United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q2 2021 Earnings Presentation
28 slides from United Community Banks's earnings presentation, Jul 21, 2021
Slide 1: 2Q21 Investor Presentation
2 Q21 Investor Presentation July 20, 2021
Slide 2: Important Information For Stockholders and Investors
Important Information For Stockholders and Investors This presentation contains information related to a proposed mergers of United Community Banks, Inc ..(" with Aquesta Financial Holdings, Inc Aquesta and Reliant Bancorp, Inc ..(" In connection with the proposed mergers, United intends to file wit
Slide 3: Disclosures: Cautionary Statement
Disclosures CAUTIONARY STATEMENT This communication contains "forward looking statements” within the meaning of Section 27 A of the Securities Act of 1933 as amended, and Section 21 E of the Securities Exchange Act of 1934 as amended In general, forward looking statements usually may be identified t
Slide 4: Disclosures: Non-GAAP Measures
Disclosures NON GAAP MEASURES This Investor Presentation includes financial information determined by methods other than in accordance with generally accepted accounting principles (" This financial information includes certain operating performance measures, which exclude merger related and other c
Slide 5: United Community Banks, Inc.
#2 Highest Net Promoter Score a mong all banks nationwide J.D. Power 2020 TOP WORKPLACES i n S.C. & Atlanta Greenville Business Magazine & Atlanta Journal Constitution 162 BANKING OFFICES ACROSS THE SOUTHEAST #1 IN CUSTOMER SATISFACTION i n 2021 with Retail Banking in the Southeast J.D. Power United
Slide 6: 2Q21 Highlights
$21.22 $22.15 $22.81 $16.95 $17.83 $18.49 2Q20 1Q21 2Q21 Book Value Per Share GAAP Tangible $0.78 Diluted earnings per share GAAP $0.79 Diluted earnings per share operating 1.46% Return on average assets GAAP 1.48% Return on average assets operating 1.67% PTPP return on average assets operating 0.09
Slide 7: Long Term Financial Performance & Shareholder Return
0.91% 0.98% 1.06% 1.09% 1.40% 1.51% 1.07% 1.65% 1.48% 2014 2015 2016 2017 2018 2019 2020 1Q21 2Q21 ROA operating UCBI KRX Long Term Financial Performance & Shareholder Return 7 (1) See non GAAP reconciliation table slides in the Appendix for a reconciliation of operating performance measures to GAAP
Slide 8: UCBI Focused on High-Growth MSAs in Southeast
$62.1 $67.8 11.4% 9.0% 5.7% 2.9% (1) Includes MSAs with a population of greater than 300,000 (2) Data by MSA shown on a weighted average basis by deposits Located in Most of the Top 20 Markets in the Region United MSA Presence Projected Population Growth (2) 2021 – 2026 (%) Projected Household Incom
Slide 9: Increasing Liquidity Trend
Increasing Liquidity Trend Loans and Deposits 9 9 $ in billions $10.1 $11.8 $11.4 $11.7 $11.4 $12.7 $14.6 $15.2 $16.0 $16.3 80% 81% 75% 73% 70% 65% 70% 75% 80% 85% 90% 95% 100% $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 2Q20 3Q20 4Q20 1Q21 2Q21 Loans Deposits Loans / Deposits % Note: Core loan g
Slide 10: Diversified Loan Portfolio
43% 8% 22% 1% 13% 6% 3% 4% Residential Mortgage Diversified Loan Portfolio 2 Q21 Total Loans $11.4 billion Note: C&I includes commercial and industrial loans, owner occupied CRE loans and Navitas (equipment finance) loans 10 Quarter Highlights „Ï Loans, excluding PPP, increased $123 million, or 5% a
Slide 11: Valuable Deposit Mix
38% 22% 24% 7% 9% DDA MMDA Savings Time NOW Valuable Deposit Mix 11 Note: Core transaction accounts include demand deposits, interest bearing demand, money market and savings accounts, excluding public funds deposits Quarter Highlights „Ï Total deposits were up $335 million, or 8% annualized from 1Q
Slide 12: Capital Ratios
Capital Ratios 12 „Ï Quarterly dividend of $ 0.19 per share „Ï Repurchased a total of 150,000 shares at an average price of $33.98 for a total of $5.1 million repurchased „Ï Capital levels expect to remain at peer levels pro forma for announced transactions *2Q21 regulatory capital ratios are prelim
Slide 13: Net Interest Revenue / Margin
$109.3 $132.1 $138.4 2Q20 1Q21 2Q21 Net Interest Revenue / Margin (1) $ in millions „Ï Net interest margin decreased 3 bps from 1Q21, mainly driven by a change in the earning asset mix; larger securities portfolio „Ï L oan accretion totaled $5.5 million and contributed 12 bps to the margin, flat fro
Slide 14: Noninterest Income
Noninterest Income $ in millions $7.0 $7.6 $8.3 $7.2 $10.0 $8.5 $1.3 $3.5 $3.8 $23.7 $22.6 $11.1 $1.0 $1.0 $4.1 2Q20 1Q21 2Q21 Service Charges Other Brokerage / Wealth Mgmt Mortgage Loan sale gains $35.8 Linked Quarter „Ï Fees down $8.9 million ¡E Mortgage fees down $11.5 million from 1Q21 primarily
Slide 15: Disciplined Expense Management
$84.0 $95.2 $95.5 $83.6 $93.7 $94.5 2Q20 1Q21 2Q21 55.9% 53.6% 54.5% 55.6% 52.7% 53.9% GAAP Operating ( Efficiency Ratio Expenses Operating ( GAAP Disciplined Expense Management $ in millions Linked Quarter „Ï GAAP and operating expenses increased 0.4% and 0.9%, respectively Year over Year „Ï GAAP a
Slide 16: PPP Update
„Ï As of June 30 th , approximately 75% of our PPP loans, representing $1.4 billion in loans, have been forgiven by the SBA „Ï In 2Q21, we recognized $11.0 million in PPP fees „Ï We have $19 million of PPP fees remaining to recognize „Ï Average loan amount fully forgiven of $109 thousand 16 PPP Upda
Slide 17: Credit Quality
Credit Quality 17 „Ï 2 Q21 net recoveries of $456 thousand, or 0.02% of average loans, annualized ¡E The quarter benefited from unusually strong Navitas NCOs of 0.13% ¡E The quarter also benefited from $326 thousand of C&D recoveries „Ï 2020 NCOs of $18.3 million, or 0.17% of average loans „Ï The pr
Slide 18: Higher Risk Loan Trends
„Ï Special mention loans decreased $6.3 million from 1Q21, but remained flat as a % of total loans „Ï Substandard, but still accruing loans, increased 0.19% quarter over quarter as a % of total loans „Ï Non performing assets improved by $10.1 million during the quarter and represent 0.41% of total l
Slide 19: ACL Walkforward
19 ACL Walkforward $135,592 $122,460 $1,096 $2,118 $456 ($2,321) ($14,481) 1Q21 ACL Loan Growth Reserve for Unfunded Commitments Net Recoveries Specific Reserve Model / Forecast Changes 2Q21 ACL ($000) ACL / Loans: 1.16% ACL / Loans excl. PPP: 1.26% 1.08% 1.12% Note: ACL includes the reserve for unf
Slide 20: Enhancing Our Franchise Through Strategic M&A
Total Assets $18,557 $7 $752 $3,057 $22,374 Total Gross Loans $11,844 $- $576 $2,444 $14,864 Total Deposits $15,993 $- $636 $2,613 $19,243 Enhancing Our Franchise Through Strategic M&A E X P A N S I O N R A T I O N A L E 1. Includes MSAs with a population greater than 300,000 2. Does not include mer
Slide 21: 2Q21 Exhibits
2 Q21 INVESTOR PRESENTATION Exhibits
Slide 22: Selected Segments: Hotels
9.2% 3.1% 10.5% 33.2% 28.6% 15.4% Top 50 Hotels by Sector Selected Segments Hotels 22 Extended Stay Interstate, Limited Service Conference Center Urban, Limited Service „Ï Top 50 hotel loans outstanding totaled $296 million as of 2Q21, or 3% of total loans „Ï Original loan to value low at 60% on ave
Slide 23: Selected Segments: Senior Care
Selected Segments Senior Care 23 „Ï Senior Care lending team are dedicated specialists with significant experience in the space „Ï Senior Care funded exposure for UCBI totaled $537 million as of 2 Q21, or 5% of total loans „Ï Senior Care borrowers provide significant equity up front with an average
Slide 24: Navitas Credit Quality
„Ï Navitas 2 Q21 NCOs = 0.13% „Ï Economic recovery and government intervention driving historically low loss rates „Ï Navitas ¡¦ cumulative net loss rates have approximated 2 % for the last 10 years „Ï Navitas ACL Loans equated to 1.87% as of 2Q21 „Ï Rating agencies have historically assigned Navita
Slide 25: Expanding Mortgage Throughout the Footprint
Expanding Mortgage Throughout the Footprint „Ï Gain on sale has declined, but remains above pre pandemic levels „Ï Mortgage production per originator, per quarter decreased $96 thousand in 2Q21 to $7.6 million, or 11% above 2Q20 „Ï Purchase / Refi mix has shifted from 43% / 57% in 2Q20 to 63% / 37%
Slide 26: Non-GAAP Reconciliation Tables
Non GAAP Reconciliation Tables $ in thousands, except per share data 26 26 2Q203Q204Q201Q212Q21Expenses Expenses - GAAP83,980$ 95,981$ 106,490$ 95,194$ 95,540$ Merger-related and other charges(397) (3,361) (2,452) (1,543) (1,078) Expenses - Operating83,583$ 92,620$ 104,038$ 93,651$ 94,462$ Diluted E
Slide 27: Non-GAAP Reconciliation Tables
Non GAAP Reconciliation Tables $ in thousands, except per share data 27 27 2Q203Q204Q201Q212Q21Return on Assets Return on assets - GAAP0.71 % 1.07 % 1.30 % 1.62 % 1.46 % Merger-related and other charges0.01 0.07 0.04 0.03 0.02 Return on assets - Operating0.72 % 1.14 % 1.34 % 1.65 % 1.48 % Return on
Slide 28: Glossary
Glossary 28 28 ACL – Allowance for Credit LossesMTM – Marked-to-marketALLL – Allowance for Loan LossesMSA – Metropolitan Statistical AreaAUA – Assets Under AdministrationMSR – Mortgage Servicing Rights AssetBPS – Basis PointsNCO – Net Charge-OffsC&I – Commercial and IndustrialNIM – Net Interest Marg
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