United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q3 2018 Earnings Presentation
24 slides from United Community Banks's earnings presentation, Oct 23, 2018
Slide 1: 2018 Investor Presentation, Third Quarter 2018
2018 INVESTOR PRESENTATION THIRD QUARTER 2018 October 23, 2018
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. 3Q18 Overview Ticker UCBI (NASDAQ) Market Cap $2.1Bn P/EPS (2019E) 11.2x P/TBV 194% Assets $12.4Bn Loans $8.2Bn Deposits $10.2Bn CET1* 12.0% NPAs / Assets 0.19% ROA – GAAP 1.41% ROA – Operating (1) 1.42% ROCE – GAAP 11.96% ROTCE – Operating (1) 15.
Slide 4: 3Q18 Highlights
3Q18 Highlights ¾ Operating diluted earnings per share of $0.55 compared with Earnings Per Share Return on Assets GAAP diluted earnings per share 1.41% 1.42% $0.54 $0.55 1.30% 1.39% of $0.54 $0.49 $0.53 $0.38 $0.41 1.01% 1.09% ¾ GAAP EPS up 42% vs. last year ¾ Operating EPS rose 34% over the same ti
Slide 5: Net Interest Revenue / Margin
Net Interest Revenue / Margin (1) $ in millions $112.1 $108.5 ¾ Net interest revenue of $112.1 mm increased $3.6 mm (3.4%) vs. 2Q18 and $22.3 mm (24.9%) vs. 3Q17 ¾ Benefit of Navitas acquisition and an increase in average balances, in addition to rising short-term $89.8 interest rates ¾ Net interest
Slide 6: Deposit Growth
Deposit Growth Deposits by Category in millions 2016 2017 1Q 2018 2Q 2018 3Q 2018 Non-Interest Bearing Core Dem and Deposit $ 2,423 $ 2,910 $ 3,027 $ 3,068 $ 3,118 Interest Bearing Core NOW 1,114 1,221 1,225 1,204 1,200 MMDA 1,830 1,986 1,979 1,989 2,015 Savings 548 649 675 681 678 Total Interest Be
Slide 7: Deposits
Deposits Low-Cost Deposit Base Sufficient Liquidity to Support Future Growth Cost of Total Deposits (bps) (1) (2) Loans / Deposits (1) (2) 94% 60 82% 52 bps 50 42 bps 40 33 bps KRX Peer 30 26 bps 20 10 0 KRX Peer Note – Peer comparison banks comprise the KBW Regional Bank Index (ticker:KRX) (1) Sour
Slide 8: Loans
Loans $ in billions $8.2 $8.2 $0.5 5.7% $0.5 6.2% $7.2 $0.4 4.9% $0.3 4.4% $0.5 7.2% ¾ Annualized end-of-period loan growth was $1.9 23.4% $1.9 23.5% 0.3%, or 2.1% excluding indirect auto runoff $1.8 25.2% of $41 mm $0.7 8.9% $0.8 9.3% ¾ Diversified portfolio, weighted towards C&I $0.6 8.1% ¾ Well w
Slide 9: Loan Growth Drivers
Loan Growth Drivers ¾ Continued expansion in our metro markets, including our new Myrtle Beach and Raleigh 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 partnershi
Slide 10: Fee Revenue
Fee Revenue in millions $24.2 ¾ Vs Linked quarter, fees up $0.9 mm due to: $23.3 ¾ Strong mortgage quarter with $237 mm in $2.6 originations vs. record $258 mm last quarter $20.5 $2.4 ¾ SBA loan sales of $35.5 mm up 25% vs. last quarter, that drove a 8.5% increase in gains, as gain on sale margins h
Slide 11: Expense Discipline
Expense Discipline $ in millions $77.7 $77.1 $76.9 $74.0 ¾ Linked quarter, GAAP and operating expenses grew 1% and 4%, respectively ¾ Operating efficiency ratio relatively stable at 56.4% $65.7 ¾ Operating expenses up $3.1 mm vs. 2Q18 ¾ The majority of the increase driven by higher $62.3 salaries an
Slide 12: Credit Quality
Credit Quality Provision for Credit Losses Net Charge-Offs as % $ in millions of Average Loans 0.09% $1.8 $1.8 0.07% 0.07% $1.0 3Q17 2Q18 3Q18 3Q17 2Q18 3Q18 Allowance for Loan Losses Non-Performing Assets as % of Total Assets 0.81% 0.74% 0.74% 0.23% 0.20% 0.19% 3Q17 2Q18 3Q18 3Q17 2Q18 3Q18 ucbi.co
Slide 13: Capital Ratios
Capital Ratios Holding Company 3Q17 2Q18 3Q18 Common Equity Tier I 12.2% 11.6% 12.0% Capital Tier I Risk-Based Capital 12.3 12.0 12.3 Total Risk-Based Capital 13.0 13.8 14.2 Leverage 9.3 9.3 9.5 Tangible Common Equity to 12.8 11.4 11.6 Risk-Weighted Assets Average Tangible Equity to 9.5 8.8 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 THIRD QUARTER 2018 October 23, 2018
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: Focused on High-Growth MSAs in Southeast
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) 3Q18 2Q18 3Q17 2Q18 3Q17 Atlanta $ 120.0 $ 142.3 $ 151.5 $ (22.3) (31.5) Coastal Georgia 34.7 43.3 41.1 (8.6) (6.4) North Georgia 68.3 65.2 63.8 3.1 4.5 North Caro
Slide 20: Commercial RE Diversification – 9/30/2018
Commercial RE Diversification – 9/30/2018 Commercial Construction Commercial Real Estate – Income Producing in millions in millions Committed Outstanding Committed Outstanding Assisted Living/Nursing Home/Rehab Cntr $ 296 22.4 % $ 125 16.4 % Office Buildings $ 440 23.1 % $ 398 22.2 % Residential Con
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: Accretable Yield Analysis
Accretable Yield Analysis Profitability Comparison (2Q18 Annualized) Core ROAA Adj. Core ROAA(1) Core PTPP / Avg Assets Adj. Core PTPP / Avg Assets(1) Peer 1 2.08% Peer 1 0.22% 1.86% Peer 8 2.95% Peer 8 0.11% 2.84% Peer 3 1.64% Peer 3 0.15% 1.50% Peer 1 2.86% Peer 1 0.29% 2.57% Peer 2 1.64% UCBI 0.0
Slide 23: Non-GAAP Reconciliation Tables
Non-GAAP Reconciliation Tables $ in thousands, except per share data 3Q17 4Q17 1Q18 2Q18 3Q18 (1) (1) (1) (1) (1) Net Income Net income - GAAP $ 27,946 $ (11,916) $ 37,658 $ 39,634 $ 43,682 Merger-related and other charges 3,420 7,358 2,646 2,873 592 Tax benefit on merger-related and other charges (
Slide 24: Non-GAAP Reconciliation Tables
Non-GAAP Reconciliation Tables $ in thousands, except per share data 3Q17 4Q17 1Q18 2Q18 3Q18 (1) (1) (1) (1) (1) Return on Tangible Common Equity Return on common equity - GAAP 9.22 % (3.57) % 11.11 % 11.20 % 11.96 % Effect of merger-related and other charges 0.75 1.86 0.60 0.77 0.13 Impairment of
United Community Banks — Q3 2018 Earnings Presentation on 6ix