United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q3 2023 Earnings Presentation
26 slides from United Community Banks's earnings presentation, Oct 18, 2023
Slide 1: 3Q23 Investor Presentation
3Q23 Investor Presentation October 18, 2023 Member FDIC. © 2023 United Community Bank | ucbi.com
Slide 2: Disclosures: Cautionary Statement
Disclosures CAUTIONARY STATEMENT This communication contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In general, forward-looking statements usually may be identified
Slide 3: 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 (“GAAP”). This financial information includes certain operating performance measures, which exclude merger-related and
Slide 4: United Community Banks, Inc. Company Overview
United Community Banks, Inc. Company Overview $26.9 $18.2 BILLION IN BILLION IN TOTAL ASSETS TOTAL LOANS Regional Full-Service Branch Network National Navitas and SBA Markets $5.1 $22.9 BILLION IN BILLION IN AUA TOTAL DEPOSITS AMERICA’S BEST BANKS 12.6% in 2023 for the ninth UCBI Banking Offices TIE
Slide 5: 3Q23 Highlights
5.32% $0.39 Return on common equity Diluted earnings per share – – GAAP GAAP 9.03% 3Q23 Highlights $0.45 Return on tangible common Diluted earnings per share – equity operating(1) – operating(1) Diluted Earnings Per Share Return on Average Assets $0.74 $0.75 1.32% 1.34% 0.68% 5.4% $0.53 $0.55 0.95%
Slide 6: Footprint Focused on High-Growth MSAs in Southeast
Footprint Focused on High-Growth MSAs in Southeast Top 10 MSAs - % of Total Deposits Fastest Growing UCBI's % ’23 – ’28 ’23 – ’28 Major Southeast of Total Proj. Pop. Proj. HHI. (1) MSAs Deposits Growth % Growth % Myrtle Beach, SC 1) Raleigh, NC 3.73% 7.40 11.77 Charlotte, NC 2) Jacksonville, FL 0.52
Slide 7: Outstanding Deposit Franchise
Outstanding Deposit Franchise 3Q23 Total Deposits $22.9 billion Strong Customer Deposit Growth Time 16% ✓ Total deposits were up $606 million in 3Q23 from DDA 2Q23 30% Savings 6% ✓ Excluding FNBSM ($829 million), the TN branches sale ($110 million) and brokered deposits (paid down $427 million), tot
Slide 8: Deposit Trends
Deposit Trends 3Q23 Total Deposits $22.9 billion $ in billions ✓ Paid down brokered funding of $427 million and sold $0.8 $1.3 two TN branches with $110 million in deposits in 3Q23 ✓ Deposits are granular with a $33 thousand average $22.3 $22.1 account size and are diverse by industry and $20.3 $19.
Slide 9: Well-Diversified Loan Portfolio
Well-Diversified Loan Portfolio $ in billions 3Q23 Total Loans $18.2 billion Quarter Highlights Residential Manufactured ✓ Loans increased $241 million, or 5.4% Construction Housing annualized, excluding FNBSM and the TN 2% branches sale Home Equity 3% 5% ✓ Construction & CRE ratio as a percentage o
Slide 10: Balance Sheet Strength – Liquidity and Capital
Balance Sheet Strength – Liquidity and Capital Loans / Deposits % 86% ✓ Substantial balance sheet liquidity and above-peer capital ratios 78% 78% 80% ✓ Customer deposit growth and the sale of FNBSM’s 77% 73% securities portfolio provided funding for loan growth 68% 70% and to pay down brokered fundi
Slide 11: Capital
Capital Risk-Based Capital Ratios CET1 Non-common Tier 1 Tier 2 Total ✓ 3Q23 regulatory risk-based capital 14.5% 14.6% 14.8% 14.4% 14.6% 14.4% ratios decreased an average of 9 bps 13.5% 1.9% 1.9% 2.0% 1.8% 1.9% 1.9% from 2Q23 due to the closing of 0.6% 0.5% 0.5% 0.5% 0.5% 1.7% 0.5% 0.6% FNBSM ✓ The
Slide 12: Net Interest Revenue / Margin
(1) Net Interest Revenue / Margin $ in millions Net Interest Revenue & Net Interest Margin $202.6 ✓ Net interest revenue increased $2.3 million from 2Q23 4.0 0% $199.8 $200.3 $21 0.0 3.57% $19 0.0 ✓ Net interest margin decreased 13 bps from 2Q23, 3.5 0% 3.37% $17 0.0 primarily driven by increased de
Slide 13: Noninterest Income
Noninterest Income $ in millions $36.4 Linked Quarter $33.4 ✓ Noninterest income was down $4.4 million $31.9 $32.0 • 3Q23 decrease mainly due to the absence of a one- $30.2 time gain on the sales of assets in 2Q23 $12.1 $6.3 • Excluding FNBSM, service charges increased 3.7% $7.9 from 2Q23 $13.5 $9.4
Slide 14: Disciplined Expense Management
Disciplined Expense Management Efficiency Ratio % ✓ The GAAP efficiency ratio increased compared 61.3% to last quarter 57.2% 55.7% 55.3% 57.4% ✓ On an operating basis, the efficiency ratio 48.4% 48.0% 53.7% 54.2% increased as solid expense control, adjusted for 47.7% 47.4% FNBSM, was more than offse
Slide 15: Credit Quality
Credit Quality Net Charge-Offs as % of Average Loans 0.59% ✓ 3Q23 net charge-offs of $26.6 million, or 0.59% of average loans, annualized • The previously disclosed loss of $19 million on the 8.7% participation in a 0.49% $218.5 million nationally syndicated credit was attributable to 0.42% of the 0
Slide 16: Allowance for Credit Losses
Allowance for Credit Losses Allowance for Credit Losses (ACL) Walk-Forward $4,005 ✓ The 3Q23 reserve increase of $2,236 $22,571 $3,718 $212,277 $219,624 $7.3 million was primarily due $1,455 to the addition of FNBSM ($26,638) ($000) 2Q23 ACL Loan Growth NCOs Specific Model Impact First Miami First M
Slide 17: 3Q23 Exhibits
3Q23 INVESTOR PRESENTATION Exhibits
Slide 18: Navitas Performance
Navitas Performance $ in millions Navitas Portfolio ✓ Navitas represents 8% of total loans 9.25% $1, 800 10. 00% 9.08% 9.01% 8.89% 8.88% 8.99% 9.12% 8.85% 8.80% 8.79% $1, 600 ✓ Navitas 3Q23 NCOs of 1.62%, or 9.0 0% $1, 400 $6.3 million 8.0 0% ✓ Navitas ACL / Loans of 1.98% 7.0 0% $1, 200 6.0 0% $1,
Slide 19: Navitas Portfolio
Navitas Portfolio $ in millions Top 25 Industries - $1.0 billion Top 25 Equipment Types - $1.4 billion EATING PLACES $195.3 FRANCHISE $273.0 PHYSICAL FITNESS FACILITIES $109.0 TITLED EQUIPMENT $266.7 OFFICES OF DOCTORS OF MEDICINE $77.9 MEDICAL LASER/AESTHETICS $141.0 BEAUTY SHOPS $74.6 GYM/PLAYGROU
Slide 20: Shared National Credits Portfolio
Shared National Credits Portfolio $ in millions Top 10 Industries - $185 million Residential ✓ SNC’s outstanding total Remodelers (1) $309 million, or 1.7% of $12.3 Metal Window and Door Manufacturing (1) Solar Electric Power Generation (3) total loans $13.0 $31.6 ✓ Top 10 industries Recreational Ve
Slide 21: Selected Segments – Office
Selected Segments – Office $ in millions Investment CRE – Office Outstanding $ $710 $722 $711 $666 $683 $664 $661 $531 $541 1% 6% 20% 49% 25% 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 ✓ Office portfolio is distributed across our Southeastern primary and secondary markets, with very few loans in c
Slide 22: Selected Segments – Senior Care
Selected Segments – Senior Care $ in millions $549 $520 $518 $465 $442 $408 $410 1% 6% $394 $388 20% 49% $170 $169 $108 25% $102 $144 $91 $135 $124 $111 $80 $80 $79 $106 $106 $102 $73 $65 $60 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 Substandard $ Special Mention $ Pass $ ✓ Senior Care portfolio
Slide 23: Mortgage Activity Trends
Mortgage Activity Trends $ in millions Mortgage Locks & Sales ✓ Rate locks were $304 million compared to $50 0 4.0 % $45 0 3.5 % $456 $40 0 3.1% 2.7% 2.9% 2.8% 2.9% 3.0 % $305 million in 2Q23 ✓ 34% of locked loans were variable rate $35 0 $364 $335 2.5 % $30 0 $305 $304 $25 0 $20 0 2.0 % mortgages i
Slide 24: Non-GAAP Reconciliation Tables
Non-GAAP Reconciliation Tables $ in thousands, except per share data 3Q22 4Q22 1Q23 2Q23 3Q23 Expenses Expenses - GAAP $ 112,755 $ 117,329 $ 139,805 $ 132,407 $ 144,474 Merger-related and other charges (1,746) (1,470) (8,631) (3,645) (9,168) Expenses - Operating $ 111,009 $ 115,859 $ 131,174 $ 128,7
Slide 25: Non-GAAP Reconciliation Tables
Non-GAAP Reconciliation Tables $ in thousands, except per share data 3Q22 4Q22 1Q23 2Q23 3Q23 Return on Assets to return on assets- pre-tax pre-provision Return on assets - GAAP 1.32 % 1.33 % 0.95 % 0.95 % 0.68 % Income tax expense 0.37 0.41 0.29 0.29 0.18 (Release of) provision for credit losses 0.
Slide 26: Glossary
Glossary ACL – Allowance for Credit Losses MLO – Mortgage Loan Office ALLL – Allowance for Loan Losses MMDA – Money Market Deposit Account AOCI – Accumulated Other Comprehensive Income (Loss) MTM – Marked-to-market AUA – Assets Under Administration MSA – Metropolitan Statistical Area BPS – Basis Poi
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