United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q2 2024 Earnings Presentation
27 slides from United Community Banks's earnings presentation, Jul 24, 2024
Slide 1: 2Q24 Investor Presentation
2Q24 Investor Presentation July 24, 2024 Member FDIC. © 2024 United Community Bank | ucbi.com
Slide 2: Disclosures: Cautionary Statement
Disclosures CAUTIONARY STATEMENT This Investor Presentation 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 ide
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 $27.1 $18.2 BILLION IN BILLION IN TOTAL LOANS TOTAL ASSETS Regional Full-Service Branch Network National Navitas and SBA Markets $3.0 $23.0 (1) BILLION IN BILLION IN AUA TOTAL DEPOSITS AMERICA’S BEST 12.8% (2) BANKS CET1 RBC in 2023 for the ninth UCBI Ba
Slide 5: 2Q24 Highlights
$0.54 7.53% Diluted earnings per share – GAAP Return on common equity – GAAP 2Q24 Highlights $0.58 11.68% Diluted earnings per share – Return on tangible common equity – 1) (1) operating( operating Diluted Earnings Per Share Return on Average Assets 59.7% $0.53 $0.55 $0.51 $0.52 $0.54 $0.58 1.00% 1.
Slide 6: Outstanding Deposit Franchise
Outstanding Deposit Franchise 2Q24 Change in Customer Deposits $ in millions Customer Deposit Growth $162 $23,157 ($118) ✓ Significant liquidity and less loan demand ($261) ($38) ($84) $22,818 allowed for a strategy to lower rates for public funds and other more expensive accounts ✓ Excluding broker
Slide 7: Well-Diversified Loan Portfolio
Well-Diversified Loan Portfolio 2Q24 Loan Portfolio Decline $ in millions Quarter Highlights $37 $18,375 ($85) $32 ✓ Loan shrinkage partly driven by a ($148) $18,211 conservative approach to credit management, which includes a more cautious stance on new originations and actively moving problem cred
Slide 8: Balance Sheet Strength – Liquidity and Capital
Balance Sheet Strength – Liquidity and Capital Loans / Core Deposits % ✓ Substantial balance sheet liquidity and above-peer capital 95% ratios ✓ $6.0 billion securities portfolio offers significant near- and medium-term cash flow opportunities ✓ FHLB borrowings remained at zero in 2Q24 80% 80% 79% 7
Slide 9: Capital
Capital Risk-Based Capital Ratios CET1 Non-common Tier 1 Tier 2 Total ✓ 2Q24 regulatory risk-based capital ratios 16.00% 14.4% 14.6% 14.5% 14.5% 14.6% 15.1% increased from 1Q24 and remained above 14.3% 14.00% 1.8% peers 1.8% 1.9% 1.9% 1.9% 1.8% 2.3% 0.5% 12.00% 0.5% 0.5% 0.5% 0.4% 0.4% 0.3% ✓ The le
Slide 10: Net Interest Revenue / Margin
(1) Net Interest Revenue / Margin Net Interest Revenue & Net Interest Margin $ in millions ✓ Net interest revenue increased $9.6 million from 1Q24 $208.7 primarily driven by an increased focus on our pricing $200.3 $199.1 4.0 0% $20 0.0 discipline of loans and deposits 3.5 0% 3.37% 3.37% $18 0.0 ✓ C
Slide 11: Noninterest Income - Operating
Noninterest Income - Operating $ in millions $37.2 Linked Quarter $36.4 $36.6 ✓ GAAP noninterest income was down $3.0 million to $36.6 million, primarily due to the $32.0 absence of a non-recurring gain in the prior $12.6 $11.5 quarter $12.1 $6.3 $28.6 ✓ On an operating basis, noninterest income dec
Slide 12: Noninterest Expense
Noninterest Expense Efficiency Ratio % 66.3% ✓ The GAAP and operating efficiency ratios improved compared to last quarter 61.3% ✓ The operating efficiency ratio improved due to higher 60.5% 59.7% net interest income combined with relatively flat 59.4% 59.6% expenses 55.7% 59.2% 57.4% 57.1% 54.2% 2Q2
Slide 13: Credit Quality
Credit Quality Net Charge-Offs as % of Average Loans ✓ 2Q24 net charge-offs of $11.6 million, or 0.26% of average 0.59% loans annualized ✓ Nonperforming assets increased $9.5 million during the 0.20% 0.49% 0.28% 0.26% quarter and were 0.64% of total loans, an increase of 0.22% 0.17% 0.17% 6 bps from
Slide 14: Allowance for Credit Losses
Allowance for Credit Losses Allowance for Credit Losses (ACL) Walk-Forward $ in thousands $16,900 ✓ The 2Q24 reserve was stable from 1Q24 $224,119 ($2,753) $224,740 due to less loan growth ($1,467) ($11,614) ($445) ✓ Reserve for unfunded commitments decreased $1.5 million from 1Q24 due to lower comm
Slide 15: 2Q24 Investor Presentation Exhibits
2Q24 INVESTOR PRESENTATION Exhibits Member FDIC. © 2024 United Community Bank | ucbi.com
Slide 16: United Community Wealth Strategy
United Community Wealth Strategy ✓ After a review of our entire wealth Trust & management business, we have Private Advisory elected to invest in the businesses Investment Insurance that are more integrated with our Banking Services Services banking customer base and sell our RIA (FinTrust Capital A
Slide 17: Deposit Trends
Deposit Trends 2Q24 Total Deposits $ in billions ✓ Deposits are granular with a $34,000 average account $0.8 size and are diverse by industry and geography ✓ Business deposits of $8.7 billion and personal deposits of $11.2 billion in 2Q24 • The remaining $2.9 billion of deposits are predominantly co
Slide 18: Average Deposit Costs
Average Deposit Costs 2Q23 3Q23 4Q23 1Q24 2Q24 $ in billions; rates annualized Average Average Average Average Average Average Average Average Average Average Balance Rate Balance Rate Balance Rate Balance Rate Balance Rate DDA $7.1 N/A $6.9 N/A $6.7 N/A $6.4 N/A $6.3 N/A NOW $4.9 2.27% $5.3 2.67% $
Slide 19: Navitas Performance
Navitas Performance Navitas Portfolio $ in millions $1, 800 ✓ Navitas represents 9% of total loans 9.43% 9.58% $1, 600 8.85% 8.80% 8.79% 8.88% 8.99% 9.12% 9.25% 9.30% 10. 00% ✓ Navitas ACL / Loans of 2.85% ✓ Navitas 2Q24 NCOs of 1.42% annualized or $1, 400 8.0 0% $5.5 million $1, 200 $1, 000 ✓ Of th
Slide 20: Selected Portfolios – Office
Selected Portfolios – Office Top 10 MSAs by Note Current Balance + Unfunded Commitment – Weighted Avg. LTV 61.5% 2Q24 Portfolio Characteristics $ in millions Outstanding $799.0 million Atlanta, GA LTV 60.7% $122.4 % of Total Loans 4.4% Charleston, SC LTV 62.6% $98.5 Average1%Loan Size $1.4 million M
Slide 21: Selected Portfolios – Multi-Family
Selected Portfolios – Multi-Family Top 10 MSAs by Note Current Balance + Unfunded Commitment – Weighted Avg. LTV 44.4% 2Q24 Portfolio Characteristics $ in millions Outstanding $883.7 million Atlanta, GA LTV 45.7% $135.4 % of Total Loans 4.9% Raleigh, NC LTV 40.3 $113.3 Average1%Loan Size $2.5 millio
Slide 22: Selected Portfolios – Senior Care
Selected Portfolios – Senior Care Investment CRE – Senior Care Outstanding 2Q24 Portfolio Characteristics $ in millions Outstanding $355.2 million $518 $465 % of Total Loans 2.0% $442 $408 $410 Average1%Loan Size $7.4 million $394 $388 $382 $369 6% $355 20% Median Loan Size $6.6 million Largest Loan
Slide 23: Mortgage Activity Trends
Mortgage Activity Trends Mortgage Locks & Sales $ in millions $35 0 4.0 0% ✓ Rate locks were $295 million compared to $260 million in $30 0 $305 $304 3.0% 3.5 0% 1Q24, driven primarily by seasonality 2.9% $295 2.8% 2.9% ✓ 92% of locked loans were fixed rate mortgages, which 3.0 0% $25 0 2.4% $260 we
Slide 24: 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 25: Non-GAAP Reconciliation Tables
Non-GAAP Reconciliation Tables $ in thousands, except per share data 2Q23 3Q23 4Q23 1Q24 2Q24 Noninterest Income Noninterest income - GAAP $ 36,387 $ 31,977 $ (23,090) $ 39,587 $ 36,556 Bond portfolio restructuring loss - - 51,689 - - Lease termination gain - - - (2,400) - Noninterest income - opera
Slide 26: Non-GAAP Reconciliation Tables
Non-GAAP Reconciliation Tables $ in thousands, except per share data 2Q23 3Q23 4Q23 1Q24 2Q24 Return on Assets Return on assets - GAAP 0.95 % 0.68 % 0.18 % 0.90 % 0.97 % Merger-related and other charges - - 0.06 0.03 0.01 Bond portfolio restructuring loss - - 0.57 - - FDIC special assessment 0.05 0.
Slide 27: 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
United Community Banks — Q2 2024 Earnings Presentation on 6ix