United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q1 2014 Earnings Presentation
38 slides from United Community Banks's earnings presentation, Apr 24, 2014
Slide 1: United Community Banks, Inc. First Quarter 2014 Investor Presentation
United Community Banks, Inc. First Quarter 2014 Investor Presentation
Slide 2: Cautionary Statement
2 Cautionary Statement This investor presentation may contain forward - looking statements, as defined by federal securities laws, including statements about United’s financial outlook and business environment . These statements are based on current expectations and are provided to assist in the und
Slide 3: United at a Glance
3 United at a Glance Founded in 1950 Third - largest bank holding company headquartered in Georgia with 1,488 employees Key Statistics as of 3/31/14 (in billions) Assets Deposits Loans $7.40 $6.25 $4.36 Deposit Market Share (1) Market Offices Deposit Market Share Rank No. Georgia 22 34% 1 Atlanta MS
Slide 4: Footprint
4 Footprint Savannah Nashville Greenville Asheville Atlanta Chattanooga Raleigh Charlotte Charleston Myrtle Beach Knoxville Current Footprint Blairsville Headquartered in Blairsville, Georgia with 102 locations in: Georgia; North Carolina; South Carolina; and Tennessee
Slide 5: Business and Operating Model
5 Business and Operating Model Service is Point of Differentiation #1 in Customer Satisfaction according to Customer Service Profiles Nationally recognized customer service by well regarded market research companies Golden rule of banking – treating people the way we want to be treated “The Bank tha
Slide 6: Highlights First Quarter 2014
6 Highlights First Quarter 2014 IMPROVING QUARTERLY RESULTS 1Q14 1Q13 Net Income $15.4M $11.8M EPS $.25 $.15 ROA .85% .70% ROCE 8.64% 8.51% Solid Improvement in Credit Quality from One Year Ago Credit costs decline substantially: Provision of $2.5 million vs. $11.0 million Net charge - offs decline
Slide 7: Highlights First Quarter 2014 (Compared to a year ago)
7 Highlights First Quarter 2014 (Compared to a year ago) Solid Capital Ratios and Improved Debt Position Redeemed all preferred stock of $ 197 million in fourth and first quarters without issuing common stock Tier I Common to Risk Weighted Assets of 10.0%; Tangible Common to RWAs of 13.6% Tier 1 Ris
Slide 8: 2014 Goals
8 2014 Goals Strong local leadership and senior management Funding advantage in legacy markets Consistent and attractive culture Class leading customer satisfaction Maximize employee retention HOW? LEVERAGE OUR STRENGTHS Continue to invest in and improve commercial and retail capabilities Diversify
Slide 9: 2014 Goals
8 2014 Goals Community bank service with large bank resources Strong local leadership and senior management Funding advantage in legacy markets Consistent and attractive culture Class leading customer satisfaction HOW? LEVERAGE OUR STRENGTHS Continue to invest in and improve commercial and retail ca
Slide 10: Financial Review
FINANCIAL REVIEW
Slide 11: Highlights First Quarter 2014 (Compared to a year ago)
7 Highlights First Quarter 2014 (Compared to a year ago) Solid Capital Ratios and Improved Debt Position Redeemed all preferred stock of $197 million in fourth and first quarters without issuing common stock Tier I Common to Risk Weighted Assets of 10.0%; Tangible Common to RWAs of 13.6% Tier 1 Risk
Slide 12: Core Operating Expenses
12 Core Operating Expenses (1) Includes foreclosed property costs, severance, and gains and losses on deferred compensation plan liabilities. $ in thousands 1Q14 4Q13 1Q13 Salaries & Employee Benefits 24,211$ (376)$ 1,156$ Communications & Equipment 3,239 (175) 193 Occupancy 3,378 (357) 11 FDIC Asse
Slide 13: Key Drivers of Net Interest Revenue / Margin
13 Key Drivers of Net Interest Revenue / Margin Net Interest Revenue 1Q growth impacted by: Net loan growth Higher securities yield Offset partially by loan pricing competition Two fewer days vs. 4Q $ in millions KEY DRIVERS OF NIR NET INTEREST REVENUE & MARGIN Loan / Securities Pricing Deposit Pric
Slide 14: Net Income
14 Net Income $ in thousands NET OPERATING INCOME 1Q14 4Q13 1Q14 Core Earnings (Pre-Tax, Pre-Credit) 27,350$ (555)$ 1,058$ Provision for Loan Loss 2,500 (500) (8,500) NON-CORE FEE REVENUE: Securities Gains (Losses) 217 147 101 Gains (Losses) on Deferred Compensation Plan Assets 29 (201) (148) Total
Slide 15: Customer Deposit Mix & Core Growth
15 Customer Deposit Mix & Core Growth $ in thousands Time >$100M 9% Demand & NOW 36% Deposits by % / Customer Mix Public Funds 15% Time <$100M 14% MMDA & Sav 26% Time >$100M 22% Demand & NOW 23% Public Funds 14% Time <$100M 31% MMDA & Sav 10% 1Q14 $5.8B 62%* 2Q08 $6.2B 34%* 1Q14 4Q13 1Q13 4Q08 Deman
Slide 16: Capital Ratios
16 Capital Ratios Holding Company Well- Cap 1Q14 4Q13 3Q13 2Q13 1Q13 Tier I RBC 6 % 11.1 % 12.7 % 14.2 % 13.7 % 14.3 % Total RBC 10 12.3 14.0 15.5 15.2 15.9 Leverage 5 8.0 9.1 10.0 9.8 9.7 Tier 1 Common RBC 10.0 9.3 9.0 8.5 8.9 Tangible Common to Assets 9.2 9.0 9.0 6.3 5.7 Tangible Equity to Assets
Slide 17: Loan Portfolio & Credit Quality
LOAN PORTFOLIO & CREDIT QUALITY
Slide 18: Loan Portfolio
18 Loan Portfolio (total $4.36 billion) Diversifying Portfolio Geographic Diversity Residential Mortgage 30% $1.31 Period $ in Billions 1Q14 $4.356 4Q13 $4.329 3Q13 $4.267 2Q13 $4.189 1Q13 $4.194 By Loan Type 1Q11 $4.194 1Q14 $4.356 Reduced concentrations of A&D and Investor RE loans 6% 6% 10% 13% 2
Slide 19: New Loans Funded and Advances
19 New Loans Funded and Advances (1) $ in millions CATEGORY 1Q14 1Q13 1Q14 1Q13 Commercial C & I 74.7$ 40.1$ Atlanta 86.1$ 90.7$ Owner Occupied CRE 48.9 57.9 Coastal Georgia 31.1 18.1 Income Producing CRE 41.1 14.5 N. Georgia 41.3 66.1 Commercial Constr. 1.9 1.6 North Carolina 16.9 32.2 Total Commer
Slide 20: Commercial Loans
20 Commercial Loans (total $2.41 billion) $ in billions Geographic Diversity Income Producing 26% $.62B C & I 21% $.50B 5% 7% 7% 13% 23% 40% Average Loan Size Type $ in Thousands Owner Occup’d $630 Income Prod 748 C & I 138 Comm Constr 524 By Loan Type 5%
Slide 21: Retail Loans
21 Retail (total $1.63 billion) Geographic Diversity Home Equity LOC 27% $.447B Avg loan size $56 thousand 0% 7% 8% 16% 20% 32% By Loan Type Mortgage 53% $.867B Avg loan size $101 thousand 4% 13% $ in billions Success with new portfolio products and HELOCs Conservative underwriting 62.7% of HE Prima
Slide 22: Residential Construction
22 Residential Construction (total $318 million) $ in millions Geographic Diversity Raw 12% $37 Lot 50% $159 3% 4% 5% 21% 22% 45% By Loan Type Developing 12% $37 1Q14 4Q13 3Q13 2Q13 1Q13 1Q14 vs. 1Q13 TOTAL COMPANY Land Loans Developing 37$ 39$ 40$ 42$ 57$ (20)$ Raw 37 38 35 36 42 (5) Lot 159 166 16
Slide 23: Credit Quality
23 Credit Quality $ in millions 1Q14 4Q13 3Q13 2Q13 1Q13 Net Charge-offs 4.0$ 4.4$ 4.5$ 72.4$ 12.4$ as % of Average Loans .38 % .41 % .42 % 6.87 % 1.21 % Allowance for Loan Losses 75.2$ 76.8$ 80.4$ 81.8$ 105.8$ as % of Total Loans 1.73 % 1.77 % 1.88 % 1.95 % 2.52 % as % of NPLs 301 286 308 294 110 P
Slide 24: Non-Performing Loans (NPLs) Inflow Trends
24 Non - Performing Loans (NPLs) Inflow Trends $ in millions Quarterly NPL Inflows Total NPLs
Slide 25: Performing Classified Loans
25 Performing Classified Loans $ in millions 1Q13 2Q13 3Q13 4Q13 1Q14 Commercial: Commercial & Industrial 20$ 11$ 10$ 9$ 8$ Owner Occupied 71 43 40 43 48 Total C & I 91 54 50 52 56 Income Producing CRE 57 36 36 34 37 Commercial Construction 18 16 17 17 5 Total Commercial 166 106 103 104 98 Residenti
Slide 26: TDRs
26 TDRs $ in millions LOAN TYPE 1Q14 vs. 1Q13 1Q14 vs. 1Q13 1Q14 vs. 1Q13 Commercial (Sec by RE) 38.9$ 65.7$ 2.1$ 9.0$ 41.0$ 74.7$ Commercial & Industrial 3.2 8.6 .1 .2 3.3 8.8 Commercial Construction 11.5 15.8 .1 16.8 11.6 32.6 Total Commercial 53.6 90.1 2.3 26.0 55.9 116.1 Residential Mortgage 16.
Slide 27: Net Charge-offs by Category & Market
27 Net Charge - offs by Category & Market $ in thousands NET CHARGE-OFFS BY CATEGORY Total % of Avg Loans 4Q13 3Q13 2Q13 1Q13 Commercial (Sec. by RE): Owner Occupied 278$ .10 % .57 % .58 % 5.85 % .69 % Income Producing 205 .13 .21 .14 5.45 1.99 Total Comm (Sec. by RE) 483 .11 .44 .49 5.70 1.18 Comme
Slide 28: NPAs by Loan Category & Market
28 NPAs by Loan Category & Market $ in thousands NPLs OREO Total NPAs NPLs OREO Total NPAs LOAN CATEGORY LOAN CATEGORY Commercial (sec. by RE): Commercial (sec. by RE): Owner Occupied 3,868$ 1,167$ 5,035$ Owner Occupied 8,142$ 4,750$ 12,892$ Income Producing 1,278 1,645 2,923 Income Producing 9,162
Slide 29: Appendix
APPENDIX
Slide 30: Experienced Proven Leadership
30 Experienced Proven Leadership Jimmy C. Tallent President & CEO Joined 1984 H. Lynn Harton Chief Operating Officer Joined 2012 Rex S. Schuette EVP & CFO Joined 2001 David P. Shearrow EVP & CRO Joined 2007 Bill M. Gilbert Director of Banking Joined 2000 Timothy K. Schools Chief Strategy Officer Joi
Slide 31: Market Share Opportunities & Demographics
31 Market Share Opportunities & Demographics Population Actual Projected Markets 1 (in thousands) 2010 - 2013 2013 - 2018 Atlanta, GA MSA 5,421 3% 6% East Tennessee 874 2 4 Greenville-Mauldin-Easley, SC MSA 850 3 5 Western North Carolina 449 3 3 Coastal Georgia 393 3 6 North Georgia 389 2 2 Gainesvi
Slide 32: Liquidity: Loans / Deposits and Wholesale Borrowings
32 LOANS / DEPOSITS WHOLESALE BORROWINGS Liquidity 1Q14 4Q13 1Q13 vs 1Q13 Loans 4,356$ 4,329$ 4,194$ 27$ 162$ Core (DDA, MMDA, Savings) 3,572$ 3,437$ 3,294$ 135$ 278$ Public Funds 838 895 732 (57) 106 CD's 1,367 1,445 1,668 (78) (301) Total Deposits (excl Brokered) 5,777$ 5,777$ 5,694$ -$ 83$ Loan t
Slide 33: Business Mix – Deposits
33 Business Mix – Deposits (at quarter - end) 1Q14 vs. DEPOSITS BY CATEGORY 1Q14 4Q13 3Q13 2Q13 1Q13 1Q13 Demand & Now 2,073$ 1,969$ 1,979$ 1,916$ 1,894$ 179$ MMDA & Savings 1,499 1,468 1,437 1,406 1,401 98 Core Transaction Deposits 3,572 3,437 3,416 3,322 3,295 277 Time < $100,000 828 888 920 977 1
Slide 34: Core Transaction Deposits
34 Core Transaction Deposits 4Q13 South Carolina 99.0 % 99.0 % Gainesville MSA 71.0 70.2 Coastal GA 69.6 67.9 East TN 65.9 63.6 North Carolina 64.2 63.5 Atlanta MSA 65.0 61.6 North Georgia 52.7 50.4 Total 61.8 % 59.5 % 1Q14 Core Transactions / Total Deposits $ in millions
Slide 35: Lending & Credit Environment
35 Lending & Credit Environment Regional Credit Review – Standard Underwriting • House Lending Limit $ 25 • Project Lending Limit 15 • Top 25 Relationships 343.8 PROACTIVELY ADDRESSING CREDIT ENVIRONMENT STRUCTURE PROCESS • Continuous external loan review • Internal loan review of new credit relatio
Slide 36: Commercial Construction & Real Estate
36 Commercial Construction & Real Estate Amount Percent Land Develop - Vacant (Improved) 54$ 38 % Raw Land - Vacant (Unimproved) 30 21 Commercial Land Development 16 11 Multi-Residential 13 9 Churches 8 6 Retail Building 7 5 Mfg Facility 3 2 Office Buildings 2 1 Warehouse 2 1 Carwash 2 1 Other Prope
Slide 37: Loans by Business Mix and Region
37 Loans by Business Mix and Region 1Q14 4Q13 3Q13 2Q13 1Q13 1Q14 vs. 1Q13 QUARTERLY LOANS - BUSINESS MIX BY CATEGORY Commercial: Comm & Indus 495$ 472$ 457$ 437$ 454$ 41$ Owner Occ'd 1,142 1,134 1,129 1,119 1,130 12 Total C & I 1,637 1,606 1,586 1,556 1,584 53 Income Prod CRE 624 623 614 629 674 (5
Slide 38: Non-GAAP Reconciliation Tables
38 Non - GAAP Reconciliation Tables 1Q14 4Q13 3Q13 2Q13 1Q13 CORE FEE REVENUE Core fee revenue 11,930$ 13,219$ 13,966$ 14,063$ 12,618$ Securities gains, net 217 70 - - 116 Gains from sales of low income housing tax credits - - - 468 - BOLI death benefit gain - - 86 1,366 - Mark to market on deferred
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