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What changed in UNITED COMMUNITY BANKS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of UNITED COMMUNITY BANKS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+411 added−485 removedSource: 10-K (2026-02-17) vs 10-K (2025-02-27)

Top changes in UNITED COMMUNITY BANKS INC's 2025 10-K

411 paragraphs added · 485 removed · 281 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

81 edited+17 added−39 removed101 unchanged
Biggest changeOther Factors Affecting Dividends If, in the opinion of the applicable regulatory authority, the Holding Company or the Bank are engaged in or about to engage in an unsafe or unsound practice (which, depending on the financial condition of the Holding Company or the Bank, could include the payment of dividends), such authority may require us or the Bank to cease and desist from that practice.
Biggest changeAs a Federal Reserve member bank, the Bank is permitted to pay a dividend to the Holding Company of up to the sum of current year and the previous two years undistributed income without requesting approval of the Federal Reserve, which is less restrictive than the requirements of the SCBFI. 13 Other Factors Affecting Dividends If, in the opinion of the applicable regulatory authority, the Holding Company or the Bank is engaged in or about to engage in an unsafe or unsound practice (which, depending on the financial condition of the Holding Company or the Bank, could include the payment of dividends), such authority may require us or the Bank to cease and desist from that practice.
Economic weakness tends to diminish client borrowing and other activities that otherwise benefit our performance. Further information on these topics is presented: within Item 1A, Risk Factors under the headings: Risks From Changes in Economic Conditions and Monetary Policy , Liquidity and Funding Risk , and Interest Rate and Yield Curve Risks.
Economic weakness tends to diminish client borrowing and other activities that otherwise benefit our performance. Further information on these topics is presented: within Item 1A, Risk Factors under the headings: Risks From Changes in Economic Conditions and Monetary Policy , Liquidity and Funding Risks , and Interest Rate and Yield Curve Risks.
Activities that the Federal Reserve has found to be so closely related to banking as to be a proper incident to the business of banking include: • factoring accounts receivable; • making, acquiring, brokering or servicing loans and usual related activities; • leasing personal or real property; • operating a non-bank depository institution, such as a savings association; • trust company functions; • financial and investment advisory activities; • conducting discount securities brokerage activities; • underwriting and dealing in government obligations and money market instruments; • providing specified management consulting and counseling activities; • performing selected data processing services and support services; • acting as agent or broker in selling credit life insurance and other types of insurance in connection with credit transactions; and • performing selected insurance underwriting activities.
Activities that the Federal Reserve has found to be so closely related to banking as to be a proper incident to the business of banking include: • factoring accounts receivable; • making, acquiring, brokering or servicing loans and usual related activities; 18 • leasing personal or real property; • operating a non-bank depository institution, such as a savings association; • trust company functions; • financial and investment advisory activities; • conducting discount securities brokerage activities; • underwriting and dealing in government obligations and money market instruments; • providing specified management consulting and counseling activities; • performing selected data processing services and support services; • acting as agent or broker in selling credit life insurance and other types of insurance in connection with credit transactions; and • performing selected insurance underwriting activities.
We encounter strong pricing competition in providing our services, particularly in making loans and attracting deposits. The larger national and super-regional banks may have significantly greater lending limits and may offer additional products. We attempt to compete successfully with our competitors, regardless of their size, by emphasizing customer service while continuing to provide a wide variety of services.
We encounter strong pricing competition in providing our services, particularly in making loans and attracting deposits. The larger national and super-regional banks may have significantly greater lending limits and may offer additional products. We attempt to 11 compete successfully with our competitors, regardless of their size, by emphasizing customer service while continuing to provide a wide variety of services.
In addition, our government deposit balances tend to be strongest in the third and fourth quarters correlating with their tax receipts. 9 Cyclicality Banking Financial services facilitate commercial and consumer economic activities in critical ways. As a result, in many ways, the performance of the financial services industry tends to reflect that of the economies it serves.
In addition, our government deposit balances tend to be strongest in the third and fourth quarters correlating with their tax receipts. Cyclicality Banking Financial services facilitate commercial and consumer economic activities in critical ways. As a result, in many ways, the performance of the financial services industry tends to reflect that of the economies it serves.
Incentive Compensation and Risk Management In addition to the potential restrictions on discretionary bonus compensation under the Basel III rules, the federal bank regulatory agencies have issued guidance on incentive compensation policies (the “Incentive Compensation Guidance”) intended to ensure that 17 the incentive compensation policies of financial institutions do not undermine the safety and soundness of such institutions by encouraging excessive risk-taking.
Incentive Compensation and Risk Management In addition to the potential restrictions on discretionary bonus compensation under the Basel III rules, the federal bank regulatory agencies have issued guidance on incentive compensation policies (the “Incentive Compensation Guidance”) intended to ensure that the incentive compensation policies of financial institutions do not undermine the safety and soundness of such institutions by encouraging excessive risk-taking.
Moreover, these laws, and proposed legislation, are still subject to revision or formal guidance and they may be interpreted or applied in a manner inconsistent with our understanding. Like other lenders, the Bank and other of our subsidiaries use credit bureau data in their underwriting activities.
Moreover, these laws, and proposed legislation, are still subject to revision or formal guidance and they may be interpreted or applied in a manner inconsistent with our understanding. Like other lenders, the Bank and our other subsidiaries use credit bureau data in their underwriting activities.
Interchange Fee Restrictions We are subject to regulations that severely cap interchange fees which the Bank may charge merchants for debit card transactions. These restrictions were required by a statutory provision known as the Durbin Amendment of the Dodd-Frank Act.
Interchange Fee Restrictions We are subject to regulations that cap interchange fees which the Bank may charge merchants for debit card transactions. These restrictions were required by a statutory provision known as the Durbin Amendment of the Dodd-Frank Act.
Real Estate Lending Inter-agency guidelines adopted by federal bank regulatory agencies mandate that financial institutions establish real estate lending policies with maximum allowable real estate loan-to-value limits, subject to an allowable amount of non-conforming loans as a percentage of capital.
Real Estate Lending Inter-agency guidelines adopted by federal bank regulatory agencies mandate that financial institutions establish real estate lending policies with maximum allowable real estate loan-to-value limits, subject to an allowable amount of non-conforming loans as a 17 percentage of capital.
We are required to file with the Federal Reserve annual reports and such additional information as the Federal Reserve may require pursuant to the BHC Act. 12 The Holding Company being a financial holding company allows for engagement in a broader range of financial activities.
We are required to file with the Federal Reserve annual reports and such additional information as the Federal Reserve may require pursuant to the BHC Act. The Holding Company being a financial holding company allows for engagement in a broader range of financial activities.
Secretary of the Treasury from time to time. If this fifth requirement ceases to be met after a 19 bank controls or holds an interest in a financial subsidiary, the bank cannot invest additional capital in that subsidiary until the requirement again is met.
Secretary of the Treasury from time to time. If this fifth requirement ceases to be met after a bank controls or holds an interest in a financial subsidiary, the bank cannot invest additional capital in that subsidiary until the requirement again is met.
Supervision and Regulation Scope of this Section This section describes certain material aspects of the regulatory framework applicable to banks and financial holding companies and their subsidiaries and to companies engaged in securities and insurance activities.
Supervision and Regulation Scope of this Section This section describes certain material aspects of the regulatory framework applicable to banks and financial holding companies and their subsidiaries and to companies engaged in insurance activities.
The Holding Company’s principal source of cash flow, including cash flow to pay dividends on our stock or to pay principal and interest on debt securities, is dividends paid to it by the Bank.
The Holding Company’s principal source of cash flow, including cash flow to pay dividends on our common stock or to pay principal and interest on debt securities, is dividends paid to it by the Bank.
Risk-Based Ratios Category Total Capital Tier 1 Capital CET1 Capital Leverage Ratio Tangible Equity to Total Assets Well-capitalized at least 10% at least 8% at least 6.5% at least 5% Adequately capitalized at least 8% at least 6% at least 4.5% at least 4% Undercapitalized under 8% under 6% under 4.5% under 4% Significantly undercapitalized under 6% under 4% under 3% under 3% Critically undercapitalized 2% or less As of December 31, 2024, the Bank qualified as “well-capitalized” under the regulatory capital requirements discussed above.
Risk-Based Ratios Category Total Capital Tier 1 Capital CET1 Capital Leverage Ratio Tangible Equity to Total Assets Well-capitalized at least 10% at least 8% at least 6.5% at least 5% Adequately capitalized at least 8% at least 6% at least 4.5% at least 4% Undercapitalized under 8% under 6% under 4.5% under 4% Significantly undercapitalized under 6% under 4% under 3% under 3% Critically undercapitalized 2% or less As of December 31, 2025, the Bank qualified as “well-capitalized” under the regulatory capital requirements discussed above.
Our principal expenses are interest paid on deposits and other borrowings and operating and general administrative expenses. Available Information Our internet website address is www.ucbi.com.
Our principal expenses are interest paid on deposits and other borrowings and operating and general administrative expenses. 20 Available Information Our internet website address is www.ucbi.com.
The Federal Reserve has also indicated that a bank holding company should not maintain a level of cash dividends that places undue pressure on the capital of its bank subsidiaries, or that can be funded only through additional borrowings or other arrangements that undermine the bank holding company’s ability to act as a source of strength to its bank subsidiaries.
The Federal Reserve has also indicated that a bank holding company should not maintain a level of cash dividends that places undue pressure on the capital of its bank subsidiaries, or that can be funded only through additional borrowings or other arrangements that undermine the bank holding company’s ability to be a source of strength to its bank subsidiaries.
These regulations obligate depositary institutions and broker-dealers to verify the identity of their customers, conduct customer due diligence, report on suspicious activity, file reports of transactions in currency and conduct enhanced due diligence on certain accounts. They also prohibit U.S. persons from engaging in transactions with certain designated restricted countries and persons.
These regulations obligate depositary institutions to verify the identity of their customers, conduct customer due diligence, report on suspicious activity, file reports of transactions in currency and conduct enhanced due diligence on certain accounts. They also prohibit U.S. persons from engaging in transactions with certain designated restricted countries and persons.
Also, the Bank and certain of its affiliates are prohibited from engaging in certain tie-in arrangements in connection with extensions of credit, leases or sales of property, or furnishing products or services. Payment of Dividends The Holding Company is a legal entity separate and distinct from the Bank and other subsidiaries.
Also, the Bank and certain of its affiliates are prohibited from engaging in certain tie-in arrangements in connection with extensions of credit, leases or sales of property, or furnishing products or services. Payment of Dividends The Holding Company, incorporated in Georgia, is a legal entity separate and distinct from the Bank and other subsidiaries.
We offer insurance products and services to our clients through United Community Insurance, Inc., which operates as an independent insurance agency for our customers. Within our United Community Private Wealth division, United Community Advisors sells non-deposit investment products and insurance products, including life insurance, long-term care insurance and tax-deferred annuities, to our customers.
We offer insurance products and services to our clients through United Community Insurance, Inc., which operates as an independent insurance agency for our customers. Within our United Community Private Wealth division, United Community Advisors sell non-deposit investment products and insurance products, including life insurance, long-term care insurance and tax-deferred annuities, to our customers.
In addition, various federal regulators, including the Federal Reserve and the SEC, have increased their focus on cyber-security through guidance, examinations and regulations. The Bank has adopted a customer information security program that has been approved by its Board of Directors.
In addition, various federal regulators, including the Federal Reserve and the SEC, have increased their focus on cyber-security through guidance, examinations and regulations. The Bank has adopted a customer information security program that has been approved by its Board.
We provide payment processing services for our commercial and small business customers through UCPS. UCPS is a joint venture between the Bank and Clover, a merchant services provider and subsidiary of Fiserv, Inc. Other General Information Subsidiaries Our consolidated operating subsidiaries at December 31, 2024 are listed in Exhibit 21 to this Report.
We provide payment processing services for our commercial and small business customers through UCPS, which is a joint venture between the Bank and Clover, a merchant services provider and subsidiary of Fiserv, Inc. Other General Information Subsidiaries Our consolidated operating subsidiaries at December 31, 2025 are listed in Exhibit 21 to this Report.
Further, our references to website URLs are intended to be inactive textual references only. 21
Further, our references to website URLs are intended to be inactive textual references only.
This buffer must consist solely of Tier 1 Common Equity, but the buffer applies to all three risk-based measurements (CET1, Tier 1 capital and total capital).
This buffer must consist solely of CET1 capital, but the buffer applies to all three risk-based measurements (CET1 capital, Tier 1 capital and total capital).
Depository institutions and broker-dealers are required by their federal regulators to maintain robust policies and procedures in order to ensure compliance with these obligations.
Depository institutions are required by their federal regulators to maintain robust policies and procedures in order to ensure compliance with these obligations.
CFPB The Dodd-Frank Act created the CFPB, which is granted broad rulemaking, supervisory and enforcement powers under various federal consumer financial protection laws, including the Equal Credit Opportunity Act, Truth in Lending Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, the Consumer Financial Privacy provisions of the GLB Act and certain other statutes.
CFPB The CFPB is granted broad rulemaking, supervisory and enforcement powers under various federal consumer financial protection laws, including the Equal Credit Opportunity Act, Truth in Lending Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, the Consumer Financial Privacy provisions of the GLB Act and certain other statutes.
Our mortgage business tends to be seasonally strong in the second and third quarters correlating with home buying trends. Our commercial lending businesses (including SBA and Navitas) tend to be seasonally weaker in the first quarter and seasonally stronger in the fourth quarter.
Our commercial lending businesses (including SBA and equipment finance) tend to be seasonally weaker in the first quarter and seasonally stronger in the fourth quarter. Our mortgage business tends to be seasonally strong in the second and third quarters correlating with home buying trends.
The preponderance of our loans are to customers located in the immediate market areas of our banking locations in Georgia, South Carolina, North Carolina, Tennessee, Florida and Alabama, including customers who have a seasonal residence in our market areas.
The preponderance of our loans are to customers located in the immediate market areas of our banking locations in Georgia, South Carolina, North Carolina, Tennessee, Florida and Alabama, including customers who have seasonal residences in our market areas.
The FDIC may also terminate deposit insurance upon a finding that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.
In the event of a finding that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC, the FDIC may terminate deposit insurance.
The Federal Reserve has released a supervisory letter advising, among other things, that a bank holding company should inform the Federal Reserve and should eliminate, defer, or significantly reduce its dividends if (i) the bank holding company’s net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (ii) the bank holding company’s prospective rate of earnings is not consistent with the bank holding company’s capital needs and overall current and prospective financial condition; or (iii) the bank holding company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios. 14 Transactions with Affiliates Federal banking laws restrict transactions between a bank and its affiliates, including a parent bank holding company.
The Federal Reserve has released a supervisory letter advising, among other things, that a bank holding company should inform the Federal Reserve and should eliminate, defer, or significantly reduce its dividends if (i) the bank holding company’s net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (ii) the bank holding company’s prospective rate of earnings is not consistent with the bank holding company’s capital needs and overall current and prospective financial condition; or (iii) the bank holding company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.
The most significant categories of our loans are those to finance owner occupied commercial real estate, commercial income property, commercial and industrial equipment and operating loans, and consumer loans secured by personal residences. A majority of our loans are made on a secured basis.
The most significant categories of our loans are those to finance owner occupied CRE, commercial income producing property, commercial and industrial equipment and operating loans, and consumer loans secured by personal residences. A majority of our loans are made on a secured basis.
In addition, depositors of a bank, and the FDIC as their subrogee, would be entitled to priority over the other creditors in the event of liquidation of the bank. Under Federal Reserve policy, now codified in the Dodd-Frank Act, we are expected to act as a source of financial strength to, and to commit resources to support, the Bank.
In addition, depositors of a bank, and the FDIC as their subrogee, would be entitled to priority over the other creditors in the event of liquidation of the bank. Under Federal Reserve policy we are expected to be a source of financial strength to, and to commit resources to support, the Bank.
In addition, federal law contains a number of other provisions that may affect the Bank’s operations, including limitations on the use and disclosure to third parties of client information. As of December 31, 2024, we are a financial holding company and we have financial subsidiaries, as discussed in Subsidiaries in this Item.
In addition, federal law contains a number of other provisions that may affect the Bank’s operations, including limitations on the use and disclosure to third parties of client information. As of December 31, 2025, we are a financial holding company and we have one financial subsidiary other than the Bank, as discussed in Subsidiaries in this Item.
We have grown through a combination of strategic acquisitions and organic growth throughout Georgia, South Carolina, North Carolina, Tennessee, Florida and Alabama as well as nationally through our SBA/USDA lending and equipment finance businesses. As of December 31, 2024, we had consolidated total assets of $27.7 billion.
We have grown through a combination of strategic acquisitions and organic growth throughout Georgia, South Carolina, North Carolina, Tennessee, Florida and Alabama as well as nationally through our SBA/USDA lending and equipment finance businesses. As of December 31, 2025, we had consolidated total assets of $28.0 billion.
There are statutory and regulatory requirements applicable to the payment of dividends and other distributions by the Bank, as well as by the Holding Company to its shareholders. 13 During 2024, 2023, and 2022, the Bank paid dividends to the Holding Company of $153 million, $198 million and $133 million, respectively.
There are statutory and regulatory requirements applicable to the payment of dividends and other distributions by the Bank, as well as by the Holding Company to its shareholders. During 2025, 2024, and 2023, the Bank paid dividends to the Holding Company of $356 million, $153 million and $198 million, respectively.
In general, the statute requires explanations to consumers on policies and procedures regarding the disclosure of such nonpublic information and, except as otherwise required by law, prohibits disclosing such information except as provided in a banking subsidiary’s policies and procedures. The Bank has implemented a privacy policy.
In general, the statute requires explanations to consumers on policies and procedures regarding the disclosure of such nonpublic information and, except as otherwise required by law, prohibits disclosing such information except as provided in a banking subsidiary’s policies and procedures.
Insurance activities are subject to regulation by the states in which such business is transacted. Although most of such regulation focuses on insurance companies and their insurance products, insurance agents and their activities are also subject to regulation by the states, including, among other things, licensing and marketing and sales practices.
Although most of such regulation focuses on insurance companies and their insurance products, insurance agents and their activities are also subject to regulation by the states, including, among other things, licensing and marketing and sales practices.
Further, a bank holding company and its subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit, lease or sale of property or furnishing of services. See Transactions with Affiliates discussed below .
Further, a bank holding company and its subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit, lease or sale of property or furnishing of services.
The Holding Company declared quarterly cash dividends on its common stock in 2024, 2023, and 2022 totaling $0.94, $0.92 and $0.86 per share, respectively.
The Holding Company declared quarterly cash dividends on its common stock in 2025, 2024, and 2023 totaling $0.98, $0.94 and $0.92 per share, respectively.
Our goal is to maintain a reasonable earn-back period of any tangible book value dilution, using realistic growth and expense reduction assumptions, as well as to achieve an attractive return on investment. Our ability to engage in any potential acquisition will depend upon the review and approval from various bank regulatory authorities.
Our goal is to achieve an attractive return on investment, as well as maintain a reasonable earn-back period of any tangible book value dilution, using realistic growth and expense reduction assumptions. Our ability to engage in any potential acquisition is also subject to review by and approval of various bank regulatory authorities.
States are also increasingly proposing or enacting legislation that relates to data privacy and data protection. We continue to assess the requirements of such laws and proposed legislation and their applicability to us.
The Bank has implemented a privacy policy. 19 States are also increasingly proposing or enacting legislation that relates to data privacy and data protection. We continue to assess the requirements of such laws and proposed legislation and their applicability to us.
During 2024, the Bank originated $870 million in residential mortgage loans for the purchase of homes and to refinance existing mortgage debt. Approximately 70% of these mortgages were sold into the secondary market without recourse to us, other than for breaches of warranties. We have retained the servicing on most of our mortgage loans sold.
During 2025, the Bank originated $1.02 billion in residential mortgage loans for the purchase of homes and to refinance existing mortgage debt. Approximately 65% of these mortgages were sold into the secondary market without recourse to us, other than for breaches of warranties. We have retained the servicing on most of our mortgage loans sold.
Federal banking regulators are required to take various mandatory supervisory actions and are authorized to take other discretionary actions with respect to institutions in the three undercapitalized categories. The severity of the action depends upon the capital category in which the institution is placed.
Institutions generally are not allowed to publicly disclose examination results. 15 Federal banking regulators are required to take various mandatory supervisory actions and are authorized to take other discretionary actions with respect to institutions in the three undercapitalized categories. The severity of the action depends upon the capital category in which the institution is placed.
Changes in fair value on AFS securities are generally recorded directly in our shareholders’ equity account and are not recognized in our income statement. Securities classified by us as HTM are recorded at amortized cost.
Our AFS securities are recorded at fair value on our balance sheet. Changes in fair value on AFS securities are generally recorded in shareholders’ equity and are not recognized in our income statement. Our securities classified as HTM are recorded at amortized cost.
The Bank is subject to examination and reporting requirements of the Federal Reserve, FDIC, the SCBFI and the CFPB. During 2024, the Bank changed its primary federal regulator from the FDIC to the Federal Reserve.
The Bank is subject to examination and reporting requirements of the Federal Reserve, FDIC, the SCBFI and the CFPB. During 2024, the Bank changed its primary federal regulator from the FDIC to the Federal Reserve. The Bank is insured by the FDIC and is subject to regulation by the Federal Reserve and, in certain respects, by the CFPB.
These statutes and regulations are subject to change, and additional statutes, regulations, and corresponding guidance may be adopted. Additionally, we expect the incoming federal administration will implement a regulatory reform agenda that is significantly different than that of the prior administration, affecting the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies.
These statutes and regulations are subject to change, and additional statutes, regulations, and corresponding guidance may be adopted. Additionally, the current federal administration is implementing a regulatory reform agenda that is significantly different than that of the prior administration, which affects the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies.
Failure to meet capital guidelines could subject a bank to a variety of enforcement remedies, including the termination of deposit insurance by the FDIC, and to certain restrictions on its business and in certain circumstances to the appointment of a conservator or receiver.
Failure to meet capital guidelines could subject a bank to a variety of enforcement remedies, including the termination of deposit insurance by the FDIC, and to certain restrictions on its business and in certain circumstances to the appointment of a conservator or receiver. See Prompt Corrective Action immediately below for additional information.
Our Board has approved policies and procedures that it believes comply with these laws. 20 Depositor Preference Federal law provides that deposits and certain claims for administrative expenses and associate compensation against an insured depository institution would be afforded a priority over other general unsecured claims against such an institution, including federal funds and letters of credit, in the “liquidation or other resolution” of such an institution by any receiver.
Depositor Preference Federal law provides that deposits and certain claims for administrative expenses and associate compensation against an insured depository institution would be afforded a priority over other general unsecured claims against such an institution, including federal funds and letters of credit, in the “liquidation or other resolution” of such an institution by any receiver.
Client Concentration Neither we nor any of our significant subsidiaries is dependent upon a single client or very few clients. Calendar-Year Seasonality We do not experience material seasonality; however, we do experience seasonal variation in certain revenues, expenses, and credit trends.
Client Concentration Neither we nor any of our significant subsidiaries is dependent upon a single client or very few clients. Calendar-Year Seasonality Seasonality does not affect us in any material way; however, we do experience seasonal variation in certain areas of our business that affects revenues, expenses, balance sheet accounts and credit trends.
An institution may be deemed to be in a capitalization category that is lower than is indicated by its actual capital position if it receives an unsatisfactory examination rating. Institutions generally are not allowed to publicly disclose examination results.
An institution may be deemed to be in a capitalization category that is lower than is indicated by its actual capital position if it receives an unsatisfactory examination rating.
There have been a number of significant enforcement actions by regulators, as well as state attorneys general and the Department of Justice, against banks, broker-dealers and non-bank financial institutions with respect to these laws and some have resulted in substantial penalties, including criminal pleas.
There have been a number of significant enforcement actions by regulators, as well as state attorneys general and the Department of Justice, against banks and non-bank financial institutions with respect to these laws and some have resulted in substantial penalties, including criminal pleas. Our Board has approved policies and procedures that it believes comply with these laws.
See Prompt Corrective Action immediately below for additional information. 15 In addition, the Bank is required to have a capital structure that the SCBFI determines is adequate, based on SCBFI’s assessment of the Bank’s businesses and risks. The SCBFI may require the Bank to increase its capital, if found to be inadequate.
In addition, the Bank is required to have a capital structure that the SCBFI determines is adequate, based on SCBFI’s assessment of the Bank’s businesses and risks. The SCBFI may require the Bank to increase its capital, if found to be inadequate.
New CFPB regulations, and changes to CFPB regulations and enforcement priorities, may have a material impact on our compliance costs, compliance risk, and operations of the Bank. FDIC Insurance Assessments; Deposit Insurance Fund The FDIC insures the Bank’s deposits up to $250,000 per depositor subject to applicable limitations through the Deposit Insurance Fund.
Although the future authority of the CFPB is not clear under the current administration, if adopted, new CFPB regulations, and changes to CFPB regulations and enforcement priorities, could have a material impact on our compliance costs, compliance risk, and operations of the Bank. 16 FDIC Insurance Assessments; Deposit Insurance Fund The FDIC insures the Bank’s deposits up to $250,000 per depositor subject to applicable limitations through the Deposit Insurance Fund.
These factors, and their impacts on us, often are mixed rather than consistently positive or negative. For example, low interest rates reduce the interest income we earn, reduce our costs of funding, tend to stimulate economic activity and loan growth, and, through lower debt service, tend to ease financial pressure on clients, reducing default risk.
For example, low interest rates reduce the interest income we earn, reduce our costs of funding, tend to stimulate economic activity and loan growth, and, through lower debt service, tend to ease financial pressure on clients, reducing default risk.
We are unable to predict these future changes or the effects, if any, that these changes could have on our business. Finally, investors should be aware that the regulatory framework governing banks and the financial services industry is intended primarily to protect depositors and the Deposit Insurance Fund – not to protect our Bank or our security holders.
Finally, investors should be aware that the regulatory framework governing banks and the financial services industry is intended primarily to protect depositors and the Deposit Insurance Fund – not to protect our Bank or our security holders.
The interest rates that we charge on loans vary with the degree of risk, maturity and amount of the loan, and are further subject to competitive pressures, deposit costs, availability of funds and government regulations.
Our consolidated loans at December 31, 2025 were $19.4 billion, or 69% of total consolidated assets. The interest rates that we charge on loans vary with the degree of risk, maturity and amount of the loan and are further subject to competitive pressures, deposit costs, availability of funds and government regulations.
Our banking business is highly dependent on the level of interest rates, whether federal monetary policy is easing or tightening, and on the shape of the interest rate yield curve. These factors also are cyclical, and are related in complex ways with the business cycle mentioned above.
Our banking business is highly dependent on the level of interest rates, whether federal monetary policy is easing or tightening, and on the shape of the interest rate yield curve.
These laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedure Act and their respective state law counterparts. 16 Volcker Rule The Volcker rule (1) generally prohibits banks from engaging in proprietary trading, which is engaging as principal (for the bank’s own account) in any purchase or sale of one or more of certain types of financial instruments, and (2) limits banks’ ability to invest in or sponsor hedge funds or private equity funds.
Volcker Rule The Volcker rule (1) generally prohibits banks from engaging in proprietary trading, which is engaging as principal (for the bank’s own account) in any purchase or sale of one or more of certain types of financial instruments, and (2) limits banks’ ability to invest in or sponsor hedge funds or private equity funds.
For additional information regarding our lending activity, see the section captioned “Loans” in the “Balance Sheet Review” section of Part II, Item 7. MD&A of this Report. Deposit Activities Deposits are the major source of our funds for lending and other investment activities.
For additional information regarding our lending activity, see the section captioned “Credit Risk Management” in Part II, Item 7. MD&A of this Report. Deposit Activities Deposits are the major source of our funds for lending and other investment activities. We offer our customers a variety of deposit products, including checking accounts, savings accounts, money market accounts and other deposit accounts.
Through our memberships with the American Bankers Association, the Risk Management Association, the Mid-Size Bank Coalition of America, and state bankers associations, our employees have access to resources, online training, conferences, and discussion groups designed for bankers at all levels in all roles.
Through memberships with the American Bankers Association, the Risk Management Association, the Mid-Size Bank Coalition of America, and state banking associations, our employees benefit from access to resources, online training, conferences, and professional discussion groups. We encourage participation in these opportunities for skill enhancement, leadership development and industry engagement.
The Bank Our most significant subsidiary, United Community Bank, headquartered in Greenville, South Carolina , is a South Carolina state-chartered bank subject to the regulation and supervision of, and to examination by, t he SCBFI.
See Transactions with Affiliates discussed below . 12 The Bank Our most significant subsidiary, United Community Bank, is subject to the regulation and supervision of, and to examination by, t he SCBFI.
Basel III Capital Standards Federal financial industry regulators require that regulated financial institutions, including the Holding Company and the Bank, maintain minimum capital levels.
Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors. 14 Basel III Capital Standards Federal financial industry regulators require that regulated financial institutions, including the Holding Company and the Bank, maintain minimum capital levels.
Capital adequacy guidelines involve quantitative measures of assets, liabilities and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors.
Capital adequacy guidelines involve quantitative measures of assets, liabilities and certain off-balance-sheet items calculated under regulatory accounting practices.
Lending Activities We offer a full range of lending services to individuals, small and mid-sized businesses and non-profit organizations. We also originate loans partially guaranteed by the SBA and, to a lesser extent, by the USDA loan programs. Our consolidated loans at December 31, 2024 were $18.2 billion, or 66% of total consolidated assets.
Forbes has also consistently listed us as one of the World’s Best Banks and one of America’s Best Banks. 7 Lending Activities We offer a full range of lending services to individuals, small and mid-sized businesses and non-profit organizations. We also originate loans partially guaranteed by the SBA and, to a lesser extent, by the USDA loan programs.
ITEM 1. BUSINESS Overview United Community Banks, Inc. is a Georgia corporation incorporated in 1987 and headquartered in Greenville, South Carolina. We are a bank holding company under the BHC Act and a financial holding company under the GLB Act. In May 2024, we officially moved our Holding Company headquarters from Blairsville, Georgia to Greenville, South Carolina.
ITEM 1. BUSINESS Overview United Community Banks, Inc., headquartered in Greenville, South Carolina, is a bank holding company under the BHC Act and a financial holding company under the GLB Act. We provide diversified financial services primarily through our principal subsidiary, United Community Bank, a South Carolina state-chartered bank.
We offer a variety of group health plans for our employees, including comprehensive medical, prescription drug coverage, dental and vision plans, disability and life insurance. We also offer health care savings accounts, which help our employees reduce the costs of medical and dependent care by allowing them to set aside pre-tax dollars.
Our benefits portfolio includes comprehensive group health plans - medical, prescription drug, dental and vision coverage - as well as disability and life insurance. Employees have access to health care savings accounts, enabling them to set aside pre-tax dollars for medical and dependent care expenses.
Federal banking regulators periodically assess the Bank for CRA compliance and that assessment is made public. The Bank’s low- and moderate-income community operations and activities traditionally are critical focal points in those assessments.
The Bank’s low- and moderate-income community operations and activities traditionally are critical focal points in those assessments.
Once a bank has established branches in a state through de novo or acquired branching or through an interstate merger transaction, the bank may then establish or acquire additional branches within that state to the same extent that a bank chartered in that state is allowed to establish or acquire branches within the state. 18 Community Reinvestment Act The CRA requires each U.S. bank, consistent with safe and sound operation, to help meet the credit needs of each community where the bank accepts deposits, including low- and moderate-income communities.
Once a bank has established branches in a state through de novo or acquired branching or through an interstate merger transaction, the bank may then establish or acquire additional branches within that state to the same extent that a bank chartered in that state is allowed to establish or acquire branches within the state.
In addition, any capital loans by a bank holding company to any of its subsidiary banks are subordinate in right of payment to deposits and to certain other indebtedness of the subsidiary bank.
This support may be required at times even if, absent such Federal Reserve policy, we neither wish nor do we have the resources to provide it. In addition, any capital loans by a bank holding company to any of its subsidiary banks are subordinate in right of payment to deposits and to certain other indebtedness of the subsidiary bank.
Our organizational structure reflects these strengths, with local leaders for each market and market advisory boards operating in partnership with the product experts of our Commercial Banking Solutions unit.
Our organizational structure reflects these strengths, with local leaders for each market and market advisory boards operating in partnership with the product experts of our Commercial Banking Solutions unit. We believe that this combination of service and expertise sets us apart and is instrumental in our strategy to build long-term relationships. In 2025, we became an 11-time winner of J.D.
We offer our customers a variety of deposit products, including checking accounts, savings accounts, money market accounts and other deposit accounts. Generally, we attempt to maintain the rates paid on our deposits at a competitive level. We generate the majority of our deposits from customers in our local markets.
Generally, we attempt to maintain the rates paid on our deposits at a competitive level. We generate the majority of our deposits from customers in our local markets. For additional information regarding our deposit accounts, see the section captioned “Deposits” in Part II, Item 7. MD&A of this Report.
For additional information regarding our deposit accounts, see the section captioned “Deposits” in Part II, Item 7. MD&A of this Report. Investments We use our investment portfolio to provide for the investment of excess funds at acceptable risk levels while providing liquidity to fund loan demand or to offset fluctuations in deposits.
Investments We use our investment portfolio to provide for the investment of excess funds at acceptable risk levels while providing liquidity to fund loan demand or to offset fluctuations in deposits. Our portfolio consists primarily of residential and commercial mortgage-backed securities, asset-backed securities, U.S. Treasury, U.S. agency and municipal obligations.
We believe that our ability to earn the trust of our customers and deliver exceptional customer service hinges on our culture, which in turn depends upon the dedication and engagement of our employees. When employees are dedicated and engaged, they take extra steps for our customers.
We believe that building and maintaining customer trust and delivering outstanding service are rooted in our company culture, which thrives on the dedication and engagement of our employees. Engaged employees consistently go above and beyond for our customers.
We have an affiliation with a third-party broker/dealer, LPL Financial, to facilitate this line of business. 8 On October 1, 2024, we sold substantially all of the assets of our FinTrust Capital Advisors, LLC and FinTrust Brokerage Services, LLC, which offered investment advisory and brokerage services.
We have an affiliation with a third-party broker/dealer, LPL Financial, to facilitate this line of business. 8 Reinsurance and Merchant Services Through NLFC Reinsurance Corp., we provide reinsurance on property insurance contracts covering equipment financed by the Bank’s equipment financing business.
Through our “Together for Good Council,” a group of employees who help to coordinate volunteer efforts, guide charitable giving and lead each of our “Good Days” of service, we are continuing our efforts to enhance our community engagement initiatives and involvement with our local communities.
We recognize that employees value working for organizations that give back and we believe in the power of collective action for positive impact. Our “Together for Good Council,” comprised of employees who coordinate volunteer initiatives, charitable giving and our “Good Days” of service, continues to drive our community engagement and involvement.
Compensation and Benefits We are committed to providing competitive compensation and benefits programs designed to attract, retain, motivate and reward employees for matching the right products with our customers’ needs, while also staying within our risk tolerance.
At the management level, our Employee Retirement Plan Committee administers our 401(k) retirement program, while our Incentive Compensation Committee oversees non-executive incentive compensation plans and evaluates associated risks. Compensation and Benefits We offer competitive compensation and benefits designed to attract, retain, motivate and reward employees for aligning our products with our customers’ needs within our established risk parameters.
Mortgage Origination and Related Services The strength of consumer mortgage lending activity in the United States impacts our mortgage origination and related services line of business. Mortgage lending activity is strongly linked to economic strength and interest rate cycles.
Mortgage Origination and Related Services Mortgage lending activity is strongly linked to economic strength and interest rate cycles. Activity tends to be inversely related to prevailing mortgage rates: when rates are high, home-buying and refinancing decrease, and when rates are low, home-buying and refinancing increase.
Activity tends to be inversely related to prevailing mortgage rates: when rates are high, home-buying and refinancing decrease, and when rates are low, home-buying and refinancing increase. Moreover, expectations about near-term future mortgage rates can accelerate or delay those impacts, as borrowers rush to avoid future rate increases or wait for future rate decreases.
Moreover, expectations about near-term future mortgage rates can accelerate or delay those impacts, as borrowers rush to avoid future rate increases or wait for future rate decreases. Human Resources Management Workforce Overview As of December 31, 2025, we employed 3,070 full-time equivalent employees compared to 2,979 as of December 31, 2024.
FinTrust Capital Advisors, LLC operated as a registered investment adviser which was regulated under the Investment Advisers Act of 1940 until the sale of FinTrust in the fourth quarter of 2024. Insurance Activities Certain of our subsidiaries sell various types of insurance as agent in a number of states.
Insurance Activities Certain of our subsidiaries sell various types of insurance as agent in a number of states. Insurance activities are subject to regulation by the states in which such business is transacted.
Employee Engagement Surveys The Best Banks to Work For program, initiated in 2013 by American Banker and Best Companies Group, identifies and recognizes U.S. banks for outstanding employee satisfaction. We are honored to have been named one of American Banker’s 2024 Best Banks to Work For, an award we have received for eight consecutive years.
This group provides alternative channels for employees at all levels to share ideas, suggestions and concerns directly with senior leadership. Employee Engagement We are honored to have been named one of American Banker’s “Best Banks to Work For” in 2025, an accolade we have received for nine consecutive years.
Employees are eligible to contribute to our 401(k) Retirement Plan beginning the first of the month following their date of employment and may earn a company match on 5% of pay after 90 days of service.
Eligibility to participate in our 401(k) Retirement Plan begins the first of the month following employment with a company match up to 5% of pay available after 90 days of service. Talent Development We invest in talent development, through programs such as our Manager Development Program, which provides ongoing education led by our internal experts and subject matter specialists.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur financial performance generally, and in particular the ability of borrowers to pay interest on and repay principal of outstanding loans and the value of collateral securing those loans, as well as demand for loans and other products and services we offer, is highly dependent upon the business environment in the markets where we operate and in the United States as a whole.
Biggest changeOur financial performance is highly dependent upon the economic landscape in the markets where we operate and in the United States as a whole and how it impacts borrowers’ ability to pay interest on and repay principal of outstanding loans, the value of underlying collateral securing loans, as well as demand for loans and other products and services we offer.
The financial services industry has undergone and continues to undergo rapid change as a result of frequent new technological innovations, such as the use of artificial intelligence and machine learning. The effective use of technology increases efficiency and enables financial institutions to better serve customers and to reduce costs.
The financial services industry has undergone and continues to undergo rapid change as a result of frequent new technological innovations, such as artificial intelligence and machine learning. The effective use of technology increases efficiency and enables financial institutions to better serve customers and to reduce costs.
In addition, because the techniques used to cause such security breaches change frequently, often are not recognized until launched against a target and may originate from less regulated and remote areas around the world, we may be unable to proactively address these techniques or to implement adequate preventative measures.
In addition, because the techniques used to cause such security breaches change frequently, often are not recognized until launched against a target and may originate from less regulated and remote areas around the world, we may be unable to proactively address these techniques or implement adequate preventative measures.
CREDIT AND COUNTERPARTY RISK We face the risk that our clients may not repay their loans or other obligations and that the realizable value of collateral may be insufficient to avoid a charge-off. We also face risks that other counterparties, in a wide range of situations, may fail to honor their obligations to pay us.
CREDIT AND COUNTERPARTY RISKS We face the risk that our clients may not repay their loans or other obligations and that the realizable value of collateral may be insufficient to avoid a charge-off. We also face risks that counterparties, in a wide range of situations, may fail to honor their obligations to pay us.
Substantial legal liability or significant regulatory action against us could have material adverse financial effects or cause significant reputational harm to us, which in turn could seriously harm our business prospects. Data privacy is becoming a major political concern. The laws governing it are new, and are likely to evolve and expand.
Substantial legal liability or significant regulatory action against us could have material adverse financial effects or cause significant reputational harm to us, which in turn could seriously harm our business prospects. Data privacy is becoming a major business and political concern. The laws governing it are new, and are likely to evolve and expand.
These provisions include: • allowing the Board to consider the interests of our employees, customers, suppliers and creditors when considering an acquisition proposal; • that all amendments to the articles and certain portions of the bylaws must be approved by a majority of the outstanding shares of our capital stock entitled to vote; • requiring that any business combination involving United be approved by 75% of the outstanding shares of United’s common stock excluding shares held by stockholders who are deemed to have an interest in the transaction unless the business combination is approved by 75% of United’s directors; • restricting removal of directors except for cause and upon the approval of two-thirds of the outstanding shares of our capital stock entitled to vote; • that any special meeting of shareholders may be called only by the chairman, chief executive officer, president, chief financial officer, board of directors or the holders of 25% of the outstanding shares of United’s capital stock entitled to vote; and • establishing certain advance notice procedures for matters to be considered at an annual meeting of shareholders.
These provisions include: • allowing the Board to consider the interests of our employees, customers, suppliers and creditors when considering an acquisition proposal; • that all amendments to the articles and certain portions of the bylaws must be approved by a majority of the outstanding shares of our capital stock entitled to vote; • requiring that any business combination involving United be approved by 75% of the outstanding shares of United’s common stock excluding shares held by stockholders who are deemed to have an interest in the transaction unless the business combination is approved by 75% of United’s directors; 33 • restricting removal of directors except for cause and upon the approval of two-thirds of the outstanding shares of our capital stock entitled to vote; • that any special meeting of shareholders may be called only by the chairman, chief executive officer, president, chief financial officer, board of directors or the holders of 25% of the outstanding shares of United’s capital stock entitled to vote; and • establishing certain advance notice procedures for matters to be considered at an annual meeting of shareholders.
Loan repayments are a relatively stable source of funds but are subject to the borrowers’ ability to repay loans, which can be adversely affected by a number of factors including changes in general economic conditions, adverse trends or events affecting business industry groups or specific businesses, declines in real estate values or markets, business closings or lay-offs, inclement weather, natural disasters and other factors.
Loan repayments are a relatively stable source of funds but are subject to the borrowers’ ability to repay loans, which can be adversely affected by a number of factors including changes in general economic conditions, adverse trends or events affecting business industry groups or specific businesses, declines in real estate values or markets, business closings or lay-offs, inclement weather and natural disasters.
These risks include, without limitation, our inability to do the following: • attract and retain clients in our banking market areas; • achieve and maintain growth in our earnings while pursuing new business opportunities; • maintain a high level of client service while optimizing our physical branch count due to changing client demand, all while expanding our remote banking services and expanding or enhancing our information processing, technology, compliance, and other operational infrastructures effectively and efficiently; 22 • maintain loan quality while, at the same time, creating loan growth; • attract sufficient deposits and capital to fund anticipated loan growth; • maintain adequate common equity and regulatory capital while managing the liquidity and capital requirements associated with growth, especially organic growth and cash-funded acquisitions; • hire or retain adequate management personnel and systems to oversee and support such growth; • implement additional policies, procedures and operating systems required to support our growth; • manage effectively and efficiently the changes and adaptations necessitated by a complex, burdensome, and evolving regulatory environment.
These risks include, without limitation, our inability to do the following: • attract and retain clients in our banking market areas; • achieve and maintain growth in our earnings while pursuing new business opportunities; • maintain a high level of client service while optimizing our physical branch count due to changing client demand, all while expanding our remote banking services and expanding or enhancing our information processing, technology, compliance, and other operational infrastructures effectively and efficiently; • maintain loan quality while, at the same time, creating loan growth; • attract sufficient deposits and capital to fund anticipated loan growth; • maintain adequate common equity and regulatory capital while managing the liquidity and capital requirements associated with growth, especially organic growth and cash-funded acquisitions; • hire and retain adequate bankers, management personnel and systems to oversee and support such growth; • implement additional policies, procedures and operating systems required to support our growth; • manage effectively and efficiently the changes and adaptations necessitated by a complex, burdensome, and evolving regulatory environment.
According to statements made by the FDIC staff and the leadership of the federal banking agencies, customers with larger uninsured deposit account balances often are small- and mid-sized businesses that rely upon deposit funds for payment of operational expenses and, as a result, are more likely to closely monitor the financial condition and performance of their depository institutions.
According to statements made by the FDIC staff and the leadership of the federal banking agencies, customers with larger uninsured deposit account balances often are 30 small- and mid-sized businesses that rely upon deposit funds for payment of operational expenses and, as a result, are more likely to closely monitor the financial condition and performance of their depository institutions.
Due to the inherent nature of these estimates, it is possible that, at some time in the future, we may significantly increase the allowance for credit losses and/or sustain credit losses that are significantly higher than the provided allowance, or we may recognize a significant provision for impairment of assets, or we may make some other adjustment that will differ materially from the estimates that we make today.
Due to the inherent nature of these estimates, it is possible that, at some time in the future, we may significantly increase the ACL and/or sustain credit losses that are significantly higher than the provided allowance, or we may recognize a significant provision for impairment of assets, or we may make some other adjustment that will differ materially from the estimates that we make today.
Deposit levels may be affected by several factors, including rates paid by competitors, general interest rate levels, returns available to customers on alternative investments, general economic and market conditions, customer concerns about the safety and soundness of our bank, whether real or perceived, or the U.S. banking system in general and other factors.
Deposit levels may be affected by several factors, including rates paid by competitors, general interest rate levels, returns available to customers on alternative investments, general economic and market conditions, customer concerns about the safety and soundness of our bank, whether real or perceived, or the U.S. banking system in general.
Maintaining and adapting our internal controls over financial reporting, disclosure controls and procedures and effective corporate governance policies and procedures (“controls and procedures”) is expensive and requires significant management attention. Moreover, as we continue to grow, our controls and procedures may become more complex and require additional resources to ensure 32 they remain effective amid dynamic regulatory and other guidance.
Maintaining and adapting our internal controls over financial reporting, disclosure controls and procedures and effective corporate governance policies and procedures (“controls and procedures”) is expensive and requires significant management attention. Moreover, as we continue to grow, our controls and procedures may become more complex and require additional resources to ensure they remain effective amid dynamic regulatory and other guidance.
These restrictions and other consequences of public health issues may result in significant adverse effects for many different types of businesses, including, among others, those in the hospitality (including hotels and lodging) and restaurant industries, and result in layoffs and furloughs of employees nationwide, including the regions in which we operate. 35 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
These restrictions and other consequences of public health issues may result in significant adverse effects for many different types of businesses, including, among others, those in the hospitality (including hotels and lodging) and restaurant industries, and result in layoffs and furloughs of employees nationwide, including the regions in which we operate. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
As interest rates change, we expect that we will periodically 27 experience “gaps” in the interest rate sensitivities of our assets and liabilities, meaning that either our interest-bearing liabilities (usually deposits and borrowings) will be more sensitive to changes in market interest rates than our interest-earning assets (usually loans and investment securities), or vice versa.
As interest rates change, we expect that we will periodically experience “gaps” in the interest rate sensitivities of our assets and liabilities, meaning that either our interest-bearing liabilities (usually deposits and borrowings) will be more sensitive to changes in market interest rates than our interest-earning assets (usually loans and investment securities), or vice versa.
In addition, we are subject to a wide array of other regulations that govern other aspects of how we conduct our business, such as in the areas of 29 employment and intellectual property. Federal and state legislative and regulatory authorities often change these regulations or adopt new ones.
In addition, we are subject to a wide array of other regulations that govern other aspects of how we conduct our business, such as in the areas of employment and intellectual property. Federal and state legislative and regulatory authorities often change these regulations or adopt new ones.
The issuance of our preferred stock, while providing desirable flexibility in connection with possible acquisitions, financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, a controlling interest in us.
The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions, financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, a controlling interest in us.
As a result, we must make payments on these debt instruments (including the related trust preferred securities) and preferred shares before any dividends can be paid on our common stock and, in the event of bankruptcy, dissolution or liquidation, the holders of the debt and preferred shares must be satisfied before any distributions can be made on our common stock.
As a result, we must make payments on these debt instruments (including the related trust preferred securities) before any dividends can be paid on our common stock and, in the event of bankruptcy, dissolution or liquidation, the holders of the debt must be satisfied before any distributions can be made on our common stock.
Even if these assumptions are adequate, the models themselves may prove to be inadequate or inaccurate because of other flaws in their design or their implementation, including flaws caused by failures in controls, data management, human error or from the reliance on technology.
Even if these assumptions are adequate, the models themselves may prove to be inadequate or inaccurate because of other flaws in their design or their implementation, including those caused by failures in controls, data management, human error or from the reliance on technology.
A downgrade of our credit rating could limit our access to borrowings or increase our borrowing costs. Credit ratings are subject to ongoing review by rating agencies, which consider a number of factors, including our financial strength, performance, prospects and operations as well as factors not under our control.
A downgrade of our credit rating could limit our access to borrowings and increase our borrowing costs. Credit ratings are subject to ongoing review by rating agencies, which consider a number of factors, including our financial strength, performance, prospects and operations as well as factors not under our control.
Although our strategy is expected to evolve as business conditions change, our current strategy is to continue to invest resources in our banking businesses and operations, including the businesses and operations we plan to integrate through any planned acquisitions, and seek to exploit opportunities for cost and revenue synergies.
Although our strategy is expected to evolve as business conditions change, our current strategy is to continue to invest resources in expanding our banking businesses and operations, including the businesses and operations we plan to integrate through any planned acquisitions, and seek to exploit opportunities for cost and revenue synergies.
Any such failure in our analytical or forecasting models could have a material adverse effect on our business, financial condition and results of operations. RISKS FROM CHANGES IN ECONOMIC CONDITIONS AND MONETARY POLICY Inflationary pressures present a potential threat to our results of operations and financial condition.
Any such failure in our analytical or forecasting models could have a material adverse effect on our business, financial condition and results of operations. 25 RISKS FROM CHANGES IN ECONOMIC CONDITIONS AND MONETARY POLICY Inflationary pressures present a potential threat to our results of operations and financial condition.
We may face a competitive disadvantage as a result of our smaller size, more limited geographic diversification and inability to spread costs across broader markets. We may also be affected by the marketplace loosening of credit underwriting standards and structures.
We may face a competitive disadvantage as a result of our relatively smaller size, more limited geographic diversification and inability to spread costs across broader markets. We may also be affected by the marketplace loosening of credit underwriting standards and structures.
Failure to implement effective controls and procedures or circumvention of our controls and procedures could harm our business, results of operations and financial condition or cause us to fail to meet our public reporting obligations. GEOGRAPHIC AND CLIMATE RISKS We are subject to risks of operating in various jurisdictions.
Failure to implement effective controls and procedures or circumvention of our controls and procedures could harm our business, results of operations and financial condition or cause us to fail to meet our public reporting obligations. 31 GEOGRAPHIC AND CLIMATE RISKS We are subject to risks of operating in various jurisdictions.
There have been several instances involving financial services, credit bureaus and consumer-based companies reporting the unauthorized disclosure of client or customer information or the destruction or theft of 24 corporate data, by both private individuals and foreign governments.
There have been several instances involving financial services, credit bureaus and consumer-based companies reporting the unauthorized disclosure of client or customer information or the destruction or theft of corporate data, by both private individuals and foreign governments.
Significant changes in the yield curve may reduce our net interest margin and adversely affect our loan and investment portfolios. The yield curve is a reflection of interest rates applicable to short and long-term debt.
Significant changes in the yield curve may also reduce our net interest margin and adversely affect our loan and investment portfolios. The yield curve is a reflection of interest rates applicable to short- and long-term debt.
Our success in the competitive environment in which we operate requires consistent investment of capital and human resources in innovation, particularly in light of the current “FinTech” environment, in which the financial services industry is undergoing rapid technological changes and financial institutions are investing significantly in evaluating new technologies, such as artificial intelligence, machine learning, blockchain and other distributed ledger technologies, and developing potentially industry-changing new products, services and industry standards.
Our success in the competitive environment in which we operate requires consistent investment of capital and human resources in innovation, particularly in light of the current fintech environment, in which the financial services industry is undergoing rapid technological changes and financial institutions are investing significantly in evaluating new technologies, such as artificial intelligence, machine learning, blockchain and other distributed ledger technologies, and developing potentially industry-changing new products, services and industry standards.
These risks include, without limitation, our inability to do the following: • identify and expand into suitable markets; • identify and acquire suitable sites for new branches and service locations; • identify and execute potential acquisition targets; • develop accurate estimates and judgments to evaluate asset values and credit, operations, management and market risks with respect to an acquired branch or institution, a new branch office or a new market; • realize certain assumptions and estimates to preserve the expected financial benefits of the transaction; • avoid the diversion of our management’s attention from existing operations during the negotiation of a transaction; • manage successful entry into new markets where we have limited or no direct prior experience; • obtain regulatory and other approvals, or obtain such approvals without restrictive conditions; • integrate the acquired business’ operations, clients, and properties quickly and cost-effectively; • manage cultural assimilation risks associated with growth through acquisitions, which can be an often-overlooked and often-critical failure point in mergers; • combine the franchise values of businesses that we acquire with those of ours without significant loss of employees or customers from re-branding and other similar changes; or • retain core clients and key employees.
These risks include, without limitation, our inability to do one or more of the following: • identify and expand into suitable markets; • identify and acquire suitable sites for new branches and service locations; • identify and execute potential acquisition targets; • develop accurate estimates and judgments to evaluate asset values and credit, operations, management and market risks with respect to an acquired branch or institution, a new branch office or a new market; • realize certain assumptions and estimates necessary to preserve the expected financial benefits of the transaction; • avoid the diversion of our management’s attention from existing operations during the negotiation of a transaction; • manage successful entry into new markets where we have limited or no direct prior experience; • obtain regulatory and other approvals, or obtain such approvals without restrictive conditions; • integrate the acquired business’ operations, clients, and properties quickly and cost-effectively; • manage cultural assimilation risks associated with growth through acquisitions, which can be an often-overlooked and often-critical failure point in mergers; • combine the franchise values of businesses that we acquire with those of ours without significant loss of employees or customers from re-branding and other similar changes; or 21 • retain core clients and key employees of any businesses that we acquire.
Under such circumstances, we may be required to access funding from sources such as the Federal Reserve’s discount window in order to manage our liquidity risk. ACCOUNTING AND TAX RISKS The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make significant assumptions, estimates and judgments that affect the financial statements.
Under such circumstances, we may be required to access funding from sources such as the Federal Reserve’s discount window in order to manage our liquidity risk. ACCOUNTING AND TAX RISKS The preparation of our consolidated financial statements in conformity with GAAP requires management to make significant assumptions, estimates and judgments that affect the financial statements.
Future dividends, if any, will be declared and paid at the Board’s discretion and will depend on a number of factors including, among others, asset quality, earnings performance, liquidity and capital requirements. Our principal 33 source of funds used to pay cash dividends on our common and preferred stock is dividends that we receive from the Bank.
Future dividends, if any, will be declared and paid at the Board’s discretion and will depend on a number of factors including, among others, asset quality, earnings performance, liquidity and capital requirements. Our principal source of funds used to pay cash dividends on our common stock is dividends that we receive from the Bank.
If we raise funds by issuing equity securities or instruments that are convertible into equity securities, the percentage ownership of our current common stockholders will be reduced, the new equity securities may have rights and preferences superior to those of our common or outstanding preferred stock, and additional issuances could be at a sales price which is dilutive to current stockholders.
If we raise funds by issuing equity securities or instruments that are convertible into equity securities, the percentage ownership of our current common stockholders will be reduced, the new equity securities may have rights and preferences superior to those of our outstanding common stock, and additional issuances could be at a sales price that is dilutive to current stockholders.
Additionally, if we fail to remain “well-capitalized” our ability to utilize brokered deposits may be restricted. An inability to maintain or raise funds (including the inability to access secondary funding sources) in amounts necessary to meet our liquidity needs would have a substantial negative effect on our liquidity.
Additionally, if we fail to remain “well-capitalized” our ability to utilize funding sources such as brokered deposits may be restricted. An inability to maintain or raise funds (including the inability to access secondary funding sources) in amounts necessary to meet our liquidity needs would have a substantial negative effect on our liquidity.
If that region of the U.S. did not grow or was to experience adversity not shared by other parts of the country, for example the risk of hurricanes in our geographic footprint, we would likely experience adversity to a degree not shared by those competitors which have a broader or different regional footprint.
If that region did not grow or was to experience adversity not shared by other parts of the country, for example the risk of hurricanes in our geographic footprint, we would likely experience adversity to a degree not shared by those competitors which have a broader or different regional footprint.
If loan customers with significant loan balances fail to repay their loans, our results of operations, financial condition and capital levels will suffer. 28 We are exposed to higher credit and concentration risk from our CRE, commercial and industrial and commercial construction lending.
If loan customers with significant loan balances fail to repay their loans, our results of operations, financial condition and capital levels will suffer. 27 We are exposed to higher credit and concentration risk from our CRE, commercial and industrial and commercial construction lending.
We are subject to many banking, deposit, insurance, securities brokerage and underwriting, and consumer lending regulations in addition to the rules applicable to all companies whose securities are publicly traded in the U.S. securities markets. Failure to comply with applicable regulations could result in financial, structural, and operational penalties.
We are subject to many banking, deposit, insurance, and consumer lending regulations in addition to the rules applicable to all companies whose securities are publicly traded in the U.S. securities markets. Failure to comply with applicable regulations could result in financial, structural, and operational penalties.
We may from time to time issue additional senior or subordinated indebtedness or preferred stock that would have to be repaid before our shareholders would be entitled to receive any of our assets. Our stock price can be volatile.
We may also from time to time issue additional senior or subordinated indebtedness or preferred stock that would have to be repaid before our common shareholders would be entitled to receive any of our assets. Our stock price can be volatile.
Widespread outbreaks of communicable diseases and acts of terrorism may cause significant disruption in the international and United States economies and financial markets and could have an adverse effect on our business and results of operations.
Widespread outbreaks of diseases and acts of terrorism may cause significant disruption in the international and United States.S. economies and financial markets and could have an adverse effect on our business and results of operations.
Any failure, interruption or breach in security of these systems could result in disruptions to our accounting, deposit, loan and other systems, and adversely affect our customer relationships. There have been increasing efforts on the part of third parties, including through cyber-attacks, to breach data security at financial institutions or with respect to financial transactions.
Any failure, interruption or breach in security of these systems could result in disruptions to our accounting, deposit, loan and other systems, and adversely affect our customer relationships. There have been increasing efforts on the part of third parties, including through cyberattacks, to breach data security at financial institutions or with respect to financial transactions.
Further general regulation to protect data privacy appears likely, and banking industry regulations might be enlarged as well. 30 LIQUIDITY AND FUNDING RISK Liquidity is essential to our business model and a lack of liquidity, or an increase in the cost of liquidity, could materially impair our ability to fund our operations and jeopardize our results of operation, financial condition and cash flows.
Further general regulation to protect data privacy appears likely, and banking industry regulations might be enlarged as well. 29 LIQUIDITY AND FUNDING RISKS Liquidity is essential to our business model and a lack of liquidity, or an increase in the cost of liquidity, could materially impair our ability to fund our operations and jeopardize our results of operation, financial condition and cash flows.
Our success is also influenced heavily by population growth, income levels, loans and deposits and on stability in real estate values in our markets. To a significant degree our banking business is exposed to economic, regulatory, natural disaster, and other risks that primarily impact the southeastern U.S. states where we do most of our traditional banking business.
Our success is also influenced heavily by population growth, income levels, loans and deposits and on stability in real estate values in our markets. To a significant degree our banking business is exposed to economic, regulatory, natural disaster, and other risks that primarily impact the southeastern region of the United States where we do most of our traditional banking business.
OTHER EXTERNAL RISKS Pandemics and outbreaks of communicable diseases, acts of terrorism and other adverse external events may lead to periods of significant volatility in financial and other markets, and could adversely affect our ability to conduct normal business and could harm our clients, businesses, financial condition and results of operations.
OTHER EXTERNAL RISKS Pandemics and disease outbreaks, acts of terrorism and other adverse external events may lead to periods of significant volatility in financial and other markets, and could adversely affect our ability to conduct normal business and could harm our clients, businesses, financial condition and results of operations.
Moreover, obtaining adequate funding to meet our deposit obligations may be more challenging during periods of elevated prevailing interest rates, such as the present period. Our ability to attract depositors during a time of actual or perceived distress or instability in the marketplace may be limited. Further, interest rates paid for borrowings generally exceed the interest rates paid on deposits.
Moreover, obtaining adequate funding to meet our deposit obligations may be more challenging during periods of elevated prevailing interest rates. Our ability to attract depositors during a time of actual or perceived distress or instability in the marketplace may be limited. Further, interest rates paid for borrowings generally exceed the interest rates paid on deposits.
As of December 31, 2024, approximately 74% of our loan portfolio consisted of commercial loans, including commercial and industrial, equipment financing, commercial construction and CRE mortgage loans. Our commercial borrowers tend to be small to medium-sized businesses. These types of loans are typically larger than residential real estate loans or consumer loans.
As of December 31, 2025, approximately 75% of our loan portfolio consisted of commercial loans, including commercial and industrial, equipment financing, commercial construction and CRE mortgage loans. Our commercial borrowers tend to be small to medium-sized businesses. These types of loans are typically larger than residential real estate loans or consumer loans.
This framework is comprised of various processes, systems and strategies, and is designed to identify, measure, monitor, report and manage the types of risk to which we are subject, including, among others, credit risk, interest rate risk, liquidity risk, legal and regulatory risk, cybersecurity risk, compliance risk, strategic risk, reputational risk and operational risk related to its employees, systems and vendors, among others .
This framework is comprised of various processes, systems and strategies, and is designed to identify, measure, assess, monitor, report and manage the types of risk to which we are subject, including, among others, credit, capital, interest rate, liquidity, legal and regulatory, cybersecurity, compliance, strategic, reputational and operational risks related to our employees, systems and vendors, among others .
Such factors include significant economic trends or events as well as significant international monetary policies and events. Such strategies also can affect the U.S. and world-wide financial systems in ways that may be difficult to predict.
Such factors include significant economic trends or events as well as significant international monetary policies and events. Such strategies also can affect the United States and world-wide financial systems in ways that may be difficult to predict.
The estimate that is consistently one of our most critical is the level of the allowance for credit losses. However, other estimates can be highly significant at discrete times or during periods of varying length. Estimates are made at specific points in time. As actual events unfold, estimates are adjusted accordingly.
The estimate that is consistently one of our most critical is the level of the ACL. However, other estimates can be highly significant at discrete times or during periods of varying length. Estimates are made at specific points in time. As actual events unfold, estimates are adjusted accordingly.
Transition risks may arise from changes in regulations or market preferences toward a low-carbon economy, which in turn could have negative impacts on asset values, results of operations or our reputation or that of our customers and clients.
Transition risks may arise from changes in regulations or market preferences, which in turn could have negative impacts on asset values, results of operations or our reputation or that of our customers and clients.
OPERATIONAL RISKS Fraud is a major, and increasing, operational risk for us and all banks. Deposit and loan fraud continue to be major sources of fraud attempts and loss. The sophistication and methods used to perpetrate fraud continue to evolve as technology changes.
OPERATIONAL RISKS Fraud is a major, and increasing, operational risk for financial institutions. Deposit and loan fraud continue to be major sources of fraud attempts and loss. The sophistication and methods used to perpetrate fraud continue to evolve as technology changes.
This spread may be exacerbated by higher prevailing interest rates. In addition, because our investment securities lose value when interest rates rise, after-tax proceeds resulting from the sale of such assets may be diminished during periods when interest rates are elevated.
This spread may be exacerbated by higher prevailing interest rates, credit ratings, industry pressures or macroeconomic factors. In addition, because our investment securities lose value when interest rates rise, after-tax proceeds resulting from the sale of such assets may be diminished during periods when interest rates are elevated.
During a lapse in funding, such as has occurred during previous federal government “shutdowns”, the SBA may not be able to engage in such interaction. Similarly, loans we make through USDA lending programs may be delayed or adversely affected by lapses in funding for the USDA.
During a lapse in funding, such as the one that occurred during the 2025 federal government “shutdown”, the SBA may not be able to engage in such interaction. Similarly, loans we make through USDA lending programs may be delayed or adversely affected by lapses in funding for the USDA.
Because of significant competitive pressures in our markets and the negative impact of these pressures on our deposit and loan pricing, coupled with the fact that a significant portion of our loan portfolio has variable rate pricing that moves in concert with changes to benchmark rates, our net interest margin may be negatively impacted if these short-term rates continue to decrease and we are unable to lower deposit pricing commensurately.
Additionally, competitor pricing and the resulting negotiations that occur with our customers also impact the rates we collect on loans and the rates we pay on deposits. 26 Because of significant competitive pressures in our markets and the negative impact of these pressures on our deposit and loan pricing, coupled with the fact that a significant portion of our loan portfolio has variable rate pricing that moves in concert with changes to benchmark rates, our net interest margin may be negatively impacted if these short-term rates continue to decrease and we are unable to lower deposit pricing commensurately.
Technology has allowed disruptors to enter traditional banking areas by providing payment and exchange services that compete directly with banks in ways not previously possible. Through digital marketing and service platforms, these disruptors and other banks are making client inroads unrelated to physical presence.
Physical branch utilization has been in decline throughout the industry for many years. Technology has allowed disruptors to enter traditional banking areas by providing payment and exchange services that compete directly with banks in ways not previously possible. Through digital marketing and service platforms, these disruptors and other banks are making client inroads unrelated to physical presence.
If our risk management framework is not effective, we could suffer unexpected losses and become subject to litigation, negative regulatory 25 consequences, or reputational damage among other adverse consequences, any of which could result in our business, financial condition, results of operations or prospects being materially adversely affected. Competition for talent is substantial and increasing.
If our risk management framework is not effective, we could suffer unexpected losses and become subject to litigation, negative regulatory consequences, or reputational damage among other adverse consequences, any of which could result in our business, financial condition, results of operations or prospects being materially adversely affected. We may not be able to attract and retain management-level and specialized talent.
Replacing these third-party vendors could also create significant delay and expense. Because our information technology and telecommunications systems interface with and depend on third-party systems, we could experience service denials if demand for such services exceeds capacity or such third-party systems fail or experience interruptions.
Because our information technology and telecommunications systems interface with and depend on third-party systems, we could experience service denials if demand for such services exceeds capacity or such third-party systems fail or experience interruptions.
Our business is highly dependent on the successful and uninterrupted functioning of our information technology and telecommunications systems, third-party accounting systems and mobile and online banking platforms. We outsource many of our major systems, such as data processing, loan servicing and deposit processing systems and online banking platforms.
Our business is highly dependent on the successful and uninterrupted functioning of our information technology and telecommunications systems, third-party accounting systems and mobile and online banking platforms. We outsource many of our major systems, such as data processing, loan servicing, deposit processing and online banking platforms. While we have selected these vendors carefully, we do not control their actions.
If the Bank is not permitted to pay cash dividends to the Holding Company, it is unlikely that we would be able to continue to pay dividends on our common stock or to pay interest on our indebtedness.
If the Bank is not permitted to pay cash dividends to the Holding Company, it is unlikely that we would be able to continue to pay dividends on our common stock or to pay interest on our indebtedness. 32 Holders of our indebtedness have rights that are senior to those of our common shareholders.
Our network, and the systems of parties with whom we contract, could be vulnerable to unauthorized access, ransomware attacks, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches. Cyber threats are rapidly evolving and we may not be able to anticipate or prevent all such attacks.
Our network, and the systems of parties with whom we contract, could be vulnerable to unauthorized access, ransomware attacks, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches.
If the trend persists, the deficit could create inflationary pressure, which may be detrimental to the U.S. economy, and unemployment rates could 26 suffer if deficit reduction measures are implemented. Additionally, the 2025 incoming federal administration may deploy new trading strategies, such as tariffs on U.S. imports, which may create economic volatility.
If the trend persists, the deficit could create inflationary pressure, which may be detrimental to the U.S. economy, and unemployment rates could suffer if deficit reduction measures are implemented. Additionally, the current federal administration has deployed and may continue to deploy new trading strategies, which have created and may continue to create economic volatility.
Although we model multiple scenarios assuming differing interest rate curves and economic events, it is not possible for our modeling to anticipate every scenario or how one assumption may be influenced by changes in another assumption.
Although we model multiple scenarios assuming differing interest rate curves and economic events, it is not possible for our modeling to anticipate every scenario or how one assumption may be influenced by changes in another assumption. Similarly, models used to estimate credit losses rely on various assumptions that may not ultimately result in accurate loss predictions.
If sustained or repeated, a system failure or service denial could result in a deterioration of our ability to process new and renewed loans, gather deposits and provide customer service, compromise our ability to operate effectively, damage our reputation, result in a loss of customer business and/or subject us to additional regulatory scrutiny and possible financial liability, any of which could have a material adverse effect on our financial condition and results of operations.
It could also compromise our ability to operate effectively, damage our reputation, result in a loss of customer business and/or subject us to additional regulatory scrutiny and possible financial liability, any of which could have a 24 material adverse effect on our financial condition and results of operations.
These models reflect assumptions that may not be accurate, particularly in times of market stress or other unforeseen circumstances. If the assumptions used in our model for measuring interest sensitivity and asset-liability management fail to appropriately anticipate customer response to changing interest rates, our earnings and / or liquidity position could be threatened.
If the assumptions used in our model for measuring interest sensitivity and asset-liability management fail to appropriately anticipate customer response to changing interest rates, our earnings and / or liquidity position could be threatened.
These markets may have different or weaker performance than other areas of the country and our portfolio may be more negatively impacted than a financial services company with wider geographic diversity. See the section captioned “Loans” in the “Balance Sheet Review” section of Part II, Item 7.
These markets may have different or weaker performance than other areas of the country and our portfolio may be more negatively impacted than a financial services company with wider geographic diversity. See the section captioned “Credit Risk Management” section of Part II, Item 7. MD&A of this Report for further discussion related to commercial and industrial, construction and CRE loans.
We may be required to spend significant capital and other resources to protect against the threat of security breaches and computer viruses, or to alleviate problems caused by security breaches or viruses.
If we fail to assess and identify cybersecurity risks associated with acquisitions and new initiatives, we may become increasingly vulnerable to such risks. We may be required to spend significant capital and other resources to protect against the threat of security breaches and computer viruses, or to alleviate problems caused by security breaches or viruses.
In recent years, the United States generally and the regions in which we operate specifically have experienced, for the first time in decades, significant inflationary pressures, evidenced by higher gas prices, higher food prices and higher prices on other consumer items.
In recent years, the United States generally and the regions in which we operate specifically have experienced significant inflationary pressures, evidenced by higher gas prices, higher food prices and higher prices on other consumer items. During 2025, the effects of inflation continued to present a risk to our business and our customers.
In addition, a security breach could also subject us to additional regulatory scrutiny, expose us to civil litigation and possible financial liability and cause reputational damage.
In addition, a security breach could also subject us to additional regulatory scrutiny, expose us to civil litigation and possible financial liability and cause reputational damage. Cyberattacks are increasing in number and sophistication and we may be unable to anticipate or prevent such attacks.
If the downgrade is due to lower earnings performance, elevated credit losses, capital deficiencies or other factors, collateral requirements for secured borrowings could also be elevated which could further limit our borrowing capacity and increase our borrowing costs. 31 The proportion of our deposit account balances that exceed FDIC insurance limits may expose us to enhanced liquidity risk in times of financial distress.
If the downgrade is due to lower earnings performance, elevated credit losses, capital deficiencies or other factors, collateral requirements for secured borrowings could also be elevated which could further limit our borrowing capacity and increase our borrowing costs.
Although we take protective measures and endeavor to modify these systems as circumstances warrant, the advances in technology increase the risk of information security breaches. We provide our customers the ability to bank remotely, including over the internet or through their mobile device. The secure transmission of confidential information is a critical element of remote and mobile banking.
We provide our customers the ability to bank remotely, including over the internet or through their mobile device. The secure transmission of confidential information is a critical element of remote and mobile banking.
While inflationary pressure has lessened during 2024, the effects of inflation continue to present a risk to our business and our customers. Inflation represents a loss in purchasing power because the value of investments often does not keep up with inflation and erodes the purchasing power of money and the potential value of investments over time.
Inflation represents a loss in purchasing power because the value of investments often does not keep up with inflation and erodes the purchasing power of money and the potential value of investments over time.
If we are unable to provide enhancements and new features and integrations for our existing platform, develop new products that achieve market acceptance, or innovate quickly enough to keep pace with these rapid technological developments, our business could be harmed.
If we are unable to provide enhancements and new features and integrations for our existing platform, develop new products that achieve market acceptance, or innovate quickly enough to keep pace with these rapid technological developments, our business could be harmed. 22 Our traditional approach to customer service, which is highly effective when executed in a physical branch with in-person interactions, may be less effective as customer habits and preferences evolve.
Payments of the principal and interest on the senior debentures, subordinated debentures and the subordinated debentures accompanying the trust preferred securities and dividends on the preferred stock are senior to payments with respect to shares of our common stock. We also conditionally guarantee payments of the principal and interest on the trust preferred securities.
At December 31, 2025, we had outstanding subordinated debentures, trust preferred securities and accompanying subordinated debentures totaling $120 million. Payments of the principal and interest on the subordinated debentures, including those accompanying the trust preferred securities are senior to payments with respect to shares of our common stock.
We rely on information technology and telecommunications systems and certain third-party service providers, the operational functions of which may experience disruptions that could adversely affect us and over which we may have limited or no control.
We may be adversely affected by disruptions in information technology and telecommunications systems on which we rely, including those of third-party service providers where we may have limited or no control over operational functionality.
It is also common for other financial institutions to deploy this strategy as well and there is a risk that teams of our employees may be recruited by other financial institutions. Additionally, operating our technology systems requires employees with specialized skills that are not readily available in the general employee candidate pool.
It is also common for other financial institutions to deploy this strategy as well and there is a risk that teams of our employees may be recruited by other financial institutions.
Certain new technologies, such as use of artificial intelligence, present new and significant cybersecurity safety risks that must be analyzed and addressed before implementation. If we fail to assess and identify cybersecurity risks associated with acquisitions and new initiatives, we may become increasingly vulnerable to such risks.
Certain new technologies, such as the use of artificial intelligence, present new and significant cybersecurity safety risks that must be analyzed and addressed before implementation.
Our reputation is affected principally by our business practices and how those practices are perceived and understood by others. Negative public opinion could adversely affect our ability to keep and attract customers and expose us to adverse legal and regulatory consequences.
Negative public opinion could adversely affect our ability to keep and attract customers and expose us to adverse legal and regulatory consequences.
Among other things, damage can occur due to outright theft or extortion of our funds, fraud or identity theft perpetrated on clients, or adverse publicity associated with a breach and its potential effects.
Among other things, damage can occur due to theft or extortion of funds, fraud or identity theft perpetrated on clients, or adverse publicity associated with a breach and its potential effects. Perpetrators potentially can be associates, clients, and certain vendors, all of whom legitimately have access to some portion of our systems, as well as outsiders with no legitimate access.
General market fluctuations, including real or anticipated changes in the strength of the local economy; industry factors and general economic and political conditions and events, such as economic slowdowns or recessions; interest rate changes, oil price volatility or credit loss trends could also cause our stock price to decrease regardless of our operating results. 34 Our corporate organizational documents and the provisions of Georgia law to which we are subject contain certain provisions that could have an anti-takeover effect and may delay, make more difficult or prevent an attempted acquisition of United that you may favor.
General market fluctuations, including real or anticipated changes in the strength of the local economy; industry factors and general economic and political conditions and events, such as economic slowdowns or recessions; interest rate changes, oil price volatility or credit loss trends could also cause our stock price to decrease regardless of our operating results.
REPUTATION RISKS Our ability to conduct and grow our businesses, and to obtain and retain clients, is highly dependent upon external perceptions of our business practices and financial stability. Our reputation is a key asset for us. Reputation risk, or the risk to our earnings, liquidity and capital from negative public opinion, is inherent in our business.
See Risks Associated From Changes in Economic Conditions and Monetary Policy within this section of the Report for additional information. REPUTATION RISKS Our ability to conduct and grow our businesses, and to obtain and retain clients, is highly dependent upon external perceptions of our business practices and financial stability. Our reputation is a key asset for us.
Moreover, much of our organic loan growth in recent years was the result of our ability to attract experienced financial services professionals who have been able to attract customers from other financial institutions. We anticipate deploying a similar hiring strategy in the future.
In recent years, our cost of hiring and retaining top revenue-producing talent has increased, and that trend is likely to continue. Moreover, much of our organic loan growth in recent years was the result of our ability to attract experienced financial services professionals who have been able to attract customers from other financial institutions.
MD&A of this Report for further discussion related to commercial and industrial, construction and CRE loans. If our allowance for credit losses is not large enough to cover losses in our loan portfolio, our results of operations and financial condition could be materially and adversely affected.
If our allowance for credit losses is not large enough to cover losses in our loan portfolio, our results of operations and financial condition could be materially and adversely affected. We maintain an ACL, which is a reserve established through a provision for credit losses charged to expense.
While we provide a large number of services remotely (online and mobile) and technology has helped us reduce costs and improve service, it has also weakened traditional geographic and relationship ties. 23 The nature of technology-driven disruption to our industry is changing, in some cases seeking to displace traditional financial service providers rather than merely enhance traditional services or their delivery.
The nature of technology-driven disruption to our industry is changing, in some cases seeking to displace traditional financial service providers rather than merely enhance traditional services or their delivery.
The level of the allowance reflects our continuing evaluation of factors including current economic forecasts, historical loss experience, the volume and types of loans, and specific credit risks.
It is possible that CECL may increase the cost of lending in the industry and result in slower loan growth and lower levels of net income. The level of the allowance reflects our continuing evaluation of factors including current economic forecasts, historical loss experience, the volume and types of loans, and specific credit risks.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe underlying controls of our cyber risk management program are based on recognized best practices and standards for cybersecurity and information technology, including frameworks such as the Center for Internet Security’s Critical Security Controls and the Federal Financial Institutions Examination Council’s Cybersecurity Assessment. We periodically engage third-parties to assess our cyber risk program and technical controls.
Biggest changeWe believe our cyber risk management program is grounded in globally recognized best practices and standards, incorporating frameworks such as the Center for Internet Security’s Critical Security Controls, which provide prioritized, actionable safeguards to defend against common cyber threats, and the Cyber Risk Institute Profile, a standardized assessment framework for the financial sector built on the NIST Cybersecurity Framework.
Banks’ service providers are required under that rule to notify any affected bank to or on behalf of which the service provider provides services “as soon as possible” after determining that it has experienced an incident that materially disrupts or degrades, or is reasonably likely to materially disrupt or degrade, covered services provided to such bank for as much as four hours.
Banks’ service providers are required under that rule to notify any affected bank to or on behalf of which the service provider provides services “as soon as possible” after determining that it has 34 experienced an incident that materially disrupts or degrades, or is reasonably likely to materially disrupt or degrade, covered services provided to such bank for as much as four hours.
That program, which is designed to identify, assess, manage, mitigate, and respond to cybersecurity threats, is integrated within our overall enterprise risk management and business continuity frameworks. We employ an in-depth, layered, defensive approach that leverages people, 36 processes and technology to manage and maintain cybersecurity controls.
That program, which is designed to identify, assess, manage, mitigate, and respond to cybersecurity threats, is integrated within our overall enterprise risk management and business continuity frameworks. We employ an in-depth, layered, defensive approach that leverages people, processes and technology to manage and maintain cybersecurity controls.
The Risk Committee receives regular updates on the status of our information security program, penetration testing results, infrastructure assessments, threat environment, security operations, operational events, vendor and supply chain security, and application/data security. On an annual basis, the CISO presents a cybersecurity program update to the Risk Committee.
The Risk Committee receives regular updates on the status of our information security program, penetration testing results, infrastructure assessments, threat environment, security operations, operational events, vendor and supply chain security, and application/data security. On an annual basis, the CISO presents a cybersecurity program update to the Risk Committee. 36
The internal business owners of hosted applications, depending upon the level of risk, are required to provide a report as to their controls ( e.g., a System and Organization Controls (SOC) 2 or ISO 27001 (Information and Security Certification) or similar report).
The internal business owners of hosted applications, depending upon the level of risk, are required to provide a report as to 35 their controls ( e.g., a System and Organization Controls (SOC) 2 or ISO 27001 (Information and Security Certification) or similar report).
Specifically, the rule requires banking organizations to notify their primary federal regulator as soon as possible and no later than 36 hours after the discovery of a “computer-security incident” that rises to the level of a “notification incident” as those terms are defined in the rule.
Federal financial regulatory agencies require banking organizations and their service providers to notify their primary federal regulator as soon as possible and no later than 36 hours after the discovery of a “computer-security incident” that rises to the level of a “notification incident” as those terms are defined in the rule.
Our CISO is informed about and monitors prevention, detection, mitigation and remediation efforts through regular communication and reporting from professionals in the information security team, several of whom have extensive records of service in financial institutions and cybersecurity.
Governance Our cybersecurity program is headed by our Chief Information Security Officer (CISO), who reports to our Chief Information Officer. Our CISO is informed about and monitors prevention, detection, mitigation and remediation efforts through regular communication and reporting from professionals in the information security team, several of whom have extensive records of service in financial institutions and cybersecurity.
Other members of 37 his team also hold CISSP certifications as well as CompTIA Security+, SANS Institute Cloud Security Essentials, SANS Institute GIAC Certified Enterprise Defender, SANS Institute Security Awareness Professional, Certified Information Security Manager, GIAC Certified Incident Handler, Certified in Risk and Information Systems Control, and GIAC Cyber Threat Intelligence certifications.
Other members of our Information Security, Information Technology and Enterprise Risk teams possess respected security certifications such as CISSP, CompTIA Security+, SANS Institute Cloud Security Essentials, GIAC Certified Enterprise Defender, SANS Institute Security Awareness Professional, Certified Information Security Manager, GIAC Certified Incident Handler, Certified in Risk and Information Systems Control, and GIAC Cyber Threat Intelligence certifications, among others.
For example, a financial institution’s management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption and maintenance of the institution’s operations after a cyberattack involving destructive malware. A rule issued by federal financial regulatory agencies imposes upon banking organizations and their service providers notification requirements for significant cybersecurity incidents.
For example, a financial institution’s management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption and maintenance of the institution’s operations after a cyberattack involving destructive malware.
To date, however, we have not experienced any previous cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. Governance Our cybersecurity program is headed by our Chief Information Security Officer (CISO), who reports to our Chief Information Officer.
To date, however, we have not experienced any previous cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. To strengthen our organizational resilience and mitigate the likelihood and impact of future cybersecurity incidents, we routinely conduct structured tabletop exercises tailored for both technical teams and management audiences.
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Our leveraging of these proven models is intended to ensure a comprehensive, risk-based approach that strengthens resilience, streamlines compliance, and supports continuous improvement across our organization. We periodically engage third parties to assess our cyber risk program and technical controls.
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These exercises help validate our response processes, improve cross-functional coordination, and ensure readiness across all levels of the organization. In addition, we maintain an active retainer with a qualified digital forensics firm, enabling rapid investigative support when needed, and we leverage access to specialized cyber coaches provided through our cyber insurance carrier to further enhance our preparedness and response capabilities.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeFor many years, branch usage by clients has slowly declined, and for many years we have slowly consolidated branch locations in response to changing utilization patterns. We expect that long-term trend to continue. We consider our properties to be suitable and adequate for operating our banking business.
Biggest changeFor many years, branch usage by clients has slowly declined, and as a result, we have slowly consolidated branch locations in response to changing utilization patterns. We expect that long-term trend to continue. We consider our properties to be suitable and adequate for operating our banking business.
ITEM 2. PROPERTIES The Holding Company’s principal offices and the Bank’s headquarters, which we own, are located at 200 East Camperdown Way, Greenville, South Carolina. As of December 31, 2024, we operated 199 banking offices located throughout Georgia, South Carolina, North Carolina, Tennessee, Florida and Alabama.
ITEM 2. PROPERTIES The Holding Company’s principal offices and the Bank’s headquarters, which we own, are located at 200 East Camperdown Way, Greenville, South Carolina. As of December 31, 2025, we operated 199 banking offices located throughout Georgia, South Carolina, North Carolina, Tennessee, Florida and Alabama.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS In the ordinary course of operations, we are parties to various legal proceedings and periodic regulatory examinations and investigations. There are no material pending legal proceedings to which we or any of our properties are subject. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS In the ordinary course of operations, we are parties to various legal proceedings and periodic regulatory examinations and investigations. There are no material pending legal proceedings to which we or any of our properties are subject. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 37 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR UNITED’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stock. Effective August 6, 2024, United transferred the listing of its securities to the NYSE. Our common shares now trade under the symbol “UCB” and our preferred Series I depositary shares trade under the symbol UCB PRI.
Biggest changeITEM 5. MARKET FOR UNITED’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stock. Our common shares trade on the NYSE under the symbol “UCB”. At January 31, 2026, there were 9,075 record shareholders of United’s common stock. Dividends.
Additional information regarding dividends is included in this Report in Note 1 to our consolidated financial statements in Part II Item 8 Financial Statements and Supplementary Data, under the heading of “Supervision and Regulation” in Part I Item 1. Business and under the heading “Capital Resources and Dividends” in Part II, Item 7. MD&A.
Additional information regarding dividends is included in this Report in Note 1 to our consolidated financial statements in Part II, Item 8. Financial Statements and Supplementary Data and under the heading of “Supervision and Regulation” in Part I, Item 1. Business. Share Repurchases .
Set forth below is a line graph comparing the yearly percentage change in the cumulative total shareholder return on our common stock against the cumulative total return on the Nasdaq Stock Market (U.S. Companies) Index, the NYSE Index and the KBW Nasdaq Regional Banking Index for the five-year period commencing December 31, 2019 and ending on December 31, 2024.
Set forth below is a line graph comparing the yearly percentage change in the cumulative total shareholder return on our common stock to the cumulative total returns on the NYSE Index and the KBW Nasdaq Regional Banking Index for the five-year period commencing December 31, 2020 and ending on December 31, 2025.
We currently intend to continue to pay comparable quarterly cash dividends on our common stock, subject to approval by our Board, although we may elect not to pay dividends or to change the amount of such dividends.
Our Board declared cash dividends totaling $0.98 and $0.94 per share on our common stock in 2025 and 2024, respectively. We currently intend to continue to pay comparable quarterly cash dividends on our common stock, subject to approval by our Board, although we may elect not to pay dividends or to change the amount of such dividends.
Cumulative Total Return* 2019 2020 2021 2022 2023 2024 United Community Banks, Inc. $ 100 $ 95 $ 123 $ 119 $ 107 $ 122 NYSE Index 100 104 123 109 121 137 Nasdaq Stock Market (U.S.) Index 100 144 174 117 167 215 KBW Nasdaq Regional Banking Index 100 88 117 106 102 112 * Assumes $100 invested on December 31, 2019 in our common stock and above noted indexes.
Cumulative Total Return* 2020 2021 2022 2023 2024 2025 United Community Banks, Inc. $ 100 $ 129 $ 125 $ 112 $ 128 $ 128 NYSE Index 100 118 105 116 131 151 KBW Nasdaq Regional Banking Index 100 133 121 116 127 131 * Assumes $100 invested on December 31, 2020 in our common stock and above noted indexes.
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Prior to listing on the NYSE, United’s securities traded on the Nasdaq Global Select Market. At January 31, 2025, there were 9,499 record shareholders of United’s common stock. Dividends. Our Board declared cash dividends totaling $0.94 and $0.92 per share on our common stock in 2024 and 2023, respectively.
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The following table contains information regarding purchases of our common stock made during the quarter ended December 31, 2025 by or on behalf of United or any “affiliated purchaser,” as defined by Rule 10b-18(a)(3) of the Exchange Act: (Dollars in thousands, except for per share amounts) Total Number of Shares Purchased Average Price Paid per Share (1)(2) 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 (2)(3) October 1, 2025 - October 31, 2025 — $ — — $ 86,058 November 1, 2025 - November 30, 2025 1,003,649 29.84 1,003,649 56,059 December 1, 2025 - December 31, 2025 — — — 56,059 Total 1,003,649 $ — 1,003,649 (1) Excludes commissions.
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Securities Authorized for Issuance under Equity Compensation Plans. See Part III, Item 12 for information relating to compensation plans under which United’s equity securities are authorized for issuance. 38 Share Repurchases .
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(2) Excludes excise tax on share repurchases. (3) Under United’s 2025 common stock repurchase program, which expired on December 31, 2025, management was authorized to repurchase up to $100 million of its common stock.
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We made no common stock or preferred stock repurchases during the quarter ended December 31, 2024 by or on behalf of United or any “affiliated purchaser,” as defined by Rule 10b-18(a)(3) of the Exchange Act. Performance Graph.
Added
Under the program, shares may be repurchased in open market transactions or in privately negotiated transactions, from time to time, subject to market conditions, including transactions outside the safe harbor provided by Exchange Act Rule 10b-18 (but nevertheless adhering to Rule 10b-18’s requirements).
Removed
This year, we added the NYSE Index to the performance graph below because we transferred the listing of our securities from the Nasdaq Global Select Market to the NYSE during the year. We intend to omit the Nasdaq Stock Market (U.S.) Index from the performance graph in future years.
Added
The repurchase program may be modified, suspended or discontinued at any time at the Company’s discretion without prior notice, and does not commit the Company to repurchase shares of its common stock.
Added
The actual number and value of the shares to be purchased will be determined by the Company at its discretion, and will depend on a number of factors including the market price of United’s common stock, general market and economic conditions, the availability of alternative investment opportunities and other factors the Company deems appropriate.
Added
In the fourth quarter of 2025, the Board approved the renewal of United’s common stock repurchase program for 2026, authorizing the repurchase of up to $100 million from January 1, 2026 through December 31, 2026. 38 Performance Graph.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

86 edited+89 added−123 removed29 unchanged
Biggest changeTable 1 (Continued) - Non-GAAP Performance Measures Reconciliation Selected Financial Information For the Years Ended December 31, (dollars in thousands, except per share data) 2024 2023 2022 Noninterest income reconciliation Noninterest income (GAAP) $ 124,756 $ 75,483 $ 137,707 Loss on sale of manufactured housing loans 27,209 — — Gain on lease termination (2,400) — — Bond portfolio restructuring loss — 51,689 — Noninterest income - operating $ 149,565 $ 127,172 $ 137,707 Noninterest expenses reconciliation Noninterest expenses (GAAP) $ 578,167 $ 571,273 $ 470,149 Loss on FinTrust (goodwill impairment) (5,100) — — FDIC special assessment (1,736) (9,995) — Merger-related and other charges (8,623) (27,210) (19,375) Noninterest expenses - operating $ 562,708 $ 534,068 $ 450,774 Net income reconciliation Net income (GAAP) $ 252,397 $ 187,544 $ 277,472 Loss on sale of manufactured housing loans 27,209 — — Bond portfolio restructuring loss — 51,689 — Gain on lease termination (2,400) — — Loss on FinTrust (goodwill impairment) 5,100 — — FDIC special assessment 1,736 9,995 — Merger-related and other charges 8,623 27,210 19,375 Income tax benefit of non-operating items (8,702) (21,489) (4,246) Net income - operating $ 283,963 $ 254,949 $ 292,601 Diluted income per common share reconciliation Diluted income per common share (GAAP) $ 2.04 $ 1.54 $ 2.52 Loss on sale of manufactured housing loans 0.18 — — Bond portfolio restructuring loss — 0.33 — Gain on lease termination (0.02) — — Loss on FinTrust (goodwill impairment) 0.03 — — FDIC special assessment 0.01 0.06 — Merger-related and other charges 0.06 0.18 0.14 Diluted income per common share - operating $ 2.30 $ 2.11 $ 2.66 Book value per common share reconciliation Book value per common share (GAAP) $ 27.87 $ 26.52 $ 24.38 Effect of goodwill and other intangibles (7.87) (8.13) (7.25) Tangible book value per common share $ 20.00 $ 18.39 $ 17.13 Return on tangible common equity reconciliation Return on common equity (GAAP) 7.07 % 5.34 % 9.54 % Loss on sale of manufactured housing loans 0.61 — — Bond portfolio restructuring loss — 1.15 — Gain on lease termination (0.05) — — Loss on FinTrust (goodwill impairment) 0.11 — — FDIC special assessment 0.04 0.22 — Merger-related and other charges 0.19 0.62 0.53 Return on common equity - operating 7.97 7.33 10.07 Effect of goodwill and other intangibles 3.45 3.30 3.97 Return on tangible common equity - operating 11.42 % 10.63 % 14.04 % 45 UNITED COMMUNITY BANKS, INC.
Biggest changeAdditional information on the loan portfolio and ACL can be found in the sections of MD&A titled “Asset Quality and Risk Elements” and “Nonperforming Assets.” Note 1 to the consolidated financial statements includes additional information on accounting policies related to the ACL. 61 Table 21 - Non-GAAP Performance Measures Reconciliation Selected Financial Information For the Years Ended December 31, (dollars in thousands, except per share data) 2025 2024 2023 Noninterest income reconciliation Noninterest income (GAAP) $ 154,045 $ 124,756 $ 75,483 Loss on sale of manufactured housing loans — 27,209 — Gain on lease termination — (2,400) — Bond portfolio restructuring loss — — 51,689 Noninterest income - operating $ 154,045 $ 149,565 $ 127,172 Noninterest expense reconciliation Noninterest expense (GAAP) $ 591,934 $ 578,167 $ 571,273 Loss on FinTrust including goodwill impairment — (5,100) — FDIC special assessment — (1,736) (9,995) Merger-related and other charges (10,204) (8,623) (27,210) Noninterest expense - operating $ 581,730 $ 562,708 $ 534,068 Net income reconciliation Net income (GAAP) $ 328,095 $ 252,397 $ 187,544 Loss on sale of manufactured housing loans — 27,209 — Bond portfolio restructuring loss — — 51,689 Gain on lease termination — (2,400) — Loss on sale of FinTrust, including goodwill impairment — 5,100 — FDIC special assessment — 1,736 9,995 Merger-related and other charges 10,204 8,623 27,210 Income tax benefit of non-operating items (2,212) (8,702) (21,489) Net income - operating $ 336,087 $ 283,963 $ 254,949 Diluted income per common share reconciliation Diluted income per common share (GAAP) $ 2.62 $ 2.04 $ 1.54 Loss on sale of manufactured housing loans — 0.18 — Deemed dividend on preferred stock redemption 0.03 — — Bond portfolio restructuring loss — — 0.33 Gain on lease termination — (0.02) — Loss on sale of FinTrust, including goodwill impairment — 0.03 — FDIC special assessment — 0.01 0.06 Merger-related and other charges 0.06 0.06 0.18 Diluted income per common share - operating $ 2.71 $ 2.30 $ 2.11 Book value per common share reconciliation Book value per common share (GAAP) $ 30.17 $ 27.87 $ 26.52 Effect of goodwill and other intangibles (7.93) (7.87) (8.13) Tangible book value per common share $ 22.24 $ 20.00 $ 18.39 Return on tangible common equity reconciliation Return on common equity (GAAP) 9.12 % 7.07 % 5.34 % Loss on sale of manufactured housing loans — 0.61 — Deemed dividend on preferred stock redemption 0.09 — — Bond portfolio restructuring loss — — 1.15 Gain on lease termination — (0.05) — Loss on sale of FinTrust, including goodwill impairment — 0.11 — FDIC special assessment — 0.04 0.22 Merger-related and other charges 0.23 0.19 0.62 Return on common equity - operating 9.44 7.97 7.33 Effect of goodwill and other intangibles 3.90 3.45 3.30 Return on tangible common equity - operating 13.34 % 11.42 % 10.63 % 62 Table 21 - Non-GAAP Performance Measures Reconciliation Selected Financial Information For the Years Ended December 31, (dollars in thousands, except per share data) 2025 2024 2023 Return on assets reconciliation Return on assets (GAAP) 1.17 % 0.90 % 0.68 % Loss on sale of manufactured housing loans — 0.08 — Bond portfolio restructuring loss — — 0.15 Gain on lease termination — (0.01) — Loss on sale of FinTrust, including goodwill impairment — 0.02 — FDIC special assessment — 0.01 0.03 Merger-related and other charges 0.03 0.02 0.08 Return on assets - operating 1.20 % 1.02 % 0.94 % Efficiency ratio reconciliation Efficiency ratio (GAAP) 55.46 % 60.24 % 60.09 % Loss on sale of manufactured housing loans — (1.63) — Gain on lease termination — 0.15 — Loss on sale of FinTrust, including goodwill impairment — (0.53) — FDIC special assessment — (0.18) (1.05) Merger-related and other charges (0.95) (0.90) (2.87) Efficiency ratio - operating 54.51 % 57.15 % 56.17 % Tangible common equity to tangible assets reconciliation Equity to total assets (GAAP) 12.99 % 12.38 % 11.95 % Effect of goodwill and other intangibles (3.07) (3.09) (3.27) Effect of preferred equity — (0.32) (0.32) Tangible common equity to tangible assets 9.92 % 8.97 % 8.36 % ITEM 7A.
For example, our ACL model is particularly sensitive to our recent charge-off experience and changes in the forecasted unemployment rate. Although management believes its process for determining the allowance adequately considers all the potential factors that could potentially result in credit losses, the process includes subjective elements and is susceptible to significant change.
For example, our ACL model is particularly sensitive to our recent charge-off experience and changes in the forecasted unemployment rate. Although 60 management believes its process for determining the allowance adequately considers all the potential factors that could potentially result in credit losses, the process includes subjective elements and is susceptible to significant change.
Management evaluates each customer’s creditworthiness on a case-by-case basis and the amount of the collateral, if deemed necessary, is based on the credit evaluation. Collateral held varies, but may include unimproved and improved real estate, certificates of deposit, personal property or other acceptable collateral.
Management evaluates each customer’s creditworthiness on a case-by-case basis and the amount of the collateral, if deemed necessary, is based on 56 the credit evaluation. Collateral held varies, but may include unimproved and improved real estate, certificates of deposit, personal property or other acceptable collateral.
Under the risk-based capital guidelines of Basel III, assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories according to the obligor, or, if relevant, the guarantor or the nature of the collateral.
Regulatory Capital Under the risk-based capital guidelines of Basel III, assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories according to the obligor, or, if relevant, the guarantor or the nature of the collateral.
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.
Asset Quality 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.
Changes in the economic forecast could significantly affect estimated expected credit losses and lead to materially different amounts from one period to the next. At December 31, 2024, we used a baseline economic forecast in our ACL calculation that was generally consistent with economists’ consensus.
Changes in the economic forecast could significantly affect estimated expected credit losses and lead to materially different amounts from one period to the next. At December 31, 2025, we used a baseline economic forecast in our ACL calculation that was generally consistent with economists’ consensus.
(4) Net interest margin is taxable equivalent net interest revenue divided by average interest-earning assets. 48 The following table shows the relative effect on net interest revenue resulting from changes in the average outstanding balances (volume) of interest-earning assets and interest-bearing liabilities and the rates we earned and paid on such assets and liabilities.
(4) Net interest margin is taxable equivalent net interest revenue divided by average interest-earning assets. 44 The following table shows the relative effect on net interest revenue resulting from changes in the average outstanding balances (volume) of interest-earning assets and interest-bearing liabilities and the rates we earned and paid on such assets and liabilities.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and accompanying notes. The discussion of the components of our results of operations focuses on financial trends and events occurring between 2023 and 2024.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and accompanying notes. The discussion of the components of our results of operations focuses on financial trends and events occurring between 2024 and 2025.
For additional information related to financial trends between 2023 and 2022, please see the information under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 23, 2024, which information under that caption is incorporated herein by this reference.
For additional information related to financial trends between 2024 and 2023, please see the information under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 27, 2025, which information under that caption is incorporated herein by this reference.
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.
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 21 of MD&A.
Overview We offer a wide array of commercial and consumer banking services and investment advisory services, which as of December 31, 2024, was comprised of 199 banking offices throughout Georgia, South Carolina, North Carolina, Tennessee, Florida and Alabama. Our equipment finance and SBA/USDA lending businesses operate throughout the United States.
Executive Overview and Results of Operations Overview We offer a wide array of commercial and consumer banking services and investment advisory services, which as of December 31, 2025, was comprised of 199 banking offices throughout Georgia, South Carolina, North Carolina, Tennessee, Florida and Alabama. Our equipment finance and SBA/USDA lending businesses operate throughout the United States.
Operating performance measures include “noninterest income - operating”, “noninterest expenses - operating”, “net income – operating,” “diluted income per common share – operating,” “return on common equity – operating,” “return on tangible common equity – operating,”, “tangible book value per common share”, “return on assets – operating”, “efficiency ratio – operating” and “tangible common equity to tangible assets.” Management has developed internal processes 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.
Operating performance measures include “noninterest income - operating”, “noninterest expense - operating”, “net income – operating,” “diluted income per common share – operating,” “return on common equity – operating,” “return on tangible common equity – operating,” “return on assets – operating,” and “efficiency ratio – operating.” Management has developed internal processes 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.
The FTE adjustments totaled $4.29 million, $4.17 million, and $4.81 million, respectively, for 2024, 2023, and 2022. The tax rate used to calculate the adjustment was 25% in 2024 and 26% in 2023 and 2022, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
The FTE adjustments totaled $4.11 million, $4.29 million, and $4.17 million, respectively, for 2025, 2024, and 2023. The tax rate used to calculate the adjustment was 25% in 2025 and 2024 and 26% in 2023, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
To provide additional context regarding the sensitivity of the ACL, we simulated our ACL process while considering a more pessimistic forecast of expected economic outcomes. In this downside scenario, the unemployment rate is expected to peak at 7.1% in 2025 compared to 4.1% in the baseline scenario.
To provide additional context regarding the sensitivity of the ACL, we simulated our ACL process while considering a more pessimistic forecast of expected economic outcomes. In this downside scenario, the unemployment rate is expected to peak at 7.2% in 2026 compared to 4.8% in the baseline scenario.
As of December 31, 2024, we had outstanding subordinated debt of $100 million, of which $60.0 million qualified as Tier 2 capital after applying a discount related to the debt maturing in 2028.
As of December 31, 2025, we had outstanding subordinated debt of $100 million, of which $40.0 million qualified as Tier 2 capital after applying a discount related to the debt maturing in 2028.
Table 17 - Contractual Maturity and Weighted-Average Yield of AFS and HTM Debt Securities As of December 31, 2024 (dollars in thousands) Maturity By Years 1 or Less 1 to 5 6 to 10 Over 10 Total Amortized Cost WA Yield Amortized Cost WA Yield Amortized Cost WA Yield Amortized Cost WA Yield Amortized Cost WA Yield AFS U.S.
Table 16 - Contractual Maturity and Weighted-Average Yield of AFS and HTM Debt Securities As of December 31, 2025 (dollars in thousands) Maturity By Years 1 or Less 1 to 5 6 to 10 Over 10 Total Amortized Cost Yield Amortized Cost Yield Amortized Cost Yield Amortized Cost Yield Amortized Cost Yield AFS U.S.
We recorded a provision for credit losses of $51.0 million in 2024, compared to $89.4 million in 2023. The amount of provision recorded in each period was the amount required such that the total ACL reflected the appropriate balance as determined by management reflecting expected life of loan losses.
Provision for Credit Losses We recorded a provision for credit losses of $48.8 million in 2025, compared to $51.0 million in 2024. The amount of provision recorded in each period was the amount required such that the total ACL reflected the appropriate balance as determined by management reflecting expected life of loan losses.
Pretax unrealized losses of $306 million, $424 million, and $277 million in 2024, 2023, and 2022, respectively, are included in other assets for purposes of this presentation.
Pretax unrealized losses of $232 million, $306 million, and $424 million in 2025, 2024, and 2023, respectively, are included in other assets for purposes of this presentation.
In 2023 and 2024, we entered into fair value hedges on a portion of our AFS securities portfolio in order to partially mitigate the impact of any potential future unrealized losses on our tangible common equity. Gains and losses related to the hedges and hedged items are reflected in investment securities interest income.
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 hedges and hedged items are reflected in investment securities interest income.
We have identified the determination of our ACL and fair value measurements to be the accounting areas that require the most subjective or complex judgments, estimates and assumptions, and where changes in those judgments, estimates and assumptions (based on new or additional information, changes in the economic climate and/or market interest rates, etc.) could have a significant effect on our financial statements.
We have identified the determination of our ACL to require subjective or complex judgments, estimates and assumptions, and where changes in those judgments, estimates and assumptions (based on new or additional information, changes in the economic climate and/or market interest rates, etc.) could have a significant effect on our financial statements.
(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. * Represents a non-GAAP measure. See reconciliation of non-GAAP measures to related GAAP financial measures on the following page.
(2) Net income less preferred stock dividends, divided by average common equity. (3) Excludes effect of acquisition related intangibles and associated amortization. * Represents a non-GAAP measure. See reconciliation of non-GAAP measures to related GAAP financial measures.
For qualifying leases with a term exceeding one year, we record a lease liability and ROU asset on our balance sheet. As of December 31, 2024, the lease liability and ROU asset totaled $45.2 million and $42.8 million, respectively, compared to $44.1 million and $42.8 million, respectively, at December 31, 2023.
For qualifying leases with a term exceeding one year, we record a lease liability and ROU asset on our balance sheet. As of December 31, 2025, the lease liability and ROU asset totaled $38.4 million and $37.0 million, respectively, compared to $45.2 million and $42.8 million, respectively, at December 31, 2024.
(consolidated) United Community Bank Minimum Capital Well-Capitalized Minimum Capital Plus Capital Conservation Buffer 2024 2023 2024 2023 Risk-based ratios: CET1 capital 4.5 % 6.5 % 7.0 % 13.27 % 12.16 % 13.05 % 12.22 % Tier 1 capital 6.0 8.0 8.5 13.72 12.60 13.05 12.22 Total capital 8.0 10.0 10.5 15.17 14.49 14.08 13.23 Leverage ratio 4.0 5.0 N/A 9.96 9.47 9.46 9.17 Additional information related to capital ratios, as calculated under regulatory guidelines, is provided in Note 21 to the consolidated financial statements.
(consolidated) United Community Bank Minimum Capital Well-Capitalized Minimum Capital Plus Capital Conservation Buffer 2025 2024 2025 2024 Risk-based ratios: CET1 capital 4.5 % 6.5 % 7.0 % 13.44 % 13.27 % 12.34 % 13.05 % Tier 1 capital 6.0 8.0 8.5 13.44 13.72 12.34 13.05 Total capital 8.0 10.0 10.5 14.77 15.17 13.37 14.08 Leverage ratio 4.0 5.0 N/A 10.28 9.96 9.42 9.46 59 Additional information related to capital ratios, as calculated under regulatory guidelines, is provided in Note 21 to the consolidated financial statements.
The following table presents the amortized cost of securities by contractual maturity of investment securities and weighted-average yields on a FTE basis. Weighted-average yield for each maturity range includes coupon interest, discount accretion and premium amortization and has been calculated using the amortized cost of each security in that range.
Unrealized losses were primarily attributable to changes in interest rates. The following table presents the amortized cost of securities by contractual maturity of investment securities and weighted-average yields on an FTE basis. Weighted-average yield for each maturity range includes coupon interest, discount accretion and premium amortization and has been calculated using the amortized cost of each security in that range.
While the Holding Company has access to the capital markets, the ultimate sources of its liquidity are subsidiary service fees and dividends from the Bank, which are limited by applicable law and regulations.
While the Holding Company has access to the capital markets, the ultimate sources of its liquidity are subsidiary service fees and dividends from the Bank, which are limited by applicable law and regulations. In 2025 and 2024, the Bank paid dividends of $356 million and $153 million, respectively, to the Holding Company.
During 2024, we recorded $15.6 million in ROU assets in exchange for operating lease liabilities of approximately the same amount. As of December 31, 2024, the remaining terms of our leases ranged from one month to 10 years. Certain leases contain options to renew the lease at the end of the current term.
During 2025, we recorded $3.63 million in ROU assets in exchange for operating lease liabilities of approximately the same amount. As of December 31, 2025, the remaining terms of our leases with remaining lease liabilities ranged from three months to 10 years. Certain leases contain options to renew the lease at the end of the current term.
See Table 8 of MD&A for further detail on noninterest expense. 41 Critical Accounting Estimates Our accounting and reporting policies are in accordance with GAAP and conform to general practices within the banking industry. Application of these principles requires management to make estimates, assumptions or judgments that affect the amounts reported in the financial statements and the accompanying notes.
Critical Accounting Estimates Our accounting and reporting policies are in accordance with GAAP and conform to general practices within the banking industry. Application of these principles requires management to make estimates, assumptions or judgments that affect the amounts reported in the financial statements and the accompanying notes.
Treasuries $ — — % $ 19,896 1.40 % $ — — % $ — — % $ 19,896 1.40 % U.S.
Treasuries $ — — % $ 19,927 1.40 % $ — — % $ — — % $ 19,927 1.40 % U.S.
Liquidity management involves maintaining the ability to meet the daily cash flow requirements of customers, both depositors and borrowers. The primary objective is to ensure that sufficient funding is available, at a reasonable cost, to meet ongoing operational cash needs and to take advantage of revenue producing opportunities as they arise.
The primary objective of liquidity management is to maintain the ability to meet the daily cash flow requirements of customers, both depositors and borrowers, at a reasonable cost and to take advantage of revenue producing opportunities as they arise.
Therefore, we consider these policies, discussed below, to be critical accounting estimates and discuss them directly with the Audit Committee of our Board. Our most significant accounting policies are presented in Note 1 to the accompanying consolidated financial statements.
Therefore, we consider the ACL to be a critical accounting estimate, which we discuss directly with the Audit Committee of our Board. Our most significant accounting policies are presented in Note 1 to the accompanying consolidated financial statements.
As of December 31, 2024, for certain of these investments, we had committed to fund an additional $27.7 million related to future capital calls that has not been reflected in the consolidated balance sheet.
We also hold investments in fintech fund limited partnerships. As of December 31, 2025, for certain of these investments, we had committed to fund an additional $50.8 million related to future capital calls that has not been reflected in the consolidated balance sheet.
Table 21 - Long-term Debt by Maturity Category As of December 31, 2024 (in thousands) Next 5 years $ 135,000 6 - 10 years 100,000 11 - 15 years 25,775 260,775 Less discount (6,623) Total long-term debt $ 254,152 Operating Lease Obligations We are party to operating lease agreements for many of our branch locations, ATMs, ITMs, loan production offices and operation centers.
Table 17 - Long-term Debt by Maturity Category As of December 31, 2025 (in thousands) Next 5 years $ 100,000 6 - 10 years 5,155 11 - 15 years 20,620 125,775 Less discount (5,375) Total long-term debt $ 120,400 Operating Lease Obligations We are a party to operating lease agreements for many of our branch locations, ATMs, ITMs, loan production offices and operation centers.
Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Letters of credit and financial guarantees are conditional commitments issued to guarantee a customer’s performance to a third party and have essentially the same credit risk as extending loan facilities to customers. Those commitments are primarily issued to local businesses.
Letters of credit and financial guarantees are conditional commitments issued to guarantee a customer’s performance to a third party and have essentially the same credit risk as extending loan facilities to customers. Those commitments are primarily issued to local businesses.
As of December 31, 2024 and 2023, both United and the Bank were characterized as “well-capitalized”. Effect of Inflation and Changing Prices A bank’s asset and liability structure is substantially different from that of an industrial firm, because primarily all assets and liabilities of a bank are monetary in nature, with relatively little investment in fixed assets or inventories.
Effect of Inflation and Changing Prices A bank’s asset and liability structure is substantially different from that of an industrial firm, because a bank’s assets and liabilities are primarily monetary in nature, with relatively little investment in fixed assets or inventories.
Treasury and Government Agency securities, we include a zero loss assumption. At December 31, 2024, calculated credit losses on HTM debt securities were deemed de minimis due to the high credit quality of the portfolio, which included securities issued or guaranteed by U.S. Government agencies, GSEs, high credit quality municipalities and supranational entities.
At both December 31, 2025 and 2024, calculated credit losses on HTM debt securities were deemed de minimis due to the high credit quality of the portfolio, which included securities issued or guaranteed by U.S. Government agencies, GSEs, high credit quality municipalities and supranational entities. As a result, no ACL for HTM debt securities was recorded.
Table 1 Selected Financial Information For the Years Ended December 31, (dollars in thousands, except per share data) 2024 2023 2022 INCOME SUMMARY Interest revenue $ 1,377,741 $ 1,237,107 $ 813,155 Interest expense 550,373 419,342 60,798 Net interest revenue 827,368 817,765 752,357 Provision for credit losses 50,951 89,430 63,913 Noninterest income 124,756 75,483 137,707 Total revenue 901,173 803,818 826,151 Noninterest expenses 578,167 571,273 470,149 Income before income tax expense 323,006 232,545 356,002 Income tax expense 70,609 45,001 78,530 Net income 252,397 187,544 277,472 Non-operating items 40,268 88,894 19,375 Income tax benefit of non-operating items (8,702) (21,489) (4,246) Net income - operating (1)* $ 283,963 $ 254,949 $ 292,601 PERFORMANCE MEASURES Per common share: Diluted net income - GAAP $ 2.04 $ 1.54 $ 2.52 Diluted net income - operating (1)* 2.30 2.11 2.66 Common stock cash dividends declared 0.94 0.92 0.86 Book value 27.87 26.52 24.38 Tangible book value (3)* 20.00 18.39 17.13 Key Performance Ratios: Return on common equity - GAAP (2) 7.07 % 5.34 % 9.54 % Return on common equity - operating (1)(2)* 7.97 7.33 10.07 Return on tangible common equity - operating (1)(2)(3)* 11.42 10.63 14.04 Return on assets - GAAP 0.90 0.68 1.13 Return on assets - operating (1)* 1.02 0.94 1.19 Net interest margin (FTE) 3.29 3.35 3.38 Efficiency ratio - GAAP 60.24 60.09 52.31 Efficiency ratio - operating (1)* 57.15 56.17 50.16 Equity to total assets 12.38 11.95 11.25 Tangible common equity to tangible assets (3)* 8.97 8.36 7.88 ASSET QUALITY Total NPAs $ 115,635 $ 92,877 $ 44,281 ACL - loans 206,998 208,071 159,357 Net charge-offs 57,690 52,243 9,654 ACL - loans to loans 1.14 % 1.14 % 1.04 % Net charge-offs to average loans 0.32 0.30 0.07 NPAs to total assets 0.42 0.34 0.18 AT PERIOD END ($ in millions) Loans $ 18,176 $ 18,319 $ 15,335 Investment securities 6,804 5,822 6,228 Total assets 27,720 27,297 24,009 Deposits 23,461 23,311 19,877 Shareholders’ equity 3,432 3,262 2,701 Common shares outstanding (thousands) 119,364 119,010 106,223 (1) Excludes non-operating items as detailed on Non-GAAP Performance Measures Reconciliation on next page .
Table 1 Selected Financial Information For the Years Ended December 31, (dollars in thousands, except per share data) 2025 2024 2023 INCOME SUMMARY Interest revenue $ 1,382,939 $ 1,377,741 $ 1,237,107 Interest expense 473,832 550,373 419,342 Net interest revenue 909,107 827,368 817,765 Noninterest income 154,045 124,756 75,483 Total revenue 1,063,152 952,124 893,248 Provision for credit losses 48,806 50,951 89,430 Noninterest expense 591,934 578,167 571,273 Income before income tax expense 422,412 323,006 232,545 Income tax expense 94,317 70,609 45,001 Net income 328,095 252,397 187,544 Non-operating items 10,204 40,268 88,894 Income tax benefit of non-operating items (2,212) (8,702) (21,489) Net income - operating (1)* $ 336,087 $ 283,963 $ 254,949 PERFORMANCE MEASURES Per common share: Diluted net income - GAAP $ 2.62 $ 2.04 $ 1.54 Diluted net income - operating (1)* 2.71 2.30 2.11 Common stock cash dividends declared 0.98 0.94 0.92 Book value 30.17 27.87 26.52 Tangible book value (3)* 22.24 20.00 18.39 Key Performance Ratios: Return on common equity - GAAP (2) 9.12 % 7.07 % 5.34 % Return on common equity - operating (1)(2)* 9.44 7.97 7.33 Return on tangible common equity - operating (1)(2)(3)* 13.34 11.42 10.63 Return on assets - GAAP 1.17 0.90 0.68 Return on assets - operating (1)* 1.20 1.02 0.94 Net interest margin (FTE) 3.52 3.29 3.35 Efficiency ratio - GAAP 55.46 60.24 60.09 Efficiency ratio - operating (1)* 54.51 57.15 56.17 Equity to total assets 12.99 12.38 11.95 Tangible common equity to tangible assets (3)* 9.92 8.97 8.36 ASSET QUALITY Total NPAs $ 93,498 $ 115,635 $ 92,877 ACL - loans 210,429 206,998 208,071 Net charge-offs 41,926 57,690 52,243 ACL - loans to loans 1.09 % 1.14 % 1.14 % Net charge-offs to average loans 0.22 0.32 0.30 NPAs to total assets 0.33 0.42 0.34 AT PERIOD END ($ in millions) Loans $ 19,384 $ 18,176 $ 18,319 Investment securities 5,988 6,804 5,822 Total assets 28,003 27,720 27,297 Deposits 23,798 23,461 23,311 Shareholders’ equity 3,639 3,432 3,262 Common shares outstanding (thousands) 120,598 119,364 119,010 (1) Excludes non-operating items as detailed on Non-GAAP Performance Measures Reconciliation on page 62 .
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 internal capital resources to meet these obligations.
Additionally, 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 to its common shareholders, and interest and principal on any outstanding debt or trust preferred securities. The Holding Company currently has internal capital resources to meet these obligations.
This was driven by higher demand for money market accounts, which are more liquid than time deposits and offer a higher interest rate than demand and savings accounts. As of December 31, 2024, we had approximately $9.56 billion in uninsured deposits, of which $3.12 billion was collateralized by investment securities.
Money market accounts increased the most significantly due to continued high demand as money markets are more liquid than time deposits and offer a higher interest rate than demand and savings accounts. As of December 31, 2025, we had approximately $9.81 billion in uninsured deposits, of which $3.02 billion was collateralized by investment securities.
Rate Assets: Interest-earning assets: Loans, net of unearned income (FTE) (1)(2) $ 18,124,179 $ 1,146,440 6.33 % $ 17,576,424 $ 1,042,578 5.93 % $ 14,571,746 $ 673,491 4.62 % Taxable securities (3) 6,172,942 199,789 3.24 5,929,687 162,505 2.74 6,284,603 121,501 1.93 Tax-exempt securities (FTE) (1)(3) 362,655 9,152 2.52 381,731 9,796 2.57 496,327 13,865 2.79 Federal funds sold and other interest-earning assets 623,426 26,652 4.28 642,499 26,397 4.11 1,065,057 9,104 0.85 Total interest-earning assets (FTE) 25,283,202 1,382,033 5.47 24,530,341 1,241,276 5.06 22,417,733 817,961 3.65 Noninterest-earning assets: Allowance for credit losses (212,968) (191,016) (135,144) Cash and due from banks 215,411 239,574 204,852 Premises and equipment 394,127 355,139 288,044 Other assets (3) 1,611,405 1,517,940 1,275,263 Total assets $ 27,291,177 $ 26,451,978 $ 24,050,748 Liabilities and Shareholders’ Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW and interest-bearing demand $ 6,014,052 175,534 2.92 $ 5,161,071 125,336 2.43 $ 4,486,263 17,312 0.39 Money market 6,188,579 214,742 3.47 5,462,677 156,397 2.86 4,900,667 18,274 0.37 Savings deposits 1,146,305 2,717 0.24 1,312,469 2,866 0.22 1,482,599 693 0.05 Time deposits 3,519,461 140,229 3.98 3,106,989 100,973 3.25 1,693,307 5,152 0.30 Brokered time deposits 50,359 2,297 4.56 224,914 10,002 4.45 61,636 668 1.08 Total interest-bearing deposits 16,918,756 535,519 3.17 15,268,120 395,574 2.59 12,624,472 42,099 0.33 Federal funds purchased and other borrowings 2,468 131 5.31 75,965 3,195 4.21 13,004 507 3.90 FHLB advances 4 — — 124,425 5,761 4.63 34,027 1,424 4.18 Long-term debt 319,163 14,723 4.61 324,753 14,812 4.56 323,102 16,768 5.19 Total borrowed funds 321,635 14,854 4.62 525,143 23,768 4.53 370,133 18,699 5.05 Total interest-bearing liabilities 17,240,391 550,373 3.19 15,793,263 419,342 2.66 12,994,605 60,798 0.47 Noninterest-bearing liabilities: Noninterest-bearing deposits 6,299,019 7,091,034 7,967,321 Other liabilities 409,547 397,337 377,221 Total liabilities 23,948,957 23,281,634 21,339,147 Shareholders’ equity 3,342,220 3,170,344 2,711,601 Total liabilities and shareholders’ equity $ 27,291,177 $ 26,451,978 $ 24,050,748 Net interest revenue (FTE) $ 831,660 $ 821,934 $ 757,163 Net interest-rate spread (FTE) 2.27 % 2.40 % 3.18 % Net interest margin (FTE) (4) 3.29 % 3.35 % 3.38 % (1) Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans.
Rate Assets: Interest-earning assets: Loans, net of unearned income (FTE) (1)(2) $ 18,776,288 $ 1,152,585 6.14 % $ 18,124,179 $ 1,146,440 6.33 % $ 17,576,424 $ 1,042,578 5.93 % Taxable securities (3) 6,354,276 209,810 3.30 6,172,942 199,789 3.24 5,929,687 162,505 2.74 Tax-exempt securities (FTE) (1)(3) 352,899 8,951 2.54 362,655 9,152 2.52 381,731 9,796 2.57 Federal funds sold and other interest-earning assets 481,507 15,701 3.26 623,426 26,652 4.28 642,499 26,397 4.11 Total interest-earning assets (FTE) 25,964,970 1,387,047 5.34 25,283,202 1,382,033 5.47 24,530,341 1,241,276 5.06 Noninterest-earning assets: Allowance for credit losses (217,084) (212,968) (191,016) Cash and due from banks 208,922 215,411 239,574 Premises and equipment 396,923 394,127 355,139 Other assets (3) 1,664,206 1,611,405 1,517,940 Total assets $ 28,017,937 $ 27,291,177 $ 26,451,978 Liabilities and Shareholders’ Equity: Interest-bearing liabilities: Interest-bearing deposits: NOW and interest-bearing demand $ 6,023,746 141,267 2.35 $ 6,014,052 175,534 2.92 $ 5,161,071 125,336 2.43 Money market 6,775,187 193,908 2.86 6,188,579 214,742 3.47 5,462,677 156,397 2.86 Savings 1,120,753 3,208 0.29 1,146,305 2,717 0.24 1,312,469 2,866 0.22 Time 3,572,941 123,301 3.45 3,519,461 140,229 3.98 3,106,989 100,973 3.25 Brokered time deposits 50,509 2,068 4.09 50,359 2,297 4.56 224,914 10,002 4.45 Total interest-bearing deposits 17,543,136 463,752 2.64 16,918,756 535,519 3.17 15,268,120 395,574 2.59 Federal funds purchased and other borrowings 22,693 1,233 5.43 2,468 131 5.31 75,965 3,195 4.21 FHLB advances 9,592 433 4.51 4 — — 124,425 5,761 4.63 Long-term debt 195,686 8,414 4.30 319,163 14,723 4.61 324,753 14,812 4.56 Total borrowed funds 227,971 10,080 4.42 321,635 14,854 4.62 525,143 23,768 4.53 Total interest-bearing liabilities 17,771,107 473,832 2.67 17,240,391 550,373 3.19 15,793,263 419,342 2.66 Noninterest-bearing liabilities: Noninterest-bearing deposits 6,327,200 6,299,019 7,091,034 Other liabilities 345,832 409,547 397,337 Total liabilities 24,444,139 23,948,957 23,281,634 Shareholders’ equity 3,573,798 3,342,220 3,170,344 Total liabilities and shareholders’ equity $ 28,017,937 $ 27,291,177 $ 26,451,978 Net interest revenue (FTE) $ 913,215 $ 831,660 $ 821,934 Net interest-rate spread (FTE) 2.68 % 2.27 % 2.40 % Net interest margin (FTE) (4) 3.52 % 3.29 % 3.35 % (1) Interest revenue on tax-exempt securities and loans includes a taxable-equivalent adjustment to reflect comparable interest on taxable securities and loans.
At the end of 2024, we saw loan growth return and we experienced some deposit attrition that resulted in the need to use modest short-term borrowings to meet our short-term funding needs. At December 31, 2024, we had $195 million of outstanding federal funds purchased.
At the end of 2025 and 2024, due to loan growth and some seasonal deposit attrition, we utilized modest short-term borrowings to meet short-term funding needs. At December 31, 2025 and 2024, we had $85.0 million and $195 million, respectively, of outstanding federal funds purchased.
While the desired level of liquidity will vary depending upon a variety of factors, our primary goal is to maintain a sufficient level of liquidity in all expected economic environments. To assist in determining the adequacy of our liquidity, we perform a variety of liquidity stress tests.
While the desired level of liquidity will vary depending upon a variety of factors, our primary goal is to maintain a sufficient level of liquidity in all expected economic environments. 52 The Bank’s main source of liquidity is customer deposit accounts.
Unless we have determined we are reasonably likely to renew the lease, these options have been excluded from the calculation of our lease liability and ROU asset.
Unless we have determined we are reasonably likely to renew the lease, these options have been excluded from the calculation of our lease liability and ROU asset. Additional information regarding operating leases is provided in Note 13 to the consolidated financial statements.
In addition, we had outstanding junior subordinated debentures related to trust preferred securities totaling $25.8 million at December 31, 2024, of which $25.0 million (excluding common securities) qualified as Tier 2 capital.
In addition, we had outstanding junior subordinated debentures related to trust preferred securities totaling $25.8 million at December 31, 2025, of which $25.0 million (excluding common securities owned by United) qualified as Tier 2 capital. Further information on subordinated debt and trust preferred securities is provided in Note 12 to the consolidated financial statements.
The total ACL for loans at December 31, 2024 decreased by $1.07 million compared to December 31, 2023 and the ACL for loans as a percentage of total loans remained constant.
The ACL for loans at December 31, 2025 totaled $210 million compared to $207 million at December 31, 2024 and the ACL for loans as a percentage of total loans decreased to 1.09% from 1.14%.
Table 13 - Net Charge-offs Years Ended December 31, (dollars in thousands) 2024 2023 2022 Average Loans Net Charge-Offs (Recoveries) Net Charge-Offs to Average Loans Average Loans Net Charge-Offs (Recoveries) Net Charge-Offs to Average Loans Average Loans Net Charge-Offs (Recoveries) Net Charge-Offs to Average Loans Owner occupied CRE $ 3,302,948 $ (2) — % $ 3,166,495 $ 503 0.02 % $ 2,662,600 $ (1,761) (0.07) % Income producing CRE 4,193,032 3,581 0.09 3,834,585 5,939 0.15 3,283,107 (343) (0.01) Commercial & industrial 2,349,933 13,839 0.59 2,483,931 21,059 0.85 2,271,279 6,460 0.28 Commercial construction 1,865,786 9 — 1,800,307 (157) (0.01) 1,502,093 (584) (0.04) Equipment financing 1,577,020 22,943 1.45 1,503,826 20,162 1.34 1,217,993 3,953 0.32 Residential mortgage 3,233,863 54 — 2,900,916 (246) (0.01) 2,007,843 (247) (0.01) Home equity 991,460 (77) (0.01) 935,596 (2,878) (0.31) 802,674 (618) (0.08) Residential construction 223,399 264 0.12 436,513 936 0.21 394,413 (231) (0.06) Manufactured housing 203,735 14,388 7.06 337,712 3,859 1.14 285,556 765 0.27 Consumer 183,003 2,691 1.47 176,543 3,066 1.74 144,188 2,260 1.57 $ 18,124,179 $ 57,690 0.32 $ 17,576,424 $ 52,243 0.30 $ 14,571,746 $ 9,654 0.07 In both 2024 and 2023, we had individually significant charge-off events that contributed to elevated total net charge-offs.
Table 9 - Net Charge-offs Years Ended December 31, (dollars in thousands) 2025 2024 2023 Average Loans Net Charge-Offs (Recoveries) Net Charge-Offs to Average Loans Average Loans Net Charge-Offs (Recoveries) Net Charge-Offs to Average Loans Average Loans Net Charge-Offs (Recoveries) Net Charge-Offs to Average Loans Owner occupied CRE $ 3,536,366 $ 4,703 0.13 % $ 3,302,948 $ (2) — % $ 3,166,495 $ 503 0.02 % Income producing CRE 4,523,284 1,429 0.03 4,193,032 3,581 0.09 3,834,585 5,939 0.15 Commercial & industrial 2,529,312 9,899 0.39 2,349,933 13,839 0.59 2,483,931 21,059 0.85 Commercial construction & land 1,699,442 1,926 0.11 1,865,786 9 — 1,800,307 (157) (0.01) Equipment financing 1,740,217 20,584 1.18 1,577,020 22,943 1.45 1,503,826 20,162 1.34 Residential mortgage 3,210,939 179 0.01 3,233,863 54 — 2,900,916 (246) (0.01) Home equity 1,170,841 (209) (0.02) 991,460 (77) (0.01) 935,596 (2,878) (0.31) Residential construction & land 178,791 238 0.13 223,399 264 0.12 436,513 936 0.21 Manufactured housing (1) — — — 203,735 14,388 7.06 337,712 3,859 1.14 Consumer 187,096 3,177 1.70 183,003 2,691 1.47 176,543 3,066 1.74 $ 18,776,288 $ 41,926 0.22 $ 18,124,179 $ 57,690 0.32 $ 17,576,424 $ 52,243 0.30 (1) In 2025, manufactured housing loans were included in consumer loans.
Table 5 - Noninterest Income For the Years Ended December 31, (in thousands) Change 2024 2023 2022 2024-2023 Service charge and fees: Overdraft fees $ 13,523 $ 11,737 $ 10,822 15 % ATM and debit card interchange fees 15,563 15,431 16,132 1 Other service charges and fees 11,908 11,244 11,209 6 Total service charges and fees 40,994 38,412 38,163 7 Mortgage loan gains and related fees 27,567 19,220 32,524 43 Wealth management fees 23,695 23,740 23,594 — (Losses) gains from sales of other loans, net (21,284) 9,146 10,730 Other lending and loan servicing fees 14,396 13,973 10,005 3 Securities losses, net (3,316) (53,333) (3,872) Other noninterest income: Customer derivatives 2,304 2,517 2,180 (8) Other investment income 7,817 (7) 2,023 BOLI 9,299 8,030 6,603 16 Treasury management income 6,779 5,064 3,758 34 Other 16,505 8,721 11,999 89 Total other noninterest income 42,704 24,325 26,563 76 Total noninterest income $ 124,756 $ 75,483 $ 137,707 65 Overdraft fees for 2024 increased compared to 2023, driven by higher overdraft transaction volume.
Table 4 - Noninterest Income For the Years Ended December 31, (in thousands) Change 2025 2024 2023 2025-2024 Service charge and fees: Overdraft fees $ 13,538 $ 13,523 $ 11,737 — % ATM and debit card interchange fees 16,000 15,563 15,431 3 Other service charges and fees 12,193 11,908 11,244 2 Total service charges and fees 41,731 40,994 38,412 2 Mortgage loan gains and related fees 25,073 27,567 19,220 (9) Wealth management fees 18,870 23,695 23,740 (20) Gains (losses) from sales of other loans, net 7,923 (21,284) 9,146 n/m Other lending and loan servicing fees 16,412 14,396 13,973 14 Securities gains (losses), net 352 (3,316) (53,333) n/m Other noninterest income: Customer derivatives 4,916 2,304 2,517 113 Other investment income 3,205 7,817 (7) n/m BOLI 10,138 9,299 8,030 9 Treasury management income 8,470 6,779 5,064 25 Other 16,955 16,505 8,721 3 Total other noninterest income 43,684 42,704 24,325 2 Total noninterest income $ 154,045 $ 124,756 $ 75,483 23 The decrease in mortgage loan gains and related fees was primarily a result of a decrease in mortgage servicing income of $2.39 million, which includes fair value adjustments to our mortgage servicing asset.
Table 18 - Deposits As of December 31, (dollars in thousands) 2024 2023 Balance Customer Deposit Composition Balance Customer Deposit Composition Noninterest-bearing demand $ 6,211,182 27 % $ 6,534,307 28 % NOW and interest-bearing demand 6,141,342 26 6,155,193 27 Money market and savings 7,498,735 32 6,808,394 29 Time 3,441,424 15 3,649,498 16 Total customer deposits 23,292,683 100 % 23,147,392 100 % Brokered deposits 168,292 163,219 Total deposits $ 23,460,975 $ 23,310,611 60 The following table sets forth the scheduled maturities of time deposits greater than $250,000.
The following table sets forth the deposit composition for the periods indicated. 53 Table 13 - Deposits As of December 31, (dollars in thousands) 2025 2024 Balance Customer Deposit Composition Balance Customer Deposit Composition Noninterest-bearing demand $ 6,252,252 27 % $ 6,211,182 27 % NOW and interest-bearing demand 5,969,864 25 6,141,342 26 Money market and savings 7,781,861 33 7,498,735 32 Time 3,619,189 15 3,441,424 15 Total customer deposits 23,623,166 100 % 23,292,683 100 % Brokered deposits 175,264 168,292 Total deposits $ 23,798,430 $ 23,460,975 The following table sets forth the scheduled maturities of time deposits greater than $250,000.
Table 8 - Noninterest Expenses For the Years Ended December 31, (dollars in thousands) Change 2024 2023 2022 2024-2023 Salaries and employee benefits $ 340,043 $ 318,464 $ 276,205 7 % Occupancy 44,306 42,640 36,247 4 Communications and equipment 49,249 43,264 38,234 14 Professional fees 24,732 26,732 20,166 (7) Lending and loan servicing expense 8,379 9,722 9,350 (14) Outside services - electronic banking 13,703 11,577 12,583 18 Postage, printing and supplies 9,867 9,467 8,749 4 Advertising and public relations 8,546 9,473 8,384 (10) FDIC assessments and other regulatory charges 20,978 27,449 9,894 (24) Amortization of intangibles 14,596 15,175 6,826 (4) Merger-related and other charges 8,623 27,210 19,375 (68) Other 35,145 30,100 24,136 17 Total noninterest expenses $ 578,167 $ 571,273 $ 470,149 1 Salaries and employee benefits for 2024 increased $21.6 million compared to 2023.
Table 5 - Noninterest Expense For the Years Ended December 31, (dollars in thousands) Change 2025 2024 2023 2025-2024 Salaries and employee benefits $ 354,451 $ 340,043 $ 318,464 4 % Occupancy 44,968 44,306 42,640 1 Communications and equipment 55,244 49,249 43,264 12 Professional fees 24,595 24,732 26,732 (1) Lending and loan servicing expense 8,759 8,379 9,722 5 Outside services - electronic banking 13,441 13,703 11,577 (2) Postage, printing and supplies 10,650 9,867 9,467 8 Advertising and public relations 9,605 8,546 9,473 12 FDIC assessments and other regulatory charges 18,987 20,978 27,449 (9) Amortization of intangibles 13,079 14,596 15,175 (10) Merger-related and other charges 10,204 8,623 27,210 18 Other 27,951 35,145 30,100 (20) Total noninterest expense $ 591,934 $ 578,167 $ 571,273 2 The increase in salaries and employee benefits was driven by higher total compensation, reflecting annual merit increases that went into effect on April 1, 2025, higher performance-related incentive compensation and the addition of ANB employees on May 1, 2025.
This scenario does not reflect our current expectations at December 31, 2024, nor does it capture all the potential unknowns that could arise in the forecast period.
Excluding consideration of qualitative adjustments, this sensitivity analysis would result in a hypothetical increase to our ACL of $36.0 million at December 31, 2025. This scenario does not reflect our current expectations at December 31, 2025, nor does it capture all the potential unknowns that could arise in the forecast period.
Long-term Debt At December 31, 2024 and 2023, we had long-term debt outstanding of $254 million and $325 million, respectively, consisting of senior debentures, subordinated debentures, and trust preferred securities, all of which were obligations of the Holding Company. The following table provides long-term debt outstanding by maturity in five-year increments.
Long-term Debt At December 31, 2025 and 2024, we had long-term debt outstanding of $120 million and $254 million, respectively. As of December 31, 2025 long-term debt consisted of subordinated debentures and trust preferred securities, all of which were obligations of the Holding Company. During 2025, we redeemed two senior debt series prior to maturity, which totaled $135 million.
An important part of the Bank’s liquidity resides in the asset portion of the balance sheet, which provides liquidity primarily through loan interest and principal repayments and the maturities and sales of securities, as well as the ability to use these assets as collateral for borrowings on a secured basis. Liquidity is also available from cash and cash equivalents.
Our loan and securities portfolios also provide liquidity primarily through loan principal and interest payments and the maturities and sales of securities, as well as the ability to use these assets as collateral for borrowings on a secured basis.
The net interest spread was 2.27% and 2.40% for 2024 and 2023, respectively, while the net interest margin was 3.29% and 3.35%, respectively. The following tables indicate the relationship between interest revenue and expense and the average amounts of assets and liabilities, which provide further insight into net interest spread and net interest margin for the periods indicated.
The following tables indicate the relationship between interest revenue and expense and the average amounts of assets and liabilities, which provide further insight into net interest spread and net interest margin for the periods indicated. 43 Table 2 - Average Consolidated Balance Sheets and Net Interest Margin Analysis For the Years Ended December 31, (dollars in thousands, (FTE)) 2025 2024 2023 Average Balance Interest Avg.
Table 3 - Change in Interest Revenue and Interest Expense (dollars in thousands, (FTE)) 2024 Compared to 2023 2023 Compared to 2022 Increase (decrease) due to changes in Total Increase (decrease) due to changes in Total Volume Rate Change Volume Rate Change Interest-earning assets: Loans $ 33,180 $ 70,682 $ 103,862 $ 155,447 $ 213,640 $ 369,087 Taxable securities 6,889 30,395 37,284 (7,235) 48,239 41,004 Tax-exempt securities (483) (161) (644) (3,009) (1,060) (4,069) Federal funds sold and other interest-earning assets (797) 1,052 255 (4,910) 22,203 17,293 Total interest-earning assets 38,789 101,968 140,757 140,293 283,022 423,315 Interest-bearing liabilities: Interest-bearing deposits: NOW and interest-bearing demand 22,597 27,601 50,198 2,985 105,039 108,024 Money market 22,480 35,865 58,345 2,332 135,791 138,123 Savings deposits (381) 232 (149) (88) 2,261 2,173 Time deposits 14,526 24,730 39,256 7,610 88,211 95,821 Brokered time deposits (7,956) 251 (7,705) 4,299 5,035 9,334 Total interest-bearing deposits 51,266 88,679 139,945 17,138 336,337 353,475 Federal funds purchased and other short-term borrowings (3,729) 665 (3,064) 2,645 43 2,688 FHLB advances (5,761) — (5,761) 4,170 167 4,337 Long-term debt (257) 168 (89) 84 (2,040) (1,956) Total borrowed funds (9,747) 833 (8,914) 6,899 (1,830) 5,069 Total interest-bearing liabilities 41,519 89,512 131,031 24,037 334,507 358,544 Increase in net interest revenue $ (2,730) $ 12,456 $ 9,726 $ 116,256 $ (51,485) $ 64,771 Any variance attributable jointly to volume and rate changes is allocated to the volume and rate variance in proportion to the relationship of the absolute dollar amount of the change in each.
Table 3 - Change in Interest Revenue and Interest Expense (dollars in thousands, (FTE)) 2025 Compared to 2024 2024 Compared to 2023 Increase (decrease) due to changes in Total Increase (decrease) due to changes in Total Volume Rate Change Volume Rate Change Interest-earning assets: Loans $ 40,580 $ (34,435) $ 6,145 $ 33,180 $ 70,682 $ 103,862 Taxable securities 5,939 4,082 10,021 6,889 30,395 37,284 Tax-exempt securities (247) 46 (201) (483) (161) (644) Federal funds sold and other interest-earning assets (5,362) (5,589) (10,951) (797) 1,052 255 Total interest-earning assets 40,910 (35,896) 5,014 38,789 101,968 140,757 Interest-bearing liabilities: Interest-bearing deposits: NOW and interest-bearing demand 282 (34,549) (34,267) 22,597 27,601 50,198 Money market 19,103 (39,937) (20,834) 22,480 35,865 58,345 Savings deposits (62) 553 491 (381) 232 (149) Time deposits 2,102 (19,030) (16,928) 14,526 24,730 39,256 Brokered time deposits 7 (236) (229) (7,956) 251 (7,705) Total interest-bearing deposits 21,432 (93,199) (71,767) 51,266 88,679 139,945 Federal funds purchased and other short-term borrowings 1,099 3 1,102 (3,729) 665 (3,064) FHLB advances 433 — 433 (5,761) — (5,761) Long-term debt (5,367) (942) (6,309) (257) 168 (89) Total borrowed funds (3,835) (939) (4,774) (9,747) 833 (8,914) Total interest-bearing liabilities 17,597 (94,138) (76,541) 41,519 89,512 131,031 Increase in net interest revenue $ 23,313 $ 58,242 $ 81,555 $ (2,730) $ 12,456 $ 9,726 Any variance attributable jointly to volume and rate changes is allocated to the volume and rate variance in proportion to the relationship of the absolute dollar amount of the change in each. 45 Noninterest Income The following table presents the components of noninterest income for the periods indicated.
Further information on subordinated debt and trust preferred securities is provided in Note 12 to the consolidated financial statements. 63 The following table outlines the minimum ratios required for capital adequacy purposes, as well as the thresholds for a categorization of “well-capitalized”. Table 22 - Capital Ratios As of December 31, United Community Banks, Inc.
The following table outlines the minimum ratios required for capital adequacy purposes, as well as the thresholds for a categorization of “well-capitalized”. Table 19 - Capital Ratios As of December 31, United Community Banks, Inc.
In a rising rate environment, the opposite may occur. Prepayments tend to slow and the weighted average 58 life extends. This is referred to as extension risk, which can lead to lower levels of liquidity due to the delay of cash receipts and can result in the holding of a below market yielding asset for a longer period of time.
This is referred to as extension risk, which can lead to lower levels of liquidity due to the delay of cash receipts and can result in the holding of a below market yielding asset for a longer period of time. ACL- Investments Our HTM debt securities portfolio is evaluated quarterly to assess whether an ACL is required.
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. At December 31, 2024, we had sufficient qualifying collateral to support additional borrowings, which is detailed in the table below.
At December 31, 2025 and 2024, we had sufficient qualifying collateral to support additional borrowings, which is detailed in the table below.
When third-party information is not available, valuation adjustments are estimated in good faith by management primarily through the use of internal cash flow modeling techniques. Certain policies inherently have a greater reliance on the use of estimates, assumptions or judgments and as such, have a greater possibility of producing results that could be materially different than originally reported.
Certain areas of accounting inherently have a greater reliance on the use of estimates, assumptions or judgments and as such, have a greater possibility of producing results that could be materially different than originally reported.
We believe our high level of service, as evidenced by our strong customer satisfaction scores, is instrumental in attracting and retaining customer deposit accounts. Since December 31, 2023, customer deposits increased $145 million, which was mostly driven by an increase in money market deposit accounts with offsetting decreases in other customer deposit types.
We believe our high level of service, as evidenced by our strong customer satisfaction scores, is instrumental in attracting and retaining customer deposit accounts. Compared to December 31, 2024, customer deposits increased $330 million, which reflects deposits acquired in the ANB transaction and organic growth.
Additional unrealized losses on HTM debt securities of $59.5 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.
At December 31, 2025, HTM debt securities had a fair value of $1.92 billion, indicating pre-tax net unrealized losses of $319 million. Additional pre-tax unrealized losses on HTM debt securities of $51.7 million were included in AOCI as a result of the transfer of AFS debt securities to HTM in 2022.
The actual maturities of these securities will differ from the contractual maturities because the loans underlying the securities can prepay. Decreases in interest rates will generally cause an acceleration of prepayment levels. In a declining or prolonged low interest rate environment, we may not be able to reinvest the proceeds from these prepayments in assets that have comparable yields.
These securities rely on the underlying pools of mortgage loans to provide a cash flow of principal and interest. The actual maturities of these securities will differ from the contractual maturities because the loans underlying the securities can prepay. Decreases in interest rates will generally cause an acceleration of prepayment levels.
FDIC assessments and other regulatory charges for 2024 reflects an additional $1.74 million of accrued expense related to the final determination of the FDIC special assessment and higher expense due to the increase in our assessment base. 52 The increase in other noninterest expense for 2024 was primarily attributable to a $5.39 million loss on the sale of FinTrust.
FDIC assessments and other regulatory charges decreased for 2025 as the comparative period of 2024 included $1.74 million of FDIC special assessment expense. Other noninterest expense decreased for 2025 as the 2024 comparative period included a $5.39 million loss on the sale of FinTrust. In addition, during 2025, fraud losses declined compared to 2024.
These financial instruments included commitments to extend credit and letters of credit, which totaled $4.03 billion at December 31, 2024. A commitment to extend credit is an agreement to lend to a customer as long as there is no violation of any condition established in the contract.
A commitment to extend credit is an agreement to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.
Selling the portfolio reduced risk and allowed us to redirect our management and capital resources to activities that better align with our strategic objectives. Results of Operations We reported net income of $252 million in 2024 compared to $188 million in 2023.
In addition, during 2024, we sold $303 million of manufactured housing loans, substantially all of that portfolio, which resulted in a $27.2 million loss. The sale reduced risk and allowed us to redirect resources to activities that better align with our strategic objectives.
In addition to the reviews mentioned above, an independent loan review team reviews the portfolio to ensure consistent application of credit and risk rating policies and procedures. The ACL reflects management’s assessment of the life of loan expected credit losses in the loan portfolio and unfunded loan commitments.
In addition to the reviews mentioned above, an independent loan review team reviews the portfolio to ensure consistent application of credit and risk rating policies and procedures. Loans As of December 31, 2025, loans totaled $19.4 billion, an increase of $1.21 billion, or 7%, compared to $18.2 billion at December 31, 2024.
Additional information regarding operating leases is provided in Note 13 to the consolidated financial statements. 62 Off-Balance Sheet Arrangements We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of customers.
Off-Balance Sheet Arrangements We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of customers. These financial instruments included commitments to extend credit and letters of credit, which totaled $4.79 billion at December 31, 2025.
The decrease in provision for credit losses for 2024 is indicative of slower loan growth, a reduction in unfunded commitments, lower net charge-offs and lack of acquisition-related provision expense, partly offset by a special provision of $9.89 million related to expected losses in western North Carolina, which was severely affected by Hurricane Helene.
Additionally, the provision for credit losses for 2024 included a special provision of $9.80 million related to expected losses in western North Carolina, which was severely affected by Hurricane Helene. This reserve was fully released over the course of 2025 as losses were lower than expected.
The changes in the fair value of the hedges and the hedged items substantially offset each other. See Note 8 to the financial statements for further detail. Table 16 - Investment Securities Portfolio Composition As of December 31, 2024 At December 31, 2024, HTM debt securities had a fair value of $1.94 billion, indicating net unrealized losses of $424 million.
The changes in the fair value of the hedges and the hedged items substantially offset each other. See Notes 5 and 8 to the consolidated financial statements for further detail on investment securities and derivatives, respectively. The table below summarizes the carrying value of our securities portfolio and other relevant portfolio metrics as of the dates presented.
Table 20 - Borrowing Capacity As of December 31, 2024 (in thousands) FHLB $ 1,917,905 Federal Reserve - Discount Window 2,267,139 Borrowing capacity from pledged collateral $ 4,185,044 Unpledged securities available as collateral for additional borrowings $ 3,603,885 In addition, because the Holding Company is a separate entity and apart from the Bank, it must provide for its own liquidity.
Table 12 - Liquid Funds and Unused Borrowing Capacity (in thousands) Available liquid funds: December 31, 2025 December 31, 2024 Cash and cash equivalents $ 395,754 $ 519,873 Availability of borrowings (1) : FHLB $ 2,006,045 $ 1,917,905 Federal Reserve - Discount Window 2,347,191 2,267,139 Unpledged securities available as collateral for additional borrowings $ 3,007,534 $ 3,603,885 (1) Based on collateral pledged.
We recorded an incremental loss of approximately $293,000 when the sale closed during the fourth quarter of 2024. Merger-related and other charges for 2024 primarily consisted of costs associated with our rebranding, branch closure costs, and expenses related to the sale of FinTrust.
Merger-related and other charges for 2025 primarily related to the ANB acquisition and branch closure costs. Merger-related and other charges for 2024 primarily consisted of costs associated with our rebranding, branch closure costs, and expense 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.
The Bank’s main source of liquidity is customer deposit accounts, which we are able to attract by competing more aggressively on pricing. Liquidity is also available from wholesale funding sources consisting primarily of Federal funds purchased, securities sold under agreements to repurchase, FHLB advances and brokered deposits.
Liquidity is also available from cash and cash equivalents and wholesale funding sources consisting primarily of Federal funds purchased, securities sold under agreements to repurchase, FHLB advances and brokered deposits. Wholesale funding instruments are generally short-term in nature and used as necessary to fund asset growth and meet other short-term liquidity needs.
Table 10 - CRE - Income Producing Portfolio Composition As of December 31, 2024 As of December 31, 2024, our 25 largest credit relationships consisted of loans and loan commitments ranging from $38.3 million to $79.2 million, with an aggregate total credit exposure of $1.19 billion, including $282 million in unfunded commitments and $904 million in balances outstanding, excluding participations sold.
Therefore, our exposure to credit risk is significantly affected by changes in the economy within these markets. As of December 31, 2025, the average credit exposure of our 25 largest credit relationships was $51.5 million, with an aggregate total credit exposure of $1.29 billion, including $282 million in unfunded commitments and $1.01 billion in balances outstanding, excluding participations sold.
Absent circumstances when an AFS security would be sold, we evaluate whether the decline in fair value has resulted from credit losses or other factors. The evaluation considers factors such as the extent to which fair value is less than amortized cost, changes to the security’s rating, and adverse conditions specific to the security.
For AFS debt securities in an unrealized loss position, absent circumstances when the securities would be sold, we evaluate whether the decline in fair value has resulted from credit losses or other factors. If the evaluation indicates a credit loss exists, an ACL may be 55 recorded.
These increases were offset by net losses on sales of other loans of $21.3 million in 2024, due to the manufactured housing loan sale loss, compared to gains of $9.15 million in 2023. See Tables 5 through 7 of MD&A for further detail on noninterest income. • Noninterest expenses increased $6.89 million, or 1%, compared to 2023.
See section titled Net Interest Revenue and Tables 2 and 3 of MD&A for further detail on net interest revenue. In addition, noninterest income for 2025 increased $29.3 million, or 23%, compared to 2024, which is mostly due to the absence of the 2024 loss on the manufactured housing loan sale mentioned above.
The increase was primarily a result of net income of $252 million and other comprehensive income of $26.3 million, mostly driven by unrealized holding gains on AFS debt securities. These increases were partially offset by dividends on common and preferred stock of $119 million.
Shareholders’ Equity Highlights Shareholders’ equity at December 31, 2025 was $3.64 billion, an increase of $207 million from December 31, 2024. The increase was primarily a result of net income of $328 million, other comprehensive income of $62.3 million, mostly driven by unrealized holding gains on AFS debt securities, and equity of $65.7 million issued for the acquisition of ANB.
The amount of loans sold depends on several variables including the current lending environment and balance sheet management activities. From time to time, we also sell certain equipment financing receivables based on market conditions. In addition, during 2024, we sold substantially all of our manufactured housing loan portfolio.
Gains and losses on sales of other loans generally result from the sale of SBA/USDA loans and equipment financing loans. We sell a portion of our SBA/USDA loan production each quarter, which is determined mostly by the current lending environment and balance sheet management activities. We also sell certain equipment financing receivables based on market conditions.
Effective duration represents the expected change in the price of a security when rates change by 100 basis points. 57 Table 15 - Investment Securities As of December 31, (dollars in thousands) 2024 2023 Carrying Value % of portfolio Carrying Value % of portfolio 2024 - 2023 $ Change AFS $ 4,436,291 65 % $ 3,331,084 57 % $ 1,105,207 HTM 2,368,107 35 2,490,848 43 (122,741) Total investment securities $ 6,804,398 $ 5,821,932 $ 982,466 Investment securities as a % of total assets 25 % 21 % Weighted average life 5.7 years 6.2 years Swap adjusted effective duration 3.5 % 4.0 % Effective duration 3.9 4.4 During 2024, we purchased $1.94 billion in AFS securities, continuing our strategy of investing excess funds in our AFS portfolio.
Table 15 - Investment Securities As of December 31, (dollars in thousands) 2025 2024 Carrying Value % of portfolio Carrying Value % of portfolio 2025 - 2024 $ Change AFS $ 3,750,863 63 % $ 4,436,291 65 % $ (685,428) HTM 2,237,356 37 2,368,107 35 (130,751) Total investment securities $ 5,988,219 $ 6,804,398 $ (816,179) Investment securities as a % of total assets 21 % 25 % Weighted average life 5.4 years 5.7 years Swap adjusted effective duration 3.5 % 3.5 % Effective duration 3.8 3.9 54 The decrease in the investment securities portfolio reflects our current balance sheet management optimization strategy that prioritizes reinvesting principal and interest from securities to fund loan growth.
See section titled Net Interest Revenue and Tables 2 and 3 of MD&A for further detail on net interest revenue. • We recorded a provision for credit losses of $51.0 million compared to $89.4 million for 2023.
See Table 4 of MD&A for further detail on noninterest income. We recorded a provision for credit losses of $48.8 million in 2025 compared to $51.0 million for 2024. The provision for credit losses in 2025 reflects lower net charge-offs, partially offset by stronger loan growth compared to 2024.
Common risks for this loan category include declines in general economic conditions, declines in real estate value, declines in occupancy rates, and lack of suitable alternative use for the property. Over the past few years, the cost of renting CRE has risen substantially due to increased levels of inflation and a relatively high interest rate environment.
Common risks for this loan category include declines in general economic conditions, declines in real estate value, declines in lease rates, declines in occupancy rates, supply and demand for various industries and lack of suitable alternative use for the property. We monitor our income producing CRE portfolio through debt covenant monitoring and performing annual review procedures.
In addition, periodic reviews of banking services and products are conducted to adjust pricing in view of current and expected costs. 64
In addition, periodic reviews of banking services and products are conducted to adjust pricing in view of current and expected costs. 58 Capital Risk Management The maintenance and management of capital levels is one of management’s significant priorities. We are committed to maintaining a capital position that will support ongoing operations and achieve our strategic objectives.
See Table 13 Net Charge-offs in MD&A for further detail. Additional discussion on credit quality and the ACL is included in the “Asset Quality and Risk Elements” and “Critical Accounting Estimates” sections of this Report, as well as Note 1 to the consolidated financial statements. Noninterest Income The following table presents the components of noninterest income for the periods indicated.
Additional discussion on the ACL is included in the “Allowance for Credit Losses” section under “Credit Risk Management” section of this Report. 46 Noninterest Expense The following table presents the components of noninterest expense for the periods indicated.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Sensitivity Management Interest rate sensitivity is a function of the repricing characteristics of the portfolio of assets and liabilities. These repricing characteristics are the time frames within which the interest-earning assets and interest-bearing liabilities are subject to change in interest rates either at replacement, repricing or maturity.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk 63 Item 8. Financial Statements and Supplementary Data 63 Management’s Report on Internal Control Over Financial Reporting 64 Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 65 Consolidated Financial Statements and Accompanying Notes 66
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Interest rate sensitivity management focuses on the maturity structure of assets and liabilities and their repricing characteristics during periods of changes in market interest rates.
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Effective interest rate sensitivity management seeks to ensure that both assets and liabilities respond to changes in interest rates on a net basis within an acceptable timeframe, thereby minimizing the potentially adverse effect of interest rate changes on net interest revenue. The absolute level and volatility of interest rates can have a significant effect on profitability.
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The primary objective of interest rate risk management is to identify and manage the sensitivity of net interest revenue to changing interest rates, consistent with our overall financial goals. Based on economic conditions, asset quality and various other considerations, management establishes tolerance ranges for interest rate sensitivity and manages within these ranges.
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Net interest revenue and the fair value of financial instruments are influenced by changes in the level of interest rates. We attempt to limit our exposure to fluctuations in interest rates through policies established by our ALCO and approved by the Board.
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The ALCO meets periodically and has responsibility for formulating and recommending asset/liability management policies to the Board, formulating and implementing strategies to improve balance sheet positioning and/or earnings, and reviewing interest rate sensitivity. One of the tools management uses to estimate and manage the sensitivity of net interest revenue to changes in interest rates is an asset/liability simulation model.
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Resulting estimates are based upon multiple assumptions for each scenario, including loan and deposit re-pricing characteristics and the rate of prepayments. The ALCO periodically reviews the assumptions for reasonableness based on historical data and future expectations; however, actual net interest revenue may differ from model results.
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The primary objective of the simulation model is to measure the potential change in net interest revenue over time using multiple interest rate scenarios. The base scenario assumes rates remain flat and is the scenario to which all others are compared, in order to measure the change in net interest revenue.
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Policy limits are based on immediate rate shock scenarios, as well as gradually rising and falling rate scenarios, which are all compared to the base scenario. Our assumptions include floors such that market rates and discount rates do not go below zero.
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Other scenarios analyzed may include delayed rate shocks, yield curve steepening or flattening, or other variations in rate movements. While the primary policy scenarios focus on a 12-month time frame, longer time horizons are also modeled.
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Our policy is based on the 12-month impact on net interest revenue simulations with various interest rate shocks and ramps compared to the base scenario. 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.
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Our policy limits the projected change in net interest revenue from the base scenario to 8% for each 100 basis point change in simulations with rate shock and ramp scenarios. The following table presents our interest sensitivity position at the dates indicated.
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Table 23 - Interest Sensitivity Increase (Decrease) in Net Interest Revenue from Base Scenario at December 31, 2024 2023 Change in Rates Shock Ramp Shock Ramp 200 basis point increase 2.01 % 0.92 % (0.88) % (1.70) % 100 basis point increase 1.19 0.66 (0.38) (0.88) 100 basis point decrease (2.27) (1.46) (0.60) 0.14 200 basis point decrease (6.00) (2.38) (2.89) 0.10 Our interest sensitivity model includes significant key assumptions which may change over time.
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The scenario results presented in the table above assume parallel movements in the yield curve, which may differ from actual future curve behavior. Other than an assumption for the runoff of surge deposits, our model generally assumes no change in deposit portfolio size or composition.
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As of December 31, 2024, our modeled total deposit beta, which is measured as the change in our overall deposit rate as a percentage of the change in the targeted federal funds rate, was 43% in an up scenario and 38% in a down scenario.
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In order to manage interest rate sensitivity, we executed a number of strategies to move us from being slightly liability sensitive in 2023 to slightly asset sensitive in 2024.
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The primary driver in the change in interest rate shocks and ramps between December 31, 2024 and 2023 is the derivative financial instruments we entered into in late 2023 and early 2024. Derivative financial instruments can 65 be a cost-effective and capital-effective means of modifying the repricing characteristics of on-balance sheet assets and liabilities.
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These contracts generally consist of interest rate swaps under which we pay a fixed rate, (or variable rate, as the case may be) and receive a variable rate (or fixed rate, as the case may be).
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In addition to the derivative transactions, in an effort to protect against higher rates, we also shortened our investment portfolio duration to 3.9% at year-end 2024 from 4.4% at year-end 2023 and used our loan pricing strategies to encourage floating rate loans and discourage fixed rate loans.
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Derivative financial instruments that are designated as accounting hedges are classified as either cash flow or fair value hedges. The change in fair value of cash flow hedges is recognized in OCI.
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Fair value hedges recognize in earnings both the effect of the change in the fair value of the derivative financial instrument and the offsetting effect of the change in fair value of the hedged asset or liability associated with the particular risk of that asset or liability being hedged.
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We have other derivative financial instruments that are not designated as accounting hedges but are used for interest rate risk management purposes and as an effective economic hedge. Derivative financial instruments that are not accounted for as an accounting hedge are marked to market through earnings.
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All non-customer derivative financial instruments are used only for asset/liability management and as effective economic hedges, and not for trading or speculative purposes. Management believes that the risk associated with using derivative financial instruments to mitigate interest rate risk sensitivity is minimal and should not have any material unintended effect on our financial condition or results of operations.
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In order to mitigate potential credit risk, from time to time we may require the counterparties to derivative contracts to pledge cash or securities as collateral to cover the net exposure. See Note 8 to the financial statements for further detail.

Other UCB 10-K year-over-year comparisons