United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q3 2016 Earnings Presentation
38 slides from United Community Banks's earnings presentation, Oct 26, 2016
Slide 1: Investor Presentation Third Quarter 2016
ucbi.com | 1 INVESTOR PRESENTATION Third Quarter 2016 October 26, 2016
Slide 2: Disclosures
ucbi.com | 2 ucbi.com | 2 Disclosures “operating net income per diluted share,” “tangible book value,” “operating return on common equity,” “operating return on tangible common equity,” “operating return on assets,” “operating dividend payout ratio,” “operating efficiency ratio,” “average tangible e
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 • 140 locations • 1,986 employees Market Data Ticker UCBI Price (as of 10/21/
Slide 4: United Foundation – The Bank that SERVICE Built
ucbi.com | 4 United Foundation – The Bank that SERVICE Built ucbi.com | 4
Slide 5: Third Quarter 2016 Highlights
ucbi.com | 5 Third Quarter 2016 Highlights ucbi.com | 5 $18.3 $21.3 $18.6 $23.5 $26.4 $12 $16 $20 $24 $28 3Q15 4Q15 1Q16 2Q16 3Q16 Fee Revenue in millions 7.85% 7.02% 8.57% 9.54% 9.61% 10.29% 10.87% 10.91% 11.56% 12.45% 6.00% 8.00% 10.00% 12.00% 14.00% 3Q15 4Q15 1Q16 2Q16 3Q16 Return on (Tangible) C
Slide 6: Third Quarter 2016 Highlights – Earnings Summary
ucbi.com | 6 (1) See non - GAAP reconciliation table slides at the end of the exhibits (2) Includes Palmetto as of the acquisition date of September 1, 2015 (3) Includes Tidelands as of the acquisition date of July 1, 2016 ucbi.com | 6 Third Quarter 2016 Highlights EARNINGS SUMMARY ($ in thousands)
Slide 7: Third Quarter 2016 Highlights
ucbi.com | 7 Third Quarter 2016 Highlights ucbi.com | 7 (in millions) 3Q16 2Q16 3Q15 Net Income ($ in millions) GAAP $ 25.9 $ 25.3 $ 17.9 Operating (1) 27.8 26.0 21.7 EPS GAAP .36 .35 .27 Operating (1) .39 .36 .33 ROA GAAP 1.00 1.04 0.82 Operating (1) 1.08 1.07 1.00 ROCE GAAP 9.61 9.54 7.85 ROTCE Op
Slide 8: Third Quarter 2016 Highlights – Increasing Profitability
ucbi.com | 8 Third Quarter 2016 Highlights ucbi.com | 8 Increasing Profitability Net Interest Revenue ► $79.0 Million – Increased 5% from 2Q16 and 21% from 3Q15 ● Increased $4.1 million from 2Q16 and $13.6 million from 3Q15 ● Average loans increased to $6.68 million in 3Q16 from $6.15 billion in 2Q1
Slide 9: Third Quarter 2016 Highlights – Generating Growth
ucbi.com | 9 Third Quarter 2016 Highlights ucbi.com | 9 Generating Growth Loan Growth ► Well - Diversified Loan Portfolio ● Increased $133 million from 2Q16, or 8% annualized (excluding mergers ) and $586 million from 3Q15, or 10% ( excluding mergers and healthcare portfolio loan sale) ● Strong loan
Slide 10: Path to 1.10% ROA (Operating) by Q416
ucbi.com | 10 100 107 108 110 90 95 100 105 110 1Q16 Actual 2Q16 Actual 3Q16 Actual 4Q16 Target 4Q16 Execute Strategies x Fee Revenue Initiatives x Loan Growth x Operating Efficiency Initiatives ucbi.com | 10 Return on Assets - Operating (bps) Path to 1.10% ROA (Operating) by Q416
Slide 11: Protecting High-Quality Balance Sheet – Credit Quality
ucbi.com | 11 Protecting High - Quality Balance Sheet Credit Quality Net Charge-offs 1.4$ 1.3$ 2.1$ 1.7$ 1.4$ as % of Average Loans 0.10 % 0.09 % 0.14 % 0.11 % 0.08 % Allowance for Loan Losses 69.1$ 68.4$ 66.3$ 64.3$ 63.0$ as % of Total Loans 1.15 % 1.14 % 1.09 % 1.02 % 0.94 % as % of NPLs 344 302 2
Slide 12: Prudent Capital Management
ucbi.com | 12 Protecting High - Quality Balance Sheet Prudent Capital Management ucbi.com | 12 Holding Company 3Q16 2Q16 1Q16 4Q15 3Q15 Tier I Risk - Based Capital 11.1% 11.4% 11.3% 11.5% 11.4% Total Risk - Based Capital 11.9 12.4 12.3 12.5 12.5 Leverage 8.4 8.5 8.4 8.3 9.1 Tier I Common Risk - Base
Slide 13: Earnings, Fee Revenue, and Expenses
ucbi.com | 13 $65.4 $73.8 $75.0 $74.9 $79.0 $48.5 $56.4 $55.2 $56.9 $60.9 $35.2 $38.6 $38.3 $41.5 $44.5 $18.3 $21.3 $18.6 $23.5 $26.4 $10 $20 $30 $40 $50 $60 $70 $80 $90 3Q15 4Q15 1Q16 2Q16 3Q16 Net Interest Revenue Expenses - Operating (1) Pre-Tax, Pre-Credit Earnings (1) Fee Revenue Increasing Pro
Slide 14: Expense Discipline
ucbi.com | 14 Increasing Profitability ucbi.com | 14 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 infrastructure 2012 2013 2014 1Q15
Slide 15: Key Drivers of Net Interest Revenue / Margin
ucbi.com | 15 $65.4 $73.8 $75.0 $74.9 $79.0 $30 $40 $50 $60 $70 $80 3Q15 4Q15 1Q16 2Q16 3Q16 4.16% 4.15% 4.14% 2.13% 2.45% 2.36% 0.17% 0.18% 0.17% 0% 1% 2% 3% 4% 5% 3Q15 4Q15 1Q16 2Q16 3Q16 0.17% 0.17% 0.15% 0.22% 0.26% 0.27% 0.09% 0.10% 0.10% .00% .05% .10% .15% .20% .25% .30% 3Q15 4Q15 1Q16 2Q16 3
Slide 16: Fee Revenue
ucbi.com | 16 Increasing Profitability Fee Revenue ucbi.com | 16 Driving Fee Revenue Through Core Banking Infrastructure 9.3 11.5 10.1 10.5 10.8 2.3 3.4 2.9 4.6 5.8 1.2 1.1 1.1 1.1 1.2 3.8 3.3 3.3 4.5 6.0 1.7 2.0 1.2 2.8 2.5 $0 $5 $10 $15 $20 $25 $30 3Q15 4Q15 1Q16 2Q16 3Q16 Fee Revenue in millions
Slide 17: New Loans Funded and Advances
ucbi.com | 17 Generating Growth New Loans Funded and Advances (1) $ in millions ucbi.com | 17 3Q16 2Q16 3Q15 2Q16 3Q15 Commercial & Industrial 140.0$ 168.4$ 94.8$ (28.4)$ 45.2$ Owner-Occupied CRE 90.2 80.9 51.4 9.3 38.8 Income-Producing CRE 144.8 132.3 95.6 12.5 49.2 Commercial Constr. 14.3 11.0 8.3
Slide 18: Loan Mix
ucbi.com | 18 2012 2013 2014 2015 3Q16 North Georgia 1,364$ 1,240$ 1,163$ 1,125$ 1,110$ Atlanta MSA 1,204 1,235 1,243 1,259 1,332 North Carolina 579 572 553 549 548 Coastal Georgia 400 423 456 537 565 Gainesville MSA 261 255 257 254 236 East Tennessee (1) 283 280 280 504 506 South Carolina (2) - 4 3
Slide 19: Customer Deposit Mix
ucbi.com | 19 2012 2013 2014 2015 3Q16 2012 2013 2014 2015 3Q16 Non-Interest Bearing Core Demand Deposit 232$ 123$ 161$ 618$ 327$ Demand Deposit 1,188$ 1,311$ 1,471$ 2,089$ 2,416$ NOW (65) 4 9 441 3 MMDA 115 73 41 325 199 Interest Bearing Core Savings 29 24 41 177 73 Total CommercialNOW 654 659 668
Slide 20: High-Quality, Low-Cost Core Transaction Deposit Base
ucbi.com | 20 $ 2.02 $ 2.13 $2.22 $3.16 $3.44 $1.19 $1.31 $1.47 $2.09 $2.41 - $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 2012 2013 2014 2015 3Q16 in billions Non-Interest Bearing Core Transaction Interest Bearing Core Transaction $3.21 $3.44 $3.69 $5.25 $5.85 ucbi.com | 20 High - Quality, Low - Cost Core T
Slide 21: Acquisition of Tidelands Bancshares, Inc.
ucbi.com | 21 Generating Growth Acquisition of Tidelands Bancshares, Inc. ucbi.com | 21 Combined Branch Map INTERSTATE 26 INTERSTATE 95 Myrtle Beach Garden City Beach North Charleston Summerville Charleston Hilton Head Island Savannah United Community Banks, Inc. (134) Tidelands Bancshares, Inc . (7
Slide 22: Exhibits
ucbi.com | 22 ucbi.com | 22 EXHIBITS
Slide 23: Who We Are
ucbi.com | 23 United Community Banks, Inc. ucbi.com | 23 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 retu
Slide 24: Granular Portfolio – Exposure and Industry Limits
ucbi.com | 24 Protecting High - Quality Balance Sheet ucbi.com | 24 Granular Portfolio – Exposure and Industry Limits • Legal Lending Limit $ 261M • House Lending Limit 28M • Project Lending Limit 17M • Top 25 Relationships 396M STRUCTURE • Centralized underwriting and approval process for consumer
Slide 25: Loan Portfolio Transformation and Diversification
ucbi.com | 25 Protecting High - Quality Balance Sheet ucbi.com | 25 Loan Portfolio Transformation and Diversification 7% 12% 16% 26% 9% 27% 3% $5.7 Billion Loan Portfolio as of 12/31/2008 Commercial (C&I) CRE Income Producing CRE Owner-Occupied Residential Construction Commercial Construction Reside
Slide 26: Excellent Credit Performance and Management
ucbi.com | 26 Note: Peer comparison banks comprise the KBW Regional Bank Index (ticker: KRX) Source: SNL Financial LC Protecting High - Quality Balance Sheet Excellent Credit Performance and Management ucbi.com | 26 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% BOH CBSH UMPQ OZRK COLB BPFH VLY UCBI BKU PB CBU
Slide 27: Performing Classified Loans
ucbi.com | 27 Protecting High - Quality Balance Sheet Performing Classified Loans ucbi.com | 27 By Category $ in millions 3Q15 4Q15 1Q16 2Q16 3Q16 Commercial & Industrial 6$ 6$ 9$ 9$ 10$ Owner-Occupied CRE 42 40 33 33 38 Total Commercial & Industrial 48 46 42 42 48 Income-Producing CRE 30 30 30 28 2
Slide 28: TDRs
ucbi.com | 28 $84.6 $83.0 $72.8 $73.3 $70.1 $60 $70 $80 $90 3Q15 4Q15 1Q16 2Q16 3Q16 Protecting High - Quality Balance Sheet TDRs ucbi.com | 28 $ in millions LOAN TYPE 3Q16(1) 2Q16 3Q15 3Q16(1) 2Q16 3Q15 3Q16(1) 2Q16 3Q15 Commercial & Industrial 1.9$ 2.1$ 3.5$ -$ -$ -$ 1.9$ 2.1$ 3.5$ Owner-Occupied
Slide 29: Commercial Real Estate Diversification
ucbi.com | 29 Protecting High - Quality Balance Sheet Commercial Real Estate Diversification ucbi.com | 29 Multi-Residential 120$ 17.0 % 67$ 17.2 % Retail Building 116 16.5 66 17.0 Other Properties 78 11.1 43 11.0 Land Develop - Vacant (Improved) 65 9.2 54 13.9 Office Buildings 89 12.6 39 10.0 Comme
Slide 30: Liquidity
ucbi.com | 30 Protecting High - Quality Balance Sheet Liquidity ucbi.com | 30 Capacity 3Q16 2Q16 3Q15 vs 2Q16 vs 3Q15 WHOLESALE BORROWINGS Brokered Deposits (1) 1,030$ 359$ 412$ 517$ (53)$ (158)$ FHLB 1,106 449 735 200 (286) 249 Holding Company LOC 50 - - - - - Fed Funds 740 - - 5 - (5) Other Wholes
Slide 31: High-Quality, Low-Cost Core Deposit Base
ucbi.com | 31 Note: Peer comparison banks comprise the KBW Regional Bank Index (ticker: KRX) Source: SNL Financial LC Increasing Profitability High - Quality, Low - Cost Core Deposit Base ucbi.com | 31 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% CFR COLB WABC FFIN BOH CVBF CBU UMBF FMBI UCBI TRMK CBSH O
Slide 32: Steady Loan Growth
ucbi.com | 32 Generating Growth ucbi.com | 32 Steady Loan Growth $4.18 $4.33 $4.52 $4.96 $6.42 $1.04 $0.31 $0.16 $3.00 $4.00 $5.00 $6.00 $7.00 2012 2013 2014 2015 3Q16 Total Loans in billions Organic Acquired Healthcare (sold 4Q15) $6.00 $4.68 $6.73 9% Annualized Growth 10% Growth
Slide 33: Market Share Opportunities
ucbi.com | 33 Generating Growth Market Share Opportunities ucbi.com | 33 (1) FDIC deposit market share and rank as of June 30, 2016 for markets where United takes deposits. Data Source: FDIC. (2) Based on current quarter. $ in billions (1) (2) (1) (1) North Georgia $ 6.5 $ 2.3 9 22 36% 1 Atlanta, Ge
Slide 34: Market Share Demographics
ucbi.com | 34 Generating Growth Market Share Demographics ucbi.com | 34 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
Slide 35: Mergers & Acquisitions Strategy
ucbi.com | 35 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 36: UCBI MoneyTree and Palmetto Acquisitions
ucbi.com | 36 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 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 $4
Slide 38: Non-GAAP Reconciliation Tables
ucbi.com | 38 3Q15 4Q15 1Q16 2Q16 3Q16 Net Income Net income - GAAP 17,887$ 18,208$ 22,295$ 25,266$ 25,874$ Merger-related and other charges 5,744 9,078 2,653 1,176 3,152 Tax benefit on merger-related and other charges (1,905) (3,486) (1,004) (445) (1,193) Net income - Operating 21,726$ 23,800$ 23,9
United Community Banks — Q3 2016 Earnings Presentation on 6ix