United Community Banks Combines Solid Execution With An Ongoing M&A Growth Story

Banks are not very popular at the moment, and banks that lean heavily on M&A to drive growth are even less popular … and yet, United Community Banks (NASDAQ:UCBI) shares are up about 5% since my last update, outperforming the regional bank group by around 10%. UCBI management has continued its acquisitive ways, but has also been delivering on strong asset sensitivity and operating leverage, driving better-than-expected results for the year.

I continue to believe that UCBI operates in fundamentally attractive markets, and I like the company’s overall strategy with respect to lending and deposit-gathering, including meaningful operations in “second-tier” metro areas where there is still good population and income growth, but less competition from non-local banks. Valuation is challenged by the reliance on an M&A model, but I do believe the shares are still modestly undervalued.

 

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United Community Banks Combines Solid Execution With An Ongoing M&A Growth Story