United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q4 2012 Earnings Presentation
83 slides from United Community Banks's earnings presentation, Jan 24, 2013
Slide 1: United Community Banks, Inc. Fourth Quarter 2012 Investor Presentation
Jimmy C. Tallent P id t & CEO President H. Lynn Harton Chief Operating Officer Rex S. Schuette EVP & Chief Financial Officer rex_schuette@ucbi.com _ @ (706) 781-2266 David P. Shearrow EVP & Chief Risk Officer United Community Banks, Inc. Fourth Quarter 2012 Investor Presentation
Slide 2: Cautionary Statement
2 Cautionary Statement This news release contains 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 understanding of f
Slide 3: Non-GAAP Measures
3 Non-GAAP Measures This presentation also contains financial measures determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). Such non‐GAAP financial measures include the following: net interest margin – pre credit, core net interest margin, core net i
Slide 4: United at a Glance
4 United at a Glance Founded in 1950 27 Banks and 105 Offices Third‐largest bank holding company in Georgia Headquartered in Blairsville, Georgia with 105 locations throughout north Georgia, metro Atlanta, coastal Georgia, western North Carolina and east Tennessee 1,590 employees Deposit Market Shar
Slide 5: Performance – Trends
5 PERFORMANCE – TRENDS
Slide 6: Highlights Fourth Quarter
6 Highlights Fourth Quarter Improving Quarterly Results Net income of $9.26 million, or 11 cents per share Sixth Si th q quarterly t l profit fit iin past st sseven quarters q t s Core earnings (pre-tax, pre-credit) of $29.1 million d Loan Growth, Modest h Both h Linked i k d Quarter and d
Slide 7: Net Interest Revenue
7 Net Interest Revenue $ in millions $65 $60 $58.9 $59.3 $59.1 $58.9 $58.4 $57.4 $56.9 $56.0 $55 $50 1Q11* 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 *Excludes $2 million accrued interest on performing loans sold in connection with the bulk loan sale in 1Q11 that we were not paid for as part of the agreemen
Slide 8: Core Fee Revenue - Improving
8 Core Fee Revenue - Improving $ in millions $15 $14.6 $14 $13 $13.1 $13.0 $12.8 $12 $11.3 $11.4 $11 $11.1 $10.4 $10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Slide 9: Core Operating Expenses – Gaining Efficiencies
9 Core Operating Expenses – Gaining Efficiencies $ in millions $48 $46.6 $46 $45.6 $44 $44.1 $43.8 $42.7 $42 $41.6 $4 $41 3 $41.3 $40.5 $40 $38 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Slide 10: Core Deposit Mix - Improving
10 Core Deposit Mix - Improving $ in billions 1Q11 Q 4Q12 $5.91 $5.71 Public P bli Public Funds Funds 11% 13% Core Transaction Core 46% Time Transaction Time 31% 56% 43% 1Q11 4Q12 Demand / NOW $ 1,576 $ 1,841 MMDA / Savings 1,149 1,372 Core Transaction 2,725 3,213 Time 2,516 1,050 Public Deposits 67
Slide 11: Key Driver of Net Interest Revenue – Loan Growth
11 Key Driver of Net Interest Revenue – Loan Growth 6.0% 5.49% 5.39% 5.18% 5.07% Margin Compression 5.0% D tto Due Loan and 4.0% securities pricing 3.34% under pressure 3.0% 2.47% 2.15% Difficult to lower 2.0% 1.86% deposit pricing 1 08% 1.08% 1.0% .70% .49% .41% 0.0% 1Q11 2Q11 3Q11 4Q11 1Q12 2Q
Slide 12: Key Drivers of Net Interest Revenue / Margin
12 Key Drivers of Net Interest Revenue / Margin Net Interest Revenue Growth 3.8% Offset margin g compression by 3.7 growing loans 3.60 4Q12 impacted by: 3.6 3.55 3 53 3.53 Overlap of sub- 3.51 3.5 debt (5 bps) 3.43 3.44 Full quarter 3.41 3.41 3.4 impact of scheduled h d l d 3.3 repricing of
Slide 13: New Loans Funded (> $100 Thousand)
13 New Loans Funded (> $100 Thousand) $ in millions $200 $150 $147.3 $149.8 $ $131.4 $137.5 $137 5 $100 $104.6 $87.8 $86.5 $50 $52.6 $ $- 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 L Loans b ) ($ bns): $4.163 $4.110 $4.110 $4.128 $4.119 $4.138 $4.175
Slide 14: Loan Portfolio – Diversifying
14 Loan Portfolio – Diversifying ($ in billions) 1Q11 4Q12 Retail Retail 31% 33% C&I C&I 34% 38% Constr Inv RE Constr 18% 17% 13% Inv RE 16% 1Q11 4Q12 Commercial C&I $ 1.425 $ 1.590 Commercial Inv. Inv RE .698 698 .682 682 Construction .763 .536 Retail 1.308 1.367 $ 4.194 $ 4.175
Slide 15: Core Earnings – Growth Through Fee Revenue / Expense Efficiencies
15 Core Earnings – Growth Through Fee Revenue / Expense Efficiencies $ in millions $32 $30 $29.9 $29.3 $29.1 $28 $28.3 $26.5 $26.7 $26 $24 $24.4 $ 44 $22 $22.1 $20 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Slide 16: Net Income (Loss)
16 Net Income (Loss) $ in millions $ 20 $12.0 $11.5 $ 10 $9.3 $9.9 $6.5 $10.6 $ 0 $(10) $(11.3) $(20) 2Q11 3Q11* 4Q11 1Q12 2Q12 3Q12 4Q12 *Includes $25 million provision for large customer relationship
Slide 17: Non-Performing Assets (NPAs)
17 Non-Performing Assets (NPAs) $ in millions $200 $188.8 $160.1 $161.6 $150 $138.1 $145.7 $142.0 $ 8 $128.2 $118.7 $100 $50 $- 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12* 4Q12 Non-Performing Loans Foreclosed Properties (OREO) *NPAs to total assets – 1.88% / Allowance to loans at 2.57%
Slide 18: Non-Performing Loans (NPLs) Inflow Trends
18 18 Non-Performing Loans (NPLs) Inflow Trends $ in millions Quarterly NPL Inflows Since 2009 $193.3 89.5% $200.0 $174.8 $177.7 Decline $174.9 $155.0 $139.0 from Peak $150.0 $119.8 $103.4 $100.0 $81.0 $54.7 $35.9 $45 7 $45.7 $50.0 $32.4 $29.4 30.5 20.2 $0.0 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10
Slide 19: Performing Classified Loans
19 Performing Classified Loans $ in millions $360 $341.3 $335 $328.5 $322.7 $323.6 $316.9 $310 $313.1 $285 $282.5 $ 5 $260 $261.9 Q 1Q11 Q 2Q11 3Q 3Q11 4Q 4Q11 Q 1Q12 Q 2Q12 3Q 3Q12 4Q 4Q12 Performing Classified Loans
Slide 20: Outlook
20 OUTLOOK
Slide 21: Our goal: leverage our strengths
21 Our goal: leverage our strengths Strong Local Leadership Funding Advantage in Our Legacy Markets Consistent and Attractive Culture Class leading customer satisfaction Low employee turnover
Slide 22: Become Better Retail and Small Business Bank
22 To grow our business the right way Become Better Retail and Small Business Bank Grow sales: G l B Better tt product d td design, i merchandising, h di i campaign execution HELOC program success: $100 million in new balances I Invest t in i people l
Slide 23: Continue to Invest In, and Improve, Commercial Capabilities
23 To grow our business the right way Continue to Invest In, and Improve, Commercial Capabilities Diversify portfolio – Focus on C&I and owner occupied Success in Atlanta and Savannah markets Invest in people: 30 lenders past 2 years ($300 million) E t new markets: Enter k t O Opened d LPO
Slide 24: Grow existing fee businesses at faster pace
24 Grow existing fee businesses at faster pace Mortgage First Priority Performing well, but at 50% of peers Focus on home purchase product as well as refinancings F Focus on llower performing f i markets k Invest in management, people and new markets Mortgage Fee Revenue ($ in millions) $3.
Slide 25: Summary
25 Summary Focus on Core Earnings Growth – Fee Revenue, Expenses, Efficiencies Goal for 4Q13 – increase $10 million annually from 4Q12 Offsetting Margin Headwinds Through Loan Growth and Improving Deposit Mix Goal loan growth in 2013 – mid-single digit range Expecting p gqquarterlyy margin g
Slide 26: Financial Review
26 FINANCIAL REVIEW
Slide 27: Core Earnings Summary
27 27 Core Earnings Summary (in thousands) Variance - Increase / (Decrease) 4Q12 3Q12 4Q11 Net Interest Revenue $ 56,028 $ (1,343) $ (3,022) Fee Revenue 14,614 1,611 3,172 Gross Revenue 70,642 268 150 Operating Expense (Excl OREO) 41,552 1,029 (2,291) Pre-Tax, Pre-Credit (Core) $ 29,090 $ (761) $ 2,
Slide 28: Fee Revenue - Core
28 28 Fee Revenue - Core (in thousands) (Decrease) 4Q12 3Q12 4Q11 Overdraft Fees $ 3 464 3,464 $ 102 $ (73) Debit Card Fees 3,701 638 732 Other Service Charges 1,210 (61) 468 T t l Service Total S i Charges Ch and dFFees 8 375 8,375 679 1 127 1,127 Mortgage Loan & Related Fees 3,262 462 1,437 Broker
Slide 29: Operating Expenses - Core
29 29 Operating Expenses - Core (in thousands) Variance - Increase / (Decrease) 4Q12 3Q12 4Q11 Salaries & Employee Benefits $ 22,960 $ 596 $ (2,578) Communications & Equipment 3,320 66 191 Occupancy 3,455 (84) (517) FDIC Assessment 2,505 (32) (94) Advertising & Public Relations 987 53 43 Postage, Pr
Slide 30: Net Operating Income
30 30 Net Operating Income (in thousands) Variance - Increase / (Decrease) 4Q12 3Q12(1) 4Q11 Core Earnings (Pre-Tax, Pre-Credit) $ 29,090 $ (761) $ 2,441 Provision for Loan Loss (14,000) (1,500) - NON-CORE FEE REVENUE: Hedge Ineffectiveness Gaines (Losses) 116 (492) (197) Securites Gains (Losses) 31
Slide 31: Net Income
31 31 Net Income (in thousands) Variance - Increase / (Decrease) 4Q12 3Q12 4Q11 Net Income $ 9,261 $ (1,307) $ (640) Preferred Stock Dividends (3,045) (4) (20) Net Income Avail to Common Shareholders $ 6,216 $ (1,311) $ (660) Net Income Per Share $ .11 $ (.02) $ (.01) Tangible Book Value $ 6.64 $ -
Slide 32: Core Earnings Summary 2012 Full Year
32 Core Earnings Summary 2012 Full Year (in millions) Over/(Under) Full Year 2012 2011 Net Interest Revenue $ 229.1 $ (6.6) Fee Revenue 53.5 9.3 O Operating ti Expense E (Excl (E l OREO) (166 1) (166.1) 14 2 14.2 Core Earnings (Pre-Credit) 116.5 16.9 Provision for Loan Losses (62.5) (16.5) -Fletcher
Slide 33: Key Ratios 2012 Full Year
33 Key Ratios 2012 Full Year Full Year 2012 Earnings per Share $ .44 Margin 3.50 % Return on Equity 6.43 % Return on Tangible g Equity q y 7.29 Return on Assets .55 Operating Efficiency 64.0 64 0 % -Core (Excl. OREO) 58.8 Tangible Book Value $ 6.64 -B o o k Value DTA Reco very $ 271M illio n o r $ 4
Slide 34: Fee Revenue – Core 2012 Full Year
34 Fee Revenue – Core 2012 Full Year (in millions) Over / 2012 2011 (Under) NSF & Bounce Safe Fees $ 13.3 $ 14.2 $ (.9) Interchange Income 13.1 12.1 1.0 Other Service Charges 5.3 2.8 2.5 Mortgage Loan & Related Fees 10 5 10.5 54 5.4 51 5.1 Advisory Services 3.1 3.0 .1 Other 8.2 6.7 1.5 Core 53.5 44.
Slide 35: Operating Expenses – Core 2012 Full Year
35 Operating Expenses – Core 2012 Full Year (in millions) Over / 2012 2011 (Under) Salaries & Employee Benefits $ 93.2 $ 101.3 $ (8.1) Communications & Equipment 12.9 13.1 (.2) Occupancy 14.3 15.6 (1.3) FDIC Assessment 10.1 14.3 (4.2) Advertising & Public Relations 3.9 4.3 (.4) Postage, Printing & S
Slide 36: Deposit Pricing, Excluding Brokered Deposits
36 36 Deposit Pricing, Excluding Brokered Deposits .50 .40 .36 .32 .30 .30 .30 .31 .30 .24 .23 .22 .21 21 .20 .20 .17 .16 .14 .15 .10 10 4Q11 1Q12 2Q12 3Q12 4Q12 CDS MMDA NOW Note – CD pricing reflects the quarter-ending new and renewed yield. MMDA / NOW pricing reflects the deposit yield for each q
Slide 37: Customer Deposit Mix Improving
37 37 Customer Deposit Mix Improving (in millions) 4Q12 56% $5.7B Public Demand & 4Q12 3Q12 4Q11 4Q08 Funds NOW Demand / NOW $ 1,841 $ 1,796 $ 1,674 $ 1,457 Time 14% 32% MMDA / Savings 1,372 1,342 1,228 630 >$100k 12% Core Transaction 3,213 3,138 2,902 2,087 Time <$100k $100k MMDA & 11% Growth - $31
Slide 38: Core Deposit Growth – Category and Market
38 38 Core Deposit Growth – Category and Market (in millions, millions excluding public) Growth Year CATEGORY 4Q12 2012 Demand $ 34.3 $ 232.2 MM Accounts 24.7 115.1 Savings 4.9 28.8 NOW 11.3 (65.4) Total Categories $ 75.2 $ 310.7 P Percent t Growth G th (Annualized) (A li d) 10 % 11 % MARKET Atlanta
Slide 39: Capital Ratios
39 39 Capital Ratios Well- Capitalized DEC '12 SEP '12 JUN '12 Bank Tier 1 RBC 6 % 14.6 % 14.5 % 14.4 % Total RBC 10 15.8 15.7 15.7 Leverage 5 9.9 9.9 9.2 Holding Company Tier 1 RBC 6 14.2 14.3 14.3 Total RBC 10 15.8 15.8 16.0 Leverage 5 9.7 9.8 9.2 Tier I Common RBC 8.9 8.8 8.8 Tangible Equity to A
Slide 40: Loan Portfolio & Credit Quality
40 LOAN PORTFOLIO & CREDIT QUALITY
Slide 41: Loan Portfolio (total $4.18 billion)
41 Loan Portfolio (total $4.18 billion) Geographic Diversity By Loan Type $ in millions 42% % North Georggia $ 1,364 Atlanta MSA $ 1,288 36% $1.21B Residential Mortgage 29% A 30% h Carolina 24% Western North $ 579 9 Georgia 18% $2.43B ssee Commercial $ 400 W Coastal G 58% East Tennes $ 283 Gainesvil
Slide 42: New Loans Funded (> $100 Thousand) – Category and Market
42 New Loans Funded (> $100 Thousand) – Category and Market (in millions) Year Year CATEGORY 4Q12 2012 MARKET 4Q12 2012 Commercial C & I $ 18.9 $ 80.9 Atlanta $ 49.0 $ 181.9 Owner Occupied CRE 47.4 47 4 150 0 150.0 Coastal Georgia 31 7 31.7 88 3 88.3 Income Producing CRE 13.4 57.0 N. Georgia 33.5 11
Slide 43: Commercial Loans (total $2.43 billion)
43 Commercial Loans (total $2.43 billion) By Loan Type Atlanta MSA Geographic Diversity $967 6% $ in millions 19% Comm 42% % C&I Const A $.46B $.15B North Georgia 36% $ 659 28% G 6 Income Producing 30% $.68B 47% Owner Occupied $1.13B 24% North Carolina astal Georgia $ 281 18% $ 188 MSA see Gainesvil
Slide 44: Commercial Real Estate (by loan type)
44 44 Commercial Real Estate (by loan type) December 31, 2012 Owner Income Portfolio Characteristics (in millions) Occupied Producing Total Percent Office Buildings $ 300 $ 198 $ 498 25 % Multi-Residential/Other Properties 148 119 267 15 62.4% owner-occupied Small Warehouses/Storage 114 66 180 10
Slide 45: Commercial Construction (by loan type)
45 45 Commercial Construction (by loan type) December 31, 2012 (in millions) Amount Percent Land Develop - Vacant (Improved) $ 65 42 % Portfolio Characteristics Raw Land - Vacant (Unimproved) 42 27 Commercial Land Development 21 14 Office Buildings 8 5 Average loan size: $414k Churches 5 3 Warehou
Slide 46: Residential Mortgage (total $1.21 billion)
46 Residential Mortgage (total $1.21 billion) By Loan Type Geographic Diversity h Georgia $ in millions Home Equity $473 32% $ 38B $.38B $ North 42% h Carolina Avg loan size $48k 36% Western North $2888 30% W A Atlanta MSA 24% Mortgage $196 68% $.83B nessee 18% Coastal Georrgia Gainesville MSA A $10
Slide 47: Residential Construction (total $.38 billion)
47 Residential Construction (total $.38 million) By Loan Type orth Georgia Geographic Diversity $182 $ in millions 12% 49% 9% Raw No $45 42% 51% Westerrn North Carolina 16% Lot Developing $193 $62 35% $82 28% Atlanta MSA 10% Sold $66 $40 11% 21% Spec $41 Coastal Georgia nesville MSA East Tennessee 1
Slide 48: Residential Construction – Total Company
48 Residential Construction – Total Company 4Q12 vs. (in millions) 4Q12 3Q12 2Q12 1Q12 4Q11 4Q11 Land Loans Developing Land $ 62 $ 71 $ 78 $ 86 $ 88 $ (26) Raw Land 46 41 45 57 61 (15) Lot Loans 193 196 203 204 207 (14) Total 301 308 326 347 356 (55) Construction Loans Spec 41 44 49 57 59 (18) Sold
Slide 49: Credit Quality
49 49 Credit Quality (in millions) 4Q12 3Q12 2Q12 1Q12 4Q11 (1) Net Charge-offs $ 14.5 $ 20.6 $ 18.9 $ 15.9 $ 20.6 as % of Average Loans (1) 1.39 % 1.99 % 1.85 % 1.55 % 1.99 % Allowance for Loan Losses $ 107.1 $ 107.6 $ 112.7 $ 113.6 $ 114.5 as % of Total Loans 2.57 % 2.60 % 2.74 % 2.75 % 2.79 % as
Slide 50: Performing Classified Loans
50 50 Performing Classified Loans (in millions) LOANS BY CATEGORY 4Q12 3Q12 2Q12 1Q12 4Q11 Commercial (Sec. by RE): Owner Occupied $ 65 $ 77 $ 54 $ 78 $ 79 Income Producing 53 49 94 56 64 Total Comm (Sec. by RE) 118 126 148 134 143 Commercial & Industrial 18 19 16 17 16 Commercial Construction 19 27
Slide 51: TDRs by Loan Type
51 TDRs by Loan Type (in thousands) (1) LOAN TYPE Accruing Non-Accruing Total TDRs As of December 31, 2012 Commercial ((Sec byy RE)) $ 63,975 , $ 12,216 , $ 76,191 , Commercial & Industrial 7,053 198 7,251 Commercial Construction 16,370 17,439 33,809 Total Commercial 87,398 29,853 117,251 Residentia
Slide 52: Net Charge-offs by Loan Category
52 52 Net Charge-offs by Loan Category (in thousands) 4Q12 % of Average Loans (Annualized) % of Avg Total Loans 3Q12 2Q12 1Q12 4Q11(1) Commercial (Sec. by RE): Owner Occupied $ 4,997 1.76 % 3.56 % .46 % .87 % 1.16 % Income Producing 1,153 .67 .70 1.75 .70 .57 Total Comm (Sec. by RE) 6,150 1.35 1.79
Slide 53: Net Charge-offs by Market
53 53 Net Charge-offs by Market (in millions) 4Q12 % of Average Loans (Annualized) % of Avg Total Loans 3Q12 2Q12 1Q12 4Q11(1) North Georgia $ 4,474 1.26 % 1.84 % 3.58 % 2.56 % 2.70 % Atl t MSA Atlanta 3 977 3,977 1 27 1.27 3 02 3.02 .75 75 .89 89 1 37 1.37 North Carolina 2,032 1.39 1.15 2.52 1.14 2
Slide 54: NPAs by Loan Category and Market
54 54 NPAs by Loan Category and Market (in thousands) 4Q12 4Q12 NPLs OREO Total NPAs NPLs OREO Total NPAs LOAN CATEGORY MARKETS Commercial (sec. by RE): North Georgia $ 69,950 $ 8,219 $ 78,169 Owner Occupied $ 12,599 $ 4,989 $ 17,588 Atlanta MSA 18,556 3,442 21,998 Income Producing 9,549 490 10,039
Slide 55: Appendix
55 APPENDIX
Slide 56: Experienced Proven Leadership
56 56 Experienced Proven Leadership Joined Years in UCBI Banking Jimmy Tallent President & CEO 1984 38 Lynn Harton Chief Operating Officer 2012 29 Rex Schuette Chief Financial Officer 2001 35 David Shearrow Chief Risk Officer 2007 31 Bill Gilbert Director of Banking 2000 36 Tim Schools Chief Strateg
Slide 57: Business and Operating Model
57 57 Business and Operating Model Twenty-seven “community banks” ▫ Local CEOs with deep roots in their communities ▫ Resources of $6.80 billion bank Service is point of differentiation ▫ #1 in Customer Satisfaction according to Customer Service Profiles ▫ J.D. Power Customer Service Champion for 20
Slide 58: Robust Demographics (fast growing markets)
58 58 Robust Demographics (fast growing markets) Population Growth (%) Population Actual Projected 1 Markets (in thousands) 2000 - 2011 2011 - 2016 N th G North Georgia i 386 21 % 4% Atlanta, GA MSA 5,321 25 5 Gainesville, GA MSA 181 30 4 Coastal Georgia 385 15 5 Western North Carolina 441 15 5 East
Slide 59: Market Share Opportunities
59 59 Market Share Opportunities Excellent growth prospects Market United Deposits Deposits Deposit Markets (in billions) (1) (in billions) (2) Banks Offices Share (1) Rank(1) North Georgia g $ 6.4 $ 2.0 11 22 32 % 1 Western North Carolina 6.4 .9 1 20 12 3 Gainesville MSA 2.6 .3 1 5 12 5 Atlanta MSA
Slide 60: Leading Demographics
60 60 Leading Demographics 2011 ‐ 2016 Total Assets Population (1) (2) Rank Ticker Company State ($B) Growth 1 CFR Cullen/Frost Bankers, Inc. TX 21.8 8.41 2 IBOC International Bancshares Corporation TX 12.1 7.08 3 HBHC Hancock Holding Company MS 18.5 6.94 4 PB Prosperity Bancshares, Inc. TX 13.7 6.2
Slide 61: Loans / Deposits - Liquidity
61 61 Loans / Deposits - Liquidity (in millions) Variance 4Q12 3Q12 4Q11 vs 3Q12 vs 4Q11 L Loans $ 4 175 4,175 $ 4 138 4,138 $ 4 110 4,110 $ 37 $ 65 Core (DDA, MMDA, Savings) $ 3,213 $ 3,138 $ 2,902 $ 75 $ 311 Public Funds 770 644 884 126 (114) CD' CD's 1 724 1,724 1 817 1,817 2 133 2,133 (93) (409)
Slide 62: Wholesale Borrowings - Liquidity
62 62 Wholesale Borrowings - Liquidity (in millions) Unused Variance Capacity 4Q12 3Q12 4Q11 vs 3Q12 vs 4Q11 Wholesale Borrowings (1) Brokered Deposits $ 1,455 $ 245 $ 233 $ 179 $ 12 $ 66 FHLB 1,123 40 50 0 41 (10) (1) Fed Funds 130 - - - - - Other Wholesale - 53 53 103 - (50) Total $ 2 708 2,708 $
Slide 63: Business Mix – Deposits at quarter-end
63 63 Business Mix – Deposits at quarter-end (in millions) 4Q12 vs. DEPOSITS BY CATEGORY 4Q12 3Q12 2Q12 1Q12 4Q11 4Q11 Demand & Now $ 1,841 1 841 $ 1,796 1 796 $ 1,735 1 735 $ 1,722 1 722 $ 1,674 1 674 $ 167 MMDA & Savings 1,372 1,342 1,330 1,331 1,228 144 Core Transaction Deposits 3,213 3,138 3,065
Slide 64: Core Transaction Deposits
64 64 Core Transaction Deposits Geographic Diversity Core Transactions / Total Deposits (%) 4Q 11 4Q 12 4Q12 4Q11 $ in millions Coastal GA 67.8 % 43.2 % East Tennessee $165 Gainesville MSA 63.7 56.8 $174 North Carolina 58.9 52.9 Coastal Georgia $186 $ Atl t MSA Atlanta 59 9 59.9 51 0 51.0 $202 East
Slide 65: Margin – Credit Costs
65 65 Margin – Credit Costs .30% .26% .25% Credit Costs .05% 05% .23% 23% Impacting Margin .05% .20% .19% .19% Historically 8 to 12 bps .03% .03% .17% .03% .15% .13% Cost 4Q12 vs. Historical – .12% 5 bps (annual earnings impact .10% .10% .10% 10% .09% of $3.2 $3 2 million) .05% 1 bps = $648 th
Slide 66: Proactively Addressing Credit Environment
66 66 Proactively Addressing Credit Environment St t Structure Centralized underwriting and approval process Segregated work‐out teams Highly skilled ORE disposition group Seasoned regional credit professionals Process Continuous external loan review Intensive executive management involv
Slide 67: Lending – Credit Summary
67 67 Lending – Credit Summary (in millions) Legal lending limit $163 House lending limit 20 Project j lending g limit 12 Top 25 relationships 371 Regional credit review – Standard underwriting
Slide 68: Business Mix Loans (at quarter-end)
68 68 Business Mix Loans (at quarter-end) (in millions) 4Q12 vs. LOANS BY CATEGORY 4Q12 3Q12 2Q12 1Q12 4Q11 4Q11 Commercial (Sec. by RE): Owner Occupied $ 1,131 1 131 $ 1,126 1 126 $ 1,140 1 140 $ 1,137 1 137 $ 1,111 1 111 $ 20 Income Producing 682 693 697 706 711 (29) Total Comm (Sec. by RE) 1,813
Slide 69: Loans – Markets Served (at quarter-end)
69 69 Loans – Markets Served (at quarter-end) (in millions) 4Q12 vs. LOANS BY MARKET 4Q12 3Q12 2Q12 1Q12 4Q11 4Q11 North Georgia $ 1,364 $ 1,383 $ 1,387 $ 1,408 $ 1,426 $ (62) Atlanta MSA 1,288 1,257 1,252 1,239 1,220 68 North Carolina 579 579 576 588 597 (18) Coastal Georgia 400 380 369 366 346 54
Slide 70: Residential Construction – North Georgia
70 70 Residential Construction – North Georgia (in millions) 4Q12 vs. 4Q12 3Q12 2Q12 1Q12 4Q11 4Q11 Land Loans Developing Land $ 30 $ 33 $ 39 $ 44 $ 44 $ (14) Raw Land 17 17 18 26 26 (9) Lot Loans 112 111 113 113 118 (6) Total 159 161 170 183 188 (29) Construction Loans Spec 7 8 9 12 12 (5) Sold 17
Slide 71: Residential Construction – Atlanta MSA
71 71 Residential Construction – Atlanta MSA (in millions) 4Q12 vs. 4Q12 3Q12 2Q12 1Q12 4Q11 4Q11 Land Loans Developing Land $ 13 $ 14 $ 14 $ 17 $ 17 $ (4) Raw Land 9 9 9 13 14 (5) Lot Loans 16 18 22 22 22 (6) Total 38 41 45 52 53 (15) Construction Loans Spec 20 19 24 27 27 (7) Sold 8 8 7 7 6 2 Tota
Slide 72: Business Mix Loans (at year-end)
72 72 Business Mix Loans (at year-end) (in millions) 2012 2011 2010 2009 2008 LOANS BY CATEGORY Commercial (Sec. by RE) $ 1,813 $ 1,822 $ 1,761 $ 1,779 $ 1,627 Commercial & Industrial 458 428 441 390 410 Commercial Construction 155 164 297 363 500 Total Commercial 2,426 2,414 2,499 2,532 2,537 Resid
Slide 73: Loans – Markets Served (at year-end)
73 73 Loans – Markets Served (at year-end) (in millions) 2012 2011 2010 2009 2008 LOANS BY MARKET North Georgia $ 1,364 $ 1,426 $ 1,689 $ 1,884 $ 2,040 Atlanta MSA 1,288 1,220 1,310 1,435 1,706 North Carolina 579 597 702 772 810 Coastal Georgia 400 346 335 405 464 Gainesville MSA 261 265 312 390 420
Slide 74: NPAs by Loan Category, Market, and Activity
74 74 NPAs by Loan Category, Market, and Activity (1) Credit Quality Fourth Quarter 2012 Third Quarter 2012 Second Quarter 2012 Non-performing Foreclosed Total Non-performing Foreclosed Total Non-performing Foreclosed Total (in thousands) Loans Properties NPAs Loans Properties NPAs Loans Properties
Slide 75: Net Charge-offs by Category and Market
75 75 Net Charge-offs by Category and Market (1) Credit Quality Fourth Quarter 2012 Third Quarter 2012 Second Quarter 2012 Net Charge- Net Charge- Net Charge- Offs to Offs to Offs to Net Average Net Average Net Average (2) (2) (2) (in thousands) Charge-Offs Loans Charge-Offs Loans Charge-Offs Loans
Slide 76: Net Charge-offs by Category and Market – Asset Disposition Plan
76 76 Net Charge-offs by Category and Market Asset Disposition Plan as of March 31, 2011 (1) Credit Quality - Net Charge-Offs First Quarter 2011 Asset Disposition Plan Bulk Loan Sale (2) First Quarter Performing Nonperforming Other Bulk Loan Foreclosure Other Net 2011 Net Charge- (in thousands) Loan
Slide 77: Credit Quality – Bulk Loan Sale Summary
77 77 Credit Quality – Bulk Loan Sale Summary as of March 31, 2011 Credit Quality - Bulk Loan Sale Summary (1) Performing Loans Nonperforming Loans Total Loans Carrying Charge- Charge Loans Held Carrying Charge- Charge Loans Held Carrying Charge- Charge Loans Held (in thousands) Amount (2) Offs (3)
Slide 78: Non GAAP Reconciliation Tables
78 78 Non GAAP Reconciliation Tables (in thousands except EPS) Operating Earnings to GAAP Earnings Reconciliation 4Q12 3Q12 2Q12 1Q12 Core net interest revenue reconciliation Core net interest revenue $ 56,028 $ 57,371 $ 56,836 $ 58,864 Interesst reversed on performing loans included in bulk sale -
Slide 79: Non GAAP Reconciliation Tables
79 79 Non GAAP Reconciliation Tables (in thousands except EPS) Operating Earnings to GAAP Earnings Reconciliation 4Q11 3Q11 2Q11 1Q11 Core net interest revenue reconciliation Core net interest revenue $ 59,050 $ 59,281 $ 58,946 $ 58,406 Interesst reversed on performing loans included in bulk sale -
Slide 80: Non GAAP Reconciliation Tables
80 80 Non GAAP Reconciliation Tables Operating Earnings to GAAP Earnings Reconciliation 4Q12 3Q12 2Q12 1Q12 Net interest margin - pre credit reconciliation Net interest margin - pre credit 3.61 % 3.79 % 3.62 % 3.76 % Effect of interest reversals, lost interest, and carry costs of NPAs (.17) (.19) (.
Slide 81: Non GAAP Reconciliation Tables
81 81 Non GAAP Reconciliation Tables Operating Earnings to GAAP Earnings Reconciliation 4Q11 3Q11 2Q11 1Q11 Net interest margin - pre credit reconciliation Net interest margin - pre credit 3.77 % 3.79 % 3.67 % 3.84 % Effect of interest reversals, lost interest, and carry costs of NPAs (.26) (.24) (.
Slide 82: Analyst Coverage
82 82 Analyst Coverage FIG Partners Sandler O'Neill & Partners (Market Perform f ‐ Nov 9, 2012) (Hold, Oct 25, 2012) Keefe, Bruyette & Woods Stephens, Inc. (M k t Perform (Market P f ‐ Oct O t 25, 2012)) (O (Overweight i ht ‐ JJan 14, 2013)) Raymond y James & Assoc. SunTrust Robinson Humphrey p y (M
Slide 83: United Community Banks, Inc.
83 United Community Banks, Inc. Investor Presentation Fourth Quarter 2012 Copyright 2013 United Community Banks, Inc. All rights reserved.
United Community Banks — Q4 2012 Earnings Presentation on 6ix