United Community Banks, Inc. Q1 2026 Earnings Call Summary

• Performance was driven by a 4.5% annualized loan growth and a 3-basis-point expansion in net interest margin, marking the fifth consecutive quarter of margin growth.

• Management attributed the margin expansion to the continued repricing of the back book and a strategic shift in asset mix from securities toward higher-yielding loans.

• Deposit costs decreased by 9 basis points to 1.67%, with a cumulative total deposit beta of 39%, which management noted exceeded their internal goals for the down cycle.

• Credit quality remained stable with net charge-offs at 22 basis points, though management highlighted that excluding Navitas, charge-offs were only 10 basis points.

• The bank maintained a strong liquidity position with an 82% loan-to-deposit ratio and limited reliance on brokered deposits or wholesale borrowings.

• Strategic hiring of 10 new revenue producers in Q1 is expected to drive loan growth momentum, particularly in C&I and middle-market segments, with a lag of 5 to 6 months before full productivity.

• Management expects the net interest margin to expand by another 3 to 5 basis points in the second quarter, supported by $1.4 billion in assets repricing at higher rates.

• Loan growth is projected to remain in the 5% to 6% range for the remainder of 2026, assuming no significant macroeconomic or geopolitical disruptions.

• The bank aims for a 10% annual growth in revenue producers, with plans to reach the 2026 hiring goal by the end of the second quarter.

• Guidance for operating expense growth is targeted at approximately 3.5%, though new hires may add $1 million to $1.2 million in quarterly costs in the near term.

• Management intends to redeem $100 million in subordinated debt in the second quarter, of which only 20% currently qualifies as Tier 2 capital.

• Announced the acquisition of Peach State Bank for $100 million in a 50-50 cash-stock mix, expected to provide the #1 deposit share in Hall County, Georgia.

• The Peach State transaction is projected to be $0.12 accretive to earnings by 2027, assuming the planned repurchase of the $50 million in shares issued for the deal.

• A $1.9 million non-operating gain was realized from the release of an FDIC special assessment that was filled faster than originally anticipated.

• A one-time non-operating charge was incurred due to a payroll transition from current payment to payment in arrears to comply with legislative changes.

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