In a recent statement, United Community Banks Inc. (UCBI) revealed that it will incur a charge of 41 cents per share during the fourth quarter. This charge includes a loss of 34 cents per share due to the sale of bonds classified as available-for-sale (AFS), as well as an estimated pre-tax charge of about 7 cents per share linked to the FDIC special assessment after the failure of Silicon Valley Bank and Signature Bank earlier this year.
According to FactSet data, analysts currently expect the bank to earn 53 cents per share in the fourth quarter.
Increased Annual Earnings Outlook
Notwithstanding the anticipated charges in the fourth quarter, United Community Banks also announced a positive update to its annual earnings outlook. The company has raised its outlook by 6 cents per share, attributing this increase to the purchase of higher-yielding securities during the quarter.
Impact of AFS Bond Transactions
United Community Banks reported a loss of $52 million from the sale of AFS bonds that yielded 1.46%. Simultaneously, the company invested $264 million in AFS bonds with a significantly higher yield of 5.36%.
Enhanced Net Interest Income Outlook
United Community Banks has raised its net interest income outlook by $9.6 million on an annual basis.
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