The board of directors of United Community Banks Inc. in Blairsville, Ga., said Tuesday that it was temporarily suspending its quarterly dividend to avoid further dilution of its shares and improve its liquidity.
In September the owner of the $8.4 billion-asset United Community Bank nearly doubled its shares outstanding through an increased $225.5 million offering of stock to bolster its capital for its banking operations and potential acquisitions.
United Community, a regional bank holding company, operates 27 banks with 107 branches.
"We recognize the importance our stock dividend is to many of our shareholders," said Jimmy Tallent, United Community's president and chief executive officer. "Yet we believe the best way for every shareholder to benefit is to avoid further dilution and continue to position the company for future earnings growth and enhance our liquidity."
Stung by surging credit costs, United Community has become unprofitable this year.