United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q4 2022 Earnings Presentation
26 slides from United Community Banks's earnings presentation, Jan 17, 2023
Slide 1: 4Q22 Investor Presentation
4Q22 Investor Presentation January 17, 2023
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 Committed to Service Since 1950 $24.0 $15.3 BILLION IN BILLION IN TOTAL ASSETS TOTAL LOANS Regional Full Service Branch Network Region Nation National Navitas and SBA Markets $4.3 $19.9 BILLION IN BILLION IN AUA TOTAL DEPOSITS UCBI Banking Offices 100 BE
Slide 5: 4Q22 Highlights
$0.74 10.86% Diluted earnings per share Return on common equity 4Q22 Highlights – GAAP – GAAP $0.75 15.2% Diluted earnings per share Return on tangible common – operating(1) equity – operating(1) Diluted Earnings Per Share Return on Average Assets $0.74 $0.75 $0.74$0.75 1.32% 1.34% 1.33% 1.35% $0.64
Slide 6: Long-Term Financial Performance & Shareholder Return
Long-Term Financial Performance & Shareholder Return (1)(2) (1)(2) ROA ROTCE 1.51% 1.42% 17.33% 1.40% 1.34% 1.35% 15.69% 15.81% 15.60% 1.46% 1.37% 15.20% 1.17% 14.20% 1.35% 1.07% 1.32% 1.33% 12.24% 11.00% 1.04% 0.89% 13.14% 1.08% 11.60% 11.89% 11.02% 10.86% 0.78% 9.25% 9.31% 6.80% 2018 2019 2020 202
Slide 7: Progress Financial Corporation Merger Update
Progress Financial Corporation Merger Update Business Update 9 Closed acquisition on January 3, 2023 9 Progress is headquartered 6% 1% in Huntsville, 20% Alabama and has 14 branches in some Huntsville of the Southeast’s fastest growing Florence Decatur markets in Alabama and the Florida 49% Panhandl
Slide 8: Footprint Focused on High-Growth MSAs in Southeast
Footprint Focused on High-Growth MSAs in Southeast Fastest Growing UCBI % of ’22 – ’27 ’22 – ’27 ’22 Total UCBI UCBI ’22 – ’27 ’22 – ’27 ’22 Total Fastest Growing Mid- Major Southeast Market UCBI Proj. Pop. Proj. HHI. Deposits (2) Market (%) of Total Proj. Pop. Proj. HHI. Deposits Size Southeast MSA
Slide 9: Outstanding Deposit Franchise
Outstanding Deposit Franchise 4Q22 Total Deposits $19.9 billion Time 9 Favorable core deposit mix and deposit Savings 9% costs below peers 8% 38% DDA 9 Cost of deposits increased to 0.49%; up 30 bps from 3Q22 MMDA 23% 9 4Q22 deposit beta of 21% 9 12.0% cumulative deposit beta since 4Q21 22% 9 Histor
Slide 10: Deposit Trends
Deposit Trends 3Q22 4Q22 Balance Avg Cust. Balance Avg Cust. ($ in millions) Balance ($ in millions) Balance Business - DDA $5,310 $60,184 $4,778 $54,028 Business - All Other $2,371 $186,344 $2,281 $178,636 Personal - DDA $3,912 $12,129 $3,771 $11,629 Personal - All Other $6,380 $32,723 $6,437 $33,0
Slide 11: Well-Diversified Loan Portfolio
Well-Diversified Loan Portfolio $ in billions 4Q22 Total Loans $15.3 billion Quarter Highlights Manufactured Residential Housing 9 Loans increased $453 million, or 12% Construction annualized 3% 2% Home Equity 9 Construction & CRE ratio as a percentage of 6% total RBC = 79% / 199% Residential 9 Top
Slide 12: Balance Sheet Strength – Liquidity and Capital
Balance Sheet Strength – Liquidity and Capital Loans / Deposits % 9 Substantial balance sheet liquidity and 82% above-peer capital ratios 77% 73% 9 $6.2 billion securities portfolio offers 70% 68% 70% significant near- and medium-term cash 66% 64% flow opportunities 9 Deposits funding 95% of total f
Slide 13: Capital
Capital Risk-Based Capital Ratios* CET1 Non-common Tier 1 Tier 2 Total 9 4Q22 capital ratios increased 14.9% 14.7% 14.3% 14.5% 14.6% 14.8% and are above peers 13.6% 1.6% 0.8% 1.5% 0.7% 1.9% 0.6% 1.9% 0.6% 1.9% 0.6% 1.9% 2.0% 0.6% 9 The leverage ratio increased 28 0.6% bps to 9.69%, as compared to 3Q
Slide 14: Net Interest Revenue / Margin
(1) Net Interest Revenue / Margin $ in millions Net Interest Revenue & Net Interest Margin $209.9 9 Net interest revenue increased $10.1 million from 3Q22, or 20% $199.8 4.0 0% 3.76% $20 0.0 annualized 3.57% 9 Net interest margin increased 19 bps from 3Q22, primarily 3.5 0% $137.6 3.74% $15 0.0 driv
Slide 15: Noninterest Income
Noninterest Income Linked Quarter $ in millions 9 Fees were up $1.5 million $39.0 • Notable items include: $37.2 • Positive equity valuation marks of $3.6 million $3.2 • $184,000 of securities losses $3.8 $33.5 $33.4 • A $3.2 million decline in mortgage fees driven by $31.9 $1.5 $3.8 the absence of
Slide 16: Disciplined Expense Management
Disciplined Expense Management Efficiency Ratio % 62.1% 9 The efficiency ratio improved compared to last 57.4% 56.6% quarter due to continuing strong growth in Net 56.5% 52.04% Interest Income 53.1% 53.2% 48.4% 48.0% 9 Year over year comparisons are also positively 47.7% 47.4% impacted due to merger
Slide 17: Credit Quality
Credit Quality Net Charge-Offs as % of Average Loans 9 4Q22 net charge-offs of $6.6 million, or 0.17% of average loans, annualized 0.17% • Navitas 4Q22 NCOs of 0.50%, annualized, or $1.7 million 0.08% 0.03% 9 Non-performing assets increased $8.8 million during the quarter and 0.01% were 0.29% of tot
Slide 18: Allowance for Credit Losses
Allowance for Credit Losses Allowance for Credit Losses (ACL) Walk-Forward 9 The provision for credit losses $12,855 $6,996 was $19.8 million in 4Q22 $180,520 $167,300 ($6,611) ($20) 9 Loan growth accounted for $7.0 million of the provision ($000) increase 9 A weakening Moody’s economic forecast dro
Slide 19: Exhibits
4Q22 INVESTOR PRESENTATION Exhibits
Slide 20: Interest Rate Sensitivity
Interest Rate Sensitivity Net Interest Income Sensitivity 6.97% 9 2.85% asset sensitivity in +100 bp ramp; down from 3.60% asset sensitivity in 3Q22 3.53% 9 One 25 bp Fed rate hike is worth 4.33% approximately 3.6 bps to net interest margin 2.85% 9 Other relevant data points 0.89% • Approximately $5
Slide 21: Navitas Performance
Navitas Performance $ in millions Navitas Portfolio $1, 600 9.19% 9.12% 9.08% 9.08% 9.01% 8.89% 8.85% 8.80% 8.88% 10. 00% 9 Navitas represents 9% of total 8.79% $1, 400 9.0 0% loans 9 Navitas 4Q22 NCOs of 8.0 0% $1, 200 7.0 0% $1, 000 6.0 0% 0.50%, or $1.7 million $80 0 $1,374 5.0 0% 9 Navitas ACL /
Slide 22: Mortgage Activity Shift to Purchase & Adj. Rate Loans
Mortgage Activity Shift to Purchase & Adj. Rate Loans $ in millions Mortgage Locks & Sales $80 0 5.5 % 9 Gain on sale % decreased in 4Q22 driven $757 by a continued rise in rates driving $70 0 4.5 % $60 0 $695 3.9% 3.6% 3.7% 3.1% $50 0 $597 2.7% 3.5 % increased price competition $456 9 Rate locks we
Slide 23: Selected Segments – Senior Care
Selected Segments – Senior Care $ in millions $535 $537 $549 $520 $518 $511 $465 $442 1% 6% $408 20% 49% 25% $170 $170 $169 $172 $144 $135 $111 $124 $100 $48 $64 $73 $73 $66 $59 $58 $77 $46 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Substandard Accruing $ Special Mention $ Pass $ 9 Senior Care len
Slide 24: Non-GAAP Reconciliation Tables
24 Non-GAAP Reconciliation Tables $ in thousands, except per share data 4Q21 1Q22 2Q22 3Q22 4Q22 Expenses Expenses - GAAP $ 109,156 $ 119,275 $ 120,790 $ 112,755 $ 117,329 Merger-related and other charges (9,912) (9,016) (7,143) (1,746) (1,470) Expenses - Operating $ 99,244 $ 110,259 $ 113,647 $ 111
Slide 25: Non-GAAP Reconciliation Tables
25 Non-GAAP Reconciliation Tables $ in thousands, except per share data 4Q21 1Q22 2Q22 3Q22 4Q22 Return on Assets to return on assets- pre-tax pre-provision Return on assets - GAAP 0.96 % 0.78 % 1.08 % 1.32 % 1.33 % Income tax expense 0.26 0.20 0.32 0.37 0.41 (Release of) provision for credit losses
Slide 26: Glossary
26 Glossary ACL – Allowance for Credit Losses MLO – Mortgage Loan Officer ALLL – Allowance for Loan Losses MTM – Marked-to-market AUA – Assets Under Administration MSA – Metropolitan Statistical Area BPS – Basis Points MSR – Mortgage Servicing Rights Asset C&I – Commercial and Industrial NCO – Net C
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