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GREENVILLE, S.C. - On Wednesday, United Community Banks, Inc. (NYSE:UCB) reported third-quarter earnings that matched analyst expectations as strong revenue growth and lower credit provisions boosted profits.
The bank’s shares rose 1.99% in pre-market trading following the announcement.
The regional bank posted net income of $91.5 million, or $0.70 per diluted share, representing a 93% increase from the same quarter last year and a $0.07 improvement from the second quarter. On an operating basis, earnings per share reached $0.75, up 32% year-over-year. Revenue grew 27% from the year-ago period to $276.8 million, exceeding analyst estimates of $271.03 million.
"We are proud of our third quarter financial results. Our teams drove solid loan and deposit growth as well as healthy margin expansion," said Chairman and CEO Lynn Harton. "These actions resulted in meaningful improvement in our return on assets and return on tangible common equity."
The bank’s net interest margin expanded to 3.58%, up eight basis points from the previous quarter, reflecting lower funding costs and an improved asset mix. Loans grew by $254 million, or 5.4% annualized, while customer deposits excluding seasonal public fund outflows increased by $137 million or 2.6% annualized.
Credit quality remained solid with net charge-offs of $7.7 million, or 0.16% of average loans annualized, an improvement from the second quarter. The provision for credit losses decreased by $3.9 million from the previous quarter to $7.9 million.
Noninterest income rose $8.5 million on a linked-quarter basis, primarily due to gains on investments, death benefit claims on bank-owned life insurance, and favorable mortgage servicing rights valuation.
The bank’s efficiency ratio improved to 54.3%, or 53.1% on an operating basis, while return on assets reached 1.29%, or 1.33% on an operating basis. United Community Banks also increased its quarterly dividend by 4% year-over-year to $0.25 per share.
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