: United Community Banks shares fall as ‘industry-wide deposit price competition’ weighs on results
Shares of United Community Banks Inc. UCBI fell 6.1% after hours on Tuesday after the bank reported second-quarter results that missed expectations, as competition to attract new customers drove up costs. The bank, which has offices in the southeastern U.S., reported net income of $63.3 million, or 53 cents a share, compared with $66.8 million, or 61 cents, in the same quarter last year. Revenue increased to $213.9 million, compared with $206.8 million in the prior-year quarter. Adjusted for merger-related and other charges, United Community Banks earned 55 cents a share. Analysts polled by FactSet expected adjusted earnings per share of 63 cents on revenue of $241.5 million. Executives said that “industry-wide deposit price competition” — or what banks pay to depositors — drove higher deposit costs and weighed on net interest margins. Still, management said it grew loans and deposits overall during the quarter. The bank reported as higher interest rates make borrowing more difficult, and as the collapse of Silicon Valley Bank and Signature Bank earlier this year upends the landscape for regional-bank customers. Western Alliance Bancorp. WAL, which also reported results on Tuesday, said it continued to “return to normal business operations” after the turmoil, although shares fell.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.