QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2025
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from ___________ to ___________
Commission file number 001-35095
UNITED COMMUNITY BANKS, INC.
(Exact name of registrant as specified in its charter)
Georgia
58-1807304
(State of incorporation)
(I.R.S. Employer Identification No.)
200 East Camperdown Way
Greenville, South Carolina
29601
(Address of principal executive offices)
(Zip code)
(800) 822-2651
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange on Which Registered
Common stock, par value $1 per share
UCB
New York Stock Exchange
Depositary shares, each representing 1/1000th interest in a share of Series I Non-Cumulative Preferred Stock
UCB PRI
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
There were 121,474,460 shares of the registrant’s common stock, par value $1 per share, outstanding as of July 31, 2025.
This Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither statements of historical or current fact nor are they assurances of future performance and generally can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “will”, “could”, “should”, “projects”, “plans”, “goal”, “targets”, “potential”, “estimates”, “pro forma”, “seeks”, “intends”, or “anticipates”, or similar expressions. Forward-looking statements include discussions of strategy, financial projections, guidance and estimates (including their underlying assumptions), statements regarding plans, objectives, expectations or consequences of various transactions or events, and statements about our future performance, operations, products and services, and should be viewed with caution.
Because forward-looking statements relate to the future, they are subject to known and unknown risks, uncertainties, assumptions, and changes in circumstances, many of which are beyond our control, and that are difficult to predict as to timing, extent, likelihood and degree of occurrence, and that could cause actual results to differ materially from the results implied or anticipated by the statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, but are not limited to the following:
•negative economic and political conditions that adversely affect the general economy, the banking sector, housing prices, the real estate market, the job market, consumer confidence, the financial condition of our borrowers and consumer spending habits, which may affect, among other things, the levels of NPAs, charge-offs and provision expense;
•changes in loan underwriting, credit review or loss policies associated with economic conditions, examination conclusions or regulatory developments;
•the potential effects of pandemics or public health conditions on the economic and business environments in which we operate, including the impact of actions taken by governmental authorities to address these conditions;
•strategic, market, operational, liquidity and interest rate risks associated with our business;
•potential fluctuations or unanticipated changes in the interest rate environment, including interest rate changes made by the Federal Reserve, replacement or reform of other interest rate benchmarks, as well as cash flow reassessments may reduce net interest margin and/or the volumes and values of loans made or held as well as the value of other financial assets;
•any unanticipated or greater than anticipated adverse conditions in the national or local economies in which we operate;
•our loan concentration in industries or sectors that may experience unanticipated or greater than anticipated adverse conditions than other industries or sectors in the national or local economies in which we operate;
•the risks of expansion into new geographic or product markets;
•risks with respect to our ability to identify and complete future mergers or acquisitions as well as our ability to successfully expand and integrate those businesses and operations that we acquire;
•our ability to attract and retain key employees;
•competition from financial institutions and other financial service providers including non-bank financial technology providers and our ability to attract customers from other financial institutions;
•losses due to fraudulent and negligent conduct of our customers, third-party service providers or employees;
•cybersecurity risks and the vulnerability of our network and online banking portals, and the systems or parties with whom we contract, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches that could adversely affect our business and financial performance or reputation;
•our reliance on third parties to provide key components of our business infrastructure and services required to operate our business;
•the risk that we may be required to make substantial expenditures to keep pace with regulatory initiatives and the rapid technological changes in the financial services market;
•the availability of and access to capital, particularly if there were to be increased capital requirements or enhanced regulatory supervision;
•legislative, regulatory or accounting changes that may adversely affect us;
•volatility in the ACL resulting from the CECL methodology, either alone or as that may be affected by conditions affecting our business;
•adverse results (including judgments, costs, fines, reputational harm, inability to obtain necessary approvals and/or other negative effects) from current or future legislation, litigation, regulatory proceedings, examinations, investigations, or similar matters, or developments related thereto;
•any matter that would cause us to conclude that there was impairment of any asset, including intangible assets, such as goodwill;
•limitations on our ability to declare and pay dividends and other distributions from the Bank to the Holding Company, which could affect Holding Company liquidity, including its ability to pay dividends to shareholders or take other capital actions;
•the potential effects of events beyond our control that may have a destabilizing effect on financial markets and the economy, such as inflation or recession, terrorist activities, wars and other foreign conflicts, climate change and weather related events, disruptions in our customers’ supply chains, disruptions in transportation, essential utility outages or trade disputes and tariffs including threats thereof, either imposed by the U.S. or other trading partners in retaliation to U.S. tariffs; and
•other risks and uncertainties disclosed in documents filed or furnished by us with or to the SEC, any of which could cause actual results to differ materially from future results expressed, implied or otherwise anticipated by such forward-looking statements.
We caution readers that the foregoing list of factors is not exclusive, is not necessarily in order of importance and readers should not place undue reliance on forward-looking statements. Additional factors that may cause actual results to differ materially from those contemplated by any forward-looking statements also may be found in our 2024 10-K (including the “Risk Factor” section of that report), Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the SEC and available at the SEC’s website at http://www.sec.gov. We do not intend to and, except as required by law, hereby disclaim any obligation to update or revise any forward-looking statement contained in this Report, which speaks only as of the date of its filing with the SEC, whether as a result of new information, future events, or otherwise. The financial statements and information contained herein have not been reviewed, or confirmed for accuracy or relevance, by the FDIC or any other regulator.
4
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheets(Unaudited)
(in thousands, except share data)
June 30, 2025
December 31, 2024
ASSETS
Cash and due from banks
$
201,509
$
296,161
Interest-bearing deposits in banks
359,492
223,712
Federal funds and other short-term investments
13,955
—
Cash and cash equivalents
574,956
519,873
Debt securities available-for-sale
4,075,323
4,436,291
Debt securities held-to-maturity (fair value $1,935,748 and $1,944,126, respectively)
2,306,730
2,368,107
Loans held for sale
37,143
57,534
Loans and leases held for investment
18,920,875
18,175,980
Less allowance for credit losses - loans and leases
(216,500)
(206,998)
Loans and leases, net
18,704,375
17,968,982
Premises and equipment, net
396,479
394,264
Bank owned life insurance
362,201
346,234
Goodwill and other intangible assets, net
974,385
956,643
Other assets (including $108,291 and $116,020 at fair value, respectively)
653,929
672,330
Total assets
$
28,085,521
$
27,720,258
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand
$
6,381,975
$
6,211,182
Interest-bearing deposits
17,581,037
17,249,793
Total deposits
23,963,012
23,460,975
Short-term borrowings
—
195,000
Long-term debt
155,143
254,152
Accrued expense and other liabilities (including $75,294 and $93,165 at fair value, respectively)
354,442
378,004
Total liabilities
24,472,597
24,288,131
Shareholders' equity:
Preferred stock, $1 par value: 10,000,000 shares authorized; 3,662 shares Series I issued and
outstanding; $25,000 per share liquidation preference
88,266
88,266
Common stock, $1 par value: 200,000,000 shares authorized,
121,431,262 and 119,364,110 shares issued and outstanding, respectively
121,431
119,364
Common stock issuable: 592,256 and 600,168 shares, respectively
13,190
12,999
Capital surplus
2,764,617
2,710,279
Retained earnings
802,590
714,138
Accumulated other comprehensive loss
(177,170)
(212,919)
Total shareholders' equity
3,612,924
3,432,127
Total liabilities and shareholders' equity
$
28,085,521
$
27,720,258
See accompanying notes to consolidated financial statements (unaudited).
5
UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Income(Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands, except per share data)
2025
2024
2025
2024
Net interest revenue:
Interest revenue:
Loans, including fees
$
288,284
$
291,595
$
562,340
$
575,578
Investment securities, including tax exempt of $1,671, $1,699, $3,349 and $3,420, respectively
55,862
50,063
114,712
96,499
Deposits in banks and short-term investments
3,219
5,307
5,670
11,616
Total interest revenue
347,365
346,965
682,722
683,693
Interest expense:
Deposits
119,136
134,462
238,070
268,246
Short-term borrowings
83
60
1,190
60
Federal Home Loan Bank advances
—
—
433
—
Long-term debt
2,615
3,743
5,477
7,538
Total interest expense
121,834
138,265
245,170
275,844
Net interest revenue
225,531
208,700
437,552
407,849
Noninterest income:
Service charges and fees
10,122
10,620
19,657
19,884
Mortgage loan gains and other related fees
5,370
6,799
11,492
14,310
Wealth management fees
4,400
6,386
8,865
12,699
Net gains from sales of other loans
1,995
1,296
3,391
2,833
Lending and loan servicing fees
3,690
3,328
7,855
7,538
Securities gains, net
286
—
292
—
Other
8,845
8,127
18,812
18,879
Total noninterest income
34,708
36,556
70,364
76,143
Total revenue
260,239
245,256
507,916
483,992
Provision for credit losses
11,818
12,235
27,237
25,134
Noninterest expense:
Salaries and employee benefits
86,997
85,818
171,264
170,803
Communications and equipment
13,332
11,988
27,031
23,908
Occupancy
10,935
11,056
21,864
22,155
Advertising and public relations
2,881
2,459
4,762
4,360
Postage, printing and supplies
2,495
2,251
5,056
4,899
Professional fees
5,609
6,044
11,540
12,032
Lending and loan servicing expense
2,330
2,014
4,317
3,841
Outside services - electronic banking
3,570
2,812
6,333
5,730
FDIC assessments and other regulatory charges
4,745
4,467
9,387
12,033
Amortization of intangibles
3,292
3,794
6,578
7,681
Merger-related and other charges
4,833
2,157
6,130
4,244
Other
6,900
12,184
14,756
20,360
Total noninterest expense
147,919
147,044
289,018
292,046
Income before income taxes
100,502
85,977
191,661
166,812
Income tax expense
21,769
19,362
41,515
37,566
Net income
$
78,733
$
66,615
$
150,146
$
129,246
Net income available to common shareholders
$
76,722
$
64,674
$
146,150
$
125,387
Net income per common share:
Basic
$
0.63
$
0.54
$
1.21
$
1.05
Diluted
0.63
0.54
1.21
1.05
Weighted average common shares outstanding:
Basic
121,377
119,726
120,714
119,694
Diluted
121,432
119,785
120,820
119,763
See accompanying notes to consolidated financial statements (unaudited).
6
UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Comprehensive Income(Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
Before-tax Amount
Tax
(Expense)
Benefit
Net of Tax Amount
Before-tax Amount
Tax (Expense) Benefit
Net of Tax Amount
2025
Net income
$
100,502
$
(21,769)
$
78,733
$
191,661
$
(41,515)
$
150,146
Other comprehensive income:
Unrealized gains on available-for-sale securities:
Unrealized holding gains
12,023
(2,759)
9,264
46,647
(10,929)
35,718
Reclassification adjustment for gains included in net income
(286)
68
(218)
(292)
70
(222)
Net unrealized gains on available-for-sale securities
11,737
(2,691)
9,046
46,355
(10,859)
35,496
Amortization of unrealized losses on held-to-maturity securities transferred from available-for-sale
1,961
(465)
1,496
3,925
(929)
2,996
Derivative instruments designated as cash flow hedges:
Unrealized holding losses on derivatives
(397)
100
(297)
(1,386)
350
(1,036)
Gains on derivative instruments realized in net income
(1,129)
285
(844)
(2,250)
568
(1,682)
Net cash flow hedge activity
(1,526)
385
(1,141)
(3,636)
918
(2,718)
Amortization of defined benefit pension plan net periodic pension cost components
(17)
5
(12)
(34)
9
(25)
Total other comprehensive income
12,155
(2,766)
9,389
46,610
(10,861)
35,749
Comprehensive income
$
112,657
$
(24,535)
$
88,122
$
238,271
$
(52,376)
$
185,895
2024
Net income
$
85,977
$
(19,362)
$
66,615
$
166,812
$
(37,566)
$
129,246
Other comprehensive income:
Unrealized gains on available-for-sale securities
1,348
(773)
575
1,704
(982)
722
Amortization of unrealized losses on held-to-maturity securities transferred from available-for-sale
2,474
(702)
1,772
4,537
(1,195)
3,342
Derivative instruments designated as cash flow hedges:
Unrealized holding gains on derivatives
1,000
(208)
792
3,524
(853)
2,671
Gains on derivative instruments realized in net income
(1,438)
363
(1,075)
(2,878)
731
(2,147)
Net cash flow hedge activity
(438)
155
(283)
646
(122)
524
Amortization of defined benefit pension plan net periodic pension cost components
46
(12)
34
90
(23)
67
Total other comprehensive income
3,430
(1,332)
2,098
6,977
(2,322)
4,655
Comprehensive income
$
89,407
$
(20,694)
$
68,713
$
173,789
$
(39,888)
$
133,901
See accompanying notes to consolidated financial statements (unaudited).
7
UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Changes in Shareholders’ Equity(Unaudited)
(in thousands except share and per share data)
Shares of Common Stock
Preferred Stock
Common Stock
Common Stock Issuable
Capital Surplus
Retained Earnings
Accumulated
Other Comprehensive Loss
Total
Three Months Ended June 30,
Balance at March 31, 2024
119,136,518
$
88,266
$
119,137
$
11,923
$
2,702,807
$
614,612
$
(236,635)
$
3,300,110
Net income
66,615
66,615
Other comprehensive income
2,098
2,098
Preferred stock dividends
(1,573)
(1,573)
Common stock dividends ($0.23 per share)
(27,415)
(27,415)
Impact of equity-based compensation awards
34,544
34
92
2,450
2,576
Impact of other United sponsored equity plans
3,741
4
130
88
222
Balance at June 30, 2024
119,174,803
$
88,266
$
119,175
$
12,145
$
2,705,345
$
652,239
$
(234,537)
$
3,342,633
Balance at March 31, 2025
119,514,298
$
88,266
$
119,514
$
12,983
$
2,711,721
$
754,971
$
(186,559)
$
3,500,896
Net income
78,733
78,733
Other comprehensive income
9,389
9,389
Impact of acquisition
2,380,952
2,381
63,357
65,738
Purchases of common stock
(506,600)
(507)
(13,435)
(13,942)
Preferred stock dividends
(1,573)
(1,573)
Common stock dividends ($0.24 per share)
(29,541)
(29,541)
Impact of equity-based compensation awards
38,441
39
78
2,881
2,998
Impact of other United sponsored equity plans
4,171
4
129
93
226
Balance at June 30, 2025
121,431,262
$
88,266
$
121,431
$
13,190
$
2,764,617
$
802,590
$
(177,170)
$
3,612,924
Six Months Ended June 30,
Balance at December 31, 2023
119,010,319
$
88,266
$
119,010
$
13,110
$
2,699,112
$
581,219
$
(239,192)
$
3,261,525
Net income
129,246
129,246
Other comprehensive income
4,655
4,655
Preferred stock dividends
(3,146)
(3,146)
Common stock dividends ($0.46 per share)
(55,080)
(55,080)
Impact of equity-based compensation awards
114,691
114
168
5,406
5,688
Impact of other United sponsored equity plans
49,793
51
(1,133)
827
(255)
Balance at June 30, 2024
119,174,803
$
88,266
$
119,175
$
12,145
$
2,705,345
$
652,239
$
(234,537)
$
3,342,633
Balance at December 31, 2024
119,364,110
$
88,266
$
119,364
$
12,999
$
2,710,279
$
714,138
$
(212,919)
$
3,432,127
Net income
150,146
150,146
Other comprehensive income
35,749
35,749
Impact of acquisitions
2,380,952
2,381
63,357
65,738
Purchases of common stock
(506,600)
(507)
(13,435)
(13,942)
Preferred stock dividends
(3,146)
(3,146)
Common stock dividends ($0.48 per share)
(58,548)
(58,548)
Impact of equity-based compensation awards
142,222
143
1,063
3,464
4,670
Impact of other United sponsored equity plans
50,578
50
(872)
952
130
Balance at June 30, 2025
121,431,262
$
88,266
$
121,431
$
13,190
$
2,764,617
$
802,590
$
(177,170)
$
3,612,924
See accompanying notes to consolidated financial statements (unaudited).
8
UNITED COMMUNITY BANKS, INC.
Consolidated Statements of Cash Flows(Unaudited)
Six Months Ended June 30,
(in thousands)
2025
2024
Operating activities:
Net income
$
150,146
$
129,246
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion, net
23,326
20,616
Provision for credit losses
27,237
25,134
Stock based compensation
5,208
4,989
Deferred income tax expense
3,550
1,808
Securities gains, net
(292)
—
Net gains from sales of other loans
(3,391)
(2,833)
FinTrust goodwill write-down
—
5,100
Changes in assets and liabilities:
Other assets
9,247
4,574
Accrued expense and other liabilities
(39,954)
21,574
Loans held for sale
20,391
(16,307)
Net cash provided by operating activities
195,468
193,901
Investing activities:
Debt securities held-to-maturity:
Proceeds from maturities and calls
63,865
60,939
Debt securities available-for-sale:
Proceeds from sales
258,909
647
Proceeds from maturities and calls
407,365
356,110
Purchases
(192,605)
(635,039)
Net (increase) decrease in loans
(453,439)
89,127
Payments for other investments
(21,947)
(97,829)
Proceeds from other investments
7,241
556
Purchases of premises and equipment
(16,434)
(31,568)
Net cash received in acquisition
41,246
—
Other investing inflows
8,936
9,788
Net cash provided by (used in) investing activities
103,137
(247,269)
Financing activities:
Net increase (decrease) in deposits
127,494
(329,119)
Net decrease in short-term borrowings
(195,000)
—
Repayment of long-term debt
(100,000)
—
Proceeds from FHLB advances
126,000
100
Repayment of FHLB advances
(126,000)
(100)
Repurchase of common stock
(13,942)
—
Cash dividends on common stock
(58,136)
(55,494)
Cash dividends on preferred stock
(3,146)
(3,146)
Other financing inflows
965
1,328
Other financing outflows
(1,757)
(1,213)
Net cash used in financing activities
(243,522)
(387,644)
Net change in cash and cash equivalents
55,083
(441,012)
Cash and cash equivalents, beginning of period
519,873
1,003,875
Cash and cash equivalents, end of period
$
574,956
$
562,863
See accompanying notes to consolidated financial statements (unaudited).
9
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Note 1 – Basis of Presentation
Basis of Presentation
United’s accounting and financial reporting policies conform to GAAP and reporting guidelines of banking regulatory authorities. The accompanying interim consolidated financial statements have not been audited. All material intercompany balances and transactions have been eliminated. A more detailed description of United’s accounting policies is included in its 2024 10-K.
In management’s opinion, all necessary accounting adjustments have been made to fairly present the financial position and results of operations in the accompanying financial statements. These adjustments are normal and recurring accruals considered necessary for a fair and accurate presentation. The results for interim periods are not necessarily indicative of results for the full year or any other interim periods. The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes appearing in United’s 2024 10-K.
Note 2 – Supplemental Cash Flow Information
The supplemental schedule of significant non-cash investing and financing activities for the six months ended June 30, 2025 and 2024 is as follows.
Six Months Ended June 30,
(in thousands)
2025
2024
Significant non-cash investing and financing transactions:
Commitments to fund other investments
$
8,906
$
9,214
Acquisitions:
Assets acquired
446,504
—
Liabilities assumed
380,766
—
Common stock issued for net assets acquired
65,738
—
10
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Note 3 – Acquisitions
Acquisition of ANB
On May 1, 2025, United acquired all of the outstanding common stock of ANB in a stock transaction. ANB operated one banking location in Oakland Park, Florida, which facilitated United’s expansion within that market. United’s operating results for the three and six months ended June 30, 2025 include the operating results of the acquired business for the period subsequent to the acquisition date of May 1, 2025.
ANB
Fair Value Recorded by United (1)
(in thousands)
May 1, 2025
Assets
Cash and cash equivalents
$
41,246
Debt securities
56,503
Loans held for investment
301,303
Bank-owned life insurance
13,822
Net deferred tax asset
6,565
Core deposit intangible
6,290
Other assets
2,746
Total assets acquired
428,475
Liabilities
Deposits
374,468
Other liabilities
6,298
Total liabilities assumed
380,766
Total identifiable net assets
47,709
Consideration transferred
Common stock issued (2,380,952 shares)
65,738
Goodwill
$
18,029
(1) Fair values are preliminary and are subject to refinement for a period not to exceed one year after the closing date of an acquisition as information relative to closing date fair values becomes available.
Goodwill represents the intangible value of ANB’s business and reputation within the markets it served and is not expected to be deductible for income tax purposes. The ANB core deposit intangible will be amortized over 10 years using the sum-of-the-years-digits method.
The following table presents additional information related to the acquired ANB loan portfolio at the acquisition date.
(in thousands)
May 1, 2025
PCD Loans
Par value
$
42,649
ACL at acquisition
(1,251)
Non-credit discount
(2,998)
Purchase price
$
38,400
Non- PCD:
Fair value
$
262,903
Gross contractual amounts receivable
325,973
Estimate of contractual cash flows not expected to be collected
3,158
Pro forma information
The following table discloses the impact of the ANB acquisition since the acquisition date. The table also presents certain pro forma information as if ANB had been acquired on January 1, 2024. These results combine the historical results of the acquired entity with United’s consolidated statement of income. Adjustments were made for the estimated impact of certain fair value adjustments and other acquisition-related activity; however pro forma financial results presented are not necessarily indicative of what would have occurred had the acquisition taken place in an earlier year.
11
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
ANB merger-related costs for the three and six months ended June 30, 2025 of $8.93 million and $9.13 million, respectively, have been excluded from the pro forma information for those periods and included in the three and six months ended June 30, 2024 pro forma information. The actual results and pro forma information were as follows:
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
Revenue
Net Income
Revenue
Net Income
2025
Actual ANB results included in statement of income since acquisition date
$
2,290
$
(1,026)
$
2,290
$
(1,026)
Supplemental consolidated pro forma as if ANB had been acquired January 1, 2024
261,830
81,944
513,212
154,518
2024
Supplemental consolidated pro forma as if ANB had been acquired January 1, 2024
$
249,217
$
61,135
$
491,835
$
122,791
Note 4 – Investment Securities
The amortized cost basis, unrealized gains and losses and fair value of HTM debt securities as of the dates indicated are as follows.
(in thousands)
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value
As of June 30, 2025
U.S. Treasuries
$
19,911
$
—
$
1,187
$
18,724
U.S. Government Agencies & GSEs
98,968
—
12,721
86,247
State and political subdivisions
286,966
15
53,371
233,610
Residential MBS, Agency & GSEs
1,232,783
13
192,516
1,040,280
Commercial MBS, Agency & GSEs
653,102
—
109,134
543,968
Supranational entities
15,000
—
2,081
12,919
Total
$
2,306,730
$
28
$
371,010
$
1,935,748
As of December 31, 2024
U.S. Treasuries
$
19,896
$
—
$
1,734
$
18,162
U.S. Government Agencies & GSEs
99,154
—
16,291
82,863
State and political subdivisions
289,492
10
55,206
234,296
Residential MBS, Agency & GSEs
1,282,174
1
223,671
1,058,504
Commercial MBS, Agency & GSEs
662,391
—
124,409
537,982
Supranational entities
15,000
—
2,681
12,319
Total
$
2,368,107
$
11
$
423,992
$
1,944,126
12
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
The amortized cost basis, unrealized gains and losses, and fair value of AFS debt securities as of the dates indicated are presented below.
(in thousands)
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value
As of June 30, 2025
U.S. Treasuries
$
339,348
$
839
$
5,695
$
334,492
U.S. Government Agencies & GSEs
307,198
128
11,635
295,691
State and political subdivisions
171,226
1
13,805
157,422
Residential MBS, Agency & GSEs
1,893,872
5,825
95,721
1,803,976
Residential MBS, Non-Agency
290,616
6
14,786
275,836
Commercial MBS, Agency & GSEs
784,869
4,123
27,856
761,136
Commercial MBS, Non-Agency
8,069
—
149
7,920
Corporate bonds
146,082
14
8,266
137,830
Asset-backed securities
302,387
252
1,619
301,020
Total
$
4,243,667
$
11,188
$
179,532
$
4,075,323
As of December 31, 2024
U.S. Treasuries
$
511,994
$
874
$
9,199
$
503,669
U.S. Government Agencies & GSEs
334,147
100
13,980
320,267
State and political subdivisions
175,041
—
16,809
158,232
Residential MBS, Agency & GSEs
2,070,433
1,431
125,833
1,946,031
Residential MBS, Non-Agency
302,318
—
18,390
283,928
Commercial MBS, Agency & GSEs
844,302
851
35,243
809,910
Commercial MBS, Non-Agency
13,323
—
336
12,987
Corporate bonds
164,069
130
11,579
152,620
Asset-backed securities
248,673
501
527
248,647
Total
$
4,664,300
$
3,887
$
231,896
$
4,436,291
As of June 30, 2025 and December 31, 2024 the carrying value of pledged securities totaled $2.81 billion and $3.20 billion, respectively. Securities were pledged primarily to secure public deposits.
The following table summarizes the fair values and gross unrealized losses of HTM debt securities as of the dates indicated based on the length of time that individual securities have been in a continuous unrealized loss position.
Length of Time in Unrealized Loss Position
Less than 12 Months
12 Months or More
Total
(in thousands)
Fair Value
Unrealized Loss
Fair Value
Unrealized Loss
Fair Value
Unrealized Loss
As of June 30, 2025
U.S. Treasuries
$
—
$
—
$
18,724
$
1,187
$
18,724
$
1,187
U.S. Government Agencies & GSEs
—
—
86,247
12,721
86,247
12,721
State and political subdivisions
7,563
126
216,852
53,245
224,415
53,371
Residential MBS, Agency & GSEs
5,635
1,590
1,033,507
190,926
1,039,142
192,516
Commercial MBS, Agency & GSEs
—
—
543,968
109,134
543,968
109,134
Supranational entities
—
—
12,919
2,081
12,919
2,081
Total
$
13,198
$
1,716
$
1,912,217
$
369,294
$
1,925,415
$
371,010
As of December 31, 2024
U.S. Treasuries
$
—
$
—
$
18,162
$
1,734
$
18,162
$
1,734
U.S. Government Agencies & GSEs
—
—
82,863
16,291
82,863
16,291
State and political subdivisions
18,729
305
212,356
54,901
231,085
55,206
Residential MBS, Agency & GSEs
6,778
1,822
1,051,455
221,849
1,058,233
223,671
Commercial MBS, Agency & GSEs
—
—
537,981
124,409
537,981
124,409
Supranational entities
—
—
12,319
2,681
12,319
2,681
Total
$
25,507
$
2,127
$
1,915,136
$
421,865
$
1,940,643
$
423,992
13
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
The following table summarizes the fair values and gross unrealized losses of AFS debt securities as of the dates indicated based on the length of time that individual securities have been in a continuous unrealized loss position.
Length of Time in Unrealized Loss Position
Less than 12 Months
12 Months or More
Total
(in thousands)
Fair Value
Unrealized Loss
Fair Value
Unrealized Loss
Fair Value
Unrealized Loss
As of June 30, 2025
U.S. Treasuries
$
—
$
—
$
108,842
$
5,695
$
108,842
$
5,695
U.S. Government Agencies & GSEs
63,519
342
189,422
11,293
252,941
11,635
State and political subdivisions
—
—
155,427
13,805
155,427
13,805
Residential MBS, Agency & GSEs
312,651
1,454
864,320
94,267
1,176,971
95,721
Residential MBS, Non-Agency
2,289
63
273,108
14,723
275,397
14,786
Commercial MBS, Agency & GSEs
78,620
225
347,768
27,631
426,388
27,856
Commercial MBS, Non-Agency
—
—
7,919
149
7,919
149
Corporate bonds
—
—
136,814
8,266
136,814
8,266
Asset-backed securities
156,826
897
38,077
722
194,903
1,619
Total
$
613,905
$
2,981
$
2,121,697
$
176,551
$
2,735,602
$
179,532
As of December 31, 2024
U.S. Treasuries
$
75,183
$
808
$
106,036
$
8,391
$
181,219
$
9,199
U.S. Government Agencies & GSEs
101,964
388
190,525
13,592
292,489
13,980
State and political subdivisions
—
—
157,479
16,809
157,479
16,809
Residential MBS, Agency & GSEs
773,257
7,593
896,691
118,240
1,669,948
125,833
Residential MBS, Non-Agency
2,788
98
281,140
18,292
283,928
18,390
Commercial MBS, Agency & GSEs
226,363
1,733
355,852
33,510
582,215
35,243
Commercial MBS, Non-Agency
—
—
12,987
336
12,987
336
Corporate bonds
—
—
150,666
11,579
150,666
11,579
Asset-backed securities
46,870
98
64,271
429
111,141
527
Total
$
1,226,425
$
10,718
$
2,215,647
$
221,178
$
3,442,072
$
231,896
At June 30, 2025, there were 519 AFS debt securities and 300 HTM debt securities that were in an unrealized loss position. United does not intend to sell nor does it believe it will be required to sell securities in an unrealized loss position prior to the recovery of their amortized cost basis. Unrealized losses at June 30, 2025 were primarily attributable to changes in interest rates.
At June 30, 2025 and December 31, 2024, the majority of HTM securities were considered to have a zero loss assumption for ACL purposes. For the remaining HTM securities, primarily those issued by state and political subdivisions, calculated credit losses, and, thus, the related ACL were de minimis due to the high credit quality of the portfolio. As a result, no ACL was recorded on the HTM portfolio at June 30, 2025 and December 31, 2024. In addition, based on the assessments performed at June 30, 2025 and December 31, 2024, there was no ACL required related to the AFS portfolio.
The following table presents accrued interest receivable on HTM and AFS debt securities, which was excluded from the estimate of credit losses, for the periods indicated.
Accrued Interest Receivable
(in thousands)
June 30, 2025
December 31, 2024
HTM
$
5,633
$
5,763
AFS
17,113
18,201
14
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
The amortized cost and fair value of AFS and HTM debt securities at June 30, 2025, by contractual maturity, are presented in the following table.
AFS
HTM
(in thousands)
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Within 1 year:
U.S. Treasuries
$
124,053
$
124,328
$
—
$
—
U.S. Government Agencies & GSEs
458
452
—
—
State and political subdivisions
2,182
2,154
3,700
3,703
Corporate bonds
6,549
6,407
—
—
133,242
133,341
3,700
3,703
1 to 5 years:
U.S. Treasuries
215,295
210,164
19,911
18,724
U.S. Government Agencies & GSEs
42,689
40,568
—
—
State and political subdivisions
34,552
32,337
35,466
33,356
Corporate bonds
118,028
112,119
—
—
410,564
395,188
55,377
52,080
5 to 10 years:
U.S. Government Agencies & GSEs
176,519
169,321
75,193
66,446
State and political subdivisions
70,767
62,951
80,336
67,886
Corporate bonds
21,505
19,304
—
—
Supranational entities
—
—
15,000
12,919
268,791
251,576
170,529
147,251
More than 10 years:
U.S. Government Agencies & GSEs
87,532
85,350
23,775
19,801
State and political subdivisions
63,725
59,980
167,464
128,665
Corporate bonds
—
—
—
—
151,257
145,330
191,239
148,466
Debt securities not due at a single maturity date:
Asset-backed securities
302,387
301,020
—
—
Residential MBS
2,184,488
2,079,812
1,232,783
1,040,280
Commercial MBS
792,938
769,056
653,102
543,968
3,279,813
3,149,888
1,885,885
1,584,248
Total
$
4,243,667
$
4,075,323
$
2,306,730
$
1,935,748
Expected maturities may differ from contractual maturities because issuers and borrowers may have the right to call or prepay obligations.
Realized gains and losses are derived using the specific identification method for determining the cost of securities sold. The following table summarizes AFS securities sales activity for the three and six months ended June 30, 2025 and 2024.
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2025
2024
2025
2024
Proceeds from sales
$
205,433
$
—
$
258,909
$
647
Gross realized gains
$
515
$
—
$
521
$
—
Gross realized losses
(229)
—
(229)
—
Securities gains, net
$
286
$
—
$
292
$
—
Income tax expense attributable to sales
$
68
$
—
$
70
$
—
15
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Equity Investments
The table below reflects the carrying value of certain equity investments, which are included in other assets on the consolidated balance sheet, as of the dates indicated.
(in thousands)
June 30, 2025
December 31, 2024
Federal Reserve stock
$
90,422
$
88,008
FHLB stock
18,049
18,051
Equity securities with readily determinable fair values
2,272
2,341
Note 5 – Loans and Leases and Allowance for Credit Losses
Major classifications of the loan and lease portfolio (collectively referred to as the “loan portfolio” or “loans”) are summarized as of the dates indicated as follows. At June 30, 2025, remaining manufactured housing loans of $1.38 million are classified as consumer because manufactured housing is no longer a significant component of loans following the sale of substantially all of that portfolio in 2024.
(in thousands)
June 30, 2025
December 31, 2024
Owner occupied CRE
$
3,563,126
$
3,398,217
Income producing CRE
4,548,235
4,360,920
Commercial & industrial
2,515,360
2,428,376
Commercial construction
1,751,850
1,655,710
Equipment financing
1,777,936
1,662,501
Total commercial
14,156,507
13,505,724
Residential mortgage
3,210,430
3,231,479
Home equity
1,180,455
1,064,874
Residential construction
173,829
178,405
Manufactured housing
—
1,723
Consumer
190,958
186,448
Total loans excluding fair value hedge basis adjustment
18,912,179
18,168,653
Fair value hedge basis adjustment
8,696
7,327
Total loans
18,920,875
18,175,980
Less ACL - loans
(216,500)
(206,998)
Loans, net
$
18,704,375
$
17,968,982
Accrued interest receivable related to loans totaled $58.6 million and $60.1 million at June 30, 2025 and December 31, 2024, respectively, and was reported in other assets on the consolidated balance sheets. Accrued interest receivable was excluded from the estimate of credit losses.
At June 30, 2025 and December 31, 2024, the loan portfolio included certain loans specifically pledged to the Federal Reserve as well as loans covered by a blanket lien on qualifying loan types with the FHLB to secure contingent funding sources.
The following table presents the amortized cost of certain loans held for investment that were sold in the periods indicated. The net gain on these loan sales were included in noninterest income on the consolidated statements of income.
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2025
2024
2025
2024
Guaranteed portion of SBA/USDA loans
$
21,760
$
18,311
$
43,709
$
27,699
Equipment financing receivables
16,887
8,391
21,049
36,714
Total
$
38,647
$
26,702
$
64,758
$
64,413
16
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Past Due and Nonaccrual Loans
The following table presents the aging of the amortized cost basis in loans by aging category and accrual status as of the dates indicated. Past due status is based on contractual terms of the loan. The accrual of interest is generally discontinued when a loan becomes 90 days past due.
Accruing
Current Loans
Loans Past Due
(in thousands)
30 - 59 Days
60 - 89 Days
> 90 Days
Nonaccrual Loans
Total Loans
As of June 30, 2025
Owner occupied CRE
$
3,553,328
$
1,591
$
—
$
—
$
8,207
$
3,563,126
Income producing CRE
4,532,716
895
—
—
14,624
4,548,235
Commercial & industrial
2,495,943
3,415
580
—
15,422
2,515,360
Commercial construction
1,750,058
424
—
—
1,368
1,751,850
Equipment financing
1,758,884
3,709
3,612
—
11,731
1,777,936
Total commercial
14,090,929
10,034
4,192
—
51,352
14,156,507
Residential mortgage
3,179,352
6,512
1,969
—
22,597
3,210,430
Home equity
1,173,748
1,607
1,007
—
4,093
1,180,455
Residential construction
172,533
90
3
—
1,203
173,829
Consumer
189,250
340
161
—
1,207
190,958
Total loans
$
18,805,812
$
18,583
$
7,332
$
—
$
80,452
$
18,912,179
As of December 31, 2024
Owner occupied CRE
$
3,381,622
$
4,402
$
519
$
—
$
11,674
$
3,398,217
Income producing CRE
4,333,651
1,705
207
—
25,357
4,360,920
Commercial & industrial
2,395,889
2,665
483
—
29,339
2,428,376
Commercial construction
1,646,175
1,693
442
—
7,400
1,655,710
Equipment financing
1,644,721
5,939
2,916
—
8,925
1,662,501
Total commercial
13,402,058
16,404
4,567
—
82,695
13,505,724
Residential mortgage
3,199,956
4,808
2,100
—
24,615
3,231,479
Home equity
1,059,010
986
248
—
4,630
1,064,874
Residential construction
177,371
133
844
—
57
178,405
Manufactured housing
155
124
—
—
1,444
1,723
Consumer
185,545
636
129
—
138
186,448
Total loans
$
18,024,095
$
23,091
$
7,888
$
—
$
113,579
$
18,168,653
The following table presents nonaccrual loans held for investment by loan class for the periods indicated.
Nonaccrual Loans
June 30, 2025
December 31, 2024
(in thousands)
With no allowance
With an allowance
Total
With no allowance
With an allowance
Total
Owner occupied CRE
$
2,625
$
5,582
$
8,207
$
9,926
$
1,748
$
11,674
Income producing CRE
10,749
3,875
14,624
24,970
387
25,357
Commercial & industrial
7,689
7,733
15,422
21,570
7,769
29,339
Commercial construction
836
532
1,368
6,817
583
7,400
Equipment financing
24
11,707
11,731
33
8,892
8,925
Total commercial
21,923
29,429
51,352
63,316
19,379
82,695
Residential mortgage
2,716
19,881
22,597
6,540
18,075
24,615
Home equity
708
3,385
4,093
231
4,399
4,630
Residential construction
773
430
1,203
—
57
57
Manufactured housing
—
—
—
—
1,444
1,444
Consumer
1
1,206
1,207
36
102
138
Total
$
26,121
$
54,331
$
80,452
$
70,123
$
43,456
$
113,579
At June 30, 2025 and December 31, 2024, United had $36.0 million and $75.1 million, respectively, in loans for which repayment is expected to be provided substantially through the operation or sale of the collateral. Estimated credit losses for these loans are based on the net realizable value of the collateral relative to the amortized cost of the loan. The majority of these loans are income producing CRE and commercial and industrial loans.
17
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Lease Receivables
The equipment financing portfolio includes sales-type and direct financing lease receivables. The components of the net investment in these lease receivables as of June 30, 2025 and December 31, 2024 are provided in the table below.
(in thousands)
June 30, 2025
December 31, 2024
Minimum future lease payments receivable
$
106,362
$
97,793
Estimated residual value of leased equipment
6,737
5,749
Initial direct costs
2,071
1,856
Security deposits
(485)
(491)
Unearned income
(16,669)
(15,412)
Net investment in leases
$
98,016
$
89,495
Minimum future lease payments expected to be received from equipment financing lease contracts as of June 30, 2025 were as follows:
(in thousands)
Year
Remainder of 2025
$
19,125
2026
33,831
2027
26,955
2028
17,182
2029
7,959
Thereafter
1,310
Total
$
106,362
Credit Quality Indicators
United utilizes internal risk ratings as the primary credit quality indicator as outlined below:
Commercial Purpose Loans. United analyzes commercial loans individually on an ongoing basis based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, public information, and current industry and economic trends, among other factors. Commercial loans are categorized by the credit risk ratings of Pass, Special Mention, Substandard and Doubtful. Special Mention, Substandard and Doubtful ratings are defined by regulatory authorities and represent an elevated level of risk due to weaknesses identified related to the credit and/or borrower. Ratings within these categories are based on the severity of the weakness and the likelihood of repayment. Pass loans are considered to have a low probability of default and do not meet the criteria of the other ratings.
Consumer Purpose Loans. United applies a pass/fail grading system to all consumer purpose loans. Under this system, loans generally classified as “fail” are those that are on nonaccrual status, become past due 90 days, or meet certain bankruptcy status criteria. All other loans are classified as “pass”. For reporting purposes, loans in these categories that are classified as “fail” are reported as substandard and all other loans are reported as pass.
18
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
The following tables present the risk category of term loans and gross charge-offs by vintage year, which is the year of origination or most recent renewal, as of the date indicated.
(in thousands)
Term Loans by Origination Year
Revolvers
Revolvers converted to term loans
Total
As of June 30, 2025
2025
2024
2023
2022
2021
Prior
Owner occupied CRE
Pass
$
338,649
$
435,661
$
507,581
$
618,033
$
502,481
$
856,402
$
128,598
$
24,352
$
3,411,757
Special Mention
—
3,436
23,464
12,001
18,616
15,601
4,800
233
78,151
Substandard
1,083
2,950
4,137
32,581
7,796
22,193
2,346
132
73,218
Total owner occupied CRE
$
339,732
$
442,047
$
535,182
$
662,615
$
528,893
$
894,196
$
135,744
$
24,717
$
3,563,126
Current period gross charge-offs
$
—
$
165
$
—
$
—
$
—
$
667
$
—
$
—
$
832
Income producing CRE
Pass
$
403,211
$
473,221
$
496,550
$
906,116
$
891,169
$
1,064,513
$
49,931
$
13,550
$
4,298,261
Special Mention
11,989
5,342
3,070
36,924
2,609
8,702
—
—
68,636
Substandard
20,038
40,187
38,391
7,831
3,830
71,061
—
—
181,338
Total income producing CRE
$
435,238
$
518,750
$
538,011
$
950,871
$
897,608
$
1,144,276
$
49,931
$
13,550
$
4,548,235
Current period gross charge-offs
$
—
$
—
$
—
$
1,970
$
—
$
—
$
—
$
—
$
1,970
Commercial & industrial
Pass
$
283,935
$
442,728
$
361,686
$
213,279
$
185,955
$
270,360
$
628,197
$
15,165
$
2,401,305
Special Mention
59
2,313
9,430
17,862
1,757
3,980
7,589
1,564
44,554
Substandard
2,565
3,239
21,638
5,563
5,061
9,043
15,663
6,729
69,501
Total commercial & industrial
$
286,559
$
448,280
$
392,754
$
236,704
$
192,773
$
283,383
$
651,449
$
23,458
$
2,515,360
Current period gross charge-offs
$
—
$
676
$
3,896
$
736
$
—
$
225
$
—
$
597
$
6,130
Commercial construction
Pass
$
271,120
$
374,217
$
318,612
$
446,901
$
126,786
$
59,949
$
43,352
$
2,724
$
1,643,661
Special Mention
5,896
7,062
462
41,989
5,253
464
6,333
110
67,569
Substandard
—
458
543
29,998
5,604
4,017
—
—
40,620
Total commercial construction
$
277,016
$
381,737
$
319,617
$
518,888
$
137,643
$
64,430
$
49,685
$
2,834
$
1,751,850
Current period gross charge-offs
$
—
$
—
$
—
$
—
$
130
$
—
$
—
$
—
$
130
Equipment financing
Pass
$
442,271
$
583,426
$
372,142
$
254,493
$
82,532
$
27,948
$
—
$
—
$
1,762,812
Special Mention
—
—
—
550
417
—
—
—
967
Substandard
499
2,091
4,196
4,229
2,344
798
—
—
14,157
Total equipment financing
$
442,770
$
585,517
$
376,338
$
259,272
$
85,293
$
28,746
$
—
$
—
$
1,777,936
Current period gross charge-offs
$
—
$
1,083
$
4,001
$
4,734
$
1,677
$
369
$
—
$
—
$
11,864
Residential mortgage
Pass
$
106,569
$
112,636
$
326,486
$
976,419
$
952,065
$
706,930
$
—
$
2,731
$
3,183,836
Substandard
—
1,736
3,334
7,531
3,204
10,646
—
143
26,594
Total residential mortgage
$
106,569
$
114,372
$
329,820
$
983,950
$
955,269
$
717,576
$
—
$
2,874
$
3,210,430
Current period gross charge-offs
$
—
$
—
$
373
$
48
$
—
$
—
$
—
$
—
$
421
Home equity
Pass
$
—
$
—
$
—
$
—
$
—
$
—
$
1,143,215
$
32,360
$
1,175,575
Substandard
—
—
—
—
—
—
—
4,880
4,880
Total home equity
$
—
$
—
$
—
$
—
$
—
$
—
$
1,143,215
$
37,240
$
1,180,455
Current period gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
71
$
71
Residential construction
Pass
$
33,404
$
90,141
$
20,315
$
14,483
$
6,474
$
7,688
$
—
$
88
$
172,593
Substandard
—
80
944
72
9
131
—
—
1,236
Total residential construction
$
33,404
$
90,221
$
21,259
$
14,555
$
6,483
$
7,819
$
—
$
88
$
173,829
Current period gross charge-offs
$
—
$
—
$
102
$
124
$
—
$
—
$
—
$
—
$
226
Consumer
Pass
$
58,563
$
56,385
$
31,570
$
17,592
$
4,380
$
2,300
$
18,794
$
109
$
189,693
Substandard
—
220
486
176
137
246
—
—
1,265
Total consumer
$
58,563
$
56,605
$
32,056
$
17,768
$
4,517
$
2,546
$
18,794
$
109
$
190,958
Current period gross charge-offs
$
1,956
$
234
$
131
$
80
$
35
$
13
$
—
$
47
$
2,496
19
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(in thousands)
Term Loans
Revolvers
Revolvers converted to term loans
Total
As of December 31, 2024
2024
2023
2022
2021
2020
Prior
Owner occupied CRE
Pass
$
455,248
$
540,913
$
621,020
$
555,846
$
507,121
$
425,932
$
120,574
$
21,867
$
3,248,521
Special Mention
1,093
13,414
13,653
14,735
6,520
6,496
4,995
393
61,299
Substandard
3,285
5,365
37,791
9,647
8,519
22,319
1,471
—
88,397
Total owner occupied CRE
$
459,626
$
559,692
$
672,464
$
580,228
$
522,160
$
454,747
$
127,040
$
22,260
$
3,398,217
Current period gross charge-offs
$
—
$
—
$
221
$
—
$
—
$
707
$
—
$
—
$
928
Income producing CRE
Pass
$
468,247
$
477,887
$
977,090
$
896,096
$
614,584
$
606,395
$
50,955
$
15,025
$
4,106,279
Special Mention
16,852
2,145
21,007
2,724
3,538
10,465
50
—
56,781
Substandard
59,437
36,259
16,758
3,411
39,085
42,910
—
—
197,860
Total income producing CRE
$
544,536
$
516,291
$
1,014,855
$
902,231
$
657,207
$
659,770
$
51,005
$
15,025
$
4,360,920
Current period gross charge-offs
$
—
$
3,128
$
—
$
—
$
—
$
1,691
$
—
$
—
$
4,819
Commercial & industrial
Pass
$
464,843
$
440,557
$
270,459
$
198,320
$
125,964
$
180,262
$
583,147
$
8,480
$
2,272,032
Special Mention
8,630
12,438
18,832
2,794
1,238
3,794
24,286
1,806
73,818
Substandard
2,428
22,877
9,773
12,133
3,986
7,081
16,078
8,170
82,526
Total commercial & industrial
$
475,901
$
475,872
$
299,064
$
213,247
$
131,188
$
191,137
$
623,511
$
18,456
$
2,428,376
Current period gross charge-offs
$
842
$
2,908
$
6,826
$
1,994
$
2,282
$
1,236
$
—
$
3,270
$
19,358
Commercial construction
Pass
$
448,497
$
348,179
$
495,712
$
153,303
$
40,254
$
40,004
$
46,863
$
1,196
$
1,574,008
Special Mention
5,005
462
44,152
5,253
—
100
6,040
—
61,012
Substandard
1,900
3,956
1,491
6,549
6,621
173
—
—
20,690
Total commercial construction
$
455,402
$
352,597
$
541,355
$
165,105
$
46,875
$
40,277
$
52,903
$
1,196
$
1,655,710
Current period gross charge-offs
$
—
$
69
$
53
$
—
$
—
$
23
$
—
$
—
$
145
Equipment financing
Pass
$
693,205
$
454,501
$
328,490
$
122,920
$
33,870
$
15,788
$
—
$
—
$
1,648,774
Special Mention
—
—
659
1,989
708
496
—
—
3,852
Substandard
653
2,784
3,453
1,828
527
630
—
—
9,875
Total equipment financing
$
693,858
$
457,285
$
332,602
$
126,737
$
35,105
$
16,914
$
—
$
—
$
1,662,501
Current period gross charge-offs
$
261
$
5,489
$
13,359
$
6,418
$
1,033
$
309
$
—
$
—
$
26,869
Residential mortgage
Pass
$
121,145
$
321,804
$
1,015,693
$
989,673
$
402,894
$
347,249
$
—
$
2,971
$
3,201,429
Substandard
2,291
3,841
8,922
2,410
1,748
10,618
—
220
30,050
Total residential mortgage
$
123,436
$
325,645
$
1,024,615
$
992,083
$
404,642
$
357,867
$
—
$
3,191
$
3,231,479
Current period gross charge-offs
$
87
$
124
$
71
$
3
$
—
$
10
$
—
$
—
$
295
Home equity
Pass
$
—
$
—
$
—
$
—
$
—
$
—
$
1,028,340
$
31,291
$
1,059,631
Substandard
—
—
—
—
—
—
—
5,243
5,243
Total home equity
$
—
$
—
$
—
$
—
$
—
$
—
$
1,028,340
$
36,534
$
1,064,874
Current period gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
95
$
95
Residential construction
Pass
$
74,854
$
55,164
$
30,216
$
8,539
$
4,528
$
4,872
$
—
$
90
$
178,263
Substandard
—
—
49
—
3
90
—
—
142
Total residential construction
$
74,854
$
55,164
$
30,265
$
8,539
$
4,531
$
4,962
$
—
$
90
$
178,405
Current period gross charge-offs
$
—
$
221
$
73
$
48
$
—
$
—
$
—
$
—
$
342
Manufactured housing
Pass
$
124
$
—
$
—
$
—
$
—
$
150
$
—
$
—
$
274
Substandard
285
506
178
112
169
199
—
—
1,449
Total manufactured housing
$
409
$
506
$
178
$
112
$
169
$
349
$
—
$
—
$
1,723
Current period gross charge-offs
$
—
$
1,679
$
3,570
$
2,518
$
2,518
$
4,304
$
—
$
—
$
14,589
Consumer
Pass
$
84,100
$
43,889
$
20,332
$
7,103
$
7,625
$
563
$
22,508
$
100
$
186,220
Substandard
1
118
42
36
30
1
—
—
228
Total consumer
$
84,101
$
44,007
$
20,374
$
7,139
$
7,655
$
564
$
22,508
$
100
$
186,448
Current period gross charge-offs
$
3,082
$
281
$
162
$
34
$
11
$
8
$
—
$
152
$
3,730
20
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Modifications to Borrowers Experiencing Financial Difficulty
The period-end amortized cost and additional information regarding loans modified under the terms of a FDM during the six months ended June 30, 2025 and 2024 are presented in the following tables.
Six Months Ended June 30,
2025
2024
New FDMs
Defaults within 12 months of modification
New FDMs
Defaults within 12 months of modification
(dollars in thousands)
Amortized Cost
% of Total Class of Receivable
Amortized Cost
% of Total Class of Receivable
Owner occupied CRE
$
2,364
0.1
%
$
—
$
2,697
0.1
%
$
—
Income producing CRE
—
—
—
28,553
0.7
—
Commercial & industrial
—
—
—
27,603
1.2
—
Equipment financing
7,683
0.4
378
4,290
0.3
284
Residential mortgage
5,304
0.2
282
1,994
0.1
—
Home equity
72
—
—
—
—
—
Manufactured housing
—
—
—
126
—
—
Total loans
$
15,423
0.1
$
660
$
65,263
0.4
$
284
The following table presents the aging category and accrual status of loans modified under the terms of a FDM during the previous 12 months on an amortized cost basis as of June 30, 2025.
Accruing
Loans Past Due
(in thousands)
Current
30 - 59 Days
60 - 89 Days
> 90 Days
Nonaccrual
Total
As of June 30, 2025
Owner occupied CRE
$
2,654
$
—
$
—
$
—
$
—
$
2,654
Income producing CRE
—
—
—
—
7,983
7,983
Commercial & industrial
2,693
306
—
—
130
3,129
Equipment financing
11,640
17
141
—
1,352
13,150
Residential mortgage
5,387
—
—
—
1,889
7,276
Home equity
—
—
—
—
72
72
Consumer
—
—
—
—
80
80
Total
$
22,374
$
323
$
141
$
—
$
11,506
$
34,344
The following table presents the amortized cost by type of FDM and the applicable weighted-average impact of the modifications for the periods indicated.
21
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
New FDMs
Six Months Ended June 30,
2025
2024
(dollars in thousands)
Amortized Cost
Weighted Average Modification
Amortized Cost
Weighted Average Modification
Extension
Owner occupied CRE
$
—
$
198
6 months
Commercial & industrial
—
23,284
11 months
Residential mortgage
538
7.1 years
25
1 year
Total
538
23,507
Payment Delay
Owner occupied CRE (1)
2,364
7 months
896
4 months
Income producing CRE (2)
—
28,553
1 year
Commercial & industrial (1)
—
155
6 months
Residential mortgage
2,602
9 months
—
Total
4,966
29,604
Rate Reduction
Commercial & industrial
—
891
50 basis points
Residential mortgage
348
240 basis points
—
Home equity
72
400 basis points
—
Total
420
891
Payment Delay and Extension
Commercial & industrial
—
573
Payment delay: 4 months;
Extension: 3 years
Equipment financing
7,683
Extension and payment delay:
8 months
4,290
Extension and payment delay:
8 months
Total
7,683
4,863
Rate Reduction and Extension
Residential mortgage
1,816
Rate reduction: 393 basis points; Extension: 5.8 years
1,969
Rate reduction: 471 basis points; Extension: 2.6 years
Manufactured housing
—
126
Rate reduction: 624 basis points; Extension: 6 years
(1) Payment delay FDMs in bankruptcy are excluded from the weighted average payment delay calculation.
(2) Payment delays in this category reflect principal payment delays, while interest payments continue in accordance with loan terms.
22
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Allowance for Credit Losses
The ACL for loans represents management’s estimate of life of loan credit losses in the portfolio as of the end of the period. The ACL related to unfunded commitments is included in other liabilities in the consolidated balance sheet.
For all periods presented, United used a one-year reasonable and supportable forecast period. Expected credit losses were estimated using a regression model for each segment based on historical data from peer banks combined with a baseline economic forecast to predict the change in credit losses. These estimates were then combined with a starting value that was based on United’s recent charge-off experience to produce an expected default rate, with the results subject to a floor.
At June 30, 2025, the baseline economic forecast had worsened slightly relative to the forecasts at March 31, 2025 and December 31, 2024 as the implemented tariffs were larger than anticipated, which negatively affected forecasted unemployment and GDP. However, the decrease in United’s charge-offs lowered the initial expected default rates for some segments and thus contributed to a lower modeled ACL balance. At June 30, 2025, United applied a qualitative adjustment to increase the model’s calculated ACL for the income producing CRE portfolio, partially offset by qualitative adjustments to decrease the model’s calculated ACL for the residential mortgage and commercial and industrial portfolios. These qualitative adjustments were applied to better reflect management’s expectations of future performance as indicated by internal credit performance measures. In addition, at June 30, 2025, United’s qualitative adjustment to estimate losses for loans to borrowers affected by Hurricane Helene added $4.42 million to the ACL balance, compared to $9.80 million at December 31, 2024.
For periods beyond the reasonable and supportable forecast period of one year, United reverted to historical credit loss information on a straight line basis over two years. For most collateral types, United reverted to through-the-cycle average default rates using peer data from 2000 to 2017. For loans secured by residential mortgages, the peer data was adjusted for changes in lending practices designed to mitigate the magnitude of losses observed during the 2008 mortgage crisis.
23
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
The following table presents the balance and activity in the ACL by portfolio segment for the periods indicated.
Three Months Ended June 30,
2025
2024
(in thousands)
Beginning Balance
Initial ACL -PCD loans (2)
Charge-Offs
Recoveries
(Release) Provision
Ending Balance
Beginning Balance
Charge-Offs
Recoveries
(Release) Provision
Ending Balance
Owner occupied CRE
$
21,505
$
278
$
(561)
$
91
$
(346)
$
20,967
$
19,658
$
(373)
$
210
$
2,292
$
21,787
Income producing CRE
45,817
910
(950)
17
3,278
49,072
46,798
(3,129)
161
(936)
42,894
Commercial & industrial
37,704
23
(2,768)
1,741
1,993
38,693
31,858
(3,284)
2,003
1,524
32,101
Commercial construction
16,725
39
(130)
41
(696)
15,979
20,023
—
48
(454)
19,617
Equipment financing
47,600
—
(5,927)
964
5,263
47,900
39,982
(6,604)
1,102
10,635
45,115
Residential mortgage
29,679
—
(372)
59
851
30,217
28,636
(6)
113
(131)
28,612
Home equity
10,297
1
(71)
143
442
10,812
9,715
—
27
(356)
9,386
Residential construction
1,622
—
—
9
181
1,812
1,529
(56)
30
(119)
1,384
Manufactured housing (1)
—
—
—
—
—
—
12,044
(1,233)
83
628
11,522
Consumer
1,025
—
(982)
471
534
1,048
691
(916)
210
619
604
ACL - loans
211,974
1,251
(11,761)
3,536
11,500
216,500
210,934
(15,601)
3,987
13,702
213,022
ACL - unfunded commitments
11,227
—
—
—
318
11,545
13,185
—
—
(1,467)
11,718
Total ACL
$
223,201
$
1,251
$
(11,761)
$
3,536
$
11,818
$
228,045
$
224,119
$
(15,601)
$
3,987
$
12,235
$
224,740
Six Months Ended June 30,
2025
2024
(in thousands)
Beginning Balance
Initial ACL - PCD loans (2)
Charge-Offs
Recoveries
(Release) Provision
Ending Balance
Beginning Balance
Charge- Offs
Recoveries
(Release) Provision
Ending Balance
Owner occupied CRE
$
19,873
$
278
$
(832)
$
236
$
1,412
$
20,967
$
23,542
$
(801)
$
436
$
(1,390)
$
21,787
Income producing CRE
41,427
910
(1,970)
319
8,386
49,072
47,755
(3,358)
185
(1,688)
42,894
Commercial & industrial
35,441
23
(6,130)
2,656
6,703
38,693
30,890
(8,070)
2,883
6,398
32,101
Commercial construction
16,370
39
(130)
179
(479)
15,979
21,741
(53)
81
(2,152)
19,617
Equipment financing
47,415
—
(11,864)
1,859
10,490
47,900
33,383
(13,893)
2,029
23,596
45,115
Residential mortgage
32,259
—
(421)
109
(1,730)
30,217
28,219
(22)
145
270
28,612
Home equity
11,247
1
(71)
205
(570)
10,812
9,647
(7)
88
(342)
9,386
Residential construction
1,672
—
(226)
16
350
1,812
1,833
(189)
44
(304)
1,384
Manufactured housing (1)
450
—
—
—
(450)
—
10,339
(2,840)
121
3,902
11,522
Consumer
844
—
(2,496)
729
1,971
1,048
722
(1,777)
476
1,183
604
ACL - loans
206,998
1,251
(24,140)
6,308
26,083
216,500
208,071
(31,010)
6,488
29,473
213,022
ACL - unfunded commitments
10,391
—
—
—
1,154
11,545
16,057
—
—
(4,339)
11,718
Total ACL
$
217,389
$
1,251
$
(24,140)
$
6,308
$
27,237
$
228,045
$
224,128
$
(31,010)
$
6,488
$
25,134
$
224,740
(1) The release of ACL presented for manufactured housing loans for the six months ended June 30, 2025 represents a reclassification of the allowance to the consumer line where these loan balances are reflected as of June 30, 2025.
(2) Represents the initial ACL related to PCD loans acquired in the ANB transaction.
24
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Note 6 – Derivatives and Hedging Activities
The table below presents the fair value of derivative financial instruments, which are included in other assets and other liabilities on the consolidated balance sheet, as of the dates indicated.
June 30, 2025
December 31, 2024
Notional Amount
Fair Value
Notional Amount
Fair Value
(in thousands)
Derivative Asset
Derivative Liability
Derivative Asset
Derivative Liability
Derivatives designated as hedging instruments:
Cash flow hedge of subordinated debt
$
100,000
$
8,027
$
—
$
100,000
$
11,196
$
—
Cash flow hedges of trust preferred securities
20,000
—
—
20,000
—
—
Fair value hedges of AFS debt securities
802,731
—
—
821,507
—
—
Fair value hedges of loans
2,050,000
—
—
1,650,000
—
—
Total
2,972,731
8,027
—
2,591,507
11,196
—
Derivatives not designated as hedging instruments:
Customer derivative positions
1,359,362
10,356
40,944
1,225,732
1,740
63,703
Dealer offsets to customer derivative positions
1,359,362
12,311
10,155
1,225,732
21,897
1,811
Risk participations
121,073
—
157
81,147
—
12
Mortgage banking - loan commitments
60,875
1,472
—
52,444
822
—
Mortgage banking - forward sales commitment
81,388
—
561
77,401
394
34
Bifurcated embedded derivatives
51,935
7,658
—
51,935
10,834
—
Dealer offsets to bifurcated embedded derivatives
51,935
—
9,060
51,935
—
12,274
Total
3,085,930
31,797
60,877
2,766,326
35,687
77,834
Total derivatives
$
6,058,661
$
39,824
$
60,877
$
5,357,833
$
46,883
$
77,834
Total gross derivative instruments
$
39,824
$
60,877
$
46,883
$
77,834
Less: Amounts subject to master netting agreements
(7,872)
(7,872)
(1,900)
(1,900)
Less: Cash collateral received/pledged
(14,945)
(11,445)
(33,005)
(12,230)
Net amount
$
17,007
$
41,560
$
11,978
$
63,704
United clears certain derivatives centrally through the CME. CME rules legally characterize variation margin payments for centrally cleared derivatives as settlements of the derivatives’ exposure rather than as collateral. As a result, the variation margin payment and the related derivative instruments are considered a single unit of account for accounting purposes. Variation margin, as determined by the CME, is settled daily. As a result, derivative contracts that clear through the CME have an estimated fair value of zero.
Hedging Derivatives
Cash Flow Hedges of Interest Rate Risk
As of June 30, 2025 and December 31, 2024, United utilized interest rate caps and swaps to hedge the variability of cash flows due to changes in interest rates on certain of its variable-rate subordinated debt and trust preferred securities. Gains and losses related to changes in fair value are reclassified into earnings in the periods the hedged forecasted transactions occur. Over the next twelve months, United expects to reclassify $4.03 million of gains from AOCI into earnings related to these agreements.
Fair Value Hedges of Interest Rate Risk
United uses interest rate derivatives to manage its exposure to changes in fair value attributable to changes in interest rates on certain of its fixed-rate financial instruments.
25
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
The table below presents the effect of derivatives in hedging relationships, all of which are interest rate contracts, on net interest income for the periods indicated.
Affected Income Statement Line Item Increase/(Decrease) to Earnings
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2025
2024
2025
2024
Fair value hedges:
AFS securities:
Amounts related to interest settlements on derivatives
$
1,548
$
3,120
$
2,889
$
5,976
(Loss) gain recognized on derivative
(4,863)
390
(13,167)
9,852
Gain (loss) recognized on hedged items
4,901
310
13,308
(9,488)
Net income recognized on AFS securities fair value hedges
Interest revenue - investment securities
$
1,586
$
3,820
$
3,030
$
6,340
Loans:
Amounts related to interest settlements on derivatives
$
(327)
$
3,665
$
(887)
$
4,963
Gain (loss) recognized on derivatives
1,220
3,467
(788)
5,625
(Loss) gain recognized on hedged items
(826)
(3,351)
1,369
(5,646)
Net income (loss) recognized on loan fair value hedges
Interest revenue - loans, including fees
$
67
$
3,781
$
(306)
$
4,942
Cash flow hedges:
Long-term debt (1)
Interest expense- long term debt
$
1,129
$
1,438
$
2,250
$
2,878
(1) Includes premium amortization expense excluded from the assessment of hedge effectiveness of $234,000 and $235,000 for the six months ended 2025 and 2024, respectively.
The table below presents the carrying amount of hedged items and cumulative fair value hedging basis adjustments for the periods presented. All fair value hedges of AFS debt securities and loans at June 30, 2025 and December 31, 2024 were designated under the portfolio layer method.
(in thousands)
June 30, 2025
December 31, 2024
Balance Sheet Location
Carrying Amount
Hedge Accounting Basis Adjustment
Hedged Portfolio Layer
Carrying Amount
Hedge Accounting Basis Adjustment
Hedged Portfolio Layer
Debt securities AFS (1)
$
983,772
$
3,556
$
802,731
$
1,002,511
$
(9,752)
$
821,507
Loans and leases held for investment
4,289,904
8,696
2,050,000
4,628,030
7,327
1,650,000
(1) Carrying amount for AFS debt securities reflects amortized cost, which excludes the hedge accounting basis adjustment.
Derivatives Not Designated as Hedging Instruments
Customer derivative positions include swaps, caps, and collars between United and certain commercial loan customers with offsetting positions to dealers under a back-to-back program. In addition, United occasionally enters into credit risk participation agreements with counterparty banks to accept or transfer a portion of the credit risk related to interest rate swaps.
United also has three interest rate swap contracts that are economic hedges of market-linked brokered certificates of deposit, which contain embedded derivatives that are bifurcated from the host instruments. The fair value marks on the swaps and the bifurcated embedded derivatives tend to move in opposite directions and therefore provide an economic hedge.
In addition, in connection with residential mortgage loans that are originated with the intention of selling them, United enters into commitments to originate residential mortgage loans and forward loan sales commitments.
26
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
The table below presents the gains and losses recognized in income on derivatives not designated as hedging instruments for the periods indicated.
Location of Gain (Loss) Recognized in Income on Derivatives
Amount of Gain (Loss) Recognized in Income on Derivatives
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2025
2024
2025
2024
Customer derivatives and dealer offsets
Other noninterest income
$
1,058
$
451
$
2,002
$
206
Bifurcated embedded derivatives and dealer offsets
Other noninterest income
(10)
1
(4)
(191)
Mortgage banking derivatives
Mortgage loan gains and other related fees
(705)
451
(295)
1,352
Risk participations
Other noninterest income
(19)
(3)
175
(1)
$
324
$
900
$
1,878
$
1,366
Credit-Risk-Related Contingent Features
United manages its credit exposure on derivatives transactions by entering into a bilateral credit support agreement with each non-customer counterparty. The credit support agreements require collateralization of exposures beyond specified minimum threshold amounts. The details of these agreements, including the minimum thresholds, vary by counterparty.
United’s agreements with each of its derivative counterparties provide that if either party defaults on any of its indebtedness, then it could also be declared in default on its derivative obligations. The agreements with derivative counterparties also include provisions that if not met, could result in United being declared in default. United has agreements with certain of its derivative counterparties that provide that if United fails to maintain its status as a well-capitalized institution or is subject to a prompt corrective action directive, the counterparty could terminate the derivative positions and United would be required to settle its obligations under the agreements. Derivatives that are centrally cleared do not have credit-risk-related features that would require additional collateral if United’s credit rating were downgraded.
Note 7 – Goodwill and Other Intangible Assets
The carrying amount of goodwill and other intangible assets as of the dates indicated is summarized below.
(in thousands)
June 30, 2025
December 31, 2024
Core deposit intangible
$
106,984
$
100,694
Less: accumulated amortization
(57,718)
(51,141)
Net core deposit intangible (1)
49,266
49,553
Goodwill
925,119
907,090
Total goodwill and other intangible assets, net
$
974,385
$
956,643
(1) As intangible assets become fully amortized, they are excluded from balances presented.
During the second quarter of 2025, in connection with the ANB acquisition, United recorded a core deposit intangible of $6.29 million.
The following table summarizes the changes in the carrying amount of goodwill for the periods indicated.
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2025
2024
2025
2024
Balance, beginning of period
$
907,090
$
921,253
$
907,090
$
919,914
Acquisition of ANB (1)
18,029
—
18,029
—
Measurement period adjustment - First Miami
—
—
—
1,339
FinTrust goodwill write-down
—
(5,100)
—
(5,100)
Balance, end of period
$
925,119
$
916,153
$
925,119
$
916,153
(1) See Note 3 for further details.
27
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
The estimated aggregate amortization expense for future periods for finite-lived intangibles is as follows:
(in thousands)
Year
Remainder of 2025
$
6,502
2026
11,501
2027
9,498
2028
7,592
2029
5,835
Thereafter
8,338
Total
$
49,266
Note 8 – Assets and Liabilities Measured at Fair Value
Accounting standards define fair value as the price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market available to the entity in an orderly transaction between market participants on the measurement date. Fair values are categorized within a three-level measurement hierarchy:
Level 1 Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities that United has the ability to access.
Level 2 Valuation is based upon quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals.
Level 3 Valuation is generated from model-based techniques that use at least one significant assumption based on unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity.
United has processes in place to review the significant valuation inputs and to assesses on a quarterly basis how instruments are classified within the valuation framework. Transfers into or out of fair value hierarchy levels are made as the observability of input assumptions change. During the six months ended June 30, 2025, there were no changes to valuation approaches or techniques that warranted a hierarchy level change.
28
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The table below presents United’s assets and liabilities measured at fair value on a recurring basis as of the dates indicated, aggregated by the level in the fair value hierarchy within which those measurements fall.
(in thousands)
June 30, 2025
Level 1
Level 2
Level 3
Total
Assets:
AFS debt securities:
U.S. Treasuries
$
334,492
$
—
$
—
$
334,492
U.S. Government agencies & GSEs
—
295,691
—
295,691
State and political subdivisions
—
157,422
—
157,422
Residential MBS
—
2,079,812
—
2,079,812
Commercial MBS
—
769,056
—
769,056
Corporate bonds
—
136,595
1,235
137,830
Asset-backed securities
—
301,020
—
301,020
Equity securities
—
2,272
—
2,272
Mortgage loans held for sale
—
37,143
—
37,143
Mutual funds
14,415
—
—
14,415
Servicing rights for SBA/USDA loans
—
—
4,806
4,806
Residential mortgage servicing rights
—
—
39,677
39,677
Contingent consideration receivable
—
—
7,297
7,297
Derivative financial instruments
—
30,694
9,130
39,824
Total assets
$
348,907
$
3,809,705
$
62,145
$
4,220,757
Liabilities:
Deferred compensation plan liability
$
14,417
$
—
$
—
$
14,417
Derivative financial instruments
—
51,660
9,217
60,877
Total liabilities
$
14,417
$
51,660
$
9,217
$
75,294
(in thousands)
December 31, 2024
Level 1
Level 2
Level 3
Total
Assets:
AFS debt securities:
U.S. Treasuries
$
503,669
$
—
$
—
$
503,669
U.S. Government agencies & GSEs
—
320,267
—
320,267
State and political subdivisions
—
158,232
—
158,232
Residential MBS
—
2,229,959
—
2,229,959
Commercial MBS
—
822,897
—
822,897
Corporate bonds
—
150,394
2,226
152,620
Asset-backed securities
—
248,647
—
248,647
Equity securities
—
2,341
—
2,341
Mortgage loans held for sale
—
57,534
—
57,534
Mutual funds
15,335
—
—
15,335
Servicing rights for SBA/USDA loans
—
—
4,697
4,697
Residential mortgage servicing rights
—
—
39,294
39,294
Contingent consideration receivable
—
—
7,470
7,470
Derivative financial instruments
—
35,227
11,656
46,883
Total assets
$
519,004
$
4,025,498
$
65,343
$
4,609,845
Liabilities:
Deferred compensation plan liability
$
15,331
$
—
$
—
$
15,331
Derivative financial instruments
—
65,548
12,286
77,834
Total liabilities
$
15,331
$
65,548
$
12,286
$
93,165
29
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Level 3 Fair Value Measurements
The following table presents quantitative information about significant unobservable inputs related to United’s material categories of Level 3 financial instruments measured at fair value on a recurring basis as of the dates indicated.
Level 3 Assets and Liabilities
Valuation Technique
Significant Unobservable Inputs
June 30, 2025
December 31, 2024
Range
Weighted Average
Range
Weighted Average
Residential mortgage servicing rights
Discounted cash flow
Discount rate
10.0 - 12.5
10.1
10.0 - 14.0
10.1
Prepayment rate
6.5 - 25.8
7.5
6.5 - 77.6
7.6
Derivative assets - mortgage
Internal model
Pull through rate
73.0 - 100
90.2
70.4 - 100
91.6
Derivative assets and liabilities - other
Dealer priced
Dealer priced
N/A
N/A
N/A
N/A
Contingent consideration receivable
Discounted cash flow
Discount rate
0.0 - 7.1
6.4
0.0 - 7.1
6.4
Probability of achievement
89.3 - 100
92.6
89.3 - 100
92.6
The table below presents a reconciliation of the beginning and ending balances of Level 3 assets and liabilities measured at fair value on a recurring basis for the periods indicated.
2025
2024
(in thousands)
Derivative Assets
Derivative Liabilities
SBA/USDA Loan Servicing Rights
Residential Mortgage Servicing Rights
Corporate Bonds
Contingent Consideration Receivable
Derivative Assets
Derivative Liabilities
SBA/USDA Loan Servicing Rights
Residential Mortgage Servicing Rights
Corporate Bonds
Three Months Ended June 30,
Beginning balance
$
11,319
$
10,825
$
4,920
$
39,660
$
2,230
$
7,390
$
12,811
$
13,185
$
5,507
$
37,358
$
2,160
Additions
1,403
—
410
1,440
—
—
1,362
—
345
1,060
—
Sales and settlements
(1,990)
—
(221)
(653)
(1,000)
(93)
(1,394)
—
(313)
(1,037)
—
Fair value adjustments included in OCI
—
—
—
—
5
—
—
—
—
—
37
Fair value adjustments included in earnings
(1,602)
(1,608)
(303)
(770)
—
—
154
128
(292)
633
—
Ending balance
$
9,130
$
9,217
$
4,806
$
39,677
$
1,235
$
7,297
$
12,933
$
13,313
$
5,247
$
38,014
$
2,197
Six Months Ended June 30,
Beginning balance
$
11,656
$
12,286
$
4,697
$
39,294
$
2,226
$
7,470
$
10,642
$
11,172
$
5,444
$
35,897
$
2,205
Additions
3,245
321
852
2,492
—
—
2,828
—
515
1,778
—
Transfers from Level 2
—
—
—
—
—
—
484
925
—
—
—
Sales and settlements
(2,595)
—
(358)
(1,261)
(1,000)
(173)
(2,317)
—
(554)
(1,797)
—
Fair value adjustments included in OCI
—
—
—
—
9
—
—
—
—
—
(8)
Fair value adjustments included in earnings
(3,176)
(3,390)
(385)
(848)
—
—
1,296
1,216
(158)
2,136
—
Ending balance
$
9,130
$
9,217
$
4,806
$
39,677
$
1,235
$
7,297
$
12,933
$
13,313
$
5,247
$
38,014
$
2,197
30
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Fair Value Option
United generally records mortgage loans held for sale at fair value under the fair value option. Interest income on these loans is calculated based on the note rate of the loan and is recorded in interest revenue. The following tables present the fair value and outstanding principal balance of loans accounted for under the fair value option, as well as the gain or loss recognized from the change in fair value for the periods indicated.
Mortgage Loans Held for Sale
(in thousands)
June 30, 2025
December 31, 2024
Outstanding principal balance
$
35,885
$
56,097
Fair value
37,143
57,534
Gain (Loss) from Change in Fair Value on Mortgage Loans Held for Sale
Location
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2025
2024
2025
2024
Mortgage loan gains (losses) and other related fees
$
—
$
204
$
(179)
$
172
Changes in fair value were mostly offset by hedging activities. An immaterial portion of these amounts was attributable to changes in instrument-specific credit risk.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
United may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from the application of the lower of the amortized cost or fair value accounting or write-downs of individual assets due to impairment. The following table presents the fair value hierarchy and carrying value of assets that were still held as of June 30, 2025 and December 31, 2024, for which a nonrecurring fair value adjustment was recorded during the year-to-date periods presented.
(in thousands)
Level 1
Level 2
Level 3
Total
June 30, 2025
Loans held for investment
$
—
$
—
$
8,213
$
8,213
December 31, 2024
Loans held for investment
$
—
$
—
$
27,313
$
27,313
Loans held for investment that are reported above are generally impaired loans that have either been partially charged off or have specific reserves assigned to them.
Assets and Liabilities Not Measured at Fair Value
The following disclosure provides estimated fair values for financial instruments not carried at fair value on the Consolidated Balance Sheets. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect the premium or discount on any particular financial instrument that could result from the sale of United’s entire holdings. All estimates are inherently subjective in nature. Changes in assumptions could significantly affect the estimates.
31
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Fair Value Level
(in thousands)
Carrying Amount
Level 1
Level 2
Level 3
Total
June 30, 2025
Assets:
HTM debt securities
$
2,306,730
$
18,724
$
1,917,024
$
—
$
1,935,748
Loans and leases, net
18,704,375
—
—
18,082,340
18,082,340
Liabilities:
Deposits
23,963,012
—
23,959,284
—
23,959,284
Long-term debt
155,143
—
—
151,070
151,070
December 31, 2024
Assets:
HTM debt securities
$
2,368,107
$
18,162
$
1,925,964
$
—
$
1,944,126
Loans and leases, net
17,968,982
—
—
17,325,630
17,325,630
Liabilities:
Deposits
23,460,975
—
23,453,487
—
23,453,487
Long-term debt
254,152
—
—
248,657
248,657
Note 9 – Reclassifications Out of AOCI
The following table presents the details regarding amounts reclassified out of AOCI for the periods indicated. Amounts shown in parentheses reduce earnings.
(in thousands)
Details about AOCI Components
Three Months Ended June 30,
Six Months Ended June 30,
Affected Line Item in the Statement Where Net Income is Presented
2025
2024
2025
2024
Realized net gains on AFS securities:
$
286
$
—
$
292
$
—
Securities gains, net
(68)
—
(70)
—
Income tax expense
$
218
$
—
$
222
$
—
Net of tax
Amortization of unrealized losses on HTM securities transferred from AFS:
$
(1,961)
$
(2,474)
$
(3,925)
$
(4,537)
Investment securities interest revenue
465
702
929
1,195
Income tax expense
$
(1,496)
$
(1,772)
$
(2,996)
$
(3,342)
Net of tax
Reclassifications related to derivative instruments accounted for as cash flow hedges:
Interest rate contracts
$
1,129
$
1,438
$
2,250
$
2,878
Long-term debt interest expense
(285)
(363)
(568)
(731)
Income tax expense
$
844
$
1,075
$
1,682
$
2,147
Net of tax
Amortization of defined benefit pension plan net periodic pension cost components:
Prior service cost
$
17
$
(46)
$
34
$
(90)
Salaries and employee benefits expense
(5)
12
(9)
23
Income tax expense
$
12
$
(34)
$
25
$
(67)
Net of tax
Total reclassifications for the period
$
(422)
$
(731)
$
(1,067)
$
(1,262)
Net of tax
32
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Note 10 – Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share for the periods indicated.
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands, except per share data)
2025
2024
2025
2024
Net income
$
78,733
$
66,615
$
150,146
$
129,246
Dividends on preferred stock
(1,573)
(1,573)
(3,146)
(3,146)
Earnings allocated to participating securities
(438)
(368)
(850)
(713)
Net income available to common shareholders
$
76,722
$
64,674
$
146,150
$
125,387
Weighted average shares outstanding:
Basic
121,377
119,726
120,714
119,694
Effect of dilutive securities:
Stock options
55
59
71
69
Restricted stock units
—
—
35
—
Diluted
121,432
119,785
120,820
119,763
Net income per common share:
Basic
$
0.63
$
0.54
$
1.21
$
1.05
Diluted
$
0.63
$
0.54
$
1.21
$
1.05
For the three and six months ended June 30, 2025, no potentially dilutive shares of common stock issuable upon exercise of stock options were excluded from the computation of earnings per share because of their antidilutive effect. For the three and six months ended June 30, 2024, respectively, 58,734 and 984 potentially dilutive shares of common stock issuable upon exercise of stock options were excluded from the computation of earnings per share because of their antidilutive effect.
Note 11 – Regulatory Matters
As of June 30, 2025, United and the Bank were categorized as well-capitalized under the regulatory requirements in effect at that time. To be categorized as well-capitalized, United and the Bank must have exceeded the well-capitalized guideline ratios in effect at the time, as set forth in the table below, and have met certain other requirements. Management believes that United and the Bank exceeded all well-capitalized requirements at June 30, 2025, and there have been no conditions or events since quarter-end that would change the status of well-capitalized.
Regulatory capital ratios at June 30, 2025 and December 31, 2024, along with the minimum amounts required for capital adequacy purposes and to be well-capitalized under regulatory requirements in effect at such times, are presented below for United and the Bank:
United Community Banks, Inc. (Consolidated)
United Community Bank
(dollars in thousands)
Minimum (1)
Well- Capitalized
June 30, 2025
December 31, 2024
June 30, 2025
December 31, 2024
Risk-based ratios:
CET1 capital
4.5
%
6.5
%
13.34
%
13.27
%
12.60
%
13.05
%
Tier 1 capital
6.0
8.0
13.77
13.72
12.60
13.05
Total capital
8.0
10.0
15.14
15.17
13.66
14.08
Leverage ratio
4.0
5.0
10.37
9.96
9.48
9.46
CET1 capital
$
2,728,423
$
2,608,136
$
2,569,206
$
2,555,941
Tier 1 capital
2,816,689
2,696,402
2,569,206
2,555,941
Total capital
3,096,192
2,982,273
2,783,709
2,756,811
Risk-weighted assets
20,456,677
19,655,227
20,385,881
19,582,815
Average total assets for the leverage ratio
27,153,560
27,059,513
27,104,174
27,014,385
(1) As of June 30, 2025 and December 31, 2024, the minimum ratios as presented were subject to an additional capital conservation buffer of 2.50%
33
UNITED COMMUNITY BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Note 12 – Commitments and Contingencies
United is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and letters of credit. United uses the same credit policies in making commitments and conditional obligations as it uses for underwriting on-balance sheet instruments. In most cases, collateral or other security is required to support financial instruments with credit risk.
The following table summarizes the contractual amount of significant off-balance sheet instruments as of the dates indicated.
United, in the normal course of business, is subject to various pending and threatened lawsuits in which claims for monetary damages are asserted. Although it is not possible to predict the outcome of these lawsuits, or the range of any possible loss, management, after consultation with legal counsel, does not anticipate that the ultimate aggregate liability, if any, arising from these lawsuits will have a material adverse effect on United’s financial position or results of operations.
34
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following is a discussion of our financial condition at June 30, 2025 and December 31, 2024 and our results of operations for the three and six months ended June 30, 2025 and 2024. The purpose of this discussion is to focus on information about our financial condition and results of operations which is not otherwise apparent from our consolidated financial statements and is intended to provide insight into our results of operations and financial condition. The following discussion and analysis should be read along with our consolidated financial statements and related notes included in Part I - Item 1 of this Report, “Cautionary Note Regarding Forward-Looking Statements” and the risk factors discussed in our 2024 10-K and the other reports we have filed with the SEC after we filed the 2024 10-K.
Unless the context otherwise requires, the terms “we,” “our,” “us” refer to United on a consolidated basis.
Overview
We offer a wide array of commercial and consumer banking services and investment advisory solutions through a network of 200 banking offices in Georgia, South Carolina, North Carolina, Tennessee, Florida and Alabama. Our equipment finance and SBA/USDA lending businesses operate throughout the United States. At June 30, 2025, we had consolidated total assets of $28.1 billion and 3,050 full-time equivalent employees.
Recent Developments
On May 1, 2025, we completed the acquisition of ANB, which was headquartered in Oakland Park, Florida where it operated one banking location. We acquired $447 million of assets, including goodwill, and assumed $381 million of liabilities in the acquisition, which included $301 million in loans and $374 million in deposits. Our operating results for the three and six months ended June 30, 2025 include ANB’s operating results for the period subsequent to the acquisition date.
On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act, which includes a broad range of tax reform provisions affecting businesses. Of note, the 21% corporate tax rate provided by the Tax Cuts and Jobs Act of 2017, which was scheduled to sunset on December 31, 2025, was made permanent with the passing of this law.
Results of Operations
We reported net income and diluted earnings per common share of $78.7 million and $0.63, respectively, for the second quarter of 2025, compared to $66.6 million and $0.54, respectively, for the same period in 2024. For the six months ended June 30, 2025 and 2024, we reported net income of $150 million and $129 million, respectively, and diluted earnings per common share of $1.21 and $1.05, respectively.
Net interest revenue for the second quarter and first half of 2025 was $226 million and $438 million, respectively, compared to $209 million and $408 million, respectively, for the same periods of 2024. The increase in net interest revenue was mostly driven by lower deposit interest expense.
Net interest margin for the second quarter and first half of 2025 increased to 3.50% and 3.43%, respectively, from 3.37% and 3.28%, respectively, for the comparative 2024 periods. The increases in net interest margin were primarily due to the larger decrease in interest rates paid on deposits compared to the decrease in interest rates earned on loans.
We recorded a provision for credit losses of $11.8 million and $27.2 million for the second quarter and first half of 2025, respectively, which included $2.49 million for the initial ACL for ANB non-PCD loans and unfunded commitments. Provision expense for the comparative periods of 2024 was $12.2 million and $25.1 million.
Noninterest income of $34.7 million and $70.4 million for the second quarter and first half of 2025 decreased by $1.85 million and $5.78 million, respectively, compared to the same periods of 2024. The decrease was mostly driven by negative fair value adjustments to our mortgage servicing asset and a decrease in wealth management fees. The decrease in wealth management fees is reflective of the decrease in assets under management following the sale of FinTrust in the fourth quarter of 2024.
Noninterest expense of $148 million and $289 million in the second quarter and first six months of 2025 were relatively consistent with the expense reported for the comparative periods of 2024. The three and six months of 2025 included ANB merger-related expense and higher communications and equipment expense, while the comparative periods of 2024 included a $5.10 million goodwill write-down related to the sale of FinTrust.
35
Results for the second quarter and first six months of 2025 are discussed in further detail throughout the following sections of MD&A.
Critical Accounting Estimates
In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Our accounting and reporting estimates are in accordance with GAAP and conform to customary practices within the banking industry. Estimates that are susceptible to significant changes include accounting for the ACL and fair value measurements, both of which require significant judgments by management. Actual results could differ significantly from those estimates. Also, different assumptions in the application of these accounting estimates could result in material changes in our consolidated financial position or consolidated results of operations. Our critical accounting estimates are discussed in MD&A in our 2024 10-K.
Non-GAAP Reconciliation and Explanation
This Report contains financial information determined by methods other than in accordance with GAAP. Such non-GAAP financial information includes the following measures: “tangible book value per common share,” and “tangible common equity to tangible assets.” In addition, management presents non-GAAP operating performance measures, which exclude merger-related and other items that are not part of our ongoing business operations. Operating performance measures include “noninterest income - operating,” “noninterest expense - operating,” “net income – operating,” “diluted income per common share – operating,” “tangible book value per common share,” “return on common equity – operating,” “return on tangible common equity – operating,” “return on assets – operating,” “efficiency ratio – operating” and “tangible common equity to tangible assets” We have developed internal policies and procedures to accurately capture and account for merger-related and other charges and those charges are reviewed with the Audit Committee of our Board each quarter. We use these non-GAAP measures because we believe they provide useful supplemental information for evaluating our operations and performance over periods of time, as well as in managing and evaluating our business and in discussions about our operations and performance. We believe these non-GAAP measures may also provide users of our financial information with a meaningful measure for assessing our financial results and credit trends, as well as a comparison to financial results for prior periods. Nevertheless, non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. These non-GAAP measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP. In addition, because non-GAAP measures are not standardized, it may not be possible to compare our non-GAAP measures to similarly titled measures used by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable measures as reported in accordance with GAAP are included in Table 1 of MD&A.
36
UNITED COMMUNITY BANKS, INC.
Table 1 - Financial Highlights
(dollars in thousands, except per share data)
2025
2024
Second Quarter
2025 - 2024 Change
For the Six Months Ended June 30,
YTD Change
Second Quarter
First Quarter
Fourth Quarter
Third Quarter
Second Quarter
2025
2024
INCOME SUMMARY
Interest revenue
$
347,365
$
335,357
$
344,962
$
349,086
$
346,965
$
682,722
$
683,693
Interest expense
121,834
123,336
134,629
139,900
138,265
245,170
275,844
Net interest revenue
225,531
212,021
210,333
209,186
208,700
8
%
437,552
407,849
7
%
Noninterest income
34,708
35,656
40,522
8,091
36,556
(5)
70,364
76,143
(8)
Total revenue
260,239
247,677
250,855
217,277
245,256
6
507,916
483,992
5
Provision for credit losses
11,818
15,419
11,389
14,428
12,235
(3)
27,237
25,134
8
Noninterest expense
147,919
141,099
143,056
143,065
147,044
1
289,018
292,046
(1)
Income before income tax expense
100,502
91,159
96,410
59,784
85,977
17
191,661
166,812
15
Income tax expense
21,769
19,746
20,606
12,437
19,362
12
41,515
37,566
11
Net income
78,733
71,413
75,804
47,347
66,615
18
150,146
129,246
16
Non-operating items
4,833
1,297
2,203
29,385
6,493
n/m
6,130
8,680
n/m
Income tax benefit of non-operating items
(1,047)
(281)
(471)
(6,276)
(1,462)
n/m
(1,328)
(1,955)
n/m
Net income - operating (1)
$
82,519
$
72,429
$
77,536
$
70,456
$
71,646
15
$
154,948
$
135,971
14
PERFORMANCE MEASURES
Per common share:
Diluted net income - GAAP
$
0.63
$
0.58
$
0.61
$
0.38
$
0.54
17
$
1.21
$
1.05
15
Diluted net income - operating (1)
0.66
0.59
0.63
0.57
0.58
14
1.25
1.10
14
Cash dividends declared
0.24
0.24
0.24
0.24
0.23
4
0.48
0.46
4
Book value
28.89
28.42
27.87
27.68
27.18
6
28.89
27.18
6
Tangible book value (3)
21.00
20.58
20.00
19.66
19.13
10
21.00
19.13
10
Key performance ratios:
Return on common equity - GAAP (2)(4)
8.45
%
7.89
%
8.40
%
5.20
%
7.53
%
8.18
%
7.34
%
Return on common equity - operating (1)(2)(4)
8.87
8.01
8.60
7.82
8.12
8.45
7.73
Return on tangible common equity - operating (1)(2)(3)(4)
12.34
11.21
12.12
11.17
11.68
11.78
11.18
Return on assets - GAAP (4)
1.11
1.02
1.06
0.67
0.97
1.06
0.94
Return on assets - operating (1)(4)
1.16
1.04
1.08
1.01
1.04
1.10
0.99
Net interest margin (FTE) (4)
3.50
3.36
3.26
3.33
3.37
3.43
3.28
Efficiency ratio - GAAP
56.69
56.74
56.05
65.51
59.70
56.71
60.08
Efficiency ratio - operating (1)
54.84
56.22
55.18
57.37
57.06
55.51
58.08
Equity to total assets
12.86
12.56
12.38
12.45
12.35
12.86
12.35
Tangible common equity to tangible assets (3)
9.45
9.18
8.97
8.93
8.78
9.45
8.78
ASSET QUALITY
NPAs
$
83,959
$
93,290
$
115,635
$
114,960
$
116,722
(28)
$
83,959
$
116,722
(28)
ACL - loans
216,500
211,974
206,998
205,290
213,022
2
216,500
213,022
2
Net charge-offs
8,225
9,607
9,517
23,651
11,614
n/m
17,832
24,522
n/m
ACL - loans to loans
1.14
%
1.15
%
1.14
%
1.14
%
1.17
%
1.14
%
1.17
%
Net charge-offs to average loans (4)
0.18
0.21
0.21
0.52
0.26
0.20
0.27
NPAs to total assets
0.30
0.33
0.42
0.42
0.43
0.30
0.43
AT PERIOD END($ in millions)
Loans
$
18,921
$
18,425
$
18,176
$
17,964
$
18,211
4
$
18,921
$
18,211
4
Investment securities
6,382
6,661
6,804
6,425
6,038
6
6,382
6,038
6
Total assets
28,086
27,874
27,720
27,373
27,057
4
28,086
27,057
4
Deposits
23,963
23,762
23,461
23,253
22,982
4
23,963
22,982
4
Shareholders’ equity
3,613
3,501
3,432
3,407
3,343
8
3,613
3,343
8
Common shares outstanding (thousands)
121,431
119,514
119,364
119,283
119,175
2
121,431
119,175
2
(1) Excludes non-operating items as detailed on Non-GAAP Performance Measures Reconciliation on next page.(2) Net income less preferred stock dividends, divided by average realized common equity, which excludes AOCI. (3) Excludes effect of acquisition related intangibles and associated amortization. (4) Annualized.
37
UNITED COMMUNITY BANKS, INC.
Table 1 (Continued) - Financial Highlights
Non-GAAP Performance Measures Reconciliation
(dollars in thousands, except per share data)
2025
2024
For the Six Months Ended June 30,
Second Quarter
First Quarter
Fourth Quarter
Third Quarter
Second Quarter
2025
2024
Noninterest income reconciliation
Noninterest income (GAAP)
$
34,708
$
35,656
$
40,522
$
8,091
$
36,556
$
70,364
$
76,143
Loss on sale of manufactured housing loans
—
—
—
27,209
—
—
—
Gain on lease termination
—
—
—
—
—
—
(2,400)
Noninterest income - operating
$
34,708
$
35,656
$
40,522
$
35,300
$
36,556
$
70,364
$
73,743
Noninterest expense reconciliation
Noninterest expense (GAAP)
$
147,919
$
141,099
$
143,056
$
143,065
$
147,044
$
289,018
$
292,046
Loss on FinTrust (goodwill impairment)
—
—
—
—
(5,100)
—
(5,100)
FDIC special assessment
—
—
—
—
764
—
(1,736)
Merger-related and other charges
(4,833)
(1,297)
(2,203)
(2,176)
(2,157)
(6,130)
(4,244)
Noninterest expense - operating
$
143,086
$
139,802
$
140,853
$
140,889
$
140,551
$
282,888
$
280,966
Net income to operating income reconciliation
Net income (GAAP)
$
78,733
$
71,413
$
75,804
$
47,347
$
66,615
$
150,146
$
129,246
Loss on sale of manufactured housing loans
—
—
—
27,209
—
—
—
Gain on lease termination
—
—
—
—
—
—
(2,400)
Loss on FinTrust (goodwill impairment)
—
—
—
—
5,100
—
5,100
FDIC special assessment
—
—
—
—
(764)
—
1,736
Merger-related and other charges
4,833
1,297
2,203
2,176
2,157
6,130
4,244
Income tax benefit of non-operating items
(1,047)
(281)
(471)
(6,276)
(1,462)
(1,328)
(1,955)
Net income - operating
$
82,519
$
72,429
$
77,536
$
70,456
$
71,646
$
154,948
$
135,971
Diluted income per common share reconciliation
Diluted income per common share (GAAP)
$
0.63
$
0.58
$
0.61
$
0.38
$
0.54
$
1.21
$
1.05
Loss on sale of manufactured housing loans
—
—
—
0.18
—
—
—
Gain on lease termination
—
—
—
—
—
—
(0.02)
Loss on FinTrust (goodwill impairment)
—
—
—
—
0.03
—
0.03
FDIC special assessment
—
—
—
—
—
—
0.02
Merger-related and other charges
0.03
0.01
0.02
0.01
0.01
0.04
0.02
Diluted income per common share - operating
$
0.66
$
0.59
$
0.63
$
0.57
$
0.58
$
1.25
$
1.10
Book value per common share reconciliation
Book value per common share (GAAP)
$
28.89
$
28.42
$
27.87
$
27.68
$
27.18
$
28.89
$
27.18
Effect of goodwill and other intangibles
(7.89)
(7.84)
(7.87)
(8.02)
(8.05)
(7.89)
(8.05)
Tangible book value per common share
$
21.00
$
20.58
$
20.00
$
19.66
$
19.13
$
21.00
$
19.13
Return on tangible common equity reconciliation
Return on common equity (GAAP)
8.45
%
7.89
%
8.40
%
5.20
%
7.53
%
8.18
%
7.34
%
Loss on sale of manufactured housing loans
—
—
—
2.43
—
—
—
Gain on lease termination
—
—
—
—
—
—
(0.11)
Loss on FinTrust (goodwill impairment)
—
—
—
—
0.46
—
0.23
FDIC special assessment
—
—
—
—
(0.07)
—
0.08
Merger-related and other charges
0.42
0.12
0.20
0.19
0.20
0.27
0.19
Return on common equity - operating
8.87
8.01
8.60
7.82
8.12
8.45
7.73
Effect of goodwill and other intangibles
3.47
3.20
3.52
3.35
3.56
3.33
3.45
Return on tangible common equity - operating
12.34
%
11.21
%
12.12
%
11.17
%
11.68
%
11.78
%
11.18
%
38
UNITED COMMUNITY BANKS, INC.
Table 1 (Continued) - Financial Highlights
Non-GAAP Performance Measures Reconciliation
(dollars in thousands, except per share data)
2025
2024
For the Six Months Ended June 30,
Second Quarter
First Quarter
Fourth Quarter
Third Quarter
Second Quarter
2025
2024
Return on assets reconciliation
Return on assets (GAAP)
1.11
%
1.02
%
1.06
%
0.67
%
0.97
%
1.06
%
0.94
%
Loss on sale of manufactured housing loans
—
—
—
0.31
—
—
—
Gain on lease termination
—
—
—
—
—
—
(0.01)
Loss on FinTrust (goodwill impairment)
—
—
—
—
0.06
—
0.03
FDIC special assessment
—
—
—
—
(0.01)
—
0.01
Merger-related and other charges
0.05
0.02
0.02
0.03
0.02
0.04
0.02
Return on assets - operating
1.16
%
1.04
%
1.08
%
1.01
%
1.04
%
1.10
%
0.99
%
Efficiency ratio reconciliation
Efficiency ratio (GAAP)
56.69
%
56.74
%
56.05
%
65.51
%
59.70
%
56.71
%
60.08
%
Loss on sale of manufactured housing loans
—
—
—
(7.15)
—
—
—
Gain on lease termination
—
—
—
—
—
—
0.29
Loss on FinTrust (goodwill impairment)
—
—
—
—
(2.07)
—
(1.05)
FDIC special assessment
—
—
—
—
0.31
—
(0.36)
Merger-related and other charges
(1.85)
(0.52)
(0.87)
(0.99)
(0.88)
(1.20)
(0.88)
Efficiency ratio - operating
54.84
%
56.22
%
55.18
%
57.37
%
57.06
%
55.51
%
58.08
%
Tangible common equity to tangible assets reconciliation
Equity to total assets (GAAP)
12.86
%
12.56
%
12.38
%
12.45
%
12.35
%
12.86
%
12.35
%
Effect of goodwill and other intangibles
(3.10)
(3.06)
(3.09)
(3.20)
(3.24)
(3.10)
(3.24)
Effect of preferred equity
(0.31)
(0.32)
(0.32)
(0.32)
(0.33)
(0.31)
(0.33)
Tangible common equity to tangible assets
9.45
%
9.18
%
8.97
%
8.93
%
8.78
%
9.45
%
8.78
%
Net Interest Revenue
For the quarter:
FTE net interest revenue for the second quarter of 2025 was $227 million, an increase of $16.8 million from the same period in 2024. Net interest-rate spread and net interest margin were 2.62% and 3.50%, respectively, which were up 30 basis points and 13 basis points, respectively, compared to the second quarter of 2024. The interest rate changes during the past year included cuts of 100 basis points in the federal funds rate, which drove decreases in funding costs, and to a lesser extent, loan yields.
For the six months ended:
FTE net interest revenue for the first six months of 2025 and 2024 was $440 million and $410 million, respectively. During the first six months of 2025, our net interest spread increased 31 basis points and our net interest margin increased by 15 basis points compared to the same period of 2024. Changes in net interest revenue and related metrics for the six months ended 2025 were a result of the same factors affecting the quarter.
39
Table 2 - Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended June 30,
(dollars in thousands, (FTE))
2025
2024
Average Balance
Interest
Average Rate
Average Balance
Interest
Average Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) (1)(2)
$
18,664,228
$
288,023
6.19
%
$
18,213,384
$
291,378
6.43
%
Taxable securities (3)
6,492,288
54,191
3.34
5,952,414
48,364
3.25
Tax-exempt securities (FTE) (1)(3)
354,162
2,236
2.53
363,393
2,273
2.50
Federal funds sold and other interest-earning assets
451,953
3,898
3.46
499,565
6,011
4.84
Total interest-earning assets (FTE)
25,962,631
348,348
5.38
25,028,756
348,026
5.59
Noninterest-earning assets:
Allowance for credit losses
(220,059)
(215,104)
Cash and due from banks
203,909
204,792
Premises and equipment
398,241
392,325
Other assets (3)
1,637,125
1,605,558
Total assets
$
27,981,847
$
27,016,327
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand
$
6,051,489
36,956
2.45
$
5,866,038
43,910
3.01
Money market
6,645,336
49,603
2.99
6,068,530
53,531
3.55
Savings
1,195,295
1,457
0.49
1,160,708
687
0.24
Time
3,532,848
30,596
3.47
3,544,327
35,695
4.05
Brokered time deposits
50,488
524
4.16
50,323
639
5.11
Total interest-bearing deposits
17,475,456
119,136
2.73
16,689,926
134,462
3.24
Federal funds purchased and other borrowings
7,412
83
4.49
4,093
60
5.90
Federal Home Loan Bank advances
—
—
—
—
—
—
Long-term debt
237,992
2,615
4.41
324,870
3,743
4.63
Total borrowed funds
245,404
2,698
4.41
328,963
3,803
4.65
Total interest-bearing liabilities
17,720,860
121,834
2.76
17,018,889
138,265
3.27
Noninterest-bearing liabilities:
Noninterest-bearing deposits
6,351,540
6,283,487
Other liabilities
346,643
400,974
Total liabilities
24,419,043
23,703,350
Shareholders' equity
3,562,804
3,312,977
Total liabilities and shareholders' equity
$
27,981,847
$
27,016,327
Net interest revenue (FTE)
$
226,514
$
209,761
Net interest-rate spread (FTE)
2.62
%
2.32
%
Net interest margin (FTE) (4)
3.50
%
3.37
%
(1)Interest revenue on tax-exempt securities and loans includes a taxable-equivalent adjustment to reflect comparable interest on taxable securities and loans. The FTE adjustment totaled $983,000 and $1.06 million, respectively, for the three months ended June 30, 2025 and 2024. The tax rate used to calculate the adjustment was 25%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.
(3)Unrealized losses on AFS securities, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $240 million in 2025 and $344 million in 2024 are included in other assets for purposes of this presentation.
(4)Net interest margin is taxable equivalent net interest revenue divided by average interest-earning assets.
40
Table 3 - Average Consolidated Balance Sheets and Net Interest Analysis
For the Six Months Ended June 30,
(dollars in thousands, (FTE))
2025
2024
Average Balance
Interest
Average Rate
Average Balance
Interest
Average Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (FTE) (1)(2)
$
18,440,110
$
561,953
6.15
%
$
18,256,562
$
575,338
6.34
%
Taxable securities (3)
6,614,294
111,363
3.37
5,890,408
93,079
3.16
Tax-exempt securities (FTE) (1)(3)
355,430
4,481
2.52
364,873
4,584
2.51
Federal funds sold and other interest-earning assets
426,415
6,899
3.26
587,080
12,816
4.39
Total interest-earning assets (FTE)
25,836,249
684,696
5.34
25,098,923
685,817
5.49
Non-interest-earning assets:
Allowance for loan losses
(215,141)
(214,050)
Cash and due from banks
211,681
212,998
Premises and equipment
397,347
389,173
Other assets (3)
1,623,689
1,611,928
Total assets
$
27,853,825
$
27,098,972
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW and interest-bearing demand
$
6,092,519
74,346
2.46
$
5,972,065
90,121
3.03
Money market
6,614,819
99,144
3.02
5,966,374
104,009
3.51
Savings
1,146,075
2,081
0.37
1,176,768
1,393
0.24
Time
3,489,687
61,427
3.55
3,570,407
71,639
4.03
Brokered time deposits
50,468
1,072
4.28
50,333
1,084
4.33
Total interest-bearing deposits
17,393,568
238,070
2.76
16,735,947
268,246
3.22
Federal funds purchased and other borrowings
43,883
1,190
5.47
2,054
60
5.87
Federal Home Loan Bank advances
19,343
433
4.51
2
—
—
Long-term debt
246,061
5,477
4.49
324,854
7,538
4.67
Total borrowed funds
309,287
7,100
4.63
326,910
7,598
4.67
Total interest-bearing liabilities
17,702,855
245,170
2.79
17,062,857
275,844
3.25
Noninterest-bearing liabilities:
Noninterest-bearing deposits
6,273,313
6,340,783
Other liabilities
358,227
395,713
Total liabilities
24,334,395
23,799,353
Shareholders' equity
3,519,430
3,299,619
Total liabilities and shareholders' equity
$
27,853,825
$
27,098,972
Net interest revenue (FTE)
$
439,526
$
409,973
Net interest-rate spread (FTE)
2.55
%
2.24
%
Net interest margin (FTE) (4)
3.43
%
3.28
%
(1)Interest revenue on tax-exempt securities and loans includes a taxable-equivalent adjustment to reflect comparable interest on taxable securities and loans. The FTE adjustment totaled $1.97 million and $2.12 million, respectively, for the six months ended June 30, 2025 and 2024. The tax rate used to calculate the adjustment was 25%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)Included in the average balance of loans outstanding are loans on which the accrual of interest has been discontinued and loans that are held for sale.
(3)Unrealized gains and losses on AFS securities, including those related to the transfer from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $254 million and $333 million in 2025 and 2024, respectively, are included in other assets for purposes of this presentation.
(4)Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.
41
Noninterest Income
The following table presents the components of noninterest income for the periods indicated.
Table 4 - Noninterest Income
(dollars in thousands)
Three Months Ended June 30,
Change
Six Months Ended June 30,
Change
2025
2024
Amount
Percent
2025
2024
Amount
Percent
Service charges and fees:
Overdraft fees
$
3,294
$
3,374
$
(80)
(2)
%
$
6,321
$
6,374
$
(53)
(1)
%
ATM and debit card fees
3,979
3,939
40
1
7,755
7,444
311
4
Other service charges and fees
2,849
3,307
(458)
(14)
5,581
6,066
(485)
(8)
Total service charges and fees
10,122
10,620
(498)
(5)
19,657
19,884
(227)
(1)
Mortgage loan gains and related fees
5,370
6,799
(1,429)
(21)
11,492
14,310
(2,818)
(20)
Wealth management fees
4,400
6,386
(1,986)
(31)
8,865
12,699
(3,834)
(30)
Gains on sales of other loans
1,995
1,296
699
54
3,391
2,833
558
20
Lending and loan servicing fees
3,690
3,328
362
11
7,855
7,538
317
4
Securities gains, net
286
—
286
n/m
292
—
292
n/m
Other noninterest income:
Customer derivative fees
905
199
706
n/m
2,157
438
1,719
n/m
Other investment income
(333)
1,845
(2,178)
n/m
71
2,948
(2,877)
n/m
BOLI
2,026
1,909
117
6
4,135
4,804
(669)
(14)
Treasury management income
1,975
1,691
284
17
3,958
3,188
770
24
Other
4,272
2,483
1,789
72
8,491
7,501
990
13
Total other noninterest income
8,845
8,127
718
9
18,812
18,879
(67)
—
Total noninterest income
$
34,708
$
36,556
$
(1,848)
(5)
$
70,364
$
76,143
$
(5,779)
(8)
The decrease in mortgage loan gains and related fees for the three and six months ended June 30, 2025 compared to the same periods of 2024 was primarily a result of negative fair value adjustments to our mortgage servicing asset which were less favorable by $1.40 million and $2.98 million, respectively, compared to the fair value adjustments for the comparable periods of 2024. This decrease was partially offset by higher gains on mortgage sales and rate lock volume. The following table provides additional mortgage metrics for the periods indicated.
Table 5 - Mortgage Loan Metrics
(dollars in thousands)
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
% Change
2025
2024
% Change
Mortgage rate locks
$
359,348
$
294,935
22
%
$
689,838
$
554,512
24
%
Mortgage loans sold
$
175,256
$
144,651
21
$
316,161
$
270,590
17
Mortgage loans originated:
Purchases
$
251,504
$
191,060
32
$
414,867
$
339,285
22
Refinances
33,526
23,791
41
57,395
46,551
23
Total
$
285,030
$
214,851
33
$
472,262
$
385,836
22
The decrease in wealth management fees reflects the decrease in assets under management and advisement as a result of the FinTrust sale in the fourth quarter of 2024. Assets under management and advisement totaled $3.29 billion and $5.30 billion at June 30, 2025 and 2024, respectively.
42
Customer derivative fees for the three and six months ended June 30, 2025 were up due to stronger loan growth and increased product demand, attributable to the lower rates compared to the same periods of 2024.
The decrease in other investment income was primarily driven by weaker market conditions for the 2025 reporting periods, particularly related to our mutual fund and fintech investments.
The increase in other noninterest income was largely driven by a positive change in collateral charges related to derivative positions.
Provision for Credit Losses
We recorded a provision for credit losses of $11.8 million and $27.2 million for the three and six months ended June 30, 2025, compared to $12.2 million and $25.1 million for the same periods of 2024. For the three and six months ended June 30, 2025, the provision for credit losses included the initial provision for ANB’s non-PCD loans and unfunded commitments of $2.49 million. Additional discussion on credit quality and the ACL is included in the “Asset Quality and Risk Elements” section of MD&A in this Report.
Noninterest Expense
The following table presents the components of noninterest expense for the periods indicated.
Table 6 - Noninterest Expense
(dollars in thousands)
Three Months Ended June 30,
Change
Six Months Ended June 30,
Change
2025
2024
Amount
Percent
2025
2024
Amount
Percent
Salaries and employee benefits
$
86,997
$
85,818
$
1,179
1
%
$
171,264
$
170,803
$
461
—
%
Communications and equipment
13,332
11,988
1,344
11
27,031
23,908
3,123
13
Occupancy
10,935
11,056
(121)
(1)
21,864
22,155
(291)
(1)
Advertising and public relations
2,881
2,459
422
17
4,762
4,360
402
9
Postage, printing and supplies
2,495
2,251
244
11
5,056
4,899
157
3
Professional fees
5,609
6,044
(435)
(7)
11,540
12,032
(492)
(4)
Lending and loan servicing expense
2,330
2,014
316
16
4,317
3,841
476
12
Outside services - electronic banking
3,570
2,812
758
27
6,333
5,730
603
11
FDIC assessments and other regulatory charges
4,745
4,467
278
6
9,387
12,033
(2,646)
(22)
Amortization of intangibles
3,292
3,794
(502)
(13)
6,578
7,681
(1,103)
(14)
Merger-related and other charges
4,833
2,157
2,676
n/m
6,130
4,244
1,886
n/m
Other
6,900
12,184
(5,284)
(43)
14,756
20,360
(5,604)
(28)
Total noninterest expense
$
147,919
$
147,044
$
875
1
$
289,018
$
292,046
$
(3,028)
(1)
Communications and equipment expense for the second quarter and first half of 2025 compared to the same periods of 2024 increased primarily due to new software contracts and incremental software contract costs on existing contracts, including volume based increases.
The increase in outside services - electronic banking reflects both volume-based cost increases and enhancements to our digital banking solutions.
FDIC assessments and other regulatory charges decreased for the first six months of 2025 as the comparative period of 2024 included $1.74 million of FDIC special assessment accrued expense.
The decrease in amortization of intangibles was primarily driven by the natural decline in amortization expense of our core deposit intangibles over time. This decrease was partially offset by ANB core deposit intangible amortization expense starting in May 2025.
The increase in merger-related and other charges for the second quarter and first half of 2025 was primarily driven by ANB merger-related costs.
43
Other noninterest expense for the three and six months ended 2025 was down compared to the same periods of last year as 2024 included a goodwill write-down of $5.10 million related to the sale of FinTrust.
Income Tax Expense
The following table presents income tax expense and the effective tax rate for the periods indicated.
Table 7 - Income Tax Expense
(dollars in thousands)
Three Months Ended June 30,
For the Six Months Ended June 30,
2025
2024
2025
2024
Income before income taxes
$
100,502
$
85,977
$
191,661
$
166,812
Income tax expense
21,769
19,362
41,515
37,566
Effective tax rate
21.7
%
22.5
%
21.7
%
22.5
%
Balance Sheet Review
Total assets at June 30, 2025 and December 31, 2024 were $28.1 billion and $27.7 billion, respectively. Total liabilities at June 30, 2025 and December 31, 2024 were $24.5 billion and $24.3 billion, respectively. Shareholders’ equity totaled $3.61 billion and $3.43 billion at June 30, 2025 and December 31, 2024, respectively.
Loans
Our loan portfolio is our largest category of interest-earning assets. The following table presents the loan portfolio and the allocation of the ACL by loan type for the periods indicated.
Table 8 - Loan Portfolio Composition and ACL Allocation
(dollars in thousands)
June 30, 2025
December 31, 2024
Loans
% of portfolio
ACL
ACL to Loans
Loans
% of portfolio
ACL
ACL to Loans
Owner occupied CRE
$
3,563,126
19
%
$
20,967
0.59
%
$
3,398,217
19
%
$
19,873
0.58
%
Income producing CRE
4,548,235
24
49,072
1.08
4,360,920
24
41,427
0.95
Commercial & industrial
2,515,360
13
38,693
1.54
2,428,376
13
35,441
1.46
Commercial construction
1,751,850
10
15,979
0.91
1,655,710
9
16,370
0.99
Equipment financing
1,777,936
9
47,900
2.69
1,662,501
9
47,415
2.85
Total commercial
14,156,507
75
172,611
1.22
13,505,724
74
160,526
1.19
Residential mortgage
3,210,430
17
30,217
0.94
3,231,479
18
32,259
1.00
Home equity
1,180,455
6
10,812
0.92
1,064,874
6
11,247
1.06
Residential construction
173,829
1
1,812
1.04
178,405
1
1,672
0.94
Manufactured housing (2)
—
—
—
—
1,723
—
450
26.12
Consumer
190,958
1
1,048
0.55
186,448
1
844
0.45
Total (1)
$
18,912,179
$
216,500
1.14
$
18,168,653
$
206,998
1.14
(1) Loans presented exclude fair value hedge basis adjustments.
(2) In 2025, manufactured housing loans were included in consumer loans.
44
The following table provides a disaggregation of our income producing CRE portfolio as of June 30, 2025 and December 31, 2024.
Table 9 - CRE - Income Producing Portfolio Composition
(dollars in thousands)
June 30, 2025
December 31, 2024
Total
% of loans in category
Total
% of loans in category
Retail
$
865,274
19
%
$
765,987
18
%
Office
823,711
18
792,449
18
Multifamily
590,291
13
633,296
15
Warehouse
544,620
12
502,586
11
Other
517,332
11
475,898
11
Hotel
501,473
11
467,139
11
Rental 1-4 Family
327,484
7
326,286
7
Senior Care
219,986
5
259,056
6
Self Storage
158,064
4
138,223
3
Total
$
4,548,235
100
%
$
4,360,920
100
%
Asset Quality and Risk Elements
We manage asset quality and control credit risk through review and oversight of the loan portfolio as well as adherence to policies designed to promote sound underwriting and loan monitoring practices. Our credit risk management function is responsible for monitoring asset quality and Board approved portfolio concentration limits, establishing credit policies and procedures and enforcing the consistent application of these policies and procedures.
The ACL reflects our assessment of the life of loan expected credit losses in the loan portfolio and unfunded loan commitments. This assessment involves uncertainty and judgment and is subject to change in future periods. See the Critical Accounting Estimates section of MD&A in our 2024 10-K for additional information on the ACL.
The ACL for loans at June 30, 2025 totaled $217 million compared to $207 million at December 31, 2024. The ACL for loans as a percentage of total loans remained flat at 1.14%. The increase in the ACL was primarily attributable to loan growth and the initial allowance established for ANB, partially offset by a reduction in the Hurricane Helene related allowance based on our latest assessment of potential storm related-loan losses. The initial ACL for ANB loans totaled $3.65 million, $1.25 million of which was reclassified from the fair value of PCD loans with no impact to earnings. The Hurricane Helene related reserve totaled $4.42 million and $9.80 million at June 30, 2025 and December 31, 2024, respectively. Our ACL for unfunded commitments, which totaled $11.5 million, increased $1.15 million compared to December 31, 2024 mostly due to an increase in our construction commitments.
45
The following table provides a summary of net charge-offs to average loans for the periods indicated.
Table 10 - Net Charge-offs to Average Loans
(dollars in thousands)
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
Net charge-offs (recoveries)
Owner occupied CRE
$
470
$
163
$
596
$
365
Income producing CRE
933
2,968
1,651
3,173
Commercial & industrial
1,027
1,281
3,474
5,187
Commercial construction
89
(48)
(49)
(28)
Equipment financing
4,963
5,502
10,005
11,864
Residential mortgage
313
(107)
312
(123)
Home equity
(72)
(27)
(134)
(81)
Residential construction
(9)
26
210
145
Manufactured housing
—
1,150
—
2,719
Consumer
511
706
1,767
1,301
Total net charge-offs
$
8,225
$
11,614
$
17,832
$
24,522
Average loans
Owner occupied CRE
$
3,492,599
$
3,288,757
$
3,438,970
$
3,283,715
Income producing CRE
4,488,186
4,113,743
4,451,373
4,168,985
Commercial & industrial
2,507,891
2,341,253
2,479,055
2,371,413
Commercial construction
1,744,511
1,966,053
1,701,888
1,929,485
Equipment financing
1,723,360
1,555,641
1,689,191
1,547,562
Residential mortgage
3,214,776
3,238,225
3,219,652
3,224,620
Home equity
1,134,274
972,630
1,100,224
967,075
Residential construction
174,030
233,317
175,716
256,031
Manufactured housing
—
322,998
—
327,220
Consumer
184,601
180,767
184,041
180,456
Total average loans
$
18,664,228
$
18,213,384
$
18,440,110
$
18,256,562
Net charge-offs to average loans (1)
Owner occupied CRE
0.05
%
0.02
%
0.03
%
0.02
%
Income producing CRE
0.08
0.29
0.07
0.15
Commercial & industrial
0.16
0.22
0.28
0.44
Commercial construction
0.02
(0.01)
(0.01)
—
Equipment financing
1.16
1.42
1.19
1.54
Residential mortgage
0.04
(0.01)
0.02
(0.01)
Home equity
(0.03)
(0.01)
(0.02)
(0.02)
Residential construction
(0.02)
0.04
0.24
0.11
Manufactured housing
—
1.43
—
1.67
Consumer
1.11
1.57
1.94
1.45
Total
0.18
0.26
0.20
0.27
(1) Annualized.
We completed the sale of substantially all of our manufactured housing loan portfolio in the third quarter of 2024. For the second quarter and first six months of 2025, the average balance and net charge-offs related to the remaining manufactured housing loans are reflected in consumer loans. Equipment finance charge-offs for the three months ended June 30, 2025 decreased compared to the same period in 2024 due to lower long-haul trucking related losses.
46
Nonperforming Assets
The table below summarizes NPAs for the periods indicated. NPAs include nonaccrual loans, OREO and repossessed assets. The decrease in NPAs since December 31, 2024 was primarily driven by $49.6 million in payoffs and paydowns of nonaccrual loans. Notably, we had two payoffs of senior care loans (included in income producing CRE) totaling $14.6 million and significant paydowns and payoffs for three larger relationships totaling $17.8 million included in commercial and industrial and owner occupied CRE loans.
Table 11 - NPAs
(dollars in thousands)
June 30, 2025
December 31, 2024
$ Change
Nonaccrual loans:
Owner occupied CRE
$
8,207
$
11,674
$
(3,467)
Income producing CRE
14,624
25,357
(10,733)
Commercial & industrial
15,422
29,339
(13,917)
Commercial construction
1,368
7,400
(6,032)
Equipment financing
11,731
8,925
2,806
Total commercial
51,352
82,695
(31,343)
Residential mortgage
22,597
24,615
(2,018)
Home equity
4,093
4,630
(537)
Residential construction
1,203
57
1,146
Manufactured housing (1)
—
1,444
(1,444)
Consumer
1,207
138
1,069
Total
80,452
113,579
(33,127)
OREO and repossessed assets
3,507
2,056
1,451
Total NPAs
$
83,959
$
115,635
$
(31,676)
Nonaccrual loans as a percentage of total loans
0.43
%
0.62
%
NPAs as a percentage of total assets
0.30
0.42
ACL - loans to nonaccrual loans coverage ratio
2.69
1.82
(1) In 2025, manufactured housing loans were included in consumer loans.
Investment Securities
The composition of the investment securities portfolio reflects our investment strategy of maintaining an appropriate level of liquidity while providing a relatively stable source of revenue. The investment securities portfolio also provides a balance to interest rate risk and credit risk in other categories of the balance sheet while providing a vehicle for the investment of available funds, furnishing liquidity, and supplying securities to pledge as required collateral for certain deposits and borrowings. The table below summarizes the carrying value of our securities portfolio and other relevant portfolio metrics including weighted-average life and effective duration as of the dates presented. Effective duration represents the expected change in the price of a security when rates change by 100 basis points.
47
Table 12 - Investment Securities
(dollars in thousands)
June 30, 2025
December 31, 2024
Carrying Value
% of portfolio
Carrying Value
% of portfolio
$ Change
AFS
$
4,075,323
64
%
$
4,436,291
65
%
$
(360,968)
HTM
2,306,730
36
2,368,107
35
(61,377)
Total investment securities
$
6,382,053
$
6,804,398
$
(422,345)
Investment securities as a % of total assets
23
%
25
%
Weighted average life
5.7 years
5.7 years
Swap adjusted effective duration
3.7
%
3.5
%
Effective duration
4.0
3.9
We utilize fair value hedges on a portion of our AFS securities portfolio in order to mitigate the impact of potential future unrealized losses on our tangible common equity. Gains and losses related to the hedge and hedged item are reflected in investment securities interest income. The changes in the fair value of the hedge and the hedged item substantially offset each other. See Note 6 to the financial statements for further detail.
At June 30, 2025, HTM debt securities had a fair value of $1.94 billion, indicating net unrealized losses of $371 million (pre-tax). Additional unrealized losses on HTM debt securities of $55.5 million (pre-tax) were included in AOCI as a result of the transfer of AFS debt securities to HTM in 2022. Unrealized losses were primarily attributable to changes in interest rates.
See Note 4 to the consolidated financial statements for additional detail.
Goodwill and Other Intangible Assets
As of June 30, 2025 and December 31, 2024, goodwill and other intangibles totaled $974 million and $957 million, respectively. In connection with the acquisition of ANB in the second quarter of 2025, we recorded goodwill and a core deposit intangible of $18.0 million and $6.29 million, respectively. See Notes 3 and 7 to the financial statements for further information.
Deposits
Customer deposits are the primary source of funds for the continued growth of our earning assets. We believe our high level of service, as evidenced by our strong customer satisfaction scores, is instrumental in attracting and retaining customer deposit accounts, which has continued to contribute to our organic deposit growth. Since December 31, 2024, customer deposits increased $514 million, which includes deposits of $374 million acquired in the ANB transaction as of the acquisition date. As of June 30, 2025, we had approximately $9.64 billion of uninsured deposits, of which $2.81 billion was collateralized by investment securities.
Table 13 - Deposits
(dollars in thousands)
June 30, 2025
December 31, 2024
Balance
% of Total
Balance
% of Total
Noninterest-bearing demand
$
6,381,975
26
%
$
6,211,182
26
%
NOW and interest-bearing demand
5,986,049
25
6,141,342
26
Money market and savings
7,832,527
33
7,498,735
32
Time
3,606,511
15
3,441,424
15
Total customer deposits
23,807,062
99
23,292,683
99
Brokered deposits
155,950
1
168,292
1
Total deposits
$
23,963,012
$
23,460,975
48
Borrowing Activities
At June 30, 2025 and December 31, 2024, we had long-term debt outstanding of $155 million and $254 million, respectively, which includes senior debentures, subordinated debentures, and trust preferred securities. During the second quarter of 2025, we redeemed our $100 million 2030 senior debentures. At June 30, 2025 there were no short-term borrowings outstanding. At December 31, 2024, there were $195 million in short-term borrowings outstanding. The need to utilize wholesale funding sources has decreased because our liquidity needs have been met by our deposit and cash balances.
Contractual Obligations and Off-Balance Sheet Arrangements
There have not been any material changes to our contractual obligations and off-balance sheet arrangements since December 31, 2024.
Interest Rate Sensitivity Management
Interest rate sensitivity is a function of the repricing characteristics of the portfolio of assets and liabilities. Repricing characteristics are the time frames within which the interest rates on interest-earning assets and interest-bearing liabilities are subject to change either at replacement, repricing or maturity.
Management uses an asset/liability simulation model to measure the potential change in net interest revenue over time using multiple interest rate scenarios. Our modeling is based on the 12-month impact on net interest revenue simulations with various interest rate shocks and ramps, which are compared to a base scenario that assumes rates remain unchanged. In the shock scenarios, rates immediately change the full amount at the scenario onset. In the ramp scenarios, rates change by 25 basis points per month until they reach the predetermined levels.
The following table presents our interest sensitivity position at the dates indicated. The scenario results presented assume parallel movements in the yield curve, which may differ from actual future curve behavior. Other than an assumption for the runoff of estimated surge deposits, which is assumed to be replaced with higher cost wholesale funding, this presentation generally assumes no change in deposit portfolio size or composition.
Table 14 - Interest Sensitivity
Increase (Decrease) in Net Interest Revenue from Base Scenario at
June 30, 2025
December 31, 2024
Change in Rates
Shock
Ramp
Shock
Ramp
200 basis point increase
3.59
%
1.62
%
2.01
%
0.92
%
100 basis point increase
1.97
1.18
1.19
0.66
100 basis point decrease
(3.02)
(1.94)
(2.27)
(1.46)
200 basis point decrease
(7.22)
(3.08)
(6.00)
(2.38)
The change in results from December 31, 2024 to June 30, 2025 reflects more floating interest rate loans and a slight shortening of asset duration to address rising interest rate risk concerns. In addition, the balance sheet became slightly more asset sensitive at June 30, 2025 due to higher cash balances on hand at quarter-end.
Liquidity Management
The Bank’s main source of liquidity is customer interest-bearing and noninterest-bearing deposit accounts. Liquidity is also available from wholesale funding sources consisting primarily of repurchase agreements, Federal funds purchased, FHLB advances, and brokered deposits. These sources of liquidity are generally short-term in nature and are used as necessary to fund asset growth and meet other short-term liquidity needs. As part of our liquidity management, we focus on maximizing the amount of securities and loans available as collateral for contingent liquidity sources and calibrating our assumptions in our liquidity stress test on an ongoing basis, particularly as it relates to deposit duration. At June 30, 2025 and December 31, 2024, we had sufficient liquid funds and qualifying collateral to support additional borrowings, which are detailed in the table below.
49
Table 15 - Liquid Funds and Unused Borrowing Capacity
(in thousands)
June 30, 2025
December 31, 2024
Available liquid funds:
Cash and cash equivalents
$
574,956
$
519,873
Availability of borrowings (1):
FHLB
1,921,234
1,917,905
Federal Reserve - Discount Window
2,395,442
2,267,139
Unpledged securities available as collateral for additional borrowings
3,571,790
3,603,885
(1) Based on collateral pledged.
In addition, because the Holding Company is a separate entity and apart from the Bank, it must provide for its own liquidity. The Holding Company is responsible for the payment of dividends declared for its common and preferred shareholders, and interest and principal on any outstanding debt or trust preferred securities. The Holding Company currently has sufficient liquid assets to meet these obligations. Holding Company liquidity is maintained at a level of at least 125% of the next 12 months of forecasted cash obligations.
In the opinion of management, our liquidity position at June 30, 2025 was sufficient to meet our expected cash flow requirements for the foreseeable future. See the consolidated statement of cash flows for further detail.
Capital Resources and Dividends
Shareholders’ equity at June 30, 2025 was $3.61 billion, an increase of $181 million from December 31, 2024 primarily due to year-to-date earnings, other comprehensive income and the issuance of stock for the ANB acquisition, partially offset by dividends declared on common and preferred stock.
The following table shows capital ratios, as calculated under applicable regulatory guidelines, at June 30, 2025 and December 31, 2024. As of June 30, 2025, capital levels remained characterized as “well-capitalized” under regulatory requirements in effect at the time. Additional information related to capital ratios is provided in Note 11 to the consolidated financial statements.
Table 16 - Capital Ratios
United Community Banks, Inc. (Consolidated)
United Community Bank
Minimum
Well- Capitalized
Minimum Capital Plus Capital Conservation Buffer
June 30, 2025
December 31, 2024
June 30, 2025
December 31, 2024
Risk-based ratios:
CET1 capital
4.5
%
6.5
%
7.0
%
13.34
%
13.27
%
12.60
%
13.05
%
Tier 1 capital
6.0
8.0
8.5
13.77
13.72
12.60
13.05
Total capital
8.0
10.0
10.5
15.14
15.17
13.66
14.08
Leverage ratio
4.0
5.0
N/A
10.37
9.96
9.48
9.46
50
The following table shows capital composition as of June 30, 2025 and December 31, 2024.
Table 17 - Capital Composition under Basel III
(in thousands)
United Community Banks, Inc. (Consolidated)
United Community Bank
June 30, 2025
December 31, 2024
June 30, 2025
December 31, 2024
Total common shareholders' equity
$
3,524,658
$
3,343,861
$
3,358,442
$
3,282,263
CECL transitional amount
—
3,334
—
3,334
Goodwill
(925,119)
(907,090)
(925,119)
(907,090)
Intangibles, other than goodwill and mortgage servicing rights, net of associated DTLs
(41,937)
(42,334)
(41,937)
(42,334)
DTAs arising from net operating loss and tax credit carryforwards
(6,349)
(2,554)
(5,422)
(1,988)
Net unrealized losses on AFS securities
142,149
177,645
141,233
176,777
Accumulated net gains on cash flow hedges
(6,988)
(9,705)
—
—
Net unrealized losses on HTM securities that are included in AOCI
42,133
45,129
42,133
45,129
Other
(124)
(150)
(124)
(150)
CET1 capital
2,728,423
2,608,136
2,569,206
2,555,941
Preferred stock, net of issuance cost
88,266
88,266
—
—
Tier 1 capital
2,816,689
2,696,402
2,569,206
2,555,941
Tier 2 capital instruments
65,000
85,000
—
—
Qualifying ACL
214,503
200,871
214,503
200,870
Total capital
$
3,096,192
$
2,982,273
$
2,783,709
$
2,756,811
Effect of Inflation and Changing Prices
A bank’s asset and liability structure is substantially different from that of an industrial firm in that primarily all assets and liabilities of a bank are monetary in nature with relatively little investment in fixed assets or inventories. Management believes the effect of inflation on financial results depends on our ability to react to changes in interest rates, and by such reaction, reduce the inflationary effect on performance. We have an asset/liability management program to manage interest rate sensitivity. In addition, periodic reviews of banking services and products are conducted to adjust pricing in view of current and expected costs.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
There have been no material changes in our market risk as of June 30, 2025 from that presented in our 2024 10-K. Our interest rate sensitivity position at June 30, 2025 is set forth in Table 14 in MD&A of this Report and incorporated herein by this reference.
Item 4. Controls and Procedures
(a) Disclosure Controls and Procedures. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures (as such term is defined in Exchange Act Rule 13a-15(e)) as of June 30, 2025. Based on that evaluation, our principal executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Report.
(b) Changes in Internal Control Over Financial Reporting. No change in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) occurred during the fiscal quarter ended June 30, 2025 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
51
Part II. OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
The following table contains information regarding purchases of our common stock made during the quarter ended June 30, 2025 by or on behalf of United or any “affiliated purchaser,” as defined by Rule 10b-18(a)(3) of the Exchange Act:
Common Stock Repurchases
(Dollars in thousands, except for per share amounts)
Total Number of Shares Purchased
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar
Value of Shares that May
Yet Be Purchased Under
the Plans or Programs (1)
April 1, 2025 - April 30, 2025
343,338
$
27.31
343,338
$
90,622
May 1, 2025 - May 31, 2025
163,262
27.96
163,262
86,058
June 1, 2025 - June 30, 2025
—
—
—
86,058
Total
506,600
$
27.52
506,600
(1) Under United’s common stock repurchase program, management is authorized to repurchase up to $100 million of its common stock. The program is scheduled to expire on the earlier of the repurchase of our common stock having an aggregate purchase price of $100 million or December 31, 2025. A more detailed description of United’s common stock repurchase plan is included in its 2024 10-K.
Item 5. Other Information
(c) On June 10, 2025, Lynn Harton, our President and Chief Executive Officer, entered into a”Rule 10b5-1 trading arrangement” (as defined in Item 408(a) of Regulation S-K), providing for the sale of 25,000 shares of United common stock beginning February 15, 2026 and continuing until March 16, 2026, or such earlier time as all shares covered by the trading arrangement are sold.
During the quarter ended June 30, 2025, no other director or officer of the Company adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Interactive data files for United Community Bank, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in Inline XBRL: (i) the Consolidated Balance Sheets (unaudited); (ii) the Consolidated Statements of Income (unaudited); (iii) the Consolidated Statements of Comprehensive Income (unaudited); (iv) the Consolidated Statements of Changes in Shareholders’ Equity (unaudited); (v) the Consolidated Statements of Cash Flows (unaudited); and (vi) the Notes to Consolidated Financial Statements (unaudited).
104
The cover page from United Community Bank’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (formatted in Inline XBRL and included in Exhibit 101)
53
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
UNITED COMMUNITY BANKS, INC.
/s/ H. Lynn Harton
H. Lynn Harton
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Jefferson L. Harralson
Jefferson L. Harralson
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
/s/ Alan H. Kumler
Alan H. Kumler
Senior Vice President and Chief Accounting Officer