United Community Banks Sees Strong Start to 2026 with 19% Growth in Operating EPS
United Community Banks (UCB) kicked off the year on a high note, reporting a 19% increase in operating earnings per share (EPS) for the first quarter of 2026. The company's Chairman and Chief Executive Officer, Lynn Harton, highlighted the strong start to the year during an earnings call earlier this month.
In its Q1 2026 results, UCB reported net income of $84 million, translating into EPS of $0.69 on a GAAP basis. However, on an operating basis, the company's EPS was $0.70, representing a notable increase from the same period in 2025. This growth was driven by annualized loan growth of 4.5% and an expansion of the net interest margin of three basis points.
The company's credit performance also showed improvement, with total charge-offs of 22 basis points, only 10 basis points excluding Navitas. Non-performing assets as a percentage of loans were down one basis point from Q1 2025, and special mention and substandard loans totaled only 2.9% of total loans, down two basis points from the same period in 2025.
UCB's operating return on assets (ROA) was 122 basis points, an 18 basis point improvement year over year. The company also saw its operating return on tangible common equity (ROTE) increase to 13.1%. Given its high capital levels, UCB continued to return capital to shareholders through a quarterly dividend of $0.25 and the repurchase of $37 million in shares.
As reported by Jefferson Harralson, Chief Financial Officer, during the earnings call, UCB's deposit results were also noteworthy. On an end-of-period basis, customer deposits grew by $237 million or 4% annualized, driven primarily by DDA growth in the quarter. The cost of deposits moved down nine basis points to 1.67%, and the cumulative total deposit beta stands at 39% in this down cycle, exceeding UCB's goal.
The company also highlighted its loan portfolio, which grew at a 4.5% annualized pace in the first quarter. The growth came primarily in the HELOC and C&I categories, two areas of focus for growth. UCB emphasized that its balance sheet is well-positioned from a liquidity and capital standpoint to navigate any economic volatility.
With its strong Q1 2026 results, UCB has demonstrated its ability to drive growth while maintaining a stable and secure financial foundation. The company's commitment to returning value to shareholders through dividends and share repurchases further underscores its confidence in its financial position.
As Lynn Harton pointed out during the earnings call, United Community Banks' recognition by J.D. Power as the top-ranked bank for retail client satisfaction in the Southeast is a testament to the dedication and genuine care of its teams across the footprint. This achievement marks the 12th time UCB has received this distinction.
With its impressive Q1 2026 results, United Community Banks is poised to continue its growth trajectory in 2026. As the company continues to navigate a rapidly changing economic landscape, it remains committed to delivering strong financial performance and superior client satisfaction.
