share in 2003 ƒ 12 years old - $195 million in assets, $165 million in deposits ƒ 8 offices in attractive

  37. Slide 37: Staying Focused on Our Customers

    ¾Exhibit Staying Focused on Our Customers ƒ Extensive customer service survey and benchmark study in 4Q ‘02 ƒ Key indicators of customer satisfaction and loyalty ƒ High marks - overall 9.45 out of a possible 10 ƒ 95 percent of respondents had already or would likely recommend United to others ƒ Bott

  38. Slide 38: Shareholder Information

    ¾Exhibit Shareholder Information Share Price (7/14/03) $ 26.76 Trading Range (52-week range) 21.73 – 30.00 Book Value Per Share (As of 6/30/03) 12.22 Annual Dividend (Payout ratio of 18% - 2003) .30 Market Capitalization ($ million) 624 Shares Outstanding (As of 6/30/03- million) 23.3 Average Daily

  39. Slide 39: Analyst Coverage and Market Makers

    ¾Exhibit Analyst Coverage and Market Makers ƒ Keefe, Bruyette & Woods ƒ Deutsche Banc Alex Brown ƒ FIG Partners, LLC. (Outperform, 7/24/03) ƒ FTN Financial Securities Corp. Goldman, Sachs & Co. ƒ McConnell, Budd & Romano ƒ ƒ Herzog, Heine, Guduld (Outperform, 2/14/03) ƒ Hill, Thompson, Magid & Co. ƒ

  40. Slide 40: Returning Value to Our Shareholders

    ¾Exhibit Returning Value to Our Shareholders 200 180 160 UCBI 140 Nasdaq – Bank Index 120 100 80 Nasdaq – Composite 60 40 20 0 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 7/14/03 Index 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 7/14/03 CAGR UCBI 100 105 96 100 126 139 8% Nasdaq - Composite 100 18

  41. Slide 41: Experienced Management Team

    ¾Exhibit Experienced Management Team Jimmy Tallent, President and CEO 1984 Rex Schuette, CFO (State Street Corp.) 2001 Guy Freeman, Banking 1994 Harold Brewer (Brintech, Inc.) 2000 Tom Gilliland, General Counsel and Secretary 1992 Ray Williams, Risk Management (Bank South Corp.) 2002 Craig Metz, Mar

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