United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q1 2017 Earnings Presentation
36 slides from United Community Banks's earnings presentation, Apr 26, 2017
Slide 1: First Quarter 2017 Investor Presentation
2017 INVESTOR PRESENTATION FIRST QUARTER 2017 APRIL 26, 2017
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: Snapshot of United Community Banks, Inc.
• 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 • 1,955 employees ucbi.com | 3 Snapshot of United Community Banks, Inc . u
Slide 4: United Foundation: The Bank that SERVICE Built
ucbi.com | 4 United Foundation The Bank that SERVICE Built ® ucbi.com | 4
Slide 5: First Quarter 2017 Highlights
First Quarter 2017 Highlights ucbi.com | 5 $18.6 $23.5 $26.4 $25.2 $22.1 $16 $20 $24 $28 $32 1Q16 2Q16 3Q16 4Q16 1Q17 Fee Revenue in millions 8.57% 9.54% 9.61% 9.89% 8.54% 10.91% 11.56% 12.45% 12.47% 12.10% 5.00% 7.00% 9.00% 11.00% 13.00% 1Q16 2Q16 3Q16 4Q16 1Q17 Return on (Tangible) Common Equity R
Slide 6: Earnings Summary
(1) See non - GAAP reconciliation table slides at the end of the exhibits ( 2 ) Includes Tidelands as of the acquisition date of July 1, 2016 ucbi.com | 6 EARNINGS SUMMARY ($ in thousands) Net Income Available to Common Shareholders - GAAP 22,274$ 25,266$ 25,874$ 27,221$ 23,524$ (3,697)$ 1,250$ Net
Slide 7: Capital Ratios Holding Company
ucbi.com | 7 Holding Company 1Q17 4Q16 3Q16 2Q16 1Q16 Tier I Risk - Based Capital 11.5% 11.3% 11.0% 11.4% 11.3% Total Risk - Based Capital 12.3 12.1 11.9 12.4 12.3 Leverage 8.6 8.5 8.4 8.5 8.4 Tier I Common Risk - Based Capital 11.4 11.3 11.0 11.4 11.3 Tangible Common Equity to Risk - Weighted Asset
Slide 8: Pre-Tax Pre-Credit Earnings, Expenses and Fee Revenue
$75.0 $74.9 $79.0 $80.9 $83.6 $55.2 $56.9 $60.9 $60.2 $60.8 $38.3 $41.5 $44.5 $46.0 $44.9 $18.6 $23.5 $26.4 $25.2 $22.1 $10 $20 $30 $40 $50 $60 $70 $80 $90 1Q16 2Q16 3Q16 4Q16 1Q17 Net Interest Revenue Expenses - Operating (1) Pre-Tax, Pre-Credit Earnings (1) Fee Revenue ucbi.com | 8 1Q17 4Q16 1Q17
Slide 9: Net Interest Revenue / Margin
$75.0 $74.9 $79.0 $80.9 $83.6 $40 $50 $60 $70 $80 $90 1Q16 2Q16 3Q16 4Q16 1Q17 4.29% 4.18% 4.27% 2.32% 2.38% 2.51% 0.16% 0.20% 0.21% 0% 1% 2% 3% 4% 5% 1Q16 2Q16 3Q16 4Q16 1Q17 0.26% 0.25% 0.26% 0.24% 0.26% 0.28% 0.10% 0.11% 0.12% .00% .10% .20% .30% .40% 1Q16 2Q16 3Q16 4Q16 1Q17 3.41% 3.35% 3.34% 3.
Slide 10: New Loans Funded and Advances
ucbi.com | 10 1Q17 4Q16 1Q16 4Q16 1Q16 Commercial & Industrial 106.8$ 168.0$ 133.9$ (61.2)$ (27.1)$ Owner-Occupied CRE 79.5 139.5 79.4 (60.0) 0.1 Income-Producing CRE 102.2 160.4 114.3 (58.2) (12.1) Commercial Constr. 116.3 10.7 54.8 105.6 61.5 Total Commercial 404.8 478.6 382.4 (73.8) 22.4 Resident
Slide 11: Loan Growth by Region and Category
2013 2014 2015 2016 1Q17 North Georgia 1,240$ 1,163$ 1,125$ 1,097$ 1,076$ Atlanta MSA 1,235 1,243 1,259 1,399 1,408 North Carolina 572 553 549 545 541 Coastal Georgia 423 456 537 581 591 Gainesville MSA 255 257 254 248 252 East Tennessee (1) 280 280 504 504 483 South Carolina (2) 4 30 819 1,233 1,24
Slide 12: Deposit Growth by Category and Region
2013 2014 2015 2016 1Q17 2013 2014 2015 2016 1Q17 Demand Deposit 123$ 161$ 618$ 334$ 161$ Non-Interest Bearing Core NOW 4 9 441 5 19 Demand Deposit 1,311$ 1,471$ 2,089$ 2,423$ 2,584$ MMDA 73 41 325 246 (16) Savings 24 41 177 79 25 Interest Bearing Core Growth by Category 224$ 252$ 1,561$ 664$ 189$ T
Slide 13: High-Quality, Low-Cost Core Transaction Deposit Base
$ 2.02 $ 2.13 $3.16 $3.49 $3.52 $1.19 $1.47 $2.09 $2.42 $2.58 $3.44 $3.69 $5.25 $5.91 $6.10 - $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 2013 2014 2015 2016 1Q17 Billions Non-Interest Bearing Core Transaction Interest Bearing Core Transaction ucbi.com | 13 High - Quality, Low - Cost Core Transaction Deposi
Slide 14: Credit Quality
Net Charge-offs 2.1$ 1.7$ 1.4$ 1.5$ 1.7$ as % of Average Loans 0.14 % 0.11 % 0.08 % 0.09 % 0.10 % Allowance for Loan Losses 66.3$ 64.3$ 63.0$ 61.4$ 60.5$ as % of Total Loans 1.09 % 1.02 % 0.94 % 0.89 % 0.87 % as % of NPLs 296 301 292 285 306 Past Due Loans (30 - 89 Days) 0.21 % 0.22 % 0.33 % 0.25 %
Slide 15: Fee Revenue
ucbi.com | 15 10.1 10.5 10.8 10.7 10.6 2.9 4.6 5.8 4.1 3.7 1.1 1.1 1.2 0.9 1.4 3.3 4.5 6.1 6.5 4.4 1.2 2.8 2.5 3.0 2.0 $18.6 $23.5 $26.4 $25.2 $22.1 $0 $5 $10 $15 $20 $25 $30 1Q16 2Q16 3Q16 4Q16 1Q17 Fee Revenue in millions Service Charges Other Brokerage Mortgage SBA $3.3 $4.5 $6.1 $6.5 $4.4 $0 $1
Slide 16: Expense Discipline / Efficiency Ratio
ucbi.com | 16 ► Efficiency improvements are attributable to various expense reduction initiatives while maintaining high business growth ► Declining trend sustained while making substantial investments in growth and infrastructure 2012 2013 2014 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 TGT GAAP
Slide 17: HCSB Acquisition Overview
19.3% 8.1% 7.8% HCSB UCBI South Carolina Rank Bank Branches Deposits ($MM) Mkt. Share (%) 1. BB&T 27 1,829 24.1 2. CNB Corp. 14 813 10.7 3. Wells Fargo 10 704 9.3 4. Bank of America 9 601 7.9 5. UCBI Pro Forma 10 452 5.9 Strong Demographics Myrtle Beach is the fastest growing MSA in the state Compel
Slide 18: Exhibits
2017 INVESTOR PRESENTATION Exhibits FIRST QUARTER 2017 APRIL 26, 2017
Slide 19: Protecting High-Quality Balance Sheet; Increasing Profitability; Generating Growth
ucbi.com | 19 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 to shareholders with increasing return on tangible
Slide 20: Disciplined Credit Processes
ucbi.com | 20 Granular Portfolio – Exposure and Industry Limits • Legal Lending Limit $ 261M • House Lending Limit 28M • Project Lending Limit 17M • Top 25 Relationships 403M Concentration limits set for all segments of the portfolio Protecting High - Quality Balance Sheet Disciplined Credit Process
Slide 21: Loan Portfolio Diversification
ucbi.com | 21 15% 19% 23% 3% 10% 22% 8% $7.0 Billion Loan Portfolio as of 3/31/2017 Commercial (C&I) CRE Income Producing CRE Owner-Occupied Residential Construction Commercial Construction Residential Mortgage & HELOC Installment ► Specialized Lending, which began in 2013, had loans totaling $911 m
Slide 22: Excellent Credit Performance
Note: Peer comparison banks comprise the KBW Regional Bank Index (ticker: KRX) Protecting High - Quality Balance Sheet ucbi.com | 22 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% CBSH BOH UMPQ CVBF WABC PB VLY BPFH CBU UCBI PNFP OZRK CFR UMBF COLB EWBC FFIN MBFI ISBC FNB WTFC SBNY BKU WAL FCF WBS PFS CATY BXS
Slide 23: Performing Classified Loans
ucbi.com | 23 By Category 1Q16 2Q16 3Q16 4Q16 1Q17 Commercial & Industrial 9$ 9$ 10$ 9$ 10$ Owner-Occupied CRE 38 38 42 42 41 Total Commercial & Industrial 47 47 52 51 51 Income-Producing CRE 38 35 32 29 24 Commercial Construction 5 6 9 9 9 Total Commercial 90 88 93 89 84 Residential Mortgage 20 20
Slide 24: Troubled Debt Restructurings
$72.8 $73.3 $70.1 $67.8 $64.9 $60 $70 $80 $90 1Q16 2Q16 3Q16 4Q16 1Q17 ucbi.com | 24 LOAN TYPE 1Q17(1) 4Q16 1Q16 1Q17(1) 4Q16 1Q16 1Q17(1) 4Q16 1Q16 Commercial & Industrial 1.3$ 1.3$ 2.2$ -$ 0.1$ -$ 1.3$ 1.4$ 2.2$ Owner-Occupied CRE 23.9 24.5 24.7 0.6 1.7 2.6 24.5 26.2 27.3 Income-Producing CRE 21.6
Slide 25: Commercial Real Estate Diversification
Protecting High - Quality Balance Sheet Commercial Real Estate Diversification ucbi.com | 25 Retail Building 143$ 13.1 % 90$ 13.5 % Assisted Living/Nursing Home/Rehab 140 12.9 18 2.7 Multi-Residential 121 11.1 92 13.8 Office Buildings 123 11.3 65 9.7 Commercial Residential CIP: Spec 87 8.0 57 8.5 La
Slide 26: Liquidity and Funding
ucbi.com | 26 Capacity 1Q17 4Q16 1Q16 vs 4Q16 vs 1Q16 WHOLESALE BORROWINGS Brokered Deposits (1) 1,073$ 364$ 328$ 447$ 36$ (83)$ FHLB 1,372 569 709 510 (140) 59 Holding Company LOC 50 - - - - - Fed Funds 720 - 5 - (5) - Other Wholesale 1,187 - - - - - Total 4,402$ 933$ 1,042$ 957$ (109)$ (24)$ LONG-
Slide 27: High-Quality, Low-Cost Core Deposit Base
Note: Peer comparison banks comprise the KBW Regional Bank Index (ticker: KRX) ucbi.com | 27 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8% CFR COLB WABC CVBF FFIN BOH CBU FMBI CBSH UMBF TRMK UCBI FCF ONB PACW BOKF UMPQ MBFI WAL FHN PB TCBI BXS GBCI ASB HBHC WBS SNV FNB BPFH PFS UBSI WTFC FULT EWBC PN
Slide 28: Steady Loan Growth
Generating Growth Steady Loan Growth ucbi.com | 28 $4.51 $4.96 $6.61 $1.04 $0.31 $0.16 $4.33 $4.67 $6.00 $6.92 $6.96 $3.00 $4.00 $5.00 $6.00 $7.00 2013 2014 2015 2016 1Q17 Millions Total Loans in billions Organic Acquired Healthcare (sold 4Q15) ucbi.com | 28
Slide 29: Market Share Growth Opportunities
ucbi.com | 29 (1) (2) (2) (2) (1) (1) North Georgia $ 6.5 $ 2.4 9 19 36% 1 Atlanta, Georgia 66.2 2.6 10 34 4 7 Gainesville, Georgia 3.2 0.4 1 5 11 4 Coastal Georgia 8.7 0.4 2 7 4 8 Western North Carolina 11.9 1.0 1 19 8 3 East Tennessee 17.4 0.6 2 11 3 6 Upstate South Carolina 23.2 1.1 4 25 5 7 Coas
Slide 30: Market Share Demographics
ucbi.com | 30 3.32% 4.38% 5.21% 6.10% 6.61% 6.69% 7.10% 8.66% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% Knoxville, TN Cleveland, TN Asheville, NC Greenville, SC Gainesville, GA Atlanta, GA Savannah, GA Charleston, SC Key MSA Growth Markets Projected Change 2017 - 2022 3.77% 3.90% 5
Slide 31: M&A Growth 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 . ► We are interested in pursuing transactio
Slide 32: Tidelands Transaction Summary
ucbi.com | 32 INTERSTATE 26 INTERSTATE 95 Myrtle Beach Garden City Beach North Charleston Summerville Charleston Hilton Head Island Savannah Transaction Summary Headquarters Mt. Pleasant, SC Established 2003 Branches (7) Charleston (4) Myrtle Beach (2) Hilton Head (1) Assets ($MM) $451 Total Gross L
Slide 33: MoneyTree and Other Acquisitions
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 – three UCBI a
Slide 34: Executive Management Team
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 $42 million in assets in 1989 to $10.7 billion
Slide 35: Non-GAAP Reconciliation: Net Income, EPS, ROA
1Q16 2Q16 3Q16 4Q16 1Q17 Net Income Net income - GAAP 22,295$ 25,266$ 25,874$ 27,221$ 23,524$ Merger-related and other charges 2,653 1,176 3,152 1,141 2,054 Tax benefit on merger-related and other charges (1,004) (445) (1,193) (432) (758) Impairment of deferred tax asset on cancelled nonqualified st
Slide 36: Non-GAAP Reconciliation: ROTCE, Expenses, Pre-Tax Earnings
1Q16 2Q16 3Q16 4Q16 1Q17 Return on Tangible Common Equity Return on common equity - GAAP 8.57 % 9.54 % 9.61 % 9.89 % 8.54 % Effect of merger-related and other charges 0.63 0.27 0.73 0.26 0.47 Impairment of deferred tax asset on cancelled nonqualified stock options - - - 0.36 - Release of disproporti
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