United munity Banks(UCBI) - 2025 Q4 - Annual Report

Financial Performance - As of December 31, 2025, United Community Banks, Inc. had consolidated total assets of $28.0 billion[20] - Consolidated loans amounted to $19.4 billion, representing 69% of total consolidated assets as of December 31, 2025[28] - In 2025, the bank originated $1.02 billion in residential mortgage loans, with approximately 65% sold into the secondary market[31] - The acquisition of ANB in May 2025 included $301 million in loans and $374 million in deposits[27] - The Bank paid dividends to the Holding Company totaling $356 million in 2025, $153 million in 2024, and $198 million in 2023[73] - The Holding Company declared quarterly cash dividends of $0.98 per share in 2025, $0.94 in 2024, and $0.92 in 2023[73] Capital Management - The bank redeemed all outstanding shares of its Series I preferred stock, with a carrying value of $88.3 million, as part of its capital management strategy[27] - During 2025, the bank redeemed two series of senior debentures totaling $135 million, comprising all outstanding senior debt[27] - The Holding Company must maintain a CET1 capital conservation buffer of 2.5% to avoid restrictions on capital distributions[75] - The minimum capital requirements under Basel III include a CET1 capital ratio of 4.5% and a total capital ratio of 8.0%[83] - The Bank is permitted to pay dividends of up to 100% of its current year earnings without SCBFI approval, provided certain conditions are met[76] - The Holding Company is subject to regulatory requirements that restrict dividend payments if it cannot meet its debts as they become due[74] - The Bank's capital structure must be deemed adequate by the SCBFI based on its assessment of the Bank's businesses and risks[87] - As of December 31, 2025, the Bank qualified as "well-capitalized" under regulatory capital requirements, with Tier 1 capital at least 10% and CET1 capital at least 8%[89] Regulatory Compliance - The Bank changed its primary federal regulator from the FDIC to the Federal Reserve in 2024[70] - The Federal Reserve requires bank holding companies to pay dividends only out of current operating earnings[80] - The Bank is subject to various regulatory capital requirements administered by state and federal banking agencies[82] - The Bank received a "Satisfactory" rating in its most recent Community Reinvestment Act examination, which is critical for expansion plans[110] - The Volcker Rule prohibits banks from engaging in proprietary trading and limits investments in hedge funds and private equity funds[94] - The Bank is subject to regulations that cap interchange fees for debit card transactions at $0.21 plus five basis points, with potential adjustments for fraud prevention[100] - The Bank must submit a capital restoration plan if categorized as undercapitalized, and is prohibited from declaring dividends in such cases[90] - The company is subject to a challenging regulatory environment that restricts activities and may lead to operational penalties if compliance is not maintained[169] Operational and Market Risks - The bank faces intense competition from various financial service providers, including non-traditional disruptors, which could impact its market position[132] - The bank's operational risks include evolving fraud methods and the need for effective anti-fraud measures to mitigate losses[138] - The bank's ability to grow depends on maintaining a strong operational infrastructure and managing expenses effectively[139] - Legislative and regulatory changes could materially affect the bank's operations and financial condition[125] - The company faces interest rate risk, as net interest income is dependent on the difference between interest earned on loans and interest paid on deposits[155] - A decrease in demand for loans and services could result from economic conditions, leading to higher levels of non-performing assets and charge-offs[156] - The concentration of loans in primary markets such as Georgia, South Carolina, and Florida may expose the company to higher credit losses during economic downturns[164] - The company anticipates that regulatory changes could increase compliance costs and affect its ability to pursue certain business opportunities[169] Cybersecurity and Information Security - The company has implemented a comprehensive information security program to safeguard customer information, approved by its Board[115] - The company is required to notify regulators of cybersecurity incidents within 36 hours, highlighting the importance of robust cybersecurity measures[205] - The company has implemented a comprehensive cybersecurity risk management program based on globally recognized best practices, including the Center for Internet Security's Critical Security Controls and the NIST Cybersecurity Framework[210] - The Chief Information Security Officer (CISO) oversees the cybersecurity program and reports to the Chief Information Officer, with over 20 years of experience in IT operations/security roles in the financial services industry[218] - The company conducts regular assessments of third-party vendors to manage cybersecurity risks, including security requirements based on perceived risk levels[211] - Cybersecurity threats are expected to remain significant due to the evolving nature of threats and the increasing use of technology-based products and services by customers[209] - The company has not experienced any cybersecurity incidents that materially affected its business strategy or financial condition to date[216] - Regular tabletop exercises are conducted to validate response processes and improve cross-functional coordination within the organization[217] - The Risk Committee of the Board oversees cybersecurity risks, receiving updates on security testing, audits, and key cybersecurity metrics at quarterly meetings[219] - The company employs a layered defensive approach to manage cybersecurity controls, utilizing people, processes, and technology[210] - An ongoing enterprise-wide security awareness training program is in place to protect data, systems, and networks from cyber threats[210] - The company has established incident response protocols to manage and mitigate the effects of cybersecurity incidents[215] Economic and Financial Conditions - Inflationary pressures have been significant, impacting purchasing power and potentially leading to higher interest rates, which could adversely affect the company's financial condition[152] - Economic volatility may increase due to rising U.S. budget deficits, affecting demand for the company's products and services[153] - The company relies primarily on deposits, loan repayments, and cash flows from investment securities for liquidity, with secondary sources including FHLB advances and brokered deposits[179] - A downgrade in the company's credit rating could limit access to borrowings and increase borrowing costs, impacting overall financial performance[181] - Changes in accounting standards could negatively affect the company's reported earnings and financial condition, making it difficult to predict future impacts[186] - The company's stock price can be volatile, influenced by general market fluctuations and economic conditions, which may not reflect its operating results[196] - The company may need to issue additional equity securities, which could dilute current shareholders' ownership[201] - Natural disasters and climate change pose risks that could adversely affect the company's financial condition and results of operations[190]