United Community Banks, Inc. · NYSE:UCB
United Community Banks — Investor Day (October 2015)
144 slides from United Community Banks's investor day presentation, Oct 8, 2015
Slide 1: Investor Day 2015
ucbi.com | 1 INVESTOR DAY 2015 OCTOBER 8, 2015
Slide 2: Disclosures
ucbi.com | 2 Disclosures efficiency ratio, operating dividend payout ratio, core fee revenue, core operating expense, core earnings, tangible common equity to tangible assets, tangible equity to tangible assets and tangible common equity to risk - weighted assets . The most comparable GAAP measures
Slide 3: Agenda
ucbi.com | 3 Agenda 3 Page Number 10:00 am Introduction Jimmy Tallent 5 10:15 am Strategy Lynn Harton 11 10:30 am Community Banking Panel Discussion with Local CEOs Bill Gilbert 29 11:15 am Specialized Lending Panel Discussion with Line of Business Leaders Rich Bradshaw 58 12:00 pm Lunch with Econom
Slide 4: Agenda
ucbi.com | 4 Agenda 4 Page Number 1:00 pm Mortgage Services Mike Davies 77 1:20 pm Credit Administration Rob Edwards 86 1:40 pm Retail Credit Administration Chuck Valerio 92 1:55 pm Finance Rex Schuette Alan Kumler 98 2:15 pm Mergers & Acquisitions Chris Zych 109 2:35 pm Impact of Exceeding $10 Bill
Slide 5: Introduction
ucbi.com | 5 INVESTOR DAY JIMMY TALLENT Chairman and Chief Executive Officer INTRODUCTION
Slide 6: Snapshot of United Community Bank
ucbi.com | 6 Snapshot of United Community Bank 6 (1) Reflects the acquisition of Palmetto Bancshares, Inc., which closed on September 1, 2015 $ in billions Second Quarter 2015 Established 1950 Banking Offices (1) 133 Assets (1) $9.4 Loans (1) $6.1 Deposits (1) $7.8 TCE/TA 9.7% Leverage 9.1% Total RB
Slide 7: Financial Highlights
ucbi.com | 1 Financial Highlights 7 (1) Presented on an operating basis which is a non - GAAP performance measure. For a reconciliation of the differences between our non - GAAP financial measures and the most comparable GAAP measures, please refer to the ‘ Non - GAAP Reconcilement Tables’ at the en
Slide 8: Focus on Operating Efficiency
ucbi.com | 8 Focus on Operating Efficiency 8 OPERATING EXPENSES (1) OPERATING EFFICIENCY RATIO (1) 65.0% 64.4% 58.6% 60.0% 59.1% 58.7% 58.0% 57.5% 59.2% 57.6% 57% 59% 61% 63% 65% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 $43.7 $45.6 $40.0 $41.6 $39.0 $40.5 $41.3 $41.9 $43.0 $45.2 $34 $36 $38
Slide 9: Growth Summary
ucbi.com | 9 Growth Summary 9 NET INTEREST REVENUE LOANS (in billions) 4.2 4.2 4.3 4.3 4.4 4.4 4.6 4.7 4.8 5.2 $3 $4 $4 $5 $5 $6 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 54.6 54.9 54.3 55.9 54.2 55.0 57.0 58.3 57.6 61.3 $40 $45 $50 $55 $60 $65 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q
Slide 10: Key Profitability Metrics
ucbi.com | 10 Key Profitability Metrics 10 $.08 $.11 $.21 $.22 $.25 $.27 $.29 $.30 $.29 $.32 $.05 $.10 $.15 $.20 $.25 $.30 $.35 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 DILUTED OPERATING EPS (1) OPERATING RETURN ON ASSETS (1) OPERATING RETURN ON TANGIBLE COMMON EQUITY (1) .47% .55% .86% .86
Slide 11: Strategy
ucbi.com | 11 INVESTOR DAY LYNN HARTON President and Chief Operating Officer STRATEGY
Slide 12: Strategy and Goals
ucbi.com | 12 Strategy and Goals Our performance improvement has come from a series of strategic actions which leave us well prepared for future growth. Improve Core Performance Build a Scalable Platform Execute on Growth 1 2 3 Necessary steps to improve core performance • Reduce costs • Improve cre
Slide 13: Reducing Costs
ucbi.com | 13 Reducing Costs 52% 54% 56% 58% 60% 62% 64% 66% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Hundreds United Regional Bank Median • Capital management actions to reduce funding costs by $4.0 million annually • Centralization of loan operations, marketing, collections and other core
Slide 14: Improving Credit Performance and Management
ucbi.com | 14 Improving Credit Performance and Management • New credit leadership in 2007 • C entralization of special assets • Centralization of consumer loan underwriting and approval • Changed commercial approval process, including a Senior Credit Committee for visibility and culture building • I
Slide 15: Rebuilding Business Momentum
ucbi.com | 15 Rebuilding Business Momentum • Sales training of all front - office employees • Institution of sales campaign calendars and branch merchandising plans • New incentive plans tied to individual branch and bank performance • Improvement of consumer and mortgage lending products • Creation
Slide 16: Resulting Improvement in Market Perception
ucbi.com | 16 Resulting Improvement in Market Perception Total Return 0% 20% 40% 60% 80% 100% 120% 140% 160% 1/1/2013 7/1/2013 1/1/2014 7/1/2014 1/1/2015 7/1/2015 Hundreds United KBW Regional Bank Index 16 Source: SNL Financial LC
Slide 17: Strategy and Goals
ucbi.com | 17 Strategy and Goals Our performance improvement has come from a series of strategic actions which leave us well prepared for future growth. Improve Core Performance Build a Scalable Platform Execute on Growth 1 2 3 Necessary steps to improve core performance • Reduce costs • Improve cre
Slide 18: Attractive Model
ucbi.com | 18 Attractive Model 18 • CEOs with P/L ownership drive local decision - making • Consistent back office, brand and product set for efficiencies • Specialized lending integrated with the banks , not siloed • Highly - engaged employees • Small bank s ervice – large bank c apabilities 27% 14
Slide 19: Service Advantage
ucbi.com | 19 Service Advantage • Multiple customer service awards • Created via a disciplined process – 5,000 customer impressions annually – Service scores at each branch level – Knowledge integrated into training curriculum – Service scores both a qualifier and a multiplier for bank incentive sys
Slide 20: Combination of Great Markets
ucbi.com | 20 Combination of Great Markets • Legacy Markets – Strong core deposits – High market share – Deep customer penetration and fee revenue • Fee revenue / assets in the 1.55% to 1.65% range – Low market growth • Metro Markets – Asset growth opportunity – 70% of United’s loan production – Mea
Slide 21: Top Quartile Core Deposit Franchise
ucbi.com | 21 Top Quartile Core Deposit Franchise • Core deposits — non - Jumbo CDs/Brokered — are 88% of our total deposits • Our total cost of deposits is less than 12 basis points (1) , which compares favorably to peers (2 ) with a median of 23 basis points 21 (1) Reflects the acquisitions of Pal
Slide 22: ERM Program Planned for Growth
ucbi.com | 22 ERM Program Planned for Growth • Additional financial experts added to the board • Risk Committee of the Board constituted • Risk appetite quantified for all lines of business • Additional resources added in compliance, SOX and internal audit • DFAST style stress testing methodology im
Slide 23: Investing in Technology
ucbi.com | 23 Investing in Technology • Strategy to be a close follower from a customer perspective and a slightly better than peer experience for technology that supports our internal bankers • Developed a digital roadmap – as a result have successfully deployed Mobile banking, Remote deposit captu
Slide 24: Strategy and Goals
ucbi.com | 24 Strategy and Goals Our performance improvement has come from a series of strategic actions which leave us well prepared for future growth. Improve Core Performance Build a Scalable Platform Execute on Growth 1 2 3 Necessary steps to improve core performance • Reduce costs • Improve cre
Slide 25: Growth
ucbi.com | 25 Growth • Organic – Leverage traditional community bank strengths and new sales processes – Continue lift - out strategies in growth MSAs – Continue to expand Specialized Lending • To date: SBA, Income Property, Asset - Based Lending, Builder Finance • Acquisition – Disciplined – Deeper
Slide 26: Profitable Growth the Goal - ROA Targets
ucbi.com | 26 Profitable Growth the Goal - ROA Targets Announced 1.00% target with our 2Q 2013 earnings release and achieved it last quarter 26 (1) Presented on an operating basis which is a non - GAAP performance measure. For a reconciliation of the differences between our non - GAAP financial meas
Slide 27: ROA Targets
ucbi.com | 27 ROA Targets • Current Target of 1.10% by 4Q 2016 – Realizing M&A cost saves – Mid - to - high single digit loan growth – Continuing growth in mortgage, SBA and other fee businesses – Continued strong credit results – Maintain stable NIM • Longer - term goal of top 1/3 of peers 27
Slide 28: Summary
ucbi.com | 28 Summary • Strong performance results – highly efficient, solid credit metrics and strong risk management processes • Scalable model attractive to bankers and merger partners • Class - leading customer service – Personal service delivery and quality of a small bank – Product and managem
Slide 29: Community Banking
ucbi.com | 29 INVESTOR DAY BILL GILBERT President of Community Banking COMMUNITY BANKING
Slide 30: Community Banking Operating Model
ucbi.com | 30 Community Banking Operating Model • Community Banking Model made up of a group of 30 banks locally managed by CEOs who drive the achievement of budgeted goals for their individual bank • Decentralized decision - making and centralized risk management, giving our bankers the ability to
Slide 31: Management of Our Markets
ucbi.com | 31 Management of Our Markets 31
Slide 32: Deposit and Loan Composition by Region
ucbi.com | 32 Deposit and Loan Composition by Region 32 Deposits: $7.3 (1) Atlanta 36% North GA 24% Coastal GA 4% South Carolina 14% Western NC 13% East TN 9% (2) Note: Deposits include all customer (non - brokered) deposits (1) Reflects the acquisition of Palmetto Bancshares, Inc., which closed on
Slide 33: Loan Production
ucbi.com | 33 Loan Production Market Banks 2Q15 1Q15 2Q14 Atlanta (1) 129.3 110.3 101.1 North GA $66.7 $47.0 $69.0 Coastal GA 48.9 43.4 28.5 South Carolina 6.5 3.9 9.8 Western NC 27.6 19.6 21.0 East TN 17.6 15.0 16.7 Total $296.7 $239.2 $246.1 33 $246.1 $270.0 $260.8 $ 239.2 $ 296.7 $200.0 $220.0 $2
Slide 34: Deposit Market Share by Region
ucbi.com | 34 Deposit Market Share by Region 34 SOUTH CAROLINA Market Deposits: $18.5 billion WESTERN NC Market Deposits: $ 5.6 billion EAST TENNESSEE Market Deposits: $16.3 billion Company Deposits ($millions ) Market Share Company Deposits ($millions) Market Share Company Deposits ($millions ) Mar
Slide 35: Key Statistics
ucbi.com | 35 Key Statistics 35 2013 2014 2015 YTD (1) Operating Expenses YoY Change $(10.1) $(5.0) $1.2 Operating Efficiency (2) 46.6% 44.1% 42.0% Customer Satisfaction Scores 96.0% 96.9% 97.4% (1) As of June 30, 2015 (2) Direct costs - excludes Shared Services allocations $ in millions
Slide 36: Quarterly Sales Campaigns
ucbi.com | 36 Quarterly Sales Campaigns 36 Quarterly sales campaigns provide focus on specific products sets to drive revenue
Slide 37: 1Q 2015 Save & Invest Campaign Results
ucbi.com | 37 1Q 2015 Save & Invest Campaign Results Savings • 5,394 new accounts • Deposits > $70 million • Savings YTD Average growth of $17 million • Only 10 offices did not exceed their established goals Advisory Services • Total referrals – 1,066 • “Qualified” referrals – 783 • Revenue - $1.6 m
Slide 38: 2Q 2015 Mortgage Campaign
ucbi.com | 38 2Q 2015 Mortgage Campaign • 815 referrals resulting in mortgage applications • $146.3 million in mortgages closed in 2Q • Achieved 137% of goal 38
Slide 39: Community Banking Panel Discussion
ucbi.com | 39 Community Banking Panel Discussion 39 • Jack Keener, Regional President & CEO – North Georgia • Steve Williams, Regional President & CEO – East Atlanta • Gene Gibson, Regional President & CEO – Coastal Georgia • Sam Erwin, Regional President & CEO – South Carolina
Slide 40: Legacy Markets
ucbi.com | 40 INVESTOR DAY JACK KEENER Regional President & CEO – North Georgia LEGACY MARKETS
Slide 41: Legacy Markets – Overview
ucbi.com | 41 Legacy Markets – Overview • 21 locations in North Georgia • Close proximity to Atlanta, Greenville and Chattanooga • Mix of residential , consumer and c ommercial b usiness • Attractive markets for retirement and second homes • Growing medical and retail complexes • 160,972 d eposit ac
Slide 42: Legacy Markets Drivers and Recent Wins
ucbi.com | 42 Legacy Markets Drivers and Recent Wins • Economic Drivers – Tourism and retirement – Poultry and foreign m anufacturing – Regional h ospitals and medical g roups • Recent Wins – $ 4 million c onstruction l oan for three national fast food franchise locations – $ 5 million a sset - base
Slide 43: Legacy Markets Strategy
ucbi.com | 43 Legacy Markets Strategy • Strategy is to utilize our depth in these markets and brand awareness to drive additional growth in fee revenue, core deposits and new loan opportunities including Specialized Lending • Utilize needs - based selling and “Big Picture” conversations to drive cro
Slide 44: Atlanta
ucbi.com | 44 INVESTOR DAY STEVE WILLIAMS Regional President & CEO – East Atlanta ATLANTA
Slide 45: Atlanta Market – Overview
ucbi.com | 45 Atlanta Market – Overview • 43 locations in the Metro Atlanta area divided into West, East and Midtown regions • State of Georgia has a population of 10 million and Metro Atlanta has more than 55% of the total population • Highest growth markets are inside the I - 285 perimeter and the
Slide 46: Atlanta Market Key Economic Drivers
ucbi.com | 46 Atlanta Market Key Economic Drivers • Hartsfield Jackson International Airport – Two new terminals and a 6 th runway are in the planning phases – Currently the busiest airport in the world • Transportation Infrastructure – The Georgia legislature has passed a bill to provide $1 billion
Slide 47: Atlanta Market Recent Wins and Results
ucbi.com | 47 Atlanta Market Recent Wins and Results • YTD Wins – $19 million medical o ffice b uilding with a large ophthalmology practice – $23 million multi - family project (1) • A partnership with CRE team – $ 30 million r etail center anchored by national credit tenant (1) • A partnership with
Slide 48: Atlanta Market Strategy
ucbi.com | 48 Atlanta Market Strategy • Our strategy is to call on closely - held businesses with revenues between $ 1 million and $ 100 million • The portfolio currently consists of – Manufacturing and d istribution – Transportation and logistics – Technology – Professional services – Strong medica
Slide 49: Coastal Georgia
ucbi.com | 49 INVESTOR DAY GENE GIBSON Regional President & CEO – Coastal Georgia COASTAL GEORGIA
Slide 50: Coastal Georgia Market Overview
ucbi.com | 50 • Population of 612,000 • Projected growth of 22 % • Savannah Bank – 3 Locations – # 9 Deposit Market Share • Brunswick Bank – 5 Locations – # 2 Deposit Market Share • $500+ million in loans • $310+ million in deposits • 21,066 customers • 67,980 services Coastal Georgia Market Overvie
Slide 51: Coastal Georgia Market Economic Drivers
ucbi.com | 51 Coastal Georgia Market Economic Drivers • Ports – Fastest growing – Savannah harbor expansion • Manufacturing – Gulfstream expansion – International companies • Health Services – Regional medical hub – Steady employment growth 51 • Tourism / Hospitality – Over 13 million visitors – Hot
Slide 52: Coastal Georgia Recent Wins and Results
ucbi.com | 52 Coastal Georgia Recent Wins and Results • $6.6 million Construction/Perm for an owner - occupied warehouse to a shipping terminal operation – Executed a forward interest rate swap generating over $ 100,000 in additional revenue • $10.8 million retail center anchored by a large national
Slide 53: Coastal Georgia Market Strategy
ucbi.com | 53 Coastal Georgia Market Strategy ▪ De novo Entry in Savannah – Entered prior to downturn – Real estate focus • Focus Change in 2010 – Operating companies and professional p ractices – Attracted talented in - market bankers to fit focus • Corporate culture • Geography - based l eadership
Slide 54: South Carolina and Acquisition
ucbi.com | 54 INVESTOR DAY SAM ERWIN Regional President & CEO – South Carolina SOUTH CAROLINA AND ACQUISITION
Slide 55: Upstate South Carolina Market Overview
ucbi.com | 55 Upstate South Carolina Market Overview • Seventh largest deposit franchise in the Upstate, building on 108 years of banking in Upstate South Carolina – Largest community bank • 26 branches • Branch network approximately halfway between Atlanta, Charlotte, Asheville and Columbia • Led b
Slide 56: Upstate South Carolina Economic Drivers
ucbi.com | 56 Upstate South Carolina Economic Drivers • Robust Employment Market – National and regional corporate headquarters of BMW, Milliken, Michelin, General Electric, FujuFilm , Fluor, Robert Bosch, Adidas, Electrolux • Significant International Investment – 400+ companies from 32 countries •
Slide 57: Upstate South Carolina Market Strategy
ucbi.com | 57 Upstate South Carolina Market Strategy • Build on the Legacy Palmetto Franchise – Continue to serve our traditional customer and prospect base through a community banking model, but with a greater depth of products and services such as: • Treasury services • Derivatives • Merchant serv
Slide 58: Specialized Lending
ucbi.com | 58 INVESTOR DAY RICH BRADSHAW President, Specialized Lending SPECIALIZED LENDING
Slide 59: Mission
ucbi.com | 59 Mission • Specialized Lending lines of business partner with and grow the community bank • Each line of business is fully - staffed with loan officers, underwriters and credit professionals who have an extraordinary level of expertise in their respective fields • Depth of knowledge tha
Slide 60: Specialized Lending Summary
ucbi.com | 60 Specialized Lending Summary 60 (1) Reflects the acquisition of Palmetto Bancshares, Inc., which closed on September 1, 2015 91% $ in millions 25% 75% 2015 Loan Production Plan Specialized Lending Community Banking / Other (1) Specialized Lending $274 $739 $986 $125 $497 $627 $0 $200 $4
Slide 61: Specialized Lending - Lines of Business
ucbi.com | 61 Specialized Lending - Lines of Business 61 Small Business Administration (SBA) Commercial Real Estate (CRE) Middle Market Asset - Based Lending (ABL) Builder Finance
Slide 62: SBA Lending
ucbi.com | 62 SBA Lending • Target Market – S mall businesses with revenue between $ 1 million and $ 25 million • United’s SBA has 2 channels – Footprint and National Verticals 62
Slide 63: SBA Channels
ucbi.com | 63 SBA Channels • Footprint – Four SBA Sales Officers and a Sales Manager cover four states and they partner with the community bank to find opportunities − Community Bank Relationship Manager and bank get credit for the deal − Deal is underwritten, approved and closed in the SBA division
Slide 64: SBA Channels (Continued)
ucbi.com | 64 • National Verticals − Veterinary − Medical/Dental − Franchise − Manufacturing − Funeral Homes − Owner - Occupied CRE SBA Channels (Continued) – Vertical sales focus only on the specific vertical; underwriting and closing teams are specifically assigned to support the individual vertic
Slide 65: SBA Video
ucbi.com | 65 SBA Video 65
Slide 66: Quarterly SBA Production
ucbi.com | 66 $3.8 $10.1 $24.9 $30.4 $36.4 $1.8 $8.6 $14.6 $19.7 $31.3 $5.1 $7.4 $15.0 $13.0 $14.7 $0 $5 $10 $15 $20 $25 $30 $35 $40 2Q14 3Q14 4Q14 1Q15 2Q15 Committed Funded Loans Sold Quarterly SBA Production 66 $ in millions
Slide 67: Commercial Real Estate (CRE)
ucbi.com | 67 Commercial Real Estate (CRE) • Target Market - Experienced, well capitalized developers in our footprint • Focus – M ultifamily , retail, industrial, office and hospitality (very selective) – Loans greater than $ 5 million • Differentiator – Experienced , knowledgeable CRE lenders – Un
Slide 68: Quarterly CRE Production
ucbi.com | 68 Quarterly CRE Production $125 $146 $169 $194 $278 $284 $64 $66 $93 $103 $120 $136 $0 $50 $100 $150 $200 $250 $300 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Committed Funded 68 $ in millions
Slide 69: Middle Market
ucbi.com | 69 Middle Market • Target Market – Generally, companies with revenue between $50 million and $500 million • Services United provides – Term Loans – Revolving Lines of Credit – Participations / Club Deals – Tax Advantage L oans – Treasury Management Services – Interest Rate H edges (SWAPs)
Slide 70: Quarterly Middle Market Production
ucbi.com | 70 Quarterly Middle Market Production $59 $74 $74 $82 $90 $0 $20 $25 $46 $58 $65 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Committed Funded 70 $ in millions
Slide 71: Asset-Based Lending (ABL)
ucbi.com | 71 Asset - Based Lending (ABL) • Target Market – Generally, companies with revenue between $5 million and $250 million – Working capital, trade finance – Typically distributors, manufacturers, staffing firms, government contracts and transportation • Products – Accounts Receivable and Inv
Slide 72: Quarterly ABL Production
ucbi.com | 72 Quarterly ABL Production $8.0 $16.8 $24.0 $32.0 $0.0 $6.0 $7.0 $11.5 $18.6 $24.0 $0 $5 $10 $15 $20 $25 $30 $35 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Committed Funded 72 $ in millions
Slide 73: Builder Finance
ucbi.com | 73 Builder Finance • Target Market – Major metro areas in the United footprint with specific emphasis on Atlanta, Greenville and Charleston • Client Focus – Larger local and regional production builders with proven track records • Loan Products – Construction loans - Primarily focused on
Slide 74: Quarterly Builder Finance Production
ucbi.com | 74 Quarterly Builder Finance Production $48.0 $57.1 $54.4 $48.7 $58.7 $74.8 $36.8 $35.5 $43.3 $38.7 $42.0 $48.7 $20 $30 $40 $50 $60 $70 $80 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Committed Funded 74 $ in millions
Slide 75: Specialized Lending Panel Discussion
ucbi.com | 75 Specialized Lending Panel Discussion • Annemarie Murphy, SVP, SBA Chief Operating Officer • Charles Chamberlain, SVP, Director of Corporate Banking • Lisa Shelnutt, SVP, Commercial Real Estate • Gary Guthrie , President, Builder Finance 75
Slide 76: Economic Update: Southeastern Region
ucbi.com | 76 INVESTOR DAY ANNE KAISER VP, Community and Economic Development G eorgia Power ECONOMIC UPDATE: SOUTHEASTERN REGION
Slide 77: Mortgage Services
ucbi.com | 77 INVESTOR DAY MIKE DAVIES President, United Community Mortgage Services MORTGAGE SERVICES
Slide 78: United Community Mortgage Services
ucbi.com | 78 United Community Mortgage Services • Production in 2014 of $276.3 million • Production YTD in 2015 of $345.6 million • Fee Revenue in 2014 of $6.9 million • Fee Revenue YTD in 2015 of $9.1 million 78
Slide 79: Customer Service Reputation: A Key Strength
ucbi.com | 79 • Year - to - date customer satisfaction score of 9.63 out of 10 which drives customer loyalty • “United Community Bank UCMS mortgage operations captured an outstanding 37.36% of the mortgages done by UCB households during 2013. Many regional banks capture only 5% - 10% of mortgage loa
Slide 80: Growth Strategy
ucbi.com | 80 Growth Strategy • Build on our proven strengths demonstrated in our legacy markets of North Georgia and North Carolina • Increase our sales capacity (i.e. # of MLOs) in our growth markets of Metro Atlanta, Coastal Georgia, South Carolina, and Tennessee • Upside potential is tremendous
Slide 81: Growth Market Tactics
ucbi.com | 81 Growth Market Tactics We didn’t have dominant market share – we do have outstanding service / what else did we need ? Improved our product set + Added marketing support/tools for top producers + Upgraded our Loan Origination System + United Service = Helped us attract top talent in our
Slide 82: Coastal Georgia Case Study
ucbi.com | 82 Coastal Georgia Case Study 82 39.4 60.9 48.8 185.2 366.7 370.7 $- $50 $100 $150 $200 $250 $300 $350 $400 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Coastal GA Fee Revenue Coastal GA Fee Revenue 1,739 2,058 3,867 8,899 12,582 14,991 $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 1Q14
Slide 83: Results by Quarter
ucbi.com | 83 Results by Quarter 83 $ in millions • Growth in production driven by additional originators • Increasing penetration of targeted metro markets $0.78 $0.76 $0.89 $0.66 $0.50 $0.71 $0.50 $0.72 $0.97 $0.82 $1.00 $1.23 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14
Slide 84: Solutions
ucbi.com | 84 Solutions • Developed a competitive portfolio of products to complement sales efforts and identify loan customers with additional cross - sell opportunities. Products include a Physician’s Mortgage Program and competitive ARM products (5, 7 and 10/1 ARMs) with strong credit • Launched
Slide 85: Upside Remains
ucbi.com | 85 Upside Remains • Trigger lead strategy in development to be deployed in 4Q 2015 in target markets • Continuing recruiting success in metro markets • Evaluating the retention of servicing to drive more repeat business and customer penetration • In the process of changing loan sale proce
Slide 86: Credit Administration
ucbi.com | 86 INVESTOR DAY ROB EDWARDS EVP, Chief Credit Officer CREDIT ADMINISTRATION
Slide 87: Credit Organization
ucbi.com | 87 Credit Organization 87
Slide 88: Commercial Credit Approval
ucbi.com | 88 Commercial Credit Approval • Committee Members include Chief Credit Officer (Chair), President & COO, Regional Banking President, Specialized Lending President and respective Senior Credit Officer. • This committee meets no less than weekly with an emphasis on quick turnaround. Senior
Slide 89: Portfolio Strategies
ucbi.com | 89 Portfolio Strategies • Portfolio limits are established based on the component percentage of the portfolio and also as a percentage of capital • Portfolio limits and strategies are Board approved and reviewed monthly in Senior Credit Committee • The portfolio strategy is set at the top
Slide 90: Portfolio Transformation
ucbi.com | 90 Portfolio Transformation 90 • C&I has increased from 7% of the portfolio to 15% • Owner - Occupied Real Estate has increased from 16% of the portfolio to 24% • Residential Construction has declined from 26% of the portfolio to 6% • Commercial Construction has declined from 9% of the po
Slide 91: Credit Quality Trends
ucbi.com | 91 Credit Quality Trends 4Q2013 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 2Q2015 Non - Performing Loans $26.8 $25.2 $20.7 $18.7 $17.9 $19.0 $18.8 OREO 4.2 5.6 3.0 3.2 1.7 1.2 2.4 Total NPAs 31.0 30.8 23.7 21.9 19.6 20.2 21.2 NPAs/Total Loans & OREO 0.72 % 0.71 % 0.54 % 0.48 % 0.42 % 0.42 % 0.41
Slide 92: Retail Credit Administration
ucbi.com | 92 INVESTOR DAY CHUCK VALERIO Chief Retail Credit Officer RETAIL CREDIT ADMINISTRATION
Slide 93: Retail Credit Organization
ucbi.com | 93 Retail Credit Organization 93
Slide 94: Consumer Credit Approval / Governance
ucbi.com | 94 Consumer Credit Approval / Governance • Process is designed to optimize the customer experience, manage credit risk and adherence to regulatory policy • Centralized underwriting consistently applies policy to build a predictable portfolio of performing retail loans • Preparation of reg
Slide 95: Home Equity Line of Credit (HELOC)
ucbi.com | 95 Home Equity Line of Credit (HELOC) • 62% of the balances have May 2015 refresh scores of 740 or higher • 29% of the balances have May 2015 refresh scores of 800 or higher • 71% of the portfolio was originated after 2011 • 90% of the balances are secured by a primary residence • 64% of
Slide 96: Indirect Lending Portfolio – Purchase Pools
ucbi.com | 96 Indirect Lending Portfolio – Purchase Pools • Prime originations - Ave Wgt Risk Score 740+ • Disciplined due diligence process • Highly respected seller who is well known to the bank • Product with relatively short shelf life 96 Quarterly Liquidation Rates Outstandings $100 $150 $200 $
Slide 97: Indirect Lending Portfolio – Purchase Pools
ucbi.com | 97 Indirect Lending Portfolio – Purchase Pools • Pools demonstrate consistent and predictable performance • Excellent vintage level quality factors • Seller has a demonstrated history of effectively servicing indirect loans. 97 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1 2 3 4 5 6 7 8 9 10 11 1
Slide 98: Finance
ucbi.com | 98 INVESTOR DAY REX SCHUETTE EVP, Chief Financial Officer ALAN KUMLER SVP, Chief Accounting Officer FINANCE
Slide 99: Today's Topics
ucbi.com | 99 Today’s Topics • Net Interest Revenue and Margin • Interest Rate Sensitivity • Securities Portfolio • Liquidity • Capital Management and Dividends 99
Slide 100: Margin Stable – Net Interest Revenue Increasing
ucbi.com | 100 Margin Stable – Net Interest Revenue Increasing 100 .17% .16% .16% .22% .19% .20% .12% .11% .10% .02% .06% .10% .14% .18% .22% .26% 2Q14 3Q14 4Q14 1Q15 2Q15 $55.0 $57.0 $58.3 $57.6 $61.3 $45 $47 $49 $51 $53 $55 $57 $59 $61 $63 2Q14 3Q14 4Q14 1Q15 2Q15 KEY DRIVERS OF NIR NET INTEREST R
Slide 101: Increasing Percent of Variable Rate Loans
ucbi.com | 101 Increasing Percent of Variable Rate Loans 101 $4.18 $4.33 $4.67 $5.17 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 2012 2013 2014 2Q15 Commercial construction Income producing commercial real estate Owner occupied commercial real estate Commercial & industrial Indirect auto Home equity lines of cred
Slide 102: Strong / Growing Core Deposit Base
ucbi.com | 102 Strong / Growing Core Deposit Base 102 TOTAL DEPOSIT MIX 2008 2014 2Q15 Core Deposits Demand / NOW 1,457$ 2,139$ 2,514$ MMDA / Savings 630 1,550 1,738 Public Funds 755 960 773 Time < $100K 1,945 744 788 Total Core Deposits 4,787 5,393 5,813 Time > $100K 1,336 479 434 Public Time > $10
Slide 103: Low Cost of Funds
ucbi.com | 103 Low Cost of Funds 103 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 2Q15 1Q15 4Q14 4Q13 4Q12 4Q11 4Q10 4Q09 4Q08 UCBI Peer Median (1) Peer group comprised of banks with total assets between $6 billion and $15 billion at June 30, 2015 as reported by SNL.
Slide 104: Low Risk IRR Position
ucbi.com | 104 Low Risk IRR Position 104 Well - positioned for rising rates • Slightly asset sensitive in Earnings at Risk (EAR) and Economic Value of Equity (EVE) is slightly sensitive to rising rates • NIR assumed to increase 1.6% with a 200 - basis point ramp in rates • NIR modeled as static bala
Slide 105: Conservative Investment Portfolio
ucbi.com | 105 Conservative - Investment Portfolio 105 SECURITIES AS % OF TOTAL ASSETS • Well - structured portfolio with limited extension and price risk • Total portfolio duration is unlikely to exceed 3.5 years even with large rate shocks • Most duration extension is in the HTM portfolio with no
Slide 106: Solid Liquidity / Access to Markets
ucbi.com | 106 Solid Liquidity / Access to Markets 106 Unused Capacity 2Q15 1Q15 2Q14 vs 1Q15 vs 2Q14 Brokered Deposits (1) 295$ 530$ 498$ 424$ 32$ 106$ FHLB 550 385 270 175 115 210 Holding Company LOC 50 - - 40 - (40) Fed Funds 415 25 - 25 25 - Other Wholesale - - - 11 - (11) Total Wholesale 1,310$
Slide 107: Strong Capital Ratios
ucbi.com | 107 Strong Capital Ratios 107 $ in millions Min Well- Cap'd RAS Trigger 2Q15 (1) 1Q15 2Q14 Parent Company Tier 1 Leverage 4.0 % 5.0 % 6.0 % 9.1 % 8.7 % 8.3 % Tier 1 RBC 6.0 8.0 9.0 11.9 11.5 11.8 Total RBC 8.0 10.0 11.0 13.1 12.8 13.0 Tier 1 Common RBC 4.5 6.5 7.5 11.9 11.5 11.8 Bank Tier
Slide 108: Building Tier 1 Common / Dividend Payout
ucbi.com | 108 9.1% 11.9% 5.6% .8% 1.2% 3Q13 2Q15 Tier 1 Common Additional Tier 1 Tier 2 Building Tier I Common / Dividend Payout 108 C apital thresholds (Targets: CET1 9 - 10% and Total RBC 12.5% - 13.5%) 15.5% 13.1% • Capital Actions • TARP……………… $(196.5) • TruPS ……………… $( 47.8) • Funded by cash f
Slide 109: Mergers & Acquisitions
ucbi.com | 109 INVESTOR DAY CHRIS ZYCH SVP, Director M&A and Management Reporting MERGERS & ACQUISITIONS
Slide 110: Key Considerations for M&A
ucbi.com | 110 Key Considerations for M&A • Growth in target markets - M&A accelerates our growth strategy in new or 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 q
Slide 111: Target Universe Identification
ucbi.com | 111 Target Universe Identification Asset Workout (1) : 5 Clean Bank: 45 Identified Targets: 50 Banks with assets greater than $100MM and less than United’s: 375 Banks in Target States (GA, TN, SC, NC): 493 Identified Target Universe Focus Areas – Metro Markets: • Coastal, SC – Charleston,
Slide 112: Acquisition Strategy
ucbi.com | 112 Acquisition Strategy • We understand that pursuing a large transformational or mid - sized deal could have the largest impact and potentially drive more value creation in the near - term • As we approach $10 billion, we view larger deals as one potential way to bridge the earnings gap
Slide 113: Acquisition Experience
ucbi.com | 113 Acquisition Experience March 31, 2003 • First Central Bank, Lenoir City, TN • $195 million • 8 branches May 1, 2003 • First Georgia Bank, Brunswick, GA • $303 million • 6 branches June 1, 2004 • First Community Bank, Fairburn, GA • $192 million • 5 branches November 1, 2004 • Eagle Na
Slide 114: 2015 Acquisition: MoneyTree / FNB
ucbi.com | 114 2015 Acquisition: MoneyTree / FNB • Closed on May 1 with successful operational conversion on July 18 - 19; business has remained stable • Consolidated six branches – three United and three MoneyTree / FNB branches in September and will have net 12 branches • Added a $425 million, 107
Slide 115: 2015 Acquisition: The Palmetto Bank
ucbi.com | 115 2015 Acquisition: The Palmetto Bank • Closed on September 1 with operational conversion planned for February 20 - 21, 2016 • Somewhat simpler conversion than MoneyTree / FNB due to limited (1) branch closures and the same core systems provider • Added a $1.2 billion, 108 year old comm
Slide 116: Acquisition Risk Evaluation
ucbi.com | 116 Acquisition Risk Evaluation 116 Key Risk Description Potential Threat Level Due Diligence Failure to identify or properly assess credit, compliance, legal, environmental and other key risks (in areas including Finance/Accounting/Planning, Treasury, IT/Ops and HR) Execution Inability t
Slide 117: Tested Integration Process
ucbi.com | 117 Tested Integration Process Organizational Structure Roles Steering Committee (CEO, COO, Target CEO, CFO, Pres. of Community Banking, CSO, CCO, CRO, HR) Executive Owner (COO) Program Office (CIO, PMO) Project Mgr. / Team Project Mgr. / Team Project Mgr. / Team Project Mgr. / Team Issue
Slide 118: Focus on Execution and Cost Savings
ucbi.com | 118 Focus on Execution and Cost Savings • We take a very deliberate approach to identifying achievable cost savings by working directly with the potential merger partner early and often in the acquisition process • We attempt to refine our assumptions as much as possible by becoming exper
Slide 119: Financial Return Targets
ucbi.com | 119 Financial Return Targets • We carefully evaluate and price potential acquisitions with specific financial return targets in mind, including: – Year one EPS accretion, not including transaction expenses – TBV dilution threshold in the low single digits and earnback within three years –
Slide 120: Acquisition Posture
ucbi.com | 120 Acquisition Posture It has long been said that banks are sold and not bought, while we happen to believe this, we will continue to: • View acquisitions as an important component of our growth strategy and pursue transactions with a line of business mentality • Pursue a roll - up strat
Slide 121: Impact of Exceeding $10 Billion Asset Threshold
ucbi.com | 121 INVESTOR DAY LYNN HARTON P resident and Chief Operating Officer IMPACT OF EXCEEDING $10 BILLION ASSET THRESHOLD
Slide 122: Primary Regulatory Implications
ucbi.com | 122 Primary Regulatory Implications • Durbin Amendment (debit card interchange revenue) • FDIC insurance premiums • S tress testing • Oversight by Consumer Financial Protection Bureau (CFPB ) • Measurement date of Durbin Amendment under the Dodd - Frank Act is a snapshot of total assets a
Slide 123: Projected Timing
ucbi.com | 123 Projected Timing • We will not exceed $10 billion as of December 31, 2015 – Ability to reduce securities portfolio and wholesale borrowings to manage total assets if needed • Planning based upon an assumption we will exceed $10 billion as of December 31, 2016 due to organic growth and
Slide 124: Plan to Offset Projected Financial Impact
ucbi.com | 124 Plan to Offset Projected Financial Impact • Company - wide project led by Chief Strategy Officer – Comprehensive approach covering all areas of the Company – Project management discipline and methodology • Currently identifying both operating revenue and expense reduction opportunitie
Slide 125: Summary
ucbi.com | 125 Summary • Earliest financial impact begins July 1, 2017 • We have time to prepare based on current asset projections and DFA effective dates • We are proactively working to increase revenues and decrease expenses to offset the projected impact, using a disciplined approach and defined
Slide 126: Recap of Today - Investment Thesis
ucbi.com | 126 Recap of Today - Investment Thesis • Strong performance results with solid credit metrics and strong risk management processes • Business model that attracts both bankers and customers • Valuable franchise where legacy strengths have funded building of metro markets • Strong capital b
Slide 127: Closing Remarks
ucbi.com | 127 INVESTOR DAY JIMMY TALLENT Chairman and Chief Executive Officer CLOSING REMARKS
Slide 128: Investor Day Exhibits
ucbi.com | 128 INVESTOR DAY EXHIBITS
Slide 129: Risk Management
ucbi.com | 129 INVESTOR DAY BRAD MILLER EVP, General Counsel & Chief Risk Officer RISK MANAGEMENT
Slide 130: Enterprise Risk Management Framework
ucbi.com | 130 Everyone in the organization is a risk stakeholder. Our ERM framework provides the ability to understand, control and articulate the level of risks across the enterprise in pursuit of our strategic and business objectives Risk identification Risk assessment/ measurement Risk response/
Slide 131: Strong Board and Governance
ucbi.com | 131 Strong Board and Governance • Experienced Board of Directors – Added strength to our legacy Board through financial crisis • Cathy Cox – Young Harris College, President – University of Georgia School of Law, January - May 2007 - Carl E. Sanders Political Leadership Chair – Georgia Sec
Slide 132: Strong Board and Governance Cont.
ucbi.com | 132 Strong Board and Governance Cont. • Talented Board of Directors Cont. • Lynn Harton – President and COO of United • Nick Paumgarten – Chairman of Corsair Capital, former Managing Director at J.P. Morgan Chase • Improved Governance • Added Risk Committee of Board • Added depth to Audit
Slide 133: Risk Management
ucbi.com | 133 Risk Management 133
Slide 134: Risk Management Enhancements
ucbi.com | 134 Risk Management Enhancements 134 ERM COMPLIANCE MARKET/LIQUIDITY RISK LOAN REVIEW AUDIT INFORMATION SECURITY Improvements to existing structure • Identification • Assessment • Measurement • Reporting Experienced leadership Added Depth • BSA • Fair Lending • CRA • Added depth to ALCO •
Slide 135: GAAP Reconciliation
ucbi.com | 135 GAAP Reconciliation 135 First Second Third Fourth First Second Third Fourth First Second Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 Operating Efficiency Ratio Operating Efficiency Ratio 69.47% 64.44
Slide 136: GAAP Reconciliation
ucbi.com | 136 GAAP Reconciliation 136 First Second Third Fourth First Second Third Fourth First Second Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 Operating Return on Assets Operating Return on Assets 0.47% 0.55%
Slide 137: GAAP Reconciliation
ucbi.com | 137 GAAP Reconciliation 137 Second First Second Quarter Quarter Quarter 2014 2015 2015 Net Interest Revenue ($ in thousands) Net Interest Revenue, Taxable Equivalent $ 54,950 $ 57,617 $ 61,317 Taxable Equivalent Adjustment (377) (375) (326) Net Interest Revenue (GAAP) $ 54,573 $ 57,242 $
Slide 138: Executive Experience
ucbi.com | 138 INVESTOR DAY EXECUTIVE EXPERIENCE
Slide 139: Executive Experience
U United [yNteo] COMMUNITY BANKS, ING: OCTOBER 6, 2015 Executive Experience Jimmy Tallent United Community Banks, Inc. United Community Bank cr & Chief Executive Officer President & Chief Executive Officer 1984-Present idelity Bank 1982-1984 ‘Senior Vice President Habersham Bank 1975-1982 Senior Vic
Slide 140: Executive Experience
U United [yNteo] COMMUNITY BANKS, ING: OCTOBER 6, 2015 Rich Bradshaw United Community Banks, Inc. United Community Bank President, Specialized Lending TO Bank, NA Head of U.S. SBA Programs Carolina First EVP, Director of Corporate Financial Services ‘SBA, Mortgage and Insurance UPS Capital Business,
Slide 141: Executive Experience
U United [yNteo] COMMUNITY BANKS, ING: Charles Chamberlain United Community Bank ‘SVP, Director of Corporate Banking 2013-Present TO Bank, NA 2010-2013 President, TD Community Development Corporation Carolina First 8: 1989-2010 Executive Credit Otficer, Corporate Banking President, Carolina First Co
Slide 142: Executive Experience
U United [UNITED] COMMUNITY BANKS, INC: OCTOBER 6, 2015 Gary Guthrie Alan Kumler United Community Bank 2001-Present United Community Banke 2001-Present President Buider Finance immunity Bank SUP, Chia’ Accounting Ocor Premier Bank BB&T 1990-2001 Comprate Contoter ‘SVP, Builder Finance Wachovia Bank,
Slide 143: Executive Experience
U United [yNteo] COMMUNITY BANKS, ING: Lisa Sheinutt United Community Bank 2012-Present VP, Commercial Real Estate TO Bank, NA / Carolina First Bank 2004-2012 ‘SVP, Commercial Real Estate Wachovia Bank / First Union National Bank 1991-2004 Real Est ‘Senior Portfolio Manager, Commercial Real Estate R
Slide 144: Featured Speaker
U United [UNITED] COMMUNITY BANKS, INC: OCTOBER ®, 2015 Featured Speaker Anne Hydrick Kaiser Vico President, Community and Economic Development + Georgia Power ‘Anne Hydrick Kaiser serves as vice Georgia Power, ; efforts to rgia and improve bei inte ly in the world, bringing more than 121, je $24 bi