United Community Banks, Inc. · NYSE:UCB
United Community Banks — Q4 2020 Earnings Presentation
24 slides from United Community Banks's earnings presentation, Jan 19, 2021
Slide 1: 4Q Investor Presentation
4Q Investor Presentation January 19, 2021
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-
Slide 3: United Community Banks, Inc. Company Overview
United Community Banks, Inc. Company Overview Committed to Service Since 1950 $17.8 $11.4 BILLION IN ASSETS BILLION IN TOTAL LOANS Regional Full Service Branch nch Network National Navitas and SBA Markets $2.5 $15.2 BILLION IN BILLION IN AUA(1) TOTAL DEPOSITS 100 BEST BANKS IN Banking Offices 13.0%
Slide 4: 4Q20 Highlights
$0.66 12.4% Diluted earnings per share Return on common equity - GAAP – GAAP $0.68 16.3% 4Q20 Highlights Diluted earnings per share Return on tangible common – operating(1) equity - operating (1) Diluted Earnings Per Share Return on Average Assets 1.50% 1.50% $0.66 $0.68 $0.61 $0.61 1.30%1.34% 1.30%
Slide 5: High Quality Balance Sheet / Earnings Strength
High Quality Balance Sheet / Earnings Strength Capital Profitability 9 3Q20 TCE + reserves is 50 bps higher compared to peers 9 3Q20 PTPP ROA - operating is 20% higher compared to peers 9 UCBI ranks 21st highest among the 50 KRX peers 9 UCBI ranks 14th highest PTPP ROA among the 50 KRX peers (1) TCE
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 Grow ing ‘21 – ’26 Proj. ’21 ‘26 Proj. Median 5.7% Southeast MSAs (1) Pop. Grow th % Population Household I 2.9%
Slide 7: Diversified Loan Portfolio
7 Diversified Loan Portfolio 4Q20 Total Loans $11.4 billion 9 Loans decreased $428 million in 4Q20 due to $671 million of PPP Residential PPP forgiveness Construction 6% 9 4Q20 core loan growth of $243 3% Home Equity million, or 8% annualized excluding 6% PPP Residential (1) C&I Mortgage 11% 42% Oth
Slide 8: Credit Quality
Credit Quality Net Charge-Offs as % of Average Loans 0.40% 0.37% 9 4Q20 NCOs of $1.5 million, or 0.05% of 0.35% average loans, annualized 0.30% • The quarter benefited from $5.3 million of 0.25% 0.25% recoveries 0.20% 0.15% 0.18% 9 2020 NCOs of $18.3 million, or 0.17% of 0.10% 0.09% average loans 0.
Slide 9: Criticized & Classified Loan Trends
Criticized & Classified Loan Trends Loan Deferrals 9 $207 million Criticized and Classified 15.9% $1,800 $1,850 16.0% increase from 3Q20 $1,600 $1,400 14.0% • Criticized and Classified are 5% of total loans $1,200 12.0% • The primary drivers of the increase to 10.0% $1,000 Criticized and Classified
Slide 10: ACL Walk-Forward
ACL Walk-Forward $3,365 $3,103 ($1,362) ($2,199) $147,568 $146,176 ($1,515) ($000) 3Q ACL Loan Growth Reserve for NCOs Specific Reserve Model / Forecast 4Q ACL Unfunded Changes Commitments ACL / Loans: 1.24% 1.30% ACL / Loans 1.39% 1.38% excl. PPP: 10
Slide 11: Capital Ratios
Capital Ratios 3Q20 KRX Peer UCBI Holding Company 4Q19 2Q20 3Q20 4Q20* Median vs. KRX Common Equity Tier 1 Capital 13.0 % 12.9 % 12.3 % 11.5 % + 0.8 % 12.2 % Tier 1 Risk-Based Capital 13.2 14.0 13.1 11.9 + 1.2 13.0 Total Risk-Based Capital 15.0 16.1 15.3 14.2 + 1.1 15.1 Leverage 10.3 10.3 9.4 8.8 +
Slide 12: Net Interest Revenue / Margin
(1) Net Interest Revenue / Margin $ in millions $145.4 0.37% 3.55% $128.5 0.01% $116.6 3.27% (0.06%) (0.04%) (%) 3.93% 3.55% 3.27% 4Q19 3Q20 4Q20 3Q NIM Excess Low Interest Purchased Loan PPP Fees 4Q NIM Liquidity Rates Accretion Net Interest Revenue ($ in millions) (1) 4Q20 NIM Expansion Net Intere
Slide 13: Valuable Deposit Mix
Valuable Deposit Mix 4Q20 Total Deposits $15.2 billion 4Q20 Highlights Time 9 Total deposits were up $629 million, or 17% annualized 12% from 3Q20 and up $4.3 billion, or 40% YOY Savings • Excluding Seaside, total deposits were up $2.5 billion, or 6% 35% DDA 23% YOY 9 Core transaction deposits were
Slide 14: Noninterest Income
Noninterest Income $ in millions $48.7 $1.2 Linked Quarter 9 Fees down $7.3 million $41.4 • Mortgage fees down $6.1 million from 3Q20, $1.5 as continued strong volumes were offset by margins decreasing from historical levels and $25.1 greater GSE fees $30.2 • Rate locks were down with $117 million i
Slide 15: Disciplined Expense Management
Disciplined Expense Management $ in millions Linked Quarter $106.5 $104.0 9 GAAP and operating expenses increased 11% and 12%, respectively $96.0 $92.6 • Salaries and benefits were up $2.8 million mainly due to $1.8 million of Paid Time Off 56.7% hours carried into 2021 as a result of COVID $81.4 $8
Slide 16: PPP Update
PPP Update PPP Totals $ in millions $647 $672 $- $200 $400 $600 $800 $1,000 $1,200 $1,400 Not Forgiven Forgiven 9 As of December 31, approximately 52% of our PPP loans, representing $671 million in loans, have been forgiven by the SBA 9 In 4Q20, we recognized $19.4 million in PPP fees, of which we c
Slide 17: Exhibits
4Q INVESTOR PRESENTATION Exhibits Member FDIC. © 2020 United Community Bank
Slide 18: 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 9 In 2014, centralized 9 CEO with deep 9 Granular portfolio, with 9 Five state franchise 9 Constru
Slide 19: Selected Segments – Hotels
Selected Segments – Hotels Top 50 Hotels by Sector Top 50 Hotel Risk Rating $ in millions Airport Leisure Conference 9.9% $7 15.2% 3.3% Center $33 $48 Extended Stay $68 10.1% $234 31.3% $159 Urban, Limited Service 30.2% Interstate, Limited Service 3Q20 4Q20 Pass Special Mention Classified 9 Top 50 h
Slide 20: Selected Segments – Senior Care
Selected Segments – Senior Care Senior Care by Project Type Skilled Nursing 9Senior Care lending team are 11.5% Facility dedicated specialists with significant 1% 6% Memory Care experience in the space 20% 13.1% 9Senior Care funded exposure for UCBI 6.1% Independent Living totaled $462 million as of
Slide 21: Credit Quality — Navitas
Credit Quality — Navitas Net Charge-Offs as % of Average Loans 0.93% 0.89% 0.87% 0.84% 0.81% 0.75% 0.67% 0.58% 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 9 Navitas 4Q20 NCOs = 0.75% 9 Navitas’ cumulative net loss rates have approximated 2% for the last 10 years 9 Navitas ACL - Loans equated to 1.95% as
Slide 22: Non-GAAP Reconciliation Tables
22 Non-GAAP Reconciliation Tables $ in thousands, except per share data 4Q19 1Q20 2Q20 3Q20 4Q20 Expenses Expenses - GAAP $ 81,424 $ 81,538 $ 83,980 $ 95,981 $ 106,490 Merger-related and other charges 74 (808) (397) (3,361) (2,452) Expenses - Operating $ 81,498 $ 80,730 $ 83,583 $ 92,620 $ 104,038 D
Slide 23: Non-GAAP Reconciliation Tables
23 Non-GAAP Reconciliation Tables $ in thousands, except per share data 4Q19 1Q20 2Q20 3Q20 4Q20 Return on Assets Return on assets - GAAP 1.50 % 0.99 % 0.71 % 1.07 % 1.30 % Merger-related and other charges - 0.02 0.01 0.07 0.04 Return on assets - Operating 1.50 % 1.01 % 0.72 % 1.14 % 1.34 % Return o
Slide 24: Glossary
24 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
United Community Banks — Q4 2020 Earnings Presentation on 6ix