United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q4 2014 Earnings Presentation
36 slides from United Community Banks's earnings presentation, Jan 21, 2015
Slide 1: Fourth Quarter 2014 Investor Presentation
Fourth 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: Highlights Fourth Quarter 2014
3 Highlights Fourth Quarter 2014 IMPROVING QUARTERLY RESULTS 4Q14 3Q14 4Q13 Net Income $18.2 $17.6 $15.9 EPS $.30 $.29 $.22 ROA .96% .95% .86% ROCE 9.60% 9.41% 7.52% Net Interest Revenue of $58.3 Million vs. $57.0 Million in 3Q14 and $55.9 Million in 4Q13 Loan growth of $103 million in 4Q14 , up $34
Slide 4: Highlights Fourth Quarter 2014
4 Highlights Fourth Quarter 2014 Solid Capital Ratios – Increased Dividend to Shareholders Approved quarterly dividend of 5 cents (vs. 3 cents last quarter) Tier I Common to Risk Weighted Assets of 11.1%; Tangible Common to RWAs of 13.8% Tier I Risk Based Capital of 12.1% and Tier I Leverage of 8.7%
Slide 5: Earnings Per Share / Return on Assets
5 .86% .85% .88% .95% .96% .70% .80% .90% Earnings Per Share / Return on Assets GOAL OF 1% ROA $.22 $.25 $.27 $.29 $.30 $.18 $.22 $.26 $.30 4Q13 1Q14 2Q14 3Q14 4Q14 E A R N I N G S P E R S H A R E R E T U R N O N A S S E T S EPS ROA
Slide 6: 2015 Goals
6 2015 Goals 2015 LEVERAGE OUR STRENGTHS Community bank service with large bank resources Strong local leadership and senior management Funding strength in legacy markets Consistent and attractive culture Class leading customer satisfaction Continue to invest in and improve commercial and retail cap
Slide 7: Core Earnings Trend and Core Fee Revenue
7 Core Earnings Trend and Core Fee Revenue $55.9 $54.2 $55.0 $57.0 $58.3 $41.2 $38.7 $40.1 $41.1 $42.1 $27.9 $27.4 $28.8 $30.3 $30.8 $13.2 $11.9 $13.9 $14.4 $14.6 $10 $20 $30 $40 $50 $60 $70 4Q13 1Q14 2Q14 3Q14 4Q14 Net Interest Revenue Core Operating Expenses Core Earnings Core Fee Revenue Core Ear
Slide 8: Core Operating Expenses
8 Core Operating Expenses (1) Includes foreclosed property costs, severance costs, reversal of previously established litigation reserve, reimbursement of claimed interest for the initial period of the loss sharing agreements, and gains / losses on deferred compensation plan liabilities. $ in thousa
Slide 9: Key Drivers of Net Interest Revenue / Margin
9 Key Drivers of Net Interest Revenue / Margin $55.9 $54.2 $55.0 $57.0 $58.3 $45 $49 $53 $57 4Q13 1Q14 2Q14 3Q14 4Q14 Net Interest Revenue 4Q growth impacted by: $103M loan growth Higher securities yield Stable margin $ in millions KEY DRIVERS OF NIR NET INTEREST REVENUE & MARGIN Loan / Securities P
Slide 10: Summary - Core Earnings / Net Income
10 Net Income $ in thousands SUMMARY ̶ CORE EARNINGS / NET INCOME 4Q14 3Q14 4Q13 Core Earnings (Pre-Tax, Pre-Credit) 30,804$ 515$ 2,899$ Provision for Loan Loss 1,800 (200) (1,200) NON-CORE FEE REVENUE: Securities Gains 208 197 138 Deferred Compensation Plan Assets Gains (Losses) 62 80 (168) Total N
Slide 11: Customer Deposit Mix & Core Growth
11 Customer Deposit Mix & Core Growth $ in thousands Time >$100M 8% Demand & NOW 36% Deposits by % / Customer Mix Public Funds 17% Time <$100M 13% MMDA & Sav 26% Time >$100M 22% Demand & NOW 23% Public Funds 14% Time <$100M 31% MMDA & Sav 10% 4 Q14 $5.9B 63%* 2Q08 $6.2B 34%* 4Q14 3Q14 4Q13 4Q08 Dema
Slide 12: Capital Ratios
12 Capital Ratios Holding Company Well- Cap 4Q14 3Q14 2Q14 1Q14 4Q13 Tier I Risk Based Capital ("RBC") 6 % 12.1 % 12.1 % 11.8 % 11.1 % 12.7 % Total RBC 10 13.3 13.3 13.0 12.4 14.0 Leverage 5 8.7 8.7 8.3 8.0 9.1 Tier 1 Common RBC 11.1 11.0 10.7 10.1 9.3 Tangible Common to Assets 9.7 9.8 9.6 9.2 9.0 T
Slide 13: Loan Portfolio
13 Loan Portfolio (total $4.672 billion) Retail 31% $1.308 C&I 34% $1.424 Inv RE 17% $.699 Diversifying Portfolio Retail 37% $1.705 C&I 40% $1.874 Inv RE 13% $.598 Commercial 57% $2.668 Geographic Diversity Residential Mortgage 29% $1.332 Consumer 8% $.373 Period $ in Billions 4Q14 $4.672 3Q14 $4.56
Slide 14: New Loans Funded and Advances
14 New Loans Funded and Advances (1) $ in millions $324.5 $287.5 $356.8 $453.1 $401.1 $275 $325 $375 $425 $475 4Q13 1Q14 2Q14 3Q14 4Q14 CATEGORY 4Q14 3Q14 4Q13 4Q14 3Q14 4Q13 Commercial C & I 115.9$ 150.0$ 58.7$ Atlanta 91.6$ 96.7$ 111.1$ Owner Occupied CRE 56.0 48.1 54.1 Coastal Georgia 34.0 38.4 3
Slide 15: Commercial Loans
15 Commercial Loans (total $2.668 billion) $ in billions CRE Owner Occupied 44% $1.163B Geographic Diversity CRE Income Producing 22% $.599B C & I 27% $.710B Coastal Georgia $ .338 Gainesville MSA $ .180 Western North Carolina $ .153 South Carolina $ .402 North Georgia $ .513 East Tennessee $ .138 A
Slide 16: Retail Loans
16 Retail (total $1.705 billion) Geographic Diversity Home Equity LOC 27% $.466B Avg loan size $48 thousand South Carolina $ .009 Coastal Georgia $ .102 East Tennessee $ .134 Atlanta MSA $ .269 Western North Carolina $ .334 North Georgia $ .521 Gainesville MSA $.067 Indirect Auto $.269 0% 12% 24% 36
Slide 17: Residential Construction
17 Residential Construction (total $299 million) $ in millions Geographic Diversity Raw 11% $33 Lot 49% $147 Gainesville MSA $ 10 East Tennessee $ 9 Coastal Georgia $ 16 Western North Carolina $ 66 Atlanta MSA $ 69 North Georgia $ 129 0% 12% 24% 36% 48% 3% 3% 6% 22% 23% 43% By Loan Type 4Q14 3Q14 2Q
Slide 18: Credit Quality
18 Credit Quality $ in millions 4Q14 3Q14 2Q14 1Q14 4Q13 Net Charge-offs 2.5$ 3.2$ 4.2$ 4.0$ 4.4$ as % of Average Loans .22 % .28 % .38 % .38 % .41 % Allowance for Loan Losses 71.6$ 71.9$ 73.2$ 75.2$ 76.8$ as % of Total Loans 1.53 % 1.57 % 1.66 % 1.73 % 1.77 % as % of NPLs 401 384 353 299 286 Past D
Slide 19: Non-Performing Loans (NPLs) Inflow Trends
19 Non - Performing Loans (NPLs) Inflow Trends $ in millions $11.0 $9.3 $9.5 $7.7 $7.1 $0 $5 $10 $15 4Q13 1Q14 2Q14 3Q14 4Q14 Resi Constr Comm Constr Resi Mtg Comm RE Comm Consumer Quarterly NPL Inflows Total NPLs $26.8 $25.2 $20.7 $18.7 $17.9 $0 $6 $12 $18 $24 4Q13 1Q14 2Q14 3Q14 4Q14
Slide 20: Performing Classified Loans
20 Performing Classified Loans $ in millions 4Q13 1Q14 2Q14 3Q14 4Q14 Commercial: Commercial & Industrial 9$ 8$ 6$ 7$ 8$ Owner Occupied 43 48 48 50 46 Total C & I 52 56 54 57 54 Income Producing CRE 34 37 25 22 20 Commercial Construction 17 5 4 4 4 Total Commercial 104 98 83 83 78 Residential Mortga
Slide 21: TDRs
21 TDRs $ in thousands $78.7 $77.9 $84.5 $82.2 $81.3 $- $50 $100 $150 4Q13 1Q14 2Q14 3Q14 4Q14 LOAN TYPE 4Q14 (1) 4Q13 4Q14 4Q13 4Q14 4Q13 Owner Occupied Commercial Real Estate 25,287$ 20,490$ 1,009$ 1,909$ 26,296$ 22,399$ Income Producing Commercial Real Estate 17,416 17,521 499 747 17,915 18,268 C
Slide 22: Net Charge-offs by Category & Market
22 Net Charge - offs by Category & Market $ in thousands NET CHARGE-OFFS BY CATEGORY Total % of Avg Loans 3Q14 2Q14 1Q14 4Q13 Commercial (Sec. by RE): Owner Occupied 891$ .31 % .26 % (.64) % .10 % .57 % Income Producing 143 .09 .07 .29 .13 .21 Total Comm (Sec. by RE) 1,034 .23 .19 (.32) .11 .44 Comm
Slide 23: NPAs by Loan Category & Market
23 NPAs by Loan Category & Market $ in thousands $31.0 $30.8 $23.7 $21.9 $19.6 $0 $10.0 $20.0 $30.0 4Q13 1Q14 2Q14 3Q14 4Q14* Non-Performing Loans Foreclosed Properties (OREO) NPLs OREO Total NPAs NPLs OREO Total NPAs LOAN CATEGORY LOAN CATEGORY Commercial (sec. by RE): Commercial (sec. by RE): Owne
Slide 24: Appendix
COMMUNITY BANKS, INGS APPENDIX
Slide 25: Footprint
25 Footprint Savannah Nashville Greenville Asheville Atlanta Chattanooga Raleigh Charlotte Charleston Myrtle Beach Knoxville Current Footprint Blairsville Headquartered in Blairsville, Georgia with 103 locations in: Georgia; North Carolina; South Carolina; and Tennessee
Slide 26: United at a Glance
26 United at a Glance Founded in 1950 Third - largest bank holding company headquartered in Georgia with 1,536 employees Key Statistics as of 12/31/14 (in billions) Assets Deposits Loans $7.57 $6.33 $4.67 Deposit Market Share (1) Market Offices Deposit Market Share Rank North Georgia 22 35% 1 Atlant
Slide 27: Business and Operating Model
27 Business and Operating Model Service is Point of Differentiation #1 in Customer Satisfaction according to Customer Service Profiles #1 in Southeast and #2 in US in Customer Satisfaction by national research company Golden rule of banking – treating people the way we want to be treated “The Bank t
Slide 28: Experienced Proven Leadership
28 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 President of Community Banking Joined 2000 • Over 40 years in banking • Led c
Slide 29: Market Share Opportunities & Demographics
29 Market Share Opportunities & Demographics North Georgia $ 6.3 $ 2.2 11 22 35% 1 Western North Carolina 11.3 .9 1 19 8 3 Gainesville, Georgia 2.8 .3 1 5 12 4 Atlanta, Georgia 56.3 2.3 10 36 4 6 Coastal Georgia 7.1 .3 2 8 5 7 East Tennessee 15.7 .3 2 8 2 8 Greenville, SC 9.4 - 1 1 1 25 Total Market
Slide 30: Liquidity
30 LOANS / DEPOSITS WHOLESALE BORROWINGS Liquidity 4Q14 3Q14 4Q13 vs 4Q13 Loans 4,672$ 4,569$ 4,329$ 103$ 343$ Core (DDA, MMDA, Savings) 3,690$ 3,714$ 3,437$ (24)$ 253$ Public Funds 989 852 894 137 95 CD's 1,223 1,269 1,446 (46) (223) Total Deposits (excl Brokered) 5,902$ 5,835$ 5,777$ 67$ 125$ Loan
Slide 31: Business Mix – Deposits
31 Business Mix – Deposits (at quarter - end) 4Q14 vs. DEPOSITS BY CATEGORY 4Q14 3Q14 2Q14 1Q14 4Q13 4Q13 Demand & Now 2,139$ 2,159$ 2,106$ 2,073$ 1,969$ 170$ MMDA & Savings 1,551 1,555 1,518 1,499 1,468 83 Core Transaction Deposits 3,690 3,714 3,624 3,572 3,437 253 Time < $100,000 744 770 801 828 8
Slide 32: Core Transaction Deposits
32 Core Transaction Deposits $1,420 $984 $612 $234 $231 $186 $23 $1,442 $981 $620 $233 $235 $180 $23 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 Atlanta MSA North Georgia North Carolina Coastal Georgia Gainesville MSA East Tennessee South Carolina 3Q14 4Q14 3Q14 South Carolina 99.0 % 99.0 % Gainesvi
Slide 33: Lending & Credit Environment
33 Lending & Credit Environment Regional Credit Review – Standard Underwriting • Legal Lending Limit $ 202 • House Lending Limit 25 • Project Lending Limit 15 • Top 25 Relationships 383 PROACTIVELY ADDRESSING CREDIT ENVIRONMENT STRUCTURE PROCESS • Continuous external loan review • Internal loan revi
Slide 34: Commercial Construction & Real Estate
34 Commercial Construction & Real Estate Average Loan Size ($ in thousands) • Commercial Construction $530 • Commercial RE: • Composite CRE 460 • Owner Occupied 410 • Income Producing 603 Commercial RE Characteristics • 65.9% owner occupied • Small business, doctors, dentists, attorneys, CPAs • $15
Slide 35: Loans by Business Mix and Region
35 Loans by Business Mix and Region 4Q14 3Q14 2Q14 1Q14 4Q13 4Q14 vs. 4Q13 QUARTERLY LOANS - BUSINESS MIX BY CATEGORY Commercial: Comm & Indus 710$ 650$ 554$ 495$ 472$ 238$ Owner Occ'd 1,163 1,154 1,163 1,142 1,134 29 Total C & I 1,873 1,804 1,717 1,637 1,606 267 Income Prod CRE 599 605 598 624 623
Slide 36: Non-GAAP Reconciliation Tables
36 Non - GAAP Reconciliation Tables 4Q14 3Q14 2Q14 1Q14 4Q13 CORE FEE REVENUE Core fee revenue 14,553$ 14,419$ 13,938$ 11,930$ 13,219$ Securities gains, net 208 11 4,435 217 70 Losses on prepayment of borrowings - - (4,446) Mark to market on deferred compensation plan assets 62 (18) 216 29 230 Fee r
United Community Banks — Q4 2014 Earnings Presentation on 6ix