United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q2 2018 Earnings Presentation
23 slides from United Community Banks's earnings presentation, Jul 24, 2018
Slide 1: Second Quarter 2018 Investor Presentation
2018 INVESTOR PRESENTATION SECOND QUARTER 2018 July 24, 2018
Slide 2: Disclosures
ucbi.com | 2 Disclosures CAUTIONARY STATEMENT This investor presentation may contain forward - looking statements, as defined by federal securities laws, including statements about United and its financial outlook and business environment . These statements are based on current expectations and are
Slide 3: Who We Are / 2Q18 Overview
• Established in 1950 and headquartered in Blairsville, GA with executive offices in Greenville, SC x 2,323 employees • One of the largest regional banks in the U.S. by assets with 143 branch locations, 7 loan production offices and 4 mortgage loan offices in four states: GA, NC, SC and TN x Top 10
Slide 4: 2Q18 Highlights
2Q18 Highlights ucbi.com | 4 $15.83 $17.02 $17.29 $13.74 $12.96 $13.25 2Q17 1Q18 2Q18 Book Value Per Share (2) Book Value (GAAP) Tangible Book Value (non-GAAP) (1) $0.39 $0.47 $0.49 $0.41 $0.50 $0.53 2Q17 1Q18 2Q18 Earnings Per Share GAAP Operating (1) 1.06% 1.26% 1.30% 1.10% 1.33% 1.39% 2Q17 1Q18 2
Slide 5: Net Interest Revenue / Margin
$85.1 $103.3 $108.5 2Q17 1Q18 2Q18 3.47% 3.80% 3.90% ucbi.com | 5 (1)Net interest margin is calculated on a fully taxable equivalent basis(2)Excludes brokered deposits Net Interest Revenue / Margin (1) ucbi.com | 5 (1)Net interest margin is calculated on a fully-taxable equivalent basis $ in million
Slide 6: Low-Cost Deposit Base
0 10 20 30 40 50 26 bps 82% 95% Low - Cost Deposit Base Sufficient Liquidity to Support Future Growth Loans / Deposits (1) (2) Cost of Total Deposits (bps) (1) (2) 42 bps 33 bps Deposits KRX Peer ucbi.com | 6 KRX Peer Note – Peer comparison banks comprise the KBW Regional Bank Index (ticker:KRX) (1)
Slide 7: Loans
ucbi.com | 7$2.8$3.0$2.9$1.3$1.7$1.8$0.6$0.7$0.7$1.7$1.9$1.9$0.6$0.5$0.4$0.4$0.5$7.0$8.2$8.22Q171Q182Q18C&I (1)CREComml ConstructionResidentialOther ConsumerEquipment Finance24.7%8.3%19.1%39.9%22.2%34.9%8.9%23.4%4.9%20.5%37.2%8.4%23.1%5.6%5.7%5.2%Loansucbi.com | 7$ in billions8.0%.Annualized end-of-
Slide 8: Loan Growth Drivers
ucbi.com | 8 Loan Growth Drivers ucbi.com | 8 » Continued expansion in our metro markets, including our new Myrtle Beach and Raleigh markets » Ongoing evaluation and addition of new Commercial Banking products and verticals » Successful execution of the Navitas growth strategy » Continued developmen
Slide 9: Fee Revenue
$10.7$8.8$8.8$4.4$5.5$5.6$1.2$0.9$1.2$4.8$5.4$5.3$2.6$1.8$2.42Q171Q182Q18Service ChargesOtherBrokerageMortgageSBAucbi.com | 9Fee Revenueucbi.com | 9in millions.Linked quarter, fees up $0.9 mm due to: .Record number of locks and applications, yet slightly lower mortgage fees in 2Q vs. 1Q due to a $0.
Slide 10: Expense Discipline
57.9%57.8%57.9%56.2%55.8%55.8%$63.2$73.5$76.9$61.4$70.8$74.02Q171Q182Q18ucbi.com | 10(1)Net interest margin is calculated on a fully taxable equivalent basis(2)Excludes brokered depositsExpense Disciplineucbi.com | 10GAAPOperating (1)(1)See non-GAAP reconciliation table slides at the end of the exhi
Slide 11: Credit Quality
Credit Quality ucbi.com | 11 (1) See non - GAAP reconciliation table slides at the end of the exhibits for a reconciliation of operating performance measures to G AAP performance measures ucbi.com | 11 0.09% 0.08% 0.07% 2Q17 1Q18 2Q18 Net Charge - Offs as % of Average Loans 0.24% 0.24% 0.20% 2Q17 1Q
Slide 12: Capital Ratios
ucbi.com | 12 Holding Company 2Q17 1Q18 2Q18 Common Equity Tier I Capital 11.9% 11.3% 11.6% Tier I Risk-Based Capital 11.911.612.0 Total Risk-Based Capital 12.713.513.9 Leverage 9.09.19.3 Tangible Common Equity to Risk-Weighted Assets 12.411.211.4 Average Tangible Equity to Average Assets 9.28.88.8.
Slide 13: Key Strengths
ucbi.com | 13 Key Strengths ucbi.com | 13 » Culture and business model that attracts both bankers and potential acquisition partners » Positioned well in many of the South's fastest - growing markets » Superior customer service helps drive great core deposit growth » Well - developed credit model to
Slide 14: 2018 Exhibits
2018 INVESTOR PRESENTATION Exhibits SECOND QUARTER 2018 July 24, 2018
Slide 15: Cultural Pillars
Cultural Pillars Customer Service Is at Our Foundation High - Quality Balance Sheet » Underwriting conservatism and portfolio diversification » Top quartile credit quality performance » Prudent capital, liquidity and interest - rate risk management » Focused on improving return to shareholders with
Slide 16: Who We Are: The Bank That Service Built
16 Who We Are The Bank That Service Built ucbi.com | 16
Slide 17: Fastest Growing Southeast MSAs
Fastest Growing Southeast MSAs (1) 2018 - 2023 Proj. Population Growth 2018 Population 2023 Proj. Median Household Income 1. Myrtle Beach, SC 9.96% 470,010 $55,177 2. Cape Coral, FL 8.66% 740,553 $59,220 3. Charleston, SC 8.46% 785,518 $69,670 4. Orlando, FL 8.17% 2,518,915 $62,806 5. Raleigh, NC 8.
Slide 18: Deposit Growth by Category and Region
2015 2016 2017 1Q 2018 2Q 2018 2015 2016 2017 1Q 2018 2Q 2018 Demand Deposit 618$ 334$ 487$ 117$ 40$ Non-Interest Bearing Core NOW 441 5 107 4 (21) Demand Deposit 2,089$ 2,423$ 2,910$ 3,027$ 3,067$ MMDA 325 246 156 (7) 10 Savings 177 79 101 25 7 Interest Bearing Core Growth by Category 1,561$ 664$ 8
Slide 19: New Loans Funded and Advances
ucbi.com | 19 2Q18 1Q18 2Q17 1Q18 2Q17 Commercial & Industrial 227.4$ 220.7$ 161.8$ 6.7$ 65.6$ Owner-Occupied CRE 74.7 67.1 114.0 7.6 (39.3) Income-Producing CRE 112.3 70.2 41.6 42.1 70.7 Commercial Constr. 186.8 145.6 121.8 41.2 65.0 Total Commercial 601.2 503.6 439.2 97.6 162.0 Residential Mortgag
Slide 20: Commercial RE Diversification
Commercial RE Diversification –6/30/2018 ucbi.com | 20 Assisted Living/Nursing Home/Rehab Cntr266$ 21.0 %105$ 14.2 % Residential Construction in Process: SPEC144 11.4 88 12.0 Office Buildings 99 7.9 42 5.7 Multi-Residential Properties 97 7.6 32 4.3 Residential Construction in Process: PRESOLD 74 5.8
Slide 21: Built to Outperform in the Next Cycle
BUILT TO OUTPERFORM IN THE NEXT CYCLE 1. Process Change • In 2014, centralized and streamlined consumer underwriting and related functions • Significantly strengthened commercial process for approvals and monitoring 2. Add Significant Talent • CEO with deep knowledge and experience in credit • 2015
Slide 22: Non-GAAP Reconciliation: Net Income, EPS, ROA
2Q17 3Q17 4Q17 1Q18 2Q18(1)(1)(1)(1) Net Income Net income - GAAP28,267$ 27,946$ (11,916)$ 37,658$ 39,634$ Merger-related and other charges 1,830 3,420 7,358 2,646 2,873 Tax benefit on merger-related and other charges(675) (1,147) (1,165) (628) (121) Impairment of deferred tax asset due to federal t
Slide 23: Non-GAAP Reconciliation: ROTCE, Expenses
2Q17 3Q17 4Q17 1Q18 2Q18(1)(1)(1)(1) Return on Tangible Common Equity Return on common equity - GAAP 9.98 % 9.22 % (3.57) % 11.11 % 11.20 % Effect of merger-related and other charges 0.41 0.75 1.86 0.60 0.77 Impairment of deferred tax asset due to federal tax rate reduction- - 11.44 - - Return on co
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