Regional banking company United Community Banks (NYSE:UCB) met Wall Street’s revenue expectations in Q2 CY2025, with sales up 6.1% year on year to $260.2 million. Its non-GAAP profit of $0.66 per share was 7.4% above analysts’ consensus estimates.
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United Community Banks (UCB) Q2 CY2025 Highlights:
- Net Interest Income: $225.5 million vs analyst estimates of $224 million (8.1% year-on-year growth, 0.7% beat)
- Net Interest Margin: 3.5% vs analyst estimates of 3.4% (13 basis point year-on-year increase, 7.3 bps beat)
- Revenue: $260.2 million vs analyst estimates of $260.7 million (6.1% year-on-year growth, in line)
- Efficiency Ratio: 56.7% vs analyst estimates of 55.6% (1.1 percentage point miss)
- Adjusted EPS: $0.66 vs analyst estimates of $0.61 (7.4% beat)
- Market Capitalization: $3.80 billion
Chairman and CEO Lynn Harton stated, “This was a great quarter, with strong financial results and continued strategic accomplishments. Tangible book value per share grew by $0.42 and we successfully completed the acquisition of American National Bank on May 1. Excluding loans and deposits received from the American National Bank acquisition, loans grew by $194 million, or 4.2% annualized, while customer deposits, excluding the expected seasonal outflow of public funds, were up $64 million or 1.3% annualized. Second quarter loan growth was funded by cash flow from securities, creating a more favorable earning asset mix. Our net interest margin improved by 14 basis points, contributing to growth in our net interest income of $13.5 million when compared to the first quarter. Operating efficiency and operating leverage also both improved from the first quarter.”
Company Overview
Starting as a small community bank in 1950 and expanding through strategic acquisitions across the Southeast, United Community Banks (NYSE:UCB) is a regional bank holding company that provides financial services including loans, deposits, wealth management, and merchant services across the southeastern United States.
Sales Growth
In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees.
Thankfully, United Community Banks’s 10.6% annualized revenue growth over the last five years was impressive. Its growth beat the average bank company and shows its offerings resonate with customers.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. United Community Banks’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 1.2% over the last two years was well below its five-year trend. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, United Community Banks grew its revenue by 6.1% year on year, and its $260.2 million of revenue was in line with Wall Street’s estimates.
Net interest income made up 84.5% of the company’s total revenue during the last five years, meaning United Community Banks barely relies on non-interest income to drive its overall growth.
While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.
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Tangible Book Value Per Share (TBVPS)
The balance sheet drives banking profitability since earnings flow from the spread between borrowing and lending rates. As such, valuations for these companies concentrate on capital strength and sustainable equity accumulation potential.
This explains why tangible book value per share (TBVPS) stands as the premier banking metric. TBVPS strips away questionable intangible assets, revealing concrete per-share net worth that investors can trust. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights.
United Community Banks’s TBVPS grew at a mediocre 4.3% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 8.6% annually over the last two years from $17.80 to $21 per share.
Over the next 12 months, Consensus estimates call for United Community Banks’s TBVPS to grow by 8.7% to $22.83, decent growth rate.
Key Takeaways from United Community Banks’s Q2 Results
It was encouraging to see United Community Banks beat analysts’ EPS expectations this quarter. We were also happy its net interest income narrowly outperformed Wall Street’s estimates.Zooming out, we think this was a decent quarter. Investors were likely hoping for more, and shares traded down 6.5% to $29.24 immediately after reporting.
Big picture, is United Community Banks a buy here and now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.