Bullish indicating open at $55-$60, IPO prices at $37
GREENVILLE, SC - United Community Banks (NYSE:UCB), Inc. (NYSE:UCBI), a bank holding company headquartered in South Carolina with a market capitalization of $4 billion and impressive 24% six-month returns, announced Monday the extension of an employment agreement with a key executive. According to InvestingPro analysis, the company maintains strong financial health metrics and currently trades near its 52-week high of $35.38. The company’s Talent and Compensation Committee has approved a new contract for Richard W. Bradshaw, who will continue his role as Executive Vice President and Chief Banking Officer of the firm and its subsidiary, United Community Bank. The executive retention comes as the bank demonstrates solid financial performance, with InvestingPro data showing revenue growth of 12% and a favorable PEG ratio of 0.51, suggesting reasonable valuation relative to growth.
The employment agreement, which took effect on Monday, is set for an initial one-year term with automatic one-year renewals unless a non-renewal notice is given. Should a change in control at the company occur, the terms of a separate agreement from February 14, 2023, will take precedence. The bank’s stability is reflected in its consistent dividend payments, which it has maintained for 11 consecutive years, with a current yield of 2.83%.
According to the terms disclosed, Bradshaw’s base salary is set at a minimum of $675,000. His annual cash incentive opportunity at target is not less than 100% of his base salary, and his annual long-term incentive award opportunity will have a target grant date fair value of not less than 125% of his base salary. The incentives are consistent with those for other executive officers and subject to committee determination.
The agreement also outlines severance provisions. If Bradshaw is terminated without cause or resigns for good reason, he’s entitled to receive a pro-rata annual cash incentive for the year of termination, a sum equivalent to 1.5 times his base salary plus target incentive, and 18 times the monthly COBRA premium for his health plan. In the event of termination due to death or disability, he or his estate would receive the pro-rata incentive and, for disability only, the COBRA premium amount.
Restrictive covenants included in the agreement mandate perpetual confidentiality, mutual nondisparagement, and non-interference with customers and employees for specified periods post-employment.
The details of this agreement are based on a press release statement and the full text of the Employment Agreement is attached to United Community Banks’ Current Report on Form 8-K as Exhibit 10.1. This agreement reflects the company’s commitment to retaining its senior leadership team and maintaining stability in its executive management. Notably, InvestingPro reports that six analysts have revised their earnings upwards for the upcoming period, with the company expected to remain profitable this year. For deeper insights into UCBI’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, United Community Banks reported fourth-quarter results for 2024, which exceeded both the expectations of Raymond (NSE:RYMD) James and the consensus. The company demonstrated strong loan and average earning asset growth, which counterbalanced a lower net interest margin and enhanced net interest income. Core fee income exceeded projections, and core noninterest expenses were slightly below Raymond James’ forecast, although higher than consensus. The company also reported a slight increase in the tangible common equity ratio and a 1.7% growth in tangible book value per share.
However, United Community Banks also experienced weaker-than-expected deposit growth and a small dip in the noninterest-bearing mix. Raymond James analyst Michael Rose has subsequently raised the price target on shares of United Community Banks to $37.00, up from the previous $35.00, while maintaining an Outperform rating on the stock.
Looking forward, the bank’s initial outlook for 2025 includes expectations of mid single-digit annualized loan growth, a 5-10 basis points expansion in net interest margin in the first quarter with further improvements anticipated later in the year, and stable credit metrics and costs. Raymond James has revised its earnings per share estimates upwards, reflecting stronger revenue and lower credit costs compared to previous models. These are the recent developments for United Community Banks.
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