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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):
July 24, 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 o

 

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. o

 

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition.
   
 

On July 24, 2018, United Community Banks, Inc. (the “Registrant”) issued a news release announcing its financial results for the quarter ended June 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 July 25, 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 Second Quarter 2018 Investor Presentation (the “Investor Presentation”), which was posted to the Registrant’s website at www.ucbi.com on July 24, 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 July 24, 2018
   
99.2   Investor Presentation, Second 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: July 24, 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 Strong Second Quarter Results

Continued Margin Expansion, EPS up 26% year over year

 

BLAIRSVILLE, GA – July 24, 2018

 

United Community Banks, Inc. (NASDAQ: UCBI) (“United”) showed strong second quarter results, with solid year-over-year loan and deposit growth, efficiency improvements and continued outstanding asset quality trends. Reported earnings per share were $0.49, up 26 percent from a year ago. Excluding merger-related and other charges, earnings per share were $0.53, up 29 percent from a year ago. United also enhanced profitability with increases in return on assets and return on tangible equity.

 

Notable highlights for the quarter included strong performance from United’s recently acquired equipment finance company, Navitas Credit Corporation, as well as meaningful margin expansion. United also saw increased production in its mortgage, SBA, and brokerage units. The quarter included a one-time increase in tax expense due to changes in the Georgia state tax law.

 

“I am pleased with our second quarter performance and am excited about the remainder of the year.” said Lynn Harton, United’s Chief Executive Officer.  “Our teams continue to deliver outstanding service to our clients, as evidenced by their recognition this quarter by J.D. Power as having the highest Retail Banking Satisfaction in the Southeast for the fifth consecutive year. Our new markets and investments are doing very well and have strong expectations for the balance of the year. We continue to make progress on our return on assets targets and are proud to have attained a 1.39% return on assets this quarter on an operating basis.”

 

Second Quarter 2018 Financial Highlights:

 

● Return on assets of 1.30 percent, or 1.39 percent, excluding merger-related and other charges

● Return on common equity was 11.2 percent. Excluding merger-related and other charges, return on tangible common equity was 15.8 percent

● Loan growth, excluding planned runoff of the indirect portfolio, of 4% on an annualized basis

● Record loan production of $812 million vs. $667 million in Q2 2017

 

 1 

 

 

● Solid performance from Navitas with $42 million in Q2 loan and lease growth

● Net interest margin of 3.90 percent, up 10 basis points from the first quarter of 2018 and up 43 basis points from a year ago

● Efficiency ratio of 57.9 percent, or 55.8 percent, excluding merger-related and other charges

● Net charge offs of seven basis points, compared with eight basis points last quarter

● Nonperforming assets of 0.20 percent of total assets, compared with 0.24 percent at both March 31, 2018 and June 30, 2017.

 

Conference Call

 

United will hold a conference call, Wednesday, July 25, 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 5575248. 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

   2018   2017  

Second

Quarter

  

For the Six

Months Ended		   YTD 
   Second   First   Fourth   Third   Second   2018-2017   June 30,   2018-2017 
(in thousands, except per share data)  Quarter   Quarter   Quarter   Quarter   Quarter   Change   2018   2017   Change 
INCOME SUMMARY                                             
Interest revenue  $122,215   $115,290   $106,757   $98,839   $93,166        $237,505   $184,124      
Interest expense   13,739    12,005    9,249    9,064    8,018         25,744    15,422      
    Net interest revenue   108,476    103,285    97,508    89,775    85,148    27%   211,761    168,702    26%
Provision for credit losses   1,800    3,800    1,200    1,000    800         5,600    1,600      
Noninterest income   23,340    22,396    21,928    20,573    23,685    (1)   45,736    45,759    - 
   Total revenue   130,016    121,881    118,236    109,348    108,033    20    251,897    212,861    18 
Expenses   76,850    73,475    75,882    65,674    63,229    22    150,325    126,055    19 
Income before income tax expense   53,166    48,406    42,354    43,674    44,804    19    101,572    86,806    17 
Income tax expense   13,532    10,748    54,270    15,728    16,537    (18)   24,280    35,015    (31)
Net income   39,634    37,658    (11,916)   27,946    28,267    40    77,292    51,791    49 
Merger-related and other charges   2,873    2,646    7,358    3,420    1,830         5,519    3,884      
Income tax benefit of merger-related and other charges   (121)   (628)   (1,165)   (1,147)   (675)        (749)   (1,433)     
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)  $42,386   $39,676   $32,476   $30,219   $29,422    44   $82,062   $57,642    42 
                                              
PERFORMANCE MEASURES                                             
  Per common share:                                             
    Diluted net income - GAAP  $0.49   $0.47   $(0.16)  $0.38   $0.39    26   $0.97   $0.72    35 
    Diluted net income - operating  (1)   0.53    0.50    0.42    0.41    0.41    29    1.03    0.80    29 
    Cash dividends declared   0.15    0.12    0.10    0.10    0.09    67    0.27    0.18    50 
    Book value   17.29    17.02    16.67    16.50    15.83    9    17.29    15.83    9 
    Tangible book value (3)   13.25    12.96    13.65    14.11    13.74    (4)   13.25    13.74    (4)
                                              
  Key performance ratios:                                             
    Return on common equity - GAAP (2)(4)   11.20%   11.11%   (3.57)%   9.22%   9.98%        11.15%   9.27%     
    Return on common equity - operating (1)(2)(4)   11.97    11.71    9.73    9.97    10.39         11.84    10.32      
    Return on tangible common equity - operating (1)(2)(3)(4)   15.79    15.26    11.93    11.93    12.19         15.53    12.15      
    Return on assets - GAAP (4)   1.30    1.26    (0.40)   1.01    1.06         1.28    0.98      
    Return on assets - operating (1)(4)   1.39    1.33    1.10    1.09    1.10         1.36    1.09      
    Dividend payout ratio - GAAP   30.61    25.53    (62.50)   26.32    23.08         27.84    25.00      
    Dividend payout ratio - operating (1)   28.30    24.00    23.81    24.39    21.95         26.21    22.50      
    Net interest margin (fully taxable equivalent) (4)   3.90    3.80    3.63    3.54    3.47         3.85    3.46      
    Efficiency ratio - GAAP   57.94    57.83    63.03    59.27    57.89         57.89    58.58      
    Efficiency ratio - operating  (1)   55.77    55.75    56.92    56.18    56.21         55.76    56.77      
    Average equity to average assets   11.21    11.03    11.21    10.86    10.49         11.13    10.36      
    Average tangible equity to average assets (3)   8.83    8.82    9.52    9.45    9.23         8.82    9.09      
    Average tangible common equity to average assets (3)   8.83    8.82    9.52    9.45    9.23         8.82    9.09      
    Tangible common equity to risk-weighted assets (3)(5)   11.40    11.19    12.05    12.80    12.44         11.40    12.44      
                                  -           
ASSET QUALITY                                             
  Nonperforming loans  $21,817   $26,240   $23,658   $22,921   $23,095    (6)  $21,817   $23,095    (6)
  Foreclosed properties   2,597    2,714    3,234    2,736    2,739    (5)   2,597    2,739    (5)
    Total nonperforming assets (NPAs)   24,414    28,954    26,892    25,657    25,834    (5)   24,414    25,834    (5)
  Allowance for loan losses   61,071    61,085    58,914    58,605    59,500    3    61,071    59,500    3 
  Net charge-offs   1,359    1,501    1,061    1,635    1,623    (16)   2,860    3,302    (13)
  Allowance for loan losses to loans   0.74%   0.75%   0.76%   0.81%   0.85%        0.74%   0.85%     
  Net charge-offs to average loans (4)   0.07    0.08    0.06    0.09    0.09         0.07    0.10      
  NPAs to loans and foreclosed properties   0.30    0.35    0.35    0.36    0.37         0.30    0.37      
  NPAs to total assets   0.20    0.24    0.23    0.23    0.24         0.20    0.24      
                                              
AVERAGE BALANCES ($ in millions)                                             
  Loans  $8,177   $7,993   $7,560   $7,149   $6,980    17   $8,086   $6,942    16 
  Investment securities   2,802    2,870    2,991    2,800    2,775    1    2,836    2,798    1 
  Earning assets   11,193    11,076    10,735    10,133    9,899    13    11,135    9,885    13 
  Total assets   12,213    12,111    11,687    10,980    10,704    14    12,163    10,691    14 
  Deposits   9,978    9,759    9,624    8,913    8,659    15    9,869    8,626    14 
  Shareholders’ equity   1,370    1,336    1,310    1,193    1,123    22    1,353    1,108    22 
  Common shares - basic (thousands)   79,753    79,205    76,768    73,151    71,810    11    79,477    71,798    11 
  Common shares - diluted (thousands)   79,755    79,215    76,768    73,162    71,820    11    79,487    71,809    11 
                                              
AT PERIOD END ($ in millions)                                             
  Loans  $8,220   $8,184   $7,736   $7,203   $7,041    17   $8,220   $7,041    17 
  Investment securities   2,834    2,731    2,937    2,847    2,787    2    2,834    2,787    2 
  Total assets   12,386    12,264    11,915    11,129    10,837    14    12,386    10,837    14 
  Deposits   9,966    9,993    9,808    9,127    8,736    14    9,966    8,736    14 
  Shareholders’ equity   1,379    1,357    1,303    1,221    1,133    22    1,379    1,133    22 
  Common shares outstanding (thousands)   79,138    79,123    77,580    73,403    70,981    11    79,138    70,981    11 

 

(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) Second quarter 2018 ratio is preliminary.

 

 3 

 

 

UNITED COMMUNITY BANKS, INC.

Financial Highlights

Selected Financial Information

   2018   2017   For the Six Months Ended 
   Second   First   Fourth   Third   Second   June 30, 
(in thousands, except per share data)  Quarter   Quarter   Quarter   Quarter   Quarter   2018   2017 
Expense reconciliation                                   
Expenses (GAAP)  $76,850   $73,475   $75,882   $65,674   $63,229   $150,325   $126,055 
Merger-related and other charges   (2,873)   (2,646)   (7,358)   (3,420)   (1,830)   (5,519)   (3,884)
    Expenses - operating  $73,977   $70,829   $68,524   $62,254   $61,399   $144,806   $122,171 
Net income reconciliation                                   
Net income (GAAP)  $39,634   $37,658   $(11,916)  $27,946   $28,267   $77,292   $51,791 
Merger-related and other charges   2,873    2,646    7,358    3,420    1,830    5,519    3,884 
Income tax benefit of merger-related and other charges   (121)   (628)   (1,165)   (1,147)   (675)   (749)   (1,433)
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  $42,386   $39,676   $32,476   $30,219   $29,422   $82,062   $57,642 
Diluted income per common share reconciliation                                   
Diluted income per common share (GAAP)  $0.49   $0.47   $(0.16)  $0.38   $0.39   $0.97   $0.72 
Merger-related and other charges   0.04    0.03    0.08    0.03    0.02    0.06    0.03 
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  $0.53   $0.50   $0.42   $0.41   $0.41   $1.03   $0.80 
Book value per common share reconciliation                                   
Book value per common share (GAAP)  $17.29   $17.02   $16.67   $16.50   $15.83   $17.29   $15.83 
Effect of goodwill and other intangibles   (4.04)   (4.06)   (3.02)   (2.39)   (2.09)   (4.04)   (2.09)
   Tangible book value per common share  $13.25   $12.96   $13.65   $14.11   $13.74   $13.25   $13.74 
Return on tangible common equity reconciliation                                   
Return on common equity (GAAP)   11.20%   11.11%   (3.57)%   9.22%   9.98%   11.15%   9.27%
Merger-related and other charges   0.77    0.60    1.86    0.75    0.41    0.69    0.44 
Impact of tax reform on remeasurement of deferred tax asset   -    -    11.44    -    -    -    - 
Release of disproportionate tax effects lodged in OCI   -    -    -    -    -    -    0.61 
Return on common equity - operating   11.97    11.71    9.73    9.97    10.39    11.84    10.32 
Effect of goodwill and other intangibles   3.82    3.55    2.20    1.96    1.80    3.69    1.83 
    Return on tangible common equity - operating   15.79%   15.26%   11.93%   11.93%   12.19%   15.53%   12.15%
Return on assets reconciliation                                   
Return on assets (GAAP)   1.30%   1.26%   (0.40)%   1.01%   1.06%   1.28%   0.98%
Merger-related and other charges   0.09    0.07    0.20    0.08    0.04    0.08    0.05 
Impact of tax reform on remeasurement of deferred tax asset   -    -    1.30    -    -    -    - 
Release of disproportionate tax effects lodged in OCI   -    -    -    -    -    -    0.06 
    Return on assets - operating   1.39%   1.33%   1.10%   1.09%   1.10%   1.36%   1.09%
Dividend payout ratio reconciliation                                   
Dividend payout ratio (GAAP)   30.61%   25.53%   (62.50)%   26.32%   23.08%   27.84%   25.00%
Merger-related and other charges   (2.31)   (1.53)   12.04    (1.93)   (1.13)   (1.63)   (1.00)
Impact of tax reform on remeasurement of deferred tax asset   -    -    74.27    -    -    -    - 
Release of disproportionate tax effects lodged in OCI   -    -    -    -    -    -    (1.50)
    Dividend payout ratio - operating   28.30%   24.00%   23.81%   24.39%   21.95%   26.21%   22.50%
Efficiency ratio reconciliation                                   
Efficiency ratio (GAAP)   57.94%   57.83%   63.03%   59.27%   57.89%   57.89%   58.58%
Merger-related and other charges   (2.17)   (2.08)   (6.11)   (3.09)   (1.68)   (2.13)   (1.81)
    Efficiency ratio - operating   55.77%   55.75%   56.92%   56.18%   56.21%   55.76%   56.77%
Average equity to assets reconciliation                                   
Equity to assets (GAAP)   11.21%   11.03%   11.21%   10.86%   10.49%   11.13%   10.36%
Effect of goodwill and other intangibles   (2.38)   (2.21)   (1.69)   (1.41)   (1.26)   (2.31)   (1.27)
    Tangible equity to assets   8.83    8.82    9.52    9.45    9.23    8.82    9.09 
Effect of preferred equity   -    -    -    -    -    -    - 
    Tangible common equity to assets   8.83%   8.82%   9.52%   9.45%   9.23%   8.82%   9.09%
Tangible common equity to risk-weighted assets reconciliation (1)                                   
Tier 1 capital ratio (Regulatory)   11.97%   11.61%   12.24%   12.27%   11.91%   11.97%   11.91%
Effect of other comprehensive income   (0.57)   (0.50)   (0.29)   (0.13)   (0.15)   (0.57)   (0.15)
Effect of deferred tax limitation   0.34    0.42    0.51    0.94    0.95    0.34    0.95 
Effect of trust preferred   (0.34)   (0.34)   (0.36)   (0.24)   (0.25)   (0.34)   (0.25)
Basel III intangibles transition adjustment   -    -    (0.05)   (0.04)   (0.02)   -    (0.02)
    Tangible common equity to risk-weighted assets   11.40%   11.19%   12.05%   12.80%   12.44%   11.40%   12.44%

 

(1) Second quarter 2018 ratios are preliminary.

 

 4 

 

 

UNITED COMMUNITY BANKS, INC.

Financial Highlights

Loan Portfolio Composition at Period-End

   2018   2017   Linked   Year over 
   Second   First   Fourth   Third   Second   Quarter   Year 
(in millions)  Quarter   Quarter   Quarter   Quarter   Quarter   Change   Change 
LOANS BY CATEGORY                                   
Owner occupied commercial RE  $1,682   $1,898   $1,924   $1,792   $1,723   $(216)  $(41)
Income producing commercial RE   1,821    1,677    1,595    1,413    1,342    144    479 
Commercial & industrial   1,193    1,142    1,131    1,084    1,088    51    105 
Commercial construction   735    691    712    583    587    44    148 
Equipment financing   465    423    -    -    -    42    465 
     Total commercial   5,896    5,831    5,362    4,872    4,740    65    1,156 
Residential mortgage   1,021    992    974    933    881    29    140 
Home equity lines of credit   708    712    731    689    665    (4)   43 
Residential construction   195    190    183    190    193    5    2 
Consumer   400    459    486    519    562    (59)   (162)
     Total loans  $8,220   $8,184   $7,736   $7,203   $7,041    36    1,179 
LOANS BY MARKET                                   
North Georgia  $1,001   $1,004   $1,019   $1,047   $1,065    (3)   (64)
Atlanta MSA   1,533    1,513    1,510    1,477    1,445    20    88 
North Carolina   1,067    1,037    1,049    542    541    30    526 
Coastal Georgia   623    635    630    634    623    (12)   - 
Gainesville MSA   230    231    248    242    246    (1)   (16)
East Tennessee   474    473    475    471    486    1    (12)
South Carolina   1,571    1,537    1,486    1,470    1,260    34    311 
Commercial Banking Solutions   1,444    1,438    961    920    926    6    518 
Indirect auto   277    316    358    400    449    (39)   (172)
     Total loans  $8,220   $8,184   $7,736   $7,203   $7,041    36    1,179 

 

 5 

 

 

UNITED COMMUNITY BANKS, INC.

Financial Highlights

Credit Quality

   Second Quarter 2018   First Quarter 2018   Fourth Quarter 2017 
   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  $5,772   $812   $6,584   $6,757   $1,121   $7,878   $4,923   $1,955   $6,878 
Income producing CRE   991    455    1,446    3,942    368    4,310    3,208    244    3,452 
Commercial & industrial   2,180    -    2,180    1,917    -    1,917    2,097    -    2,097 
Commercial construction   613    576    1,189    574    658    1,232    758    884    1,642 
Equipment financing   1,075    -    1,075    428    -    428    -    -    - 
     Total commercial   10,631    1,843    12,474    13,618    2,147    15,765    10,986    3,083    14,069 
Residential mortgage   7,918    184    8,102    8,724    232    8,956    8,776    136    8,912 
Home equity lines of credit   1,812    550    2,362    2,149    335    2,484    2,024    15    2,039 
Residential construction   637    20    657    378    -    378    192    -    192 
Consumer   819    -    819    1,371    -    1,371    1,680    -    1,680 
     Total NPAs  $21,817   $2,597   $24,414   $26,240   $2,714   $28,954   $23,658   $3,234   $26,892 
                                              
NONPERFORMING ASSETS BY MARKET                                       
North Georgia  $7,583   $640   $8,223   $8,519   $85   $8,604   $7,310   $94   $7,404 
Atlanta MSA   1,928    132    2,060    1,138    132    1,270    1,395    279    1,674 
North Carolina   3,029    750    3,779    5,006    1,271    6,277    4,543    1,213    5,756 
Coastal Georgia   943    -    943    1,887    -    1,887    2,044    20    2,064 
Gainesville MSA   186    -    186    574    163    737    739    -    739 
East Tennessee   1,473    143    1,616    1,511    10    1,521    1,462    -    1,462 
South Carolina   3,093    362    3,455    3,443    483    3,926    3,433    1,059    4,492 
Commercial Banking Solutions   2,831    570    3,401    2,937    570    3,507    1,095    569    1,664 
Indirect auto   751    -    751    1,225    -    1,225    1,637    -    1,637 
     Total NPAs  $21,817   $2,597   $24,414   $26,240   $2,714   $28,954   $23,658   $3,234   $26,892 
                                              
NONPERFORMING ASSETS ACTIVITY                                       
Beginning Balance  $26,240   $2,714   $28,954   $23,658   $3,234   $26,892   $22,921   $2,736   $25,657 
Acquisitions   -    -    -    428    -    428    -    659    659 
Loans placed on non-accrual   3,612    -    3,612    7,463    -    7,463    9,375    -    9,375 
Payments received   (5,314)   -    (5,314)   (3,534)   -    (3,534)   (5,495)   -    (5,495)
Loan charge-offs   (2,065)   -    (2,065)   (1,150)   -    (1,150)   (1,747)   -    (1,747)
Foreclosures   (656)   984    328    (625)   625    -    (1,396)   2,421    1,025 
Property sales   -    (1,029)   (1,029)   -    (957)   (957)   -    (2,458)   (2,458)
Write downs   -    (106)   (106)   -    (72)   (72)   -    (117)   (117)
Net gains (losses) on sales   -    34    34    -    (116)   (116)   -    (7)   (7)
     Ending Balance  $21,817   $2,597   $24,414   $26,240   $2,714   $28,954   $23,658   $3,234   $26,892 

 

   Second Quarter 2018   First Quarter 2018   Fourth Quarter 2017 
          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  $(578)   (.13)%  $(43)   (.01)%  $(357)   (.08)%
Income producing CRE   1,421    .33    422    .10    595    .16 
Commercial & industrial   16    .01    (3)   -    (242)   (.09)
Commercial construction   (107)   (.06)   266    .15    148    .09 
Equipment financing   (49)   (.04)   40    .08    -    - 
     Total commercial   703    .05    682    .05    144    .01 
Residential mortgage   11    -    (52)   (.02)   290    .12 
Home equity lines of credit   21    .01    89    .05    137    .08 
Residential construction   (58)   (.12)   (64)   (.14)   (23)   (.05)
Consumer   682    .64    846    .72    513    .40 
     Total  $1,359    .07   $1,501    .08   $1,061    .06 
                               
NET CHARGE-OFFS BY MARKET                          
North Georgia  $246    .10%  $772    .31%  $64    .02%
Atlanta MSA   103    .03    (109)   (.03)   26    .01 
North Carolina   1,268    .48    144    .06    127    .06 
Coastal Georgia   19    .01    137    .09    174    .11 
Gainesville MSA   (2)   -    (18)   (.03)   154    .25 
East Tennessee   76    .06    31    .03    61    .05 
South Carolina   (1,057)   (.27)   12    -    95    .03 
Commercial Banking Solutions   381    .11    176    .06    75    .03 
Indirect auto   325    .44    356    .41    285    .30 
     Total  $1,359    .07   $1,501    .08   $1,061    .06 

 

(1) Annualized.

 

 6 

 

 

UNITED COMMUNITY BANKS, INC.

Consolidated Statements of Income (Unaudited)

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
(in thousands, except per share data)  2018   2017   2018   2017 
                 
Interest revenue:                    
Loans, including fees  $103,492   $74,825   $199,961   $147,552 
Investment securities, including tax exempt of $1,025, $357, $1,997, and $636   18,254    17,778    36,549    35,490 
Deposits in banks and short-term investments   469    563    995    1,082 
Total interest revenue   122,215    93,166    237,505    184,124 
                     
Interest expense:                    
Deposits:                    
NOW   1,303    635    2,416    1,232 
Money market   2,583    1,559    4,758    2,985 
Savings   35    28    84    55 
Time   4,198    1,379    7,154    2,387 
Total deposit interest expense   8,119    3,601    14,412    6,659 
Short-term borrowings   198    101    498    141 
Federal Home Loan Bank advances   1,636    1,464    3,760    2,894 
Long-term debt   3,786    2,852    7,074    5,728 
Total interest expense   13,739    8,018    25,744    15,422 
Net interest revenue   108,476    85,148    211,761    168,702 
Provision for credit losses   1,800    800    5,600    1,600 
Net interest revenue after provision for credit losses   106,676    84,348    206,161    167,102 
                     
Noninterest income:                    
Service charges and fees   8,794    10,701    17,719    21,305 
Mortgage loan and other related fees   5,307    4,811    10,666    9,235 
Brokerage fees   1,201    1,146    2,073    2,556 
Gains from sales of SBA/USDA loans   2,401    2,626    4,179    4,585 
Securities gains (losses), net   (364)   4    (1,304)   2 
Other   6,001    4,397    12,403    8,076 
Total noninterest income   23,340    23,685    45,736    45,759 
Total revenue   130,016    108,033    251,897    212,861 
                     
Noninterest expenses:                    
Salaries and employee benefits   45,363    37,338    88,238    74,029 
Communications and equipment   4,849    4,978    9,481    9,896 
Occupancy   5,547    4,908    11,160    9,857 
Advertising and public relations   1,384    1,260    2,899    2,321 
Postage, printing and supplies   1,685    1,346    3,322    2,716 
Professional fees   3,464    2,371    7,508    5,415 
FDIC assessments and other regulatory charges   1,973    1,348    4,449    2,631 
Amortization of intangibles   1,847    900    3,745    1,873 
Merger-related and other charges   2,280    1,830    4,334    3,884 
Other   8,458    6,950    15,189    13,433 
Total noninterest expenses   76,850    63,229    150,325    126,055 
    Net income before income taxes   53,166    44,804    101,572    86,806 
Income tax expense   13,532    16,537    24,280    35,015 
Net income  $39,634   $28,267   $77,292   $51,791 
                     
Net income available to common shareholders  $39,359   $28,267   $76,740   $51,791 
                     
Earnings per common share:                    
     Basic  $0.49   $0.39   $0.97   $0.72 
     Diluted   0.49    0.39    0.97    0.72 
Weighted average common shares outstanding:                    
     Basic   79,745    71,810    79,477    71,798 
     Diluted   79,755    71,820    79,487    71,809 

 

 7 

 

 

UNITED COMMUNITY BANKS, INC.

Consolidated Balance Sheets (Unaudited)

   June 30,   December 31, 
(in thousands, except share and per share data)  2018   2017 
         
ASSETS          
  Cash and due from banks  $125,013   $129,108 
  Interest-bearing deposits in banks   191,355    185,167 
      Cash and cash equivalents   316,368    314,275 
  Securities available for sale   2,536,294    2,615,850 
  Securities held to maturity (fair value $291,463 and $321,276)   297,569    321,094 
  Loans held for sale (includes $34,813 and $26,252 at fair value)   34,813    32,734 
  Loans and leases, net of unearned income   8,220,271    7,735,572 
       Less allowance for loan and lease losses   (61,071)   (58,914)
              Loans, net   8,159,200    7,676,658 
  Premises and equipment, net   202,098    208,852 
  Bank owned life insurance   190,649    188,970 
  Accrued interest receivable   33,114    32,459 
  Net deferred tax asset   77,274    88,049 
  Derivative financial instruments   29,896    22,721 
  Goodwill and other intangible assets   327,174    244,397 
  Other assets   181,091    169,401 
      Total assets  $12,385,540   $11,915,460 
LIABILITIES AND SHAREHOLDERS' EQUITY          
Liabilities:          
  Deposits:          
       Demand  $3,245,701   $3,087,797 
       NOW   2,031,396    2,131,939 
       Money market   2,036,588    2,016,748 
       Savings   683,689    651,742 
       Time   1,524,635    1,548,460 
       Brokered   444,079    371,011 
                     Total deposits   9,966,088    9,807,697 
   Short-term borrowings   9,325    50,000 
   Federal Home Loan Bank advances   560,000    504,651 
   Long-term debt   308,434    120,545 
   Derivative financial instruments   37,261    25,376 
   Accrued expenses and other liabilities   125,323    103,857 
        Total liabilities   11,006,431    10,612,126 
Shareholders' equity:          
    Common stock, $1 par value; 150,000,000 shares authorized;          
        79,137,810 and 77,579,561 shares issued and outstanding   79,138    77,580 
    Common stock issuable; 616,549 and 607,869 shares   9,509    9,083 
    Capital surplus   1,497,517    1,451,814 
    Accumulated deficit   (154,290)   (209,902)
    Accumulated other comprehensive loss   (52,765)   (25,241)
        Total shareholders' equity   1,379,109    1,303,334 
        Total liabilities and shareholders' equity  $12,385,540   $11,915,460 

 

 8 

 

 

UNITED COMMUNITY BANKS, INC.

Average Consolidated Balance Sheets and Net Interest Analysis

For the Three Months Ended June 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)  $8,177,343   $103,395    5.07%  $6,979,980   $74,811    4.30%
  Taxable securities (3)   2,651,816    17,229    2.60    2,719,390    17,421    2.56 
  Tax-exempt securities (FTE) (1)(3)   150,503    1,380    3.67    55,992    584    4.17 
  Federal funds sold and other interest-earning assets   212,849    674    1.27    143,143    743    2.08 
                               
     Total interest-earning assets (FTE)   11,192,511    122,678    4.39    9,898,505    93,559    3.79 
Non-interest-earning assets:                              
  Allowance for loan losses   (62,275)             (61,163)          
  Cash and due from banks   133,060              104,812           
  Premises and equipment   218,517              192,906           
  Other assets (3)   731,514              569,435           
     Total assets  $12,213,327             $10,704,495           
                               
Liabilities and Shareholders' Equity:                              
Interest-bearing liabilities:                              
  Interest-bearing deposits:                              
NOW  $2,071,289    1,303    0.25   $1,901,890    635    0.13 
Money market   2,214,077    2,583    0.47    2,064,143    1,559    0.30 
Savings   678,988    35    0.02    575,960    28    0.02 
Time   1,524,124    2,696    0.71    1,274,009    1,136    0.36 
Brokered time deposits   300,389    1,502    2.01    111,983    243    0.87 
       Total interest-bearing deposits   6,788,867    8,119    0.48    5,927,985    3,601    0.24 
                               
Federal funds purchased and other borrowings   45,241    198    1.76    37,317    101    1.09 
Federal Home Loan Bank advances   335,521    1,636    1.96    594,815    1,464    0.99 
Long-term debt   316,812    3,786    4.79    175,281    2,852    6.53 
      Total borrowed funds   697,574    5,620    3.23    807,413    4,417    2.19 
                               
      Total interest-bearing liabilities   7,486,441    13,739    0.74    6,735,398    8,018    0.48 
Non-interest-bearing liabilities:                              
  Non-interest-bearing deposits   3,188,847              2,731,217           
  Other liabilities   168,417              114,873           
     Total liabilities   10,843,705              9,581,488           
Shareholders' equity   1,369,622              1,123,007           
     Total liabilities and shareholders' equity  $12,213,327             $10,704,495           
                               
Net interest revenue (FTE)       $108,939             $85,541      
Net interest-rate spread (FTE)             3.65%             3.31%
                               
Net interest margin (FTE) (4)             3.90%             3.47%

 

(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 $42.9 million in 2018 and pretax unrealized gains of $6.58 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 Six Months Ended June 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)  $8,085,849   $199,784    4.98%  $6,942,130   $147,552    4.29%
  Taxable securities (3)   2,687,200    34,552    2.57    2,749,339    34,854    2.54 
  Tax-exempt securities (FTE) (1)(3)   148,528    2,689    3.62    49,125    1,041    4.24 
  Federal funds sold and other interest-earning assets   212,951    1,372    1.29    144,577    1,407    1.95 
                               
     Total interest-earning assets (FTE)   11,134,528    238,397    4.31    9,885,171    184,854    3.76 
Non-interest-earning assets:                              
  Allowance for loan losses   (60,718)             (61,414)          
  Cash and due from banks   146,697              102,048           
  Premises and equipment   217,625              191,509           
  Other assets (3)   724,488              573,281           
     Total assets  $12,162,620             $10,690,595           
                               
Liabilities and Shareholders' Equity:                              
Interest-bearing liabilities:                              
  Interest-bearing deposits:                              
NOW  $2,077,461    2,416    0.23   $1,930,624    1,232    0.13 
Money market   2,222,304    4,758    0.43    2,064,792    2,985    0.29 
Savings   667,431    84    0.03    568,339    55    0.02 
Time   1,529,639    4,937    0.65    1,269,005    1,951    0.31 
Brokered time deposits   229,766    2,217    1.95    105,199    436    0.84 
       Total interest-bearing deposits   6,726,601    14,412    0.43    5,937,959    6,659    0.23 
                               
Federal funds purchased and other borrowings   61,894    498    1.62    28,225    141    1.01 
Federal Home Loan Bank advances   423,137    3,760    1.79    637,728    2,894    0.92 
Long-term debt   295,763    7,074    4.82    175,212    5,728    6.59 
      Total borrowed funds   780,794    11,332    2.93    841,165    8,763    2.10 
                               
      Total interest-bearing liabilities   7,507,395    25,744    0.69    6,779,124    15,422    0.46 
Non-interest-bearing liabilities:                              
  Non-interest-bearing deposits   3,142,384              2,687,665           
  Other liabilities   159,734              115,808           
     Total liabilities   10,809,513              9,582,597           
Shareholders' equity   1,353,107              1,107,998           
     Total liabilities and shareholders' equity  $12,162,620             $10,690,595           
                               
Net interest revenue (FTE)       $212,653             $169,432      
Net interest-rate spread (FTE)             3.62%             3.30%
                               
Net interest margin (FTE) (4)             3.85%             3.46%

(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 $35.6 million in 2018 and pretax unrealized gains of $638 thousand 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 based 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. 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.

  

 11 

 

 

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. 

 

# # #

 

 12 

Exhibit 99.2

2018 INVESTOR PRESENTATION SECOND QUARTER 2018 July 24, 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 . ” This presentation also includes “pre - tax, pre - credit earnings,” which excludes the provision for credit losses, income taxes and merger - related and other charges . 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 2,323 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 July 20, 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 2Q18 Overview Ticker UCBI (NASDAQ) Market Cap $2.4Bn P/EPS (2019E) 12.6x P/TBV 233% Assets $12.4Bn Loans $8.2Bn Deposits $10.0Bn CET1* 11.6% NPAs / Assets 0.20% ROA – GAAP 1.30% ROA – Operating (1) 1.39% ROCE – GAAP 11.20% ROTCE – Operating (1) 15.79% *2Q18 Capital Ratios are preliminary

 

 

2Q18 Highlights ucbi.com | 4 $15.83 $17.02 $17.29 $13.74 $12.96 $13.25 2Q17 1Q18 2Q18 Book Value Per Share (2) Book Value (GAAP) Tangible Book Value (non-GAAP) (1) $0.39 $0.47 $0.49 $0.41 $0.50 $0.53 2Q17 1Q18 2Q18 Earnings Per Share GAAP Operating (1) 1.06% 1.26% 1.30% 1.10% 1.33% 1.39% 2Q17 1Q18 2Q18 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 $0.53 compared with GAAP diluted earnings per share of $0.49 » GAAP EPS up 26% vs. last year » Operating EPS rose 29% over the same time frame » GAAP ROA of 1.30% in 2Q » Operating ROA moved to 1.39%, on path towards 1.40% 2018 target » Dividend $0.15 up 67% vs. last year $0.09 $0.12 $0.15 2Q17 1Q18 2Q18 Dividends Per Share

 

 

$85.1 $103.3 $108.5 2Q17 1Q18 2Q18 3.47% 3.80% 3.90% ucbi.com | 5 (1)Net interest margin is calculated on a fully taxable equivalent basis(2)Excludes 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 $108.5 mm increased $5.2 mm (5.0%) vs. 1Q18 and $23.3 mm (27.4%) vs. 2Q17 ..Benefit of Navitasacquisition, in addition to rising short-term interest rates ..Net interest margin up 10 bps vs. 1Q18 impacted by ..Higher loan yield of 18 bps due to higher short- term interest rates and the full quarter impact of Navitas ..Accretableyield contributed $674 thousand or 2 bps to 2Q18 NIM vs. 6 bps in 1Q18 ..Net interest margin up 43 bps vs. 2Q17 due to higher short-term rates, stable core deposit base and the impact of acquisitions

 

 

0 10 20 30 40 50 26 bps 82% 95% Low - Cost Deposit Base Sufficient Liquidity to Support Future Growth Loans / Deposits (1) (2) Cost of Total Deposits (bps) (1) (2) 42 bps 33 bps Deposits KRX Peer ucbi.com | 6 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 2Q18; KRX results as of 1Q18 (Source: S&P Global Market Intelligence)

 

 

ucbi.com | 7$2.8$3.0$2.9$1.3$1.7$1.8$0.6$0.7$0.7$1.7$1.9$1.9$0.6$0.5$0.4$0.4$0.5$7.0$8.2$8.22Q171Q182Q18C&I (1)CREComml ConstructionResidentialOther ConsumerEquipment Finance24.7%8.3%19.1%39.9%22.2%34.9%8.9%23.4%4.9%20.5%37.2%8.4%23.1%5.6%5.7%5.2%Loansucbi.com | 7$ in billions8.0%.Annualized end-of-period loan growth was 2%, or 4% excluding indirect auto runoff of $39 mm.Diversified portfolio, weighted towards C&I ..Reclassified $139 mm of senior care loans in 2Q to income producing CRE from owner-occupied CRE.Well within regulatory guidance on construction and CRE levels .The 100%/300% ratios stand at 74% and 202%, respectively.Other consumer has declined to a 5% contribution due to the planned runoff of the indirect auto portfolio(1)C&I includes commercial and industrial loans as well as owner-occupied CRE loans

 

 

ucbi.com | 8 Loan Growth Drivers ucbi.com | 8 » 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 CBS 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

 

 

$10.7$8.8$8.8$4.4$5.5$5.6$1.2$0.9$1.2$4.8$5.4$5.3$2.6$1.8$2.42Q171Q182Q18Service ChargesOtherBrokerageMortgageSBAucbi.com | 9Fee Revenueucbi.com | 9in millions.Linked quarter, fees up $0.9 mm due to: .Record number of locks and applications, yet slightly lower mortgage fees in 2Q vs. 1Q due to a $0.1 mm write down of MSR vs. $0.4 mm write up in 1Q .2Q record SBA originations of $59.6 mm, up 125% over 1Q .SBA loan sales of $28.5 mm up 29% vs. last quarter, as mix change toward construction loans is limiting near term loan sales .SBA closed construction loan pipeline to $87.1 mm.Vs Last Year, fees down $0.4 mm to $23.3 mm .$1.9 mm lower service charges as $2.5 mm Durbin impact is partially offset with the increase from acquisitions .Record $259 mm of mortgageoriginations, up 27% year over year .Record 2Q SBA production of $59.6 mm, up 88% vs. 2Q17 of $31.7 mm; SBA revenue down slightly year over year on lower loan sales ($28.5 mm in 2Q18 vs. $30 million in 2Q17) .Other income up $1.2 mm includes the benefit of Navitasfee income$23.7$22.4$23.3

 

 

57.9%57.8%57.9%56.2%55.8%55.8%$63.2$73.5$76.9$61.4$70.8$74.02Q171Q182Q18ucbi.com | 10(1)Net interest margin is calculated on a fully taxable equivalent basis(2)Excludes brokered depositsExpense Disciplineucbi.com | 10GAAPOperating (1)(1)See non-GAAP reconciliation table slides at the end of the exhibits for a reconciliation of operating performance measures to GAAP performance measures.Linked quarter, GAAP and operating expenses grew 5% and 4%, respectively .Operating efficiency ratio stable at 55.8% ..Operating expenses up $3.2 mm vs. 1Q18, excluding merger-related and other charges .Full quarter of Navitasadded $1.6 mm in 2Q.Market expansions and acquisitions drove year- over-year GAAP and operating expenses higher by 22% and 20% .Operating efficiency ratio improved to 55.8% from 56.2% last yearEfficiency Ratio (1)$ in millions

 

 

Credit Quality ucbi.com | 11 (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 | 11 0.09% 0.08% 0.07% 2Q17 1Q18 2Q18 Net Charge - Offs as % of Average Loans 0.24% 0.24% 0.20% 2Q17 1Q18 2Q18 Non - Performing Assets as % of Total Assets $0.8 $1.5 $1.8 $ 2.3 (1) 2Q17 1Q18 2Q18 Provision for Credit Losses $ in millions $ 3.8 0.85% 0.75% 0.74% 2Q17 1Q18 2Q18 Allowance for Loan Losses (1) 1Q18 $2.3 million provision due to initial reserve setup for Navitas acquisition

 

 

ucbi.com | 12 Holding Company 2Q17 1Q18 2Q18 Common Equity Tier I Capital 11.9% 11.3% 11.6% Tier I Risk-Based Capital 11.911.612.0 Total Risk-Based Capital 12.713.513.9 Leverage 9.09.19.3 Tangible Common Equity to Risk-Weighted Assets 12.411.211.4 Average Tangible Equity to Average Assets 9.28.88.8. 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 67% YoY) .Q1 sub debt raise improved capital efficiency and increased total risk based capital ucbi.com | 12Capital Ratios Note: 2Q18 ratios are preliminary

 

 

ucbi.com | 13 Key Strengths ucbi.com | 13 » 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 SECOND QUARTER 2018 July 24, 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 | 15

 

 

16 Who We Are The Bank That Service Built ucbi.com | 16

 

 

Fastest Growing Southeast MSAs (1) 2018 - 2023 Proj. Population Growth 2018 Population 2023 Proj. Median Household Income 1. Myrtle Beach, SC 9.96% 470,010 $55,177 2. Cape Coral, FL 8.66% 740,553 $59,220 3. Charleston, SC 8.46% 785,518 $69,670 4. Orlando, FL 8.17% 2,518,915 $62,806 5. Raleigh, NC 8.08% 1,335,067 $76,237 6. Naples, FL 7.95% 374,242 $75,389 7. North Port, FL 7.54% 808,091 $66,409 8. Lakeland, FL 7.22% 683,670 $51,907 9. Charlotte, NC 7.22% 2,537,416 $65,758 10. Jacksonville, FL 6.89% 1,519,940 $65,428 16. Savannah, GA 6.60% 392,546 $61,718 18. Atlanta, GA 6.48% 5,919,767 $71,156 21. Greenville, SC 6.12% 901,549 $58,643 9.7% 8.9% ’18 – ’23 Proj. Household Income Growth 5.1% 3.5% ’18 – ’23 Proj. Population Growth Strong Demographic Profile (2) $54,241 $61,045 Median Household Income UCBI MSA Presence Who We Are Focused on High - Growth MSAs in Southeast (1) Includes MSAs with a population of greater than 300,000 (2) Weighted by state deposits ucbi.com | 17 United States United States United States

 

 

2015 2016 2017 1Q 2018 2Q 2018 2015 2016 2017 1Q 2018 2Q 2018 Demand Deposit 618$ 334$ 487$ 117$ 40$ Non-Interest Bearing Core NOW 441 5 107 4 (21) Demand Deposit 2,089$ 2,423$ 2,910$ 3,027$ 3,067$ MMDA 325 246 156 (7) 10 Savings 177 79 101 25 7 Interest Bearing Core Growth by Category 1,561$ 664$ 851$ 139$ 36$ Total CommercialNOW 1,109 1,114 1,221 1,225 1,204 MMDA 1,584 1,830 1,986 1,979 1,989 Atlanta MSA 223$ 168$ 91$ 38$ (19)$ Savings 469 548 649 675 681 North Georgia 158 133 80 58 15 Total Interest Bearing Core 3,162 3,492 3,856 3,878 3,874 North Carolina (1) 63 62 412 11 30 Coastal Georgia 24 16 28 40 (1) Total Core Trans Deposits 5,251 5,915 6,766 6,905 6,941 East Tennessee (2) 234 (16) (7) (2) 3 Gainesville MSA 34 48 20 5 3 Time (Customer) 1,251 1,267 1,522 1,487 1,491 South Carolina (3) 825 253 227 (11) 4 Public Funds (Customer) 1,032 1,128 1,148 1,190 1,089 Growth by Region 1,561$ 664$ 851$ 139$ 36$ Brokered 339 328 371 411 444 Total LoansTotal Deposits 7,873$ 8,638$ 9,808$ 9,993$ 9,965$ ucbi.com | 18 NOTE - Certain prior period amounts in the loans by category table have been reclassified to conform to the current presentation Deposit Mix $5.90 $7.53 $8.31 $9.44 $9.58 $9.52 - $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $10.00 $11.00 2014 2015 2016 2017 1Q 2018 2Q 2018 Billions Public Funds (customer) Time (customer) Interest Bearing Core Transaction Non-Interest Bearing Core Transaction Time & Public Core Transaction Core Transaction Deposit Growth by Category & Region in millions Deposits by Category in millions (1) Includes $354 million from the acquisition of Four Oaks NB on November 1, 2017 (2) Includes $247 million from the acquisition of FNB on May 1, 2015 (3) Includes $790 million, $175 million and $226 million, respectively, from the acquisitions of Palmetto on September 1, 2015, Tidelands on July 1, 2016 and Horry County State Bank on July 31, 2017 ucbi.com | 18 Note – Column graph summarizes customer deposits, which excludes brokered deposits

 

 

ucbi.com | 19 2Q18 1Q18 2Q17 1Q18 2Q17 Commercial & Industrial 227.4$ 220.7$ 161.8$ 6.7$ 65.6$ Owner-Occupied CRE 74.7 67.1 114.0 7.6 (39.3) Income-Producing CRE 112.3 70.2 41.6 42.1 70.7 Commercial Constr. 186.8 145.6 121.8 41.2 65.0 Total Commercial 601.2 503.6 439.2 97.6 162.0 Residential Mortgage 63.9 38.3 48.3 25.6 15.6 Residential HELOC 66.6 53.6 64.7 13.0 1.9 Residential Construction 63.4 54.4 56.8 9.0 6.6 Consumer 17.7 15.8 57.9 1.9 (40.2) Total 812.8$ 665.8$ 666.9$ 147.0$ 145.9$ 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 $666.9 $665.8 $812.8 2Q17 1Q18 2Q18 New Loans Funded and Advances by Region New Loans Funded and Advances by Category 2Q18 1Q18 2Q17 1Q18 2Q17 Atlanta 142.3$ 121.1$ 122.5$ 21.2$ 19.8 Coastal Georgia 43.3 39.3 75.7 4.0 (32.4) North Georgia 65.2 60.2 64.2 5.0 1.0 North Carolina 113.2 35.9 29.9 77.3 83.3 Tennessee 32.7 28.8 40.2 3.9 (7.5) Gainesville 15.4 11.0 13.2 4.4 2.2 South Carolina 145.1 131.3 115.0 13.8 30.1 Total Community Banks 557.2 427.5 460.7 129.7 96.5 Asset-based Lending 1.0 10.8 17.6 (9.8) (16.6) Commercial RE 38.2 33.8 41.1 4.4 (2.9) Senior Care 32.9 36.1 8.3 (3.2) 24.6 Middle Market 9.4 6.9 35.4 2.5 (26.0) SBA 36.2 32.7 35.3 3.5 0.9 Renewable Energy 0.4 8.5 - (8.1) 0.4 Navitas 100.2 65.3 - 34.9 100.2 Builder Finance 37.3 44.1 28.1 (6.8) 9.2 255.6 238.3 165.8 17.4 89.8 Indirect Auto - - 40.4 - (40.4) Total 812.8$ 665.8$ 666.9$ 147.0$ 145.9$ 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 –6/30/2018 ucbi.com | 20 Assisted Living/Nursing Home/Rehab Cntr266$ 21.0 %105$ 14.2 % Residential Construction in Process: SPEC144 11.4 88 12.0 Office Buildings 99 7.9 42 5.7 Multi-Residential Properties 97 7.6 32 4.3 Residential Construction in Process: PRESOLD 74 5.8 47 6.4 Hotels Motels 68 5.4 24 3.3 Residential Land Development - Lots Already Developed in Hands of Builders 64 5.1 60 8.2 Retail Building 58 4.6 47 6.4 Vacant (Improved) 50 4.0 44 5.9 Warehouse 50 3.9 35 4.8 Other Properties 49 3.9 42 5.7 Self Storage 46 3.6 27 3.6 Residential Land Development - Subdivisions in Process 43 3.4 30 4.1 Raw Land - Vacant (Unimproved) 39 3.1 33 4.4 Restaurants /Franchise Fast Food / Franchise Other 27 2.1 14 1.9 Residential Raw Land in the Hands of Builders/Developers 19 1.5 17 2.3 Mfg Facility14 1.1 5 0.7 Negative Pledge 11 0.9 7 0.9 Commercial Land Development 11 0.9 11 1.5 Churches 11 0.9 10 1.3 All Other 26 1.9 16 2.4 Total Commercial Construction1,266$ 100 %736$ 100 % Outstanding Committed Commercial Real Estate –Income Producing in millions Commercial Construction in millions Office Buildings 440$ 22.7 %398$ 21.8 % Retail Building 359 18.5 345 19.0 Investor Residential 201 10.4 197 10.8 Assisted Living/Nursing Home/Rehab Cntr209 10.8 187 10.3 Hotels Motels 176 9.1 172 9.5 Warehouse 169 8.7 163 8.9 Multi-Residential Properties 158 8.2 149 8.2 Other Properties 62 3.2 53 2.9 Restaurants /Franchise Fast Food / Franchise Other 52 2.7 46 2.5 Self Storage29 1.5 27 1.5 Convenience Stores 27 1.4 26 1.4 Mfg Facility 22 1.1 22 1.2 Leasehold Property 10 0.5 10 0.5 Mobile Home Parks 10 0.5 9 0.5 Automotive Service 8 0.4 8 0.5 Daycare Facility 4 0.2 4 0.2 All Other2 0.1 5 0.3 Total Commercial Real Estate - Income Producing 1,938$ 100 %1,821$ 100 % Committed Outstanding Outstanding Average Loan Size(in thousands )•Commercial Construction$322 •Commercial RE: •Composite CRE415 •Owner-Occupied 357 •Income-Producing 488 Committed Average Loan Size(in thousands )•Commercial Construction$553 •Commercial RE: •Composite CRE442 •Owner-Occupied 382 •Income-Producing 517 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 Risk: Size • In house project lending limit of $18 mm, legal lending limit of $312 mm • Relationship limit = $30 mm • $ 123 mm of SNC’s outstanding, $238 mm committed • Top 25 loans = $586 mm, 7.2 % of total loans 4. Concentration Risk: Geography • Four state franchise with mix of metro and rural markets 5. Concentration Risk: Product • Construction/CRE ratio = 74%/202% • C&D > 30% in cycle, now 12 % driven by Four Oaks • Land in C&D $ 272 mm and shrinking, due to Four Oaks conversion • Navitas 5.60% of loans • Granular product concentration limits Strong Credit Culture ucbi.com | 21

 

 

2Q17 3Q17 4Q17 1Q18 2Q18(1)(1)(1)(1) Net Income Net income - GAAP28,267$ 27,946$ (11,916)$ 37,658$ 39,634$ Merger-related and other charges 1,830 3,420 7,358 2,646 2,873 Tax benefit on merger-related and other charges(675) (1,147) (1,165) (628) (121) Impairment of deferred tax asset due to federal tax rate reduction- - 38,199 - - Net income - Operating 29,422$ 30,219$ 32,476$ 39,676$ 42,386$ Diluted Earnings per share Diluted earnings per share - GAAP0.39$ 0.38$ (0.16)$ 0.47$ 0.49$ Merger-related and other charges 0.02 0.03 0.08 0.03 0.04 Impairment of deferred tax asset due to federal tax rate reduction- - 0.50 - - Diluted earnings per share - Operating 0.41$ 0.41$ 0.42$ 0.50$ 0.53$ Return on Assets Return on assets - GAAP1.06 % 1.01 % (0.40) % 1.26 % 1.30 % Merger-related and other charges 0.04 0.08 0.20 0.07 0.09 Impairment of deferred tax asset due to federal tax rate reduction- - 1.30 - - Return on assets - Operating1.10 % 1.09 % 1.10 % 1.33 % 1.39 % Book Value per shareBook Value per share - GAAP 15.83$ 16.50$ 16.67$ 17.02$ 17.29$ Effect of goodwill and other intangibles(2.09) (2.39) (3.02) (4.06) (4.04) Tangible book value per share 13.74$ 14.11$ 13.65$ 12.96$ 13.25$ ucbi.com | 22 Non-GAAP Reconciliation Tables ucbi.com | 22$ in thousands, except per share data(1)Merger-related and other charges for 2Q18, 1Q18, 4Q17 and 3Q17 include $593 thousand, $592 thousand, $517 thousand and $244 thousand, respectively, of intangible amortization resulting from payments made to executives under their change of control agreements. The resulting intangible assets are being amortized over 12 to 24 months.

 

 

2Q17 3Q17 4Q17 1Q18 2Q18(1)(1)(1)(1) Return on Tangible Common Equity Return on common equity - GAAP 9.98 % 9.22 % (3.57) % 11.11 % 11.20 % Effect of merger-related and other charges 0.41 0.75 1.86 0.60 0.77 Impairment of deferred tax asset due to federal tax rate reduction- - 11.44 - - Return on common equity - Operating 10.39 9.97 9.73 11.71 11.97 Effect of goodwill and intangibles 1.80 1.96 2.20 3.55 3.82 Return on tangible common equity - Operating 12.19 % 11.93 % 11.93 % 15.26 % 15.79 % Expenses Expenses - GAAP 63,229$ 65,674$ 75,882$ 73,475$ 76,850$ Merger-related and other charges(1,830) (3,420) (7,358) (2,646) (2,873) Expenses - Operating 61,399$ 62,254$ 68,524$ 70,829$ 73,977$ Pre-Tax, Pre-Credit Earnings Pre-Tax Earnings - GAAP44,804$ 43,674$ 42,354$ 48,406$ 53,166$ Merger-related and other charges 1,830 3,420 7,358 2,646 2,873 Provision for credit losses 800 1,000 1,200 3,800 1,800 Pre-Tax, Pre-Credit Earnings - Operating 47,434$ 48,094$ 50,912$ 54,852$ 57,839$ Efficiency Ratio Efficiency Ratio - GAAP 57.89 % 59.27 % 63.03 % 57.83 % 57.94 % Merger-related and other charges(1.68) (3.09) (6.11) (2.08) (2.17) Efficiency Ratio - Operating 56.21 % 56.18 % 56.92 % 55.75 % 55.77 % ucbi.com | 23 Non-GAAP Reconciliation Tables ucbi.com | 23$ in thousands, except per share data(1) Merger-related and other charges for 2Q18, 1Q18, 4Q17 and 3Q17 include $593 thousand, $592 thousand, $517 thousand and $244 thousand, respectively, of intangible amortization resulting from payments made to executives under their change of control agreements. The resulting intangible assets are being amortized over 12 to 24 months.