United Community Banks, Inc. · NYSE:UCB
United Community Banks — Investor Presentation (March 2016)
39 slides from United Community Banks's investor presentation, Mar 1, 2016
Slide 1: Investor Presentation Update – March 1, 2016
ucbi.com | 1 INVESTOR PRESENTATION Update – March 1, 2016
Slide 2: Disclosures and Cautionary Statement
ucbi.com | 2 ucbi.com | 2 Disclosures operating efficiency ratio, operating dividend payout ratio, core fee revenue, core operating expense, core earnings, tangible common equity to tangible assets, tangible equity to tangible assets and tangible common equity to risk - weighted assets . The most co
Slide 3: Snapshot of United Community Banks, Inc.
ucbi.com | 3 • Head quartered in Blairsville, GA • Regional Headquarters in Greenville, SC • Four state regional community bank: GA, NC, SC and TN • One of the largest community banks in the Southeast • Established in 1950 • 134 locations • 1,941 employees Market Data Ticker UCBI Price (as of 2/ 25
Slide 4: United Foundation – The Bank that SERVICE Built
ucbi.com | 4 United Foundation – The Bank that SERVICE Built ucbi.com | 4
Slide 5: Operating Highlights & Trends
ucbi.com | 5 Operating Highlights & Trends (1) ucbi.com | 5 $14.6 $15.1 $17.2 $18.4 $20.8 $14 $16 $18 $20 $22 4Q14 1Q15 2Q15 3Q15 4Q15 Core Fee Revenue in millions 9.74% 9.46% 10.20% 10.29% 10.87% 9.00% 9.50% 10.00% 10.50% 11.00% 4Q14 1Q15 2Q15 3Q15 4Q15 Return on Tangible Common Equity $58.3 $57.6
Slide 6: Who We Are
ucbi.com | 6 United Community Banks, Inc. ucbi.com | 6 Who We Are Protecting 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
Slide 7: Loan Portfolio Transformation and Diversification
ucbi.com | 7 Who We Are: Protecting High - Quality Balance Sheet ucbi.com | 7 Loan Portfolio Transformation and Diversification 7% 9% 12% 16% 26% 27% 3% Portfolio as of 12/31/2008 Commercial (C&l) Commercial Construction CRE Income Producing CRE Owner-Occupied Residential Construction Residential Mo
Slide 8: Excellent Credit Performance and Management
ucbi.com | 8 Note: Peer comparison banks comprise the KBW Regional Bank Index (ticker: KRX) Source: SNL Financial LC Who We Are: Protecting High - Quality Balance Sheet Excellent Credit Performance and Management ucbi.com | 8 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% CBSH BOH SBNY PB UMPQ SI
Slide 9: Prudent Capital Management
ucbi.com | 9 Who We Are: Protecting High - Quality Balance Sheet ucbi.com | 9 Prudent Capital Management Holding Company Target 4Q15 3Q15 2Q15 1Q15 4Q14 Tier I Risk - Based Capital 11 – 12% 11.5% 11.4% 11.9% 11.5% 12.1% Total Risk - Based Capital 12 – 13 12.5 12.5 13.1 12.8 13.3 Leverage 8.5 – 9.5 8
Slide 10: Path to 1.10% Operating ROA by Q416
ucbi.com | 10 ucbi.com | 10 Return on Assets (bps) Ongoing 99 +5 +2 +2 +2 110 90 95 100 105 110 4Q15 Actual Palmetto Cost Savings Fee Revenue Initiatives Loan Growth Operating Efficiency Initiatives Target Path to 1.10% Operating ROA by Q416 Who We Are: Increasing Profitability
Slide 11: Driving Fee Revenue through Core Banking Infrastructure
ucbi.com | 11 Who We Are: Increasing Profitability ucbi.com | 11 Driving Fee Revenue through Core Banking Infrastructure 33.1 36.8 6.8 9.8 4.8 5.0 7.5 13.6 2.6 6.3 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 2014 2015 Core Fee Revenue in millions Service Charges Other Brokerage Mortgage SBA $54.8 $7
Slide 12: Operating Expense Discipline
ucbi.com | 12 Who We Are: Increasing Profitability ucbi.com | 12 Operating Expense Discipline ► Efficiency improvements are attributable to various expense reduction initiatives while maintaining high business growth ► Declining trend sustained with substantial investments in growth and infrastructu
Slide 13: High-Quality, Low-Cost Core Deposit Base
ucbi.com | 13 Note: Peer comparison banks comprise the KBW Regional Bank Index (ticker: KRX) Source: SNL Financial LC Who We Are: Increasing Profitability High - Quality, Low - Cost Core Deposit Base ucbi.com | 13 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% CATY ISBC WAFD BRKL SBNY VLY PACW CHCO PVTB FFBC IB
Slide 14: Steady Loan Growth
ucbi.com | 14 Who We Are: Generating Growth ucbi.com | 14 Steady Loan Growth $4.18 $4.33 $4.52 $4.96 $1.04 $3.00 $4.00 $5.00 $6.00 2012 2013 2014 2015 Total Loans in billions Organic Acquired Healthcare $6.00 $0.16 $4.68 10% Growth
Slide 15: Mergers & Acquisitions Strategy
ucbi.com | 15 Mergers & Acquisitions Strategy • M&A accelerates our growth strategy in new and existing markets and can be accomplished more efficiently than with a de novo plan; we seek to pair M&A with organic growth opportunities, including adding teams of local bankers to quickly increase growth
Slide 16: UCBI MoneyTree and Palmetto Acquisitions
ucbi.com | 16 UCBI MoneyTree • Closed on May 1 with successful operational conversion on July 18 - 19; business has remained stable • Added a $425 million, 107 year old community bank • Doubled UCBI’s East TN presence in key markets – Knoxville, Lenoir City and Cleveland • Consolidated six branches
Slide 17: $10 Billion and Beyond
ucbi.com | 17 United Community Banks, Inc. ucbi.com | 17 $10 Billion and Beyond Primary Regulatory Implications ► Durbin Amendment under the Dodd - Frank Act (“DFA”) (debit card interchange revenue) – EPS impact of $.02 per quarter ► FDIC insurance premiums ► Stress testing ► Oversight by Consumer F
Slide 18: Building for a Future United: Investment Thesis
ucbi.com | 18 Building for a Future United ucbi.com | 18 ► Business model and culture that attracts both bankers and customers ► Strong performance results with solid credit metrics and strong risk management processes ► Culture of ongoing goal setting and goal achievement ► Consistent growth in key
Slide 19: Exhibits Fourth Quarter 2015
ucbi.com | 19 ucbi.com | 19 EXHIBITS FOURTH QUARTER 2015
Slide 20: Financial Highlights
ucbi.com | 20 (1) Presented on an operating basis which is a non - GAAP performance measure. For a reconciliation of the differences between our non - GAAP financial measures and the most comparable GAAP measures, please refer to the ‘ Non - GAAP Reconcilement Tables’ at the end of these exhibits. (
Slide 21: Fourth Quarter 2015 Highlights
ucbi.com | 21 Fourth Quarter 2015 Highlights ucbi.com | 21 (in millions) 4Q15 3Q15 4Q14 Net Income ($ in millions) Operating (1) $ 23.8 $ 21.7 $ 18.2 GAAP 18.2 17.9 18.2 EPS Operating (1) .33 .33 .30 GAAP .25 .27 .30 ROA Operating (1) .99 1.00 .96 GAAP .76 .82 .96 ROTCE Operating (1) 10.87 10.29 9.7
Slide 22: Fourth Quarter 2015 Highlights: Loan Growth, Deposits, Credit
ucbi.com | 22 Fourth Quarter 2015 Highlights ucbi.com | 22 Improving Quarterly Results Loan Growth ► Growth in Many Sectors of the Portfolio ● Loan growth, excluding healthcare sale and acquisitions, of $162 million, or 11% annualized, from 3Q15 and $444 million year - to - date, or 10% ● Strong loa
Slide 23: Core Earnings, Fee Revenue, and Operating Expenses
ucbi.com | 23 $58.3 $57.6 $61.3 $65.7 $74.0 $42.1 $42.2 $45.1 $48.8 $56.5 $30.8 $30.5 $33.4 $35.4 $38.3 $14.6 $15.1 $17.2 $18.4 $20.8 $10 $20 $30 $40 $50 $60 $70 $80 4Q14 1Q15 2Q15 3Q15 4Q15 Net Interest Revenue Core Operating Expenses Core Earnings Core Fee Revenue Trends Core Earnings, Fee Revenue
Slide 24: Key Drivers of Net Interest Revenue / Margin
ucbi.com | 24 $58.3 $57.6 $61.3 $65.7 $74.0 $35 $40 $45 $50 $55 $60 $65 $70 $75 4Q14 1Q15 2Q15 3Q15 4Q15 4.37% 4.16% 4.22% 2.21% 2.13% 2.29% .25% .17% .16% 0% 1% 2% 3% 4% 5% 4Q14 1Q15 2Q15 3Q15 4Q15 .16% .17% .16% .24% .22% .21% .12% .09% .09% .00% .05% .10% .15% .20% .25% .30% 4Q14 1Q15 2Q15 3Q15 4
Slide 25: Balance Sheet Growth: New Loans Funded and Advances
ucbi.com | 25 Balance Sheet Growth New Loans Funded and Advances (1) $ in millions ucbi.com | 25 4Q15 3Q15 4Q14 3Q15 4Q14 Atlanta 94.7$ 86.7$ 90.4$ 8.0$ 4.3$ Coastal Georgia 59.2 28.2 34.0 31.0 25.2 N. Georgia 61.0 58.1 54.1 2.9 6.9 North Carolina 27.6 28.2 33.1 (.6) (5.5) Tennessee 27.3 27.5 23.1 (
Slide 26: Balance Sheet Growth: Loan Mix
ucbi.com | 26 2011 2012 2013 2014 2015 North Georgia 1,426$ 1,364$ 1,240$ 1,163$ 1,125$ Atlanta MSA 1,144 1,204 1,235 1,243 1,259 North Carolina 597 579 572 553 549 Coastal Georgia 346 400 423 456 537 Gainesville MSA 265 261 255 257 254 East Tennessee 256 283 280 280 504 (1) South Carolina - - 4 30
Slide 27: Balance Sheet Growth: Customer Deposit Mix
ucbi.com | 27 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Non-Interest Bearing Core Demand Deposit 185$ 232$ 123$ 161$ 618$ Demand Deposit 955$ 1,188$ 1,311$ 1,471$ 2,089$ NOW (84) (65) 4 9 441 MMDA 150 115 73 41 325 Interest Bearing Core Savings 15 29 24 41 177 Total CommercialNOW 719 654 659
Slide 28: High-Quality, Low-Cost Core Transaction Deposit Base
ucbi.com | 28 $1.95 $ 2.02 $2.13 $2.22 $3.16 $ 0.95 $1.19 $1.31 $1.47 $2.09 - $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 2011 2012 2013 2014 2015 in billions Non-interest bearing core transaction Interest bearing core transaction $2.90 $3.21 $3.44 $3.69 $5.25 ucbi.com | 28 High - Quality, Low - Cost Core T
Slide 29: Credit and Lending Environment
ucbi.com | 29 Credit and Lending Environment ucbi.com | 29 Granular Portfolio – Exposure and Industry Limits • Legal Lending Limit $ 242M • House Lending Limit 28M • Project Lending Limit 17M • Top 25 Relationships 395M STRUCTURE • Centralized underwriting and approval process for consumer credit •
Slide 30: Credit Quality
ucbi.com | 30 Credit Quality 4Q15 3Q15 2Q15 1Q15 4Q14 Net Charge-offs 1.3$ 1.4$ 1.0$ 2.6$ 2.5$ as % of Average Loans 0.09 % 0.10 % 0.08 % 0.22 % 0.22 % Allowance for Loan Losses 68.4$ 69.1$ 70.1$ 70.0$ 71.6$ as % of Total Loans 1.14 % 1.15% 1.36 % 1.46 % 1.53 % as % of Total Loans, Excluding Merger
Slide 31: Market Share Opportunities
ucbi.com | 31 Market Share Opportunities ucbi.com | 31 (1) (2) (3) (1) (1) North Georgia $ 6.6 $ 2.2 9 22 37% 1 Atlanta, Georgia 60.8 2.4 10 36 4 6 Gainesville, Georgia 3.0 .3 1 5 12 4 Coastal Georgia 8.0 .3 2 7 3 9 Western North Carolina 11.8 1.0 1 19 8 4 East Tennessee 16.3 .6 2 12 4 5 Upstate Sou
Slide 32: Market Share Demographics
ucbi.com | 32 Market Share Demographics ucbi.com | 32 3.35% 4.23% 4.96% 5.70% 6.38% 6.49% 6.91% 0% 1% 2% 3% 4% 5% 6% 7% 8% Knoxville, TN Cleveland, TN Asheville, NC Greenville, SC Atlanta, GA Gainesville, GA Savannah, GA Key MSA Growth Markets Projected Change 2016 - 2021 3.69% 3.82% 4.84% 4.93% 5.4
Slide 33: Liquidity
ucbi.com | 33 Liquidity ucbi.com | 33 Capacity 4Q15 3Q15 4Q14 vs 3Q15 vs 4Q14 WHOLESALE BORROWINGS Brokered Deposits (1) 615$ 347$ 517$ 425$ (170)$ (78)$ FHLB 550 430 200 270 230 160 Holding Company LOC 40 - - - - - Fed Funds 515 - 5 - (5) - Other Wholesale - 17 14 6 3 11 Total 1,720$ 794$ 736$ 701$
Slide 34: Performing Classified Loans
ucbi.com | 34 Performing Classified Loans ucbi.com | 34 By Category $ in millions 4Q14 1Q15 2Q15 3Q15 4Q15 Commercial & Industrial 8$ 7$ 6$ 6$ 6$ Owner-Occupied CRE 46 44 40 42 40 Total Commercial & Industrial 54 51 46 48 46 Income-Producing CRE 20 20 19 30 30 Commercial Construction 4 3 3 3 1 Total
Slide 35: TDRs
ucbi.com | 35 $81.3 $82.3 $86.1 $84.6 $83.0 $75 $80 $85 $90 $95 $100 4Q14 1Q15 2Q15 3Q15 4Q15 TDRs ucbi.com | 35 $ in millions LOAN TYPE 4Q15(1) 3Q15 4Q14 4Q15 3Q15 4Q14 4Q15 3Q15 4Q14 Commercial & Industrial 2.8$ 3.5$ 25.3$ 0.1$ -$ 1.0$ 2.9$ 3.5$ 26.3$ Owner-Occupied CRE 30.8 31.6 17.4 1.3 1.2 0.5
Slide 36: Lending & Credit Environment
ucbi.com | 36 Lending & Credit Environment ucbi.com | 36 Outstanding Multi-Residential 84$ 24.6 % Land Develop - Vacant (Improved) 56 16.4 Retail Building 49 14.3 Commercial Land Development 32 9.3 Raw Land - Vacant (Unimproved) 31 9.1 Other Properties 30 8.8 Hotels / Motels 26 7.6 Warehouse 15 4.4
Slide 37: Experienced Proven Leadership
ucbi.com | 37 Experienced Proven Leadership Jimmy C. Tallent Chairman & CEO Joined 1984 H. Lynn Harton Board, President & COO Joined 2012 Bill M. Gilbert President, Community Banking Joined 2000 Bradley J. Miller EVP, CRO & General Counsel Joined 2007 • Over 40 years in banking • Led company from $4
Slide 38: Non-GAAP Reconciliation Tables
ucbi.com | 38 4Q15 3Q15 2Q15 1Q15 4Q14 Net Income Operating net income 23,800$ 21,726$ 19,989$ 17,670$ 18,247$ Merger-related and other charges (9,078) (5,744) (3,173) - - Tax benefit on merger-related and other charges 3,486 1,905 997 - - Net Income (GAAP) 18,208$ 17,887$ 17,813$ 17,670$ 18,247$ Ea
Slide 39: Non-GAAP Reconciliation: Core Fee Revenue and Operating Expense
ucbi.com | 39 4Q15 3Q15 2Q15 1Q15 4Q14 Core Fee Revenue Core fee revenue 20,756$ 18,448$ 17,220$ 15,120$ 14,553$ Securities gains, net 378 325 13 1,539 208 Losses on prepayment of borrowings - (256) - (1,038) - Mark to market on deferred compensation plan assets 150 (220) 33 61 62 Non-core fee reven
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