Financial Data and Key Metrics Changes - The company reported an 11% year-over-year revenue growth in Q4 2025, with operating earnings per share increasing by 13% to $0.71 [3] - The return on assets for Q4 was 1.22%, and the return on tangible common equity was 13.3% [3] - For the full year, operating earnings per share grew by 18%, from $2.30 to $2.71, with total revenue exceeding $1 billion [3][4] Business Line Data and Key Metrics Changes - Retail and small business lending efforts surpassed $1 billion in annual production for the first time, alongside Novitas equipment finance [4] - The loan portfolio grew at an annualized pace of 4.4%, primarily in the C&I and HELOC categories [9] - Non-interest income was $40.5 million, down from the previous quarter, with growth in wealth management and treasury management offset by a seasonal decline in mortgage [11] Market Data and Key Metrics Changes - Deposits grew by 1% for the year, with a notable increase of $293 million in public funds during Q4 [8] - The cost of deposits improved by 21 basis points to 1.76%, and the cumulative total deposit beta increased from 37% to 40% [8] - The loan-to-deposit ratio increased to 82%, marking a trend of higher loan growth relative to deposits [9] Company Strategy and Development Direction - The company is focused on organic growth and enhancing its retail and small business lending capabilities, as well as expanding its presence in Florida [4][6] - There is a commitment to improving the durability of earnings through reduced securities duration and upgraded risk management systems [5] - The company plans to be more assertive in share buybacks, given strong capital build and favorable credit quality [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for continued growth in 2026, citing a strong economy in their markets [13] - The competitive landscape remains robust, with a focus on client service and employee culture to attract talent [36] - The company anticipates stable credit quality and a charge-off rate in the range of 20 to 25 basis points for 2026 [50] Other Important Information - The efficiency ratio improved by 264 basis points, and credit losses declined during the year [3] - The company was recognized for its community commitment and client satisfaction, indicating strong brand positioning [5] Q&A Session Summary Question: Balance sheet growth expectations for 2026 - The company expects balance sheet growth to depend on deposit growth, modeling it a couple hundred basis points below loan growth [17] Question: Anticipated asset class and geographic loan leaders - Florida led production, with C&I and owner-occupied CRE performing well, and Novitas contributing significantly [18] Question: Future buyback strategy - The company intends to be more assertive with buybacks in 2026 due to strong capital build and favorable credit quality [22] Question: Expense growth outlook - The company targets a 3% to 3.5% growth rate in expenses for 2026, despite a challenging environment [38] Question: M&A opportunities - The company is focused on organic growth and sees limited M&A opportunities, preferring quality targets [40][78] Question: Loan growth expectations for 2026 - The company is optimistic about loan growth, expecting similar results to Q4 2025, with potential for 5% or higher growth [84]
United Community Banks, Inc.(UCB) - 2025 Q4 - Earnings Call Transcript