United Community Banks stock holds Market Perform rating at Raymond James

Published 23/07/2025, 15:30
United Community Banks stock holds Market Perform rating at Raymond James

Investing.com - Raymond (NSE:RYMD) James has reiterated its Market Perform rating on United Community Banks (NYSE:UCB), a $3.8 billion regional bank, following the company’s quarterly earnings report that exceeded analyst expectations. According to InvestingPro data, the bank is currently trading near its Fair Value, with two analysts recently revising their earnings estimates upward for the upcoming period.

The bank reported stronger-than-anticipated core earnings per share and pre-provision net revenue, driven primarily by net interest margin expansion of 14 basis points to 3.50%, which exceeded Raymond James’ forecast of 3.44%. Credit metrics remained favorable, resulting in a lower-than-expected loan loss provision, with the loan loss reserve ratio decreasing by 1 basis point to 1.14%. The bank maintains a GOOD financial health score according to InvestingPro, supported by strong revenue growth of 12.1% in the last twelve months.

United Community Banks demonstrated improvement in several key areas, including a 2.0% increase in tangible book value to $21.00, an increase in non-interest-bearing deposit mix from 26.3% to 26.6%, and a 6 basis point reduction in interest-bearing deposit costs to 2.73%. Loan yields also improved, rising 9 basis points to 6.19%. The bank has maintained its commitment to shareholder returns, with an attractive 3.1% dividend yield and a track record of raising dividends for 11 consecutive years.

The bank faced some challenges, including lower-than-forecast core fee income, loan balances, and deposit growth. Loan growth reached 4.2% annualized excluding ANB, while deposit growth was 1.3% annualized excluding public funds and ANB. Share repurchases totaled $14 million, below Raymond James’ forecast of $23.2 million.

Raymond James indicated interest in several topics for the upcoming earnings call, including loan growth outlook, deposit trends, net interest margin expectations, credit metrics, fee income trends, expense management, and updates on the ANB acquisition and potential future merger and acquisition activity. For deeper insights into UCB’s financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which includes detailed analysis of these key metrics and more.

In other recent news, United Community Banks reported its second-quarter earnings for 2025, surpassing analysts’ expectations with an earnings per share (EPS) of $0.63, compared to the forecasted $0.61. However, the company’s revenue slightly missed projections, coming in at $260 million against an expected $261.3 million. These developments reflect the company’s current financial performance. While the earnings exceeded estimates, the revenue shortfall indicates mixed results for the quarter. Analysts and investors may interpret these figures to assess the company’s future performance. The earnings announcement is crucial for stakeholders evaluating United Community Banks’ financial health. Such updates provide insights into the company’s operational efficiency and market position.

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