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United Community Banks (UCBI) Ups Quarterly Dividend by 4.7%

·3-min read

United Community Banks, Inc. UCBI has announced that its board of directors approved a quarterly cash dividend of 22 cents per share on common stock, marking a sequential hike of 4.7%. The dividend will be paid out on Oct 5 to shareholders on record as of Sep 15, 2022.

Prior to this, UCBI hiked its dividend by 5% to 21 cents per share in February 2022. In fact, in the last five years, the bank increased its dividend nine times.

Considering the last day’s closing price of $36.18, United Community Banks’ dividend yield stands at 2.4%. The yield is significantly impressive compared with the industry average of 1.89%. It also represents a steady income stream for investors.

In November 2021, UCBI’s board of directors authorized a share repurchase program of up to $50 million of its outstanding shares. The plan will expire on Dec 31, 2022. Till the second quarter of 2022, the bank had not repurchased any shares under the authorization.

UCBI is strategically expanding its footprint and diversifying revenues through strategic acquisitions. In January 2022, the bank completed its merger with Reliant Bancorp, Inc., while last year, it closed two deals — Aquesta Financial Holdings, Inc. and FinTrust Capital Partners, LLC — as part of its expansion effort.

Apart from these, management is excited about the merger agreement with Progress Financial Corporation at an aggregate value of approximately $271.5 million, which was announced in May 2022. This will help UCBI expand in the southeast region's high-growth markets.

United Community Banks’ continuous efforts to expand its footprint and improve revenues will enhance its earnings strength. Thus, this will help the company to sustain its capital deployment activities efficiently in the upcoming period.

Over the past six months, shares of UCBI have declined 4.4% compared with a 0.9% fall of the industry it belongs to.

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UCBI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Companies Undertaking Similar Action

Over the past few months, several companies have been rewarding shareholders with dividend hikes. Some of these are Bank of America BAC and Lazard Ltd LAZ.

Bank of America declared a quarterly cash dividend of 22 cents per share, up 4.8% from the prior quarter. The dividend will be paid out on Sep 30 to BAC’s shareholders of record on Sep 2, 2022.

Lazard announced a 6% hike in its quarterly dividend to 50 cents per share on its outstanding Class A common stock. The dividend was paid out on Aug 19 to LAZ’s shareholders of record on Aug 8, 2022.

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