United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q3 2017 Earnings Presentation
32 slides from United Community Banks's earnings presentation, Oct 25, 2017
Slide 1: Third Quarter 2017 Investor Presentation
2017 INVESTOR PRESENTATION THIRD QUARTER 2017 OCTOBER 25, 2017
Slide 2: Disclosures
ucbi.com | 2 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
Slide 3: 3Q17 Overview
3Q17 Overview Ticker UCBI (NASDAQ) Market Cap $2.1Bn P/E (2017E) 17.6x P/ TBV 207% Assets $11.1Bn Loans $7.2Bn Deposits $9.1Bn CET1 12.2% NPAs / Assets 0.23% ROA – GAAP 1.01% ROA – Operating (2) 1.09% ROCE – GAAP 9.22% ROTCE – Operating (2) 11.93% • Established in 1950 and headquartered in Blairsvil
Slide 4: Focused on High-Growth MSAs in Southeast
Fastest Growing Southeast MSAs (1) 2018 - 2023 Proj . Population Growth 2018 Population 2023 Proj . Median Household Income 1. Myrtle Beach, SC 9.96% 470,010 $55,177 2. Cape Coral, FL 8.66% 740,553 $59,220 3. Charleston, SC 8.46% 785,518 $69,670 4. Orlando, FL 8.17% 2,518,915 $62,806 5. Raleigh, NC
Slide 5: Cultural Pillars
Cultural Pillars Customer Service Is at Our Foundation High - Quality Balance Sheet » Underwriting conservatism and portfolio diversification » Top quartile credit quality performance » Prudent capital, liquidity and interest - rate risk management » Focused on improving return to shareholders with
Slide 6: The Bank That Service Built
Regional Bank with Community Bank – Level Service Recognized for Ranked #1 in Retail Banking Customer Satisfaction in the Southeast by J.D. Power … Being a great place to work … H igh levels of financial performance Who We Are The Bank That Service Built ucbi.com | 6 Regional Bank 1 United Community
Slide 7: 3Q17 Highlights
3Q17 Highlights ucbi.com | 7 $13.00 $13.74 $14.11 3Q16 2Q17 3Q17 Tangible Book Value (2) $0.36 $0.39 $0.38 $0.39 $0.41 $0.41 3Q16 2Q17 3Q17 Earnings Per Share GAAP Operating (1) 1.00% 1.06% 1.01% 1.08% 1.10% 1.09% 3Q16 2Q17 3Q17 Return on Assets GAAP Operating (1) (1) See non - GAAP reconciliation t
Slide 8: Net Interest Revenue / Margin
$79.0 $85.1 $89.8 3Q16 2Q17 3Q17 3.34% 3.47% 3.54% ucbi.com | 8 (1) Net interest margin is calculated on a fully taxable equivalent basis (2) E xcludes brokered deposits Net Interest Revenue / Margin (1) ucbi.com | 8 (1) Net interest margin is calculated on a fully - taxable equivalent basis $ in mi
Slide 9: Low-Cost Deposit Base
0 10 20 30 40 79% 93% Low - Cost Deposit Base (1) Sufficient Liquidity to Support Future Growth Loans / Deposits (3) Cost of Total Deposits (bps) 31 bps 17 bps Deposits KRX Peer ucbi.com | 9 3Q15 - 2Q16 deposit beta equal to 6%, less than half the 15% industry average (2) KRX Peer Note – Peer compar
Slide 10: Loans
ucbi.com | 10 $2.6 $2.8 $2.9 $1.3 $1.3 $1.4 $0.6 $0.6 $0.6 $1.7 $1.7 $1.8 $0.6 $0.6 $0.5 $6.7 $7.0 $7.2 3Q16 2Q17 3Q17 C&I (1) CRE Comml Construction Residential Other Consumer 25.4% 8.4% 19.0% 38.4% 19.1% 39.9% 8.3% 24.7% 8.0% 19.6% 39.9% 8.1% 25.2% 7.2% Loans ucbi.com | 10 $ in billions 8.8% » Str
Slide 11: Loan Growth Drivers
ucbi.com | 11 Loan Growth Drivers ucbi.com | 11 » Greater expansion in our metro markets, including our new Myrtle B each and Raleigh markets » Expansion of our Commercial B anking S olutions (CBS) unit (i.e. deeper penetration and new verticals) » Continued development of our unique partnership mod
Slide 12: Fee Revenue
$10.8 $10.7 $8.2 $5.8 $4.4 $4.4 $1.2 $1.2 $1.0 $6.1 $4.8 $4.2 $2.5 $2.6 $2.8 3Q16 2Q17 3Q17 Service Charges Other Brokerage Mortgage SBA ucbi.com | 12 Fee Revenue ucbi.com | 12 in millions » Vs Last Year, fees down $5.8 mm to $20.6 mm » $2.7 mm lower interchange fees vs 3Q16 due to Durbin » Mortgage
Slide 13: Expense Discipline
60.8% 57.9% 59.3% 57.8% 56.2% 56.2% 60.78% 57.89% 59.27% 57.79% 56.21% 56.18% $64.0 $63.2 $65.7 $60.9 $61.4 $62.3 3Q16 2Q17 3Q17 ucbi.com | 13 (1) Net interest margin is calculated on a fully taxable equivalent basis (2) E xcludes brokered deposits Expense Discipline ucbi.com | 13 GAAP Operating (1)
Slide 14: Credit Quality
Credit Quality ucbi.com | 14 (1) See non - GAAP reconciliation table slides at the end of the exhibits for a reconciliation of operating performance measures to G AAP performance measures ucbi.com | 14 0.08% 0.09% 0.09% 3Q16 2Q17 3Q17 Net Charge - Offs as % of Average Loans 0.30% 0.24% 0.23% 3Q16 2Q
Slide 15: Key Strengths
ucbi.com | 15 Key Strengths ucbi.com | 15 » Culture and business model that attracts both bankers and potential acquisition partners » Positioned well in many of the South's fastest - growing markets » Superior customer service helps drive great core deposit growth » Well - developed credit model to
Slide 16: Capital
ucbi.com | 16 Holding Company 3Q16 2Q17 3Q17 Tier I Risk - Based Capital 11.0% 11.9% 12.3% Total Risk - Based Capital 11.9 12.7 13.0 Leverage 8.4 9.0 9.3 Tier I Common Risk - Based Capital 11.0 11.9 12.2 Tangible Common Equity to Risk - Weighted Assets 12.2 12.4 12.8 Average Tangible Equity to Avera
Slide 17: Acquisition of HCSB
19.3% 8.1% 7.8% HCSB UCBI South Carolina Rank Bank Branches Deposits ($MM) Mkt. Share (%) 1. BB&T 27 1,829 24.1 2. CNB Corp. 14 813 10.7 3. Wells Fargo 10 704 9.3 4. Bank of America 9 601 7.9 5. UCBI Pro Forma 10 452 5.9 Strong Demographics Myrtle Beach is the fastest growing MSA in the state Compel
Slide 18: Acquisition of Four Oaks Fincorp, Inc.
Transaction Overview • Scheduled to close November 1, 2017 • 90 % stock (0.6178 shares of United) and 10% cash ($1.90) - $ 124 million transaction value (1) • 177% P / TBV • An excellent springboard to grow and attract top - quality bankers in the Raleigh market Company Snapshot • Assets: $737 milli
Slide 19: 2017 Exhibits
2017 INVESTOR PRESENTATION Exhibits THIRD QUARTER 2017 OCTOBER 25, 2017
Slide 20: $79.0 $85.1 $89.8 $60.9 $61.4 $62.3 $44.5 $47.4 $48.1 $26.4 $23.7 $20.6 $10 $20
$79.0 $85.1 $89.8 $60.9 $61.4 $62.3 $44.5 $47.4 $48.1 $26.4 $23.7 $20.6 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 3Q16 2Q17 3Q17 Net Interest Revenue Expenses - Operating (1) Pre-Tax, Pre-Credit Earnings (1) Fee Revenue ucbi.com | 20 3Q17 2Q17 3Q16 Salaries & Employee Benefits 38,027$ 689$ 1,549$ Com
Slide 21: Deposit Growth by Category and Region
2013 2014 2015 2016 3Q17 2013 2014 2015 2016 3Q17 Demand Deposit 123$ 161$ 618$ 334$ 350$ Non-Interest Bearing Core NOW 4 9 441 5 52 Demand Deposit 1,311$ 1,471$ 2,089$ 2,423$ 2,773$ MMDA 73 41 325 246 82 Savings 24 41 177 79 55 Interest Bearing Core Growth by Category 224$ 252$ 1,561$ 664$ 539$ Tot
Slide 22: High-Quality, Low-Cost Core Deposit Base
Note: Peer comparison banks comprise the KBW Regional Bank Index (ticker: KRX) ucbi.com | 22 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8% 0.9% CFR WABC COLB CVBF CBU FMBI FFIN BOH CBSH FCF UCBI ONB TRMK UMBF UMPQ BOKF GBCI WAL BXS MBFI PACW PB PFS WBS SNV BPFH FNB TCF FHN FULT WTFC HBHC EWBC UBSI TC
Slide 23: New Loans Funded and Advances
ucbi.com | 23 3Q17 2Q17 3Q16 2Q17 3Q16 Commercial & Industrial 136.0$ 161.8$ 140.0$ (25.8)$ (4.0)$ Owner-Occupied CRE 72.2 114.0 92.8 (41.8) (20.6) Income-Producing CRE 80.1 41.6 148.0 38.5 (67.9) Commercial Constr. 139.1 121.8 45.7 17.3 93.4 Total Commercial 427.4 439.2 426.5 (11.8) .9 Residential
Slide 24: Loans by Region and Category
2013 2014 2015 2016 3Q17 North Georgia 1,240$ 1,163$ 1,125$ 1,097$ 1,047$ Atlanta MSA 1,235 1,243 1,259 1,399 1,477 North Carolina 572 553 549 545 542 Coastal Georgia 423 456 537 581 634 Gainesville MSA 255 257 254 248 242 East Tennessee (1) 280 280 504 504 470 South Carolina (2) 4 30 819 1,233 1,47
Slide 25: Commercial Real Estate Diversification
Commercial Real Estate Diversification ucbi.com | 25 Retail Building 88$ 8.4 % 66$ 11.3 % Assisted Living/Nursing Home/Rehab 169 16.1 35 6.0 Multi-Residential 72 6.8 50 8.6 Office Buildings 108 10.3 41 7.0 Commercial Residential CIP: Spec 87 8.3 60 10.3 Land Develop - Vacant (Improved) 65 6.2 52 8.9
Slide 26: Disciplined Credit Processes
ucbi.com | 26 Granular Portfolio – Exposure and Industry Limits • Legal Lending Limit $ 274M • House Lending Limit 28M • Project Lending Limit 17M • Top 25 Relationships 575M Concentration limits set for all segments of the portfolio Disciplined Credit Processes ucbi.com | 26 STRUCTURE • Centralized
Slide 27: Credit Quality
Net Charge-offs 1.4$ 1.5$ 1.7$ 1.6$ 1.6 as % of Average Loans 0.08 % 0.09 % 0.10 % 0.09 % 0.09 % Allowance for Loan Losses 63.0$ 61.4$ 60.5$ 59.5$ 58.6 as % of Total Loans 0.94 % 0.89 % 0.87 % 0.85 % 0.81 % as % of NPLs 292 285 306 258 256 Past Due Loans (30 - 89 Days) 0.33 % 0.25 % 0.23 % 0.23 % 0.
Slide 28: Excellent Credit Performance & Management
Note: Peer comparison banks comprise the KBW Regional Bank Index (ticker: KRX) Excellent Credit Performance & Management ucbi.com | 28 0.0% 0.5% 1.0% 1.5% 2.0% CBSH BOH UMPQ WABC CVBF BPFH PB CBU OZRK VLY UCBI UMBF CFR PNFP MBFI WAL FFIN EWBC WTFC COLB FCF FNB PFS BXS BKU FHN WAFD STL STBA CATY SNV
Slide 29: Growth Opportunities
ucbi.com | 29 (1) (2) (2) (2) (1) (1) North Georgia $ 7.6 $ 2.4 9 19 33 % 1 Atlanta, Georgia 70.4 2.6 10 34 4 7 Gainesville, Georgia 3.5 0.4 1 5 11 4 Coastal Georgia 8.9 0.4 2 7 4 8 Western North Carolina 7.4 1.1 1 19 14 3 East Tennessee 17.6 0.5 2 11 3 7 Upstate South Carolina 24.9 1.1 4 25 5 7 Coa
Slide 30: Management Team
Jimmy C. Tallent Chairman & CEO Joined 1984 H. Lynn Harton Board, President & COO Joined 2012 Bill M. Gilbert President, Community Banking Joined 2000 Bradley J. Miller EVP, CRO & General Counsel Joined 2007 • Over 40 years in banking • Led company from $42 million in assets in 1989 to $11.1 billion
Slide 31: Non-GAAP Reconciliation
3Q16 4Q16 1Q17 2Q17 3Q17 (1) Net Income Net income - GAAP 25,874$ 27,221$ 23,524$ 28,267$ 27,946$ Merger-related and other charges 3,152 1,141 2,054 1,830 3,420 Tax benefit on merger-related and other charges (1,193) (432) (758) (675) (1,147) Impairment of deferred tax asset on canceled nonqualified
Slide 32: Non-GAAP Reconciliation (continued)
3Q16 4Q16 1Q17 2Q17 3Q17 (1) Return on Tangible Common Equity Return on common equity - GAAP 9.61 % 9.89 % 8.54 % 9.98 % 9.22 % Effect of merger-related and other charges 0.73 0.26 0.47 0.41 0.75 Impairment of deferred tax asset on canceled nonqualified stock options - 0.36 - - - Release of dispropo
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