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Georgia
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No.
0-21656
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No.
58-180-7304
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(State
or other jurisdiction of
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(Commission
File Number)
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(IRS
Employer
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incorporation)
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Identification
No.)
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q
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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q
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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q
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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q
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240-13e-4(c))
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Exhibit
No.
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Description
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99.1
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Investor
Presentation Materials dated June 12, 2007
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99.2
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Press
Release dated June 12, 2007
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/s/
Rex S. Schuette
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Rex
S. Schuette
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Executive
Vice President and
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| June 12, 2007 | Chief Financial Officer |
2007 Investor Conference
Presented by:
Jimmy Tallent
CEO United Community Banks, Inc.
1
Cautionary Statement
The presentations today contain forward-looking statements, as defined by Federal
Securities Laws, including statements about financial outlook and business
environment.
These statements are provided to assist in the understanding of future financial
performance. Such performance involves risks and uncertainties that may cause actual
results to differ materially from those in such
statements. Any such statements are based
on current expectations and involve a number of risks and uncertainties. For a discussion
of factors that may cause such forward-looking
statements to differ materially from actual
results, please refer to United Community Banks, Inc. Annual Report filed on Form 10-K
with the Securities and Exchange Commission. These presentations also contain non-
GAAP financial measures,
as defined by the Federal Securities Laws. For a presentation
of the most directly comparable financial measures calculated and presented in
accordance with GAAP and a reconciliation of the differences between those measures
and the non-GAAP
financial measures, please refer to “Selected Financial Data” in the
United Community Banks, Inc. Annual Report filed on Form 10-K with the Securities
Exchange Commission, which may be found on the company’s Web site, www.ucbi.com.
2
Overview
Community Banking
Retail Banking
De Novo Strategy
Bank CEO Updates
Gwinnett / Metro Atlanta
Gainesville / Hall County
North Carolina
Marketing
Today’s Discussion Topics
Treasury / ALCO
Credit & Risk Management /
Loan Portfolio
Loan Portfolio
Credit Structure / Underwriting
Construction Lending
Global Risk Management
Technology / Operations
3
United at a Glance
27 community banks, 108 banking offices
$8.0 billion in assets
$1.5 billion market cap
Unique footprint – fast growing markets
Decentralized model
4
10 Years Ago
4 community banks
11 offices
275 employees
$500 million assets
5
Today
27 community banks
108 offices
2,031 employees
$8.0 billion assets
$89 billion deposits in
market – we have 7%
6
Expansion Over the Past Two Years
Executed balanced growth strategy
Significant reinvestment in franchise
Opened 15 de novo offices
2005 – 5
2006 – 7
2007 – 3
Opened de novo bank in Cleveland, TN (Q3 06)
Acquired Southern National Bank in metro
Atlanta (Q4 06)
Acquired First Bank of the South in northwest
metro Atlanta (Q2 07)
7
Progress Over the Past Two Years
Executed balanced growth strategy
Continued record earnings
13 percent EPS growth – 2005
16 percent EPS growth – 2006
13 percent EPS growth – Q 1 2007
8
Community Banking
Presented by:
Guy Freeman
EVP, Chief Operating Officer
1
Unique Footprint
Markets where people live, work, play, and retire
Fast growing Atlanta Markets; strategically important
Fulton County
Embry Hills, DeKalb County
Lawrenceville and Buford, Gwinnett County
Gainesville, Hall County
Attractive mountain communities that continue to prosper
Cleveland and Helen, White County
Blairsville, Union County
Hiawasee, Towns County
What We Saw on Today’s Tour
2
Business Model for Success
Operating model tailored to each of our community’s needs and
focused on providing the highest-quality
customer service
Balanced growth strategy emphasizing organic growth and
complemented by selective acquisitions
Unique footprint with some of the fastest growing markets in the
country
3
Operating Model
27 community banks each with local CEOs, local boards and local
decision-making
Bankers are highly engaged members of the community and
committed to service excellence
Best of both worlds: service delivery of a $300 million community
bank with resources of a $8.0 billion bank
“Provides a competitive advantage”
Community-Focused
4
Operating Model
Providing high-quality, personal customer service is our top priority
90 percent customer satisfaction rate leveraged through referrals
95 percent of customers “had already, or would likely” recommend
United
“The Bank That SERVICE Built”
Service-Focused
5
Operating Model
Bank CEOs execute United’s strategy to achieve its common goals
together
Intensive budget process is used to establish accountability and
track progress
Monthly de novo meetings to track progress
Quarterly and other regional meetings with CEOs to keep things
moving in the right direction
Achieving Our Goals
6
Unique Footprint
Excellent Growth Opportunities
$12.2 billion deposits
United has 3%
Assets - $.4 billion
2 Banks, 11 Offices
East Tennessee #8
$6.9 billion deposits
United has 31%
Assets - $2.6 billion
11 Banks, 23 Offices
North Georgia #1
$56.2 billion deposits
United has 4%
Assets - $3.4 billion
11 Banks, 45 Offices
Atlanta Region* #7
$6.6 billion deposits
United has 2%
Assets - $1.1 billion
1 Bank, 21 Offices
Western NC #2
$6.8 billion deposits
United has 6%
Assets - $.5 billion
2 Banks, 8 Offices
Coastal GA #7
* Combines the Atlanta and Gainesville MSAs
7
Unique Footprint - Fast Growing Markets
North Georgia
Atlanta Region*
Coastal Georgia
Western North Carolina
East Tennessee
Total Markets
Georgia
North Carolina
Tennessee
United States
6.9
1
56.2
6.8
6.6
12.2
88.7
Market
Deposits
($ in billions)
Population
(000s)
380
3,676
359
417
818
5,650
9,554
8,906
6,141
303,582
(Actual)
’00 to ‘06
(Projected)
’06 to ‘11
Population Growth
19
28
7
10
8
21
17
11
8
8
15
21
4
7
7
18
14
8
6
7
%
%
Markets
* Combines the Atlanta and Gainesville MSAs 1 as of June 30, 2006 pro forma
8
Atlanta Region
Dawson
Hall County
Forsyth
Gwinnett
Conyers (Rockdale)
Henry County
UCBI Banks & Offices
Fairburn
Carrollton
Marietta
Cherokee
Bartow
Real Estate Lending (Constr. and A&D)
45 Banking Offices in 20 counties in Metro Atlanta and Gainesville MSAs
9
Unique Footprint
Atlanta Region*
11 banks, 45 offices
Assets - $3.4 billion
43% of our company
Significant growth potential
* Combines the Atlanta and Gainesville MSAs
10
Deposit Comparison
11
Total DDA
Total Deposits
Total Funding
Total MMDA, NOW, Savings
296,037
51%
484,151
30%
60%
953,346
CDs
184,625
Funds User
339,127
31%
Annual Earning Effect
9.565
BP Effect on Loan Pricing
Balance
Yield
Mix
Balance
Yield
Mix
First Bank of the South
As of Feb 2007
UCBI Total Atlanta Region
As of Feb 2007
104,796
18%
163,530
10%
585,458
3.64%
1,601,028
3.90%
1,940,155
4.14%
3.64%
585,458
5.25%
0.59%
Retail Banking
Presented by:
Bill Gilbert
EVP Retail Banking
1
Retail Banking
Common “United” brand and product unification
Core deposits
Retail products and fee revenue opportunities
Deposits and service fees
Online banking, payroll, ACH, cash management, remote deposit
services
Mortgage banking
Brokerage
Deposit capture
Products and Services
2
Products and Services
Core Deposits ($ in billions)
3
2.7
3.3
4.0
4.2
4Q 04
4Q 05
4Q 06
1Q 07
4.5
4.0
3.5
2.5
2.0
1.5
1.0
0.5
0.0
3.0
Products and Services
Service Charges and Fees
Mortgage
Brokerage
Other
Total Fee Revenue
Fee Revenue ($ in thousands)
Q1 07
$ 7,253
2,223
998
3,908
$ 14,382
Q1 06
$ 6,353
1,513
882
3,010
$ 11,758
Q1 05
$ 5,614
1,483
442
2,661
$ 10,200
$
900
710
116
898
2,624
%
14
47
13
30
22
Variance
Q1 07 – Q1 06
4
Mortgage Production
5
146
155
172
108
500
450
400
350
300
250
200
150
100
50
0
184
294
401
365
200
180
160
140
120
100
Secondary Mortgage
Production (in millions)
Average Size Loan (in
thousand)
2004
2005
2006
1Q 07
Brokerage Production
Average Revenue Per Representative
6
Q4 04
Q4 05
Q4 06
Q1 07
30,000
25,000
15,000
10,000
5,000
0
20,000
Industry
UCBI
Brokerage Production
Fee-Based Assets (in millions)
7
Q4 05
Q4 06
Q1 07
50
40
20
10
0
30
15.8
44.2
45.0
Corporate Services
Sweep Balances
8
150
125
100
75
50
25
0
Q4 04
Q4 05
Q4 06
Q1 07
55
62
122
132
Remote Deposit Capture
9
28 Georgia Customers
13 North Carolina Customers
4 Tennessee Customers
15%
2%
83%
De Novo Activity
Presented by:
Rob Cochran
SVP of Banking
1
Agenda
Activity for 2005 – 2007
Expectations
Financial Results
2
Activity for 2005 - 2007
2005 – 2006
Opened 2 de novo banks
and 15 offices
2007
Opened 3 offices
Additional 4 offices in 2007
3
Expectations
Goal
Break Even Within 18-24 Months of Opening Date
Break Even Point
$20-25MM in Loans
$5-10MM in Core Deposits
Monthly
Meet with the Manager of Each De Novo Office
4
DeNovo Example
04/30/07
Balance
Inc / Exp
Rate
Balance
Rate
Balance
Inc / Exp
Rate
Loans
10,000
70
8.52%
11,000
8.35%
21,000
150
8.43%
Demand
700
350
1,050
NOW
200
1
3.04%
140
3.04%
340
1
3.04%
MMDA
1,000
4
4.26%
1,050
4.26%
2,050
7
4.26%
Savings
50
0
0.40%
70
0.40%
120
0
0.40%
CDs
6,000
27
5.48%
3,500
9,500
42
5.15%
Total Deposits
7,950
31
4.75%
5,110
13,060
50
4.50%
(User) / Provider
(2,050)
(11)
6.53%
(5,890)
5.25%
(7,940)
(36)
5.25%
Loan Fees
4
-
4
Net Interest Revenue
31
68
Provision
10
-
10
Fee Revenue
2
1
3
Total Expenses
58
3
61
Pre Tax Earnings
(35)
0
After
Before
ACTUAL
12/31/07
New Activity
5
DeNovo Example
Apr-07
Dec-07
Monthly
Actual
Target
Goal
Feb-07
Mar-07
Apr-07
Loans
10,000
21,000
1,571
2,000
1,500
2,100
Demand
700
1,050
50
100
50
75
NOW
200
340
20
10
40
30
MMDA
1,000
2,050
150
100
70
120
Savings
50
120
10
20
5
15
CDs
6,000
9,500
500
1,000
750
600
Total Deposits
10,178
11,330
730
1,230
915
840
Actual Growth
6
Financial Results
7
EPS
Loans
Deposits
2006 YE
1Q 07
$ 513 MM
$ 422 MM
($ .07)
($ .02)
De Novos Opened 2005 - 2007
First Bank of the South
Presented by:
Glenn White
CEO Gwinnett County
1
First Bank of the South
The newest community bank to join the United
Community Banks organization.
Why join United Community Banks?
Management decision
Overall management culture of United
More product & services offerings
More locations
Higher lending limits
Liquidity of stock
2
Defining Characteristics
Relationship Banking to Small and Medium Businesses
Lower interest expense Higher net interest margin
Emphasis on Profitability
Experienced Management Team
3
Balance Sheet
Assets ($ in millions)
4
2006
2005
2004
2003
2002
Cash and Due From Banks
$
22.9
$
18.5
$
20.0
$
20.5
$
16.8
Fed Funds Sold
47.9
12.8
5.5
23.3
20.9
Securities
49.8
30.8
27.6
35.5
22.5
Loans, Net of Unearned Income
536.1
404.9
339.0
251.6
204.5
Less Allowance for Loan Losses
(7.2)
(5.7)
(4.9)
(3.6)
(3.0)
Premises and Equipment, net
7.8
5.2
5.8
6.0
7.3
Other Assets
17.5
4.0
3.0
2.1
1.4
Total Assets
$
675
$
470
$
396
$
335
$
270
Asset Growth Percentage
43%
19%
18%
24%
118%
Balance Sheet
Liabilities and Stockholders’ Equity ($ in millions)
5
2006
2005
2004
2003
2002
Non - Interest Bearing DDA
$
110.5
$
95.6
$
77.0
$
67.8
$
49.0
Interest Bearing DDA
292.6
173.3
190.7
180.4
133.2
Certificates of Deposit
179.6
154.2
76.8
48.7
61.3
Total Deposits
582.6
423.1
344.5
296.9
243.5
Other Borrowings and Repurchase
Agreements
10.0
-
10.0
-
0.1
Other Liabilities
2.8
5.1
0.8
0.5
1.8
Total Liabilities
595
428
355
297
245
Stockholders’ Equity
79.2
42.2
40.6
38.0
24.9
Total Liabilities and Stockholders’
Equity
$
675
$
470
$
396
$
335
$
270
Net Income
11.9
8.0
5.4
4.7
3.5
Net Interest Margin
5.02%
4.88%
4.57%
4.27%
4.51%
ROA
1.92%
1.87%
1.48%
1.57%
2.39%
Earnings Growth Percentage
49%
48%
15%
35%
71%
1
Lanier Acquisition
1
2
2
Embry Acquisition
3
3
Sub "S" Corporation
Total Loans
($ in millions)
6
40%
5%
1%
38%
16%
Commercial RE: $206
C & I: $85
Consumer: $8
Residential Mortgage: 28
Construction: 210
Total Loans: $536
Total Deposits
($ in millions)
7
19%
12%
47%
3%
19%
DDA: $110
NOW Accounts: $18
Jumbo CDs & IRAs: $111
CDs & IRAs: $69
MMA & Savings: $275
Total Deposits: $583
First Bank of the South
Organization Chart
Board of Directors
Glenn White
CEO
Andy Pourchier
CFO
Dan Zartman
Sr. Credit Officer
Steve Williams
President
Nancy Cain
Operations
Loan Operations
Linda George
ADC Manager
9 Commercial Lenders
1 SBA Lender
Johns Creek
Lawrenceville
Embry Hills
Snellville
Buford
8
Nancy Cain
Retail
Gwinnett County
Population and Employment
Gwinnett County Department of Financial Services - Economic Analysis Division
9
Population
Employment
1980
1985
1990
1995
2000
2005
2011
Projected
0
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
100,000
Gwinnett County Businesses
Total Businesses
Retail
Manufacturing
Construction
Wholesale
RE, Insurance, Financial
Service
Misc.
(%)
22%
5%
9.2%
6.5%
9.7%
36.9%
10.1%
28,131
6,186
1,520
2,601
1,842
2,747
10,388
2,847
10
Gwinnett County Deposits
11
Wachovia Corp. (NC)
Bank of America Corp. (NC)
SunTrust Banks Inc. (GA)
Brand Banking Company (GA)
Royal Bank of Canada
BB&T Corp. (NC)
United Community Banks Inc. (GA)
Peoples Bank & Trust (GA)
First Charter Corp. (NC)
Community Financial Holding (GA)
Total For Institutions In Market
1
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
10
34
26
42
5
10
12
3
3
1
2
211
2,480,643
1,360,259
1,180,548
675,844
500,795
472,546
425,196
382,876
324,672
298,628
10,658,688
23.27
12.76
11.08
6.34
4.70
4.43
3.99
3.59
3.05
2.80
2,310,472
1,293,781
1,069,326
618,086
573,641
398,879
384,999
341,745
271,319
248,226
9,431,756
24.50
3.72
1.34
6.55
6.08
4.23
4.08
3.62
2.88
2.63
2006 Total
Deposits in
Market ($000)
2006
Rank
2005
Rank
Institution
2006
Number of
Branches
2006
Total Market
Share (%)
2005 Total
Deposits in
Market ($000)
2005
Total Market
Share (%)
Commercial Banking (C&I) Overview
Presented by:
Steve Williams
President Gwinnett County
1
What is C&I?
Traditional Commercial Banking
Providing Banking Products to Closely Held Business
These are Operating Companies with Good Track Records
Annual Sales Usually Between $5MM - $50MM
Our Focus is “Relationship Banking” – NOT Just a Transaction
Secured Lending
Working Capital Lines of Credit
Construction Loans for Owner-Occupied Office / Warehouse Buildings
Equipment Purchases
2
Examples
More of:
Manufacturing
Wholesale Distribution (Plumbing, Electrical, HVAC, Building
Materials, etc.)
Seasoned Contractors (General, Pipeline, Highway, etc.)
Professional Firms (Law, Medical, Dental, Veterinarians,
Engineering, etc.)
Heavy Equipment Sales
Commercial Printing
Independent Insurance Agencies
3
Examples
Less of:
Retail
Restaurants
Non Owner Occupied Real Estate
Skating Rinks / Bowling Alleys
Convenience Stores
Hotels
4
What Services / Products Do We
Provide These Businesses?
DDA & Insured Money Market Accounts
Operating Lines of Credit
Real Estate Construction & Permanent Loans
Term Loans Financing Stock Buyouts
Term Loans Financing Equipment Purchases
SBA Products for Business Acquisition, Working capital Lines of
Credit and Traditional 504 Loans
5
How Do We Get the Business?
Existing Customer Referrals
CPAs
Commercial Real Estate Companies
Attorneys
Building Contractors
Our Local Board Members
Chamber of Commerce Contacts
Civic Organizations
Cold Calling
6
Why Are C&I Relationships
Important to Us?
Great Source of Low Cost Deposits
We Grow as our Customers Grow
Owner Occupied R/E Loans Usually Kept in the Portfolio Longer
Diversifies our Asset Mix
Great Feeder / Referral Source to our SBA Professional
Opportunity to Bank Owners of the Business Personally –
Individuals That Usually Have High Income, Net Worth & Liquidity
7
Expansion Plans
We Plan to Expand C&I Beyond Gwinnett County By:
Seeking High Quality Bankers Having 5 or More Years of “In Market”
Experience
Leveraging the Larger UCB Office Network & Capital Position
Utilizing Higher-End Cash Management Products to Attract Business
Enlisting Other Local Board Members of our metro banks for C&I Referrals
Managing Credit Risk Using the 30 Years Experience of Dan Zartman, Chief
Credit Officer in Gwinnett, to Oversee the C&I Credit Function for all Metro
Atlanta banks
8
Gainesville / Hall County
Presented by:
Dick Valentine
CEO, Hall County
1
21 Months of Progress
Hall County operation established in May 2005 with 51 local bankers
July ’06 became profitable with $316M in loans and $237M in
deposits
End of Q1-07, 6 offices with 90 bankers
Total loans of $362M and total deposits of $247M
2
Pre-tax Income
Jan 06
Apr 06
Jul 06
Oct 06
Dec 06
Mar 07
($ in thousands)
$ 117
($ 338)
3
200
100
0
(100)
(200)
(300)
(400)
Loans and Deposits
($ in millions)
4
400
350
300
250
200
150
100
50
0
Deposits
Loans
May 05
2Q 05
3Q 05
4Q 05
1Q 06
2Q 06
3Q 06
4Q 06
1Q 07
Growth in Core Accounts
January 2006 – April 2007
7,213
5
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Hall County, GA
Regions Financial Corp. (AL)
Wachovia Corp. (NC)
GB&T Bancshares Inc. (GA)
United Community Banks Inc. (GA)
BB&T Corp. (NC)
SunTrust Banks Inc. (GA)
Bank of America Corp. (NC)
Community Bankshares Inc. (GA)
Peach State Bank & Trust (GA)
Hamilton State Bancshares (GA)
PAB Bankshares Inc. (GA)
NBOG Bancorp Inc (GA)
Total For Institutions In Market
1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
7
4
5
6
8
14
12
13
9
9
5
8
6
6
5
3
6
1
1
1
1
58
575,303
555,718
457,609
228,500
179,937
157,615
138,744
66,430
59,001
44,617
34,679
31,940
2,599,430
22.13
21.38
17.60
8.79
6.92
6.06
5.34
2.56
2.27
1.72
1.33
1.23
654,605
512,404
440,884
70,771
172,709
154,116
139,534
58,151
9,712
20,856
16,276
38,310
2,346,086
27.90
21.84
18.79
3.02
7.36
6.57
5.95
2.48
0.41
0.89
0.69
1.63
2006
Deposits
in Market
2006
Rank
2005
Rank
Institution
Branches
in
Market
Market
Share
(%)
2005
Deposits
in Market
Market
Share
(%)
6
Hall County, GA
Recent Openings
Main Office – 5 / 05
Thompson Bridge – 9 / 05
Quillian’s Corner – 10 /05
South Hall – 12 / 05
Lula – 4 / 07
7
Balanced Growth Strategy
Six banking offices strategically located throughout Hall County
Adequately staffed for long term growth
Focus on gaining market share from existing competitors and
capturing our share of market growth
Core relationship growth
Efficiency and profitability improves with market share increase
8
Western North Carolina
Presented by:
Greg Hining
CEO Western North Carolina
1
Bank History
Joined United in 1990 – acquisition of Citizens Bank
$55 million in assets
3 offices in Cherokee and Clay counties
Markets contiguous and similar to United’s North Georgia markets
Now have $1.1 billion in assets and 21 offices
2
High-Quality Asset Growth
(in millions)
10-year CAGR: 17%
3
1.2
1.0
0.8
0.6
0.4
0.2
0.0
94
95
96
97
98
99
00
01
02
0.3
0.4
0.5
0.6
1Q07.
Operating Model
Management Structure
Guy Freeman
EVP, Banking
Board of Directors
Greg Hining
Chairman & CEO
John Goins
President
Region 3
Dale Cable
EVP, Region 1
Rick King
EVP, Region 2
Andrews
Murphy
Sylva (2)
Franklin
Bakersville
Blowing Rock
Bryson City
Burnsville
Cherokee
Newland
Robbinsville
Spruce pine
Brevard (2)
Cashiers
Etowah
Hayesville (2)
Hendersonville
Waynesville
290 Employees
49 Lenders
36 Customer Service Representatives
117 Tellers
4
Unique Footprint
21 Offices
13 Counties
13.3% Market Share
$6.6 Billion Deposits
5
Unique Footprint
Located among The Great Smoky Mountains
Place where people want to retire or have second homes
Manufacturing continues to be replaced by service-based business
Still significant demand for real estate and small business loans that
support growth from retirees and second home owners
Market Characteristics
6
Unique Footprint
Wide range of competitors
in number and size in each
market
Competitive advantage is
our people and product
delivery
Excellent opportunities to
grow and to gain market
share
Competitive Factors – Western North Carolina
7
Total
Total
Deposits
Market
Branch
in Market
Share
Rank
Institution
Count
$0
(%)
1
FIRST-CITIZENS BANK&TRUST CO
27
1,155,891
17.42%
2
WACHOVIA BANK NATIONAL ASSN
18
1,019,812
15.37%
3
UNITED COMMUNITY BANK
18
883,065
13.31%
4
MACON BANK INC
9
657,839
9.92%
5
CAROLINA FIRST BANK
9
509,711
7.68%
6
BRANCH BANKING&TRUST CO
9
435,918
6.57%
7
RBC CENTURA BANK
12
420,938
6.34%
8
MOUNTAIN 1ST BANK&TRUST CO
6
250,386
3.77%
9
BANK OF AMERICA NA
5
223,482
3.37%
10
SUNTRUST BANK
6
220,686
3.33%
11
HOMETRUST BANK
3
176,200
2.66%
12
BLUE RIDGE SAVINGS BANK INC
5
152,267
2.30%
13
YADKIN VALLEY BANK&TRUST CO
5
131,472
1.98%
14
NANTAHALA BANK&TRUST CO
2
91,897
1.39%
15
FIRST CHARTER BANK
4
75,996
1.15%
16
ASHEVILLE SAVINGS BANK SSB
2
48,635
0.73%
17
HOME BANK
2
29,732
0.45%
18
AF BANK
1
28,729
0.43%
19
HIGHLANDS UNION BANK
2
25,111
0.38%
20
BANK OF GRANITE
1
22,590
0.34%
21
JACKSON SAVINGS BANK SSB
2
21,829
0.33%
22
PIEDMONT FS&LA
1
14,912
0.22%
23
FIRST GASTON BANK OF NC
1
14,231
0.21%
24
REGIONS BANK
1
13,825
0.21%
25
CARTER CNTY BK ELIZABETHTON
1
9,330
0.14%
Totals
152
6,634,484
100
Balanced Growth Strategy
Take advantage of market
and people opportunities
Partnerships and de novos
A “people decision”
8
Future Opportunities
Presented by:
John Goins
President Western North Carolina
1
North Carolina Markets
2
Hendersonville
De Novo
3
Henderson County
Market Share
4
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
Institution
FIRST-CITIZENS BANK&TRUST CO
CAROLINA FIRST BANK
MOUNTAIN 1ST BANK&TRUST CO
WACHOVIA BANK NATIONAL ASSN
SUNTRUST BANK
MACON BANK INC
HOMETRUST BANK
BANK OF AMERICA NA
BLUE RIDGE SAVINGS BANK INC
BRANCH BANKING&TRUST CO
ASHEVILLE SAVINGS BANK SSB
UNITED COMMUNITY BANK
RBC CENTURA BANK
Total in Market
6
3
4
2
3
2
1
1
2
2
1
1
1
29
375,975
300,194
199,897
180,158
115,517
111,972
92,038
72,074
61,732
50,391
36,378
32,247
29,037
1,657,610
22.68%
18.11%
12.06%
10.87%
6.97%
6.76%
5.55%
4.35%
3.72%
3.04%
2.19%
1.95%
1.75%
Branch
Count
Total
Deposits
in Market
$0
Total
Market
Share
(%)
Buncombe County
Potential for Market Share
5
Rank
1
2
3
4
5
6
7
8
9
10
11
12
14
Institution
WACHOVIA BANK NATIONAL ASSN
FIRST-CITIZENS BANK&TRUST CO
BANK OF AMERICA NA
SUNTRUST BANK
ASHEVILLE SAVINGS BANK SSB
BRANCH BANKING&TRUST CO
HOMETRUST BANK
RBC CENTURA BANK
BANK OF ASHEVILLE
CAROLINA FIRST BANK
CAPITAL BANK
MOUNTAIN 1ST BANK&TRUST CO
BLACK MOUNTAIN SB SSB
Total in Market
10
13
8
10
8
4
3
7
4
3
3
2
2
1
1
1
80
1,043,017
430,922
421,968
337,128
333,541
162,867
155,151
147,076
125,767
110,052
73,591
58,633
52,139
26,501
24,349
18,271
3,520,973
29.62%
12.24%
11.98%
9.57%
9.47%
4.63%
4.41%
4.18%
3.57%
3.13%
2.09%
1.67%
1.48%
0.75%
0.69%
0.52%
Branch
Count
Total
Deposits
in Market
$0
Total
Market
Share
(%)
13
BLUE RIDGE SAVINGS BANK INC
15
FIRST CHARTER BANK
16
MACON BANK INC
Opportunities
Expansion
Fee Income Priorities
30% Revenue Growth
Cash Management
Advisory Services
Mortgage
Corporate Services
6
North Carolina
Market Share
7
Total
Total
Deposits
Market
Branch
in Market
Share
Rank
Institution
Count
$0
(%)
1
WACHOVIA BANK NATIONAL ASSN
330
80,925,514
41.46%
2
BANK OF AMERICA NA
199
27,979,361
14.33%
3
BRANCH BANKING&TRUST CO
339
25,073,409
12.85%
4
FIRST-CITIZENS BANK&TRUST CO
284
9,991,589
5.12%
5
SUNTRUST BANK
199
7,879,489
4.04%
6
RBC CENTURA BANK
185
7,581,371
3.88%
7
FIRST CHARTER BANK
63
3,004,960
1.54%
8
FIRST BANK
56
1,459,839
0.75%
9
FIDELITY BANK
65
1,113,545
0.57%
10
CAPITAL BANK
26
1,030,534
0.53%
11
CAROLINA FIRST BANK
25
1,008,173
0.52%
12
SOUTHERN COMMUNITY B&T
20
985,173
0.50%
13
BANK OF GRANITE
21
981,868
0.50%
14
SOUTHERN BANK&TRUST CO
54
933,196
0.48%
15
UNITED COMMUNITY BANK
18
883,065
0.45%
16
YADKIN VALLEY BANK&TRUST CO
23
867,090
0.44%
136
GREYSTONE BANK
1
966
0.00%
Total in Market
2606
195,193,246
Corporate Marketing Briefing
Presented by:
Craig Metz
1
Employee Satisfaction
Employee satisfaction is
critical to customer
satisfaction.
“Overall, United Community
Bank is an excellent place to
work”
88
89
90
91
92
2005
2006
2007
2
Customer Satisfaction
Customer satisfaction is
critical to shareholder
value creation.
“Overall, customer satisfaction
with our service.”
Treatment
Transactions
Needs Assessment
88
89
90
91
92
2005
2006
2007
3
How does UCBI Compare?
One of the top-tier
performance banks in
the country
Well served customers
Stay longer
Buy more products
Recommend their friends
70
75
80
85
90
95
2004
2005
2006
Banks
Wachovia
UCBI
4
Meeting Objective
Focus on the Core Deposit Initiative
Specifically review the performance of the
direct marketing channel
Consider the Return on Investment by market
Make recommendations for change based on
these findings
Reduce costs where prudent
5
Core Deposit
Marketing Strategy
Targeting Tactic’s
2004 Neighbors of existing checking customers were targeted with radius limits
2005 Prioritized mail penetration into more responsive areas
2006 New customers profiled (response model – who)
Discern key common attributes
Build response model
Append demographic data to determine best prospects
2006, Mapping of branch geographic footprint (penetration model - where)
Overlay prospects
Score high response areas
2007, Fence lining & segmentation
6
Data Integrity
In 2006, we opened 50,035 DDA and Savings
accounts, up 6% from 2005 at 47,151
7
5,000
4,500
4,000
3,500
3,000
2,500
2,000
Jan
Feb
Mar
Apl
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
2003
2004
2005
2006
2007
50,035 in 2006
8
2000
2500
3000
3500
4000
4500
5000
Jan
Feb
Mar
Apl
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Product Mix
12.68
17,530
Loan
28.10
38,856
Savings
31.49
43,554
CD’s
27.73
38,353
DDA’s
100.00
138,293
Total Accounts
4x letters per HH
448,635
Unique Mail
7x cycles per year
1,827,713
Total Mail
Percent
Count
Description
9
Referrals
18.7 percent of all new account openings
are referred by employees
4.3 percent of new accounts come from
customer referrals
In 2006, we referred 11,500 accounts
worth ( based on a very conservative 4-year life on
book ) $15 million dollars in revenue
10
Treasury/ALCO
Presented by:
Dave Viar
SVP, Treasurer
1
Primary Objectives
Manage
Analysis
Support
Interest Rate Risk
Derivatives
Investment Portfolio
Wholesale Borrowing
Liquidity
Capital
Pricing
Community Banking
2
Investment Portfolio
Balance
Book Yield
Average Life
Duration
Percent of Assets
1Q 06
$1,184 M
5.14%
2.9 Years
2.3 Years
16%
$ 984 M
4.80%
3.3 Years
2.6 Years
16%
1Q 07
3
Investment Portfolio
Treasury
Agency
Pass Thru
CMOs
Corporates
Munis – Tax Exempt
Munis – Taxable
Equity Investments
–
45%
17%
31%
0%
4%
0%
3%
$ –
536,784
203,560
364,738
2,016
42,417
2,400
37,525
$1,189,440
4
Manage Interest Rate Risk
Simulation
Net Interest Income
Economic Value of Equity
Daily Balance Sheet Management
5
<3 Mo <12 Mo <3 Yr <5 Yr
1Q 07 67% 83% 94% 98%
1Q 06 68% 85% 95% 99%
Loans – Maturing / Repricing
6
Interest Rate Risk
Simulation – Net interest Income
7
Rate
Change
Policy
1Q 07
4Q 06
1Q 06
+ 200
<± 10%
1.5%
1.9%
3.4%
- 200
<± 10%
(0.3%)
(0.7%)
(6.2%)
Interest Rate Risk
Economic Value of Equity
8
Rate
Change
Policy
1Q 07
4Q 06
1Q 06
+ 100
<± 10%
2.3%
(1.8%)
1.3%
- 100
<± 10%
(4.0%)
0.8%
(2.8%)
Net Interest Margin
Quarterly Trend
9
4.25%
4.00%
3.75%
3.50%
1Q 06
2Q 06
3Q 06
4Q 06
1Q 07
4.06%
4.07%
4.07%
3.99%
3.99%
Treasury/ALCO
Presented by:
Mitch Bleske
VP, Deputy Treasurer
1
Agenda
Wholesale Borrowings
CD Trends
Derivatives
Capital
2
Wholesale Borrowings
3
0
200
400
600
800
1,000
1,200
1,400
1,600
4Q 04
4Q 05
4Q 06
1Q 07
FHLB
Fed Funds
Repos
Brokered CDs
Notes & Debentures
Other
Wholesale Borrowings
% of Assets
Note: this ratio excludes notes & debentures
4
30%
25%
20%
15%
10%
5%
0%
3 Q 04
1 Q 05
3 Q 05
1 Q 06
3 Q 06
1 Q 07
12.0%
CD Growth
($ in thousands)
5
300
250
200
150
100
50
0
(50)
(100)
225
155
270
93
(62)
(39)
(23)
(24)
(52)
1 Q 07
4 Q 06
3 Q 06
2 Q 06
1 Q 06
(100)
(90)
(80)
(70)
(60)
(50)
(40)
(30)
(20)
(10)
CD Growth
Spread to FHLB
(62)
Interest Rate Derivatives
($ in millions)
6
3,500
3,000
2,500
2,000
1,500
1,000
500
0
4Q 04
4Q 05
4Q 06
1Q 07
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
30%
14%
33%
34%
Prime-Daily Loans
Derivative Notional
Interest Rate Derivatives
Receive Fixed Swaps
Prime-based
LIBOR-based
Prime Floors
($ in millions)
505
45
500
1,050
1.20
1.70
2.83
2.00
Balance
Remaining
Avg. Life
(years)
7
Capital Position
8
Target
1Q 07
4Q 06
1Q 06
Tier 1 Ratio
Total Capital Ratio
Leverage Ratio
Tangible Capital Ratio
> 7.0%
> 11.0%
> 6.0%
> 5.5%
9.3
6.7
7.6
11.7
9.0
8.9
11.3
7.7
6.5
11.6
7.3
6.2
Credit & Risk Management /
Loan Portfolio
Presented by:
David Shearrow
EVP, Risk Management
1
Credit Culture
Strong Asset Quality by:
Secured lending
Granular Portfolio
Geographic focus
Relationship orientation
Knowledge of our markets
People
2
People
Average of over 20 years experience at the CEO level
Highly involved local Boards
Local empowerment and accountability
Training
Defined programs to bring more consistency in process
3
Markets
Metro Characterized by:
Economic Growth: Job / Population
Diversified Economy
Larger, better capitalized builders & developers
Mountain Characterized by:
Retiree & Pre-retirement in-migration
Recession Resistant
Wealthy Clients
Smaller, diversified credits
Coastal
Blend of the strengths of Metro and Mountains
Metro vs. Mountain / Coastal
4
Conservative Underwriting
Community Model: Experienced bankers dealing with people and
markets they know.
Secured Lending
Average LTV less than 75%
Real Estate Appreciation
No Bubble
Atlanta 5%*
* Office of Federal Housing Enterprise Oversight
5
Conservative Underwriting
Involved Local Boards
Independent Appraisal Review Function
Seasoned Credit Officers: Average > 25 years experience
Intense focus on primary source of repayment, collateral support
and guarantor experience & financial wherewithal.
6
Loan Portfolio - Overview
Business Mix
Commercial Real Estate
Construction
Geographic Breakdown
Credit Quality Indicators
7
Diversified Lending
$5.4 billion as of 3/31/07
18% growth
12% core growth
Commercial: 29%
Construction: 43%
Residential Mortgage: 25%
Consumer – Installment: 3%
8
Commercial RE
6%
Commercial and Industrial
6%
Other (Secured by RE)
17%
Primarily ARMs
20% Commercial
80% Residential
Business Mix – Loans
($ in millions)
Commercial - Secured by RE
Commercial & industrial
Total Commercial
Construction (primarily res.)
Residential Mortgage
Consumer
Total
$ 1,227
315
1,542
2,336
1,354
170
$ 5,402
23
6
29
43
25
3
$ 1,230
296
1,526
2,334
1,338
179
$ 5,377
%
23
6
29
43
25
3
%
$ 1,055
237
1,292
1,739
1,206
161
$ 4,398
24
5
29
40
27
4
$ 174
292
68
8
1Q 07
Mix
4Q 05
4Q 06
Mix
Mix
Average
Loan Size
(000)
%
9
Loans – Commercial
Commercial & Industrial
Commercial RE (Office Buildings, Hotels/Motels)
Other (Secured by Real Estate)
Single Unit Retail Stores
Small Strip Centers
Small Warehouses/Storage Units
Farmland
Other Small Business
Total Commercial
($ in millions)
$ 315
338
113
91
81
61
543
$1,542
$ 296
350
113
91
92
55
529
$1,526
$ 237
277
102
67
72
54
483
$1,292
1Q 07
4Q 06
4Q 05
10
Loans – Construction
Commercial
Residential
Total Construction
Residential Breakdown
Land – Builders & Developers
Improved – Subdivisions / Lots
Construction – Spec 66%, Sold 34%
Total Residential
Residential
Atlanta Region
($ in millions)
462
1,874
2,336
122
941
811
1,874
899
1Q 07
4Q 06
4Q 05
mix
20%
80%
100%
470
1,863
2,333
127
942
794
1,863
901
mix
20%
80%
100%
358
1,381
1,739
88
697
596
1,381
627
20%
80%
100%
mix
48%
*
* Includes Metro Atlanta and Gainesville MSAs ** Percent of total company residential loans
48%
45%
**
**
**
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
11
Loans – Markets Served
North Georgia
Atlanta Region (incl. acq. of $267)
Coastal Georgia
Western North Carolina (incl. acq. of $8)
East Tennessee
Total
($ in millions)
$ 2,019
2,006
372
782
233
$ 5,402
1Q 07
4Q 06
4Q 05
$ 2,039
2,000
358
773
207
$ 5,377
$ 1,792
1,453
306
669
178
$ 4,398
*
* Includes Metro Atlanta and Gainesville MSAs
12
Credit Quality
Net Charge-Offs
Percent of Average Loans
Past Due Loans > 30 Days
Percent of Average Loans
Non-Performing Assets
Percent of Total Assets
Allowance as a Percent
of Total Loans
Allowance as a Percent
of NPLs
$ 5.5
.12%
$ 51.9
.97%
$ 13.7
.19%
1.24%
534%
1Q 07
2005
2004
($ in millions)
$ 1.5
.11%
$ 36.1
.66%
$ 14.3
.20%
1.27%
559%
2006
2003
$ 5.7
.14%
$ 31.4
.71%
$ 13.0
.22%
1.22%
447%
$ 3.6
.11%
$ 25.2
.67%
$ 8.7
.17%
1.26%
588%
$ 4.1
.15%
$ 19.4
.64%
$ 7.6
.19%
1.28%
583%
13
Managing Non-Performing Assets
Non-performing Assets
Percent of Assets
3/31/07
$ 14,292
.20%
12/31/06
$ 13,654
.19%
9/30/06
$ 9,347
.14%
6/30/06
$ 8,805
.14%
Intense Management Focus
SAD Unit and OREO Manager
Frequent Executive Meetings
Velocity
Aggressive Identification
Resolution of Problem Assets
Granular Portfolio
14
Credit Underwriting / Loan Approval Process
Presented by:
Chris Jones
SVP, Chief Credit Officer
1
Credit Underwriting
Credit officers average over 25 years experience
Analysts report to credit officer for objectivity and efficiency
Decentralized for responsiveness
Emphasis on capacity, character, and collateral
Appraisal review function: Gloria McColgan, MAI (formerly Chief
Appraiser for Bank of America)
2
Loan Approval Process
Lenders
CEO
Regional credit officers
Executive management and Board approvals for large relationships
3
Credit Administration
Lending Authorities
Two Holding Company Directors
Above $12.5 MM
UCBI President & CEO or Two EVPs
$12.5 MM
EVP (involved in credit approval process)
$7.5 MM secured
Chief Credit Officer
$5 MM secured
Regional Credit Managers
Joint authority with bank CEO
$3 MM secured
Bank CEO
$250 M to $2 MM
4
Lending – Credit Summary
Legal lending limit
House lending limit
Top 25 relationships
8% of total loans
($ in millions)
$170
15
438
5
Construction Lending –Atlanta Region
Presented by:
Gary Guthrie
SVP, Real Estate Lending – Atlanta Region
1
Atlanta Region Real Estate Lending Structure
Centralized management of lending process including loan
administration and credit
Enhanced reporting
Dedicated Real Estate Lenders continue to be located in bank but
report to the Metro Atlanta Real Estate Lending Group
Individual bank’s budgets are not affected – loans are booked into
each bank and they receive income from the loans
Bank CEOs remain involved in business development
Construction and A&D
2
Atlanta Region* Construction and A&D
Commercial
Residential
Total Construction
Residential Breakdown
Land – Builders & Developers
Improved – Subdivisions / Lots
Construction – Spec 72%, Sold 28%
Total Residential
($ in millions)
251
899
1,150
52
429
418
899
1Q 07
4Q 06
4Q 05
mix
22%
78%
100%
273
901
1,174
57
430
414
901
mix
23%
77%
100%
187
627
814
33
292
302
627
23%
77%
100%
mix
* Includes Metro Atlanta and Gainesville MSAs
$
$
$
$
$
$
$
$
$
$
$
$
3
Atlanta Housing Market
First Quarter 2007
UCB
Eugene James - Director
4
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Dallas/Fort Worth, TX
Houston, TX
Phoenix, AZ
New York, NY-NJ-PA
LA Coastal, CA
Bay Area, CA
Chicago/Rockford, IL
Seattle, WA
Wash DC-MD-VA
Central Florida, FL
Atlanta, GA
Inland Empire, CA
Las Vegas, NV
Salt Lake, UT
New Orleans, LA
Denver, CO
Austin, TX
Central California,CA
Tampa Bay, FL
Charlotte, NC
Philadelphia, PA-NJ-MD
Raleigh/Durham, NC
South Florida, FL
San Antonio, TX
San Jose-Sunnyvale-Santa Clara CA
Source: U. S. Bureau of Labor Statistics
Metrostudy MARKETS
Top 25 Job Growth Markets
National Economic Overview
5
0
10,000
20,000
30,000
40,000
50,000
60,000
Atlanta, GA
Houston, TX
Chicago/Rockford, IL
Central Florida, FL
Dallas/Fort Worth, TX
Inland Empire, CA
Phoenix, AZ
LA Coastal, CA
Wash DC-MD-VA
South Florida, FL
Las Vegas, NV
Denver, CO
Central California,CA
Charlotte, NC
Naples/Ft. Myers, FL
Tampa Bay, FL
Raleigh/Durham, NC
Bay Area, CA
Austin, TX
New York, NY-NJ-PA
Twin Cities, MN
Salt Lake, UT
Seattle, WA
Nashville, TN
San Antonio, TX
METROSTUDY MARKETS
Source: U. S. Dept of Commerce
National Economic Overview
Top 25 US Housing Markets
6
ATLANTA ECONOMIC OVERVIEW
ANNUAL RATE OF NON-AG NEW JOB FORMATION
TOTAL EMPLOYMENT
-100,000
-50,000
0
50,000
100,000
150,000
NEW JOBS
41,700
Atlanta Employment
7
5,300
-3,800
7,400
-1,500
3,000
7,100
7,400
8,000
8,800
-10,000
0
10,000
20,000
30,000
40,000
50,000
NET NEW
JOBS
41,700
Atlanta Employment
8
Atlanta Housing Market
9
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
Quarterly Starts
Quarterly Closings
5,968
Atlanta Housing Market
(29.6%)
(24.5%)
5,568
10
-
5,000
10,000
15,000
20,000
25,000
30,000
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Fin Vacant
Under Const
Housing Mos
North Atlanta Housing Market
11
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
VDL Inv
VDL Mos
North Atlanta Housing Market
29.8 Mos
12
UNDER $150,000
$150,000 to $ 200,000
$300,000 to $400,000
$200,000 to $300,000
$500,000 to $750,000
$400,000 to $500,000
$750,000+
3% 3%
12% 8%
28% 21%
13% 17 %
33% 36%
6% 7%
6% 8%
1Q 2007
1Q 2006
North Atlanta Closings
By Price Range
13
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Quarterly Starts
Quarterly Closings
South Atlanta Housing Market
(37.8%)
3,614
(15.5%)
3,882
14
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
0.0
2.0
4.0
6.0
8.0
10.0
Fin Vacant
Under Const
Housing Mos
South Atlanta Housing Market
9.2
15
-
10,000
20,000
30,000
40,000
50,000
60,000
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
VDL Inv
VDL Mos
South Atlanta Housing Market
31.8 Mos
16
UNDER $150,000
$150,000 to $ 200,000
$300,000 to $400,000
$200,000 to $300,000
$500,000 to $750,000
$400,000 to $500,000
$750,000+
<1% 1%
28% 20%
37% 33%
8% 10%
22% 31%
1% 2%
3% 3%
1Q 2007
1Q 2006
South Atlanta Closings
By Price Range
17
7.18
8.27
8.52
7.79
6.27
7.14
7.36
6.76
5.78
6.95
7.56
7.56
6.74
8.45
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Annual Closings
Total Inventory
MOS
Source: FMLS
Closings up 3%
Atlanta Region
Resale Market Trend
Inventory up 25%
18
ATL
Major Feeder Markets
Minor Feeder Markets
Top Transferee Feeder Markets for Georgia
19
7.4%
7.1%
6.5%
6.0%
7.8%
8.2%
9.8%
12.7%
11.8%
12.9%
13.8%
12.6%
13.3%
12.8%
10.3%
7.9%
5.9%
4.5%
4.5%
4.5%
3.3%
3.3%
3.9%
4.2%
5.1%
5.6%
5.6%
6.1%
6.5%
6.4%
6.4%
6.1%
5.5%
5.6%
0%
2%
4%
6%
8%
10%
12%
14%
16%
4Q02
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
US Annual Appreciation
Georgia
Source: OFHEO
Georgia’s Top Transferee Feeder Markets: Annual Home Price
Appreciation Trends
20
10.4%
10.5%
9.8%
9.2%
11.7%
12.7%
15.2%
19.8%
19.8%
22.5%
25.8%
26.5%
28.1%
27.2%
21.4%
15.0%
9.5%
0%
5%
10%
15%
20%
25%
30%
4Q02
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
US Annual Appreciation
Florida
Source: OFHEO
Georgia’s Top Transferee Feeder Markets: Annual Home Price
Appreciation Trends
21
13.3%
12.9%
11.3%
10.8%
14.4%
15.4%
20.4%
27.8%
24.9%
26.5%
25.9%
20.4%
21.6%
19.4%
14.6%
10.1%
4.6%
0%
5%
10%
15%
20%
25%
30%
4Q02
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
US Annual Appreciation
California
Source: OFHEO
Georgia’s Top Transferee Feeder Markets: Annual Home Price
Appreciation Trends
22
12.7%
11.5%
9.4%
9.1%
12.2%
12.2%
14.0%
18.1%
15.1%
16.6%
14.6%
16.0%
15.2%
12.4%
9.3%
5.8%
17.8%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
4Q02
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
US Annual Appreciation
New Jersey
Source: OFHEO
Appreciation Trends
Georgia’s Top Transferee Feeder Markets: Annual Home Price
23
21.6
28.06
19.9
15.97
13.27
Top Transferee Feeder Markets for Georgia: State Ann. Appreciation %
6.35
Source: OFHEO
4Q05 Rates
US Annual Home Appreciation Trends
National 4Q 05: 13.25%
24
Top Transferee Feeder Markets for Georgia: State Ann. Appreciation %
Source: OFHEO
7.46
4.9
9.45
5.8
5.58
4.9
4Q06 Rates
US Annual Home Appreciation Trends
National 4Q 06: 5.87%
25
#1
#2
#3
#4
#5
#6
#7
#8
#9
#10
Top Ten Builders:
National 4Q 06: 5.87%
26
Atlanta Region
75.2%
Top Ten Builders
24.8%
John Wieland Homes
1.5%
Bowen Family Homes
2.2%
KB Homes
2.1%
McCar Homes
1.8%
Ryland Homes
2.6%
Pulte Home Corp.
3.2%
Homelife Communities
2.9%
Beazer Homes
1.6%
Legacy Communities
3.6%
DR Horton Homes
3.3%
20%
21%
22%
23%
24%
25%
26%
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
Top Ten Builders: Percentage Share of Atlanta Region
Annual Start vs. Annual Closings
27
Annual Closings %
Annual Starts %
Global Risk Management
Presented by:
David Shearrow
EVP, Risk Management
1
Global Risk Management
Enterprise concept, not just credit risk
Risk management process
2
Enterprise Risk Types
Credit Risk: The risk to earnings and capital arising from an obligor’s failure to meet the terms of any contract
with the institution, or otherwise fail to perform as agreed.
Interest Rate / Market Risk: The risk to a financial institution’s condition resulting from adverse
movements
in interest rates, or changes in the value of portfolios of financial instruments.
Liquidity Risk: The risk to earnings or capital that arises from a financial institution’s inability to meet its
obligations when they come due without incurring unacceptable losses.
Compliance / Legal Risk: Risk arising from violations of or non-conformance with the laws,
regulations, or prescribed
practices which govern the institution’s activities. Legal risk arises from potential
unenforceable contract, lawsuit, or judgment.
Transaction Risk: Risk arising from the potential that inadequate information systems, operational
problems, breaches
in internal controls, fraud or unforeseen catastrophes will result in unexpected losses.
Reputational Risk: Risk arising from negative public, regulatory, industry, and capital markets opinion.
Strategic Risk: Risk resulting from adverse business decisions or
the improper implementation of those decisions.
3
Board of Directors
Audit Committee
Disclosure Committee
Risk Policy Committee
President & CEO
EVP Chief Financial Officer
EVP Banking
EVP Secretary & General Counsel
EVP Risk Management & Chief Risk Officer
EVP Marketing
SVP Retail Banking
Risk Management Committee
Risk Management Chart
Co-Chairs:
EVP Risk Management & Chief Risk Officer
EVP Secretary & General Counsel
SVP Controller
SVP Human Resources
SVP Operations &
Technology
SVP Chief Credit Officer
SVP Treasurer
SVP General Auditor
SVP Retail Banking
SVP Credit Administration
SVP Chief Compliance
Officer
4
Technology / Operations
Presented by:
Jim Stewart
SVP, Technology & Operations
1
Our Role
Provide a sound infrastructure of technologies to support the
customer-centric, service-based corporate goals and objectives
Produce a suite of products and banking applications that our banks
would choose if they had a choice
Allow the customer to see us as 27 $300 million banks while
operating with efficiency as a $8.0 billion bank
Bottom line…
Our job is to allow our bankers to be better bankers
2
How Do We Do It?
Downtime is not an option – impact on service
Redundancy – eliminate single points of failure
Alternate Production Site – Cleveland, GA
Constant communication with business units – banks, credit
administration, mortgage, finance, accounting, treasury, marketing,
retail banking
3
Citrix Server Farm
26 Load Balanced Servers
n
+2 Model
Bank Location
Unisys
FS1600
ITI Core System
August 2006
BLAIRSVILLE
NetApp
Storage Area Network
Clustered Application Servers
150+ servers
Consumer and Commercial
Internet Banking
Verizon Business
Private IP Network
DSL Backup
CLEVELAND, GA
Alternate Production Site
Unisys Mainframe for ITI Core System
Storage Area Network
Server Farm
Application Servers
Objective: 100% Functionality to 50% of
end users as quickly as possible
Multiple Paths on
Windstream Fiber Optic Ring
Windstream Fiber Optic Ring
Marietta, GA
Fletcher, NC
Brunswick, GA
CHECK PROCESSING CENTERS
Perimeter
Firewall
"in the cloud"
4
Managing Our Growth
Integration of newly acquired institutions – tried and true
methodology on numerous core systems
Team approach – all areas are represented in weekly status
meetings including the acquiree
Scalability – foundation has been built to support our continued
growth, both organic and acquisition
Financial investments in technology – goal is to smooth the curve
and eliminate “writing the big check”
5
Account Volume Growth
6
600,000
550,000
500,000
450,000
400,000
350,000
300,000
250,000
1-05
4-05
7-05
10-05
1-06
4-06
7-06
10-06
1-07
Challenges for the Future
Security, security, security
Driving down variable costs – telephony as an example
Leveraging technology to create efficiencies without compromising
our community bank model – Check 21, remote merchant capture,
check processing model
Adhering to standards in order to preserve our scalability and
harden our security
7
Closing Remarks
Presented by:
Jimmy Tallent
CEO United Community Banks, Inc.
1
High Quality Growth
Total Revenue
Operating Expense
Net Income
EPS
Loans
Deposits
($ in millions)
75.8
44.8
19.3
.44
5,402
5,842
64.2
38.5
16.0
.39
4,584
4,748
18
17
21
13
18
23
2007
2006
%
First Quarter
2
Profitable Growth
Return on Tangible Equity
Return on Equity
Return on Assets
Net Interest Margin
Efficiency Ratio
17.18
12.48
1.11
3.99
56.56
17.66
13.25
1.09
4.06
56.79
2007
2006
First Quarter
%
%
3
Why Invest in UCBI
High quality growth
over a long period
of time
Business model
Commitment to
shareholder value
Ownership
4
Thank You For Attending
5
