United Community Banks, Inc. · NYSE:UCB

United Community Banks — Q3 2019 Earnings Presentation

24 slides from United Community Banks's earnings presentation, Oct 22, 2019

  1. Slide 1: 3Q Investor Presentation

    3Q INVESTOR PRESENTATION October 22, 2019 Member FDIC. © 2019 United Community Bank

  2. Slide 2: Disclosures: Cautionary Statement

    Disclosures CAUTIONARY STATEMENT This Investor Presentation contains forward-looking statements, as defined by federal securities laws, including statements about United Community Banks, Inc. (“United”) and its financial outlook and business environment. These statements are based on current expecta

  3. Slide 3: United Community Banks, Inc.

    United Community Banks, Inc. $12.8 $8.9 Committed to Service Since 1950 Billion in Assets Billion in Total Loans $2.3 $10.8 Billion in Total Deposits Billion Market Cap 180% Price / TBV 1.58% Return on average assets - 12.6x operating Price / EPS (2020E) Full Service Branch Network Extended Navitas

  4. Slide 4: United's Priorities

    United’s Priorities Service People Performance Best-in-Class A great place to Sustainable top- customer work for great quartile ROA service across people all channels Return on assets – operating of 1.58% in 3Q19, up 8 basis points from 2Q19 4

  5. Slide 5: Attractive Markets – United Deposits

    Attractive Markets – United Deposits RALEIGH $0.5 bn KNOXVILLE $0.5 bn GREENVILLE / SPARTANBURG $1.0 bn CHARLESTON / MYRTLE BEACH $0.5 bn ATLANTA $2.9 bn Density of United Branch Locations Source: S&P Global Market Intelligence 5 United deposits as of 6/30/2019

  6. Slide 6: Profitability Above Peers

    Profitability Above Peers Return on Assets - GAAP Return on Equity - GAAP 1.50% 12.50% 1.45% 1.45% 12.00% 11.83% 1.40% 11.50% 1.35% 1.31% 11.00% 1.30% 10.50% 10.13% 1.25% 10.00% 1.20% 9.50% 1.15% 9.00% 1.10% 8.50% 1.05% 8.00% 1.00% 2019 YTD 2019 YTD UCBI KRX Peers UCBI KRX Peers Achieved top quartil

  7. Slide 7: 3Q19 Highlights

    12.16% Return on common equity - $0.60 GAAP Earnings per share - 16.38% 3Q19 Highlights GAAP Return on tangible common equity - operating Earnings Per Share Return on Assets $0.63 1.58% 15% $0.59 $0.60 $0.63 $0.54 $0.55 $0.55 1.51% Earnings per share - YOY growth in 1.50% operating, up 15% YOY Book

  8. Slide 8: Net Interest Revenue / Margin

    Net Interest Revenue / Margin(1) $ in millions $119.3 $117.7 $112.1  Net interest revenue increased $1.6 mm (1%) vs. 2Q19 and $7.2 mm (6%) vs. 3Q18  Net interest margin flat quarter-over-quarter and up 17 bps YoY  Benefited from organic loan growth, strong low cost deposit growth and a continued

  9. Slide 9: Valuable Deposit Mix

    Valuable Deposit Mix 3Q19 Total Deposits $10.8 billion Time 18%  33% of deposits are Demand Deposits DDA 33%  UCBI cost of deposits down 2 bps to 0.63% in 3Q19 Savings 6%  UCBI cost of deposits significantly lower than KRX peer levels (0.65% in 2Q19 vs. KRX peers at 0.86%) 22% MMDA 21% NOW Note:

  10. Slide 10: Strong Core Transaction Deposit Growth

    Strong Core Transaction Deposit Growth $ in billions $7.503 $7.398  EOP transaction accounts increased $105 mm in 3Q19 to $7.5 bn and increased $547 mm YTD $7.091  Money market deposits up $79 mm from 2Q19, which drove the majority of 3Q19 core transaction growth  Transaction accounts increased 1

  11. Slide 11: Loans

    Loans 3Q19 Total Loans $8.9 billion Residential Construction  Annualized linked-quarter loan growth was Home Equity $65 mm, or 3% 2% 8%  Excluding the impact of planned indirect auto Residential runoff and the addition of First Madison, YTD Mortgage loan growth was 7% annualized 13% (1) C&I 41% 

  12. Slide 12: Noninterest Income

    Noninterest Income $ in millions $29.0 Linked Quarter $1.6  Fees up $4.5 mm $24.2 $24.5  Mortgage fees up $3.3 mm driven mainly by record production ($508 mm in 3Q19 rate locks vs. $390 mm in $1.5 $2.6 $8.7 2Q19)  SBA fees up $0.17 mm from 2Q19 to $1.6 mm from 2Q19 $5.3 $5.3 Year-over-Year $1.7 $

  13. Slide 13: Expense Discipline

    Expense Discipline $ in millions $82.9 $81.8 $80.3 Linked Quarter $77.7 $77.1 $77.7  GAAP and operating expenses increased 1% and 3%, respectively  Revenue driven brokerage and mortgage commissions drove the majority of the increase in salary and benefits expense compared to last quarter 57.3%  F

  14. Slide 14: Credit Quality

    Credit Quality Provision for Credit Losses Net Charge-Offs as % $ in millions of Average Loans $3.25 $3.10 0.12% 0.11% $1.80 0.07% 3Q18 2Q19 3Q19 3Q18 2Q19 3Q19 Allowance for Loan Losses Non-Performing Assets as % of Total Assets 0.74% 0.70% 0.70% 0.24% 0.21% 0.19% 3Q18 2Q19 3Q19 3Q18 2Q19 3Q19 14

  15. Slide 15: Capital Ratios

    Capital Ratios Holding Company 3Q18 2Q19 3Q19 Common Equity Tier 1 Capital 12.0 % 12.1 % 12.4 % Tier 1 Risk-Based Capital 12.3 12.4 12.7 Total Risk-Based Capital 14.2 14.2 14.5 Leverage 9.5 10.0 10.2 Tangible Common Equity to 8.9 9.9 10.2 Tangible Assets  All regulatory capital ratios significantly

  16. Slide 16: Key Strengths

    Key Strengths  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 strong core deposit growth  Well-developed credit model that drives consistent performanc

  17. Slide 17: 3Q Exhibits

    3Q INVESTOR PRESENTATION Exhibits Member FDIC. © 2019 United Community Bank

  18. Slide 18: Who We Are: Full-Service Regional Bank

    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  Underwriting conservatism and portfolio diversification High-Quality  Top quartile credit quality performance Balance  Prudent capital,

  19. Slide 19: Awards & Recognition

    AWARDS & RECOGNITION ACCOLADES NAMED ONE OF AMERICA’S BEST PERFORMING BANKS Forbes2019 PERFORM | IN AMERICA | Forbes2019 | ONE OF THE BEST BANKS WORLD’S BEST INTHE WORLD BANKS FORBES MAGAZINE G GREENWICH renee ata Powered by STATISTA f Forbes | 2019 / BEST BANKS TOP-RANKING aia, fe. IN OVERALL SATIS

  20. Slide 20: Who We Are: Focused on High-Growth MSAs in Southeast

    Who We Are Focused on High-Growth MSAs in Southeast 2024 (2) 2019-2024 Strong Demographic Profile Projected Fastest Growing Projected 2019 Median Southeast MSAs (1) Population Population Household ’19 – ’24 Projected Population Growth Growth Income 1. Myrtle Beach, SC 9.66% 485,770 $55,203 5.2% 3.6%

  21. Slide 21: Commercial RE Diversification – 9/30/2019

    Commercial RE Diversification – 9/30/2019 Commercial Real Estate - Income Producing % Outstanding Total Outstanding $1.9 billion Other 15% Office Buildings 22% Multi-Residential Properties 7% 9% Warehouse 17% Retail Buildings 10% Hotels/Motels 10% 10% Assisted Living/Nursing Investor Home/Rehab Cent

  22. Slide 22: Strong Credit Culture

    Strong Credit Culture 2. Add Significant Talent  CEO with deep knowledge and 1. Process Change experience in credit  In 2014, centralized and  2015 Rob Edwards brought in to lead streamlined consumer underwriting team (BB&T, TD Bank) and related functions  Senior credit risk team now has large 

  23. Slide 23: Non-GAAP Reconciliation Tables

    Non-GAAP Reconciliation Tables $ in thousands, except per share data 3Q18 4Q18 1Q19 2Q19 3Q19 (1) (1) (1) (1) (1) Diluted Earnings per share Diluted earnings per share - GAAP $ 0.54 $ 0.56 $ 0.55 $ 0.55 $ 0.60 Merger-related and other charges 0.01 0.01 0.01 0.04 0.03 Diluted earnings per share - Ope

  24. Slide 24: Non-GAAP Reconciliation Tables

    Non-GAAP Reconciliation Tables $ in thousands, except per share data 3Q18 4Q18 1Q19 2Q19 3Q19 (1) (1) (1) (1) (1) Return on Tangible Common Equity Return on common equity - GAAP 11.96 % 12.08 % 11.85 % 11.45 % 12.16 % Effect of merger-related and other charges 0.13 0.17 0.15 0.82 0.51 Return on comm

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