United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q4 2018 Earnings Presentation
23 slides from United Community Banks's earnings presentation, Jan 22, 2019
Slide 1: 2018 Investor Presentation, Fourth Quarter 2018
2018 INVESTOR PRESENTATION FOURTH QUARTER 2018 January 22, 2019
Slide 2: Disclosures
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 provided to assi
Slide 3: Who We Are
Who We Are Snapshot of United Community Banks, Inc. 4Q18 Overview Ticker UCBI (NASDAQ) Market Cap $1.9Bn P/EPS (2019E) 11.0x P/TBV 173% Assets $12.6Bn Loans $8.4Bn Deposits $10.5Bn CET1* 12.2% NPAs / Assets 0.20% ROA – GAAP 1.43% ROA – Operating (1) 1.45% ROCE – GAAP 12.08% ROTCE – Operating (1) 15.
Slide 4: 4Q18 Highlights
4Q18 Highlights ¾ Operating diluted earnings per share of $0.57; GAAP diluted Earnings Per Share Return on Assets earnings per share of $0.56 1.41% 1.42% 1.43% 1.45% $0.54 $0.55 $0.56 $0.57 $0.42 1.10% ¾ EPS up 2 cents per share linked quarter ¾ 15% annualized growth rate 4Q17 3Q18 4Q18 4Q17 3Q18 4Q
Slide 5: Net Interest Revenue / Margin
Net Interest Revenue / Margin (1) $ in millions $114.9 $112.1 ¾ Net interest revenue of $114.9 mm increased $2.8 mm (2.5%) vs. 3Q18 and $17.4 mm (17.8%) vs. 4Q17 ¾ Benefit of Navitas acquisition and loan growth $97.5 (average loan balances up $106 million from 3Q18) in addition to rising interest ra
Slide 6: Deposit Growth
Deposit Growth Deposits by Category in millions 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 Non-Interest Bearing Core Dem and Deposit $ 2,910 $ 3,027 $ 3,068 $ 3,118 $ 3,049 Interest Bearing Core NOW 1,221 1,225 1,204 1,200 1,193 MMDA 1,986 1,979 1,989 2,015 2,048 Savings 649 675 681 678 667 Total Interest
Slide 7: Deposits
Deposits Low-Cost Deposit Base Sufficient Liquidity to Support Future Growth Cost of Total Deposits (bps) (1) Loans / Deposits (1) (2) (3) 94% 70 4Q18 cost of deposits moved to 54 bps and the deposit beta improved to 38% in 4Q18 vs. 52% in 3Q18 60 bps 80% 60 50 44 bps 40 KRX Peer 33 bps 30 26 bps 20
Slide 8: Loans
Loans $ in billions $8.4 $8.2 $7.7 $0.6 7.1% $0.5 6.1% ¾ Annualized linked quarter loan growth was $0.3 $0.3 3.6% $0.4 5.2% 3.7% $157 mm, or 8%. Excluding the impact of planned indirect auto runoff of $34 mm, $1.9 $2.0 23.8% linked quarter loan growth was $192 mm, or $1.9 24.7% 23.2% 10% annualized
Slide 9: Loan Growth Drivers
Loan Growth Drivers ¾ Continued expansion in our metro markets ¾ Ongoing evaluation and addition of new Commercial Banking products and verticals ¾ Successful execution of the Navitas growth strategy ¾ Continued development of our unique partnership model where the community banks partner with Comme
Slide 10: Fee Revenue
Fee Revenue in millions $24.2 ¾ Vs Linked quarter, fees down $1.2 mm due to: $23.0 ¾ Mortgage fees down due to seasonality and a $1.3 $22.0 $2.6 mm negative MSR mark $2.5 ¾ SBA loan sales of $35.1 mm down 1.2% vs. last quarter $3.1 ¾ The increase in other fee revenue is due to $0.6 mm $5.3 $3.1 in n
Slide 11: Expense Discipline
Expense Discipline $ in millions $77.7 $77.1 $78.2 $77.0 ¾ Linked quarter, GAAP expenses increased 0.7% $75.9 while operating expenses decreased 0.2% ¾ Operating efficiency ratio improved 60 basis points to 55.8% ¾ Operating expenses down $0.1 mm vs. 3Q18 $68.5 primarily due to annual incentive adju
Slide 12: Credit Quality
Credit Quality Provision for Credit Losses Net Charge-Offs as % $ in millions of Average Loans 0.09% $1.8 $2.1 0.07% 0.06% $1.2 4Q17 3Q18 4Q18 4Q17 3Q18 4Q18 Allowance for Loan Losses Non-Performing Assets as % of Total Assets 0.76% 0.74% 0.73% 0.23% 0.19% 0.20% 4Q17 3Q18 4Q18 4Q17 3Q18 4Q18 ucbi.co
Slide 13: Capital Ratios
Capital Ratios Holding Company 4Q17 3Q18 4Q18 Common Equity Tier I 12.0% 12.0% 12.2% Capital Tier I Risk-Based Capital 12.2 12.3 12.4 Total Risk-Based Capital 13.1 14.2 14.3 Leverage 9.4 9.5 9.6 Tangible Common Equity to 12.1 11.6 12.0 Risk-Weighted Assets Average Tangible Equity to 9.5 9.0 9.0 Aver
Slide 14: Key Strengths
Key Strengths ¾ Culture and business model that attracts both bankers and potential acquisition partners ¾ Positioned well in many of the South's fastest-growing markets ¾ Superior customer service helps drive great core deposit growth ¾ Well-developed credit model to drive consistent performance th
Slide 15: Exhibits
2018 INVESTOR PRESENTATION Exhibits FOURTH QUARTER 2018 January 22, 2019
Slide 16: Who We Are
Who We Are Full-Service Regional Bank with a Strong Culture Rooted in Sound Credit Underwriting & Growth Cultural Pillars Customer Service Is at Our Foundation ¾ Underwriting conservatism and portfolio diversification High-Quality ¾ Top quartile credit quality performance Balance ¾ Prudent capital,
Slide 17: Who We Are
Who We Are The Bank That Service Built 17 ucbi.com | 17
Slide 18: Who We Are
Who We Are Focused on High-Growth MSAs in Southeast 2019-2024 2024 Proj. Strong Demographic Profile (2) Fastest Growing Proj. 2019 Median Southeast MSAs (1) Population Population Household Growth Income ’19 – ’24 Proj. Population Growth 1. Myrtle Beach, SC 9.66% 485,770 $55,203 5.2% 2. Cape Coral, F
Slide 19: New Loans Funded and Advances
New Loans Funded and Advances(1) $ in millions New Loans Funded and Advances New Loans Funded and Advances by Region Variance-Incr(Decr) 4Q18 3Q18 4Q17 3Q18 4Q17 Atlanta $ 145.0 $ 120.0 $ 144.3 $ 25.0 0.7 Coastal Georgia 27.1 34.7 29.5 (7.6) (2.4) North Georgia 60.2 68.3 55.9 (8.1) 4.3 North Carolin
Slide 20: Commercial RE Diversification – 12/31/2018
Commercial RE Diversification – 12/31/2018 Commercial Construction Commercial Real Estate – Income Producing in millions in millions Committed Outstanding Committed Outstanding Assisted Living/Nursing Home/Rehab Cntr $ 320 22.4 % $ 142 17.8 % Office Buildings $ 448 23.4 % $ 406 22.4 % Multi-Resident
Slide 21: Strong Credit Culture
Strong Credit Culture 1. Process Change 2. Add Significant Talent • In 2014, centralized and • CEO with deep knowledge and streamlined consumer experience in credit underwriting and related • 2015 Rob Edwards brought in to functions lead team (BB&T, TD Bank) • Significantly strengthened • Senior cre
Slide 22: Non-GAAP Reconciliation Tables
Non-GAAP Reconciliation Tables $ in thousands, except per share data 4Q17 1Q18 2Q18 3Q18 4Q18 (1) (1) (1) (1) (1) Net Income Net income - GAAP $ (11,916) $ 37,658 $ 39,634 $ 43,682 $ 45,137 Merger-related and other charges 7,358 2,646 2,873 592 1,234 Tax benefit on merger-related and other charges (
Slide 23: Non-GAAP Reconciliation Tables
Non-GAAP Reconciliation Tables $ in thousands, except per share data 4Q17 1Q18 2Q18 3Q18 4Q18 (1) (1) (1) (1) (1) Return on Tangible Common Equity Return on common equity - GAAP (3.57) % 11.11 % 11.20 % 11.96 % 12.08 % Effect of merger-related and other charges 1.86 0.60 0.77 0.13 0.17 Impairment of
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