United Community Banks: Preferred Share Downgrade On Low Yield

Jeremy LaKosh
5.47K Followers
(6min)

Summary

  • United Community Banks has seen changes in business due to rising interest rates, but net interest income remains strong.
  • Loan and deposit growth have slowed, but external debt dependence remains low.
  • Risks include exposure to non-owner occupied commercial real estate and uninsured deposits.
  • Preferred shares are yielding low compared to peers, hence the downgrade to hold.

yields sign with downward pointing arrow

McKevin

Introduction

United Community Banks, Inc. (NYSE:UCB) is a regional bank that has a strong presence in the American southeast. Like many in the industry, the bank has faced headwinds associated with higher interest rates and deposit competition. Back in June 2023, I

This article was written by

5.47K Followers
About My Writing: I am currently focused on income investing through either common shares, preferred shares, or bonds.  I will occasionally break away and write about the economy at large or a special situation involving a company I've been researching in. I target two articles per week for publication on Monday and Tuesday.About My Background: Bachelors in history/political science, Masters in Business Administration with a specialization in Finance and Economics. I enjoy numbers. I have been investing since 2000. Professionally, I am the CEO of an independent living retirement community in Illinois.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of UCB.PR.I either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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