United Community Banks, Inc. · NYSE:UCB
United Community Banks — Piper Sandler Atlanta Bank Tour (March 2023)
26 slides from United Community Banks's conference presentation, Mar 13, 2023
Slide 1: 4Q22 Investor Presentation - Piper Sandler Atlanta Bank Tour
March 13, 2023 4Q22 Investor Presentation - Piper Sandler Atlanta Bank Tour
Slide 2: Disclosures: Cautionary Statement
Disclosures 2 CAUTIONARY STATEMENT This communication contains “forward - looking statements” within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended . In general, forward - looking statements usually may be
Slide 3: Disclosures: Non-GAAP Measures
Disclosures 3 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 - relat
Slide 4: Premier Southeast Regional Bank
#2 Highest Net Promoter Score among all banks nationwide in 2021 – J.D. Power TOP 10 WORLD’S BEST BANKS and #3 in the United States – Forbes 206 BANKING OFFICES ACROSS THE SOUTHEAST #1 IN CUSTOMER SATISFACTION in 2022 with Retail Banking in the Southeast – J.D. Power United Community Banks, Inc. $ 2
Slide 5: 4Q22 Highlights
$23.63 $23.78 $24.38 $18.42 $16.52 $17.13 4Q21 3Q22 4Q22 Book Value Per Share GAAP Tangible 77% Loan - to - Deposit ratio 10.86% Return on common equity – GAAP 15.2% Return on tangible common equity – operating (1) Other 4Q notable items: $3.6mm (pre - tax) gain on equity investment marks $1.8mm (af
Slide 6: Long-Term Financial Performance & Shareholder Return
6 (1) See non - GAAP reconciliation table slides in the Appendix for a reconciliation of operating performance measures to GAAP performa nce (2) UCBI 1Q22 includes the impact of the $18.3 million initial provision to establish the reserve for Reliant loans and unfunded com mitments, which reduced RO
Slide 7: Progress Financial Corporation Merger Update
7 1% 20% 25% 49% 6% Progress Financial Corporation Merger Update Tuscaloosa Destin Huntsville Birmingham Alabama Florence Decatur Daphne Progress Financial Corporation (14) United Community Banks, Inc. (184) Panama City Business Update x Closed acquisition on January 3, 2023 x Progress is headquarte
Slide 8: Footprint Focused on High-Growth MSAs in Southeast
4.9% 3.2% (1) Includes MSAs with a population of greater than 1,000,000 (2) Includes MSAs with a population between 200,000 and 1,000,000 (3) Market Rank and (%) of Total Deposits pro forma for pending acquisition of Progress Financial Corporation Footprint Focused on High - Growth MSAs in Southeast
Slide 9: Outstanding Deposit Franchise
38% 22% 23% 8% 9% DDA MMDA Savings Time NOW Outstanding Deposit Franchise 9 Note: Core transaction accounts include demand deposits, interest - bearing demand, money market and savings accounts, excluding p ublic funds deposits x Favorable core deposit mix and deposit costs below peers x Cost of dep
Slide 10: Deposit Trends
Deposit Trends 10 x Business deposits decreased $622 million from 3Q22, primarily due to a $532 million decrease in Business DDA deposits • The Business DDA outflow was driven by a combination of asset purchases, owner distributions, tax payments and movement into higher yielding accounts, both insi
Slide 11: Well-Diversified Loan Portfolio
11 4Q22 Total Loans $15.3 billion Well - Diversified Loan Portfolio Quarter Highlights x Loans increased $453 million, or 12% annualized x Construction & CRE ratio as a percentage of total RBC = 79% / 199% x Top 25 relationships totaled $774 million, or 5.0% of total loans x SNCs outstanding of $331
Slide 12: Balance Sheet Strength – Liquidity and Capital
8.7% 8.5% 8.1% 7.7% 7.6% 7.7% 7.9% 6.8% 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 UCBI KRX Peer Median 12 Loans / Deposits % Tangible Common Equity / Tangible Assets % Common Equity Tier 1 RBC %* 70% 66% 64% 68% 70% 73% 77% 82% 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 UCBI KRX Peer Median x Substantial balance s
Slide 13: Risk-Based Capital Ratios and Tangible Book Value Per Share
13 Risk - Based Capital Ratios* Tangible Book Value Per Share x 4Q22 capital ratios increased and are above peers x The leverage ratio increased 28 bps to 9.69%, as compared to 3Q22 x Progress acquisition closed in 1Q23 and will reduce risk - based ratios approximately 45 bps to 55 bps on a stand -
Slide 14: Net Interest Revenue & Net Interest Margin
14 Net Interest Revenue & Net Interest Margin 4Q22 NIM Expansion x Net interest revenue increased $10.1 million from 3Q22, or 20% annualized x Net interest margin increased 19 bps from 3Q22, primarily driven by increased interest rates x Core net interest margin of 3.74%, which excluded purchased lo
Slide 15: Noninterest Income
Noninterest Income $ in millions $8.6 $9.1 $10.0 $9.6 $9.5 $7.8 $4.7 $6.7 $7.9 $13.5 $6.1 $5.9 $6.0 $5.9 $5.8 $10.9 $16.1 $7.0 $6.3 $3.1 $3.8 $3.2 $3.8 $2.2 $1.5 4Q21 1Q22 2Q22 3Q22 4Q22 Service Charges Other Brokerage / Wealth Mgmt Mortgage Loan sale gains $37.2 $33.4 Linked Quarter x Fees were up
Slide 16: Disciplined Expense Management
$109.2 $119.3 $120.8 $112.8 $117.3 $99.2 $110.3 $113.6 $111.0 $115.9 4Q21 1Q22 2Q22 3Q22 4Q22 GAAP Operating Disciplined Expense Management $ in millions x The efficiency ratio improved compared to last quarter due to continuing strong growth in Net Interest Income x Year over year comparisons are a
Slide 17: Credit Quality
x 4Q22 net charge - offs of $6.6 million, or 0.17% of average loans, annualized • Navitas 4Q22 NCOs of 0.50%, annualized, or $1.7 million x Non - performing assets increased $8.8 million during the quarter and were 0.29% of total loans, an increase of 5 bps quarter over quarter and essentially flat
Slide 18: Allowance for Credit Losses
Allowance for Credit Losses Allowance for Credit Losses (ACL) Walk - Forward Allowance for Credit Losses (ACL) 18 Note: ACL includes the reserve for unfunded commitments x The provision for credit losses was $19.8 million in 4Q22 x Loan growth accounted for $7.0 million of the provision increase x A
Slide 19: 4Q22 Exhibits
4 Q22 INVESTOR PRESENTATION Exhibits
Slide 20: Interest Rate Sensitivity
x 2.85% asset sensitivity in +100 bp ramp; down from 3.60% asset sensitivity in 3Q22 x One 25 bp Fed rate hike is worth approximately 3.6 bps to net interest margin x Other relevant data points • Approximately $5.3 billion or 35% of total loans are floating rate; another $1.9 billion will adjust aft
Slide 21: Navitas Portfolio
Navitas Portfolio Net Charge - Offs 21 x Navitas represents 9% of total loans x Navitas 4Q22 NCOs of 0.50%, or $1.7 million x Navitas ACL / Loans of 1.70% x After six quarters of lower than normal losses, NCOs have begun to normalize towards historical levels Navitas Performance $ in millions $823 $
Slide 22: Mortgage Activity
x Gain on sale % decreased in 4Q22 driven by a continued rise in rates driving increased price competition x Rate locks were $364 million compared to $456 million in 3Q22 x Purchase / Refi mix shifted slightly from 65% / 35% in 4Q21 to 62% / 38% in 4Q22 x 68% of locked loans were variable rate mortg
Slide 23: Selected Segments – Senior Care
23 x Senior Care lending team are dedicated specialists with significant experience in the space x Senior Care portfolio outstanding totaled $408 million as of 4Q22, or 2.7% of total loans x As of December 31, $2.2 million of Senior Care loans were nonaccruing x As of December 31, $111 million of Se
Slide 24: Non-GAAP Reconciliation Tables
Non - GAAP Reconciliation Tables $ in thousands, except per share data 24 4Q21 1Q22 2Q22 3Q22 4Q22 Expenses Expenses - GAAP 109,156$ 119,275$ 120,790$ 112,755$ 117,329$ Merger-related and other charges (9,912) (9,016) (7,143) (1,746) (1,470) Expenses - Operating 99,244$ 110,259$ 113,647$ 111,009$ 11
Slide 25: Non-GAAP Reconciliation Tables
Non - GAAP Reconciliation Tables $ in thousands, except per share data 25 4Q21 1Q22 2Q22 3Q22 4Q22 Return on Assets to return on assets- pre-tax pre-provision Return on assets - GAAP 0.96 % 0.78 % 1.08 % 1.32 % 1.33 % Income tax expense 0.26 0.20 0.32 0.37 0.41 (Release of) provision for credit loss
Slide 26: Glossary
Glossary 26 ACL – Allowance for Credit Losses MLO – Mortgage Loan Officer ALLL – Allowance for Loan Losses MTM – Marked-to-market AUA – Assets Under Administration MSA – Metropolitan Statistical Area BPS – Basis Points MSR – Mortgage Servicing Rights Asset C&I – Commercial and Industrial NCO – Net C
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