United Community Banks, Inc. · NYSE:UCB
United Community Banks — IPO Roadshow (September 2009)
48 slides from United Community Banks's IPO roadshow presentation, Sep 23, 2009
Slide 1: Follow-on Offering of Common Stock September 2009
Follow-on Offering of Common Stock NASDAQ: UCBI September 2009
Slide 2: Cautionary statement
Cautionary statement The issuer has filed a registration statement (including a prospectus and prospectus supplement) with the Securities and Exchange Commission ("SEC") for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration state
Slide 3: Non-GAAP measures
Non-GAAP measures This presentation also contains non-GAAP 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 fee revenue, core operat
Slide 4: Offering summary
Offering summary Issuer: United Community Banks, Inc. Ticker / Exchange: UCBI / NASDAQ (GSM) Transaction Size: Approximately $175 million Pro Forma Shares Outstanding: Approximately 73,533,042 (1) Over-Allotment Option: 15% Use of Proceeds: General Corporate Purposes Joint Book Running Managers: San
Slide 5: Transaction rationale
Transaction rationale Increases Tangible Common Equity ratio to approximately 7.2% Strengthens regulatory capital ratios Provides an opportunity to continue aggressively resolving problem loans To allow for an earlier return to profitability Positions UCBI to take advantage of competitor dislocation
Slide 6: Strengthened capital position
Strengthened capital position (1) Assumes gross proceeds of $175.0 million in connection with a common stock offering (2) UCBI peer group includes BOH, WTFC, FMER, UMBF, TRMK, UMPQ, MBFI, ONB, UBSI, FMBI, PCBC, BPFH Data Source: SNL Financial
Slide 7: United at a glance
United at a glance Assets $8.4 billion Deposits 6.8 billion "Community Banks" 27 Offices 110
Slide 8: Business and operating model
Business and operating model Twenty-seven "community banks" Local CEOs with deep roots in their communities Resources of $8.4 billion bank Service is point of differentiation Golden rule of banking "The Bank That SERVICE Built" Ongoing customer surveys +90% satisfaction rate Strategic footprint with
Slide 9: Deposit mix (total $6.8 billion)
Deposit mix (total $6.8 billion) Note: Dollars in millions As of June 30, 2009 Demand & NOW MMDA & Sav. Time <$100k Time >$100k Brokered East 1525 744 2465 1352 763
Slide 10: Core transaction deposits
Core transaction deposits Note: Dollars in millions 4Q 08 2Q 09 Geographic Diversity Atlanta MSA North Georgia Western North Carolina Eastern Tennessee Gainesville MSA Coastal Georgia
Slide 11: Net interest margin
Net interest margin 2Q 09 1Q 09 4Q 08 3Q 08 2Q 08 Net Interest Margin 0.0328 0.0308 0.027 0.0317 0.0332 0.0056 0.0048 0.0044 0.0036 0.0024 Net Interest Margin Second quarter margin improvement of 20 bps Improved loan and deposit pricing Replaced higher priced CDs and broker deposits NIM Characterist
Slide 12: Loan portfolio and credit quality
LOAN PORTFOLIO AND CREDIT QUALITY
Slide 13: Proactively addressing credit environment
Proactively addressing credit environment Structure Centralized underwriting and approval process Segregated work-out teams Highly skilled ORE disposition group Seasoned regional credit professionals Process Continuous external loan review covering Intensive executive management involvement: Weekly
Slide 14: Loan portfolio (total $5.5 billion)
Loan portfolio (total $5.5 billion) Geographic Diversity As of June 30, 2009
Slide 15: Commercial loans (total $2.6 billion)
Commercial Construction Owner-Occupied Income Producing C & I East 15 40 29 16 Commercial loans (total $2.6 billion) Geographic Diversity Average Loan Size CRE = $450k C&I = $71k Comm. Constr. = $661k As of June 30, 2009
Slide 16: Commercial real estate (by loan type)
Commercial real estate (by loan type) Note: Dollars in millions 58% owner-occupied 42% income producing Typical owner-occupied: small business, doctors, dentists, attorneys, CPAs $12 million project limit 48% LTV (1) $450k average credit size Portfolio Characteristics (1) Loan balance as of June 30,
Slide 17: Commercial construction (by loan type)
Commercial construction (by loan type) Note: Dollars in millions Avg Loan Size: $661k Avg LTVs (1) Total: 46% Raw Land: 44% Land Dev.: 40% Portfolio Characteristics (1) Loan balance as of June 30, 2009 / most recent appraisal
Slide 18: Residential mortgage (total $1.5 billion)
Mortgage Home Equity East 74 26 Origination Characteristics No broker loans No sub-prime / Alt-A 78% of HE > 680 FICO Policy Max LTV: 80-85% Residential mortgage (total $1.5 billion) Geographic Diversity As of June 30, 2009 Avg loan size: $47k Avg loan size: $98k
Slide 19: Residential construction (total $1.3 billion)
Spec Sold Developing Raw Lot East 267 106 412 159 371 Residential construction (total $1.3 billion) Geographic Diversity As of June 30, 2009 Spec = $226k Sold = $173k Developing Construction Land Develop. = $979k Raw = $452k Lot = $169k Average Loan Size
Slide 20: Atlanta MSA (residential construction)
Atlanta MSA (residential construction) Note: Dollars in millions
Slide 21: Credit quality
Credit quality 2Q 09 1Q 09 4Q 08 3Q 08 2Q 08 Net Charge-offs $ 58.3 $ 43.3 $ 74.0 $ 55.7 $ 14.3 as % of Average Loans 4.18 % 3.09 % 5.09 % 3.77 % .97 % Allowance for LL $ 146.0 $ 144.0 $ 122.3 $ 111.3 $ 91.0 as % of Total Loans 2.64 % 2.56 % 2.14 % 1.91 % 1.53 % as % of NPLs 51 56 64 80 74 as % of N
Slide 22: Net charge-offs by category
Net charge-offs by category Note: Dollars in thousands (1) Based on simple average of the four quarters
Slide 23: Net charge-offs by market
Net charge-offs by market Note: Dollars in thousands (1) Based on simple average of the four quarters
Slide 24: NPAs by category and market
NPAs by category and market Note: Dollars in thousands
Slide 25: Key trends - loan portfolio and credit quality
Key trends - loan portfolio and credit quality The majority of credit challenges continue to be centered in residential construction, primarily in Atlanta While some deterioration has occurred, the commercial portfolio continues to perform much better than residential construction; the commercial po
Slide 26: Credit quality - SCAP analysis
Credit quality - SCAP analysis Imputed Stress Test Loss Estimates (1) Represents the SCAP - Selected Banks Scenario modified to reflect the characteristics of United Community Banks, Inc. existing loan portfolio. (2) Based on average projected losses per loan category (More Adverse Scenario) for BB&
Slide 27: Credit quality - SCAP analysis, $175 Million Common Stock Raise
Credit quality - SCAP analysis Imputed Stress Test Loss Estimates - $175 Million Common Stock Raise
Slide 28: Financial results
FINANCIAL RESULTS
Slide 29: Core earnings summary - second quarter 2009
Core earnings summary - second quarter 2009 Note: Dollars in millions (1) Excludes FHLB prepayment charge, securities (losses) / gains and gain on acquisition. (2) Excludes BOLI expense recovery, special FDIC assessment, foreclosed property costs, severance costs and goodwill impairment charge (3) E
Slide 30: Net operating loss - second quarter 2009
Net operating loss - second quarter 2009 Note: Dollars in millions
Slide 31: Net loss - second quarter 2009
Net loss - second quarter 2009 2Q 09 1Q 09 4Q 08 2Q 08 Net Operating (Loss) Income $ (23.1 ) $ (32.0 ) $ (46.7 ) $ 7.1 Gain on Acquisition ($11.4, pre-tax) 7.1 - - - Goodwill Impairment Charge - (70.0 ) - - Severance Costs ($2.9, pre-tax) - (1.8 ) - - Net (Loss) Income $ (16.0 ) $ (103.8 ) $ (46.7 )
Slide 32: Reasons to invest in United
REASONS TO INVEST IN UNITED
Slide 33: Reasons to invest in United
Core franchise supports customer retention and strong market presence Business model thrives on relationship-driven customer service backed by "big bank" resources Footprint contains a combination of stable and long-term growth markets Significant insider ownership Significant strategic opportunitie
Slide 34: Appendix
APPENDIX
Slide 35: Experienced proven leadership
Joined UCBI Years in Banking Jimmy Tallent President and CEO 1984 36 Guy Freeman Chief Operating Officer 1994 49 Rex Schuette Chief Financial Officer 2001 32 David Shearrow Chief Risk Officer 2007 28 Glenn White President, Atlanta Region 2007 35 Craig Metz Marketing 2002 17 Bill Gilbert Retail Banki
Slide 36: Leading demographics
Leading demographics Note: Financial information as of June 30, 2009 (1) Includes publicly traded companies with assets between $5.0 - 50.0 billion as of June 30, 2009 (2) Population growth weighted by county as of June 30, 2009 Data Source: SNL Financial
Slide 37: Market share opportunities
Market share opportunities (excellent growth prospects) Note: Dollars in billions (1) FDIC deposit market share and rank as of June 30, 2008 for markets where United Community Banks takes deposits. Data Source: SNL Financial and FDIC
Slide 38: Lending - credit summary
Legal lending limit $174 House lending limit 20 Top 25 relationships 7.8% of total loans 430 Regional credit review Standard underwriting Lending - credit summary (as of June 30, 2009) Note: Dollars in millions
Slide 39: Loans - markets served (at quarter-end)
Loans - markets served (at quarter-end) Note: Dollars in millions
Slide 40: Loans - markets served (at year-end)
Loans - markets served (at year-end) Note: Dollars in millions
Slide 41: Business mix - loans (at quarter-end)
Business mix - loans (at quarter-end) Note: Dollars in millions Loans By Category 2Q 09 1Q 09 4Q 08 3Q 08 2Q 08 Year over Year Change % Commercial (sec. by RE) $1,797 $1,779 $1,627 $1,604 $1,584 13 Commercial construction 379 377 500 509 522 (27) Commercial & Industrial 399 387 410 425 417 (4) Total
Slide 42: Business mix - loans (at year-end)
Loans by market 2008 2007 2006 2005 2004 Commercial (sec. by RE) $1,627 $1,476 $1,230 $1,055 $ 966 Commercial construction 500 527 469 359 250 Commercial & Industrial 410 418 296 237 212 Total commercial 2,537 2,421 1,995 1,651 1,428 Residential construction 1,479 1,829 1,864 1,380 1,055 Residential
Slide 43: Residential construction - total company
Residential construction - total company Note: Dollars in millions
Slide 44: Residential construction - Atlanta MSA
Residential construction - Atlanta MSA Note: Dollars in millions
Slide 45: Liquidity - wholesale borrowings
Liquidity - wholesale borrowings Note: Dollars in millions
Slide 46: Liquidity - loans / deposits
Liquidity - loans / deposits Note: Dollars in millions
Slide 47: Non-GAAP reconciliation tables
Non-GAAP reconciliation tables
Slide 48: Non-GAAP reconciliation tables
Non-GAAP reconciliation tables
United Community Banks — IPO Roadshow (September 2009) on 6ix