United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q2 2022 Earnings Presentation
28 slides from United Community Banks's earnings presentation, Jul 19, 2022
Slide 1: 2Q22 Investor Presentation
2Q22 Investor Presentation July 19, 2022
Slide 2: Important Information For Shareholders and Investors
Important Information For Shareholders and Investors This presentation contains information related to a proposed merger of United Community Banks, Inc. ("United") with Progress Financial Corporation . In connection with the proposed merger, United has filed with the Securities and Exchange Commissi
Slide 3: Disclosures
Disclosures CAUTIONARY STATEMENT This communication contains -looking 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 through use of words
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 ch
Slide 5: United Community Banks, Inc. Company Overview
United Community Banks, Inc. Company Overview Committed to Service Since 1950 $24.2 $14.5 BILLION IN BILLION IN TOTAL ASSETS TOTAL LOANS Regional Full Service Branch Network National Navitas and SBA Markets $4.1 $20.9 BILLION IN BILLION IN AUA TOTAL DEPOSITS 100 BEST BANKS IN Banking Offices 12.5% A
Slide 6: 2Q22 Highlights
$0.61 9.3% Diluted earnings per share Return on common equity - GAAP $0.66 - GAAP 14.2% 2Q22 Highlights Diluted earnings per share Return on tangible common operating(1) equity operating(1) Diluted Earnings Per Share Return on Average Assets $0.78 $0.79 1.46% 1.48% 1.08% 7.0% $0.50 $0.61 $0.66 0.89%
Slide 7: Long-Term Financial Performance & Shareholder Return
Long-Term Financial Performance & Shareholder Return (1)(2) (1)(2) ROA - Operating ROTCE - Operating 1.51% 17.33% 1.40% 1.42% 15.69% 15.81% 13.89% 14.20% 1.17% 12.24% 1.07% 1.13% 12.02% 1.06% 1.09% 11.86% 2016 2017 2018 2019 2020 2021 1Q22 2Q22 2016 2017 2018 2019 2020 2021 1Q22 2Q22 UCBI KRX UCBI K
Slide 8: Footprint Focused on High-Growth MSAs in Southeast
Footprint Focused on High-Growth MSAs in Southeast United MSA Presence Progress MSA Presence Projected Population Growth(2) (2022-2027) Projected Household Income Growth (2) (2022-2027) 4.9% 11.9% 12.1% 3.2% National National Avg. Avg. (1) Includes MSAs with a population of greater than 1,000,000 (2
Slide 9: Outstanding Deposit Franchise
Outstanding Deposit Franchise 2Q22 Total Deposits $20.9 billion Time Total deposits were down $183 million Savings 8% from 1Q22 but up $4.5 billion YOY 7% DDA Excluding Reliant and Aquesta, total 39% deposits were up $1.4 billion, or 8.5% YOY 24% Core transaction deposits were down MMDA $156 million
Slide 10: Well-Diversified Loan Portfolio
10 Well-Diversified Loan Portfolio 2Q22 Total Loans $14.5 billion Quarter Highlights Residential Loans increased $225 million, or 6.3% Construction Manufactured Housing annualized; core loan growth of 7.0% Home Equity 3% 2% annualized, excluding PPP 5% Strong organic growth was driven by Residential
Slide 11: Deposit Growth Creates Remix Opportunity
11 Deposit Growth Creates Remix Opportunity $ in billions $25.0 Loans and Deposits 97% $20.0 $21.1 $20.9 87% $18.2 $15.0 $16.3 $16.9 $0.1 $14.3 $14.5 $0.5 $0.2 $11.8 77% $10.0 $11.0 $10.9 70% 70% 68% $5.0 67% 66% 64% $0.0 57% Loans Deposits Loans Deposits Loans Deposits Loans Deposits Loans Deposits
Slide 12: Capital
Capital Quarterly dividend of $0.21 per share, an increase of 11% YOY Net unrealized securities losses in AOCI increased by $90.9 million to $268 million in 2Q22 There were no share repurchases during 2Q22 *2Q22 regulatory capital ratios are preliminary 12
Slide 13: Net Interest Revenue / Margin
(1) Net Interest Revenue / Margin $ in millions $178.9 $163.8 0.18% $138.4 0.05% (0.00%) (0.01%) 3.19% 2.97% 3.19% 3.19% 2.97% 3.13% 2.81% 2.90% 2Q21 1Q22 2Q22 1Q22 NIM Mix Change Higher Interest Loan Accretion PPP Fees 2Q22 NIM Net Interest Revenue ($ in millions) Rates Net Interest Margin (1) (2)
Slide 14: Historical Deposit Beta
14 Historical Deposit Beta 3.00% 2.88% 2.76% 2.80% 2.53% 2.47% 2.40% 2.50% 2.22% 2.07% 2.40% 2.12% 1.94% 1.92% 2.00% 1.80% 1.81% 1.73% 1.58% 1.61% 1.45% 1.50% 1.37% 1.24% 1.20% 1.12% 1.15% 0.95% 1.00% 0.70% 0.39% 0.45% 0.62% 0.65% 0.50% 0.36% 0.37% 0.55% 0.44% 0.16% 0.33% 0.24% 0.26% 0.17% 0.20% 0.1
Slide 15: Noninterest Income
Noninterest Income Linked Quarter $ in millions Fees were down $5.5 million $40.1 Mortgage fees were down $9.1 million from $39.0 1Q22 primarily due to lower lock volume and $2.4 $37.2 $35.8 $3.2 $4.3 million less in MSR gains $3.8 $33.5 Rate locks were down with $597 million compared to $4.1 $757 m
Slide 16: Disciplined Expense Management
Disciplined Expense Management $ in millions $120.8 Linked Quarter $119.3 $113.6 GAAP and operating expenses increased $109.2 $110.3 1.3% and 3.1%, respectively The majority of the increase was driven by $2.2 $99.2 million of compensation merit increases, offset $96.7 $95.5 $94.5 $95.3 by Reliant co
Slide 17: Credit Quality
Credit Quality Net Charge-Offs as % of Average Loans 0.20% 2Q22 net recoveries of $1.07 0.15% million, or 0.03% of average loans, annualized 0.10% 0.08% 0.05% 0.05% 0.02% 0.01% 0.00% -0.01% -0.02% -0.03% -0.05% 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 Provision for Credit Losses & NCOs ($ in millions) Pro
Slide 18: Higher-Risk Loan Trends
Higher-Risk Loan Trends Special Mention & Substandard Accruing Loans as a % of Total Loans 3.5% 3.2% Special mention loans improved by 0.12% 3.0% 2.5% 2.6% (from $298 million in 1Q22 to $285 million 2.5% 2.1% 2.0% in 2Q22, an improvement of $13 million) 2.0% 1.5% Substandard accruing loans remained
Slide 19: Allowance for Credit Losses
Allowance for Credit Losses ACL Walk Forward $2,959 Reserve build due to loan $1,069 $2,652 ($7) $153,042 growth, net recoveries and $146,369 model changes reflecting a weaker economic forecast ($000) 1Q22 ACL Loan Growth Net Recoveries Specific Reserve Model / Forecast 2Q22 ACL Changes Allowance fo
Slide 20: Exhibits
2Q22 INVESTOR PRESENTATION Exhibits
Slide 21: Blended Cash and Securities Yield
21 Blended Cash and Securities Yield $ in billions Cash and Securities $8.0 $1.7 $1.2 $7.0 $2.2 $6.0 $1.7 $1.3 $5.0 $1.2 $1.5 $4.0 $0.9 $6.7 $3.0 $1.2 $6.4 $5.3 $5.7 $4.9 $2.0 $4.3 $3.6 $2.4 $3.1 $1.0 $0.0 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 Investments ($) Fed Funds & Interest Earning Cash
Slide 22: Interest Rate Sensitivity
22 Interest Rate Sensitivity Net Interest Income Sensitivity 11.36% 5.77% 7.29% 4.81% 1.44% 1.44% +25 bps +100 bps +200 bps % Change - Shocks % Change - Ramps 4.81% asset sensitivity in +100 bps ramp One 25 bps Fed rate hike is worth approximately 5 bps to net interest margin 22% Beta assumed for di
Slide 23: Navitas Performance
Navitas Performance $ in millions Navitas Originations Navitas 8% of total loans 9.54% 9.29% 9.44% 9.61% $250 9.26% 9.27% 9.15% 9.13% 10.00% 8.90% 8.82% Navitas 2Q22 NCOs of 0.31%, $200 $204 $213 $212 8.00% or $0.9 million $181 $186 $150 $145 $148 6.00% Average quarterly losses $134 $100 $126 4.00%
Slide 24: Mortgage Activity Shift to Purchase & Adjustable Rate Loans
Mortgage Activity Shift to Purchase & Adjustable Rate Loans $ in millions $1,200 6.0% 5.0% 5.0% $1,000 4.6% 5.0% 4.0% $993 4.0% $910 3.8% 3.9% $800 3.6% 3.7% 4.0% $802 $792 $731 $757 $702 $695 $600 3.0% $597 $400 2.0% $395 $402 $410 $407 $336 $320 $200 $285 1.0% $207 $160 $0 0.0% 2Q20 3Q20 4Q20 1Q21
Slide 25: Selected Segments Senior Care
Selected Segments Senior Care $ in millions $535 $537 $549 $520 $518 $486 $503 $511 $500 $465 1% 6% $400 20% $300 $200 49% $170 $169 25% $170 $144 $172 $135 $100 $100 $34 $64 $73 $73 $66 $59 $13 $46 $48 $7 $21 $0 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 Nonaccruals $ Substandard Accruing $ Speci
Slide 26: Non-GAAP Reconciliation Tables
26 Non-GAAP Reconciliation Tables $ in thousands, except per share data 26
Slide 27: Non-GAAP Reconciliation Tables
27 Non-GAAP Reconciliation Tables $ in thousands, except per share data 27
Slide 28: Glossary
Glossary ACL — Allowance for Credit Losses ALLL — Allowance for Loan Losses AUA — Assets Under Administration BPS — Basis Points C&l— Commercial and Industrial C&D — Construction and Development CECL — Current Expected Credit Losses CET1 — Common Equity Tier 1 Capital CRE — Commercial Real Estate CS
United Community Banks — Q2 2022 Earnings Presentation on 6ix