Core Insights - United Community Banks reported a solid end to 2025 with significant revenue growth, margin expansion, and improving profitability metrics [5][4][3] Financial Performance - Operating earnings per share increased 18% to $2.71 from $2.30 year-over-year, with annual revenue surpassing $1 billion, reflecting a 12% year-over-year growth [3] - Fourth quarter revenue rose 11% year-over-year, driven by net interest margin expansion and a 4.4% annualized loan growth [4] - Operating earnings per share for the fourth quarter was $0.71, up 13% year-over-year, with a return on assets of 1.22% and return on tangible common equity of 13.3% [4] Loan and Deposit Growth - Loan growth continued at a 4.4% annualized pace, primarily in the commercial and industrial (C&I) and home equity line of credit (HELOC) categories [2] - Novitas equipment finance achieved over $1 billion in originations for the first time, with loans representing 9.5% of total loans [1] - Deposits grew 1% for the year, with a notable increase of $293 million in public funds during the fourth quarter [6][7] Net Interest Margin and Balance Sheet - Net interest margin increased four basis points to 3.62%, with a loan-to-deposit ratio rising to 82% [8][11] - The cost of deposits improved by 21 basis points to 1.76%, and cumulative total deposit beta increased to 40% [6] Credit Quality and Expenses - Net charge-offs were reported at 34 basis points, with expectations for the loss rate to fall in the 20 to 25 basis point range for 2026 [14] - Operating expenses rose to $151.4 million, attributed mainly to higher health insurance costs, with management targeting 3% to 3.5% expense growth in 2026 [13] Capital Actions and M&A Strategy - The bank increased its dividend to an annualized rate of $1 per share and repurchased 1 million shares in the fourth quarter [15] - Management expressed a preference for its current footprint and is not actively seeking geographic expansion, identifying fewer than 10 potential M&A targets [16] Outlook for 2026 - Management is optimistic about continued growth and improvement, citing strong market economies and ongoing investments in talent and systems [17]
United Community Banks Q4 Earnings Call Highlights