United Community Banks, Inc. · NYSE:UCB

United Community Banks — Q2 2020 Earnings Presentation

27 slides from United Community Banks's earnings presentation, Jul 21, 2020

  1. Slide 1: 2Q Investor Presentation

    2Q INVESTOR PRESENTATION July 21, 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 $15.0 BILLION IN ASSETS $10.1 ONE OF THE LARGEST BILLION IN REGIONAL BANKS IN THE TOTAL LOANS U.S. BY ASSETS Regional Full Service Branch Network National Navitas and SBA Markets $2.3 $12.7 BILLION IN AUA(1) BILLION IN TOT

  4. Slide 4: 2Q20 Highlights

    6.2% Return on common equity - $0.32 Diluted earnings per share GAAP 8.1% 2Q20 Highlights – GAAP and operating Return on tangible common equity - operating (1) Earnings Per Share Return on Assets 1.50% $0.55 $0.59 0.71% 8% 1.40% YOY growth in $0.40 $0.41 0.99% 1.01% Return on average assets - $0.32

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

    High Quality Balance Sheet / Earnings Strength Capital Profitability  1Q20 TCE + reserves is substantially higher compared to  1Q20 PTPP ROA is 25% higher compared to peers peers; providing greater stability and protection against losses  UCBI is among the top 10 for peers in the KRX  UCBI ranks

  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 High-Growth MSAs in the Southeast Projected Population Growth (2) 2020 – 2025 (%) Fastest Growing ‘20 – ’25 Proj. ’20 ‘25 Proj. Median Southeast MSAs (1) Pop. Growth % Population Household Income 6.0% 1

  7. Slide 7: Loans

    7 Loans 2Q20 Total Loans $10.1 billion  Loans increased $1.2 billion in 2Q20, PPP with $1.1 billion coming from PPP loans Residential 11% Construction  Other loan growth of $103 million, or 2% 5% annualized Home Equity 7% C&I (1)  Record loan production of $2.0 billion 37% with $1.1 billion in PP

  8. Slide 8: Credit Quality — UCBI

    Credit Quality — UCBI Net Charge-Offs as % of Average Loans 0.37% 0.25%  2Q20 NCOs of $6.1 million, or 0.25% 0.11% annualized • Primarily driven by two credits that had been substandard for greater than 12 2Q19 1Q20 2Q20 months Provision for Credit Losses $ in millions  NPAs increase primarily dri

  9. Slide 9: Credit Quality — Navitas

    Credit Quality — Navitas Net Charge-Offs as % Navitas Deferral % for Top 5 Categories of Average Loans 2Q20 77% 75% 0.87% 0.81% 0.58% 31% 29% 28% 2Q19 1Q20 2Q20 Eating Places Physician Fitness Salons Local Offices Facilities Trucking  Navitas 2Q20 NCOs = 0.87%  As of June 30th, $231 million of Nav

  10. Slide 10: Loan Deferrals

    Loan Deferrals Deferrals Over Time $ in billions $1.8 $1.8 $1.8  Deferrals totaled $1.8 billion or 17% of $1.7 $1.7 $1.7 $1.6 $1.7 the entire portfolio $1.5 $1.4 • Commercial deferrals totaled $1.4 billion, (20% of Commercial portfolio) • Consumer deferrals totaled $45 million (4.5% of Consumer por

  11. Slide 11: Selected Segments – Restaurants & Hotels

    Selected Segments – Restaurants & Hotels Restaurants by Product(1) Hotels by Product(1) # of Total Total # of Total Total ($ millions) ($ millions) Loans Commitment Outstanding Loans Commitment Outstanding Owner Occupied RE 181 $ 117.4 $ 110.1 CRE 95 $ 261.6 $ 232.2 Construction 16 $ 23.6 $ 16.9 Con

  12. Slide 12: Allowance for Credit Losses (ACL)

    Allowance for Credit Losses (ACL) $ in millions Day 1 CECL 4Q19 1Q20 2Q20 1/1/2020 ACL - Loans $ 62,089 $ 68,969 $ 81,905 $ 103,669 ACL - Unfunded Commitments $ 3,458 $ 5,329 $ 6,470 $ 12,100 ACL - Allowance for Credit Losses $ 65,547 0.74% $ 74,298 $ 88,375 0.99% $ 115,769 1.14%  The allowance for

  13. Slide 13: Capital Ratios

    13 Capital Ratios Holding Company 2Q19 1Q20 2Q20(1) 2Q20 Highlights  Capital ratios near industry highs and 2Q20 also reflects Common Equity Tier 1 Capital 12.1 % 12.9 % 12.9 % the $100 million preferred equity raise on June 3rd  Raised $100 million of senior notes at the holding company providing

  14. Slide 14: Net Interest Revenue / Margin

    (1) Net Interest Revenue / Margin $ in millions $117.8 $118.6 $109.3 $9.4 $7.7 4.12% 4.07% $7.4 3.42% 2Q19 1Q20 2Q20 2Q19 1Q20 2Q20 Net Interest Revenue Core Transaction (1) Deposits (2) Net Interest Margin  Net interest revenue decreased $9 million (-8%) vs.  Core transaction deposits were up $1.

  15. Slide 15: Noninterest Income

    Noninterest Income $ in millions $40.2 Linked Quarter $1.0  Fees up $14.4 million • Service charges down $1.6 million as debit card and NSF activity slowed, but did show some recovery in June as businesses reopened • Mortgage fees up $15.3 million from 1Q20; $25.8 $23.7 $24.5 • Rate locks and produ

  16. Slide 16: Mortgage Locks

    6 Mortgage Mortgage Locks 900 801 802 30 Funded Locks / MLO Mortgage Locks ($) 700 25 508 25 20 500 390 411 298 312 15 251 17 300 15 15 13 10 12 10 9 100 5 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Mortgage Locks ($ millions) Funded Locks / MLO 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Loans Sold ($ mil

  17. Slide 17: Seaside Brings Wealth Management Expertise

    Seaside Brings Wealth Management Expertise  $1.3 billion Assets Under Management  $963 million Assets Under Administration (AUM) (AUA)  Traditional retail investment management  Customized portfolio management with open using LPL Financial for all securities and architecture and a higher net wor

  18. Slide 18: UCBI Funds Foundation with $1 Million

    UCBI Funds Foundation with $1 Million United Community Bank Foundation Mission: We exist to make good things happen for good people in our communities. United established the United Community Bank Foundation in February 2020 and initially funded the foundation with $1 million. The foundation looks f

  19. Slide 19: 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  PPP loan borrowers already had

  20. Slide 20: Expense Discipline

    Expense Discipline $ in millions $84.0 $83.6 $81.8 $81.5 $80.7 $77.7 Linked Quarter  GAAP and operating expenses increased 3% and 4%, respectively • Mortgage commissions up $1.4 million 57.3% primarily due to the increase in mortgage production volume 56.2% • $1.0 million expense from creation of 5

  21. Slide 21: Looking Forward

    Looking Forward Continue investing in digital solutions to drive revenue and greater efficiencies while improving the customer experience  Expand digital sales with online account opening for business deposit products (Bottomline Technologies)  Deliver one-to-one messaging at scale and persona- ba

  22. Slide 22: Seaside Acquisition – Closed on July 1, 2020

    Seaside Acquisition – Closed on July 1, 2020 • 8.1 million UCBI common shares issued Consideration • $25 million of options and follow-on rights cashed out Pro Forma • 91% United / 9% Three Shores Ownership Cost Savings • 24% of Three Shores’ estimated non-interest expense ($9 million pre-tax) Merge

  23. Slide 23: Exhibits

    2Q INVESTOR PRESENTATION Exhibits Member FDIC. © 2020 United Community Bank

  24. Slide 24: UCBI Valuable Deposit Mix

    UCBI Valuable Deposit Mix 2Q20 Total Deposits $12.7 billion 2Q20 Highlights 15%  Total deposits up $1.7 billion, or 15%, from1Q20; demand deposits drove the Time increase – up $1.1 billion in 2Q20 7% 37% Savings DDA  37% of deposits are noninterest bearing deposits; up 4% from 1Q20 MMDA 21%  UCBI

  25. Slide 25: 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

  26. Slide 26: Non-GAAP Reconciliation Tables

    26 Non-GAAP Reconciliation Tables $ in thousands, except per share data 2Q19 3Q19 4Q19 1Q20 2Q20 (1) (1) Expenses Expenses - GAAP $ 81,813 $ 82,924 $ 81,424 $ 81,538 $ 83,980 Merger-related and other charges (4,087) (2,605) 74 (808) (397) Expenses - Operating $ 77,726 $ 80,319 $ 81,498 $ 80,730 $ 83

  27. Slide 27: Non-GAAP Reconciliation Tables

    27 Non-GAAP Reconciliation Tables $ in thousands, except per share data 2Q19 3Q19 4Q19 1Q20 2Q20 (1) (1) Return on Assets Return on assets - GAAP 1.40 % 1.51 % 1.50 % 0.99 % 0.71 % Merger-related and other charges 0.10 0.07 - 0.02 0.01 Return on assets - Operating 1.50 % 1.58 % 1.50 % 1.01 % 0.72 %

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