United Community Banks, Inc. · NYSE:UCB

United Community Banks — Q3 2020 Earnings Presentation

26 slides from United Community Banks's earnings presentation, Oct 20, 2020

  1. Slide 1: 3Q Investor Presentation October 20, 2020

    3Q Investor Presentation October 20, 2020

  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: United Community Banks, Inc. Company Overview

    United Community Banks, Inc. Company Overview Committed to Service Since 1950 $17.2 $11.8 BILLION IN ASSETS BILLION IN TOTAL LOANS Regional Full Service Branch Network National Navitas and SBA Markets $2.4 $14.6 BILLION IN BILLION IN AUA(1) TOTAL DEPOSITS Branches United Community 100 BEST BANKS IN

  4. Slide 4: 3Q20 Highlights

    $0.52 10.1% Diluted earnings per share Return on common equity - GAAP – GAAP $0.55 13.5% 3Q20 Highlights Diluted earnings per share Return on tangible common – operating equity - operating (1) (1) Diluted Earnings Per Share Return on Assets $0.60 $0.63 1.51% 1.58% 1.07% 6% $0.52 $0.55 1.14% Return o

  5. Slide 5: High Quality Balance Sheet / Earnings Strength

    High Quality Balance Sheet / Earnings Strength Capital Profitability  2Q20 TCE + reserves is substantially higher compared to  2Q20 PTPP ROA - operating is 19% higher compared peers; providing greater stability and protection against to peers losses  UCBI ranks 12th highest PTPP ROA among the 50

  6. Slide 6: UCBI Focused on High-Growth MSAs in Southeast

    UCBI Focused on High-Growth MSAs in Southeast Located in Most of the Top 20 Markets in the Region Projected Population Growth (2) High-Growth MSAs in the Southeast 2021 – 2026 (%) Fastest Growing ‘21 – ’26 Proj. ’21 ‘26 Proj. Median 5.7% (1) Pop. Growth % Population Household Income Southeast MSAs 2

  7. Slide 7: Diversified Loan Portfolio Reduces Risk

    7 Diversified Loan Portfolio Reduces Risk 3Q20 Total Loans $11.8 billion  Loans increased $1.67 billion in 3Q20, PPP with $1.44 billion coming from Residential 11% Seaside Construction 2%  3Q20 core loan growth of $227 million, or 8% annualized Home Equity 6% (1) C&I  3Q20 Seaside loan growth of

  8. Slide 8: Allowance for Credit Losses (ACL)

    Allowance for Credit Losses (ACL) $ in millions Seaside Purchase Accounting Marks % of Total Credit Mark Interest Mark Total Mark PCD Loans 19% $11.1 $8.8 $19.9 Non-PCD Loans 81% $8.0 $18.3 $26.3 Note: Includes PPP loans, which have an interest mark of approximately $2.6 million  Day 2 provision fo

  9. Slide 9: Strong Credit Quality in 3Q

    Strong Credit Quality in 3Q Net Charge-Offs as % of Average Loans 0.25%  3Q20 NCOs of $2.5 million, or 0.09% 0.12% 0.09% annualized • The quarter benefited from $4.2 million of recoveries 3Q19 2Q20 3Q20  The provision for credit losses was Provision for Credit Losses $ in millions $21.8 million, i

  10. Slide 10: Loan Deferrals Improved Significantly in 3Q

    Loan Deferrals Improved Significantly in 3Q Payment Deferrals by Loan Type $ in thousands June 30, 2020 September 30, 2020 % of Total Loan % of Category % of Total Loan % of Category $ Deferred $ Deferred Portfolio Total Portfolio Total Hotels 219,169 1.88% 70.8% 122,601 1.04% 37.9% Restaurants 128,

  11. Slide 11: Capital Ratios Remain Strong

    Capital Ratios Remain Strong Holding Company 3Q19 1Q20 2Q20 3Q20* 3Q20 Highlights  Capital ratios significantly above “well capitalized” Common Equity Tier 1 12.4 % 12.9 % 12.9 % 12.3 % Capital  Closed the Seaside acquisition on 7/1/2020, which reduced our capital ratios as expected Tier 1 Risk-Ba

  12. Slide 12: Net Interest Revenue / Margin

    (1) Net Interest Revenue / Margin $ in millions $128.5 $119.3 $109.3 3.42% -0.10% 3.27% -0.13% 0.08% 4.12% (%) 3.42% 3.27% 3Q19 2Q20 3Q20 2Q NIM Excess Liquidity Low Interest Purchased Loan 3Q NIM Net Interest Revenue / PPP Rates / Seaside Accretion (1) Net Interest Margin 3Q20 NIM Compression  Net

  13. Slide 13: Valuable Deposit Mix

    Valuable Deposit Mix 3Q20 Total Deposits $14.6 billion 3Q20 Highlights Time 13%  Total deposits up $1.9 billion from 2Q20 Savings • Seaside contributed $1.8 billion to total deposits in 3Q20 6% 36% DDA  Core transaction deposits excluding Seaside were up $0.4 billion, or 15 % annualized from 2Q20

  14. Slide 14: Noninterest Income

    Noninterest Income $ in millions Linked Quarter $48.7 $1.2  Fees up $8.5 million • Service charges up $1.3 million due to increased debit $40.2 card and NSF activity as more businesses continued to reopen; Seaside added approximately $180k of the $1.3 $1.0 million total • Mortgage fees up $1.5 mill

  15. Slide 15: PPP Update

    PPP Update PPP Totals $ billions $1.1 $0.2 $- $0.2 $0.4 $0.6 $0.8 $1.0 $1.2  UCBI funded 10,994 PPP loans totaling $1.1 billion with an average loan size of $106 thousand  Seaside funded 789 PPP loans totaling $220 million with an average loan size of $278 thousand  56% of our PPP customers, repr

  16. Slide 16: Disciplined Expense Management

    Disciplined Expense Management $ in millions $96.0 $92.6 Linked Quarter  GAAP and operating expenses $82.9 $84.0 $83.6 $80.3 increased 14% and 11%, respectively 55.9% • 3Q20 included nominal Seaside cost 55.6% savings and we are confident in 55.6% achieving our stated cost savings target 54.1% • Mo

  17. Slide 17: Digital Adoption Increasing

    Digital Adoption Increasing  Website:  19.5% increase in ucbi.com users YOY  Since March, 65,000 users have at least started an online application to open a loan/deposit account or enroll in online banking  Digital Banking:  YTD, 15% of all new consumer deposit accounts were opened online  135

  18. Slide 18: Exhibits

    3Q INVESTOR PRESENTATION Exhibits Member FDIC. © 2020 United Community Bank

  19. Slide 19: Strong Credit Culture & Disciplined Credit Processes

    Strong Credit Culture & Disciplined Credit Processes 1 2 Add 3 Concentration 4 Concentration 5 Concentration Process Significant Management: Management: Management: Change Talent Size Geography Product  In 2014, centralized  CEO with deep  Granular portfolio, with  Five state franchise  Constru

  20. Slide 20: Retail CRE

    Retail CRE Top 50 UCBI Retail CRE - Property Type Mixed Use  Top 50 Retail CRE loans totaled 10% $322 million outstanding, 3% of total Grocery loans as of 3Q20 Anchored 28%  Average loan size of approximately $4.8 million Unanchored 27%  Seaside has $44 million of retail CRE as of 3Q20 12% Single

  21. Slide 21: Selected Segments – Restaurants & Hotels

    Selected Segments – Restaurants & Hotels (1) (1) Restaurants by Product Hotels by Product Seaside Seaside Navitas 6% 3% SBA 2% Owner 2% Occupied RE Navitas Construction 33% 12% 29% 5% 78% 14% Construction SBA 16% CRE C&I  Restaurant loans outstanding totaled  Hotel loans outstanding totaled $329.6

  22. Slide 22: Credit Quality — Navitas

    Credit Quality — Navitas Net Charge-Offs as % Deferral % by Category for Top 5 Categories of Average Loans 3Q20 10.24% 0.93% 0.87% 0.67% 3.96% 1.27% 0.37% 0.54% 3Q19 2Q20 3Q20 Eating Places Physician Fitness Salons Local Offices Facilities Trucking  Navitas 3Q20 NCOs = 0.93%  Total Navitas deferra

  23. Slide 23: Expanding Mortgage Throughout the Footprint

    3 Expanding Mortgage Throughout the Footprint Mortgage Locks 1,100 910 30 Mortgage Locks ($) Funded Locks / MLO 801 802 900 25 700 25 25 20 508 411 500 390 15 312 17 251 300 15 15 10 13 100 10 9 5 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 Mortgage Locks ($ millions) Funded Locks / MLO 4Q18 1Q19 2Q19 3

  24. Slide 24: Non-GAAP Reconciliation Tables

    24 Non-GAAP Reconciliation Tables $ in thousands, except per share data 3Q19 4Q19 1Q20 2Q20 3Q20 (1) Expenses Expenses - GAAP $ 82,924 $ 81,424 $ 81,538 $ 83,980 $ 95,981 Merger-related and other charges (2,605) 74 (808) (397) (3,361) Expenses - Operating $ 80,319 $ 81,498 $ 80,730 $ 83,583 $ 92,620

  25. Slide 25: Non-GAAP Reconciliation Tables

    25 Non-GAAP Reconciliation Tables $ in thousands, except per share data 3Q19 4Q19 1Q20 2Q20 3Q20 (1) Return on Assets Return on assets - GAAP 1.51 % 1.50 % 0.99 % 0.71 % 1.07 % Merger-related and other charges 0.07 - 0.02 0.01 0.07 Return on assets - Operating 1.58 % 1.50 % 1.01 % 0.72 % 1.14 % Retu

  26. Slide 26: Glossary

    26 Glossary ACL – Allowance for Credit Losses MSA – Metropolitan Statistical Area ALLL – Allowance for Loan Losses MSR – Mortgage Servicing Rights Asset AUA – Assets Under Administration NCO – Net Charge-Offs BPS – Basis Points NIM – Net Interest Margin C&I – Commercial and Industrial NPA – Non-Perf

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