Growth, Margin Expansion, and Disciplined Expense Control Drive Results
GREENVILLE, S.C., April 22, 2025 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NYSE: UCB) (United) today announced net income for the first quarter of 2025 of $71.4 million and pre-tax, pre-provision income of $106.6 million. Diluted earnings per share of $0.58 for the quarter represented an increase of $0.07 from the first quarter a year ago and a decrease of $0.03 from the fourth quarter of 2024.
On an operating basis, United's diluted earnings per share of $0.59 were up 13% from the year-ago quarter. The primary drivers of the increased earnings per share year-over-year were higher net interest income and lower noninterest expenses, partly offset by lower noninterest income and a higher provision for credit losses.
United's return on assets was 1.02%, or 1.04% on an operating basis. Return on common equity was 7.9%, and return on tangible common equity on an operating basis was 11.2%. On a pre-tax, pre-provision basis, operating return on assets was 1.55% for the quarter. At quarter-end, tangible common equity to tangible assets was 9.18%, up 21 basis points from the fourth quarter of 2024.
Chairman and CEO Lynn Harton stated, "The first quarter was a strong start to the year. Our teams delivered solid loan and deposit growth in what has typically been a seasonally weak quarter. Loans grew by $249 million, or 5.6% annualized, and customer deposits increased $309 million, or 5.4% annualized. Our net interest margin expanded by 10 basis points, helping us to grow net interest income by $1.7 million from the fourth quarter, despite two fewer accruing days. Credit quality remained stable, with first quarter net charge-offs holding steady at 0.21% of average loans. Our provision for credit losses increased by $4.0 million from the fourth quarter, covering first quarter net charge-offs as well as loan growth, slightly increasing our allowance for credit losses to 1.21% of loans, up from 1.20% on December 31, 2024. Expenses improved on an absolute basis from both the fourth and first quarters of 2024, reflecting our ongoing efforts to control costs.”
Harton continued, "We are particularly excited that our bankers were recognized once again by J.D. Power as #1 in Customer Satisfaction in the Southeast, along with #1 in Trust and #1 in People. This year marks our 75ᵗʰ anniversary, and we're off to a strong start. I'm proud to make this milestone meaningful for our customers, employees, and shareholders. We're also excited to continue growing our presence in Florida with the recent announcement of our planned acquisition of American National Bank, headquartered in Oakland Park. This expansion will strengthen our footprint in the fast-growing South Florida market. Our teams have been collaborating closely for several months, and we expect to close the transaction on May 1.”
United's net interest margin increased 10 basis points to 3.36% from the fourth quarter. The average yield on interest-earning assets was down four basis points to 5.29%, while the cost of interest-bearing liabilities decreased 19 basis points, leading to a 15-basis-point increase in the net interest spread. The 10-basis-point increase in net interest margin reflects progress in lowering the cost of funds through reduction in deposit rates and redemption of debt instruments, and to a lesser extent, the seasonal outflow of higher-priced public funds deposits.
Net charge-offs were $9.6 million, or 0.21% of average loans, during the quarter, equal to the fourth quarter of 2024. Nonperforming assets were 33 basis points relative to total assets, improved from 42 basis points for the fourth quarter.
First Quarter 2025 Financial Highlights:
- EPS up $0.07 compared to first quarter 2024 on a GAAP basis and up $0.07, or 13%, on an operating basis; EPS down $0.03 compared to the fourth quarter on a GAAP basis and down $0.04, or 6%, on an operating basis
- Total revenue improved $8.9 million, or 3.7%, year-over-year
- Net interest margin of 3.36% increased by 10 basis points from the fourth quarter, reflecting a lower cost of funds
- Loan production of $2.0 billion led to loan growth of $249 million, up 5.6% annualized, from the fourth quarter
- Customer deposits were up $309 million from the fourth quarter, with most of the growth in money market deposits
- Noninterest income was down $4.9 million on a linked quarter basis mostly due to the absence of unusual fourth quarter gains in the form of a mortgage servicing right write-up and other unusual gains
- Mortgage closings of $187 million compared to $171 million a year ago; mortgage rate locks of $330 million compared to $260 million a year ago
- Noninterest expenses improved $2.0 million compared to the fourth quarter on a GAAP basis and down $1.1 million on an operating basis
- Efficiency ratio of 56.7%, or 56.2% on an operating basis
- Net income of $71.4 million and pre-tax, pre-provision income of $106.6 million
- Return on assets of 1.02%, or 1.04% on an operating basis
- Pre-tax, pre-provision return on assets of 1.55% on an operating basis
- Return on common equity of 7.9%
- Return on tangible common equity of 11.2% on an operating basis
- Provision for credit losses was $15.4 million; allowance for credit losses coverage up slightly to 1.21% of total loans
- Net charge-offs of $9.6 million, or 21 basis points as a percent of average loans
- Nonperforming assets improved $22 million from December 31, 2024, to 0.33% of total assets
- Maintained robust capital ratios with preliminary Common Equity Tier 1 increasing to 13.3%
- Quarterly common dividend of $0.24 per share declared during the quarter, up 4% year-over-year
United will hold a conference call on Tuesday, April 22 at 9:00 a.m. ET to discuss the contents of this press release and to share business highlights for the quarter. Participants can pre-register for the conference call by navigating to https://dpregister.com/sreg/10198403/fed7e1f137. Those without internet access or unable to pre-register may dial in by calling 1-844-676-1337. Participants are encouraged to dial in 15 minutes prior to the call start time. The conference call also will be webcast and can be accessed by selecting "Events and Presentations” under "News and Events” within the Investor Relations section of the company's website, ucbi.com.
UNITED COMMUNITY BANKS, INC.
Selected Financial Information
(in thousands, except per share data)
| 2025 | 2024 | First Quarter 2025-2024 Change | ||||||||||||||||||||
| First Quarter | Fourth Quarter | Third Quarter | Second
Quarter | First Quarter | ||||||||||||||||||
| INCOME SUMMARY | ||||||||||||||||||||||
| Interest revenue | $ | 335,357 | $ | 344,962 | $ | 349,086 | $ | 346,965 | $ | 336,728 | ||||||||||||
| Interest expense | 123,336 | 134,629 | 139,900 | 138,265 | 137,579 | |||||||||||||||||
| Net interest revenue | 212,021 | 210,333 | 209,186 | 208,700 | 199,149 | 6 | % | |||||||||||||||
| Noninterest income | 35,656 | 40,522 | 8,091 | 36,556 | 39,587 | (10 | ) | |||||||||||||||
| Total revenue | 247,677 | 250,855 | 217,277 | 245,256 | 238,736 | 4 | ||||||||||||||||
| Provision for credit losses | 15,419 | 11,389 | 14,428 | 12,235 | 12,899 | |||||||||||||||||
| Noninterest expenses | 141,099 | 143,056 | 143,065 | 147,044 | 145,002 | (3 | ) | |||||||||||||||
| Income before income tax expense | 91,159 | 96,410 | 59,784 | 85,977 | 80,835 | 13 | ||||||||||||||||
| Income tax expense | 19,746 | 20,606 | 12,437 | 19,362 | 18,204 | 8 | ||||||||||||||||
| Net income | 71,413 | 75,804 | 47,347 | 66,615 | 62,631 | 14 | ||||||||||||||||
| Non-operating items | 1,297 | 2,203 | 29,385 | 6,493 | 2,187 | |||||||||||||||||
| Income tax benefit of non-operating items | (281 | ) | (471 | ) | (6,276 | ) | (1,462 | ) | (493 | ) | ||||||||||||
| Net income - operating (1) | $ | 72,429 | $ | 77,536 | $ | 70,456 | $ | 71,646 | $ | 64,325 | 13 | |||||||||||
| Pre-tax pre-provision income (5) | $ | 106,578 | $ | 107,799 | $ | 74,212 | $ | 98,212 | $ | 93,734 | 14 | |||||||||||
| PERFORMANCE MEASURES | ||||||||||||||||||||||
| Per common share: | ||||||||||||||||||||||
| Diluted net income - GAAP | $ | 0.58 | $ | 0.61 | $ | 0.38 | $ | 0.54 | $ | 0.51 | 14 | |||||||||||
| Diluted net income - operating (1) | 0.59 | 0.63 | 0.57 | 0.58 | 0.52 | 13 | ||||||||||||||||
| Cash dividends declared | 0.24 | 0.24 | 0.24 | 0.23 | 0.23 | 4 | ||||||||||||||||
| Book value | 28.42 | 27.87 | 27.68 | 27.18 | 26.83 | 6 | ||||||||||||||||
| Tangible book value (3) | 20.58 | 20.00 | 19.66 | 19.13 | 18.71 | 10 | ||||||||||||||||
| Key performance ratios: | ||||||||||||||||||||||
| Return on common equity - GAAP (2)(4) | 7.89 | % | 8.40 | % | 5.20 | % | 7.53 | % | 7.14 | % | ||||||||||||
| Return on common equity - operating (1)(2)(4) | 8.01 | 8.60 | 7.82 | 8.12 | 7.34 | |||||||||||||||||
| Return on tangible common equity - operating (1)(2)(3)(4) | 11.21 | 12.12 | 11.17 | 11.68 | 10.68 | |||||||||||||||||
| Return on assets - GAAP (4) | 1.02 | 1.06 | 0.67 | 0.97 | 0.90 | |||||||||||||||||
| Return on assets - operating (1)(4) | 1.04 | 1.08 | 1.01 | 1.04 | 0.93 | |||||||||||||||||
| Return on assets - pre-tax pre-provision, excluding non-operating items (1)(4)(5) | 1.55 | 1.55 | 1.50 | 1.54 | 1.40 | |||||||||||||||||
| Net interest margin (fully taxable equivalent) (4) | 3.36 |
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