United Community Banks Delivers Solid Q2 2026 Results Amid Strategic Progress
United Community Banks (UCB) reported solid second-quarter 2026 results, with operating earnings per share (EPS) increasing by 8% year-over-year to $0.71 per share. Total revenue also rose 7% compared to the same period last year.
In a conference call on July 21, UCB's Chairman and Chief Executive Officer Lynn Harton highlighted the company's progress towards its strategic goals. Notably, the bank achieved an operating net interest margin of 3.68%, up 18 basis points from the prior year and three basis points from the previous quarter.
Credit results were also impressive, with bank-only net charge-offs at just nine basis points and total net charge-offs at 16 basis points. Past dues remained low at 11 basis points, while special mention and substandard accruing loans reached their lowest level in several quarters at 2.5%. Loan growth accelerated to 6.8% annualized for the quarter, with organic loan growth (excluding Navitas) reaching a strong 6.4% annualized.
Harton attributed this significant increase in organic loan growth to the company's investment in hiring new producers. Since executing its plan to sell Navitas and refocus on its core franchise last year, UCB has seen a net expansion of 17% in producers. The bank is pleased with this execution and expects continued strong growth.
The company's operating return on assets (ROA) remained at 122 basis points, while the operating return on tangible common equity was 13%, both essentially equal to last quarter despite elevated hiring costs and a notable one-time expense item.
Additionally, UCB continues to be excited about its acquisition of Peach State Bank. The combined entity will have the best bankers and top deposit market share in one of the fastest-growing counties in the Southeast. Everything is on track for a close early in the third quarter as planned.
CFO Jefferson Harralson provided further details on UCB's second-quarter performance, noting that GAAP results included a large non-operating item from the Navitas loan loss reserve release and a notable operating expense related to a settlement with the state of California. Excluding these items, UCB's operating earnings per share would have been $0.70.
UCB maintains high capital levels despite extended blackout periods resulting from the Navitas and Peach State announcements. The company has sufficient repurchase authorization remaining to retire shares to be issued for the acquisition of Peach State, which is its intention.
The bank's commitment to strategic progress and solid financial performance positions it well for future growth and success.
