Newsletter Subscription

A Laser Focus World newsletter subscription is free to qualified professionals:

The Daily Beam

Showcases the newest content from Laser Focus World, including photonics- and optics-based applications, components, research, and trends. (Daily)

Product Watch

The latest in products within the photonics industry. (9x per year)

Bio & Life Sciences Product Watch

The latest in products within the biophotonics industry. (4x per year)

Laser Processing Product Watch

The latest in products within the laser processing industry. (3x per year)

UCB Q1 Deep Dive: Deposit Growth and Margin Expansion Drive Solid Start to 2025

By: StockStory

June 23, 2025 at 13:44 PM EDT

UCB Cover Image

Regional banking company United Community Banks (NYSE: UCB) met Wall Street’s revenue expectations in Q1 CY2025, with sales up 3.7% year on year to $247.7 million. Its non-GAAP profit of $0.59 per share was 5.4% above analysts’ consensus estimates.

Is now the time to buy UCB? Find out in our full research report (it’s free).

United Community Banks (UCB) Q1 CY2025 Highlights:

Revenue: $247.7 million vs analyst estimates of $247.2 million (3.7% year-on-year growth, in line)
Adjusted EPS: $0.59 vs analyst estimates of $0.56 (5.4% beat)
Market Capitalization: $3.38 billion

StockStory’s Take

United Community Banks began 2025 with results that prompted a notably positive response from the market. Management attributed the quarter’s performance to robust annualized growth in both loans and deposits, improvements in net interest margin, and disciplined cost control. CEO Lynn Harton highlighted the return to growth in non-interest-bearing deposits and ongoing credit quality, stating, “Credit continues to reflect quality underwriting with non-performing assets lower and credit losses stable from last quarter.” Lower deposit costs and targeted loan book expansion were also key contributors.

Looking ahead, United Community Banks’ guidance centers on continued margin expansion, careful balance sheet management, and navigating external uncertainties such as tariffs and potential interest rate changes. CFO Jefferson Harralson emphasized that further margin improvement will depend on reducing deposit costs and remixing earning assets toward loans. Management remains vigilant about potential economic headwinds, with Harton noting, “We are well positioned to succeed, despite the uncertainties developing in the economy,” and highlighting the importance of client adaptability and prudent risk oversight.

Key Insights from Management’s Remarks

Management pointed to several factors behind the quarter’s steady performance, including proactive deposit repricing, targeted loan growth, and a strong capital position.

Deposit repricing benefits: The bank strategically reduced the cost of deposits by repricing maturing certificates of deposit (CDs) at lower rates, which contributed to a 10 basis point net interest margin increase over the prior quarter. Management expects further opportunities for similar repricing savings in upcoming quarters.
Loan portfolio focus: Targeted annualized loan growth was observed in commercial & industrial (C&I), home equity lines of credit (HELOC), and Navitas (small commercial lending), with C&I up 7% and HELOC up 13%. These segments are being emphasized for their growth potential and risk-adjusted returns.
Expense control achievements: Operating expenses declined compared to both the previous quarter and the same quarter last year, enabling the bank to generate operating leverage during what is typically a seasonally weak period. This was achieved without sacrificing investment in key growth initiatives.
Credit quality and provisioning: Credit quality remained stable, with non-performing assets declining and net charge-offs flat. The loan loss provision was sufficient to cover both net charge-offs and loan growth, reflecting a conservative approach in an uncertain environment.
Strong capital and liquidity: United Community Banks ended the quarter with a common equity tier 1 (CET1) ratio of 13.3% and no wholesale borrowings, supporting both organic growth and the flexibility to deploy capital opportunistically, including potential share repurchases or acquisitions.

Drivers of Future Performance

United Community Banks’ outlook is shaped by its ability to manage deposit costs, sustain loan growth, and adapt to shifting economic and regulatory conditions.

Margin expansion priorities: Management anticipates further net interest margin improvement through ongoing deposit repricing and a gradual shift in the earning asset mix from securities to higher-yielding loans. However, expectations are tempered by the potential for Federal Reserve rate cuts, which could temporarily compress margins.
Disciplined expense growth: Operating expenses are projected to remain in the low single-digit growth range, with some increases expected from merit raises and the integration of the American National Bank acquisition. Management seeks to maintain efficiency gains even as the franchise expands.
Credit and economic headwinds: The bank is closely monitoring risks from tariffs, supply chain disruptions, and broader macroeconomic shifts, particularly for small business borrowers. While current credit trends are stable, management is prepared for potential volatility should recessionary conditions or higher unemployment materialize.

Catalysts in Upcoming Quarters

Looking ahead, our analysts will be monitoring (1) the success of further deposit repricing initiatives and their impact on net interest margin, (2) the integration progress and balance sheet effects of the American National Bank acquisition, and (3) the stability of credit quality in the face of ongoing macroeconomic uncertainties, including tariffs and supply chain risks. Progress in loan growth and expense management will also be key markers of execution.

United Community Banks currently trades at $28.30, up from $24.60 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).

High Quality Stocks for All Market Conditions

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.

About Us

Laser Focus World Membership

Magazine Subscription

Newsletter Subscription

The Daily Beam

Product Watch

Bio & Life Sciences Product Watch

Laser Processing Product Watch

Get Published!

Photonics Hot List

Following the Photons: A Photonics Podcast

Social Media

Meet the Laser Focus World Team

Editorial

Sales

Editorial Advisory Board