UNITED COMMUNITY BANKS INC
For the period ended Sep 30, 2026. Filed Nov 4, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 4, 2026
UCB$36.99+0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0000857855-26-000076
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-04.
0000857855-26-000092
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 138 previous paragraphs and 143 current paragraphs.
87 unchanged; 38 reworded; 17 added; 13 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
•On August 1, 2026, we acquired Peach State, headquartered in Gainesville, Georgia. Peach State operated two banking locations in Hall County, Georgia. In the acquisition, we acquired $754 million in assets, including $514 million in loans, and assumed $703 million in liabilities, including $678 million in deposits. See Note 3 in the Notes to the Financial Statements for further detail.
Current report
•On September 1, 2026, we completed the sale of Navitas, the bank’s equipment finance subsidiary, for total cash consideration of $2.03 billion, which resulted in a $62.2 million gain. With the sale, $1.95 billion of equipment financing receivables were sold, which represented substantially all of that portfolio. The sale reflects our strategic decision to focus on our core relationship banking business while reducing risk and enhancing liquidity and capital strength. See Note 3 in the Notes to the Financial Statements for further detail.
Current report
•In September 2026, following the sale of Navitas, United completed a strategic balance sheet repositioning designed to shorten the duration of our investment portfolio, thereby reducing interest rate risk, as well as improving future net interest revenue, net interest margin, and earnings performance. As part of the repositioning, we reclassified $2.16 billion in HTM debt securities to the AFS designation. We then sold $2.47 billion of certain lower-yielding investment AFS securities for a pre-tax loss of $366 million. The transaction was undertaken to accelerate the replacement of lower-yielding longer duration securities purchased during a lower interest rate environment with higher-yielding earning assets. See the Investment Securities section of MD&A of this Report for further details.
Current report
•During the third quarter and first nine months of 2026, we repurchased, respectively, $50.4 million and $87.8 million of our common stock. The third quarter repurchases effectively offset the shares issued in the acquisition of Peach State of $47.9 million. Additionally, effective September 1, 2026, our Board approved an incremental authorization to repurchase up to $100 million in common stock through December 31, 2027. Therefore, as of September 30, 2026, we had a total remaining authorization of $113 million.
Current report
Negative noninterest income of $263 million and $181 million, respectively, for the third quarter and first nine months of 2026 reflects securities losses related to the securities portfolio repositioning, partly offset by the gain on the sale of Navitas previously discussed. The nine months ended September 30, 2026, also includes a $5.18 million gain on a terminated cash flow hedge in the first quarter.
Current report
FTE net interest revenue for the third quarter of 2026 was $253 million, an increase of $17.9 million from the same period in 2025. Net interest spread and net interest margin were 2.94% and 3.68%, respectively, increases of 21 and 10 basis points, respectively, compared to the third quarter of 2025. Interest revenue on interest-earning assets contributed $9.00 million of the increase, which was provided by the increase in average loans of $787 million and an increase in average other interest-earning assets of $401 million compared to the third quarter of 2025. Average other interest-earning assets consists mostly of balances held on deposit at the Federal Reserve Bank. The increase in average loans was primarily driven by loan growth, including $514 million in loans acquired from Peach State on August 1, 2026. The increase in our average interest-earning cash of $413 million resulted from the $1.99 billion of sales proceeds from the Navitas sale on September 1, 2026 and proceeds from investment securities sales during September of 2026 as part of our balance sheet repositioning strategy. Much of the cash was redeployed into higher-yielding investment securities and to the repayment of FHLB advances.
Current report
Interest expense decreased $8.87 million, driven mostly by the decrease in deposit interest expense of $14.9 million, which primarily resulted from the decrease in rates paid on deposits over the last year, and is discussed further below. The reduction in deposit interest expense was partly offset by a $6.01 million net increase in interest expense on borrowed funds, largely driven by higher average short-term borrowings and FHLB advances, partly offset by a decrease in interest expense on long-term debt. During the second and third quarters of 2026, we utilized short-term borrowings and FHLB advances to fund securities purchases in anticipation of the expected influx of cash from the Navitas sale. Our average long-term debt decreased $122 million compared to the third quarter of 2025, as we repaid $135 million in senior and subordinated debentures since September 30, 2025.
Current report
For the nine months ended:
Current report
For the Nine Months Ended September 30,
Current report
Securities losses for the three and nine months ended September 30, 2026, reflects the $366 million of pre-tax losses on security sales executed as part of our strategic balance sheet repositioning. See the Investment section in MD&A for further detail.
Current report
The increase in BOLI income for the three months and nine months ended September 30, 2026, was driven by higher death benefit claims recognized compared with the same periods of 2025.
Current report
The effective tax rate for the three months ended September 30, 2026, reflects the tax effects of both the securities sales and the gain on the sale of Navitas, both of which were recognized during the quarter. The effective tax rate for the nine months ended September 30, 2026, results from the benefit from the securities losses being applied at the blended federal and state statutory rates, which is higher than our effective tax rate mostly due to the impact of tax exempt revenue.
Current report
As of September 30, 2026, loans held for investment totaled $19.0 billion, compared to $19.4 billion at December 31, 2025. During 2026, we acquired $520 million of loans in the Peach State transaction, after the reclassification of the credit related purchase discount to the ACL, and we sold $1.95 billion in equipment financing loans with the Navitas sale. Excluding these transactions and the growth in equipment finance loans in 2026 prior to the sale of Navitas, we had organic loan growth of $932 million from December 31, 2025, which we believe is reflective of one of our current key initiatives to onboard experienced and proven revenue producers, having hired over 40 since the third quarter of 2025.
Current report
In September 2026, following the sale of Navitas, we completed a strategic balance sheet repositioning transaction designed to shorten the duration of our investment securities portfolio, thereby reducing interest rate risk, as well as improving future net interest revenue, net interest margin, and earnings performance. As part of the repositioning, we reclassified $2.16 billion in HTM debt securities to AFS. We then sold approximately $2.47 billion of certain lower-yielding investment securities for a pre-tax loss of $366 million. The transaction was undertaken to accelerate the replacement of long duration, lower-yielding securities acquired during a lower interest rate environment with higher-yielding earning assets.
Current report
The sold securities carried a weighted average yield of 2.16% and a weighted average effective duration of approximately 5.2 years. We initially redeployed the proceeds from both the Navitas sale and the balance sheet repositioning primarily into cash and short-duration securities, reducing its interest rate risk profile and aiming to improve its future earnings profile. Over time, we intend to remix a portion of the balance sheet from securities into higher yielding organic loan growth.
Current report
The changes in the interest rate sensitivity scenario results presented above since December 31, 2025 were primarily driven by the balance sheet repositioning initiated during September 2026. As part of the repositioning, we sold fixed-rate, longer duration assets and reinvested in floating-rate, lower duration assets, the effect of which is reflected in the results presented for September 30, 2026.
Current report
Shareholders’ equity at September 30, 2026, was $3.51 billion, a decrease of $131 million from December 31, 2025, which reflects other comprehensive loss of $69.0 million, common stock repurchases of $87.8 million, which were partially offset by $47.9 million in shares issued in the Peach State merger, and dividends of $92.4 million declared on common stock. These decreases were partially offset by year-to-date earnings of $60.2 million. The other comprehensive loss was primarily driven by a $104 million increase in net unrealized losses on AFS securities, including losses recorded upon transfer of securities from HTM to AFS. Common dividends per share were $0.26 and $0.76, respectively, for the three and nine months ended September 30, 2026, compared to $0.25 and $0.73, respectively, for the three and nine months ended September 30, 2025.
Removed paragraphs (13)
Previous report
On June 11, 2026, we entered into a definitive stock purchase agreement to sell Navitas, the Bank’s equipment financing subsidiary. The sale of Navitas, which is expected to close in the third quarter of 2026, reflects our strategic decision to focus on our core relationship banking business while enhancing liquidity and capital strength. As a result of the decision to sell Navitas, $1.91 billion in equipment financing receivables were reclassified to held for sale during the second quarter of 2026. After the close of the sale, we will consider future plans for the redeployment of capital and liquidity resulting from the sale, which, subject to market conditions, could include continued organic loan growth, share repurchases, balance sheet optimization and/or strategic mergers and acquisitions. For additional information on the disposition, see Form 8-K filed on June 12, 2026.
Previous report
Subsequent to quarter end, on August 1, 2026, we closed on the previously announced acquisition of Peach State, headquartered in Gainesville, Georgia. As of June 30, 2026, Peach State Bank & Trust reported total assets of $786 million, with total loans of $523 million and total deposits of $707 million. We expect the merger will strengthen our existing presence in the Gainesville, Georgia MSA. See Note 13 in the Notes to the Financial Statements for further detail.
Previous report
We reported total revenue for the second quarter and first six months of 2026 of $279 million and $556 million, respectively, compared to $260 million and $508 million for the same periods in 2025, respectively.
Previous report
Noninterest income of $38.4 million and $82.1 million for the second quarter and first six months of 2026 increased by $3.67 million and $11.8 million, respectively, compared to the same periods of 2025. The increases were driven by increases in mortgage loan gains and other related fees and higher unrealized gains on our other investment portfolio, particularly relating to our mutual funds, fintech and limited partnership investments. The six months ended June 30, 2026 also included a $5.18 million gain on a terminated cash flow hedge in the first quarter.
Previous report
For the six months ended:
Previous report
For the Six Months Ended June 30,
Previous report
The increase in lending and loan servicing expense for the three and six months ended June 30, 2026 reflects higher expense accruals for loan collateral related insurance and property taxes compared to the same periods of 2025.
Previous report
As of June 30, 2026, loans held for investment totaled $18.0 billion, compared to $19.4 billion at December 31, 2025. The decrease was primarily due to the reclassification, following the decision to sell Navitas, of $1.91 billion of equipment financing receivables to held for sale in the second quarter of 2026, representing substantially all of that portfolio. The remainder of equipment financing receivables retained were reclassified to the commercial and industrial category, as equipment financing no longer represents a significant category of loans held for investment. Excluding equipment financing receivables reclassified as held for sale, loans increased $457 million, or 3%, from December 31, 2025 representing organic loan growth, particularly in our commercial portfolio. We continue to focus on organic loan growth and have seen loan growth begin to accelerate during the second quarter of 2026. One of the key initiatives implemented by Management is the onboarding of experienced and proven revenue producers whereby over 35 such producers have been added since the third quarter of 2025.
Previous report
During the second quarter of 2026, we purchased $759 million in AFS securities, mostly in preparation for the expected cash inflows from the sale of Navitas, which is expected to close in the third quarter of 2026. These purchases were partly offset by sales, maturities and paydowns during the period.
Previous report
Over the last six months, we have strategically worked to reduce our interest rate risk by buying shorter duration securities, which is reflected in the decrease in the effective duration of the securities portfolio.
Previous report
At June 30, 2026, HTM debt securities had a fair value of $1.85 billion, indicating net unrealized losses of $330 million (pre-tax). Additional unrealized losses on HTM debt securities of $48.2 million (pre-tax) were included in AOCI as a result of the reclassification of certain AFS debt securities to HTM in 2022. Unrealized losses were primarily attributable to changes in interest rates.
Previous report
Overall, the shift toward floating-rate earning assets outpaced the increase in liability sensitivity, resulting in a modest increase in asset sensitivity from December 31, 2025 to June 30, 2026 .
Previous report
Shareholders’ equity at June 30, 2026 was $3.75 billion, an increase of $106 million from December 31, 2025 primarily due to year-to-date earnings of $200 million, partially offset by common stock repurchases of $37.4 million and dividends declared on common stock of $60.8 million.
Reworded paragraphs (38)
Previous wording
The following is a discussion of our financial condition at June 30, 2026 and December 31, 2025 and our results of operations for the three and six months ended June 30, 2026 and 2025. The purpose of this discussion is to focus on information about our financial condition and results of operations which is not otherwise apparent from our consolidated financial statements and is intended to provide insight into our results of operations and financial condition. The following discussion and analysis should be read along with our consolidated financial statements and related notes included in Part I - Item 1 of this Report, “Cautionary Note Regarding Forward-Looking Statements” beginning on page 4 of this Report and the risk factors discussed in our Item 1A. of our 2025 10-K and in Part II, Item IA. of this Report.
Current wording
The following is a discussion of our financial condition at September 30, 2026 and December 31, 2025 and our results of operations for the three and nine months ended September 30, 2026 and 2025. The purpose of this discussion is to focus on information about our financial condition and results of operations which is not otherwise apparent from our consolidated financial statements and is intended to provide insight into our results of operations and financial condition. The following discussion and analysis should be read along with our consolidated financial statements and related notes included in Part I - Item 1 of this Report, “Cautionary Note Regarding Forward-Looking Statements” beginning on page 4 of this Report and the risk factors discussed in our Item 1A. of our 2025 10-K and in Part II, Item IA. of this Report.
Previous wording
This Report contains financial information determined by methods other than in accordance with GAAP. Such non-GAAP financial information includes the following measures: “tangible book value per common share,” and “tangible common equity to tangible assets.” In addition, management presents non-GAAP operating performance measures, which exclude merger-related and other items that are not part of our ongoing business operations. 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,” and “return on assets – operating,” “efficiency ratio – operating” and “tangible common equity to tangible assets.” We have developed internal policies and procedures to accurately capture and account for merger-related and other charges we consider to be non-operating or non-recurring and those charges are reviewed with the Audit Committee of our Board each quarter. We use these non-GAAP measures because we believe they provide useful supplemental information for evaluating our operations and performance over periods of time, as well as in managing and evaluating our business and in discussions about our operations and performance. We believe these non-GAAP measures may also provide users of our financial information with a meaningful measure for assessing our financial results and credit trends, as well as a comparison to financial results for prior periods. Nevertheless, non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. These non-GAAP measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP. In addition, because non-GAAP measures are not standardized, it may not be possible to compare our non-GAAP measures to similarly titled measures used by other companies. 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 16 of MD&A.
Current wording
We have developed internal policies and procedures to accurately capture and account for merger-related and other charges we consider to be non-operating or non-recurring and those charges are reviewed with the Audit Committee of our Board each quarter. We use these non-GAAP measures because we believe they provide useful supplemental information for evaluating our operations and performance over periods of time, as well as in managing and evaluating our business and in discussions about our operations and performance. We believe these non-GAAP measures may also provide users of our financial information with a meaningful measure for assessing our financial results and credit trends, as well as a comparison to financial results for prior periods. Nevertheless, non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. These non-GAAP measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP. In addition, because non-GAAP measures are not standardized, it may not be possible to compare our non-GAAP measures to similarly titled measures used by other companies. 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 17 of MD&A.
Previous wording
We offer a wide array of commercial and consumer banking services and investment advisory solutions through a network of 200 banking offices in Georgia, South Carolina, North Carolina, Tennessee, Florida and Alabama. Our equipment finance and SBA/USDA lending businesses operate throughout the United States. At June 30, 2026, we had consolidated total assets of $29.1 billion and 3,141 full-time equivalent employees.
Current wording
We offer a wide array of commercial and consumer banking services and investment advisory solutions through a network of 202 banking offices in Georgia, South Carolina, North Carolina, Tennessee, Florida and Alabama. Our SBA/USDA lending business operates throughout the United States. At September 30, 2026, we had consolidated total assets of $28.9 billion and 2,999 full-time equivalent employees.
Previous wording
We reported net income and diluted earnings per common share of $116 million and $0.95, respectively, for the second quarter of 2026, compared to $78.7 million and $0.63, respectively, for the same period in 2025. For the six months ended June 30, 2026, we reported net income and diluted earnings per common share of $200 million and $1.65, respectively, compared to $150 million and $1.21, respectively, in the same periods of 2025.
Current wording
We reported a net loss and diluted loss per common share of $140 million and $1.16, respectively, for the third quarter of 2026, compared to net income of $91.5 million and diluted earnings per share of $0.70, respectively, for the same period in 2025. For the nine months ended September 30, 2026, we reported net income and diluted earnings per common share of $60.2 million and $0.49, respectively, compared to $242 million and $1.91, respectively, in the same period of 2025.
Previous wording
Net income - operating for the second quarter and first six months of 2026 was $86.4 million and $171 million, respectively. Net income - operating for the second quarter of 2026 notably excludes the $38.5 million release of the ACL on equipment financing loans as a result of the Navitas sale mentioned above. Net income - operating for the six months ended June 30, 2026 also excludes a $6.70 million one-time payroll transition bonus and a $5.18 million gain on a terminated cash flow hedge. See Table 17 of MD&A for the Non-GAAP Performance Measures Reconciliation for further detail.
Current wording
Net income - operating for the third quarter and first nine months of 2026 was $93.7 million and $265 million, respectively. Net income - operating for these periods notably excludes the $366 million pre-tax loss on the securities portfolio repositioning and the $62.2 million gain on the sale of Navitas. Net income - operating for the nine months ended September 30, 2026, also excludes the $38.5 million release of the equipment financing loan ACL as a result of the Navitas sale, a $6.70 million one-time payroll transition bonus and a $5.18 million gain on a terminated cash flow hedge. For further detail, see Table 17 of MD&A for the Non-GAAP Performance Measures Reconciliation.
Previous wording
FTE net interest revenue for the second quarter and first six months of 2026 was $242 million and $476 million, respectively, compared to $227 million and $440 million, respectively, for the same periods of 2025. The increase in net interest revenue was mostly driven by lower deposit interest expense. Net interest margin for the second quarter and first six months of 2026 increased to 3.68% and 3.66%, respectively, from 3.50% and 3.43%, respectively, for the comparable 2025 periods. The increases in net interest margin were primarily due to the larger decrease in interest rates paid on deposits compared to the decrease in interest rates earned on loans following aggregate reductions of 75 basis points in the federal funds rate over the past year.
Current wording
FTE net interest revenue for the third quarter and first nine months of 2026 was $253 million and $729 million, respectively, compared to $235 million and $674 million, respectively, for the same periods of 2025. The increase in net interest revenue was mostly driven by decreases in deposit interest expense, in addition to interest revenue from recent acquisitions and core business growth. Net interest margin for the third quarter and first nine months of 2026 increased to 3.68% and 3.67%, respectively, from 3.58% and 3.48%, respectively, for the comparable 2025 periods. The increases in net interest margin were primarily due to the larger decrease in interest rates paid on deposits compared to the decrease in interest rates earned on loans. The decrease in rates resulted from aggregate reductions of 75 basis points in the federal funds rate over the past year through mid-September 2026 when the federal funds rate increased 25 basis points. See the net interest revenue discussion of MD&A for further details.
Previous wording
We recorded negative provisions for credit losses of $29.8 million and $19.0 million for the second quarter and first six months of 2026, respectively, reflecting the release of the ACL related to the equipment finance portfolio.
Current wording
We recorded a provision for credit losses of $10.0 million for the third quarter of 2026 and a negative provision of $8.94 million for the first nine months of 2026. The negative provision reflects the release of the ACL related to the equipment finance portfolio upon its transfer to held for sale in the second quarter of 2026.
Previous wording
Noninterest expenses of $160 million and $317 million in the second quarter and first six months of 2026, respectively, were up 8% and 10%, respectively, compared to the same periods of 2025. Salaries and employee benefits expense was the primary driver of the increase, reflecting an increase in full time equivalent employees of 3% since June 30, 2025, which reflects our current strategic hiring plan, annual merit increases that went in effect April 1, 2026, higher incentive compensation and higher group medical costs. The six months ended June 30, 2026 also includes a $6.70 million first quarter one-time payroll transition bonus paid to employees when we began paying employees bi-weekly in arrears.
Current wording
Noninterest expenses of $162 million and $479 million in the third quarter and first nine months of 2026, respectively, were up 8% and 9%, respectively, compared to the same periods of 2025. Salaries and employee benefits expense was the primary driver of the increase, mostly due to an increase in salaries, which reflects our current strategy to hire additional revenue producers and annual merit increases that went into effect April 1, 2026, higher incentive compensation and higher group medical costs. The nine months ended September 30, 2026, also includes a $6.70 million first quarter one-time payroll transition bonus paid to employees when we began paying employees bi-weekly in arrears. The acquisition of Peach State contributed to the increase in noninterest expenses for the third quarter and first nine months of 2026 and the acquisition of ANB, which occurred on May 1, 2025, also contributed to the increase in noninterest expenses over the nine months ended September 30, 2025.
Previous wording
Results for the second quarter and first six months of 2026 are discussed in further detail throughout the following sections of MD&A.
Current wording
Results for the third quarter and first nine months of 2026 are discussed in further detail throughout the following sections of MD&A.
Previous wording
(1)Excludes non-operating items as detailed on Non-GAAP Performance Measures Reconciliation on page 50. (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. (4)Annualized.
Current wording
(1)Excludes non-operating items as detailed on Non-GAAP Performance Measures Reconciliation on page 53. (2) Net income less preferred stock dividends, divided by average common equity.(3) Excludes effect of acquisition related intangibles and associated amortization. (4)Annualized.
Previous wording
FTE net interest revenue for the second quarter of 2026 was $242 million, an increase of $15.6 million from the same period in 2025. Net interest spread and net interest margin were 2.93% and 3.68%, respectively, which were up 31 basis points and 18 basis points, respectively, compared to the second quarter of 2025. The interest rate environment changes over the past year included aggregate reductions of 75 basis points in the federal funds rate, which drove decreases in funding costs, and to a lesser extent, loan yields. As a result, the primary driver of the increase in FTE net interest revenue for the second quarter of 2026 from the second quarter of 2025 was a $21.0 million decrease in deposit interest expense. Interest revenue from interest-earning assets decreased $2.76 million from the second quarter of 2025. Loan interest revenue increased $8.26 million compared to the same period of 2025, mostly driven by loan growth, while securities interest revenue decreased $9.55 million due to both lower average balances and a decrease in the average rate earned.
Current wording
The interest rate environment changes over the past year through mid-September 2026 included aggregate reductions of 75 basis points in the federal funds rate, which drove decreases in funding costs, and to a lesser extent, loan yields for much of the last 12 months. In mid-September 2026, the federal funds rate increased 25 basis points. The changes in rates over the past year drove much of the increases in net interest spread and net interest margin.
Previous wording
FTE net interest revenue for the first six months of 2026 and 2025 was $476 million and $440 million, respectively. For the first six months of 2026, our net interest spread increased 37 basis points and our net interest margin increased by 23 basis points compared to the same period of 2025. Changes in net interest revenue and related metrics for the six months ended 2026 were a result of the same factors affecting the quarter.
Current wording
FTE net interest revenue for the first nine months of 2026 and 2025 was $729 million and $674 million, respectively. For the first nine months of 2026, our net interest spread increased 31 basis points and our net interest margin increased 19 basis points compared to the same period of 2025. Changes in net interest revenue and related metrics for the nine months ended 2026 were a result of the same factors affecting the three months ended.
Previous wording
(1)Interest revenue on tax-exempt securities and loans includes a taxable-equivalent adjustment to reflect comparable interest on taxable securities and loans. The FTE adjustment totaled $1.22 million and $983,000, respectively, for the three months ended June 30, 2026 and 2025. The tax rate used to calculate the adjustment was 25%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
Current wording
(1)Interest revenue on tax-exempt securities and loans includes a taxable-equivalent adjustment to reflect comparable interest on taxable securities and loans. The FTE adjustment totaled $1.32 million and $1.04 million, respectively, for the three months ended September 30, 2026 and 2025. The tax rate used to calculate the adjustment was 25%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
Previous wording
(3)Unrealized losses on AFS securities, including those related to the reclassified from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $191 million in 2026 and $240 million in 2025 are included in other assets for purposes of this presentation.
Current wording
(3)Unrealized gains and losses on AFS securities, including those related to the reclassified from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $207 million in 2026 and $223 million in 2025 are included in other assets for purposes of this presentation.
Previous wording
(1)Interest revenue on tax-exempt securities and loans includes a taxable-equivalent adjustment to reflect comparable interest on taxable securities and loans. The FTE adjustment totaled $2.33 million and $1.97 million, respectively, for the six months ended June 30, 2026 and 2025. The tax rate used to calculate the adjustment was 25%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
Current wording
(1)Interest revenue on tax-exempt securities and loans includes a taxable-equivalent adjustment to reflect comparable interest on taxable securities and loans. The FTE adjustment totaled $3.65 million and $3.01 million, respectively, for the nine months ended September 30, 2026 and 2025. The tax rate used to calculate the adjustment was 25%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
Previous wording
(3)Unrealized gains and losses on AFS securities, including those related to the reclassified from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $183 million and $254 million in 2026 and 2025, respectively, are included in other assets for purposes of this presentation.
Current wording
(3)Unrealized gains and losses on AFS securities, including those related to the reclassified from AFS to HTM, have been reclassified to other assets. Pretax unrealized losses of $192 million and $244 million in 2026 and 2025, respectively, are included in other assets for purposes of this presentation.
Previous wording
The increase in mortgage loan gains and related fees for the three and six months ended June 30, 2026 compared to the same periods of 2025 was primarily a result of an increase in mortgage servicing income of $1.10 million and $2.14 million, respectively, which includes fair value adjustments to our mortgage servicing asset. During the first quarter of 2026, we began an economic hedging strategy utilizing a trading securities portfolio, with the intention of offsetting the impact of the changes in the fair value of our mortgage servicing asset with the gains or losses on trading securities. During the three and six months ended June 30, 2026, we recognized $904,000 and $1.98 million, respectively, in losses on trading securities, which is included in other noninterest income on the consolidated statements of income.
Current wording
The increase in mortgage loan gains and related fees for the three and nine months ended September 30, 2026, compared to the same periods of 2025 was primarily a result of an increase in mortgage servicing income of $4.35 million and $6.49 million, respectively, which was mostly driven by positive fair value adjustments to our mortgage servicing asset. During the first quarter of 2026, we began an economic hedging strategy utilizing a trading securities portfolio, with the intention of offsetting the impact of the changes in the fair value of our mortgage servicing asset with the gains or losses on trading securities. During the three and nine months ended September 30, 2026, we recognized $4.89 million and $6.87 million, respectively, in losses on trading securities, which is included in other noninterest income on the consolidated statements of income.
Previous wording
The decrease in net gains on sales of other loans is primarily driven by our strategic decision to retain more of our SBA/USDA loan production during the second quarter of 2026.
Current wording
Net gains on sales of other loans for the three and nine months ended September 30, 2026, includes the $62.2 million gain on the sale of Navitas. Excluding that gain, the decrease in net gains on sales of other loans is primarily driven by our strategic decision to retain more SBA/USDA loan production throughout 2026.
Previous wording
During the three and six months ended June 30, 2026, other investment income reflects higher earnings on our mutual fund portfolio and our fintech and limited partnership investments compared to the same periods of 2025. Our other investment portfolio includes mutual funds, equity securities, fintech and other limited partnership investments. Gains and losses from these investments are generally unrealized.
Current wording
The increase in other investment income for the three and nine months ended September 30, 2026, reflects higher earnings on our limited partnership investments. Other investment income for the third quarter of 2026 was offset by lower earnings on fintech and mutual fund investments compared to the third quarter of 2025. Our other investment portfolio includes mutual funds, equity securities, fintech and other limited partnership investments. Gains and losses from these investments are generally unrealized.
Previous wording
The increase in other noninterest income for the six months ended June 30, 2026 was primarily driven by the $5.18 million gain on the termination of an interest rate cap accounted for as a cash flow hedge of our $100 million subordinated debt, for which redemption notice was provided in the first quarter of 2026 and which was then subsequently redeemed on April 30, 2026.
Current wording
The increase in other noninterest income for the nine months ended September 30, 2026 was primarily driven by the $5.18 million gain on the termination of an interest rate cap accounted for as a cash flow hedge of our $100 million subordinated debt, for which redemption notice was provided in the first quarter of 2026 and which was then subsequently redeemed on April 30, 2026.
Previous wording
We recorded negative provisions for credit losses of $29.8 million and $19.0 million, respectively, for the three and six months ended June 30, 2026, compared to provision expense of $11.8 million and $27.2 million, respectively, for the same respective periods of 2025. 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. The negative provisions for the three and six months ended June 30, 2026 reflect the reversal of the ACL related to the equipment financing portfolio, as substantially all of that portfolio was reclassified to held for sale during the second quarter of 2026. Additional discussion on credit quality and the ACL is included in the “Allowance for Credit Losses” section of MD&A in this Report.
Current wording
We recorded a provision for credit losses of $10.0 million for the three months ended September 30, 2026, and a negative provision of $8.94 million for the nine months ended September 30, 2026, compared to provision expense of $7.91 million and $35.1 million, respectively, for the same periods of 2025. 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. The negative provision recorded during the nine months ended September 30, 2026, reflects a $38.5 million reversal of ACL associated with the equipment financing portfolio, substantially all of which was transferred to held-for-sale in the second quarter of 2026 in anticipation of the pending sale of Navitas, which subsequently closed on September 1, 2026. Additional discussion on credit quality and the ACL is included in the “Allowance for Credit Losses” section of MD&A in this Report.
Previous wording
The increase in salaries and employee benefits for the second quarter of 2026 compared to 2025 was mostly driven by an increase in salaries and higher performance-related incentive compensation as well as an increase in group medical expense. The increase in salaries was partly driven by annual merit increases that went into effect on April 1, 2026 and the increase in full-time equivalent employees. At June 30, 2026 and 2025 we had 3,141 and 3,050 full-time equivalent employees, respectively, an increase of 3%, reflecting our current strategic hiring plan. In addition to the factors impacting the quarter, the increase for the six months ended June 30, 2026 also reflects the $6.70 million first quarter one-time payroll transition bonus. The bonus was paid to bridge the gap in payroll dates due to the transition from a semi-monthly payroll cycle to a bi-weekly payroll cycle in arrears.
Current wording
The increase in salaries and employee benefits for the three and nine months ended September 30, 2026 was mostly driven by increases in salaries, performance-related incentives and stock compensation, as well as higher group insurance costs. The increase in salaries was driven by our current hiring strategy of onboarding experienced and proven revenue producers, which has resulted in over 40 such producers having been added since the third quarter of 2025. At September 30, 2026 and 2025, we had 2,999 and 3,058 full-time equivalent employees, which reflects the reduction resulting from the Navitas sale, partially offset by the addition of Peach State employees. The increase in salaries and employee benefits for the nine months ended September 30, 2026 also reflects the $6.70 million first quarter one-time payroll transition bonus. That bonus was paid to bridge the gap in payroll dates due to the transition from a semi-monthly to a bi-weekly payroll cycle in arrears.
Previous wording
The decrease in FDIC assessments and other regulatory charges for the six months ended June 30, 2026 reflects a $1.89 million accrual reversal of the FDIC special assessment related to certain 2023 bank failures, as the FDIC announced it no longer intended to collect the remainder of the assessment.
Current wording
The decrease in FDIC assessments and other regulatory charges for the nine months ended September 30, 2026 reflects a $1.89 million accrual reversal of the FDIC special assessment related to certain 2023 bank failures, as the FDIC announced it no longer intended to collect the remainder of the assessment.
Previous wording
The increase in professional fees for the three and six months ended June 30, 2026 was primarily attributable to higher legal fees compared to the same periods of 2025, driven by the Navitas California lender licensing issue discussed below, as well as other non-recurring legal expenses.
Current wording
The increase in professional fees for the three and nine months ended September 30, 2026 was primarily attributable to higher legal fees compared to the same periods of 2025, in part driven by the Navitas California lender licensing issue discussed below, as well as other non-recurring expenses.
Previous wording
Merger-related and other charges for the three and six months ended June 30, 2026 mostly consists of expenses related to the pending sale of Navitas and Peach State merger-related costs. Merger-related and other charges for the three and six months ended June 30, 2025 include merger-related costs related to the ANB merger, which closed May 1, 2025.
Current wording
Merger-related and other charges for the three and nine months ended September 30, 2026 mostly consists of expenses related to the Peach State acquisition, the Navitas sale and branch closure costs. Merger-related and other charges for the three and nine months ended September 30, 2025 include merger-related costs related to the ANB merger, which closed May 1, 2025.
Previous wording
During the second quarter of 2026, we reached a settlement with the state of California related to a dispute regarding lending license requirements for Navitas. We agreed to settle the matter for approximately $4.08 million, which drove the increase in other noninterest expense for the three and six months ended June 30, 2026. Related legal fees of $421,000 were recorded in the second quarter of 2026, which contributed to the increase in professional fees for the three and six months ended June 30, 2026.
Current wording
During the second quarter of 2026, we reached a settlement with the state of California related to a dispute regarding lending license requirements for Navitas. We agreed to settle the matter for approximately $4.08 million, which was the primary driver of the increase in other noninterest expense for the nine months ended September 30, 2026. Related legal fees of $421,000 were recorded in the second quarter of 2026, which contributed to the increase in professional fees for the nine months ended September 30, 2026.
Previous wording
The ACL for loans at June 30, 2026 totaled $169 million compared to $210 million at December 31, 2025 and the ACL for loans as a percentage of total loans held for investment decreased to 0.94% from 1.09%. The decrease in the ACL was primarily attributable to the release of the ACL on the equipment financing loans reclassified to held for sale during June of 2026. As the equipment financing loans have a higher projected loss rate, the ACL coverage ratio decreased in correlation with the release of the ACL on those loans. The ACL for the remainder of the loan portfolio increased approximately 3%, mostly due to loan growth. Our ACL for unfunded commitments, which totaled $19.6 million, increased $4.53 million compared to December 31, 2025, due to an increase in our construction commitments combined with a higher modeled loss rate.
Current wording
The ACL for loans at September 30, 2026 totaled $179 million compared to $210 million at December 31, 2025 and the ACL for loans as a percentage of total loans held for investment decreased to 0.94% from 1.09%. The decrease in the ACL was primarily attributable to the release of the ACL on the equipment financing loans sold in the Navitas transaction. As the equipment financing loans carried a higher projected loss rate, the ACL coverage ratio decreased in correlation with the release of the ACL on those loans. The ACL as of September 30, 2026, also reflects the initial ACL of $5.87 million on loans acquired in the Peach State transaction. The ACL for the remainder of the loan portfolio increased approximately 5%, mostly due to loan growth. Our ACL for unfunded commitments, which totaled $21.1 million, increased $6.00 million compared to December 31, 2025, due to an increase in our construction commitments combined with a higher modeled loss rate, as well as the addition of Peach State’s unfunded commitments.
Previous wording
The following tables provide information on loans and the ACL for the periods indicated. See Note 5 to the consolidated financial statements for further information on loans and the ACL.
Current wording
The following tables provide information on loans and the ACL for the periods indicated. See Note 5 in the Notes to the Consolidated Financial Statements for further information on loans and the ACL.
Previous wording
Table 8 - Net Charge-offs to Average Loans
Current wording
Table 8 - Net Charge-offs to Average Loans Held for Investment
Previous wording
The table below summarizes NPAs for the periods indicated. NPAs include nonaccrual loans, OREO and repossessed assets. The main driver of the increase in nonaccrual loans since December 31, 2025 was a small population of larger owner-occupied CRE loans moving to nonaccrual during the first six months of 2026.
Current wording
NPAs include nonaccrual loans, OREO and repossessed assets. The table below summarizes NPAs for the periods indicated. The decrease since December 31, 2025, was driven primarily by the sale of Navitas, reflected in the decrease in equipment financing nonaccrual loans shown below.
Previous wording
In the opinion of management, our liquidity position at June 30, 2026 was sufficient to meet our expected cash flow requirements for the foreseeable future. See the consolidated statement of cash flows for further detail.
Current wording
In the opinion of management, our liquidity position at September 30, 2026 was sufficient to meet our expected cash flow requirements for the foreseeable future.
Previous wording
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 hedge and hedged item are reflected in investment securities interest income. The changes in the fair value of the hedge and the hedged item substantially offset each other. See Note 6 to the financial statements for further detail.
Current wording
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 hedge and hedged item are reflected in investment securities interest income. The changes in the fair value of the hedge and the hedged item substantially offset each other. During the third quarter of 2026, in connection with the sales of the securities discussed above, we terminated all but one fair value hedge on the AFS securities. See Note 6 in the Notes to the Consolidated Financial Statements further detail on derivatives.
Previous wording
See Note 4 to the consolidated financial statements for additional detail on investment securities.
Current wording
See Note 4 in the Notes to the Consolidated Financial Statements for additional detail on investment securities.
Previous wording
Customer deposits are the primary source of funds for the continued growth of our earning assets. 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, 2025, customer deposits decreased $57.6 million, mostly due to a seasonal decrease in public funds, partially offset by an increase in noninterest bearing demand balances. As of June 30, 2026, we had approximately $9.48 billion of uninsured deposits, of which $2.79 billion was collateralized by investment securities.
Current wording
Customer deposits are the primary source of funds for the continued growth of our earning assets. 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, 2025, customer deposits increased $1.09 billion, which was partly attributable to the deposits assumed in the Peach State acquisition, which totaled $678 million as of the acquisition date. As of September 30, 2026, we had approximately $10.0 billion of uninsured deposits, of which $2.80 billion was collateralized by investment securities.
Previous wording
At June 30, 2026 and December 31, 2025, the Holding Company had long-term debt outstanding of $20.6 million and $120 million, respectively, which includes trust preferred securities and, as of December 31, 2025, also includes subordinated debt. On April 30, 2026, we redeemed our $100 million in principal amount of subordinated debentures prior to maturity. At June 30, 2026, the Bank had $360 million in short-term borrowings outstanding, compared to $85.0 million at December 31, 2025. The Bank also had $800 million in FHLB advances at June 30, 2026. In the second quarter we utilized wholesale funding sources to facilitate securities purchases, as discussed above, and fund loan growth.
Current wording
At September 30, 2026 and December 31, 2025, the Holding Company had long-term debt outstanding of $39.7 million and $120 million, respectively, which included subordinated debt and trust preferred securities. On April 30, 2026, we redeemed $100 million in principal amount of subordinated debentures prior to maturity. On August 1, 2026, we assumed $19.5 million of subordinated debentures from the Peach State merger. At June 30, 2026, we had $800 million of FHLB advances and $360 million in short-term borrowings outstanding, which were utilized to facilitate securities purchases and fund loan growth. In the third quarter, those borrowings were repaid with the proceeds from the sale of Navitas. At September 30, 2026, we had no FHLB advances or short-term borrowings outstanding.
Previous wording
The following table presents our estimated interest sensitivity position at the dates indicated. The scenario results presented assume parallel movements in the yield curve, which may differ from actual future curve behavior. Other than an assumption for the runoff of estimated surge deposits, which is assumed to be replaced with higher cost wholesale funding, this presentation generally assumes no change in deposit portfolio size or composition.
Current wording
The following table presents our estimated interest sensitivity position at the dates indicated. The scenario results presented assume parallel movements in the yield curve, which may differ from actual future curve behavior. This presentation generally assumes no change in balance sheet size or composition.
Previous wording
The following table shows capital composition as of June 30, 2026 and December 31, 2025. The decrease in Tier 2 capital instruments reflects the redemption of the $100 million subordinated debenture in the second quarter of 2026, which was subject to phase-out provisions as it approached maturity.
Current wording
The following table shows capital composition as of September 30, 2026 and December 31, 2025. The decrease in Tier 2 capital instruments reflects the redemption of the $100 million subordinated debenture in the second quarter of 2026, which was subject to phase-out provisions as it approached maturity. This decrease was partially offset by subordinated debentures assumed in the Peach State acquisition on August 1, 2026.
Previous wording
The following table shows capital ratios, as calculated under applicable regulatory guidelines, at June 30, 2026 and December 31, 2025. As of June 30, 2026, capital levels remained characterized as “well-capitalized” under regulatory requirements in effect at the time. Additional information related to capital ratios is provided in Note 10 to the consolidated financial statements.
Current wording
The following table shows capital ratios, as calculated under applicable regulatory guidelines, at September 30, 2026 and December 31, 2025. As of September 30, 2026, capital levels remained characterized as “well-capitalized” under regulatory requirements in effect at the time. Additional information related to capital ratios is provided in Note 11 in the Notes to the Consolidated Financial Statements.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
This Report contains financial information determined by methods other than in accordance with GAAP. Such non-GAAP financial information includes the following measures: “tangible book value per common share,” and “tangible common equity to tangible assets.” In addition, management presents non-GAAP operating performance measures, which exclude merger-related and other items that are not part of our ongoing business operations. 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,” and “return on assets – operating,” and “efficiency ratio – operating.”