United Community Banks, Inc. · NYSE:UCB

United Community Banks — Q1 2020 Earnings Presentation

32 slides from United Community Banks's earnings presentation, Apr 22, 2020

  1. Slide 1: 1Q Investor Presentation

    1Q INVESTOR PRESENTATION April 21, 2020 Member FDIC. © 2020 United Community Bank

  2. Slide 2: Disclosures

    Disclosures CAUTIONARY STATEMENT This Investor Presentation contains forward-looking statements about United Community Banks, Inc. (“United”), as defined in federal securities laws. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-

  3. Slide 3: Overview of COVID-19 Response

    Overview of COVID-19 Response Board Governance Comprehensive Pandemic Plan Pillars: 1. Employees 2. Customers 3. Risk 3

  4. Slide 4: Board Governance and COVID-19

    Board Governance and COVID-19 Guidance  Our Board has broad and significant crisis experience Board Governance with three Board members having held leadership positions with major US banks during the Financial Crisis and three others that served on the UCBI Board during that time Communication  We

  5. Slide 5: Comprehensive Pandemic Plan: Corporate Level

    Comprehensive Pandemic Plan: Corporate Level MONITOR: LATE FEBRUARY Created Crisis Management Team and Ran stress testing for capital and liquidity held Business Continuity and management, revised stress tests over Communication preparation meetings several scenarios ACT: MID-MARCH Updated employee

  6. Slide 6: Pillars: Supporting Our Employees

    Pillars: Supporting Our Employees ! EMPLOYEES CUSTOMERS RISK 6

  7. Slide 7: Supporting Our Employees: Safety

    Supporting Our Employees: Safety  Doubled remote access bandwidth to allow for more capacity to work from home if needed—brought capacity to 900 from 350 previously  Bought and issued additional laptops to further increase efficiency for home workers  Implemented an extra 10 days of paid time off

  8. Slide 8: Supporting Our Employees: Share the Good

    Supporting Our Employees: Share the Good Branches decorating drive-thru windows Employees sharing words of Employees using their skills encouragement cards to to make masks for local customers hospitals Local company donated a climate control booth for outdoor service 8

  9. Slide 9: Supporting Our Employees: Communications

    Supporting Our Employees: Communications 10 all-employee emails and 5 all- employee voicemails from Lynn Harton (from March 3- April 16) Coronavirus/PPP loan intranet resource page created (right) Share the Good internal campaign with over 50 “good stories” submissions 9

  10. Slide 10: Pillars: Supporting Our Customers

    Pillars: Supporting Our Customers ! EMPLOYEES CUSTOMERS RISK 10

  11. Slide 11: Supporting Our Customers: Service

    Supporting Our Customers: Service United PPP Loan Process (As of April 16)  Flexible deferral options where needed  Foreclosures on consumer and commercial $960 6,918 properties deferred Million+  Committing to lead in the PPP program TOTAL LOANS FUNDS RESERVED  Waiving fees for loan payments by

  12. Slide 12: Supporting Our Customers: Digital

    Supporting Our Customers: Digital  Increasing mobile capture limits to Active Digital Customers enhance customer experience and 165,000 reduce branch traffic 160,000  Eliminating mobile capture fees and 155,000 giving flexibility in waiving NSF fees for 150,000 impacted clients 145,000  Leveragin

  13. Slide 13: Supporting Our Customers: Social Media

    Supporting Our Customers: Social Media 47.5% growth on organic impressions since January 2020 on social channels 9.1% growth in LinkedIn, 23.7% growth in Twitter and 5.1% growth in Facebook followers from January 1-April 16 Site-wide direct traffic +20% and organic traffic +25% *Stats provided by Fa

  14. Slide 14: Pillars: Managing Our Risk

    Pillars: Managing Our Risk ! EMPLOYEES CUSTOMERS RISK 14

  15. Slide 15: Managing Our Risk

    ! Managing Our Risk Follow our 3 Risk Principles: We don’t bet the bank  Focus on concentration management – product, customer, and geography We don’t take risks we don’t understand  Consistent conservative customer selection and underwriting philosophies • Relationship based • Footprint centric •

  16. Slide 16: Managing Our Risk

    ! Managing Our Risk Monitoring  Identified, defined and tracked key metrics to determine impact to customers, shareholders and employees  Created centralized communication channel for efficient notification of any pandemic impact to branch operations network Information Security  Heightened onlin

  17. Slide 17: Loans

    Loans 1Q20 Total Loans $8.9 billion  Linked-quarter EOP loan growth was $122 million, or 6% annualized • Draws on lines of credit contributed ~ $60 million as Residential Construction utilization moved to 67% from 63% in 4Q19 Home Equity • Since April 1st, draw activity has been relatively 2% muted

  18. Slide 18: Credit Quality — UCBI

    Credit Quality — UCBI Net Charge-Offs as % of Average Loans  NCOs elevated at $8.1 million primarily due to a $6.4 0.37% million loss on a single C&I loan • Medical testing company with significant P/E failed 0.18% 0.15% • Not COVID related • Remaining leveraged loan book of $73 million 1Q19 4Q19 1

  19. Slide 19: Allowance for Credit Losses

    Allowance for Credit Losses $ in millions Day 1 CECL 4Q19 1Q20 1/1/2020 Allowance for Loan Losses $ 62,089 0.70% $ 68,969 $ 81,905 0.92% Allowance for Unfunded Commitments $ 3,458 0.25% $ 5,329 $ 6,470 0.31% Allowance for Credit Losses $ 65,547 0.74% $ 74,298 $ 88,375 0.99%  The allowance for credi

  20. Slide 20: Capital Ratios

    Capital Ratios Holding Company 1Q19 4Q19 1Q20* Common Equity Tier 1 Capital 12.4 % 13.0 % 12.9 % Tier 1 Risk-Based Capital 12.7 13.2 13.1 Total Risk-Based Capital 14.6 15.0 14.9 Leverage 9.9 10.3 10.4 Tangible Common Equity to 9.8 10.3 10.2 Tangible Assets  Capital ratios significantly above “well

  21. Slide 21: Entering Crisis with Strength and Momentum

    Entering Crisis with Strength and Momentum Capital Profitability  UCBI coming into the cycle with greater regulatory  4Q19 PTPP ROA is 20% higher compared to peers capital and tangible common equity compared to peers  Efficiency ratio well below peers Capital as of 4Q19 Profitability as of 4Q19 P

  22. Slide 22: Net Interest Revenue / Margin

    (1) Net Interest Revenue / Margin $ in millions $116.6 $118.6 $115.6 $7.70 $7.46 $7.09 4.10% 3.93% 4.07% 1Q19 4Q19 1Q20 1Q19 4Q19 1Q20 Net Interest Revenue Core Transaction (1) Deposits Net Interest Margin  Net interest revenue increased $2 million (2%) vs. 4Q19 and  Core transaction deposits were

  23. Slide 23: Noninterest Income

    Noninterest Income $ in millions $30.2 $2.5 Linked Quarter $25.8  Fees down $4.4 million $1.7 • Mortgage fees down $1.1 million from 4Q19; rate locks $9.4 and production volume were at record levels, but were $21.0 offset by a $4.3 million negative mark on the Mortgage $1.3 Servicing Rights (MSR) a

  24. Slide 24: Expense Discipline

    Expense Discipline $ in millions $81.4 $81.5 $81.5 $80.7 Linked Quarter $76.1 $75.3  GAAP expenses were flat while operating expenses decreased 1% Year-over-Year  The May 1st First Madison acquisition was the primary driver of expense growth compared to 56.2% 1Q19 55.3% 54.9% 55.6% 54.8% 54.9% 1Q1

  25. Slide 25: Looking Forward

    Looking Forward Accelerating trends in digitalization and greater efficiencies  Online account opening, digital mortgage platform, electronic signatures for deferrals and loan closings, “straight thru” loan processing, PPP portal development, Q2 and infrastructure improvements Ability to reimagine

  26. Slide 26: Seaside Acquisition Summary

    Seaside Acquisition Summary  Culturally compatible with a focus on customer service that mirrors that of United  Provides natural expansion into key Florida metro areas with desirable market demographics  Growing private banking and wealth platform additive to existing product suite  Financially

  27. Slide 27: Exhibits

    1Q INVESTOR PRESENTATION Exhibits Member FDIC. © 2020 United Community Bank

  28. Slide 28: Credit Quality — Navitas

    Credit Quality — Navitas Net Charge-Offs as % Navitas Deferral % for Top 5 Categories of Average Loans As of April 15 68% 61% 0.89% 0.84% 0.81% 24% 20% 15% 1Q19 4Q19 1Q20 Eating Places Physician Fitness Salons Local Trucking Offices Facilities  Navitas 1Q20 NCOs = 0.81%  Top 5 loan categories by i

  29. Slide 29: Selected Segments – Restaurants & Hotels

    Selected Segments – Restaurants & Hotels Restaurants by Product Hotels by Product # of Total Total # of Total Total ($ millions) ($ millions) Loans Commitment Outstanding Loans Commitment Outstanding Owner Occupied RE 182 $ 104.2 $ 96.9 CRE 97 $ 262.2 $ 232.6 Construction 11 $ 17.2 $ 13.3 Constructi

  30. Slide 30: Selected Segments – Senior Care

    Selected Segments – Senior Care Senior Care by LTV Senior Care by Product # of Total Total LTV > 100% ($ millions) LTV LTV 75% - 100% Loans Commitment Outstanding CRE 52 $ 220.6 $ 199.6 59% 1% LTV 0% - 25% 6% Construction 30 $ 353.7 $ 260.8 44% 20% SBA 5 $ 2.1 $ 2.1 60% Total 87 $ 576.4 $ 462.5 51%

  31. Slide 31: Non-GAAP Reconciliation Tables

    Non-GAAP Reconciliation Tables $ in thousands, except per share data 1Q19 2Q19 3Q19 4Q19 1Q20 (1) (1) (1) (1) (1) Expenses Expenses - GAAP $ 76,084 $ 81,813 $ 82,924 $ 81,424 $ 81,538 Merger-related and other charges (739) (4,087) (2,605) 74 (808) Expenses - Operating $ 75,345 $ 77,726 $ 80,319 $ 81

  32. Slide 32: Non-GAAP Reconciliation Tables

    Non-GAAP Reconciliation Tables $ in thousands, except per share data 1Q19 2Q19 3Q19 4Q19 1Q20 (1) (1) (1) (1) (1) Return on Assets Return on assets - GAAP 1.44 % 1.40 % 1.51 % 1.50 % 0.99 % Merger-related and other charges 0.01 0.10 0.07 - 0.02 Return on assets - Operating 1.45 % 1.50 % 1.58 % 1.50

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