United Community Banks (UCB) Q4 2024 earnings summary

Executive summary

• Reported Q4 2024 GAAP EPS of $0.61 and operating EPS of $0.63, with full-year EPS of $2.04 and operating EPS of $2.30, reflecting 11% annualized quarterly and 9% year-over-year growth in operating earnings.

• Q4 2024 net income was $75.8M and full-year net income was $252M, with return on assets at 1.06% GAAP and 1.08% operating.

• Tangible book value increased 9% year-over-year; tangible common equity to tangible assets was 8.97% at Q4 end.

• Balanced performance across all business lines, with no single driver dominating results.

• Announced acquisition of American National Bank (ANB Holdings), expected to close in 2Q25, adding ~$440M in assets and ~$375M in deposits.

Financial highlights

• Loan growth accelerated to a 5% annualized rate in Q4, with C&I up 13%, Navitas up 15%, and HELOC up 20% annualized; total loans reached $18.2B.

• Deposit growth reached $213M (3.7% annualized), driven by seasonally strong public funds; deposit costs fell 15 bps to 2.20%.

• Net interest revenue increased by $1.1M sequentially to $210.3M; net interest margin declined 7 bps to 3.26% due to asset mix and public funds seasonality.

• Noninterest income rose $32.4M sequentially, mainly due to the absence of prior quarter's manufactured housing loan sale loss and higher mortgage servicing rights mark.

• Operating expenses were flat at $140.9M; efficiency ratio improved to 55% (55.2% operating).

Outlook and guidance

• Expecting Q1 2025 loan growth similar to or slightly better than Q4, with strong pipelines and business owner confidence.

• Margin expected to improve by 5-10 bps in Q1 2025, with further improvement possible if rate cuts are delayed.

• Mortgage volume forecasted to decline 10% in 2025; SBA gain on sale timing shifted to Q1 and Q2 due to regulatory changes.

• ANB Holdings acquisition expected to close in 2Q25, with a targeted tangible book value decrease of ~$0.13 and CET1 decrease of 7 bps.

• 75% of time deposits mature in 1H25, with 51% maturing in 1Q25, presenting a near-term repricing opportunity.