United Community Banks : Investor Presentation First Quarter 2025

Published: 2025-04-22 08:07:08 ET UCB

1Q25 Investor Presentation

April 22, 2025

United Community Banks, Inc.

$27.9

BILLION IN

TOTAL

ASSETS

Company Overview

$3.2

13.3%

$18.4

BILLION IN

(1)

TOTAL

AUA

CET1 RBC

LOANS

$23.8

BILLION IN

TOTAL

DEPOSITS

$0.24

QUARTERLY

COMMON DIVIDEND

200

BANKING OFFICES

ACROSS THE

SOUTHEAST

Premier Southeast Regional Bank - Celebrating 75 Years of Exceptional Service

Acquisition of ANB Holdings, Inc. ("ANB") expected to close on May 1, 2025, with ~$440 million assets and ~$375 million deposits

Metro-focused branch network with locations in the fastest-growing MSAs in the Southeast

190 branches, 10 LPOs, and 3 MLOs across six Southeast states; Top 10 deposit market share in GA and SC

Extended Navitas and SBA Markets

Navitas subsidiary is a technology-enabled, small-ticket, essential-use commercial equipment financing provider SBA business has both in-footprint and national business (4 specific verticals)

#1 IN CUSTOMER SATISFACTION

with Consumer Banking in the Southeast in 2025

Plus #1 in Trust and People

- J.D. Power

BEST BANK AWARDS

5 awards for outstanding performance in small business and middle market banking in 2025 - Coalition Greenwich

BEST BANKS TO WORK FOR

in 2024 for the eighth consecutive year - American Banker

Note: See Glossary located at the end of this presentation for reference on certain acronyms

(1) 1Q25 regulatory capital ratio is preliminary

$0.58 Diluted earnings per share - GAAP $0.59 Diluted earnings per share - operating(1)

1.02% Return on assets - GAAP

1.01%

1.04%Return on Returnassets on- assets - operating(1) operating(1)

1.55% Return on assets - PTPP - operating(1)

2.05% Cost of deposits

26% DDA / total deposits

7.9% Return on common equity - GAAP

11.2% Return on tangible common equity - operating(1)

56.7% Efficiency ratio - GAAP

56.2% Efficiency ratio - operating(1)

$20.58 TBV per share(1) 3.36% Net interest margin

10% Year-over-year TBV per share(1) improvement 6% Year-over-year net interest revenue improvement

16 bps Year-over-year net interest margin improvement

293 bps Year-over-year operating(1) efficiency ratio improvement

1Q25 Highlights

Diluted Earnings Per Share

Return on Average Assets

$0.61

$0.63

$0.59

1.06%

1.08%

1.02% 1.04%

$0.58

0.90% 0.93%

$0.51

$0.52

1Q24

4Q24

1Q25

1Q24

4Q24

1Q25

GAAP

Operating(1)

GAAP

Operating(1)

Book Value Per Share

PTPP Return on Average Assets

$26.83

$27.87

$28.42

$18.71

$20.00

$20.58

1.36%

1.40%

1.52% 1.55%

1.54% 1.55%

1Q24

4Q24

1Q25

1Q24

4Q24

1Q25

GAAP

Tangible(1)

PTPP

Operating(1)

Outstanding Deposit Franchise

1Q25 Change in Customer Deposits

$ in millions

$46 $14$5

23,293

$239 $5

$23,602

Customer Deposit Growth

Excluding brokered deposits and public funds, deposits grew $395 million, or 7.8% annualized, from 4Q24

Customer deposits were up $309 million, or 5.4% annualized, from 4Q24

Public funds of $3.2 billion were down $86 million from 4Q24

4Q24

Noninterest-

NOW

Savings

MMA

Time

1Q25

Total

bearing

Total

Customer

Deposits

1Q25

Noninterest-

NOW

Savings

MMA

Time

Public

bearing

Funds

($92)

($0)

($2)

Noninterest-bearing DDA grew $46 million, or 3.0% annualized

Deposit Costs Down 15 bps in 1Q25

5.25%

5.18%

4.58%

4.25%

2.24%

2.35%

2.20%

2.05%

4Q23

2Q24

3Q24

4Q24

1Q25

Fed Target Average Lower Bound

UCBI Cost of Deposits

Deposit Costs Continue to Trend Down

Reduction of 15 bps QoQ driven by active management, product mix, and benefit of CD repricing

Cumulative deposit beta of 30% through 1Q25

Average rate of time deposits maturing in 1Q25 improved ~65 bps, from 4.14% to 3.49%

$1.3 billion, or 39%, of time deposits mature in 2Q25 at 3.78%

Deposit Trends

Total Deposit Mix Trend

$ in billions

$23.3

$23.0

$23.3

$23.5

$23.8

$6.4

$6.3

$6.2

$6.3

27%

26%

$16.9

$16.7

$17.1

$17.3

$17.5

1Q24

2Q24

3Q24

4Q24

1Q25

Interest-Bearing Deposits

Noninterest-Bearing Deposits

% Noninterest-Bearing Deposits

Time Deposit Contractual Maturities

Deposits are granular with ~$34,000 average account size and are diverse by industry and geography

Business deposits of $8.7 billion and personal deposits of $11.6 billion in 1Q25

The remaining $3.5 billion of deposits are predominantly comprised of public funds

$1.3 billion, or 39%, of time deposits mature in 2Q25 at 3.78%

Customer Deposit Granularity

$ in millions

3.78%

$1,349

3.59%

3.17%

3.13%

3.28%

$ in actual

$718

$611

$295

$499

$77,546

$20,304

$74,568

$20,006

$75,977

$20,033

$72,724

$20,309

$74,118

$20,502

2Q25

3Q25

4Q25

1Q26

Beyond

Time Deposits

Weighted Avg Rate

1Q24

2Q24

3Q24

4Q24

1Q25

Personal Deposits Avg Acct Size

Business Deposits Avg Acct Size

Stronger Targeted Loan Growth

1Q25 Loan Portfolio Growth

$ in millions

% QoQ annualized

$55

$99

$60

$18,176

+7%

+15%

$18 $34

($17)

+13%

$18,425

Quarter Highlights

Loan growth of 5.6% annualized, primarily driven by C&I, equipment finance, and HELOC

Senior Care portfolio down $23 million, or 8%, from 4Q24

Construction and CRE ratios as a percentage of total RBC were 62% and 204%, respectively, improved from 76% and 213% in 1Q24

4Q24

C&I

Equipment

CRE

Construction

HELOC

Mortgage /

1Q25

Total Loans

Finance

Consumer

Total Loans

1Q25 Total Loans $18.4 Billion

Home

Commercial Equity Residential

ConstructionConstruction

6% 1%

Other Consumer

Residential

Mortgage 17%

42%

C&I

24%

CRE

Top 25 relationships totaled $955 million, or 5.2% of total loans, up $36 million from 1Q24

SNCs outstanding of $287 million, or 1.6% of total loans, up $23 million from 1Q24

Conservative relationship lending limits driven by risk grades

Note: C&I includes Commercial & Industrial and Owner Occupied CRE

Balance Sheet Strength - Liquidity and Capital

Loans / Core Deposits %

92%

79%

80%

78%

1Q24

2Q24

3Q24

4Q24

1Q25

United

KRX Peer Median

Tangible Common Equity / Tangible Assets %

Substantial balance sheet liquidity and above-peer capital ratios

$6.7 billion securities portfolio offers significant near- and medium-term cash flow opportunities

No outstanding wholesale borrowings at the end of 1Q25

0.7% of total deposits are brokered in 1Q25, compared to 2.7% for the KRX peer median

Common Equity Tier 1 RBC %*

9.2%

8.8%

8.9%

9.0%

8.5%

8.3%

13.1%

12.8%

12.4%

13.2%13.3%

12.2%

1Q24

2Q24

3Q24

4Q24

1Q25

1Q24

2Q24

3Q24

4Q24

1Q25

United

KRX Peer Median

United

KRX Peer Median

*1Q25 regulatory capital ratio is preliminary

Above-Peer Capital Ratios

Risk-Based Capital Ratios

14.6%

15.1%

15.3%

15.1%

14.6%

15.1%

1.8%

1.5%

1.4%

1.8%

0.5%

0.4%

12.8%

13.1%

13.2%

0.6%

13.3%

12.4%

12.2%

1Q24

2Q24

3Q24

4Q24

4Q24 KRX Peer

1Q25*

Median

CET1

Additional Tier 1

Tier 2

Tangible Book Value Per Share

$0.58

$0.22

$0.03

$20.58

( $0.25 )

$20.00

4Q24 TBV

GAAP Earnings

Dividends (1) Change in AOCI

Other

1Q25 TBV

*1Q25 regulatory capital ratios are preliminary

(1) Dividends include both common and preferred dividends

1Q25 regulatory risk-based capital ratios remained strong and above peers

The leverage ratio increased 19 bps to 10.15%, as compared to 4Q24

Quarterly common dividend of $0.24 per share during the quarter, flat vs. prior quarter

Outstanding common stock repurchase authorization of $100 million

AFS securities portfolio of $4.5 billion with a 2.1-year duration

TCE of 9.18% increased 21 bps from 4Q24

Net unrealized securities losses in AOCI improved by $27.9 million to $195 million in 1Q25

ANB acquisition expected to close May 1, 2025, with expected TBV decrease of approximately $0.13 and CET1 decrease of 7 bps

Net Interest Revenue / Margin(1)

Net Interest Revenue & Net Interest Margin

$ in millions

$210.3

$212.0

$199.1

3.20%

3.26%

3.36%

3.13%

3.19%

3.31%

1Q24

4Q24

1Q25

Net Interest Revenue

Net Interest Margin(1)

Core Net Interest Margin(2)

Net interest revenue increased $1.7 million, or 3.2% annualized, from 4Q24

Core net interest margin, excluding purchase loan accretion, was up 12 bps to 3.31%, primarily due to improvement in funding costs and deployment of cash

Purchased loan accretion totaled $3.1 million and contributed 5 bps to the margin, down 2 bps vs. 4Q24

In 1Q25, purchased $74 million in securities with an average yield of 5.41%, while $265 million in securities ran off at an average yield of 3.70%

Approximately $8.3 billion, or 45%, of total loans and $2.2 billion, or 33%, of total securities, including hedging activities, are variable rate and reprice or mature within one year

1Q25 NIM Up 10 bps

0.04%

0.03%

0.05%

(0.02%)

3.36%

3.26%

4Q24 NIM

Rate

Mix

Accretion

Day Count / 1Q25 NIM

Other

Yields & Costs

6.24%

6.43%

6.42%

6.21%

6.10%

3.23%3.20%

3.37%

3.33%

3.26%

3.36%

3.27%

3.28%

3.26%

3.35%

3.25%

3.04%

3.21%

3.02%

2.83%

1Q24

2Q24

3Q24

4Q24

1Q25

Loan Yield

NIM

Securities Yield

Cost of IBL

(1)

Net interest margin is calculated on a fully-taxable equivalent basis

(2)

Core net interest margin excludes purchased loan accretion

Noninterest Income - Operating

$12.6

$1.5

$6.3

$7.5

$9.3

$36.6

$11.5

$1.3

$6.4

$6.8

$10.6

$35.3

$13.4

$1.5

$6.3

$3.5

$10.5

$40.5

$13.9

$1.6

$4.7

$9.7

$10.6

$35.7

$14.1

$1.4

$4.5

$6.1

$9.5

Linked Quarter

On an operating basis, noninterest income decreased $4.8 million from 4Q24

Service charges decreased $1.1 million, primarily due

to seasonally lower interchange and overdraft fees

Mortgage fees decreased, primarily due to the absence of a significant MSR mark, which was $3.5 million in 4Q24

Sold $21.9 million of SBA loans, resulting in $1.4 million of loan sale gains in the quarter

Year-over-Year

On an operating basis, noninterest income decreased $1.5 million from 1Q24

Mortgage fees decreased, primarily due to the absence of a significant MSR mark, which was $1.5 million in 1Q24

Brokerage fees decreased $1.8 million, primarily due to the impact of the FinTrust sale

Other income increased $1.5 million, primarily due to an increase in customer swap income

1Q24 (1)

2Q24

3Q24 (1)

4Q24

Service Charges

Mortgage

Brokerage / Wealth Mgmt

1Q25

Loan Sale Gains

Other

(1) See non-GAAP reconciliation table slides in the exhibits to this presentation for a reconciliation of operating performance measures to GAAP

performance

Disclaimer

United Community Banks Inc. published this content on April 22, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 22, 2025 at 12:04 UTC.