United Community Banks, Inc. Announces Redemption of All Oustanding Shares of 6.875% Series I Non-Cumulative Perpetual Preferred Stock

Rhea-AI Summary

United Community Banks (NYSE: UCB) has announced the redemption of all outstanding shares of its 6.875% Series I Non-Cumulative Perpetual Preferred Stock on September 15, 2025. The company will redeem $88 million aggregate liquidation preference using cash on hand, with a redemption price of $25,000 per share ($25 per Depositary Share).

The redemption involves 3,661,650 depositary shares, each representing a 1/1000th interest in a preferred stock share. UCB, with $28.1 billion in assets as of June 30, 2025, operates 200 offices across six southeastern states and manages a national SBA lending franchise.

Positive

• Strategic capital structure management through redemption of high-cost preferred stock
• Strong cash position allowing $88 million redemption using cash on hand
• Substantial asset base of $28.1 billion demonstrates financial strength

Negative

• Reduction in capital buffer through preferred stock redemption
• Loss of diversified funding source in capital structure

Insights

Capital Markets Specialist

UCB's $88M preferred stock redemption strategically optimizes capital structure, reducing higher-cost financing while demonstrating strong liquidity position.

United Community Banks is executing a complete redemption of its 6.875% Series I Non-Cumulative Perpetual Preferred Stock, totaling $88 million in aggregate liquidation preference. This capital structure optimization move will occur on September 15, 2025, with shareholders receiving $25,000 per share ($25 per depositary share).

The decision to redeem this preferred stock using cash on hand signals robust liquidity at UCB. By eliminating this 6.875% dividend obligation, the bank is effectively lowering its cost of capital, which should enhance long-term profitability metrics. The redemption price of $25 per depositary share aligns with the standard liquidation preference, indicating this isn't a distressed transaction but rather prudent capital management.

This move reflects strategic flexibility in UCB's balance sheet management. With $28.1 billion in assets as of June 30, 2025, this $88 million redemption represents approximately 0.31% of their asset base – a meaningful but manageable capital allocation decision. The bank's willingness to deploy cash reserves for this redemption rather than refinancing suggests confidence in their current liquidity position and future cash flow generation.

For existing preferred shareholders, while they'll lose this income stream after the redemption date, they'll receive their full principal investment plus the final dividend payment due on the redemption date. The termination of the 6.875% dividend obligation will modestly improve UCB's earnings available to common shareholders going forward.

GREENVILLE, S.C., Aug. 15, 2025 (GLOBE NEWSWIRE) -- United Community Banks, Inc. (NYSE: UCB) (“United”, the “Company”), is redeeming all outstanding shares of the Company’s 6.875% Series I Non-Cumulative Perpetual Preferred Stock (the “Preferred Stock”) on September 15, 2025 (the “Redemption Date”). The announced redemption reflects United’s ongoing active management of its capital structure. Payment of the cash redemption price equal to $25,000 per share of Preferred Stock (the “Redemption Price”) (equivalent to $25 per Depositary Share) will be made on the Redemption Date. United will redeem the $88 million aggregate liquidation preference of the Preferred Stock using cash on hand.

The Redemption Price does not include the previously declared dividend payment that is due on the Redemption Date and that will be paid immediately prior to the redemption of the Preferred Stock on the Redemption Date to holders of record on the record date for such dividend payment. On the Redemption Date, simultaneous with the redemption of the Preferred Stock, the depositary for the Preferred Stock will redeem 3,661,650 depositary shares (the “Depositary Shares”), each representing a 1/1000th interest in a share of the Preferred Stock, for an amount per Depositary Share equal to 1/1000th of the Redemption Price per share of Preferred Stock. On and after the Redemption Date, dividends in respect of the Preferred Stock represented by the Depositary Shares shall cease to accrue, the Preferred Stock and the Depositary Shares shall no longer be deemed outstanding and all rights of the holders of the Preferred Stock and holders of receipts evidencing the Depositary Shares shall cease and terminate, except only the right of the holders of the Preferred Stock to receive the Redemption Price and the right of the holders of receipts evidencing the Depositary Shares to receive 1/1000th of the Redemption Price, in each case, without interest.

The Depositary Shares are held through the Depository Trust Company (“DTC”) and will be redeemed in accordance with the procedures of DTC. Payment to DTC will be made by Continental Stock Transfer & Trust Company, as the depositary, in accordance with the Deposit Agreement governing the Depositary Shares.

About United Community Banks, Inc.
United Community Banks, Inc. (NYSE: UCB) is the financial holding company for United Community, a top 100 U.S. financial institution committed to building stronger communities and improving the financial health and well-being of its customers. United Community offers a full range of banking, mortgage and wealth management services. As of June 30, 2025, United Community Banks, Inc. had $28.1 billion in assets and operated 200 offices across Alabama, Florida, Georgia, North Carolina, South Carolina and Tennessee. The company also manages a nationally recognized SBA lending franchise and a national equipment finance subsidiary, extending its reach to businesses across the country. United is an 11-time winner of J.D. Power’s award for highest customer satisfaction among consumer banks in the Southeast and was named the most trusted bank in the region in 2025. The company has also been recognized eight consecutive years by American Banker as one of the “Best Banks to Work For.” In commercial banking, United earned five 2025 Greenwich Best Brand awards, including national honors for middle market satisfaction. Forbes has consistently named United among the World’s Best and America’s Best Banks. Learn more at ucbi.com.

For more information:
Jefferson Harralson
Chief Financial Officer
(864) 240-6208
Jefferson_Harralson@ucbi.com

FAQ

When will United Community Banks (UCB) redeem its Series I Preferred Stock?

UCB will redeem the Series I Preferred Stock on September 15, 2025 (the Redemption Date).

What is the redemption price for UCB's Series I Preferred Stock?

The redemption price is $25,000 per preferred share, equivalent to $25 per Depositary Share.

How many Depositary Shares of UCB Series I Preferred Stock will be redeemed?

3,661,650 Depositary Shares will be redeemed, each representing a 1/1000th interest in a preferred stock share.

How will UCB fund the Series I Preferred Stock redemption?

UCB will fund the $88 million redemption using cash on hand.

What happens to UCB Series I Preferred Stock dividends after the redemption date?

After September 15, 2025, dividends will cease to accrue, and all rights of preferred stock and depositary share holders will terminate except for receiving the redemption price.