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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported):
October 23, 2018

 

UNITED COMMUNITY BANKS, INC.
(Exact name of registrant as specified in its charter)

 

Georgia No. 001-35095 No. 58-180-7304
(State or other jurisdiction of (Commission File Number) (IRS Employer
 incorporation)   Identification No.)

 

 125 Highway 515 East
Blairsville, Georgia 30512
(Address of principal executive offices)

 

Registrant’s telephone number, including area code:
(706) 781-2265

 

Not applicable
(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§240.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition.
   
 

On October 23, 2018, United Community Banks, Inc. (the “Registrant”) issued a news release announcing its financial results for the quarter ended September 30, 2018 (the “News Release”). The News Release, including financial schedules, is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. In connection with issuing the News Release, on October 24, 2018 at 11:00 a.m. ET, the Registrant intends to hold a conference call/webcast to discuss the News Release. In addition to the News Release, during the conference call the Registrant intends to discuss certain financial information contained in the Third Quarter 2018 Investor Presentation (the “Investor Presentation”), which was posted to the Registrant’s website at www.ucbi.com on October 23, 2018. The Investor Presentation is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.

 

The presentation of the Registrant’s financial information contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. The financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations, such as “operating net income,” “operating net income per diluted share,” “operating earnings per diluted share,” “tangible book value per common share,” “operating return on common equity,” “operating return on tangible common equity,” “operating return on assets,” “operating dividend payout ratio,” “operating efficiency ratio,” “average tangible equity to average assets,” “average tangible common equity to average assets” and “tangible common equity to risk-weighted assets.” These non-GAAP measures are included because Management believes they may provide useful supplemental information for evaluating Management’s underlying performance trends. These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included in the News Release and the Investor Presentation attached as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K. 

   
   
   
 

 

 

Item 9.01

Financial Statements and Exhibits.

 

(d) Exhibits
   

Exhibit

No.         

 

Description

   
99.1 News Release, dated October 23, 2018
   
99.2 Investor Presentation, Third Quarter 2018

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

  UNITED COMMUNITY BANKS, INC.  
       
       
  By: /s/ Jefferson L. Harralson  
    Jefferson L. Harralson  
    Executive Vice President and  
    Chief Financial Officer  

 

 

Date: October 23, 2018

 

 

Exhibit 99.1

 



For Immediate Release

 

For more information:

Jefferson Harralson

Chief Financial Officer

(864) 240-6208

Jefferson_Harralson@ucbi.com

 

United Community Banks, Inc. Announces Third Quarter Results

Continued Strong Profitability, EPS up 42% year over year

 

GREENVILLE, SC – October 23, 2018

 

United Community Banks, Inc. (NASDAQ: UCBI) (“United”) realized strong third quarter results, with solid year-over-year loan and deposit growth, favorable efficiency levels and outstanding asset quality trends. Reported earnings per share were $0.54, an increase of 42 percent from a year ago. Excluding merger-related and other charges, earnings per share were $0.55, up 34 percent compared to last year. United also reported higher profitability ratios with increases in both return on assets and return on tangible equity.

 

During the quarter, United benefitted from strong core deposit growth, net interest margin expansion as well as strong mortgage and SBA production. Core transaction deposits were up $70 million and total customer deposits increased by $156 million during the quarter. Compared to last year, mortgage and SBA production increased 23 percent and 10 percent, respectively. Additionally, year-to-date SBA production is 39 percent higher than 2017. Navitas Credit Corporation, United’s equipment finance arm, continued to perform well and was a key growth driver for the quarter.

 

“I am pleased with our third quarter performance and continue to be optimistic about the balance of 2018,” said Lynn Harton, President and Chief Executive Officer of United. “Our new markets and investments continue to perform well and we have high expectations for the remainder of the year and beyond. We are pleased that we were able to exceed our return on assets target and are proud to have attained a 1.42 percent return on assets this quarter on an operating basis. I credit our outstanding team for this performance and am proud they were recognized for creating one of the “Best Banks to Work For” by American Banker for the second year in a row.”

 

 1 

 

 

Third Quarter 2018 Financial Highlights:

 

●Return on assets of 1.41 percent, or 1.42 percent, excluding merger-related and other charges
●Return on common equity of 12.0 percent
●Return on tangible equity of 15.8 percent, excluding merger-related and other charges
●Loan growth, excluding planned runoff of the indirect portfolio, of 2 percent on an annualized basis
●Loan production of $778 million, as compared to $617 million in Q3 2017
●Expansion of the net interest margin to 3.95 percent, up 5 basis points from the second quarter of 2018 and up 41 basis points from a year ago
●Efficiency ratio of 56.8 percent, or 56.4 percent, excluding merger-related and other charges
●Net charge offs of seven basis points, consistent with last quarter
●Nonperforming assets of 0.19 percent of total assets, compared with 0.20 percent at June 30, 2018 and 0.23 percent at September 30, 2017

 

Conference Call

 

United will hold a conference call, Wednesday, October 24, 2018, at 11 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. To access the call, dial (877) 380-5665 and use the conference number 1270387. The conference call also will be webcast and available for replay for 30 days by selecting “Events & Presentations” within the Investor Relations section of United’s website at www.ucbi.com.

 

 2 

 

 

UNITED COMMUNITY BANKS, INC.

Financial Highlights

Selected Financial Information

 

                       Third   For the Nine     
   2018   2017   Quarter   Months Ended   YTD 
   Third   Second   First   Fourth   Third   2018-2017   September 30,   2018-2017 
(in thousands, except per share data)  Quarter   Quarter   Quarter   Quarter   Quarter   Change   2018   2017   Change 
INCOME SUMMARY                                             
Interest revenue  $128,721   $122,215   $115,290   $106,757   $98,839        $366,226   $282,963      
Interest expense   16,611    13,739    12,005    9,249    9,064         42,355    24,486      
Net interest revenue   112,110    108,476    103,285    97,508    89,775    25%   323,871    258,477    25%
Provision for credit losses   1,800    1,800    3,800    1,200    1,000         7,400    2,600      
Noninterest income   24,180    23,340    22,396    21,928    20,573    18    69,916    66,332    5 
Total revenue   134,490    130,016    121,881    118,236    109,348    23    386,387    322,209    20 
Expenses   77,718    76,850    73,475    75,882    65,674    18    228,043    191,729    19 
Income before income tax expense   56,772    53,166    48,406    42,354    43,674    30    158,344    130,480    21 
Income tax expense   13,090    13,532    10,748    54,270    15,728    (17)   37,370    50,743    (26)
Net income (loss)   43,682    39,634    37,658    (11,916)   27,946    56    120,974    79,737    52 
Merger-related and other charges   592    2,873    2,646    7,358    3,420         6,111    7,304      
Income tax benefit of merger-related and other charges   (141)   (121)   (628)   (1,165)   (1,147)        (890)   (2,580)     
Impact of remeasurement of deferred tax asset resulting from 2017 Tax Cuts and Jobs Act   -    -    -    38,199    -         -    -      
Release of disproportionate tax effects lodged in OCI   -    -    -    -    -         -    3,400      
Net income - operating (1)  $44,133   $42,386   $39,676   $32,476   $30,219    46   $126,195   $87,861    44 
                                              
PERFORMANCE MEASURES                                             
  Per common share:                                             
    Diluted net income (loss) - GAAP  $0.54   $0.49   $0.47   $(0.16)  $0.38    42   $1.51   $1.10    37 
    Diluted net income - operating  (1)   0.55    0.53    0.50    0.42    0.41    34    1.57    1.21    30 
    Cash dividends declared   0.15    0.15    0.12    0.10    0.10    50    0.42    0.28    50 
    Book value   17.56    17.29    17.02    16.67    16.50    6    17.56    16.50    6 
    Tangible book value (3)   13.54    13.25    12.96    13.65    14.11    (4)   13.54    14.11    (4)
                                              
  Key performance ratios:                                             
    Return on common equity - GAAP (2)(4)   11.96%   11.20%   11.11%   (3.57)%   9.22%        11.43%   9.26%     
    Return on common equity - operating (1)(2)(4)   12.09    11.97    11.71    9.73    9.97         11.93    10.20      
Return on tangible common equity - operating (1)(2)(3)(4)   15.81    15.79    15.26    11.93    11.93         15.62    12.07      
    Return on assets - GAAP (4)   1.41    1.30    1.26    (0.40)   1.01         1.32    0.99      
    Return on assets - operating (1)(4)   1.42    1.39    1.33    1.10    1.09         1.38    1.09      
    Dividend payout ratio - GAAP   27.78    30.61    25.53    (62.50)   26.32         27.81    25.45      
    Dividend payout ratio - operating (1)   27.27    28.30    24.00    23.81    24.39         26.75    23.14      
    Net interest margin (fully taxable equivalent) (4)   3.95    3.90    3.80    3.63    3.54         3.88    3.49      
    Efficiency ratio - GAAP   56.82    57.94    57.83    63.03    59.27         57.52    58.81      
    Efficiency ratio - operating  (1)   56.39    55.77    55.75    56.92    56.18         55.98    56.57      
    Average equity to average assets   11.33    11.21    11.03    11.21    10.86         11.19    10.54      
    Average tangible equity to average assets (3)   8.97    8.83    8.82    9.52    9.45         8.88    9.21      
    Average tangible common equity to average assets (3)   8.97    8.83    8.82    9.52    9.45         8.88    9.21      
    Tangible common equity to risk-weighted assets (3)(5)   11.62    11.36    11.19    12.05    12.80         11.62    12.80      
                                  -           
ASSET QUALITY                                             
  Nonperforming loans  $22,530   $21,817   $26,240   $23,658   $22,921    (2)  $22,530   $22,921    (2)
  Foreclosed properties   1,336    2,597    2,714    3,234    2,736    (51)   1,336    2,736    (51)
    Total nonperforming assets (NPAs)   23,866    24,414    28,954    26,892    25,657    (7)   23,866    25,657    (7)
  Allowance for loan losses   60,940    61,071    61,085    58,914    58,605    4    60,940    58,605    4 
  Net charge-offs   1,466    1,359    1,501    1,061    1,635    (10)   4,326    4,937    (12)
  Allowance for loan losses to loans   0.74%   0.74%   0.75%   0.76%   0.81%        0.74%   0.81%     
  Net charge-offs to average loans (4)   0.07    0.07    0.08    0.06    0.09         0.07    0.09      
  NPAs to loans and foreclosed properties   0.29    0.30    0.35    0.35    0.36         0.29    0.36      
  NPAs to total assets   0.19    0.20    0.24    0.23    0.23         0.19    0.23      
                                              
AVERAGE BALANCES ($ in millions)                                             
  Loans  $8,200   $8,177   $7,993   $7,560   $7,149    15   $8,124   $7,012    16 
  Investment securities   2,916    2,802    2,870    2,991    2,800    4    2,863    2,799    2 
  Earning assets   11,320    11,193    11,076    10,735    10,133    12    11,197    9,969    12 
  Total assets   12,302    12,213    12,111    11,687    10,980    12    12,209    10,788    13 
  Deposits   9,950    9,978    9,759    9,624    8,913    12    9,896    8,723    13 
  Shareholders’ equity   1,394    1,370    1,336    1,310    1,193    17    1,367    1,137    20 
  Common shares - basic (thousands)   79,806    79,753    79,205    76,768    73,151    9    79,588    72,060    10 
  Common shares - diluted (thousands)   79,818    79,755    79,215    76,768    73,162    9    79,598    72,071    10 
                                              
AT PERIOD END ($ in millions)                                             
  Loans  $8,226   $8,220   $8,184   $7,736   $7,203    14   $8,226   $7,203    14 
  Investment securities   2,873    2,834    2,731    2,937    2,847    1    2,873    2,847    1 
  Total assets   12,405    12,386    12,264    11,915    11,129    11    12,405    11,129    11 
  Deposits   10,229    9,966    9,993    9,808    9,127    12    10,229    9,127    12 
  Shareholders’ equity   1,402    1,379    1,357    1,303    1,221    15    1,402    1,221    15 
  Common shares outstanding (thousands)   79,202    79,138    79,123    77,580    73,403    8    79,202    73,403    8 

 

(1)Excludes merger-related and other charges which includes amortization of certain executive change of control benefits, the fourth quarter 2017 impact of remeasurement of United's deferred tax assets following the passage of tax reform legislation and a first quarter 2017 release of disproportionate tax effects lodged in OCI.
(2)Net income less preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss).
(3)Excludes effect of acquisition related intangibles and associated amortization.
(4)Annualized.
(5)Third quarter 2018 ratio is preliminary.

 

 3 

 

 

UNITED COMMUNITY BANKS, INC.                      
Non-GAAP Performance Measures Reconciliation                      
Selected Financial Information                        
                             

   2018   2017  

For the Nine Months

Ended
September 30,

 
   Third   Second   First   Fourth   Third         
(in thousands, except per share data)  Quarter   Quarter   Quarter   Quarter   Quarter   2018   2017 
                             
Expense reconciliation                                   
Expenses (GAAP)  $77,718   $76,850   $73,475   $75,882   $65,674   $228,043   $191,729 
Merger-related and other charges   (592)   (2,873)   (2,646)   (7,358)   (3,420)   (6,111)   (7,304)
    Expenses - operating  $77,126   $73,977   $70,829   $68,524   $62,254   $221,932   $184,425 
                                    
Net income reconciliation                                   
Net income (loss) (GAAP)  $43,682   $39,634   $37,658   $(11,916)  $27,946   $120,974   $79,737 
Merger-related and other charges   592    2,873    2,646    7,358    3,420    6,111    7,304 
Income tax benefit of merger-related and other charges   (141)   (121)   (628)   (1,165)   (1,147)   (890)   (2,580)
Impact of tax reform on remeasurement of deferred tax asset   -    -    -    38,199    -    -    - 
Release of disproportionate tax effects lodged in OCI   -    -    -    -    -    -    3,400 
    Net income - operating  $44,133   $42,386   $39,676   $32,476   $30,219   $126,195   $87,861 
Diluted income per common share reconciliation                                   
Diluted income (loss) per common share (GAAP)  $0.54   $0.49   $0.47   $(0.16)  $0.38   $1.51   $1.10 
Merger-related and other charges   0.01    0.04    0.03    0.08    0.03    0.06    0.06 
Impact of tax reform on remeasurement of deferred tax asset   -    -    -    0.50    -    -    - 
Release of disproportionate tax effects lodged in OCI   -    -    -    -    -    -    0.05 
    Diluted income per common share - operating  $0.55   $0.53   $0.50   $0.42   $0.41   $1.57   $1.21 
                                    
Book value per common share reconciliation                                   
Book value per common share (GAAP)  $17.56   $17.29   $17.02   $16.67   $16.50   $17.56   $16.50 
Effect of goodwill and other intangibles   (4.02)   (4.04)   (4.06)   (3.02)   (2.39)   (4.02)   (2.39)
   Tangible book value per common share  $13.54   $13.25   $12.96   $13.65   $14.11   $13.54   $14.11 
                                    
Return on tangible common equity reconciliation                                   
Return on common equity (GAAP)   11.96%   11.20%   11.11%   (3.57)%   9.22%   11.43%   9.26%
Merger-related and other charges   0.13    0.77    0.60    1.86    0.75    0.50    0.55 
Impact of tax reform on remeasurement of deferred tax asset   -    -    -    11.44    -    -    - 
Release of disproportionate tax effects lodged in OCI   -    -    -    -    -    -    0.39 
Return on common equity - operating   12.09    11.97    11.71    9.73    9.97    11.93    10.20 
Effect of goodwill and other intangibles   3.72    3.82    3.55    2.20    1.96    3.69    1.87 
    Return on tangible common equity - operating   15.81%   15.79%   15.26%   11.93%   11.93%   15.62%   12.07%
                                    
Return on assets reconciliation                                   
Return on assets (GAAP)   1.41%   1.30%   1.26%   (0.40)%   1.01%   1.32%   0.99%
Merger-related and other charges   0.01    0.09    0.07    0.20    0.08    0.06    0.06 
Impact of tax reform on remeasurement of deferred tax asset   -    -    -    1.30    -    -    - 
Release of disproportionate tax effects lodged in OCI   -    -    -    -    -    -    0.04 
    Return on assets - operating   1.42%   1.39%   1.33%   1.10%   1.09%   1.38%   1.09%
                                    
Dividend payout ratio reconciliation                                   
Dividend payout ratio (GAAP)   27.78%   30.61%   25.53%   (62.50)%   26.32%   27.81%   25.45%
Merger-related and other charges   (0.51)   (2.31)   (1.53)   12.04    (1.93)   (1.06)   (1.31)
Impact of tax reform on remeasurement of deferred tax asset   -    -    -    74.27    -    -    - 
Release of disproportionate tax effects lodged in OCI   -    -    -    -    -    -    (1.00)
    Dividend payout ratio - operating   27.27%   28.30%   24.00%   23.81%   24.39%   26.75%   23.14%
                                    
Efficiency ratio reconciliation                                   
Efficiency ratio (GAAP)   56.82%   57.94%   57.83%   63.03%   59.27%   57.52%   58.81%
Merger-related and other charges   (0.43)   (2.17)   (2.08)   (6.11)   (3.09)   (1.54)   (2.24)
    Efficiency ratio - operating   56.39%   55.77%   55.75%   56.92%   56.18%   55.98%   56.57%
                                    
Average equity to assets reconciliation                                   
Equity to assets (GAAP)   11.33%   11.21%   11.03%   11.21%   10.86%   11.19%   10.54%
Effect of goodwill and other intangibles   (2.36)   (2.38)   (2.21)   (1.69)   (1.41)   (2.31)   (1.33)
    Tangible common equity to assets   8.97%   8.83%   8.82%   9.52%   9.45%   8.88%   9.21%
                                    
Tangible common equity to risk-weighted assets reconciliation (1)                      
Tier 1 capital ratio (Regulatory)   12.34%   11.94%   11.61%   12.24%   12.27%   12.34%   12.27%
Effect of other comprehensive income   (0.68)   (0.57)   (0.50)   (0.29)   (0.13)   (0.68)   (0.13)
Effect of deferred tax limitation   0.30    0.33    0.42    0.51    0.94    0.30    0.94 
Effect of trust preferred   (0.34)   (0.34)   (0.34)   (0.36)   (0.24)   (0.34)   (0.24)
Basel III intangibles transition adjustment   -    -    -    (0.05)   (0.04)   -    (0.03)
    Tangible common equity to risk-weighted assets   11.62%   11.36%   11.19%   12.05%   12.80%   11.62%   12.81%

  

(1) Third quarter 2018 ratios are preliminary.                            

 

 4 

 

 

UNITED COMMUNITY BANKS, INC.                    
Financial Highlights                            
Loan Portfolio Composition at Period-End                    

                             
   2018   2017   Linked   Year over 
   Third   Second   First   Fourth   Third   Quarter   Year 
(in millions)  Quarter   Quarter   Quarter   Quarter   Quarter   Change   Change 
LOANS BY CATEGORY                                   
Owner occupied commercial RE  $1,673   $1,682   $1,898   $1,924   $1,792   $(9)  $(119)
Income producing commercial RE   1,788    1,821    1,677    1,595    1,413    (33)   375 
Commercial & industrial   1,194    1,193    1,142    1,131    1,084    1    110 
Commercial construction   761    735    691    712    583    26    178 
Equipment financing   509    465    423    -    -    44    509 
     Total commercial   5,925    5,896    5,831    5,362    4,872    29    1,053 
Residential mortgage   1,035    1,021    992    974    933    14    102 
Home equity lines of credit   702    708    712    731    689    (6)   13 
Residential construction   198    195    190    183    190    3    8 
Consumer   366    400    459    486    519    (34)   (153)
     Total loans  $8,226   $8,220   $8,184   $7,736   $7,203    6    1,023 
                                    
LOANS BY MARKET                                   
North Georgia  $992   $1,001   $1,004   $1,019   $1,047    (9)   (55)
Atlanta MSA   1,493    1,533    1,513    1,510    1,477    (40)   16 
North Carolina   1,078    1,067    1,037    1,049    542    11    536 
Coastal Georgia   610    623    635    630    634    (13)   (24)
Gainesville MSA   235    230    231    248    242    5    (7)
East Tennessee   460    474    473    475    471    (14)   (11)
South Carolina   1,586    1,571    1,537    1,486    1,470    15    116 
Commercial Banking Solutions   1,530    1,444    1,438    961    920    86    610 
Indirect auto   242    277    316    358    400    (35)   (158)
     Total loans  $8,226   $8,220   $8,184   $7,736   $7,203    6    1,023 

 

 5 

 

 

UNITED COMMUNITY BANKS, INC.                                
Financial Highlights                                    
Credit Quality                                    
             
  

 

Third Quarter 2018

   Second Quarter 2018   First Quarter 2018 
   Nonperforming   Foreclosed   Total   Nonperforming   Foreclosed   Total   Nonperforming   Foreclosed   Total 
(in thousands)  Loans   Properties   NPAs   Loans   Properties   NPAs   Loans   Properties   NPAs 
NONPERFORMING ASSETS BY
CATEGORY		                          
Owner occupied CRE  $4,884   $183   $5,067   $5,772   $812   $6,584   $6,757   $1,121   $7,878 
Income producing CRE   1,194    156    1,350    991    455    1,446    3,942    368    4,310 
Commercial & industrial   1,516    -    1,516    2,180    -    2,180    1,917    -    1,917 
Commercial construction   825    522    1,347    613    576    1,189    574    658    1,232 
Equipment financing   1,181    -    1,181    1,075    -    1,075    428    -    428 
     Total commercial   9,600    861    10,461    10,631    1,843    12,474    13,618    2,147    15,765 
Residential mortgage   8,928    424    9,352    7,918    184    8,102    8,724    232    8,956 
Home equity lines of credit   2,814    -    2,814    1,812    550    2,362    2,149    335    2,484 
Residential construction   455    51    506    637    20    657    378    -    378 
Consumer   733    -    733    819    -    819    1,371    -    1,371 
     Total NPAs  $22,530   $1,336   $23,866   $21,817   $2,597   $24,414   $26,240   $2,714   $28,954 
                                              
NONPERFORMING ASSETS BY MARKET                                             
North Georgia  $7,170   $361   $7,531   $7,583   $640   $8,223   $8,519   $85   $8,604 
Atlanta MSA   1,778    132    1,910    1,928    132    2,060    1,138    132    1,270 
North Carolina   3,690    480    4,170    3,029    750    3,779    5,006    1,271    6,277 
Coastal Georgia   1,498    -    1,498    943    -    943    1,887    -    1,887 
Gainesville MSA   212    -    212    186    -    186    574    163    737 
East Tennessee   1,403    128    1,531    1,473    143    1,616    1,511    10    1,521 
South Carolina   3,280    235    3,515    3,093    362    3,455    3,443    483    3,926 
Commercial Banking Solutions   2,871    -    2,871    2,831    570    3,401    2,937    570    3,507 
Indirect auto   628    -    628    751    -    751    1,225    -    1,225 
     Total NPAs  $22,530   $1,336   $23,866   $21,817   $2,597   $24,414   $26,240   $2,714   $28,954 
                                              
NONPERFORMING ASSETS ACTIVITY                                             
Beginning Balance  $21,817   $2,597   $24,414   $26,240   $2,714   $28,954   $23,658   $3,234   $26,892 
Acquisitions   -    -    -    -    -    -    428    -    428 
Loans placed on non-accrual   5,759    -    5,759    3,612    -    3,612    7,463    -    7,463 
Payments received   (3,095)   -    (3,095)   (5,314)   -    (5,314)   (3,534)   -    (3,534)
Loan charge-offs   (1,588)   -    (1,588)   (2,065)   -    (2,065)   (1,150)   -    (1,150)
Foreclosures   (363)   454    91    (656)   984    328    (625)   625    - 
Property sales   -    (1,659)   (1,659)   -    (1,029)   (1,029)   -    (957)   (957)
Write downs   -    (166)   (166)   -    (106)   (106)   -    (72)   (72)
Net gains (losses) on sales   -    110    110    -    34    34    -    (116)   (116)
     Ending Balance  $22,530   $1,336   $23,866   $21,817   $2,597   $24,414   $26,240   $2,714   $28,954 

 

   Third Quarter 2018   Second Quarter 2018   First Quarter 2018 
       Net Charge-       Net Charge-       Net Charge- 
       Offs to       Offs to       Offs to 
   Net   Average   Net   Average   Net   Average 
(in thousands)  Charge-Offs   Loans (1)   Charge-Offs   Loans (1)   Charge-Offs   Loans (1) 
NET CHARGE-OFFS BY CATEGORY           
Owner occupied CRE  $(251)   (.06)%  $(578)   (.13)%  $(43)   (.01)%
Income producing CRE   1    -    1,421    .33    422    .10 
Commercial & industrial   418    .14    16    .01    (3)   - 
Commercial construction   (43)   (.02)   (107)   (.06)   266    .15 
Equipment financing   482    .39    (49)   (.04)   40    .08 
     Total commercial   607    .04    703    .05    682    .05 
Residential mortgage   171    .07    11    -    (52)   (.02)
Home equity lines of credit   279    .16    21    .01    89    .05 
Residential construction   (164)   (.33)   (58)   (.12)   (64)   (.14)
Consumer   573    .60    682    .64    846    .72 
     Total  $1,466    .07   $1,359    .07   $1,501    .08 
                               
NET CHARGE-OFFS BY MARKET     
North Georgia  $483    .19%  $246    .10%  $772    .31%
Atlanta MSA   99    .03    103    .03    (109)   (.03)
North Carolina   (87)   (.03)   1,268    .48    144    .06 
Coastal Georgia   24    .02    19    .01    137    .09 
Gainesville MSA   (48)   (.08)   (2)   -    (18)   (.03)
East Tennessee   (1)   -    76    .06    31    .03 
South Carolina   418    .11    (1,057)   (.27)   12    - 
Commercial Banking Solutions   403    .11    381    .11    176    .06 
Indirect auto   175    .27    325    .44    356    .41 
     Total  $1,466    .07   $1,359    .07   $1,501    .08 

 

(1)  Annualized.                                                

 

 6 

 

 

UNITED COMMUNITY BANKS, INC.                
Consolidated Statements of Income (Unaudited)                
                 
   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
(in thousands, except per share data)  2018   2017   2018   2017 
                 
Interest revenue:                    
Loans, including fees  $108,335   $80,264   $308,296   $227,816 
Investment securities, including tax exempt of $1,052, $671, $3,049, and $1,307   19,899    17,875    56,448    53,365 
Deposits in banks and short-term investments   487    700    1,482    1,782 
Total interest revenue   128,721    98,839    366,226    282,963 
                     
Interest expense:                    
Deposits:                    
NOW and interest-bearing demand   1,901    700    4,317    1,932 
Money market   3,261    1,953    8,019    4,938 
Savings   33    34    117    89 
Time   5,746    1,870    12,900    4,257 
Total deposit interest expense   10,941    4,557    25,353    11,216 
Short-term borrowings   274    36    772    177 
Federal Home Loan Bank advances   1,791    1,709    5,551    4,603 
Long-term debt   3,605    2,762    10,679    8,490 
Total interest expense   16,611    9,064    42,355    24,486 
Net interest revenue   112,110    89,775    323,871    258,477 
Provision for credit losses   1,800    1,000    7,400    2,600 
Net interest revenue after provision for credit losses   110,310    88,775    316,471    255,877 
                     
Noninterest income:                    
Service charges and fees   9,112    8,220    26,831    29,525 
Mortgage loan and other related fees   5,262    4,200    15,928    13,435 
Brokerage fees   1,525    1,009    3,598    3,565 
Gains from sales of SBA/USDA loans   2,605    2,806    6,784    7,391 
Securities gains (losses), net   2    188    (1,302)   190 
Other   5,674    4,150    18,077    12,226 
Total noninterest income   24,180    20,573    69,916    66,332 
Total revenue   134,490    109,348    386,387    322,209 
                     
Noninterest expenses:                    
Salaries and employee benefits   47,146    38,027    135,384    112,056 
Communications and equipment   5,590    4,547    15,071    14,443 
Occupancy   5,779    4,945    16,939    14,802 
Advertising and public relations   1,442    1,026    4,341    3,347 
Postage, printing and supplies   1,574    1,411    4,896    4,127 
Professional fees   3,927    2,976    11,435    8,391 
FDIC assessments and other regulatory charges   2,228    2,127    6,677    4,758 
Amortization of intangibles   1,681    1,212    5,426    3,085 
Merger-related and other charges   115    3,176    4,449    7,060 
Other   8,236    6,227    23,425    19,660 
Total noninterest expenses   77,718    65,674    228,043    191,729 
    Net income before income taxes   56,772    43,674    158,344    130,480 
Income tax expense   13,090    15,728    37,370    50,743 
Net income  $43,682   $27,946   $120,974   $79,737 
                     
Net income available to common shareholders  $43,381   $27,719   $120,124   $79,078 
                     
Earnings per common share:                    
     Basic  $0.54   $0.38   $1.51   $1.10 
     Diluted   0.54    0.38    1.51    1.10 
Weighted average common shares outstanding:                    
     Basic   79,806    73,151    79,588    72,060 
     Diluted   79,818    73,162    79,598    72,071 

 

 7 

 

 

UNITED COMMUNITY BANKS, INC.        
Consolidated Balance Sheets (Unaudited)        
         
   September 30,   December 31, 
(in thousands, except share and per share data)  2018   2017 
         
ASSETS          
  Cash and due from banks  $115,509   $129,108 
  Interest-bearing deposits in banks   196,459    185,167 
      Cash and cash equivalents   311,968    314,275 
  Securities available for sale   2,587,559    2,615,850 
  Securities held to maturity (fair value $277,473 and $321,276)   285,739    321,094 
  Loans held for sale (includes $27,325 and $26,252 at fair value)   27,325    32,734 
  Loans and leases, net of unearned income   8,226,466    7,735,572 
       Less allowance for loan and lease losses   (60,940)   (58,914)
              Loans, net   8,165,526    7,676,658 
  Premises and equipment, net   204,080    208,852 
  Bank owned life insurance   191,582    188,970 
  Accrued interest receivable   33,562    32,459 
  Net deferred tax asset   76,944    88,049 
  Derivative financial instruments   29,895    22,721 
  Goodwill and other intangible assets   325,493    244,397 
  Other assets   165,459    169,401 
      Total assets  $12,405,132   $11,915,460 
LIABILITIES AND SHAREHOLDERS' EQUITY          
Liabilities:          
  Deposits:          
       Noninterest-bearing demand  $3,296,908   $3,087,797 
       NOW and interest-bearing demand   2,075,479    2,131,939 
       Money market   2,060,671    2,016,748 
       Savings   680,421    651,742 
       Time   1,564,640    1,548,460 
       Brokered   551,358    371,011 
                     Total deposits   10,229,477    9,807,697 
   Short-term borrowings   -    50,000 
   Federal Home Loan Bank advances   300,000    504,651 
   Long-term debt   285,128    120,545 
   Derivative financial instruments   39,116    25,376 
   Accrued expenses and other liabilities   149,529    103,857 
        Total liabilities   11,003,250    10,612,126 
Shareholders' equity:          
    Common stock, $1 par value; 150,000,000 shares authorized;          
        79,202,479 and 77,579,561 shares issued and outstanding   79,202    77,580 
    Common stock issuable; 650,338 and 607,869 shares   10,171    9,083 
    Capital surplus   1,498,199    1,451,814 
    Accumulated deficit   (122,679)   (209,902)
    Accumulated other comprehensive loss   (63,011)   (25,241)
        Total shareholders' equity   1,401,882    1,303,334 
        Total liabilities and shareholders' equity  $12,405,132   $11,915,460 

 

 8 

 

 

UNITED COMMUNITY BANKS, INC.                        
Average Consolidated Balance Sheets and Net Interest Analysis                
For the Three Months Ended September 30,                        
                         
   2018   2017 
   Average       Avg.   Average       Avg. 
(dollars in thousands, fully taxable equivalent (FTE))  Balance   Interest   Rate   Balance   Interest   Rate 
Assets:                              
Interest-earning assets:                              
  Loans, net of unearned income (FTE) (1)(2)  $8,199,856   $108,197    5.23%  $7,149,348   $80,301    4.46%
  Taxable securities (3)   2,763,461    18,847    2.73    2,695,162    17,204    2.55 
  Tax-exempt securities (FTE) (1)(3)   152,939    1,417    3.71    105,151    1,098    4.18 
  Federal funds sold and other interest-earning assets   203,707    751    1.47    183,170    883    1.93 
                               
     Total interest-earning assets (FTE)   11,319,963    129,212    4.53    10,132,831    99,486    3.90 
Noninterest-earning assets:                              
  Allowance for loan losses   (62,322)             (60,098)          
  Cash and due from banks   123,290              103,477           
  Premises and equipment   216,775              203,579           
  Other assets (3)   703,915              599,725           
     Total assets  $12,301,621             $10,979,514           
                               
Liabilities and Shareholders' Equity:                              
Interest-bearing liabilities:                              
  Interest-bearing deposits:                              
  NOW and interest-bearing demand  $1,874,397    1,901    0.40   $1,863,160    700    0.15 
  Money market   2,167,031    3,261    0.60    2,170,148    1,953    0.36 
  Savings   680,640    33    0.02    593,823    34    0.02 
  Time   1,545,020    3,351    0.86    1,338,786    1,548    0.46 
  Brokered time deposits   434,182    2,395    2.19    109,811    322    1.16 
       Total interest-bearing deposits   6,701,270    10,941    0.65    6,075,728    4,557    0.30 
                               
Federal funds purchased and other borrowings   50,767    274    2.14    11,313    36    1.26 
Federal Home Loan Bank advances   331,413    1,791    2.14    574,404    1,709    1.18 
Long-term debt   296,366    3,605    4.83    154,616    2,762    7.09 
      Total borrowed funds   678,546    5,670    3.32    740,333    4,507    2.42 
                               
      Total interest-bearing liabilities   7,379,816    16,611    0.89    6,816,061    9,064    0.53 
Noninterest-bearing liabilities:                              
  Noninterest-bearing deposits   3,249,218              2,837,378           
  Other liabilities   278,764              133,212           
     Total liabilities   10,907,798              9,786,651           
Shareholders' equity   1,393,823              1,192,863           
     Total liabilities and shareholders' equity  $12,301,621             $10,979,514           
                               
Net interest revenue (FTE)       $112,601             $90,422      
Net interest-rate spread (FTE)             3.64%             3.37%
                               
Net interest margin (FTE) (4)             3.95%             3.54%

 

(1)Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26% in 2018 and 39% in 2017, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale.
(3)Securities available for sale are shown at amortized cost. Pretax unrealized losses of $49.9 million in 2018 and pretax unrealized gains of $12.6 million in 2017 are included in other assets for purposes of this presentation.
(4)Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.

 

 9 

 

 

UNITED COMMUNITY BANKS, INC.                
Average Consolidated Balance Sheets and Net Interest Analysis                
For the Nine Months Ended September 30,                
                       

   2018   2017 
   Average       Avg.   Average       Avg. 
(dollars in thousands, fully taxable equivalent (FTE))  Balance   Interest   Rate   Balance   Interest   Rate 
Assets:                              
Interest-earning assets:                              
  Loans, net of unearned income (FTE) (1)(2)  $8,124,269   $307,981    5.07%  $7,011,962   $227,853    4.34%
  Taxable securities (3)   2,712,900    53,399    2.62    2,731,081    52,058    2.54 
  Tax-exempt securities (FTE) (1)(3)   150,014    4,106    3.65    68,005    2,139    4.19 
  Federal funds sold and other interest-earning assets   209,836    2,123    1.35    157,582    2,290    1.94 
                               
     Total interest-earning assets (FTE)   11,197,019    367,609    4.39    9,968,630    284,340    3.81 
Noninterest-earning assets:                              
  Allowance for loan losses   (61,259)             (60,971)          
  Cash and due from banks   138,809              102,529           
  Premises and equipment   217,339              195,576           
  Other assets (3)   717,555              582,194           
     Total assets  $12,209,463             $10,787,958           
                               
Liabilities and Shareholders' Equity:                              
Interest-bearing liabilities:                              
  Interest-bearing deposits:                              
  NOW and interest-bearing demand  $2,009,029    4,317    0.29   $1,907,889    1,932    0.14 
  Money market   2,203,677    8,019    0.49    2,100,296    4,938    0.31 
  Savings   671,883    117    0.02    576,927    89    0.02 
  Time   1,534,823    8,288    0.72    1,292,521    3,499    0.36 
  Brokered time deposits   298,653    4,612    2.06    106,753    758    0.95 
       Total interest-bearing deposits   6,718,065    25,353    0.50    5,984,386    11,216    0.25 
                               
Federal funds purchased and other borrowings   58,144    772    1.78    22,525    177    1.05 
Federal Home Loan Bank advances   392,227    5,551    1.89    616,388    4,603    1.00 
Long-term debt   295,966    10,679    4.82    168,271    8,490    6.75 
      Total borrowed funds   746,337    17,002    3.05    807,184    13,270    2.20 
                               
      Total interest-bearing liabilities   7,464,402    42,355    0.76    6,791,570    24,486    0.48 
Noninterest-bearing liabilities:                              
  Noninterest-bearing deposits   3,178,387              2,738,118           
  Other liabilities   199,848              121,672           
     Total liabilities   10,842,637              9,651,360           
Shareholders' equity   1,366,826              1,136,598           
     Total liabilities and shareholders' equity  $12,209,463             $10,787,958           
                               
Net interest revenue (FTE)       $325,254             $259,854      
Net interest-rate spread (FTE)             3.63%             3.33%
                               
Net interest margin (FTE) (4)             3.88%             3.49%

 

(1)Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 26% in 2018 and 39% in 2017, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued and loans that are held for sale.
(3)Securities available for sale are shown at amortized cost.  Pretax unrealized losses of $40.4 million in 2018 and pretax unrealized gains of $4.67 million in 2017 are included in other assets for purposes of this presentation.
(4)Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.

 

 10 

 

 

About United Community Banks, Inc.

 

United Community Banks, Inc. (NASDAQ: UCBI) is a bank holding company headquartered in Blairsville, Georgia with $12.4 billion in assets. The company’s banking subsidiary, United Community Bank, is one of the southeast region’s largest full-service banks, operating 150 offices in Georgia, North Carolina, South Carolina and Tennessee at the end of the most recent quarter. The bank specializes in personalized community banking services for individuals, small businesses and corporations. Services include a full range of consumer and commercial banking products including mortgage, advisory, and treasury management. Respected national research firms consistently recognize United Community Bank for outstanding customer service. For the last five years, J.D. Power has ranked United Community Bank first in customer satisfaction in the Southeast. In 2018, for the fifth consecutive year, Forbes magazine included United on its list of the 100 Best Banks in America. Additional information about the company and the bank’s full range of products and services can be found at www.ucbi.com.

 

Non-GAAP Financial Measures

 

This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations, such as “operating net income,” “operating net income per diluted common share,” “operating earnings per share,” “tangible book value per common share,” “operating return on common equity,” “operating return on tangible common equity,” “operating return on assets,” “operating dividend payout ratio,” “operating efficiency ratio,” “average tangible equity to average assets,” “average tangible common equity to average assets” and “tangible common equity to risk-weighted assets.” These non-GAAP measures are included because United believes they may provide useful supplemental information for evaluating United’s underlying performance trends. These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included with the accompanying financial statement tables.

  

Caution About Forward-Looking Statements

 

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about future events or results or otherwise and are not statements of historical fact. Such statements are often characterized by the use of qualified words (and their derivatives) such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or words of similar meaning or other statements concerning opinions or judgments of United and its management about future events. Although United believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of United will not differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements; such statements are not guarantees of future performance. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements. Actual future results and trends may differ materially from historical results and or those anticipated depending on a variety of factors, including, but not limited to the factors and risk influences contained in the cautionary language included under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in United’s Form 10-K for the year ended December 31, 2017 and other periodic reports subsequently filed by United with the SEC, available on the SEC website, www.sec.gov. For any forward-looking statements made in this press release, United claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

  

# # #

  

 11 

 

Exhibit 99.2

 

2018 INVESTOR PRESENTATION THIRD QUARTER 2018 October 23, 2018

 

 

ucbi.com | 2 Disclosures CAUTIONARY STATEMENT This investor presentation may contain forward - looking statements, as defined by federal securities laws, including statements about United and its financial outlook and business environment . These statements are based on current expectations and are provided to assist in the understanding of our operations and future financial performance . Our operations and such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements . For a discussion of some of the risks and other factors that may cause such forward - looking statements to differ materially from actual results, please refer to United Community Banks, Inc . ’s filings with the Securities and Exchange Commission, including its 2017 Annual Report on Form 10 - K under the section entitled “Forward - Looking Statements . ” Forward - looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward - looking statements . NON - GAAP MEASURES This presentation includes financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”) . This financial information includes certain operating performance measures, which exclude merger - related and other charges that are not considered part of recurring operations . Such measures include : “Net income – operating,” “Net income available to common shareholders – operating,” “Earnings per share – operating,” “Diluted earnings per share – operating,” “Tangible book value per share,” “Return on common equity – operating,” “Return on tangible common equity – operating,” “Return on assets – operating,” “Efficiency ratio – operating,” “Expenses – operating,” “Tangible common equity to risk - weighted assets,” and “Average tangible equity to average assets . ” Management has included these non - GAAP measures because we believe they may provide useful supplemental information for evaluating our underlying performance trends . Further, management uses these measures in managing and evaluating our business and intends to refer to them in discussions about our operations and performance . Operating performance measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non - GAAP measures that may be presented by other companies . To the extent applicable, reconciliations of these non - GAAP measures to the most directly comparable GAAP measures can be found in the ‘Non - GAAP Reconciliation Tables’ included in the exhibits to this presentation . ucbi.com | 2

 

 

• Established in 1950 and headquartered in Blairsville, GA with executive offices in Greenville, SC x 2,336 employees • One of the largest regional banks in the U.S. by assets with 143 branch locations, 7 loan production offices and 4 mortgage loan offices in four states: GA, NC, SC and TN x Top 10 market share in GA and SC • Metro - focused branch network with locations in fast growing areas Premier Southeast Regional Bank United Community Bank 143 Branch locations 7 Loan Production Offices 4 Mortgage Loan Offices Who We Are Snapshot of United Community Banks, Inc. Market data as of October 17, 2018 (1) See non - GAAP reconciliation table slides at the end of the exhibits for a reconciliation of operating performance measures to GA AP performance measures ucbi.com | 3 3Q18 Overview Ticker UCBI (NASDAQ) Market Cap $ 2.1Bn P/EPS (2019E) 11.2x P/TBV 194% Assets $12.4Bn Loans $8.2Bn Deposits $ 10.2Bn CET1* 12.0% NPAs / Assets 0.19% ROA – GAAP 1.41% ROA – Operating (1) 1.42% ROCE – GAAP 11.96% ROTCE – Operating (1) 15.81% *3Q18 Capital Ratios are preliminary

 

 

3 Q18 Highlights ucbi.com | 4 $16.50 $17.29 $17.56 $14.11 $13.25 $13.54 3Q17 2Q18 3Q18 Book Value Per Share (2) Book Value (GAAP) Tangible Book Value (non-GAAP) (1) $0.38 $0.49 $0.54 $0.41 $0.53 $0.55 3Q17 2Q18 3Q18 Earnings Per Share GAAP Operating (1) 1.01% 1.30% 1.41% 1.09% 1.39% 1.42% 3Q17 2Q18 3Q18 Return on Assets GAAP Operating (1) (1) See non - GAAP reconciliation table slides at the end of the exhibits for a reconciliation of operating performance measures to G AAP performance measures ucbi.com | 4 (1) See non - GAAP reconciliation table slides at the end of the exhibits for a reconciliation of operating performance measures to GA AP performance measures (2) Excludes effect of acquisition - related intangibles and associated amortization » Operating diluted earnings per share of $ 0.55 compared with GAAP diluted earnings per share of $ 0.54 » GAAP EPS up 42% vs. last year » Operating EPS rose 34% over the same time frame » GAAP ROA of 1.41% in 3Q » Operating ROA moved to 1.42% exceeding our stated goal of 1.40%, up 3 bps from 2Q18 » Quarterly dividend of $0.15 up 50% vs. last year » Annualized loan growth of 2.1% for the quarter, excluding indirect auto runoff of $41 mm » Total deposits up $263 mm in 3Q18 or 10.6% annualized $0.10 $0.15 $0.15 3Q17 2Q18 3Q18 Dividends Per Share

 

 

$89.8 $108.5 $112.1 3Q17 2Q18 3Q18 3.54% 3.90% 3.95% ucbi.com | 5 (1) Net interest margin is calculated on a fully taxable equivalent basis (2) E xcludes brokered deposits Net Interest Revenue / Margin (1) ucbi.com | 5 (1) Net interest margin is calculated on a fully - taxable equivalent basis $ in millions Net Interest Revenue Net Interest Margin » Net interest revenue of $ 112.1 mm increased $3.6 mm (3.4%) vs. 2Q18 and $ 22.3 mm ( 24.9%) vs. 3Q17 » Benefit of Navitas acquisition and an increase in average balances, in addition to rising short - term interest rates » Net interest margin up 5 bps vs. 2Q18 impacted by » Accretable yield contributed $ 2.2 mm or 7.5 bps to 3Q18 NIM vs. 2.4 bps in 2Q18 » Higher loan yield of 16 bps due to higher short - term interest rates and improving portfolio mix from Navitas growth » Net interest margin up 41 bps vs. 3Q17 due to higher short - term rates, stable core deposit base and the impact of acquisitions

 

 

2016 2017 1Q 2018 2Q 2018 3Q 2018 Non-Interest Bearing Core Demand Deposit 2,423$ 2,910$ 3,027$ 3,068$ 3,118$ Interest Bearing Core Total CommercialNOW 1,114 1,221 1,225 1,204 1,200 MMDA 1,830 1,986 1,979 1,989 2,015 Savings 548 649 675 681 678 Total Interest Bearing Core 3,492 3,856 3,878 3,874 3,893 Total Core Trans Deposits 5,915 6,766 6,905 6,942 7,011 Time (Customer) 1,267 1,522 1,487 1,491 1,528 Public Funds (Customer) 1,128 1,148 1,190 1,089 1,139 Brokered 328 371 411 444 551 Total LoansTotal Deposits 8,638$ 9,808$ 9,993$ 9,966$ 10,229$ ucbi.com | 6 NOTE - Certain prior period amounts in the loans by category table have been reclassified to conform to the current presentation Deposit Growth Deposits by Category in millions ucbi.com | 6 » United continues to benefit from its strong core deposit base » Annualized end - of - period deposit growth of 11% » Total deposits increased $263 million vs. 2Q18 and $1.1 billion YoY

 

 

0 10 20 30 40 50 60 42 bps 26 bps 82% 94% Low - Cost Deposit Base Sufficient Liquidity to Support Future Growth Loans / Deposits (1) (2) Cost of Total Deposits (bps) (1) (2) 52 bps 33 bps Deposits KRX Peer KRX Peer Note – Peer comparison banks comprise the KBW Regional Bank Index (ticker:KRX) (1) Source: S&P Global Market Intelligence (2) United results as of 3Q18 ; KRX results as of 2Q18 (Source: S&P Global Market Intelligence) ucbi.com | 7

 

 

ucbi.com | 8 $2.9 $2.9 $2.9 $1.4 $1.8 $1.8 $0.6 $0.7 $0.8 $1.8 $1.9 $1.9 $0.5 $0.4 $0.3 $ 0.5 $0.5 $7.2 $8.2 $8.2 3Q17 2Q18 3Q18 C&I (1) CRE Comml Construction Residential Other Consumer Equipment Finance 25.2% 8.1% 19.6% 39.9% 21.7% 34.9% 9.3% 23.5% 4.4% 22.2% 34.9% 8.9% 23.4% 4.9% 6.2% 5.7% Loans ucbi.com | 8 $ in billions 7.2% » Annualized end - of - period loan growth was 0.3%, or 2.1% excluding indirect auto runoff of $41 mm » Diversified portfolio, weighted towards C&I » Well within regulatory guidance on construction and CRE levels » The 100%/300% ratios stand at 74% and 197%, respectively (1) C&I includes commercial and industrial loans as well as owner - occupied CRE loans

 

 

ucbi.com | 9 Loan Growth Drivers ucbi.com | 9 » Continued expansion in our metro markets, including our new Myrtle Beach and Raleigh markets » Ongoing evaluation and addition of new Commercial Banking products and verticals » Successful execution of the Navitas growth strategy » Continued development of our unique partnership model where the community banks partner with Commercial Banking Solutions to drive growth » Growth in the mortgage business via expansion into newly acquired markets and with the addition of on - balance sheet adjustable rate products

 

 

$8.2 $8.8 $9.1 $4.3 $5.6 $5.7 $1.0 $1.2 $1.5 $4.2 $5.3 $5.3 $2.8 $2.4 $2.6 3Q17 2Q18 3Q18 Service Charges Other Brokerage Mortgage SBA ucbi.com | 10 Fee Revenue ucbi.com | 10 in millions » Vs Linked quarter, fees up $0.9 mm due to: » Strong mortgage quarter with $237 mm in originations vs. record $258 mm last quarter » SBA loan sales of $35.5 mm up 25% vs. last quarter, that drove a 8.5% increase in gains, as gain on sale margins have compressed » Navitas fee income growth of 10% from last quarter » Vs Last Year, fees up $3.7 mm to $24.2 mm » $0.8 mm higher service charges mostly from acquisitions » Mortgage originations of $237 mm, up 23% year over year » 3 Q SBA production of $ 51.4 mm, up 19% vs. 3Q17 of $43.3 mm; SBA revenue up $5.6 mm year over year ($35.5 mm in 3Q18 vs. $29.9 mm in 3Q17 ) » Other income up $ 1.4 mm includes the benefit of Navitas fee income ( Navitas fee income of $1.3 mm in 3Q18) $20.5 $ 23.3 $ 24.2

 

 

59.3% 57.9% 56.8% 56.2% 55.8% 56.4% $65.7 $76.9 $77.7 $62.3 $74.0 $77.1 3Q17 2Q18 3Q18 ucbi.com | 11 (1) Net interest margin is calculated on a fully taxable equivalent basis (2) E xcludes brokered deposits Expense Discipline ucbi.com | 11 GAAP Operating (1) (1) See non - GAAP reconciliation table slides at the end of the exhibits for a reconciliation of operating performance measures to G AAP performance measures » Linked quarter, GAAP and operating expenses grew 1% and 4%, respectively » Operating efficiency ratio relatively stable at 56.4% » Operating expenses up $ 3.1 mm vs. 2Q18 » The majority of the increase driven by higher salaries and incentives compared to the prior quarter » Market expansions and acquisitions drove year - over - year GAAP and operating expenses higher by 18% and 24%, respectively » Operating efficiency ratio increased slightly to 56.4% from 56.2% last year Efficiency Ratio (1) $ in millions

 

 

Credit Quality ucbi.com | 12 (1) See non - GAAP reconciliation table slides at the end of the exhibits for a reconciliation of operating performance measures to G AAP performance measures ucbi.com | 12 0.09% 0.07% 0.07% 3Q17 2Q18 3Q18 Net Charge - Offs as % of Average Loans 0.23% 0.20% 0.19% 3Q17 2Q18 3Q18 Non - Performing Assets as % of Total Assets $1.0 $1.8 $1.8 3Q17 2Q18 3Q18 Provision for Credit Losses $ in millions 0.81% 0.74% 0.74% 3Q17 2Q18 3Q18 Allowance for Loan Losses

 

 

ucbi.com | 13 Holding Company 3Q17 2Q18 3 Q18 Common Equity Tier I Capital 12.2% 11.6% 12.0% Tier I Risk - Based Capital 12.3 12.0 12.3 Total Risk - Based Capital 13.0 13.8 14.2 Leverage 9.3 9.3 9.5 Tangible Common Equity to Risk - Weighted Assets 12.8 11.4 11.6 Average Tangible Equity to Average Assets 9.5 8.8 9.0 ► Profitability continues to provide significant capital ratio improvement each quarter ► All regulatory capital ratios significantly above “well - capitalized” ► Quarterly dividend of $0.15 per share (up 50% YoY ) ucbi.com | 13 Capital Ratios Note: 3Q18 ratios are preliminary

 

 

ucbi.com | 14 Key Strengths ucbi.com | 14 » Culture and business model that attracts both bankers and potential acquisition partners » Positioned well in many of the South's fastest - growing markets » Superior customer service helps drive great core deposit growth » Well - developed credit model to drive consistent performance through cycles » Liquid balance sheet and strong capital offer flexibility in a rising rate environment

 

 

2018 INVESTOR PRESENTATION Exhibits THIRD QUARTER 2018 October 23, 2018

 

 

Cultural Pillars Customer Service Is at Our Foundation 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 return to shareholders with increasing ROTCE and dividend growth Profitability » Managing a steady margin with minimal accretion income » Fee revenue expansion through focused growth initiatives » Continued operating expense discipline while investing in growth opportunities » Executing on M&A cost savings » High - quality, low - cost core deposit base Growth » Addition of Commercial Banking Solutions platforms (middle - market banking, SBA lending, senior care, income - property lending, asset - based lending, builder finance, renewable energy, equipment finance) and actively pursuing additional lending platforms » Entered into and continue to target new markets with team lift - outs (Charleston, Greenville, Atlanta, Raleigh) » Continuous emphasis on and enhancement of Mortgage product offerings to drive loan and revenue growth » Acquisitions that fit our footprint and culture and deliver desired financial returns Who We Are Full - Service Regional Bank with a Strong Culture Rooted in Sound Credit Underwriting & Growth ucbi.com | 16

 

 

17 Who We Are The Bank That Service Built ucbi.com | 17

 

 

Fastest Growing Southeast MSAs (1) 2019 - 2024 Proj . Population Growth 2019 Population 2024 Proj . Median Household Income 1. Myrtle Beach, SC 9.66% 485,770 $55,203 2. Cape Coral, FL 8.46% 757,170 $62,988 3. Orlando, FL 8.13% 2,589,416 $65,275 4. Charleston, SC 8.11% 799,117 $70,920 5. Raleigh, NC 8.02% 1,366,959 $85,734 6. Naples, FL 7.86% 381,728 $73,715 7. Lakeland, FL 7.55% 705,037 $54,996 8. North Port, FL 7.53% 825,378 $66,059 9. Charlotte, NC 7.29% 2,591,118 $73,487 10. Jacksonville, FL 6.92% 1,549,094 $67,247 17. Atlanta, GA 6.52% 6,017,552 $77,092 19. Greenville, SC 6.18% 912,621 $62,654 20. Savannah, GA 6.15% 395,004 $68,589 23. Spartanburg, SC 5.93% 340,535 $55,507 10.8% 8.8% UCBI US ’19 – ’24 Proj . Household Income Growth 5.2% 3.6% UCBI US ’19 – ’24 Proj . Population Growth Strong Demographic Profile (2) $57,412 $63,174 UCBI US Median Household Income Notes 1. Includes MSAs with a population of greater than 300,000 2. Weighted by State deposits UCBI MSA Presence ucbi.com | 18 Who We Are Focused on High - Growth MSAs in Southeast

 

 

ucbi.com | 19 3Q18 2Q18 3Q17 2Q18 3Q17 Commercial & Industrial 280.1$ 227.4$ 136.1$ 52.7$ 144.0$ Owner-Occupied CRE 77.8 74.7 72.2 3.1 5.6 Income-Producing CRE 77.1 112.3 80.0 (35.2) (2.9) Commercial Constr. 146.1 186.8 139.1 (40.7) 7.0 Total Commercial 581.1 601.2 427.4 (20.1) 153.7 Residential Mortgage 42.9 63.9 54.7 (21.0) (11.8) Residential HELOC 65.4 66.6 68.1 (1.2) (2.7) Residential Construction 70.6 63.4 53.5 7.2 17.1 Consumer 18.2 17.7 13.1 0.5 5.1 Total 778.2$ 812.8$ 616.8$ (34.6)$ 161.4$ Variance-Incr(Decr) NOTE - Certain prior period amounts have been reclassified to conform to the current presentation (1) Represents new loans funded and net loan advances (net of payments on lines of credit) New Loans Funded and Advances $616.8 $812.8 $778.2 3Q17 2Q18 3Q18 New Loans Funded and Advances by Region New Loans Funded and Advances by Category 3Q18 2Q18 3Q17 2Q18 3Q17 Atlanta 120.0$ 142.3$ 151.5$ (22.3)$ (31.5) Coastal Georgia 34.7 43.3 41.1 (8.6) (6.4) North Georgia 68.3 65.2 63.8 3.1 4.5 North Carolina 93.4 113.2 34.8 (19.8) 58.6 Tennessee 24.7 32.7 24.1 (8.0) 0.6 Gainesville 18.7 15.4 9.7 3.3 9.0 South Carolina 126.2 145.1 109.2 (18.9) 17.0 Total Community Banks 486.0 557.2 434.2 (71.2) 51.8 Asset-based Lending 9.9 1.0 8.4 8.9 1.5 Commercial RE 12.0 38.2 42.8 (26.2) (30.8) Senior Care 26.8 32.9 14.8 (6.1) 12.0 Middle Market 18.3 9.4 35.9 8.9 (17.6) SBA 75.2 36.2 43.4 39.0 31.8 Renewable Energy 6.7 0.4 - 6.3 6.7 Navitas 107.8 100.2 - 7.6 107.8 Builder Finance 35.5 37.3 37.3 (1.8) (1.8) 292.2 255.6 182.6 36.6 109.6 Indirect Auto - - - - - Total 778.2$ 812.8$ 616.8$ (34.6)$ 161.4$ Variance-Incr(Decr) Total Commercial Banking Solutions New Loans Funded and Advances (1) ucbi.com | 19 (1) Represents new loans funded and net loan advances (net of payments on lines of credit) $ in millions

 

 

Commercial RE Diversification – 9/30/2018 ucbi.com | 20 Assisted Living/Nursing Home/Rehab Cntr 296$ 22.4 % 125$ 16.4 % Residential Construction in Process: SPEC 139 10.5 89 11.7 Residential Land Development - Lots Already Developed in Hands of Builders 62 4.7 58 7.6 Retail Building 75 5.7 53 7.0 Office Buildings 99 7.5 51 6.8 Vacant (Improved) 54 4.0 46 6.1 Residential Construction in Process: PRESOLD 72 5.4 44 5.8 Multi-Residential Properties 144 10.9 43 5.7 Hotels Motels 74 5.6 38 4.9 Warehouse 45 3.4 32 4.2 Other Properties 48 3.7 31 4.1 Raw Land - Vacant (Unimproved) 35 2.6 30 4.0 Self Storage 46 3.5 29 3.8 Residential Land Development - Subdivisions in Process 34 2.5 25 3.2 Residential Raw Land in the Hands of Builders/Developers 17 1.3 16 2.0 Restaurants /Franchise Fast Food / Franchise Other 24 1.8 13 1.8 Commercial Land Development 10 0.8 9 1.1 Churches 9 0.7 8 1.0 Automotive Service 7 0.5 5 0.7 Daycare Facility 9 0.7 5 0.7 All Other 23 1.8 11 1.4 Total Commercial Construction 1,322$ 100 % 761$ 100 % OutstandingCommitted Commercial Real Estate – Income Producing in millions Commercial Construction in millions Office Buildings 440$ 23.1 % 398$ 22.2 % Retail Building 354 18.6 337 18.8 Assisted Living/Nursing Home/Rehab Cntr 198 10.4 179 10.0 Investor Residential 194 10.2 190 10.6 Hotels Motels 180 9.5 177 9.9 Warehouse 165 8.7 160 8.9 Multi-Residential Properties 133 7.0 124 7.0 Other Properties 66 3.5 59 3.3 Restaurants /Franchise Fast Food / Franchise Other 53 2.8 51 2.8 Self Storage 31 1.6 29 1.6 Mfg Facility 24 1.3 24 1.3 Convenience Stores 22 1.2 21 1.2 Leasehold Property 17 0.9 17 1.0 Mobile Home Parks 8 0.4 8 0.5 Automotive Service 8 0.4 8 0.5 Daycare Facility 3 0.2 3 0.2 All Other 3 0.2 3 0.2 Total Commercial Real Estate - Income Producing 1,899$ 100 % 1,788$ 100 % Committed Outstanding Outstanding Average Loan Size (in thousands ) • Commercial Construction $ 349 • Commercial RE: • Composite CRE 420 • Owner - Occupied 361 • Income - Producing 496 Committed Average Loan Size (in thousands ) • Commercial Construction $600 • Commercial RE: • Composite CRE 448 • Owner - Occupied 387 • Income - Producing 526 ucbi.com | 20

 

 

BUILT TO OUTPERFORM IN THE NEXT CYCLE 1. Process Change • In 2014, centralized and streamlined consumer underwriting and related functions • Significantly strengthened commercial process for approvals and monitoring 2. Add Significant Talent • CEO with deep knowledge and experience in credit • 2015 Rob Edwards brought in to lead team (BB&T, TD Bank) • Senior credit risk team now has large bank credit risk experience 3. Concentration Management: Size • In house project lending limit of $18 mm, legal lending limit of $ 324 mm • Relationship limit of $30 mm • $109 mm of SNC’s outstanding, $193 mm committed • Top 25 loans = $603 mm, 7.3 % of total loans 4. Concentration Management: Geography • Four state franchise with mix of metro and rural markets 5. Concentration Management: Product • Construction/CRE ratio = 74%/197% • C&D > 30% in cycle, now 12.6 % driven by Four Oaks • Land in C&D $ 249 mm and shrinking, due to Four Oaks conversion • Navitas 6.20 % of loans • Granular product concentration limits Strong Credit Culture ucbi.com | 21

 

 

Accretable Yield Analysis Profitability Comparison (2Q18 Annualized) ucbi.com | 22 1.18% 1.20% 1.29% 1.30% 1.37% 1.38% 1.38% 1.43% 1.44% 1.52% 1.64% 1.64% 2.08% 0.00% 1.00% 2.00% Peer 12 Peer 11 Peer 10 Peer 9 Peer 8 Peer 7 UCBI Peer 6 Peer 5 Peer 4 Peer 2 Peer 3 Peer 1 Core ROAA 1.05% 1.10% 1.17% 1.20% 1.23% 1.26% 1.28% 1.28% 1.29% 1.30% 1.36% 1.50% 1.86% 0.00% 1.00% 2.00% Peer 11 Peer 12 Peer 7 Peer 2 Peer 9 Peer 6 Peer 8 Peer 5 Peer 10 Peer 4 UCBI Peer 3 Peer 1 Adj. Core ROAA (1) 0.22% 0.15% 0.02% 0.22% 0.01% 0.09% 0.16% 0.17% 0.07% 0.44% 0.20% 0.08% 0.15% 1.54% 1.73% 1.81% 1.85% 1.90% 1.98% 1.98% 2.03% 2.10% 2.38% 2.82% 2.86% 2.95% 0.00% 1.00% 2.00% 3.00% Peer 12 Peer 10 Peer 9 Peer 11 Peer 3 UCBI Peer 6 Peer 7 Peer 4 Peer 5 Peer 2 Peer 1 Peer 8 Core PTPP / Avg Assets 1.45% 1.67% 1.71% 1.72% 1.72% 1.76% 1.78% 1.82% 1.96% 2.17% 2.26% 2.57% 2.84% 0.00% 1.00% 2.00% 3.00% Peer 12 Peer 11 Peer 9 Peer 10 Peer 3 Peer 6 Peer 7 Peer 4 UCBI Peer 5 Peer 2 Peer 1 Peer 8 Adj. Core PTPP / Avg Assets (1) 0.11% 0.29% 0.09% 0.18% 0.56% 0.21% 0.02% 0.27% 0.25% 0.22% 0.01% 0.18% 0.10% Median: 1.38% Median: 1.28% Median: 1.98% Median: 1.78% Source: Bank of America Merrill Lynch, S&P Global Market Intelligence (1) Excludes impact of accretable yield, assuming MRQ is annualized. Adj. Core ROAA assumes MRQ tax rate. % of Avg Assets Attributable to Accretable Yield

 

 

3Q17 4Q17 1Q18 2Q18 3Q18 (1) (1) (1) (1) (1) Net Income Net income - GAAP 27,946$ (11,916)$ 37,658$ 39,634$ 43,682$ Merger-related and other charges 3,420 7,358 2,646 2,873 592 Tax benefit on merger-related and other charges (1,147) (1,165) (628) (121) (141) Impairment of deferred tax asset due to federal tax rate reduction - 38,199 - - - Net income - Operating 30,219$ 32,476$ 39,676$ 42,386$ 44,133$ Diluted Earnings per share Diluted earnings per share - GAAP 0.38$ (0.16)$ 0.47$ 0.49$ 0.54$ Merger-related and other charges 0.03 0.08 0.03 0.04 0.01 Impairment of deferred tax asset due to federal tax rate reduction - 0.50 - - - Diluted earnings per share - Operating 0.41$ 0.42$ 0.50$ 0.53$ 0.55$ Return on Assets Return on assets - GAAP 1.01 % (0.40) % 1.26 % 1.30 % 1.41 % Merger-related and other charges 0.08 0.20 0.07 0.09 0.01 Impairment of deferred tax asset due to federal tax rate reduction - 1.30 - - - Return on assets - Operating 1.09 % 1.10 % 1.33 % 1.39 % 1.42 % Book Value per share Book Value per share - GAAP 16.50$ 16.67$ 17.02$ 17.29$ 17.56$ Effect of goodwill and other intangibles (2.39) (3.02) (4.06) (4.04) (4.02) Tangible book value per share 14.11$ 13.65$ 12.96$ 13.25$ 13.54$ ucbi.com | 23 Non - GAAP Reconciliation Tables ucbi.com | 23 $ in thousands, except per share data (1) Merger - related and other charges for 3Q18, 2Q18, 1Q18, 4Q17 and 3Q17 include $478, $593 thousand, $592 thousand, $517 thousand and $244 thousand, respectively, of intangible amortization resulting from payments made to executives under their change of cont rol agreements. The resulting intangible assets are being amortized over 12 to 24 months.

 

 

3Q17 4Q17 1Q18 2Q18 3Q18 (1) (1) (1) (1) (1) Return on Tangible Common Equity Return on common equity - GAAP 9.22 % (3.57) % 11.11 % 11.20 % 11.96 % Effect of merger-related and other charges 0.75 1.86 0.60 0.77 0.13 Impairment of deferred tax asset due to federal tax rate reduction - 11.44 - - - Return on common equity - Operating 9.97 9.73 11.71 11.97 12.09 Effect of goodwill and intangibles 1.96 2.20 3.55 3.82 3.72 Return on tangible common equity - Operating 11.93 % 11.93 % 15.26 % 15.79 % 15.81 % Expenses Expenses - GAAP 65,674$ 75,882$ 73,475$ 76,850$ 77,718$ Merger-related and other charges (3,420) (7,358) (2,646) (2,873) (592) Expenses - Operating 62,254$ 68,524$ 70,829$ 73,977$ 77,126$ Tangible common equity to risk-weighted assets reconciliation (*) Tier 1 capital ratio (Regulatory) 12.27$ 12.24$ 11.61$ 11.94$ 12.34$ Effect of other comprehensive income (0.13) (0.29) (0.50) (0.57) (0.68) Effect of deferred tax limitation 0.94 0.51 0.42 0.33 0.30 Effect of trust preferred (0.24) (0.36) (0.34) (0.34) (0.34) Basel III intangibles transition adjustment (0.04) (0.05) - - - Tangible common equity to risk-weighted assets 12.80 % 12.05 % 11.19 11.36 % 11.62 % Efficiency Ratio Efficiency Ratio - GAAP 59.27 % 63.03 % 57.83 % 57.94 % 56.82 % Merger-related and other charges (3.09) (6.11) (2.08) (2.17) (0.43) Efficiency Ratio - Operating 56.18 % 56.92 % 55.75 % 55.77 % 56.39 % (*) Third quarter 2018 ratios are preliminary. ucbi.com | 24 Non - GAAP Reconciliation Tables ucbi.com | 24 $ in thousands, except per share data (1) Merger - related and other charges for 3Q18, 2Q18 , 1Q18, 4Q17 and 3Q17 include $478, $593 thousand, $592 thousand, $517 thousand and $244 thousand, respectively, of intangible amortization resulting from payments made to executives under their change of cont rol agreements. The resulting intangible assets are being amortized over 12 to 24 months.