Financial Data and Key Metrics Changes - Revenue increased by over $16 million compared to the second quarter, driven by an eight basis point improvement in margin and 5.4% annualized loan growth [3][4] - Operating earnings per share reached $0.75, a 32% year-over-year improvement, with a return on assets of 1.33% and return on tangible common equity of 13.6% [4] - Tangible book value grew to $21.59, reflecting a 10% year-over-year increase [5] Business Line Data and Key Metrics Changes - Loan growth continued at a 5.4% annualized pace, with significant contributions from C&I equipment finance and HELOC categories [9] - Deposits grew by $137 million or 2.6% annualized, with a cost of deposits reduced to 1.97% [8][9] - Non-interest income increased to $43.2 million, up $8.5 million from the previous quarter [13] Market Data and Key Metrics Changes - The loan to deposit ratio increased to 80%, while the CET1 ratio remained stable at 13.4% [10][11] - Credit losses were only 16 basis points for the quarter, indicating strong credit quality [5][15] Company Strategy and Development Direction - The company aims to be cautious and selective in lending to non-depository financial institutions, maintaining limited exposure in that sector [6] - There is a focus on organic growth, dividend increases, and potential M&A opportunities, with buybacks being a lower priority [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the remainder of the year, supported by strong loan growth and positive credit quality metrics [16] - The company anticipates continued operating leverage and margin improvement into 2026, driven by loan yields and asset repricing [62] Other Important Information - The company redeemed $88 million of preferred stock, which lowered Tier one total capital and leverage ratios towards peer levels [11] - Employee engagement was reported in the 92nd percentile compared to over 2,000 companies, indicating a strong workplace culture [16] Q&A Session Summary Question: Loan growth trends and pipelines - Management noted strong loan growth across all geographies, with expectations for continued growth in Q4, particularly in C&I and HELOC products [18][20] Question: Deposit beta guidance - The company believes it can achieve a total deposit beta in the 40% range due to successful rate cuts and CD growth [23][25] Question: Capital deployment priorities - Capital priorities include organic growth, dividends, M&A opportunities, and buybacks being considered opportunistically [31][32] Question: Fee income and expectations - Management indicated that the increase in service charge income was due to better volume, with no unusual changes in fee structure [34] Question: Credit quality and Navitas book - Management reported normal fluctuations in NPAs and stable performance in the Navitas book, with expected losses around 1% in a normal environment [60][61]
United Community Banks, Inc.(UCB) - 2025 Q3 - Earnings Call Transcript