EDGAR 10-K Filing

Company CIK: 729986
Filing Year: 2025
Filename: 729986_10-K_2025_0001193125-25-042589.json

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ITEM 1. BUSINESS
Item 1. BUSINESS
Organizational History and Subsidiaries
United Bankshares, Inc. (“United,” “we,” “us,” “our,” or the “Company”) is a West Virginia corporation registered as a financial holding company pursuant to the Bank Holding Company Act of 1956, as amended. United was incorporated on March 26, 1982, organized on September 9, 1982, and began conducting business on May 1, 1984 with the acquisition of three wholly-owned subsidiaries. Since its formation in 1982, United has acquired thirty-three banking institutions. United has one banking subsidiary “doing business” under the name of United Bank, operating under the laws of Virginia. United Bank offers a full range of commercial and retail banking services and products. United also owns nonbank subsidiaries which engage in other community banking services such as asset management, real property title insurance, financial planning, mortgage banking, and brokerage services.
Web Site Address
United’s web site address is “www.ubsi-inc.com”. United makes available free of charge on its web site the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments thereto, as soon as reasonably practicable after United files such reports with the Securities and Exchange Commission (“SEC”). The reference to United’s web site does not constitute incorporation by reference of the information contained in the web site and should not be considered part of this document. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
Business of United
As a financial holding company, United’s present business is community banking. As of December 31, 2024, United’s consolidated assets approximated $30.0 billion and total shareholders’ equity approximated $5.0 billion.
United is permitted to acquire other banks and bank holding companies, as well as thrift institutions. United is also permitted to engage in certain non-banking activities which are closely related to banking under the provisions of the Bank Holding Company Act and the Federal Reserve Board’s Regulation Y. Management continues to consider such opportunities as they arise, and in this regard, management from time to time makes inquiries, proposals, or expressions of interest as to potential opportunities, although no agreements or understandings to acquire other banks or bank holding companies or non-banking subsidiaries or to engage in other nonbanking activities, other than those identified herein, presently exist.
On January 10, 2025, United consummated its acquisition of Piedmont Bancorp, Inc. (“Piedmont”), the parent company of The Piedmont Bank, a Georgia state-chartered bank, with sixteen locations in the State of Georgia. Piedmont was a single bank holding company headquartered in Atlanta, Georgia with total assets of approximately $2.4 billion, total loans of approximately $2.1 billion, total liabilities of approximately $2.2 billion, total deposits of approximately $2.1 billion, and total shareholders’ equity of approximately $202 million as of the merger date. On December 3, 2021, United completed its acquisition of Community Bankers Trust Corporation (“Community Bankers Trust”), the parent company of Essex Bank (“Essex”) with $1.8 billion in assets, headquartered in Richmond, Virginia. The acquisition of Community Bankers Trust enhanced United’s existing presence in the DC Metro MSA and took United into new markets including Baltimore, Annapolis, Lynchburg, Richmond, and the Northern Neck of Virginia. It also strategically connected our Mid-Atlantic and Southeast footprints. On May 1, 2020, United completed its acquisition of Carolina Financial Corporation (“Carolina Financial”), the parent company of CresCom Bank (“CresCom”) with $5.0 billion in assets, headquartered in Charleston, South Carolina. The acquisition of Carolina Financial broadened United’s footprint in the Southeast region with some of the most desirable banking markets in the nation. Prior to Carolina Financial, United more than doubled its size through three acquisitions in less than three and a half years. In January 2014, United closed its acquisition of Virginia Commerce Bancorp, Inc., followed by the November 2015 announcement of the Bank of Georgetown transaction which closed June 2016. In August 2016, United announced the Cardinal Financial Corporation acquisition which closed April 2017.
Business of Subsidiaries
United, through its subsidiaries, engages primarily in community banking offering most types of business permitted by law and regulation. Included among the banking services offered are the acceptance of deposits in checking, savings, time and money market accounts; the making and servicing of personal, commercial, and floor plan loans; and the making of construction and real estate loans. Also offered are individual retirement accounts, safe deposit boxes, wire transfers and other standard banking products and services. As part of its lending function, United Bank offers credit card services.
United Bank maintains a trust department which acts as trustee under wills, trusts and pension and profit sharing plans, as executor and administrator of estates, and as guardian for estates of minors and incompetents, and in addition performs a variety of investment and security services. United Bank provides services to its correspondent banks such as the buying and selling of federal funds.
As of December 31, 2024, United’s business activities are confined to one operating segment, United Bank, and one reportable segment, community banking. At December 31, 2023, United had three operating segments: United Bank, George Mason Mortgage, LLC (“George Mason”) and Crescent Mortgage Company (“Crescent”), and two reporting segments: community banking and mortgage banking. However, during the first quarter of 2024, United consolidated the mortgage origination and sales business of George Mason and Crescent with that of United Bank. United previously exited the third-party origination (“TPO”) business during the fourth quarter of 2023.
United Brokerage Services, Inc., a wholly-owned subsidiary of United Bank, is a fully-disclosed broker/dealer and a Registered Investment Advisor with the Financial Industry Regulatory Authority (“FINRA”), the Securities and Exchange Commission, and a member of the Securities Investor Protection Corporation. United Brokerage Services, Inc. offers a wide range of investment products as well as comprehensive financial planning and asset management services to the general public.
United Bank is a member of a network of automated teller machines known as the New York Currency Exchange (“NYCE”) ATM network. The NYCE is an interbank network connecting the ATMs of various financial institutions in the United States and Canada.
United Bank offers secure Digital Banking for consumer and commercial customers. Digital Banking is available on a multitude of devices to include a browser-based experience, mobile (Apple, Android) and tablet applications. Digital Banking allows customers to manage their financial lives from any place they can access the internet (cellular or Wi-Fi). Customers can quickly check balances, pay bills, complete internal and Zelle® transfers; all from the convenience of their devices. They can also set-up text and email alerts to notify them of large transactions and help them avoid overdraft fees. Commercial customers have many of the same services, including balance inquiry, cash management, sweeps and wire transfers. Consumers can also research United Bank products and open deposits accounts online and apply for mortgages from United Bank’s website.
United Bank also offers an automated telephone banking system, Telebanc, which allows customers to access their personal account(s) or business account(s) information from a touch-tone telephone.
Lending Activities
United’s loan and lease portfolio, net of unearned income, increased $314.4 million or 1.47% in 2024 due mainly to loan growth in three major loan categories. The loan and lease portfolio is mainly comprised of commercial, real estate and consumer loans including credit card and home equity loans. Since year-end 2023, commercial, financial and agricultural loans were flat, decreasing $8.0 million or less than 1%. In particular, commercial real estate loans increased $213.1 million or 2.56% while commercial loans (not secured by real estate) decreased $221.1 million or 6.19%. Construction and land development loans increased $360.8 million or 11.46%, residential real estate loans increased $236.1 million or 4.48%, and consumer loans decreased $281.6 million or 26.45% due mainly to a decrease in indirect automobile financing.
Commercial Loans and Leases
The commercial loan and lease portfolio consists of loans and leases to corporate borrowers primarily in small to mid-size industrial and commercial companies, as well as automobile dealers, service, retail and wholesale merchants. Collateral securing these loans includes equipment, machinery, inventory, receivables, vehicles and commercial real estate. Commercial loans and leases are considered to contain a higher level of risk than other loan types although care is taken to minimize these risks. Numerous risk factors impact this portfolio including industry specific risks such as economy, new technology, labor rates and cyclicality, as well as customer specific factors, such as cash flow, financial structure, operating controls and asset quality. United diversifies risk within this portfolio by closely monitoring industry concentrations and portfolios to ensure that it does not exceed established lending guidelines. Diversification is intended to limit the risk of loss from any single unexpected economic event or trend. Underwriting standards require a comprehensive credit analysis and independent evaluation of virtually all larger balance commercial loans by the loan committee prior to approval.
Real Estate Loans
Commercial real estate loans consist of commercial mortgages, which generally are secured by nonresidential and multi-family residential properties. Also included in this portfolio are loans that are secured by owner-occupied real estate, but made for purposes other than the construction or purchase of real estate. Commercial real estate loans are to many of the same customers and carry similar industry risks as the commercial loan portfolio. Real estate mortgage loans to consumers are secured primarily by a first lien deed of trust. These loans are traditional one-to-four family residential mortgages. The loans generally do not exceed an 80% loan-to-value ratio at the loan origination date and are at either a variable rate or fixed rate of interest. These loans are considered to be of normal risk. Also included in the category of real estate mortgage loans are home equity loans.
As of December 31, 2024, approximately $641.6 million or 2.96% of United’s loan portfolio were real estate loans that met the regulatory definition of a high loan-to-value loan. A high loan-to-value real estate loan is defined as any loan, line of credit, or combination of credits secured by liens on or interests in real estate that equals or exceeds a certain percentage established by United’s primary regulator of the real estate’s appraised value, unless the loan has other appropriate credit support. The certain percentage varies depending on the loan type and collateral. Appropriate credit support may include mortgage insurance, readily marketable collateral, or other acceptable collateral that reduces the loan-to-value ratio below the certain percentage.
Consumer Loans
Consumer loans are secured by automobiles, boats, recreational vehicles, and other personal property. Personal loans and unsecured credit card receivables are also included as consumer loans. United monitors the risk associated with these types of loans by monitoring such factors as portfolio growth, lending policies and economic conditions. Underwriting standards are continually evaluated and modified based upon these factors.
Underwriting Standards
United’s loan underwriting guidelines and standards are updated periodically and are presented for approval by the Board of Directors of United Bank. The purpose of the standards and guidelines is to grant loans on a sound and collectible basis; to invest available funds in a safe, profitable manner; to serve the legitimate credit needs of the communities of United’s primary market area; and to ensure that all loan applicants receive fair and equal treatment in the lending process. It is the intent of the underwriting guidelines and standards to minimize loan losses by carefully investigating the credit history of each applicant, verify the source of repayment and the ability of the applicant to repay, collateralize those loans in which collateral is deemed to be required, exercise care in the documentation of the application, review, approval, and origination process, and administer a comprehensive loan collection program.
United’s underwriting standards and practices are designed to originate both fixed and variable rate loan products in a manner which is consistent with the prudent banking practices applicable to these exposures. Typically, both fixed and variable rate loan underwriting practices incorporate conservative methodology, including the use of stress testing for commercial loans, and other product appropriate measures designed to provide an adequate margin of safety for the full collection of both principal and interest within contractual terms. Consumer real estate secured loans are underwritten to the initial rate, and to a higher assumed rate commensurate with normal market conditions. Therefore, it is the intent of United’s underwriting standards to ensure that adequate primary repayment capacity exists to address both future increases in interest rates, and fluctuations in the underlying cash flows available for repayment. Historically, and at December 31, 2024, United has not offered “teaser rate” loans, and had no loan portfolio products which were specifically designed for “sub-prime” borrowers. Management defines “sub-prime” borrowers as consumer borrowers with a credit score of less than 660.
The above guidelines are adhered to and subject to the experience, background and personal judgment of the loan officer assigned to the loan application. A loan officer may grant, with justification, a loan with variances from the underwriting guidelines and standards. However, the loan officer may not exceed his or her respective lending authority without obtaining the prior, proper approval as outlined in United’s loan policy from a superior, a regional supervisor or market president (dual approval per policy) or the Loan Committee, whichever is deemed appropriate for the nature of the variance.
Loan Concentrations
United has commercial loans, including real estate and owner-occupied, income-producing real estate and land development loans, of approximately $15.3 billion as of December 31, 2024. These loans are primarily secured by real estate located in West Virginia, southeastern Ohio, southwestern Pennsylvania, Virginia, Maryland, North Carolina, South Carolina and the District of Columbia. United categorizes these commercial loans by industry according to the North American Industry Classification System (“NAICS”) to monitor the portfolio for possible concentrations in one or more industries. As of the most recent fiscal year-end, United has one such industry classification that exceeded 10% of total loans. As of December 31, 2024, approximately $10.4 billion or 47.75% of United’s total loan portfolio were for real estate and construction. The loans were originated by United’s subsidiary bank using underwriting standards as set forth by management. United’s loan administration policies are focused on the risk characteristics of the loan portfolio, including commercial real estate loans, in terms of loan approval and credit quality. It is the opinion of management that these loans do not pose any unusual risks and that adequate consideration has been given to the above loans in establishing the allowance for loan losses.
United does not have a loan classification concentration in the restaurants, hotel and accommodations industry. As of December 31, 2024, approximately $1.3 billion or 5.92% of United’s total loan portfolio were to hotels and other traveler accommodations. In addition, United does not have a loan classification concentration in the mining, quarrying and oil and gas extraction industry. As of December 31, 2024, approximately $118.7 million or less than 1% of United’s total loan portfolio were for the purpose of extracting, manufacturing and distributing oil, coal and natural gas.
Secondary Markets
United generally originates loans within the primary market area of United Bank. United may from time to time make loans to borrowers and/or on properties outside of its primary market area as an accommodation to its existing customers.
United Bank originates residential real estate loans for resale in the secondary market. Mortgage loan originations are generally intended to be sold in the secondary market on a best efforts or mandatory basis. Servicing rights are not retained.
During 2024, United originated $645.9 million of real estate loans for sale in the secondary market and sold $657.8 million of loans designated as held for sale in the secondary market. Net gains on the sales of these loans during 2024 were $16.1 million.
The principal sources of revenue from United’s mortgage banking business are: (i) loan origination fees; (ii) gains or losses from the sale of loans; and (iii) interest earned on mortgage loans during the period that they are held by United pending sale, if any.
Investment Activities
United’s investment policy stresses the management of the investment securities portfolio, which includes both securities held to maturity and securities available for sale, to maximize return over the long-term in a manner that is consistent with good banking practices and relative safety of principal. United currently does not engage in trading account activity. The Asset/Liability Management Committee of United is responsible for the coordination and evaluation of the investment portfolio.
Sources of funds for investment activities include “core deposits”. Core deposits include certain demand deposits, savings and NOW accounts. These deposits are relatively stable and they are the lowest cost source of funds available to United. Short-term borrowings have also been a significant source of funds. These include federal funds purchased, securities sold under agreements to repurchase and FHLB borrowings.
United’s investment portfolio is comprised of a significant amount of mortgage-backed securities, asset-backed securities, obligations of states and political subdivisions, U.S. Treasury securities and obligations of U.S. Government corporations and agencies and corporate securities. Obligations of states and political subdivisions are comprised of primarily “investment grade” rated municipal securities. Interest and dividends on securities for the years of 2024, 2023, and 2022 were $133.3 million, $151.1 million, and $114.5 million, respectively. For the year of 2024 and 2023, United realized net losses on sales of securities of $11.7 million and $7.7 million, respectively. For the year of 2022, United realized net gains on sales of securities of $2 thousand.
Human Capital
At United, one of our key competitive advantages is our people. Investment in our human capital is a top priority for the Company. As of December 31, 2024, United and its subsidiaries had 2,553 actual employees and officers. Of the 2,553 actual employees and officers, 2,475 are employed in the community banking segment and 78 are in a general support and administrative function for the Company. None of these employees are represented by a collective bargaining unit and management considers employee relations to be excellent. We emphasize positive attitudes, communication, teamwork, goal attainment, personal growth, and the pursuit of excellence when it comes to delivering high-quality service to our customers and fellow employees.
Our human capital management strategy focuses on recruiting, developing, and engaging a talented workforce. Our strategy embodies our core values of integrity, teamwork, hard work, and caring, and foster positive attitudes, communication, goal attainment, personal growth, and the pursuit of United’s mission of excellence in service to our shareholders, our customers, our communities, and our employees.
Focusing on talent selection and developing top talent remains a strong pillar of our organization. We are committed to providing equal opportunity to and avoiding unlawful discrimination against all applicants and employees and attracting, retaining and promoting top quality talent regardless of personal aspects such as sex, sexual orientation, gender identity, race, color, national origin and age. We host college recruiting and internship programs that attract candidates from a variety of colleges and universities within our footprint. These two programs build a talent pipeline and prioritize these individuals for internal openings.
We are dedicated to providing a workplace for our employees that is supportive, and free of any form of unlawful discrimination or harassment; rewarding and recognizing our employees based on their individual results and performance as well as that of their department and the company overall; and recognizing and respecting all of the characteristics and differences that make each of our employees unique. United offers employees a way to report confidential and anonymous issues of concern through our website. Whether it is a compliance or regulatory violation, wrongdoing, improper conduct, or harassment, the confidential report will be instantly and discreetly forwarded for review.
Our Leadership Development Program provides an opportunity for the Company’s rising talent from across our footprint and various business lines to strengthen their leadership and communication skills, increase their visibility within the organization, and establish internal networks. This program helps to cultivate a future pipeline of leaders across the institution. Over a period of four years, these individuals are empowered to work on pertinent projects designed to enhance revenue, reduce expenses, and improve risk management functions, while developing the members’ leadership, interactive, and managerial skills. Past members now hold key positions across the Company ranging from Department Managers to Line of Business Leaders to Executive Officers.
One of our strategic priorities to ensure leadership continuity is effective succession planning. The Company has a formal plan to identify potential successors and actively develop those employees. The plan includes all critical management positions throughout the organization and is updated annually. This process is dynamic, and we have added additional management positions to the plan as the Company continues to evolve and grow. The Company’s executives constantly review and evaluate personnel to identify pools of candidates with high levels of leadership potential and promote their progress by engineering their range of work experiences. We also have an internal and external training platform to ensure our employees have the necessary tools to fill these key positions effectively.
United also has an effective and efficient onboarding program, introducing new team members to the culture and enabling an environment that helps them be engaged in their roles. We have rigorous interdepartmental training and development programs that provide employees with capabilities to perform their job functions, deliver results, and advance their careers.
We partnered with West Virginia University to develop an executive training program aimed at developing the technical, theoretical, and applied skills needed for a successful launch into a career in Business Banking. High-performing employees are given opportunities to attend state and national banking schools, conferences, industry peer groups, and training webinars. All United employees have access to career development and skills-based training through our internal online Human Resources (“HR”) management system.
United makes every effort to ensure that our compensation and benefits packages are inclusive and competitive to attract and retain talent. Our comprehensive benefit plans are designed to fully support our full-time and eligible part-time employees and their families through every stage of their life cycle, recognizing our employees’ individual needs and offering flexible benefit options. As an enhanced benefit, we recently increased our parental leave and family medical leave and added coverage for enhanced infertility coverage. We provide comprehensive health and wellness plans for all eligible employees as well as retirees of United. We also provide other paid-time off benefits such as vacation, sick time, personal days, and birthdays. The Company also provides financial wellness benefits to all employees through our 401K Plan in which the Company provides a competitive match of employee contributions. All employees are eligible to take advantage of United’s Employee Stock Purchase Plan through payroll deductions.
United Bank’s annual performance evaluation process provides the opportunity for discussing, planning, and reviewing the performance of each employee. The goal is to help employees clearly define and understand the responsibilities and expectations of their position while also identifying employees with high potential for advancement within the company. Performance evaluations also provide an opportunity for employees to be awarded additional compensation based on merit. Managers are expected to maintain open communication throughout the year as it pertains to the performance and mentorship of their employees. Training is provided to managers annually to prepare them for difficult conversations, analyzing team compensation, and maintaining fairness, among other topics.
We are committed to providing a safe and healthy work environment for our employees and offer services to foster the best physical, mental, and social well-being of our workforce. United’s Employee Assistance Program provides all employees a comprehensive and personalized process with a tailored approach to meet employees where they are and supports them through whatever journey they may be facing. The Employee Assistance Program provides unlimited phone access for information, resources, and referrals and provides sessions with a counselor for the employee and their family members. The employee, and their family, can also take advantage of a host of web-based resources the program provides.
The commitment to our employees and their family’s well-being is at the forefront for United and allows us to be competitive in attracting and retaining top talent and ensuring our employee benefits remain competitive when compared with other institutions.
Competition
United faces a high degree of competition in all of the markets it serves. We face strong competition in gathering deposits, making loans and obtaining client assets for management by our investment or trust operations. United considers all of West Virginia to be included in its market area. This area includes the five largest West Virginia Metropolitan Statistical Areas (“MSA”): the Parkersburg MSA, the Charleston MSA, the Huntington MSA, the Morgantown MSA and the Wheeling MSA. United serves the Ohio counties of Lawrence, Belmont, Jefferson and Washington and Fayette county in Pennsylvania primarily because of their close proximity to the Ohio and Pennsylvania borders and United banking offices located in those counties or in nearby West Virginia. United’s Virginia markets include the Maryland, northern Virginia and Washington, D.C. MSA, the Winchester MSA, the Harrisonburg MSA, and the Charlottesville MSA. Through its acquisition of Carolina Financial, United’s market also includes the Coastal, Midlands, and Upstate regions of South Carolina, including the Charleston (Charleston, Dorchester and Berkeley Counties), Myrtle Beach (Horry and Georgetown Counties), Columbia (Richland and Lexington Counties), and the Upstate (Greenville and Spartanburg Counties) areas as well as areas in North Carolina including Wilmington (New Hanover County), Raleigh-Durham (Durham and Wake Counties), Charlotte-Concord-Gastonia (NC and SC) and the southeastern coastal region of North Carolina (Bladen, Brunswick, Columbus, Cumberland, Duplin and Robeson Counties). Through its acquisition of Community Bankers Trust, United added new markets in Baltimore and Annapolis, Maryland and Lynchburg and Richmond, Virginia as well as the Northern Neck of Virginia. United considers all of the above locations to be the primary market areas for its business.
With prior regulatory approval, Virginia banks are permitted unlimited branch banking throughout each state. In addition, interstate acquisitions of and by Virginia banks and bank holding companies are permissible on a reciprocal basis, as well as reciprocal interstate acquisitions by thrift institutions. These conditions serve to intensify competition within United’s market.
As of December 31, 2024, there were 60 bank holding companies operating in the State of West Virginia registered with the Federal Reserve System and the West Virginia Board of Banking and Financial Institutions, 97 bank holding companies operating in the Commonwealth of Virginia registered with the Federal Reserve System and the Virginia State Corporation Commission, 64 bank holding companies operating in the State of North Carolina registered with the Federal Reserve System and the N.C. Office of the Commissioner of Banks and 65 bank holding companies operating in the State of South Carolina registered with the Federal Reserve System and the South Carolina State Board of Financial Institutions. These holding companies are headquartered in various states and control banks throughout West Virginia, Virginia, North Carolina and South Carolina, which compete for business as well as for the acquisition of additional banks. For further discussion, see the section captioned “United operates in a highly competitive market” in Item 1A. Risk Factors.
Regulation and Supervision
United, as a financial holding company, is subject to the restrictions of the Bank Holding Company Act of 1956, as amended, and is registered pursuant to its provisions. As such, United is subject to the reporting requirements of and examination by the Board of Governors of the Federal Reserve System (“Federal Reserve Board”).
The Bank Holding Company Act prohibits the acquisition by a bank holding company of direct or indirect ownership of more than five percent of the voting shares of any bank within the United States without prior approval of the Federal Reserve Board. With certain exceptions, a bank holding company also is prohibited from acquiring direct or indirect ownership or control of more than five percent of the voting shares of any company which is not a bank, and from engaging directly or indirectly in business unrelated to the business of banking, or managing or controlling banks.
The Federal Reserve Board, in its Regulation Y, permits financial holding companies to engage in preapproved non-banking activities closely related to banking or managing or controlling banks. Approval of the Federal Reserve Board is necessary to engage in certain other non-banking activities which are not preapproved or to make acquisitions of corporations engaging in these activities. In addition, on a case-by-case basis, the Federal Reserve Board may approve other non-banking activities. A financial holding company may also engage in financial activities, including securities underwriting and dealing, insurance agency and underwriting activities, and merchant banking activities.
As a financial holding company doing business in West Virginia, United is also subject to regulation and examination by the West Virginia Board of Banking and Financial Institutions (the “West Virginia Banking Board”) and must submit annual reports to the West Virginia Banking Board. Further, any acquisition application that United must submit to the Federal Reserve Board must also be submitted to the West Virginia Banking Board for approval.
The Federal Reserve Board has broad authority to prohibit activities of financial holding companies and their non-banking subsidiaries that represent unsafe and unsound banking practices or which constitute violations of laws or regulations. The Federal Reserve Board also can assess civil money penalties for certain activities conducted on a knowing and reckless basis, if those activities caused a substantial loss to a depository institution. The penalties can be as high as $1 million for each day the activity continues.
United Bank, as a Virginia state member bank, is subject to supervision, examination, and regulation by the Federal Reserve Board, and as such, is subject to applicable provisions of the Federal Reserve Act and regulations issued thereunder. United Bank is subject to the Virginia banking statutes and regulations, and is primarily regulated by the Virginia Bureau of Financial Institutions. As a member of the Federal Deposit Insurance Corporation (“FDIC”), United Bank’s deposits are insured as required by federal law. Bank regulatory authorities regularly examine revenues, loans, investments, management practices, and other aspects of United Bank. These examinations are conducted primarily to protect depositors and not shareholders. In addition to these regular examinations, United Bank must furnish to regulatory authorities quarterly reports containing full and accurate statements of its affairs.
United is also under the jurisdiction of the SEC and certain state securities commissions in regard to the offering and sale of its securities. Generally, United must file under the Securities Exchange Act of 1933, as amended, to issue additional shares of its common stock. United is also registered under and is subject to the regulatory and disclosure requirements of the Securities Exchange Act of 1934, as amended, as administered by the SEC. United is listed on the NASDAQ Global Select Market under the quotation symbol “UBSI,” and is subject to the rules of the NASDAQ for listed companies.
SEC regulations require us to disclose certain types of business and financial data on a regular basis to the SEC and to our shareholders. We are required to file annual, quarterly and current reports with the SEC. We prepare and file an annual report on Form 10-K with the SEC that contains detailed financial and operating information, as well as a management response to specific questions about United’s operations. SEC regulations require that our annual reports to shareholders contain certified financial statements and other specific items such as management’s discussion and analysis of our financial condition and results of operations. We must also file quarterly reports with the SEC on Form 10-Q that contain detailed financial and operating information for the prior quarter and we must file current reports on Form 8-K to provide the pubic with information on recent material events.
In addition to periodic reporting to the SEC, we are subject to proxy rules and tender offer rules issued by the SEC. Our officers, directors and principal shareholders (holding 10% or more of our stock) must also submit reports to the SEC regarding their holdings of our stock and any changes to such holdings, and they are subject to short-swing profit liability.
Dividends and Stock Repurchases
The principal source of United’s liquidity is dividends from United Bank. The prior approval of the Federal Reserve Board is required if the total of all dividends declared by a state-chartered member bank in any calendar year would exceed the sum of the bank’s net profits for that year and its retained net profits for the preceding two calendar years, less any required transfers to surplus or to fund the retirement of preferred stock. Federal law also prohibits a state-chartered, member bank from paying dividends that would be greater than the bank’s undivided profits. United Bank is also subject to limitations under Virginia state law regarding the level of dividends that may be paid. Limitations on United’s ability to receive dividends from United Bank could have a material adverse effect on its liquidity and ability to pay dividends on its common stock or interest and principal on its debt, and ability to fund purchases of its common stock.
In addition, United and United Bank are subject to other regulatory policies and requirements relating to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums. The appropriate federal regulatory authority is authorized to determine under certain circumstances relating to the financial condition of a bank holding company or a bank that the payment of dividends would be an unsafe or unsound practice and to prohibit payment thereof. The appropriate federal regulatory authorities have stated that paying dividends that deplete a bank’s capital base to an inadequate level would be an unsafe and unsound banking practice and that banking organizations should generally pay dividends only out of current operating earnings. In addition, in the current financial and economic environment, the Federal Reserve Board has indicated that bank holding companies should carefully review their dividend policy and has discouraged payment ratios that are at maximum allowable levels unless both asset quality and capital are very strong.
In certain circumstances, United’s repurchases of its common stock may be subject to a prior approval or notice requirement under other regulations, policies or supervisory expectations of the Federal Reserve Board. Any redemption or repurchase of preferred stock or subordinated debt is subject to the prior approval of the Federal Reserve Board.
The Inflation Reduction Act of 2022 (the “IRA”) imposes a 1% excise tax on the fair market value of stock repurchased after December 31, 2022 by publicly traded U.S. corporations. With certain exceptions, the value of stock repurchased is determined net of stock issued in the year, including shares issued pursuant to compensatory arrangements.
Deposit Insurance
The deposits of United Bank are insured by the FDIC to the extent provided by law. Accordingly, United Bank is also subject to regulation by the FDIC. United Bank is subject to deposit insurance assessments to maintain the Deposit Insurance Fund (“DIF”) of the FDIC. The FDIC utilizes a risk-based assessment system that imposes insurance premiums based upon a risk matrix that takes into account a bank’s capital level and supervisory rating (CAMELS rating) and certain financial measures to assess an institution’s ability to withstand asset-related stress and funding-related stress. The risk matrix utilizes four risk categories which are distinguished by capital levels and supervisory ratings.
On October 18, 2022, the FDIC adopted a final rule that increased the initial base deposit insurance assessment rates for insured depository institutions by 2 basis points, beginning with the first quarterly assessment period of 2023. The increased assessment rate schedules remain in effect unless and until the reserve ratio of the DIF meets or exceeds 2 percent. As a result of the new rule, the FDIC insurance costs of insured depository institutions, including United Bank, have generally increased.
On November 16, 2023, the FDIC issued a final rule to implement a special assessment to recover the loss to the DIF associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank. The Federal Deposit Insurance Act (“FDI Act”) requires the FDIC to take this action in connection with the systemic risk determination announced on March 12, 2023. The special assessment did not apply to any banking organization (defined to include FDIC-insured financial institutions that are not subsidiaries of a holding company and FDIC-insured financial institutions that are subsidiaries of a holding company with one or more FDIC-insured financial institution subsidiaries) with less than $5 billion in total consolidated assets. The FDIC estimated in November 2023 that of the total cost of the failures of Silicon Valley Bank and Signature Bank of approximately $16.3 billion was attributable to the protection of uninsured depositors. As of September 30, 2024, the FDIC’s total loss estimate was $24.1 billion, of which $18.9 billion will be recovered through the special assessment. The assessment base for the special assessment is equal to an insured depository institution’s (“IDI’s”) estimated uninsured deposits reported as of December 31, 2022, adjusted to exclude the first $5 billion, applicable either to the IDI, if an IDI is not a subsidiary of a holding company, or at the banking organization level, to the extent that an IDI is part of a holding company with one or more subsidiary IDIs. The special assessment will be collected at an annual rate of approximately 13.4 basis points for an anticipated total of eight quarterly assessment periods. The collection of this special assessment began with the first quarterly assessment period of 2024 (i.e., January 1 through March 31, 2024) with an invoice payment date of June 28, 2024. In June 2024, due to the increased estimate of losses, the FDIC announced that it projects that the special assessment will be collected for an additional two quarters beyond the initial eight-quarter collection period, at a lower rate. The updated assessment was made under the FDIC’s final rule whereby the estimated loss pursuant to the systemic risk determination can periodically be adjusted. The FDIC can also: (1) cease collection early and (2) impose a final shortfall special assessment on a one-time basis after the receiverships for Silicon Valley Bank and Signature Bank terminate, if actual losses exceed the amounts collected. In June 2024, the FDIC announced that it projects that the special assessment will be collected for an additional two quarters beyond the initial eight-quarter collection period, at a lower rate.
Capital Requirements
United and United Bank are each required to comply with applicable capital adequacy standards established by the Federal Reserve Board (the “Basel III Capital Rules”). Since fully phased in on January 1, 2019, the Basel III Capital Rules require United and United Bank to maintain the following:
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A minimum ratio of Common Equity Tier 1 (“CET1”) to risk-weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer” (resulting in a minimum ratio of CET1 to risk-weighted assets of 7.0%);
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A minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the capital conservation buffer (resulting in a minimum Tier 1 capital ratio of 8.5%);
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A minimum ratio of total capital (Tier 1 capital plus Tier 2 capital) to risk-weighted assets of at least 8.0%, plus the capital conservation buffer (resulting in a minimum total capital ratio of 10.5%); and
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A minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known as the “leverage ratio”).
Banking institutions that fail to meet the effective minimum ratios once the capital conservation buffer is taken into account, as detailed above, will be subject to constraints on capital distributions, including dividends and share repurchases, and certain discretionary executive compensation. The severity of the constraints depends on the amount of the shortfall and the institution’s “eligible retained income” (that is, the greater of (i) net income for the preceding four quarters, net of distributions and associated tax effects not reflected in net income and (ii) the average net income over the preceding four quarters).
The Basel III Capital Rules also provide for a number of deductions from and adjustments to CET1. These include, for example, the requirement that certain deferred tax assets and significant investments in non-consolidated financial entities be deducted from CET1 to the extent that any one such category exceeds 25% of CET1.
In addition, under the general risk-based capital rules, the effects of accumulated other comprehensive income items included in capital were excluded for the purposes of determining regulatory capital ratios. Under the Basel III Capital Rules, the effects of certain accumulated other comprehensive income items are not excluded; however, non-advanced approaches banking organizations, including United and United Bank, were able to make a one-time permanent election to continue to exclude these items. Both United and United Bank made this election in order to avoid significant variations in the level of capital depending upon the impact of interest rate fluctuations on the fair value of their available-for-sale securities portfolio. Under the Basel III Capital Rules, trust preferred securities no longer included in our Tier 1 capital may nonetheless be included as a component of Tier 2 capital on a permanent basis without phase-out.
In February 2019, the federal bank regulatory agencies issued a final rule (the “2019 CECL Rule”) that revised certain capital regulations to account for changes to credit loss accounting under U.S. GAAP. The 2019 CECL Rule included a transition option that allows banking organizations to phase in, over a three-year period, the day-one adverse effects of adopting a new accounting standard related to the measurement of current expected credit losses (“CECL”) on their regulatory capital ratios (three-year transition option). In March 2020, the federal bank regulatory agencies issued an interim final rule that maintains the three-year transition option of the 2019 CECL Rule and also provided banking organizations that were required under U.S. GAAP (as of January 2020) to implement CECL before the end of 2020 the option to delay for two years an estimate of the effect of CECL on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period (five-year transition option). We elected to adopt the five-year transition option.
The Basel III Capital Rules prescribe a standardized approach for risk weightings that expanded the risk-weighting categories from the general risk-based capital rules to a much larger and more risk-sensitive number of categories, depending on the nature of the assets, generally ranging from 0% for U.S. government and agency securities, to 600% for certain equity exposures (and higher percentages for certain other types of interests), and resulting in higher risk weights for a variety of asset categories. In November 2019, the federal banking agencies adopted a rule revising the scope of commercial real estate mortgages subject to a 150% risk weight.
In December 2017, the Basel Committee published standards that it described as the finalization of the Basel III post-crisis regulatory reforms. Among other things, these standards revised the Basel Committee’s standardized approach for credit risk (including by recalibrating risk weights and introduction of new capital requirements for certain “unconditionally cancellable commitments,” such as unused credit card lines of credit) and provides a new standardized approach for operational risk capital. Under the current U.S. capital rules, operational risk capital requirements and a capital floor apply only to advanced approaches institutions, and not to United or United Bank.
In July 2023, the federal banking regulators proposed revisions to the Basel III Capital Rules to implement the Basel Committee’s 2017 standards and make other changes to the Basel III Capital Rules. The proposal introduced revised credit risk, equity risk, operational risk, credit valuation adjustment risk and market risk requirements, among other changes. However, the revised capital requirements of the proposed rule would not apply to United or United Bank because they each have less than $100 billion in total consolidated assets and trading assets and liabilities below the threshold for market risk requirements. The Federal Reserve has indicated that it plans to work with other federal banking regulators on a revised proposal in 2025.
Failure to meet statutorily mandated capital guidelines or more restrictive ratios separately established for a financial institution could subject United to a variety of enforcement remedies, including issuance of a capital directive, the termination of deposit insurance by the FDIC, a prohibition on accepting or renewing brokered deposits, limitations on the rates of interest that the institution may pay on its deposits and other restrictions on its business. As described below, significant additional restrictions can be imposed on United if it would fail to meet applicable capital requirements.
Prompt Corrective Action
The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) establishes a regulatory scheme, which ties the level of supervisory intervention by bank regulatory authorities primarily to a depository institution’s capital category. Among other things, FDICIA authorizes regulatory authorities to take “prompt corrective action” with respect to depository institutions that do not meet minimum capital requirements. FDICIA establishes five capital tiers: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.
Effective January 1, 2015, under the Basel III Capital Rules, the current prompt corrective action requirements for an institution to be “well-capitalized” is a total risk-based capital ratio of 10% or greater, a Tier 1 risk-based capital ratio of 8% or greater, a CET1 ratio of 6.5% or greater and a Tier 1 leverage ratio of 5% or greater.
United Bank was considered a “well capitalized” institution as of December 31, 2024. Well-capitalized institutions are permitted to engage in a wider range of banking activities, including among other things, the accepting of “brokered deposits,” and the offering of interest rates on deposits higher than the prevailing rate in their respective markets.
If an institution is categorized as undercapitalized, significantly undercapitalized or critically undercapitalized, it is required to submit a capital restoration plan to its appropriate federal bank regulator. For such capital restoration plan to be accepted by the appropriate federal bank regulator, a bank holding company must guarantee that a subsidiary depository institution will comply with its capital restoration plan, subject to certain limitations and must provide assurances of performance. The obligation of a controlling bank holding company under the FDI Act to fund a capital restoration plan is limited to the lesser of 5% of an undercapitalized subsidiary’s assets or the amount required to meet regulatory capital requirements. If a depository institution fails to submit an acceptable capital restoration plan or fails to implement an approved plan, it is treated as if it is significantly undercapitalized. The FDICIA imposes restrictions and prohibitions on institutions that are undercapitalized, significantly undercapitalized or critically undercapitalized with respect to, among other things, asset size, acquisitions, establishing branches, engaging in new activities, capital distributions and transactions with affiliates.
Community Reinvestment Act
The Community Reinvestment Act of 1977 (“CRA”) requires depository institutions to assist in meeting the credit needs of their market areas consistent with safe and sound banking practice. Under the CRA, each depository institution is required to help meet the credit needs of its market areas by, among other things, providing credit to low- and moderate-income individuals and communities. Depository institutions are periodically examined for compliance with the CRA and are assigned ratings. Banking regulators take into account CRA ratings when considering approval of a proposed transaction.
In 2023, the year of our most recent CRA exam, United Bank received a CRA Performance Evaluation from the Federal Reserve Bank of Richmond (the “FRB”) with a rating of “Satisfactory.”
On October 24, 2023, the Federal Reserve Board, the FDIC, and the Office of the Comptroller of the Currency (“OCC”) published a final CRA rule that creates a modernized rule for the banking industry. The final rule updates the CRA regulations to achieve the following key goals: (1) encourage banks to expand access to credit, investment, and banking services in LMI communities; (2) adapt to changes in the banking industry, including mobile and online banking; (3) provide greater clarity and consistency in the application of the CRA regulations; and (4) tailor CRA evaluations and data collection to bank size and type. The final rule is currently enjoined as to the plaintiff trade associations while a federal court considers a lawsuit challenging the rule.
Deposit Acquisition Limitation
Under West Virginia banking law, an acquisition or merger is not permitted if the resulting depository institution or its holding company, including its affiliated depository institutions, would assume additional deposits to cause it to control deposits in the State of West Virginia in excess of twenty five percent (25%) of such total amount of all deposits held by insured depository institutions in West Virginia. This limitation may be waived by the Commissioner of Banking by showing good cause.
Consumer Laws and Regulations
In addition to the banking laws and regulations discussed above, bank subsidiaries are also subject to certain consumer laws and regulations that are designed to protect consumers in transactions with banks. Among the more prominent of such laws and regulations are the Truth in Lending Act, the Home Mortgage Disclosure Act, the Truth in Savings Act, the Electronic Funds Transfer Act, the Expedited Funds Availability Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Right to Financial Privacy Act and the Fair Housing Act. These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must deal with customers when taking deposits or making loans to such customers. United Bank must comply with the applicable provisions of these consumer protection laws and regulations as part of its ongoing customer relations.
The Dodd-Frank Act centralized responsibility for consumer financial protection by creating the CFPB, and giving it responsibility for implementing, examining and enforcing compliance with federal consumer protection laws. The CFPB has broad rulemaking, supervisory and enforcement authority over consumer financial products and services, including deposit products, residential mortgages, home-equity loans, and credit cards. The CFPB’s functions include investigating consumer complaints, rulemaking, supervising and examining banks’ consumer transactions, and enforcing rules related to consumer financial products and services. Banks with more than $10 billion in assets, such as United Bank, are subject to supervision by the CFPB with respect to these federal consumer financial laws.
In October 2024, the CFPB issued a final rule requiring providers of payment accounts or products, such as a bank, to make data available to consumers upon request regarding the products or services they obtain from the provider, and to third parties, with the consumer’s express authorization, for the purpose of such third parties providing the consumer with financial products or services requested by the consumer. Data required to be made available under the rule includes transaction information, account balance, account and routing numbers, terms and conditions, upcoming bill information, and certain account verification data. For banks with at least $10 billion and less than $250 billion in total assets, compliance with the rule is required by April 1, 2027.
In December 2024, the CFPB issued a final rule that, among other things, amends Regulation Z (otherwise known as the “Truth In Lending Act”) and impacts extensions of overdraft credit offered by financial institutions with more than $10 billion in assets. The final rule defines overdraft credit as generally including consumer credit extended by a financial institution to pay a transaction from a checking or other transaction account (other than a prepaid account) held at the financial institution when the consumer has insufficient or unavailable funds in that account. The final rule requires that extensions of overdraft credit adhere to consumer protections required of similarly situated products, unless the overdraft fee is at or below the institution’s costs and losses as determined by (i) calculating its own costs and losses using a standard set forth in the rule; or (ii) relying on a benchmark flat fee of five dollars. An overdraft that incurs charges that exceed costs and losses will become a covered overdraft credit and subject to Regulation Z which requires that lenders disclose borrowing costs, interest rates and fees upfront and in clear language so consumers can understand all the terms and make informed decisions. Furthermore, covered overdraft credit extensions must be put in a credit account and may not be structured as a negative balance on a checking or other transaction account. The provisions of the final rule become effective on October 1, 2025.
Notwithstanding the forgoing, the recent changes in the U.S. presidential administration and the composition of the U.S. Congress is expected to lead to potentially significant changes to the existence, priorities, scope, practices and/or staffing levels of various regulatory agencies. For example, in February 2025, the Trump administration directed the CFPB to, among other things, suspend rule implementations and cease supervision activities.
Anti-Money Laundering and the USA Patriot Act
A major focus of governmental policy on financial institutions in recent years has been aimed at combating money laundering and terrorist financing. The U.S. Bank Secrecy Act (the “BSA”) and the USA PATRIOT Act of 2001 (the “USA Patriot Act”) require financial institutions to develop programs to prevent them from being used for, and to detect and deter, money laundering, terrorist financing, and other illegal activities. The USA Patriot Act substantially broadened the scope of United States anti-money laundering laws and regulations by imposing significant
new compliance and due diligence obligations, creating new crimes and penalties and expanding the extra-territorial jurisdiction of the United States. Financial institutions are also prohibited from entering into specified financial transactions and account relationships and must use enhanced due diligence procedures in their dealings with certain types of high-risk customers and implement a written customer identification program. Financial institutions must take certain steps to assist government agencies in detecting and preventing money laundering and report certain types of suspicious transactions. Regulatory authorities routinely examine financial institutions for compliance with these obligations, and failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws or regulations, could have serious financial, legal and reputational consequences for the institution, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required. Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations.
The Anti-Money Laundering Act of 2020 (the “AMLA”), which amends the BSA, was enacted in January 2021. The AMLA is intended to be a comprehensive reform and modernization to U.S. bank secrecy and anti-money laundering laws. Among other things, it codifies a risk-based approach to anti-money laundering compliance for financial institutions; requires the U.S. Department of the Treasury to promulgate priorities for anti-money laundering and countering the financing of terrorism policy; requires the development of standards for testing technology and internal processes for BSA compliance; expands enforcement- and investigation-related authority, including increasing available sanctions for certain BSA violations; and expands BSA whistleblower incentives and protections. Many of the statutory provisions in the AMLA require additional rulemakings, reports and other measures, and the impact of the AMLA depends on, among other things, rulemaking and implementation guidance. In June 2021, the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury, issued the priorities for anti-money laundering and countering the financing of terrorism policy required under the AMLA. The priorities include: corruption, cybercrime, terrorist financing, fraud, transnational crime, drug trafficking, human trafficking and proliferation financing.
In August 2024, Financial Crimes Enforcement Network (“FinCEN”), which drafts and enforces regulations implementing the BSA and other anti-money laundering legislation, adopted a rule extending anti-money laundering obligations, including maintenance of an anti-money laundering program and filing certain reports with FinCEN, to registered investment advisers. Compliance with these requirements is required beginning on January 1, 2026.
Incentive Compensation
The Federal Reserve Board reviews, as part of its regular, risk-focused examination process, the incentive compensation arrangements of banking organizations, such as United, that are not “large, complex banking organizations.” These reviews are tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements. The findings of this supervisory initiative will be included in reports of examination. Deficiencies will be incorporated into the organization’s supervisory ratings, which can affect the organization’s ability to make acquisitions and take other actions. Enforcement actions may be taken against a banking organization if its incentive compensation arrangements, or related risk-management control or governance processes, pose a risk to the organization’s safety and soundness and the organization is not taking prompt and effective measures to correct the deficiencies.
In June 2010, the Federal Reserve Board, OCC and FDIC issued comprehensive final guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking. The guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually or as part of a group, is based upon the key principles that a banking organization’s incentive compensation arrangements should (i) provide incentives that do not encourage risk-taking beyond the organization’s ability to effectively identify and manage risks, (ii) be compatible with effective internal controls and risk management, and (iii) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors.
In April and May of 2016, the Federal Reserve Board, other federal banking agencies and the SEC (the “Agencies”) jointly published proposed rulemaking designed to implement provisions of the Dodd-Frank Act prohibiting incentive compensation arrangements that would encourage inappropriate risk taking at a covered institution, which includes a bank or bank holding company with $1 billion or more of assets, such as United. The proposed rule has not been finalized.
In August 2022, the SEC adopted final rules requiring public companies to disclose the relationship between the executive compensation actually paid to the company’s named executive officers (“NEOs”) and the company’s financial performance. The final rules implement the “pay versus performance” disclosure requirements mandated by Section 953(a) of the Dodd-Frank Act. Disclosure related to these final rules was effective for United’s proxy statement filed in 2023.
In October 2022, the SEC adopted the final “clawback” rule mandated by Section 954 of the Dodd-Frank Act directing national securities exchanges and associations, including the NASDAQ, to implement listing standards that require listed companies to adopt policies mandating the recovery or “clawback” of excess incentive-based compensation earned by a current or former executive officer during the three fiscal years preceding the date the listed company is required to prepare an accounting restatement, including to correct an error that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. The final rule required United to adopt a “clawback” policy within 60 days after such listing standard became effective.
In June 2023, the New York Stock Exchange and Nasdaq Stock Market adopted these required listing standards mandated by Section 954 of the Dodd-Frank Act, which were effective on October 2, 2023. Each listed issuer was required to adopt a policy relating to the recovery of erroneously awarded compensation no later than December 1, 2023, which is 60 days following the effective date. The incentive compensation received by executives on or after October 2, 2023 is subject to the issuer’s recovery policies. Issuers that do not adopt and comply with the compensation recovery policies or those that do not disclose the policy will be subject to delisting. United adopted a “clawback” policy on November 17, 2023. This policy is included as Exhibit 97 to this Form 10-K.
Cybersecurity
The federal banking regulators regularly issue new guidance and standards, and update existing guidance and standards, regarding cybersecurity intended to enhance cyber risk management among financial institutions. Financial institutions are expected to comply with such guidance and standards and to accordingly develop appropriate security controls and risk management processes. If we fail to observe such regulatory guidance or standards, we could be subject to various regulatory sanctions, including financial penalties.
Banking organizations are required to notify their primary banking regulator within 36 hours of determining that a “computer-security incident” has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, the banking organization’s ability to carry out banking operations or deliver banking products and services to a material portion of its customer base, its businesses and operations that would result in material loss, or its operations that would impact the stability of the United States.
In July 2023, the SEC issued a final rule, “Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure,” which requires registrants to provide investors, through enhanced and standardized disclosures, greater insight into material cybersecurity incidents and the registrants’ cybersecurity risk management, strategy and governance. See Item 1C. Cybersecurity for information on United’s risk management, strategy and governance processes related to cybersecurity.

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ITEM 1A. RISK FACTORS
Item 1A. RISK FACTORS
United is subject to risks inherent to the Company’s business. The material risks and uncertainties that management believes affect the Company are described below. Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all of the other information included or incorporated by reference in this report. The risks and uncertainties described below are not the only ones facing the Company. Additional risks and uncertainties that management is not aware of or focused on or that management currently deems immaterial may also impair United’s business operations. This report is qualified in its entirety by these risk factors.
REGULATORY AND LITIGATION RISKS
United is subject to extensive government regulation and supervision.
United is subject to extensive federal and state regulation, supervision and examination which vests significant discretion in the various regulatory authorities. Banking regulations are primarily intended to protect depositors’ funds, federal deposit insurance funds and the banking system as a whole, not shareholders. These regulations affect United’s lending practices, capital structure, investment practices, dividend policy, operations, growth, and the fees we can charge for certain products or transactions, among other things. These regulations also impose obligations to maintain appropriate policies, procedures and controls, among other things, to detect, prevent and report money laundering and terrorist financing and to verify the identities of United’s customers. Congress and federal regulatory agencies continually review banking laws, regulations and policies for possible changes. The Dodd-Frank Act, enacted in July 2010, instituted major changes to the banking and financial institutions regulatory regimes. Other changes to statutes, regulations or regulatory policies, including changes in interpretation or implementation of statutes, regulations or policies, could affect United in substantial and unpredictable ways. Such changes could subject the Company to additional costs, limit the types of financial services and products United may offer and/or increase the ability of nonbanks to offer competing financial services and products, among other things. United expends substantial effort and incurs costs to improve its systems, audit capabilities, staffing and training in order to seek to satisfy regulatory requirements and meet supervisory expectations, but the regulatory authorities may determine that such efforts are insufficient. Failure to comply with relevant laws, regulations or policies or meet supervisory expectations could result in enforcement and other legal actions, sanctions by regulatory agencies, civil money and criminal penalties, the loss of FDIC insurance, the revocation of a banking charter, significant fines and/or reputation damage, which could have a material adverse effect on United’s business, financial condition and results of operations. In this regard, government authorities, including the bank regulatory agencies, are pursuing aggressive enforcement actions with respect to compliance and other legal matters involving financial activities, which heightens the risks associated with actual and perceived compliance failures. Directives issued to enforce such actions may be confidential and thus, in some instances, we are not permitted to publicly disclose these actions. Litigation challenging actions or regulations by Federal or state authorities could, depending on the outcome, significantly affect the regulatory and supervisory framework affecting our operations. For example, there is litigation pending to challenge the Federal Reserve Board’s regulation on permissible interchange fees on the ground that the regulation allows higher interchange fees than permitted by statute, which, if successful, could significantly and adversely affect the fees banks can charge on debit card transactions. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations. See the section captioned “Regulation and Supervision” included in Item 1. While the Company has policies and procedures designed to prevent any violations of applicable laws or regulations, there can be no assurance that such violations will not occur.
In the normal course of business, United and its subsidiaries are routinely subject to examinations and challenges from federal and state tax authorities regarding the amount of taxes due in connection with investments that the Company has made and the businesses in which United has engaged. Recently, federal and state taxing authorities have become increasingly aggressive in challenging tax positions taken by financial institutions. These tax positions may relate to tax compliance, sales and use, franchise, gross receipts, payroll, property and income tax issues, including tax base, apportionment and tax credit planning. The challenges made by tax authorities may result in adjustments to the timing or amount of taxable income or deductions or the allocation of income among tax jurisdictions. If any such challenges are made and are not resolved in the Company’s favor, they could have a material adverse effect on United’s financial condition and results of operations.
The Consumer Financial Protection Bureau (“CFPB”) may reshape the consumer financial laws through rulemaking and enforcement of the prohibitions against unfair, deceptive and abusive business practices. Compliance with any such change may impact the business operations of depository institutions offering consumer financial products or services, including United Bank.
The CFPB has broad rulemaking authority to administer and carry out the provisions of the Dodd-Frank Act with respect to financial institutions that offer covered financial products and services to consumers. The CFPB has also been directed to write rules identifying practices or acts that are unfair, deceptive or abusive in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service. The concept of what may be considered to be an “abusive” practice is relatively new under the law. Moreover, United Bank is supervised and examined by the CFPB for compliance with the CFPB’s regulations and policies. The costs and limitations related to this additional regulatory reporting regimen have yet to be fully determined, although they may be material and the limitations and restrictions that will be placed upon United Bank with respect to its consumer product offering and services may produce significant, material effects on United Bank (and United’s) profitability.
United is subject to regulatory capital requirements and failure to comply with these standards may impact dividend payments, equity repurchases and executive compensation.
United and United Bank are each required to comply with applicable capital adequacy standards established by the Federal Reserve Board. From time to time, the Federal Reserve Board changes these capital adequacy standards. In particular, the capital requirements applicable to United under the Basel III rules became fully effective on January 1, 2019. Under the Basel III rules, United is required to maintain a common equity Tier 1 capital ratio of 4.5%, a Tier 1 capital ratio of 6%, a total capital ratio of 8%, and a leverage ratio of 4%. In addition, United must maintain an additional capital conservation buffer of 2.5% of total risk weighted assets.
Banking institutions that fail to meet the effective minimum ratios including the capital conservation buffer will be subject to constraints on capital distributions, including dividends and share repurchases, and certain discretionary executive compensation. The severity of the constraints depends on the amount of the shortfall and the institution’s “eligible retained income” (that is, the greater of (i) net income for the preceding four quarters, net of distributions and associated tax effects not reflected in net income and (ii) the average net income over the preceding four quarters).
The Basel III changes have resulted in generally higher minimum capital ratios than in the past, including due to the need for United and its subsidiaries to maintain capital buffers above minimum requirements to avoid restrictions on capital distributions and executive bonus payments. In addition, the application of more stringent capital requirements for United could, among other things, result in lower returns on invested capital, require the raising of additional capital and result in additional regulatory actions if United were to be unable to comply with such requirements. Implementation of changes to asset risk weightings for risk based capital calculations, items included or deducted in calculating regulatory capital and/or additional capital conservation buffers could result in management modifying its business strategy and could limit United’s ability to make distributions, including paying dividends.
United’s earnings are significantly affected by the fiscal and monetary policies of the federal government and its agencies.
The policies of the Federal Reserve Board impact United significantly. The Federal Reserve Board regulates the supply of money and credit in the United States. Its policies directly and indirectly influence the rate of interest earned on loans and paid on borrowings and interest-bearing deposits and can also affect the value of financial instruments we hold. Those policies determine to a significant extent our cost of funds for lending and investing. Changes in those policies are beyond our control and are difficult to predict. Federal Reserve Board policies can also affect our borrowers, potentially increasing the risk that they may fail to repay their loans. For example, a tightening of the money supply by the Federal Reserve Board could reduce the demand for a borrower’s products and services. This could adversely affect the borrower’s earnings and ability to repay its loan, which could have a material adverse effect on our financial condition and results of operations.
United may be required to repurchase mortgage loans or indemnify buyers against losses in some circumstances, which could harm liquidity, results of operations and financial condition.
When mortgage loans are sold, whether as whole loans or pursuant to a securitization, United is required to make customary representations and warranties to purchasers, guarantors and insurers, including the government sponsored enterprises, about the mortgage loans and the manner in which they were originated. Whole loan sale agreements require repurchase or substitute mortgage loans, or indemnification of buyers against losses, in the event United breaches these representations or warranties. In addition, United may be required to repurchase mortgage loans as a result of early payment default of the borrower on a mortgage loan. If repurchase and indemnity demands increase and such demands are valid claims and are in excess of United’s provision for potential losses, its liquidity, results of operations and financial condition may be adversely affected.
CREDIT RISKS
There are no assurances as to adequacy of the allowance for credit losses.
The accounting for credit losses on loans, leases and other financial assets held by banks, financial institutions and other organizations requires the recognition of credit losses on loans, leases and other financial assets based on an entity’s current estimate of expected losses over the lifetime of each loan, lease or other financial asset, referred to as the Current Expected Credit Loss (“CECL”) model. Under the CECL model, United is required to present certain financial assets, carried at amortized cost, at the net amount expected to be collected over the life of the financial asset. The measurement of expected credit losses is based on information about past events, including credit quality, our historical experience, current conditions, and reasonable and supportable macroeconomic forecasts that may affect the collectability of the reported amount. This measurement will take place at the time a financial asset is first added to the balance sheet and at least quarterly thereafter.
CECL requires management judgment that is supported by models and data elements, including macroeconomic forecasts. The complexity and associated risk of CECL, particularly in times of economic uncertainty or other unforeseen circumstances, could impact United’s results of operations and capital levels as well as place stress on our internal controls over financial reporting.
The determination of the appropriate level of allowance for credit losses inherently involves a high degree of subjectivity and requires us to make significant estimates related to current and expected future credit risks and trends, all of which may undergo material changes. Deterioration in economic conditions affecting borrowers and securities issuers; new information regarding existing loans, credit commitments and securities holdings; global pandemics; natural disasters and risks related to climate change; and identification of additional problem loans, ratings down-grades and other factors, both within and outside of our control, may require an increase in the allowances for credit losses on loans, securities and off-balance sheet credit exposures. In addition, federal and state regulators, as an integral part of their respective supervisory functions, periodically review United’s allowance for credit losses on loans, and may require an increase in the provision for credit losses or the recognition of further loan charge-offs, based on judgments different than those of management. Any increases in the allowance for credit losses on loans will result in a decrease in net income and, possibly, capital, and may have a material adverse effect on United’s business, financial condition and results of operations.
See the section captioned “Provision for Credit Losses” in in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Part II, Item 7 of this Form 10-K for further discussion related to our process for determining the appropriate level of the allowance for credit losses.
United is subject to credit risk in its loan portfolio.
There are risks inherent in making any loan, including risks with respect to the period of time over which the loan may be repaid, risks resulting from changes in economic and industry conditions, risks inherent in dealing with individual borrowers and risks resulting from uncertainties as to the future value of collateral. United seeks to mitigate the risk inherent in its loan portfolio by adhering to prudent loan approval practices. Although United believes that its loan approval criteria are appropriate for the various kinds of loans the Company makes, United may incur losses on loans that meet our loan approval criteria. A significant decline in general economic conditions caused by inflation or deflation, recession, unemployment, changes in government fiscal and monetary policies, acts of terrorism, or other factors beyond our control could cause our borrowers to default on their loan payments, and the collateral values securing such loans to decline and be insufficient to repay any outstanding indebtedness. In such events, we could experience significant loan losses, which could have a material adverse effect on our financial condition and results of operations.
Certain of our credit exposures are concentrated in industries that may be more susceptible to the long-term risks of climate change, natural disasters or global pandemics. To the extent that these risks may have a negative impact on the financial condition of borrowers, it could also have a material adverse effect on our business, financial condition and results of operations. See the section captioned “Loans” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations elsewhere in this report for further discussion related to commercial and industrial, energy, construction and commercial real estate loans.
OPERATIONAL RISKS
United’s information systems may experience an interruption or breach in security.
United relies heavily on communications and information systems to conduct its business. In addition, as part of its business, United collects, processes and retains sensitive and confidential client and customer information. United’s facilities and systems, and those of our third-party service providers, may be vulnerable to security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming and/or human errors, or other similar events. Any failure, interruption or breach in security of these systems could result in failures or disruptions in the Company’s customer relationship management, general ledger, deposit, loan and other systems. While United has policies and procedures designed to prevent or limit the effect of the failure, interruption or security breach of its information systems, there can be no assurance that any such failures, interruptions or security breaches will not occur or, if they do occur, that they will be adequately addressed. It is also possible that employees, merchants or United’s third-party vendors may not follow United’s policies and procedures, which may expose United to a security breach. The occurrence of any failures, interruptions or security breaches of the Company’s information systems could damage United’s reputation, result in a loss of customer business, subject United to additional regulatory scrutiny, or expose the Company to civil litigation and possible financial liability, any of which could have a material adverse effect on United’s financial condition and results of operations.
Unauthorized disclosure of sensitive or confidential client or customer information, whether through a cyber-attack, other breach of our computer systems or otherwise, could severely harm our business.
In the normal course of our business, we collect, process and retain sensitive and confidential client and customer information on our behalf and on behalf of other third parties. Despite the security measures we have in place, our facilities and systems may be vulnerable to cyber-attacks, security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming and/or human errors, or other similar events.
Like other U.S. financial services companies, United has been and expects to continue to be the target of cyber-attacks and other attempts to disrupt its operations. Information security risks for financial institutions like us have increased recently in part because of new technologies, such as artificial intelligence and quantum computing, the use of the internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions, employees working from home, the increased connectivity of third parties (including contractors) and electronic devices to United’s systems, and the increased sophistication and activities of organized crime, perpetrators of fraud, hackers, terrorists and others. In addition to cyber-attacks or other security breaches involving the theft of sensitive and confidential information, hackers have engaged in attacks against large financial institutions, particularly denial of service attacks, designed to disrupt key business services such as customer-facing web sites. We are not able to anticipate or implement effective preventive measures against all security breaches of these types. Although we employ detection and response mechanisms designed to contain and mitigate security incidents, early detection may be thwarted by persistent sophisticated attacks and malware designed to avoid detection.
We also face risks related to cyber-attacks and other security breaches in connection with card transactions that typically involve the transmission of sensitive information regarding our customers through various third parties. Some of these parties have in the past been the target of security breaches and cyber-attacks, and because the transactions involve third parties and environments that we do not control or secure, future security breaches or cyber-attacks affecting any of these third parties could impact us through no fault of our own, and in some cases we may have exposure and suffer losses for breaches or attacks relating to them. We also rely on numerous other third-party service providers to conduct other aspects of our business operations and face similar risks relating to them. While we conduct security assessments on our higher risk third parties, we cannot be sure that their information security protocols are sufficient to withstand a cyber-attack or other security breach.
Any cyber-attack or other security breach involving the misappropriation, loss or other unauthorized disclosure of confidential customer information could severely damage our reputation, erode confidence in the security of our systems, products and services, expose us to the risk of litigation and liability, disrupt our operations and have a material adverse effect on our business.
United’s business continuity plans or data security systems could prove to be inadequate, resulting in a material interruption in, or disruption to, its business and a negative impact on results of operations.
United relies heavily on communications and information systems to conduct its business. Any failure, interruption or breach in security of these systems, whether due to severe weather, natural disasters, cyber-attack, acts of war or terrorism, criminal activity or other factors, could result in failures or disruptions in general ledger, deposit, loan, customer relationship management and other systems. While United has disaster recovery and other policies and procedures designed to prevent or limit the effect of the failure, interruption or security breach of its information systems, there can be no assurance that any such failures, interruptions or security breaches will not occur or, if they do occur, that they will be adequately addressed. The occurrence of any failures, interruptions or security breaches of United’s information systems could damage its reputation, result in a loss of customer business, subject it to additional regulatory scrutiny or expose it to civil litigation and possible financial liability, any of which could have a material adverse effect on results of operations.
Our growth-oriented business strategy could be adversely affected if we are not able to attract and retain skilled employees or if we lose the services of our senior management team.
Our ability to manage growth will depend upon our ability to continue to attract, hire and retain skilled employees. The unanticipated loss of members of our senior management team, could have a material adverse effect on our results of operations and ability to execute our strategic goals. Our success will also depend on the ability of our officers and key employees to continue to implement and improve our operational and other systems, to manage multiple, concurrent customer relationships and to hire, train and manage our employees.
United’s vendors could fail to fulfill their contractual obligations, resulting in a material interruption in, or disruption to, its business and a negative impact on results of operations.
United is dependent upon third parties for certain information system, data management and processing services and to provide key components of its business infrastructure. United has entered into subcontracts for the supply of current and future services, such as data processing, mortgage loan processing and servicing, and certain property management functions. These services must be available on a continuous and timely basis and be in compliance with any regulatory requirements. Failure to do so could substantially harm United’s business.
United often purchases services from vendors under agreements that typically can be terminated on a periodic basis. There can be no assurance, however, that vendors will be able to meet their obligations under these agreements or that United will be able to compel them to do so. Risks of relying on vendors include the following:
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If an existing agreement expires or a certain service is discontinued by a vendor, then United may not be able to continue to offer its customers the same breadth of products and its operating results would likely suffer unless it is able to find an alternate supply of a similar service.
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Agreements United may negotiate in the future may commit it to certain minimum spending obligations. It is possible United will not be able to create the market demand to meet such obligations.
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If market demand for United’s products increases suddenly, its current vendors might not be able to fulfill United’s commercial needs, which would require it to seek new arrangements or new sources of supply, and may result in substantial delays in meeting market demand.
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United may not be able to control or adequately monitor the quality of services it receives from its vendors. Poor quality services could damage United’s reputation with its customers.
In addition, these third party service providers are sources of operational, cybersecurity and informational security risk to United, including risks associated with operational errors, coding errors, information system interruptions or breaches, and unauthorized disclosures of sensitive or confidential client or customer information. If third party service providers encounter any of these issues, or if United has difficulty communicating with them, United could be exposed to disruption of operations, loss of service or connectivity to customers, reputational damage, and litigation risk that could have a material adverse effect on our results of operations or our business.
Potential problems with vendors such as those discussed above could have a significant adverse effect on United’s business, lead to higher costs and damage its reputation with its customers and, in turn, have a material adverse effect on its financial condition and results of operations.
MARKET, LIQUIDITY AND INTEREST RATE RISKS
Changes in economic and political conditions could adversely affect our earnings, as our borrowers’ ability to repay loans and the value of the collateral securing our loans decline.
United’s success depends, to a certain extent, upon local and national economic and political conditions, as well as governmental monetary policies. Conditions such as an economic recession, rising unemployment, changes in interest rates, money supply reductions in government spending or the size of the government workforce, concerns relating to the U.S. debt ceiling, the imposition of tariffs and retaliatory responses, changes in trade or immigration policy and other factors beyond its control may adversely affect United’s and United Bank’s asset quality, deposit levels and loan demand and, therefore, its earnings. Because United has a significant amount of real estate loans, decreases in real estate values could adversely affect the value of property used as collateral. Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which could have an adverse impact on our earnings. Consequently, declines in the economy in our market area could have a material adverse effect on our financial condition and results of operations.
In addition, economic and inflationary pressure on consumers and uncertainty regarding the economy could result in changes in consumer and business spending, borrowing and savings habits. Such conditions could also have a material adverse effect on the credit quality of our loans and our business, financial condition and results of operations.
Concern regarding the ability of Congress to reach agreement on federal budgetary matters (including the debt ceiling), or total or partial governmental shutdowns, also can adversely affect the economy and increase the risk of economic instability or market volatility, which could have adverse consequences on United’s business, financial condition, liquidity and results of operations.
The value of certain investment securities is volatile and future declines in value could have a materially adverse effect on future earnings and regulatory capital.
Continued volatility in the fair value for certain investment securities, whether caused by changes in market conditions, interest rates, credit risk of the issuer, the expected yield of the security, or actual defaults in the portfolio could result in significant fluctuations in the value of the securities as well as any regulatory rulemaking could exclude or limit the holdings of certain investment securities. This could have a material adverse impact on United’s accumulated other comprehensive income and shareholders’ equity depending on the direction of the fluctuations. Furthermore, future downgrades, defaults or prepayments, including the liquidation of the underlying collateral in certain securities, could result in the recording of an allowance for credit losses related to these securities. This could have a material impact on United’s future earnings, although the impact on shareholders’ equity will be offset by any amount already included in other comprehensive income.
United operates in a highly competitive market.
United faces a high degree of competition in all of the markets we serve and thus faces strong competition in gathering deposits, making loans and obtaining client assets for management by its investment or trust operations. There is significant competition among commercial banks in our market areas as well as with other providers of financial services, such as savings and loan associations, credit unions, consumer finance companies, securities firms, private equity and debt funds, commercial finance and leasing companies, full service brokerage firms, discount brokerage firms, and financial/wealth technology firms. Some of our competitors have greater resources and, as such, may have higher lending limits and may offer other services that are not provided by us. United generally competes on the basis of customer service, responsiveness to customer needs, available loan and deposit products, the rates of interest charged on loans, the rates of interest paid for funds, and the availability and pricing of trust and brokerage services.
There is a risk that aggressive competition could result in United controlling a smaller share of these markets. A decline in market share could lead to a decline in net income which would have a negative impact on shareholder value.
United is subject to liquidity risk.
We require liquidity to meet our deposit and debt obligations as they come due. Our access to funding sources in amounts adequate to finance our activities or on terms that are acceptable to us could be impaired by factors that affect us specifically or the financial services industry or economy generally. A substantial majority of our liabilities are demand, savings, interest checking and money market deposits, which are payable on demand or upon several days’ notice, while by comparison, a substantial portion of our assets are loans, which cannot be called or sold in the same time frame. We may not be able to replace maturing deposits and advances as necessary in the future, especially if a large number of our depositors sought to withdraw their accounts, regardless of the reason. Our access to deposits may be negatively impacted by, among other factors, periods of low interest rates or higher interest rates, which could promote increased competition for deposits or provide customers with alternative investment options. Additionally, negative news about us or the banking industry in general could negatively impact market and/or customer perceptions of our company, which could lead to a loss of depositor confidence and an increase in deposit withdrawals, particularly among those with uninsured deposits. Furthermore, as we and other regional banking organizations experienced in 2023, the failure of other financial institutions may cause deposit outflows as customers spread deposits among several different banks so as to maximize their amount of FDIC insurance, move deposits to banks deemed “too big to fail” or remove deposits from the banking system entirely. A failure to maintain adequate liquidity could have a material adverse effect on our business, financial condition and results of operations.
United may be adversely affected by the soundness of other financial institutions.
Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships. United has exposure to many different industries and counterparties, and routinely executes transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, mutual and hedge funds, or other institutional clients. Defaults by financial services institutions, and even rumors or questions about a financial institution or the financial services industry in general, may lead to market wide liquidity problems and could lead to losses or defaults by United or other institutions. Any such losses could adversely affect United’s financial condition or results of operations.
Changes in interest rates may adversely affect United’s business.
United’s earnings, like most financial institutions, are significantly dependent on its net interest income. Net interest income is the difference between the interest income United earns on loans and other assets which earn interest and the interest expense incurred to fund those assets, such as on savings deposits and borrowed money. Therefore, changes in general market interest rates, such as a change in the monetary policy of the Federal Reserve Board or otherwise beyond those which are contemplated by United’s interest rate risk model and policy, could have an effect on net interest income. For more information concerning United’s interest rate risk model and policy, see the discussion in Quantitative and Qualitative Disclosures About Market Risk included in Part II, under Item 7A of this Form 10-K.
RISKS RELATED TO ACQUISITION ACTIVITY
Potential acquisitions may disrupt our business and dilute shareholder value
We generally seek merger or acquisition partners that are culturally similar and have experienced management and possess either significant market presence or have potential for improved profitability through financial management, economies of scale or expanded services. Acquiring other banks, businesses, or branches involves various risks commonly associated with acquisitions, including, among other things, (i) potential exposure to unknown or contingent liabilities of the target company; (ii) exposure to potential asset quality issues of the target company; (iii) potential disruption to our business; (iv) potential diversion of our management’s time and attention; (v) the possible loss of key employees and customers of the target company; (vi) difficulty in estimating the value of the target company; and (vii) potential changes in banking or tax laws or regulations that may affect the target company.
Acquisitions typically involve the payment of a premium over book and market values, and, therefore, some dilution of our tangible book value and net income per common share may occur in connection with any future transaction. Acquisitions may also result in potential dilution to existing shareholders of our earnings per share if we issue common stock in connection with the acquisition. Furthermore, we may incur substantial costs in pursuing acquisition opportunities, and we cannot guarantee that such acquisition opportunities will be successful or result in the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits from an acquisition. Failure to realize these benefits could have a material adverse effect on our business, financial condition and results of operations. Moreover, there can be no guarantee that post-acquisition intergration efforts will be successful, or that after giving effect to an acquisition, we will achieve financial results comparable to, or better than, our historical performance. In addition, from time to time, bank regulators may restrict the Company from making acquisitions. See “Regulation and Supervision” in Item 1, “Business,” of this Form 10-K for additional detail and further discussion of these matters.
Acquisitions may be delayed, impeded, or prohibited due to regulatory issues
Acquisitions by financial institutions, including us, are subject to approval by a variety of federal and state regulatory agencies (collectively, “regulatory approvals”). The process for obtaining these required regulatory approvals involves a comprehensive application review process, and our ability to engage in certain merger or acquisition transactions depends on the bank regulators’ views at the time as to our capital levels, quality of management, and overall condition, in addition to their assessment of a variety of other factors, including our compliance with law. Regulatory approvals could be delayed, impeded, restrictively conditioned or denied due to existing or new regulatory issues we have, or may have, with regulatory agencies, including, without limitation, issues related to BSA compliance, CRA issues, fair lending laws, fair housing laws, consumer protection laws, unfair, deceptive, or abusive acts or practices regulations and other laws and regulations. In recent years, acquisitions by financial institutions have encountered greater regulatory, governmental and community scrutiny and have taken substantially longer to receive the required regulatory approvals and other required governmental clearances than in the past. We may fail to pursue, evaluate or complete strategic and competitively significant acquisition opportunities as a result of our inability, or perceived or anticipated inability, to obtain regulatory approvals in a timely manner, under reasonable conditions or at all. Difficulties associated with potential acquisitions that may result from these factors could have a material adverse effect on our business, financial condition and results of operations.
SECURITY OWNERSHIP RISKS
United’s stock price can be volatile.
Stock price volatility may make it more difficult for United shareholders to resell their common stock when they want and at prices they find attractive. United’s stock price can fluctuate significantly in response to a variety of factors, including, among other things:
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Actual or anticipated negative variations in quarterly results of operations;
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Negative recommendations by securities analysts;
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Poor operating and stock price performance of other companies that investors deem comparable to United;
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News reports relating to negative trends, concerns and other issues in the financial services industry or the economy in general;
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Negative perceptions in the marketplace regarding United and/or its competitors;
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New technology used, or services offered, by competitors;
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Adverse changes in interest rates or a lending environment with prolonged low interest rates;
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Adverse changes in the real estate market;
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Negative economic news;
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Failure to integrate acquisitions or realize anticipated benefits from acquisitions;
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Adverse changes in government regulations;
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Political uncertainty in the United States; and
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Geopolitical conditions such as acts or threats of terrorism or military conflicts.
General market fluctuations, industry factors and general economic and political conditions and events, such as economic slowdowns or recessions, interest rate changes or credit loss trends, could also cause United’s stock price to decrease regardless of operating results.
Dividend payments by United’s subsidiaries to United and by United to its shareholders can be restricted.
The declaration and payment of future cash dividends will depend on, among other things, United’s earnings, the general economic and regulatory climate, United’s liquidity and capital requirements, and other factors deemed relevant by United’s board of directors. Federal Reserve Board policy limits the payment of cash dividends by bank holding companies, without regulatory approval, and requires that a holding company serve as a source of strength to its banking subsidiaries.
United’s principal source of funds to pay dividends on its common stock is cash dividends from its subsidiaries. The payment of these dividends by its subsidiaries is also restricted by federal and state banking laws and regulations. As of December 31, 2024, approximately $458.4 million was available for dividend payments from United Bank to United without regulatory approval.
An investment in United common stock is not an insured deposit.
United common stock is not a bank deposit and, therefore, is not insured against loss by the FDIC, any other deposit insurance fund or by any other public or private entity. Investment in United common stock is inherently risky for the reasons described in this section and elsewhere in this report and is subject to the same market forces that affect the price of common stock in any company. As a result, someone who acquires United common stock, could lose some or all of their investment.
Failure to maintain effective internal controls over financial reporting in the future could impair United’s ability to accurately and timely report its financial results or prevent fraud, resulting in loss of investor confidence and adversely affecting United’s business and stock price.
Effective internal controls over financial reporting are necessary to provide reliable financial reports and prevent fraud. Management believes that United’s internal controls over financial reporting are currently effective. Management will continually review and analyze the Company’s internal controls over financial reporting for Sarbanes-Oxley Section 404 compliance. Any failure to maintain, in the future, an effective internal control environment could impact United’s ability to report its financial results on an accurate and timely basis, which could result in regulatory actions, loss of investor confidence, and adversely impact United’s business and stock price.
Certain banking laws may have an anti-takeover effect.
Provisions of federal banking laws, including regulatory approval requirements, could make it more difficult to be acquired by a third party, even if perceived to be beneficial to United’s shareholders. These provisions effectively inhibit a non-negotiated merger or other business combination, which could adversely affect the market price of United’s common stock.
GENERAL RISKS
United may elect or be compelled to seek additional capital in the future, but capital may not be available when it is needed.
United is required by federal and state regulatory authorities to maintain adequate levels of capital to support the Company’s operations. In addition, United may elect to raise additional capital to support the Company’s business or to finance acquisitions, if any, or United may otherwise elect to raise additional capital.
United’s ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions and a number of other factors, many of which are outside the Company’s control, and on United’s financial performance. Accordingly, United cannot be assured of its ability to raise additional capital if needed or on terms acceptable to the Company. If United cannot raise additional capital when needed, it may have a material adverse effect on the Company’s financial condition, results of operations and prospects.
New accounting or tax pronouncements or interpretations may be issued by the accounting profession, regulators or other government bodies which could change existing accounting methods. Changes in accounting methods could negatively impact United’s results of operations and financial condition.
Current accounting and tax rules, standards, policies and interpretations influence the methods by which financial institutions conduct business, implement strategic initiatives and tax compliance, and govern financial reporting and disclosures. These laws, regulations, rules, standards, policies, and interpretations are constantly evolving and may change significantly over time, and are difficult to predict. Events that may not have a direct impact on United, such as the bankruptcy of major U.S. companies, have resulted in legislators, regulators and authoritative bodies, such as the Financial Accounting Standards Board, the SEC, the Public Company Accounting Oversight
Board, and various taxing authorities, responding by adopting and/or proposing substantive revision to laws, regulations, rules, standards, policies, and interpretations. New accounting pronouncements and varying interpretations of accounting pronouncements have occurred and may occur in the future. A change in accounting standards may adversely affect reported financial condition and results of operations.
United could face unanticipated environmental liabilities or costs related to real property owned or acquired through foreclosure. Compliance with federal, state and local environmental laws and regulations, including those related to investigation and clean-up of contaminated sites, could have a negative effect on expenses and results of operations.
A significant portion of United’s loan portfolio is secured by real property. During the ordinary course of business, United may foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties. If hazardous or toxic substances are found, United may be liable for remediation costs, as well as for personal injury and property damage. Environmental laws may require United to incur substantial expenses and may materially reduce the affected property’s value or limit United’s ability to use or sell the affected property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase exposure to environmental liability. Although United has policies and procedures to perform an environmental review before initiating any foreclosure action on real property, these reviews may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on results of operations.
Severe weather, natural disasters, public health issues, acts of war or terrorism, and other external events could significantly impact United’s ability to conduct business.
Severe weather, natural disasters, public health issues, acts of war or terrorism, and other external events could affect the stability of United’s deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, adversely impact United’s employee base, cause significant property damage, result in loss of revenue, and/or cause the Company to incur additional expenses. Although management has established disaster recovery policies and procedures, the occurrence of any such event could have a material adverse effect on United’s business, which, in turn, could have a material adverse effect on the Company’s financial condition and results of operations.
The negative economic effects caused by terrorist attacks, including cyber-attacks, potential attacks and other destabilizing events would likely contribute to the deterioration of the quality of United’s loan portfolio and could reduce its customer base, level of deposits, and demand for its financial products such as loans.
High inflation, natural disasters, acts of terrorism, including cyber-attacks, an escalation of hostilities or other international or domestic occurrences, and other factors could have a negative impact on the economy of the Mid-Atlantic and Southeast regions in which United operates. An additional economic downturn in its markets would likely contribute to the deterioration of the quality of United’s loan portfolio by impacting the ability of its customers to repay loans, the value of the collateral securing loans, and may reduce the level of deposits in its bank and the stability of its deposit funding sources. An additional economic downturn could also have a significant impact on the demand for United’s products and services. The cumulative effect of these matters on United’s results of operations and financial condition would likely be adverse and material.
Climate change may materially affect United’s business and results of operations.
We may be subject to physical and transition risks from climate change. Both physical and transition risks from climate change may have negative impacts on the financial condition or creditworthiness of our customers and may negatively affect our business and result of operations.
Physical risks refer to the harm arising from acute, climate-related events, such as hurricanes, wildfires, floods, and heatwaves, and chronic shifts in climate, including higher average temperatures, changes in precipitation patterns, sea level rise, and ocean acidification. Specifically, unpredictable and more frequent weather disasters may adversely impact the value of our properties and the value of real property securing the loans in our portfolios. Additionally, if insurance obtained by our borrowers is insufficient to cover any losses sustained to the collateral, or if insurance coverage is otherwise unavailable to our borrowers, the collateral securing our loans may be negatively impacted by climate change, which could impact our financial condition and results of operations. Further, the effects of climate change may negatively impact regional and local economic activity, which could lead to an adverse effect on our customers and impact the communities in which we operate.
Climate change also exposes us and our customers to transition risks associated with the transition to a less carbon-dependent economy. Transition risks may result from changes in policies; laws and regulations; technologies; and/or market preferences to address climate change. Such changes could materially, negatively impact our business, results of operations, financial condition and/or our reputation, in addition to having a similar impact on our customers. We have customers who operate in carbon-intensive industries like oil and gas that are exposed to climate risks, such as those risks related to the transition to a less carbon-dependent economy, as well as customers who operate in low-carbon industries that may be subject to risks associated with new technologies. In addition, ongoing legislative or regulatory uncertainties and changes regarding climate risk management and practices, including the shifting sentiment against climate and sustainability initiatives, may subject us to different and potentially conflicting requirements and result in higher regulatory, compliance, credit and reputational risks and costs.
We may also be subject to reputational risk and negative public opinion from shareholder concerns about our, actual or perceived, action, or inaction, in response to climate change, our carbon footprint and our business relationships with customers who operate in carbon-intensive industries. Our business, reputation and ability to retract and retain employees may be harmed due to stakeholder views and perceptions of our response to climate change.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B.
UNRESOLVED
STAFF COMMENTS
None

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ITEM 2. PROPERTIES
Item 2. PROPERTIES
Offices
United is headquartered in the United Center at 500 Virginia Street, East, Charleston, West Virginia. United’s executive offices are located in Parkersburg, West Virginia at Fifth and Avery Streets. United operates two hundred and nineteen (219) full service offices-forty-seven (47) offices located throughout West Virginia, ninety-nine (99) offices in the Shenandoah Valley region, the Northern Neck, the Richmond and Lynchburg metropolitan areas of Virginia and the Northern Virginia, Maryland and Washington, D.C. metropolitan area, forty-three (43) offices in the Mountains, Piedmont, Coastal Plains and Tidewater regions of North Carolina, twenty-five (25) offices in the Coastal, Midlands, and Upstate regions of South Carolina, four (4) offices in southwestern Pennsylvania and one (1) office in southeastern Ohio. United owns forty-one (41) of its West Virginia facilities while leasing six (6) of its offices under operating leases. In Virginia, United leases forty-two (42) of its branches under operating leases while owning thirty-eight (38) branches. United owns three (3) branches and leases nine (9) of its branches under operating leases in Maryland. In Washington, DC, United leases all nine (9) of its branch facilities under operating leases. United leases twenty-five (25) of its branch offices in North Carolina under operating leases while owning eighteen (18) branches. In South Carolina, United owns twenty-one (21) of its facilities while leasing under operating leases four (4) branch offices. United owns all four (4) of its Pennsylvania facilities. In Ohio, United owns its one branch. United leases operations centers in the Charleston, West Virginia and Chantilly, Virginia areas and owns two operations centers in the Morgantown, West Virginia area and Washington, North Carolina.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. LEGAL PROCEEDINGS
United and its subsidiaries are currently involved in various legal proceedings in the normal course of business. Management is vigorously pursuing all its legal and factual defenses and, after consultation with legal counsel, believes that all such litigation will be resolved with no material effect on United’s financial position.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
UNITED BANKSHARES, INC.
FORM 10-K, PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Stock
As of January 31, 2025, 200,000,000 shares of common stock, par value $2.50 per share, were authorized for United, of which 150,560,338 were issued, including 7,348,188 shares held as treasury shares. The outstanding shares are held by approximately 9,265 shareholders of record, as well as 47,319 shareholders in street name as of January 31, 2025. The unissued portion of United’ s authorized common stock (subject to registration approval by the SEC) and the treasury shares are available for issuance as the Board of Directors determines advisable. United offers its shareholders the opportunity to invest dividends in shares of United stock through its dividend reinvestment plan. United has also established stock option plans and a stock bonus plan as incentive for certain eligible officers. In addition to the above incentive plans, United is occasionally involved in certain mergers in which additional shares could be issued and recognizes that additional shares could be issued for other appropriate purposes.
In October of 2019, United’s Board of Directors approved a stock repurchase plan (the “2019 Plan”) to repurchase up to 4,000,000 shares of the Company’s common stock on the open market at prevailing prices. United repurchased 2,846,989 shares under this plan. On May 11, 2022, the Board of Directors approved a new repurchase plan (the “2022 Plan”) to repurchase up to 4,750,000 shares of United’s common stock on the open market. The 2022 Plan replaced the 2019 Plan. During 2022, United repurchased 378,761 shares under the 2022 Plan. United did not repurchase any shares in 2023 or 2024. As of December 31, 2024, United still has 4,371,239 shares available for repurchase under the 2022 Plan.
The Board of Directors believes that the availability of authorized but unissued common stock of United is of considerable value if opportunities should arise for the acquisition of other businesses through the issuance of United’s stock. Shareholders do not have preemptive rights, which allow United to issue additional authorized shares without first offering them to current shareholders.
Currently, United has only one voting class of stock issued and outstanding and all voting rights are vested in the holders of United’s common stock. On all matters subject to a vote of shareholders, the shareholders of United will be entitled to one vote for each share of common stock owned. Shareholders of United have cumulative voting rights with regard to election of directors.
United’s common stock is traded over the counter on the National Association of Securities Dealers Automated Quotations System, Global Select Market (“NASDAQ”) under the trading symbol UBSI. The closing sale price reported for United’s common stock on February 20, 2025, the last practicable date, was $36.77.
On December 23, 2008, the shareholders of United authorized the issuance of preferred stock up to 50,000,000 shares with a par value of $1.00 per share. The authorized preferred stock may be issued by the Company’s Board of Directors in one or more series, from time to time, with each such series to consist of such number of shares and to have such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, as shall be stated in the resolution or resolutions providing for the issuance of such series adopted by the Board of Directors. Currently, no shares of preferred stock have been issued.
The authorization of preferred stock will not have an immediate effect on the holders of the Company’s common stock. The actual effect of the issuance of any shares of preferred stock upon the rights of the holders of common stock cannot be stated until the Board of Directors determines the specific rights of any shares of preferred stock. However, the effects might include, among other things, restricting dividends on common stock, diluting the voting power of common stock, reducing the market price of common stock or impairing the liquidation rights of the common stock without further action by the shareholders. Holders of the common stock will not have preemptive rights with respect to the preferred stock.
There are no preemptive or conversion rights or, redemption or sinking fund provisions with respect to United’s stock. All of the issued and outstanding shares of United’s stock are fully paid and non-assessable.
Stock Performance Graph
The following Stock Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that United specifically incorporates it by reference into such filing.
The following graph compares United’s cumulative total shareholder return (assuming reinvestment of dividends) on its common stock for the five-year period ending December 31, 2024, with the cumulative total return (assuming reinvestment of dividends) of the Standard and Poor’s Midcap 400 Index and with the NASDAQ Bank Index. The cumulative total shareholder return assumes a $100 investment on December 31, 2019 in the common stock of United and each index and the cumulative return is measured as of each subsequent fiscal year-end. There is no assurance that United’s common stock performance will continue in the future with the same or similar trends as depicted in the graph.
Period Ending
12/31/19
12/31/20
12/31/21
12/31/22
12/31/23
12/31/24
United Bankshares, Inc.
100.00
88.54
103.02
119.54
115.80
120.69
NASDAQ Bank Index
100.00
92.50
132.19
110.67
106.87
128.85
S&P Mid-Cap Index
100.00
113.65
141.76
123.19
143.38
163.30
Issuer Repurchases
The table below includes certain information regarding United’s purchase of its common shares during the three months ended December 31, 2024:
Period
Total
Number of
Shares
Purchased
(1) (2)
Average Price
Paid per
Share
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans (3)
Maximum
Number of
Shares that May
Yet be Purchased
Under the Plans (3)
10/01 - 10/31/2024
$ 00.00
4,371,239
11/01 - 11/30/2024
$ 35.96
4,371,239
12/01 - 12/31/2024
$ 00.00
4,371,239
Total
$ 35.96
(1) Includes shares exchanged in connection with the exercise of stock options or the vesting of restricted stock under United’s long-term incentive plans. Shares are purchased pursuant to the terms of the applicable plan and not pursuant to a publicly announced stock repurchase plan. For the quarter ended December 31, 2024 - no shares were exchanged by participants in United’s long-term incentive plans.
(2) Includes shares purchased in open market transactions by United for a rabbi trust to provide payment of benefits under a deferred compensation plan for certain key officers of United and its subsidiaries. For the quarter ended December 31, 2024, the following shares were purchased for the deferred compensation plan: November 2024 - 5 shares at an average price of $35.96.
(3) In May of 2022, United’s Board of Directors approved a repurchase plan to repurchase up to 4,750,000 shares of United’s common stock on the open market (the “2022 Plan”). The timing, price and quantity of purchases under the plans are at the discretion of management and the plan may be discontinued, suspended or restarted at any time depending on the facts and circumstances. The 2022 Plan replaces a repurchase plan approved by United’s Board of Directors in October of 2019.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. [RESERVED]

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Congress passed the Private Securities Litigation Act of 1995 to encourage corporations to provide investors with information about the company’s anticipated future financial performance, goals, and strategies. The act provides a safe haven for such disclosure; in other words, protection from unwarranted litigation if actual results are not the same as management expectations.
United desires to provide its shareholders with sound information about past performance and future trends. Consequently, any forward-looking statements contained in this report, in a report incorporated by reference to this report, or made by management of United in this report, in any other reports and filings, in press releases and in oral statements, involve numerous assumptions, risks and uncertainties. Forward-looking statements can be identified by the use of the words “expect,” “may,” “could,” “intend,” “project,” “estimate,” “believe,” “anticipate,” and other words of similar meaning. Such forward-looking statements are based on assumptions and estimates, which although believed to be reasonable, may turn out to be incorrect. Therefore, undue reliance should not be placed upon these estimates and statements. United cannot assure that any of these statements, estimates, or beliefs will be realized and actual results may differ from those contemplated in these “forward-looking statements.” United undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.
The discussion in Item 1A, “Risk Factors,” lists some of the factors that could cause United’s actual results to vary materially from those expressed or implied by any forward-looking statements, and such discussion is incorporated into this discussion by reference.
DEVELOPMENTS
On January 10, 2025, United consummated its acquisition of Atlanta-based Piedmont Bancorp, Inc. (“Piedmont”). As of January 10, 2025, Piedmont had total assets of approximately $2.4 billion, total loans of approximately $2.1 billion, total liabilities of approximately $2.2 billion, total deposits of approximately $2.1 billion, and total shareholders’ equity of approximately $202 million.
During the first quarter of 2024, United consolidated its mortgage delivery channels by consolidating George Mason’s and Crescent’s mortgage origination and sales business with United Bank. United had previously exited the third-party origination (“TPO”) business during the fourth quarter of 2023 as part of this consolidation. United continues to offer mortgage products through its bank mortgage channel with previous George Mason offices re-branded under the United umbrella. The consolidation streamlined operations and will enhance the customer experience.
INTRODUCTION
The following discussion and analysis presents the more significant changes in financial condition as of December 31, 2024 and 2023 and the results of operations of United and its subsidiaries for each of the years then ended. This discussion and the consolidated financial statements and the notes to Consolidated Financial Statements include the accounts of United Bankshares, Inc. and its wholly-owned subsidiaries, unless otherwise indicated. Management has evaluated all significant events and transactions that occurred after December 31, 2024, but prior to the date these financial statements were issued, for potential recognition or disclosure required in these financial statements. Refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K filed with the SEC on February 29, 2024 (the 2023 Form 10-K) for a discussion and analysis of the more significant factors that affected periods prior to 2024.
This discussion and analysis should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes thereto, which are included elsewhere in this document.
USE OF NON-GAAP FINANCIAL MEASURES
This discussion and analysis contains certain financial measures that are not recognized under GAAP. Under SEC Regulation G, public companies making disclosures containing financial measures that are not in accordance with GAAP must also disclose, along with each “non-GAAP” financial measure, certain additional information, including a reconciliation of the non-GAAP financial measure to the closest comparable GAAP financial measure, as well as a statement of the company’s reasons for utilizing the non-GAAP financial measure.
Generally, United has presented a non-GAAP financial measure because it believes that this measure provides meaningful additional information to assist in the evaluation of United’s results of operations or financial position. Presentation of a non-GAAP financial measure is consistent with how United’s management evaluates its performance internally and this non-GAAP financial measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the banking industry. Specifically, this discussion contains certain references to financial measures identified as tax-equivalent (“FTE”) net interest income and return on average tangible equity. Management believes these non-GAAP financial measures to be helpful in understanding United’s results of operations or financial position.
Net interest income is presented in this discussion on a tax-equivalent basis. The tax-equivalent basis adjusts for the tax-favored status of income from certain loans and investments. Although this is a non-GAAP measure, United’s management believes this measure is more widely used within the financial services industry and provides better comparability of net interest income arising from taxable and tax-exempt sources. United uses this measure to monitor net interest income performance and to manage its balance sheet composition.
Average tangible equity is calculated as GAAP total shareholders’ equity minus total intangible assets. Tangible equity can thus be considered a more conservative valuation of the company. When considering net income, a return on average tangible equity can be calculated. Management provides a return on average equity to facilitate the understanding of as well as to assess the quality and composition of United’s capital structure. This measure, along with others, is used by management to analyze capital adequacy and performance.
However, this non-GAAP information should be considered supplemental in nature and not as a substitute for related financial information prepared in accordance with GAAP. Where the non-GAAP financial measure is used, the comparable GAAP financial measure, as well as reconciliation to that comparable GAAP financial measure, as well as a statement of the company’s reasons for utilizing the non-GAAP financial measure, can be found within this discussion and analysis. Investors should recognize that United’s presentation of this non-GAAP financial measure might not be comparable to a similarly titled measure at other companies.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
The accounting and reporting policies of United conform with U.S. generally accepted accounting principles. In preparing the consolidated financial statements, management is required to make estimates, assumptions and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions and judgments, which are reviewed with the Audit Committee of the Board of Directors, are based on information available as of the date of the financial statements. Actual results could differ from these estimates. These policies, along with the disclosures presented in the financial statement notes and in this financial review, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined. Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, management has identified the determination of the allowance for loan and lease losses, the calculation of the income tax provision, and the use of fair value measurements to account for certain financial instruments to be the accounting areas that require the most subjective or complex judgments, and as such could be most subject to revision as new information becomes available. The most significant accounting policies followed by United are presented in Note A, Notes to Consolidated Financial Statements.
Allowance for Loan and Lease Losses
The allowance for loan and lease losses is an estimate of the expected credit losses on financial assets measured at amortized cost to present the net amount expected to be collected as of the balance sheet date. Such allowance is based on the credit losses expected to arise over the life of the asset (contractual term). Determining the allowance for loan and lease losses requires management to make estimates of expected credit losses that are highly uncertain and require a high degree of judgment. At December 31, 2024, the allowance for loan and lease losses was $271.84 million and is subject to periodic adjustment based on management’s assessment of expected credit losses in the loan portfolio. Such adjustment from period to period can have a significant impact on United’s consolidated financial statements. To illustrate the potential effect on the financial statements of our estimates of the allowance for loan and lease losses, a 10% increase in the allowance for loan and lease losses would have required $27.18 million in additional allowance (funded by additional provision for loan and lease losses), which would have negatively impacted the year of 2024 net income by approximately $21.48 million, after-tax or $0.16 diluted earnings per common share. Management’s evaluation of the adequacy of the allowance for loan and lease losses and the appropriate provision for loan and lease losses is based upon a quarterly evaluation of the loan portfolio. This evaluation is inherently subjective and requires significant estimates, including estimates related to the amounts and timing of future cash flows, value of collateral, losses on pools of homogeneous loans and leases based on historical loss experience, and consideration of qualitative factors such as current economic trends, all of which are susceptible to constant and significant change. The allowance allocated to specific credits and loan pools grouped by similar risk characteristics is reviewed on a quarterly basis and adjusted as necessary based upon subsequent changes in circumstances. In determining the components of the allowance for loan and lease losses, management considers the risk arising in part from, but not limited to, qualitative factors which include charge-off and delinquency trends, current business conditions and reasonable and supportable economic forecasts, lending policies and procedures, the size and risk characteristics of the loan portfolio, concentrations of credit, and other various
factors. The methodology used to determine the allowance for loan and lease losses is described in Note A, Notes to Consolidated Financial Statements. A discussion of the factors leading to changes in the amount of the allowance for loan and lease losses is included in the Provision for Credit Losses section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”). For a discussion of concentrations of credit risk, see Item 1, under the caption of Loan Concentrations in this Form 10-K.
Income Taxes
United’s calculation of income tax provision is inherently complex due to the various different tax laws and jurisdictions in which we operate and requires management’s use of estimates and judgments in its determination. The current income tax liability also includes income tax expense related to our uncertain tax positions as required in ASC Topic 740, “Income Taxes.” Changes to the estimated accrued taxes can occur due to changes in tax rates, implementation of new business strategies, resolution of issues with taxing authorities and recently enacted statutory, judicial and regulatory guidance. These changes can be material to the Company’s operating results for any particular reporting period. The analysis of the income tax provision requires the assessments of the relative risks and merits of the appropriate tax treatment of transactions, filing positions, filing methods and taxable income calculations after considering statutes, regulations, judicial precedent and other information. United strives to keep abreast of changes in the tax laws and the issuance of regulations which may impact tax reporting and provisions for income tax expense. United is also subject to audit by federal and state authorities. Because the application of tax laws is subject to varying interpretations, results of these audits may produce indicated liabilities which differ from United’s estimates and provisions. United continually evaluates its exposure to possible tax assessments arising from audits and records its estimate of probable exposure based on current facts and circumstances. The potential impact to United’s operating results for any of the changes cannot be reasonably estimated. See Note O, Notes to Consolidated Financial Statements for information regarding United’s ASC Topic 740 disclosures.
Use of Fair Value Measurements
United determines the fair value of its financial instruments based on the fair value hierarchy established in ASC Topic 820, whereby the fair value of certain assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. ASC Topic 820 establishes a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs in the methodology for determining fair value are observable or unobservable. Observable inputs reflect market-based information obtained from independent sources (Level 1 or Level 2), while unobservable inputs reflect management’s estimate of market data (Level 3). For assets and liabilities that are actively traded and have quoted prices or observable market data, a minimal amount of subjectivity concerning fair value is needed. Prices and values obtained from third party vendors that do not reflect forced liquidation or distressed sales are not adjusted by management. When quoted prices or observable market data are not available, management’s judgment is necessary to estimate fair value.
At December 31, 2024, approximately 10.22% of total assets, or $3.07 billion, consisted of financial instruments recorded at fair value. Of this total, approximately 97.91% or $3.01 billion of these financial instruments used valuation methodologies involving observable market data, collectively Level 1 and Level 2 measurements, to determine fair value. Approximately 2.09% or $64.04 million of these financial instruments were valued using unobservable market information or Level 3 measurements. Most of these financial instruments valued using unobservable market information were loans held for sale. At December 31, 2024, only $20 thousand or less than 1% of total liabilities were recorded at fair value. This entire amount was valued using methodologies involving unobservable market data. United does not believe that any changes in the unobservable inputs used to value the financial instruments mentioned above would have a material impact on United’s results of operations, liquidity, or capital resources. See Note W for additional information regarding ASC Topic 820 and its impact on United’s financial statements.
Any material effect on the financial statements related to these critical accounting areas is further discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.
2024 COMPARED TO 2023
United’s total assets as of December 31, 2024 were $30.02 billion, which was an increase of $97.06 million or less than 1% from December 31, 2023. This increase was mainly due to an increase of $693.30 million or 43.36% in cash and cash equivalents, a $314.41 million or 1.47% increase in loans, net of unearned income, and a $10.29 million or 2.11% increase in cash surrender life insurance policies. These increases in assets were mostly offset by a $866.46 million or 21.00% decrease in investment securities, a $11.90 million or 21.15% decrease in loans held for sale, a $9.01 million or 8.08% decrease in interest receivable, and a $6.77 million or 2.45% decrease in other assets. Total liabilities decreased $124.92 million or less than 1% from year-end 2023. Borrowings decreased $1.27 billion or 63.91%, which were partially offset by a $1.14 billion or 5.01% increase in deposits. Shareholders’ equity increased $221.98 million or 4.65%.
The following discussion explains in more detail the changes in financial condition by major category.
Cash and Cash Equivalents
Cash and cash equivalents at December 31, 2024 increased $693.30 million or 43.36% from year-end 2023. In particular, interest-bearing deposits with other banks increased $709.70 million or 52.94% as United placed more cash in an interest-bearing account with the Federal Reserve while cash and due from banks decreased $16.50 million or 6.42%. Federal funds sold increased $98 thousand or 8.38%. During the year of 2024, net cash of $445.45 million and $571.49 million were provided by operating and investing activities, respectively, while net cash of $323.64 million was used in financing activities. Further details related to changes in cash and cash equivalents are presented in the Consolidated Statements of Cash Flows.
Securities
Total investment securities at December 31, 2024 decreased $866.46 million or 21.00%. Securities available for sale decreased $826.66 million or 21.83%. This change in securities available for sale reflects $2.06 billion in purchases, $2.93 billion in sales, maturities and calls of securities, and an increase of $40.55 million in market value. The majority of the sales activity was related to asset-backed securities, mortgage-backed securities and state and political subdivision securities. Equity securities were $21.06 million at December 31, 2024, an increase of $12.11 million or 135.42% due mainly to a reclass of an equity security that now has a readily determinable market value. The equity security was previously held in “Other investment securities” on the December 31, 2023 Consolidated Balance Sheets. Other investment securities decreased $51.91 million or 15.76% from year-end 2023, due mainly to a redemption of FHLB stock due to a decline in FHLB borrowings.
The following table summarizes the changes in the available for sale securities since year-end 2023:
(Dollars in thousands)
December 31
December 31
$
Change
%
Change
U.S. Treasury securities and obligations of U.S.
Government corporations and agencies
$ 245,842
$ 484,950
$ (239,108 )
(49.31 %)
State and political subdivisions
495,073
533,831
(38,758 )
(7.26 %)
Mortgage-backed securities
1,471,828
1,599,850
(128,022 )
(8.00 %)
Asset-backed securities
474,982
860,638
(385,656 )
(44.81 %)
Single issue trust preferred securities
11,919
15,141
(3,222 )
(21.28 %)
Other corporate securities
260,075
291,967
(31,892 )
(10.92 %)
Total available for sale securities, at fair value
$ 2,959,719
$ 3,786,377
$ (826,658 )
(21.83 %)
The following table summarizes the changes in the held to maturity securities since year-end 2023:
(Dollars in thousands)
December 31
December 31
$
Change
%
Change
State and political subdivisions
$ (1)
$ (2)
$ (1 )
(0.10 %)
Other corporate securities
0.00 %
Total held to maturity securities, at amortized cost
$ 1,002
$ 1,003
$ (1 )
(0.10 %)
(1) net of allowance for credit losses of $18 thousand.
(2) net of allowance for credit losses of $17 thousand.
At December 31, 2024, gross unrealized losses on available for sale securities were $323.94 million. Securities with the most significant gross unrealized losses at December 31, 2024 consisted primarily of agency residential mortgage-backed securities, state and political subdivision securities, agency commercial mortgage-backed securities and other corporate securities.
As of December 31, 2024, United’s available for sale mortgage-backed securities had an amortized cost of $1.69 billion, with an estimated fair value of $1.47 billion. The portfolio consisted primarily of $1.23 billion in agency residential mortgage-backed securities with a fair value of $1.06 billion, $88.39 million in non-agency residential mortgage-backed securities with an estimated fair value of $82.12 million, and $372.65 million in commercial agency mortgage-backed securities with an estimated fair value of $329.99 million.
As of December 31, 2024, United’s available for sale state and political subdivisions securities had an amortized cost of $574.58 million, with an estimated fair value of $495.07 million. The portfolio relates to securities issued by various municipalities located throughout the United States, and no securities within the portfolio were rated below investment grade as of December 31, 2024.
As of December 31, 2024, United’s available for sale corporate securities had an amortized cost of $771.81 million, with an estimated fair value of $746.98 million. The portfolio consisted of $13.30 million in single issue trust preferred securities with an estimated fair value of $11.92 million. In addition to the single issue trust preferred securities, the Company held positions in various other corporate securities, including asset-backed securities with an amortized cost of $476.86 million and a fair value of $474.98 million and other corporate securities, with an amortized cost of $281.65 million and a fair value of $260.08 million.
United’s available for sale single issue trust preferred securities had a fair value of $11.92 million as of December 31, 2024. Of the $11.92 million, $7.32 million, or 61.44%, were investment grade and $4.60 million, or 38.56%, were unrated. The portfolio consists of two exposures, with Truist Bank at $7.32 million and Emigrant Bank at $4.60 million. All single issue trust preferred securities are currently receiving full scheduled principal and interest payments.
During 2024, United did not recognize any credit losses on its available for sale investment securities. Management does not believe that any individual security with an unrealized loss as of December 31, 2024 is impaired. United believes the decline in value resulted from changes in market interest rates, credit spreads and liquidity, not a deterioration of credit. Based on a review of each of the securities in the available for sale investment portfolio, management concluded that it was more-likely-than-not that it would be able to realize the cost basis investment and appropriate interest payments on such securities. United has the intent and the ability to hold these securities until such time as the value recovers or the securities mature. As of December 31, 2024, there was no allowance for credit losses related to the Company’s available for sale securities. However, United acknowledges that any securities in an unrealized loss position may be sold in future periods in response to significant, unanticipated changes in asset/liability management decisions, unanticipated future market movements or business plan changes. During 2024, United sold approximately $470 million of available for sale securities at a loss of $16.30 million.
Further information regarding the amortized cost and estimated fair value of investment securities, including remaining maturities as well as a more detailed discussion of management’s impairment analysis, is presented in Note C, Notes to Consolidated Financial Statements.
Loans Held for Sale
Loans held for sale were $44.36 million at December 31, 2024, a decrease of $11.90 million or 21.15% from year-end 2023. Loan sales in the secondary market exceeded originations during the year of 2024. Loan originations for the year of 2024 were $645.94 million while loans sales were $657.84 million.
Portfolio Loans
Loans, net of unearned income, increased $314.41 million or 1.47%. Since year-end 2023, commercial, financial and agricultural loans decreased $8.01 million or less than 1% as a result of a $213.07 million or 2.56% increase in commercial real estate loans, which was mostly offset by a $221.08 million or 6.19% decrease in commercial loans (not secured by real estate). Residential real estate loans increased $236.15 million or 4.48% and construction and land development loans increased $360.79 million or 11.46%. Consumer loans decreased $281.62 million or 26.45% due to a decrease in indirect automobile financing.
The following table summarizes the changes in the major loan classes since year-end 2023:
(Dollars in thousands)
December 31
December 31
$
Change
%
Change
Loans held for sale
$ 44,360
$ 56,261
$ (11,901 )
(21.15 %)
Commercial, financial, and agricultural:
Owner-occupied commercial real estate
$ 1,590,002
$ 1,598,231
$ (8,229 )
(0.51 %)
Nonowner-occupied commercial real estate
6,939,641
6,718,343
221,298
3.29 %
Other commercial loans
3,351,362
3,572,440
(221,078 )
(6.19 %)
Total commercial, financial, and agricultural
$ 11,881,005
$ 11,889,014
$ (8,009 )
(0.07 %)
Residential real estate
5,507,384
5,271,236
236,148
4.48 %
Construction & land development
3,509,034
3,148,245
360,789
11.46 %
Consumer:
Bankcard
9,998
9,962
0.36 %
Other consumer
773,077
1,054,728
(281,651 )
(26.70 %)
Total gross loans
$ 21,680,498
$ 21,373,185
$ 307,313
1.44 %
Less: Unearned income
(7,005 )
(14,101 )
7,096
(50.32 %)
Total Loans, net of unearned income
$ 21,673,493
$ 21,359,084
$ 314,409
1.47 %
The following table shows the amount of loans acquired and outstanding by major loan classes as of December 31, 2024 and 2023:
December 31, 2024
December 31, 2023
(In thousands)
Originated
Acquired
Total
Originated
Acquired
Total
Commercial, financial, and agricultural:
Owner-occupied commercial real estate
$ 1,065,162
$ 524,839
$ 1,590,002
$ 999,471
$ 598,760
$ 1,598,231
Nonowner-occupied commercial real estate
5,562,050
1,377,591
6,939,641
5,096,074
1,622,269
6,718,343
Other commercial loans
3,192,036
159,326
3,351,362
3,144,321
428,119
3,572,440
Total commercial, financial, and agricultural
$ 9,819,249
$ 2,061,756
$ 11,881,005
$ 9,239,866
$ 2,649,148
$ 11,889,014
Residential real estate
5,062,380
445,004
5,507,384
4,731,392
539,844
5,271,236
Construction & land development
3,401,820
107,214
3,509,034
2,998,152
150,093
3,148,245
Consumer:
Bankcard
9,998
9,998
9,962
9,962
Other consumer
769,110
3,967
773,077
1,048,428
6,299
1,054,728
Total Loans and leases
$ 19,062,556
$ 2,617,942
$ 21,680,498
$ 18,027,801
$ 3,345,384
$ 21,373,185
The following table shows the maturity of loans and leases, outstanding as of December 31, 2024:
(In thousands)
Less Than
One Year
One To
Five Years
Five to
Fifteen Years
Greater than
Fifteen Years
Total
Commercial, financial and agricultural:
Owner-occupied commercial real estate
$ 136,831
$ 821,093
$ 604,021
$ 28,057
$ 1,590,002
Nonowner-occupied commercial real estate
1,750,373
3,934,896
1,157,774
96,598
6,939,641
Other commercial loans
846,283
1,743,240
664,003
97,836
3,351,362
Total commercial, financial, and agricultural
$ 2,733,487
$ 6,499,229
$ 2,425,798
$ 222,491
$ 11,881,005
Residential real estate
148,643
617,863
516,824
4,224,054
5,507,384
Construction & land development
1,143,312
2,197,352
94,071
74,299
3,509,034
Consumer:
Bankcard
1,106
8,662
9,998
Other consumer
20,137
615,907
136,055
773,077
Total Loans and leases
$ 4,046,685
$ 9,939,013
$ 3,172,978
$ 4,521,822
$ 21,680,498
At December 31, 2024, for loans and leases due after one year, interest rate information is as follows:
(In thousands)
One To
Five Years
Five to
Fifteen Years
Greater than
Fifteen Years
Total
Commercial, financial and agricultural:
Owner-occupied commercial real estate
Outstanding with fixed interest rates
$ 660,969
$ 231,632
$ 7,739
$ 900,340
Outstanding with adjustable interest rates
160,124
372,389
20,318
552,831
Total owner-occupied
821,093
604,021
28,057
1,453,171
Nonowner-occupied commercial real estate
Outstanding with fixed interest rates
$ 3,133,577
$ 501,169
$ 15,429
$ 3,650,175
Outstanding with adjustable interest rates
801,319
656,605
81,169
1,539,093
Total non-owner occupied
3,934,896
1,157,774
96,598
5,189,268
Other commercial loans
Outstanding with fixed interest rates
$ 1,194,198
$ 439,166
$ 65,060
$ 1,698,424
Outstanding with adjustable interest rates
549,042
224,837
32,776
806,655
Total other commercial
1,743,240
664,003
97,836
2,505,079
Residential real estate
Outstanding with fixed interest rates
$ 376,887
$ 202,761
$ 2,117,865
$ 2,697,513
Outstanding with adjustable interest rates
240,976
314,063
2,106,189
2,661,228
Total residential real estate
617,863
516,824
4,224,054
5,358,741
Construction
Outstanding with fixed interest rates
$ 459,839
$ 18,611
$ 64,479
$ 542,929
Outstanding with adjustable interest rates
1,737,513
75,460
9,820
1,822,793
Total construction
2,197,352
94,071
74,299
2,365,722
Consumer:
Bankcard
Outstanding with fixed interest rates
$
$
$
$
Outstanding with adjustable interest rates
7,882
8,112
Total bankcard
8,662
8,892
Other consumer
Outstanding with fixed interest rates
$ 615,729
$ 136,049
$
$ 752,756
Outstanding with adjustable interest rates
Total other consumer
615,907
136,055
752,940
Total outstanding with fixed interest rates
$ 6,441,979
$ 1,529,388
$ 2,271,550
$ 10,242,917
Total outstanding with adjustable rates
$ 3,497,034
$ 1,643,590
$ 2,250,272
$ 7,390,896
Total
$ 9,939,013
$ 3,172,978
$ 4,521,822
$ 17,633,813
More information relating to loans is presented in Note D, Notes to Consolidated Financial Statements.
Other Assets
Other assets decreased $6.77 million or 2.45% from year-end 2023. Deferred tax assets decreased $3.43 million due to an increase in the fair value and sales of AFS securities, dealer reserve decreased $7.82 million due to a decrease in indirect automobile financing, accounts receivable decreased $4.56 million due to timing differences, core deposit intangibles decreased $3.64 million due to amortization, and OREO properties decreased $2.29 million due to sales of consumer OREO properties. Partially offsetting these decreases in other assets was a $14.65 million increase in the pension asset.
Deposits
Deposits represent United’s primary source of funding. Total deposits at December 31, 2024 increased $1.14 billion or 5.01%. In terms of composition, noninterest-bearing deposits decreased $13.67 million or less than 1% while interest-bearing deposits increased $1.16 billion or 6.94% from December 31, 2023.
Noninterest-bearing deposits consist of demand deposit and noninterest bearing money market (“MMDA”) account balances. The $13.67 million decrease in noninterest-bearing deposits was due mainly to a $37.19 million decrease in commercial noninterest-bearing deposits and a $57.56 million decrease in in-process items. Partially offsetting these decreases in noninterest-bearing deposits were increases of $26.27 million and $19.92 million in personal and public noninterest-bearing deposits, respectively, and an increase of $30.11 million in official checks.
Interest-bearing deposits consist of interest-bearing transaction, regular savings, interest-bearing MMDA, and time deposit account balances. Interest-bearing transaction accounts increased $288.79 million or 5.11% since year-end 2023. In particular, commercial interest-bearing transaction accounts increased $414.86 million and public interest-bearing transaction accounts increased $6.03 million while personal interest-bearing transaction accounts decreased $132.10 million. Regular savings accounts decreased $94.96 million or 7.06% mainly as a result of a $77.10 million decrease in personal savings accounts and a $19.91 million decrease in commercial savings accounts. Interest-bearing MMDAs increased $707.44 million or 11.14%. In particular, commercial MMDAs increased $511.19 million while personal MMDAs and public funds MMDAs increased $162.06 million and $34.20 million, respectively.
Time deposits under $100,000 increased $106.37 million or 9.98% from year-end 2023. This increase in time deposits under $100,000 was the result of a $119.22 million increase in fixed rate Certificates of Deposits (“CDs”) under $100,000. Partially offsetting this increase in deposits under $100,000 was a $5.69 million decrease in CDs under $100,000 obtained through the use of deposit listing services.
Since year-end 2023, time deposits over $100,000 increased $148.57 million or 6.57% as fixed rate CDs increased $375.07 million and public funds CDs increased $45.68 million. Partially offsetting these increases in time deposits over $100,000, was a decrease of $272.13 million in brokered CDs.
The table below summarizes the changes by deposit category since year-end 2023:
(Dollars in thousands)
December 31
December 31
$
Change
%
Change
Demand deposits
$ 6,135,413
$ 6,149,080
$ (13,667 )
(0.22 %)
Interest-bearing checking
5,936,925
5,648,135
288,790
5.11 %
Regular savings
1,250,295
1,345,258
(94,963 )
(7.06 %)
Money market accounts
7,056,897
6,349,453
707,444
11.14 %
Time deposits under $100,000
1,172,462
1,066,092
106,370
9.98 %
Time deposits over $100,000 (1)
2,409,867
2,261,301
148,566
6.57 %
Total deposits
$ 23,961,859
$ 22,819,319
$ 1,142,540
5.01 %
(1) Includes time deposits of $250,000 or more of $1,115,748 and $842,118 at December 31, 2024 and December 31, 2023, respectively.
At December 31, 2024, the scheduled maturities of time deposits are as follows:
Year
Amount
(In thousands)
$ 3,340,089
164,024
50,164
17,630
2029 and thereafter
10,422
TOTAL
$ 3,582,329
Maturities of estimated uninsured time deposits of $100,000 or more outstanding at December 31, 2024 are summarized as follows:
(Dollars in thousands)
3 months
or less
Over 3
through
6 months
Over 6
through
12 months
Over
12 months
Time deposits in amounts in excess of the FDIC Insurance limit
$ 204,601
$ 210,774
$ 134,878
$ 19,499
The amounts of uninsured time deposits of $100,000 or more outstanding at December 31, 2024 are based on estimates using the same methodologies and assumptions used for regulatory reporting requirements.
The average daily amount of deposits and rates paid on such deposits is summarized for the years ended December 31:
Amount
Interest
Expense
Rate
Amount
Interest
Expense
Rate
Amount (1)
Interest
Expense
Rate
(Dollars in thousands)
Noninterest-bearing
$ 5,994,009
$
0.00 %
$ 6,475,051
$
0.00 %
$ 7,580,624
$
0.00 %
Interest-bearing transaction and money market
12,465,140
397,968
3.19 %
11,397,302
299,306
2.63 %
11,540,192
67,240
0.58 %
Regular savings
1,313,047
2,833
0.22 %
1,520,201
3,128
0.21 %
1,744,841
2,427
0.14 %
Time deposits
3,393,099
139,004
4.10 %
2,865,258
88,660
3.09 %
2,181,353
10,570
0.48 %
TOTAL
$ 23,165,295
$ 539,805
2.33 %
$ 22,257,812
$ 391,094
1.76 %
$ 23,047,010
$ 80,237
0.35 %
More information relating to deposits is presented in Note K, Notes to Consolidated Financial Statements.
Borrowings
Total borrowings at December 31, 2024 decreased $1.27 billion or 63.91% since year-end 2023. During the year of 2024, short-term borrowings decreased $20.01 million or 10.20% due to a decrease in securities sold under agreements to repurchase. Long-term borrowings decreased $1.25 billion or 69.79% from year-end 2023 due to maturities of advances obtained from the FHLB during the year of 2024.
The table below summarizes the change in the borrowing categories since year-end 2023:
(Dollars in thousands)
December 31
December 31
$
Change
%
Change
Short-term securities sold under agreements to repurchase
$ 176,090
$ 196,095
$ (20,005 )
(10.20 %)
Long-term FHLB advances
260,199
1,510,487
(1,250,288 )
(82.77 %)
Issuances of trust preferred capital securities
280,221
278,616
1,605
0.58 %
Total borrowings
$716,510
$1,985,198
$(1,268,688 )
(63.91 %)
For a further discussion of borrowings see Notes L and M, Notes to Consolidated Financial Statements.
Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities at December 31, 2024 increased $17.14 million or 8.04% from year-end 2023. In particular, other accrued expenses increased $10.96 million due to the accrual associated with housing tax credits, incentives payable increased $2.93 million due to timing differences, deferred compensation increased $3.20 million, and business franchise taxes increased $1.26 million due to timing differences. Partially offsetting these increases in accrued expenses and other liabilities was a $1.12 million decrease in accrued loan expenses and a $5.24 million decrease in other miscellaneous liabilities.
Shareholders’ Equity
Shareholders’ equity at December 31, 2024 was $4.99 billion, which was an increase of $221.98 million or 4.65% from year-end 2023.
Retained earnings increased $172.11 million or 9.86% from year-end 2023. Earnings net of dividends for the year of 2024 were $172.11 million.
Accumulated other comprehensive income increased $35.78 million or 13.78% from year-end 2023 due to an increase of $30.85 million in the fair value of United’s available for sale investment portfolio, net of deferred income taxes. In addition, the after-tax amortization of the pension net actuarial loss was $9.40 million while the after-tax accretion of pension costs was $1.78 million for the year of 2024. Partially offsetting these increases was a decrease of $6.25 million in the fair value of cash flow hedges, net of deferred income taxes.
RESULTS OF OPERATIONS
Overview
The following table sets forth certain consolidated income statement information of United:
Year Ended
Dollars in thousands except per share amounts)
Interest income
$ 1,502,121
$ 1,401,320
$ 1,001,990
Interest expense
591,053
481,396
105,559
Net interest income
911,068
919,924
896,431
Provision for credit losses
25,153
31,153
18,822
Noninterest income
123,695
135,258
153,261
Noninterest expense
545,031
560,224
555,087
Income before income taxes
464,579
463,805
475,783
Income taxes
91,583
97,492
96,156
Net income
$ 372,996
$ 366,313
$ 379,627
PER COMMON SHARE:
Net income:
Basic
$ 2.76
$ 2.72
$ 2.81
Diluted
2.75
2.71
2.80
Net income for the year 2024 was $373.00 million or $2.75 per diluted share, an increase of $6.68 million or 1.82% from $366.31 million or $2.71 per diluted share for the year of 2023. Higher net income for the year 2024 compared to the year of 2023 was primarily driven by lower noninterest expense, provision for credit losses and income tax expense partially offset by lower net interest income and lower noninterest income.
As previously mentioned, on January 10, 2025, United announced the consummation of its merger with Piedmont. Expenses of $2.87 million related to the Piedmont acquisition were recorded in the year of 2024. During the year of 2024, United sold approximately $470 million of AFS investment securities at a loss of $16.30 million. Additionally, United recognized a net gain of $7.09 million on the sale of its remaining mortgage rights (“MSRs”) associated with a loan portfolio of $1.12 billion, a gain of $6.85 million on a VISA share exchange and $1.72 million gain on the fair value of an equity security.
United’s return on average assets for the year of 2024 was 1.26% and the return on average shareholders’ equity was 7.61% as compared to 1.25% and 7.87% for the year of 2023. For the year of 2024, United’s return on average tangible equity, a non-GAAP measure, was 12.43%, as compared to 13.33% for the year of 2023.
Year Ended
(Dollars in thousands)
December 31,
December 31,
Return on Average Tangible Equity:
(a) Net Income (GAAP)
$ 372,996
$ 366,313
Average Total Shareholders’ Equity (GAAP)
4,901,069
4,654,103
Less: Average Total Intangibles
(1,899,704 )
(1,905,390 )
(b) Average Tangible Equity (non-GAAP)
$ 3,001,365
$ 2,748,713
Return on Tangible Equity (non-GAAP) [(a) / (b)]
12.43 %
13.33 %
Net interest income for the year of 2024 was $911.07 million which was relatively flat from the prior year, decreasing $8.86 million or less than 1%. The slight decrease of $8.86 million in net interest income occurred because total interest income increased $100.80 million while total interest expense increased $109.66 million from the year of 2023. Generally, interest income increased in 2024 due to the impact of rising market interest rates on earning assets, loan growth and a change in the asset mix to higher earning assets while interest expense increased mainly due to higher funding costs as a result of the rising market interest rates on higher interest-bearing balances.
The provision for credit losses was $25.15 million for the year 2024 as compared to $31.15 million for the year 2023. Noninterest income was $123.70 million for the year of 2024, which was a decrease of $11.56 million or 8.55% from the year of 2023. Noninterest expense for the year of 2024 was $545.03 million, which was a decrease of $15.19 million from the year of 2023.
Income taxes for the year of 2024 were $91.58 million as compared to $97.49 million for the year of 2023. United’s effective tax rate was approximately 19.7% and 21.0% for years ended December 31, 2024 and 2023, respectively, as compared to 20.2% for 2022.
Net Interest Income
Net interest income represents the primary component of United’s earnings. It is the difference between interest income from earning assets and interest expense incurred to fund these assets. Net interest income is impacted by changes in the volume and mix of interest-earning assets and interest-bearing liabilities, as well as changes in market interest rates. Such changes, and their impact on net interest income in 2024 and 2023, are presented below.
Net interest income for the year of 2024 was $911.07 million which was relatively flat from the year of 2023, decreasing $8.86 million or less than 1%. The $8.86 million decrease in net interest income occurred because total interest income increased $100.80 million while total interest expense increased $109.66 million from the year of 2023. For the purpose of this remaining discussion, net interest income is presented on a tax-equivalent basis to provide a comparison among all types of interest earning assets. The tax-equivalent basis adjusts for the tax-favored status of income from certain loans and investments. Although this is a non-GAAP measure, United’s management believes this measure is more widely used within the financial services industry and provides better comparability of net interest income arising from taxable and tax-exempt sources. United uses this measure to monitor net interest income performance and to manage its balance sheet composition.
Tax-equivalent net interest income for the year of 2024 decreased $9.51 million, or 1.04%, from the year of 2023. The decrease in tax-equivalent net interest income was primarily due to higher interest expense driven by deposit rate repricing, an increase in average interest-bearing deposits, and a decrease in acquired loan accretion income. These decreases were partially offset by a higher yield on average net loans, loan growth, and a decrease in average long-term borrowings. The cost on average interest-bearing deposits increased 66 basis points from the year of 2023. Average interest-bearing deposits increased $1.39 billion from the year of 2023. Acquired loan accretion income for year of 2024 of $9.26 million was a decrease of $2.28 million from the year of 2023. The yield on average earning assets increased 33 basis points from the year of 2023 to 5.74% driven by an increase in the yield on average net loans of 28 basis points. Average net loans increased $683.67 million from the year of 2023. Average long-term borrowings decreased $906.10 million from the year of 2023. Additionally, average investment securities decreased $790.73 million, or 17.89%, from the year of 2023 while the yield on average investment securities increased 25 basis points from the year of 2023. The net interest margin for the year of 2024 and 2023 was 3.49% and 3.56%, respectively.
United’s tax-equivalent net interest income also includes the impact of acquisition accounting fair value adjustments. The following table provides the discount/premium and net accretion impact to tax-equivalent net interest income for the year ended December 31, 2024, 2023 and 2022.
Year Ended
(Dollars in thousands)
December 31
December 31
December 31
Loan accretion
$ 9,264
$ 11,548
$ 18,315
Certificates of deposit
1,119
2,765
Long-term borrowings
(1,318 )
(1,353 )
(262 )
Total
$ 8,266
$ 11,314
$ 20,818
The following table reconciles the difference between net interest income and tax-equivalent net interest income for the year ended December 31, 2024, 2023 and 2022.
Year Ended
(Dollars in thousands)
December 31
December 31
December 31
Net interest income (GAAP)
$ 911,068
$ 919,924
$ 896,431
Tax-equivalent adjustment (non-GAAP) (1)
3,362
4,014
4,467
Tax-equivalent net interest income (non-GAAP)
$ 914,430
$ 923,938
$ 900,898
(1) The tax-equivalent adjustment combines amounts of interest income on federally nontaxable loans and investment securities using the statutory federal income tax rate of 21% for 2024, 2023, and 2022. All interest income on loans and investment securities was subject to state income taxes.
The following table shows the consolidated daily average balance of major categories of assets and liabilities for each of the three years ended December 31, 2024, 2023, and 2022 with the consolidated interest and rate earned or paid on such amount. The interest income and yields on federally nontaxable loans and investment securities are presented on a tax-equivalent basis using the statutory federal income tax rate of 21% for the years ended December 31, 2024, 2023, and 2022. Interest income on all loans and investment securities was subject to state taxes.
Year Ended
December 31, 2024
Year Ended
December 31, 2023
Year Ended
December 31, 2022
(Dollars in thousands)
Average
Balance
Interest
(1)
Avg.
Rate
(1)
Average
Balance
Interest
(1)
Avg.
Rate
(1)
Average
Balance
Interest
(1)
Avg.
Rate
(1)
ASSETS
Earning Assets:
Federal funds sold, securities repurchased under agreements to resell & other short-term investments
$ 1,253,832
$ 66,207
5.28 %
$ 900,077
$ 47,069
5.23 %
$ 1,597,108
$ 22,950
1.44 %
Investment Securities:
Taxable
3,424,113
128,731
3.76 %
4,125,467
144,420
3.50 %
4,532,713
105,780
2.33 %
Tax-exempt
205,427
5,796
2.82 %
294,802
8,411
2.85 %
410,037
10,983
2.68 %
Total Securities
3,629,540
134,527
3.71 %
4,420,269
152,831
3.46 %
4,942,750
116,763
2.36 %
Loans and leases, net of unearned income (2)
21,612,707
1,304,749
6.04 %
20,909,248
1,205,434
5.77 %
19,389,485
866,744
4.47 %
Allowance for credit losses
(265,171 )
(245,386 )
(216,104 )
Net loans and leases
21,347,536
6.11 %
20,663,862
5.83 %
19,173,381
4.52 %
Total earning assets
26,230,908
$ 1,505,483
5.74 %
25,984,208
$ 1,405,334
5.41 %
25,713,239
$ 1,006,457
3.91 %
Other assets
3,349,451
3,311,450
3,360,609
TOTAL ASSETS
$ 29,580,359
$ 29,295,658
$ 29,073,848
LIABILITIES
Interest-Bearing Funds:
Interest-bearing deposits (3)
$ 17,171,286
$ 539,805
3.14 %
$ 15,782,761
$ 391,094
2.48 %
$ 15,466,386
$ 80,237
0.52 %
Short-term borrowings
195,406
7,966
4.08 %
182,936
6,449
3.53 %
140,773
1,785
1.27 %
Long- term borrowings
1,017,823
43,282
4.25 %
1,923,924
83,853
4.36 %
1,014,655
23,537
2.32 %
Total Interest-Bearing Funds
18,384,515
591,053
3.21 %
17,889,621
481,396
2.69 %
16,621,814
105,559
0.64 %
Noninterest-bearing deposits (3)
5,994,009
6,475,051
7,580,624
Accrued expenses and other liabilities
300,766
276,883
269,970
TOTAL LIABILITIES
24,679,290
24,641,555
24,472,408
SHAREHOLDERS’ EQUITY
4,901,069
4,654,103
4,601,440
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$ 29,580,359
$ 29,295,658
$ 29,073,848
NET INTEREST INCOME
$ 914,430
$ 923,938
$ 900,898
INTEREST SPREAD
2.53 %
2.72 %
3.27 %
NET INTEREST MARGIN
3.49 %
3.56 %
3.50 %
(1) The interest income and the yields on federally nontaxable loans and investment securities are presented on a tax-equivalent basis using the statutory federal income tax rate of 21% for 2024, 2023 and 2022.
(2) Nonaccruing loans and loans held for sale are included in the daily average loan amounts outstanding.
The following table sets forth a summary for the periods indicated of the changes in consolidated interest earned and interest paid detailing the amounts attributable to (i) changes in volume (change in the average volume times the prior year’s average rate), (ii) changes in rate (change in the average rate times the prior year’s average volume), and (iii) changes in rate/volume (change in the average volume times the change in average rate).
2024 Compared to 2023
2023 Compared to 2022
Increase (Decrease) Due to
Increase (Decrease) Due to
(In thousands)
Volume
Rate
Rate/
Volume
Total
Volume
Rate
Rate/
Volume
Total
Interest income:
Federal funds sold, securities purchased under agreements to resell and other short-term investments
$ 18,501
$
$
$ 19,138
$ (10,037 )
$ 60,530
$ (26,374 )
$ 24,119
Investment securities:
Taxable
(24,547 )
10,726
(1,868 )
(15,689 )
(9,489 )
53,033
(4,904 )
38,640
Tax-exempt (1)
(2,547 )
(88 )
(2,615 )
(3,088 )
(181 )
(2,572 )
Loans (1),(2)
39,858
57,859
1,598
99,315
67,370
251,171
20,149
338,690
TOTAL INTEREST INCOME
31,265
68,947
(63 )
100,149
44,756
365,431
(11,310 )
398,877
Interest expense:
Interest-bearing deposits
$ 34,435
$ 104,166
$ 10,110
$ 148,711
$ 1,645
$ 303,141
$ 6,071
$ 310,857
Short-term borrowings
1,006
1,517
3,181
4,664
Long-term borrowings
(39,506 )
(2,116 )
1,051
(40,571 )
21,095
20,699
18,522
60,316
TOTAL INTEREST EXPENSE
(4,631 )
103,056
11,232
109,657
23,275
327,021
25,541
375,837
NET INTEREST INCOME
$ 35,896
$ (34,109 )
$ (11,295 )
$ (9,508 )
$ 21,481
$ 38,410
$ (36,851 )
$ 23,040
(1) Yields and interest income on federally tax-exempt loans and investment securities are computed on a fully tax-equivalent basis using the statutory federal income tax rate of 21% for 2024, 2023 and 2022.
(2) Nonaccruing loans and loans held for sale are included in the daily average loan amounts outstanding.
Provision for Credit Losses
United’s provision for credit losses was $25.15 million for the year of 2024 while the provision for credit losses was $31.15 million for the year of 2023. United’s provision for credit losses relates to its portfolio of loans and leases and held to maturity securities which are discussed in more detail in the following paragraphs.
The provision for loan and lease losses for the year of 2024 was $25.15 million as compared to $31.15 million for the year of 2023. The lower amount of provision expense for the year of 2024 compared to the year of 2023 was mainly due to less severe reasonable and supportable forecast assumptions regarding future economic expectations in 2024 as compared to 2023. Net charge-offs for the year of 2024 were $12.55 million as compared to $6.66 million for the year of 2023. The higher amount of net charge-offs for the year of 2024 as compared to the year of 2023 was primarily due to increased charge-offs within the commercial real estate nonowner-occupied and consumer loan portfolios. Net charge-offs as a percentage of average loans and leases were 0.06% and 0.03% for the year of 2024 and 2023, respectively.
The following table shows a summary of United’s nonperforming assets including nonperforming loans and other real estate owned (“OREO”) at December 31, 2024 and December 31, 2023:
(In thousands)
December 31
December 31
Nonaccrual loans
$ 56,460
$ 30,919
Loans past due 90 days of more
16,940
14,579
Total nonperforming loans
$ 73,400
$ 45,498
Other real estate owned
2,615
Total nonperforming assets
$ 73,727
$ 48,113
United maintains an allowance for loan and lease losses and a reserve for lending-related commitments. The combined allowance for loan and lease losses and reserve for lending-related commitments is considered the allowance for credit losses. At December 31, 2024, the allowance for credit losses was $306.76 million as compared to $303.94 million at December 31, 2023.
At December 31, 2024, the allowance for loan and lease losses was $271.84 million as compared to $259.24 million at December 31, 2023. The increase in the allowance for loan and lease losses was primarily driven by increased outstanding loan balances for the real estate construction and development and residential real estate portfolios as well as increased reasonable and supportable forecast adjustments for the commercial real estate nonowner-occupied office portfolio. As a percentage of loans and leases, net of unearned income, the allowance for loan losses was 1.25% at December 31, 2024 and 1.21% at December 31, 2023. The ratio of the allowance for loan and lease losses to nonperforming loans and leases or coverage ratio was 370.36% and 569.78% at December 31, 2024 and December 31, 2023, respectively. The decrease in this ratio was due to a larger increase in nonperforming loans than the allowance for loan losses.
The following table summarizes United’s credit loss experience for loan and leases losses, based on loan categories, for the year of 2024 and 2023:
(Dollars in thousands)
Commercial, financial and agricultural:
Owner-occupied commercial real estate
Loans & leases charged off
$
$
Recoveries
1,183
Net loans & leases charged off (recovered)
$ (1,067 )
$
Average gross loans & leases outstanding
1,580,499
1,687,029
Net (recoveries) charge-offs as a percentage of average gross loans & leases
outstanding
(0.07 %)
0.04 %
Nonowner-occupied commercial real estate
Loans & leases charged off
$ 2,581
$
Recoveries
1,233
Net loans & leases (recovered) charged off
$ 2,381
$ (1,209 )
Average gross loans & leases outstanding
6,947,311
6,472,608
Net charge-offs (recoveries) as a percentage of average gross loans & leases outstanding
0.03 %
(0.02 %)
Other Commercial
Loans & leases charged off
$ 3,589
$ 2,007
Recoveries
1,650
1,729
Net loans & leases charged off (recovered)
$ 1,939
$
Average gross loans & leases outstanding
3,483,589
3,568,986
Net charge-offs as a percentage of average gross loans & leases outstanding
0.06 %
0.01 %
Residential Real Estate
Loans & leases charged off
$
$
(Dollars in thousands)
Recoveries
Net loans & leases charged off
$ (14 )
$
Average gross loans & leases outstanding
5,384,411
4,894,091
Net charge-offs as a percentage of average gross loans & leases outstanding
0.00 %
0.00 %
Construction
Loans & leases charged off
$
$
Recoveries
Net loans & leases recovered
$ (290 )
$ (66 )
Average gross loans & leases outstanding
3,260,085
3,025,815
Net (recoveries) charge-offs as a percentage of average gross loans & leases outstanding
(0.01 %)
0.00 %
Consumer:
Bankcard
Loans & leases charged off
$
$
Recoveries
Net loans & leases charged off
$
$
Average gross loans & leases outstanding
9,696
9,290
Net charge-offs as a percentage of average gross loans & leases outstanding
4.25 %
2.53 %
Other consumer
Loans & leases charged off
$ 10,303
$ 7,356
Recoveries
1,119
Net loans & leases charged off
$ 9,184
$ 6,669
Average gross loans & leases outstanding
908,570
1,211,568
Net charge-offs as a percentage of average gross loans & leases outstanding
1.01 %
0.55 %
Total
Loans & leases charged off
$ 17,530
$ 11,304
Recoveries
4,985
4,641
Net loans & leases charged off
$ 12,545
$ 6,663
Average gross loans & leases outstanding
21,574,161
20,869,387
Net charge-offs as a percentage of average gross loans & leases outstanding
0.06 %
0.03 %
Nonaccrual loans & leases
$ 56,460
$ 30,919
Allowance for loan & lease losses
271,844
259,237
Loans & leases (net of unearned income)
21,673,493
21,359,084
Allowance for loan & lease losses as a percentage of loans (net of unearned income)
1.25 %
1.21 %
Nonaccrual loans as a percentage of loans & leases (net of unearned income)
0.26 %
0.14 %
Allowance for loan & lease losses as a percentage of nonaccrual loans & leases
481.48 %
838.45 %
United continues to evaluate risks which may impact its loan and lease portfolios. Reserves are initially determined based on losses identified from the PD/LGD and Cohort models which utilize the Company’s historical information. Then, any qualitative adjustments are applied to account for the Company’s view of the future and other factors. If current conditions underlying any qualitative adjustment factor were deemed to be materially different than historical conditions, an adjustment was made for that factor.
The year of 2024 qualitative adjustments include analyses of the following:
•
Current conditions - United considered the impact of changes in economic and business conditions; collateral values for dependent loans; past due, nonaccrual and adversely classified loans and leases; and concentrations of credit.
•
Reasonable and supportable forecasts - The forecast is determined on a portfolio-by-portfolio basis by relating the correlation of real GDP and the unemployment rate to loss rates to forecasts of those variables. The reasonable and supportable forecast selection is subjective in nature and requires more judgment compared to the other components of the allowance. Assumptions for the economic variables were the following:
Ø The forecast for real GDP shifted slightly in the fourth quarter, from a projection of 2.00% for 2025 as of mid-September 2024 to 2.10% for 2025 as of mid-December with a projection of 2.00% for 2026. The unemployment rate forecast also shifted slightly in the fourth quarter from a projection of 4.40% for 2025 as of mid-September 2024 to 4.30% for 2025 as of mid-December with a projection of 4.30% for 2026.
Ø Greater risk of loss in the office portfolio due to continued hybrid and remote work that may be exacerbated by future economic conditions.
Ø Reversion to historical loss data occurs via a straight-line method during the year following the one-year reasonable and supportable forecast period.
The following table presents the allocation of United’s allowance for credit losses for the years ended December 31:
(in thousands)
Commercial, financial & agricultural:
Owner-occupied commercial real estate
$ 11,852
$ 11,895
Nonowner-occupied commercial real estate
74,522
57,935
Other commercial
65,105
75,007
Total commercial, financial & agricultural
151,479
144,837
Residential real estate
46,373
41,167
Construction & land development
63,621
59,913
Consumer:
Bankcard
Other consumer
9,480
12,510
Allowance for loan losses
$ 271,844
$ 259,237
Reserve for lending-related commitments
34,911
44,706
Allowance for credit losses
$ 306,755
$ 303,943
The following is a summary of loans and leases outstanding as a percent of gross loans at December 31:
Commercial, financial & agricultural:
Owner-occupied commercial real estate
7.33 %
7.48 %
Nonowner-occupied commercial real estate
32.01 %
31.43 %
Other commercial
15.46 %
16.72 %
Total commercial, financial & agricultural
54.80 %
55.63 %
Residential real estate
25.40 %
24.66 %
Construction & land development
16.19 %
14.73 %
Consumer:
Bankcard
0.05 %
0.05 %
Other consumer
3.56 %
4.93 %
Total
100.00 %
100.00 %
United’s review of the allowance for loan and lease losses at December 31, 2024 produced increased reserves in three of the four loan categories as compared to December 31, 2023. The allowance related to the commercial, financial & agricultural loan pool, consisting of the owner and non-owner occupied commercial real estate and other commercial loan segments, increased $6.64 million due to increased reasonable and supportable forecast adjustments particularly as it pertains to office loans. The balance of office loans at December 31, 2024 totaled approximately $950 million or 13.7% of nonowner-occupied commercial real estate loans or 4.4% of loans and leases, net of unearned income. The top forty
office loans make up approximately 68% of the balance of nonowner-occupied commercial real estate office loans. The weighted average loan-to-value (“LTV”) based on current loan balances and appraised values at origination date for the top forty office loans was approximately 56% at December 31, 2024. The weighted average LTV at origination date for the top forty office loans was approximately 63%. United has been disciplined in its approach to underwriting office loans with a stringent underwriting process focusing on the underlying tenants, lease terms, sponsor support, location, property class and amenities. The residential real estate segment reserve increased $5.21 million due primarily to increased outstanding balances. The real estate construction and development loan segment reserve increased $3.71 million due to increased outstanding balances. The consumer loan segment reserve decreased $2.95 million primarily due to a decrease in outstanding balances.
An allowance is established for estimated lifetime losses for loans that are individually assessed. Nonperforming commercial loans and leases are regularly reviewed to identify expected credit losses. A loan is individually assessed for expected credit losses when the loan does not share similar characteristics with other loans in the portfolio. Measuring expected credit losses of a loan requires judgment and estimates, and the eventual outcomes may differ from those estimates. Expected credit losses are measured based upon the present value of expected future cash flows from the loan discounted at the loan’s effective rate or the fair value of collateral if the loan is collateral dependent. When the selected measure is less than the recorded investment in the loan, an expected credit loss has occurred. The allowance for loans and leases that were individually assessed was $11.21 million at December 31, 2024 and $13.15 million at December 31, 2023. In comparison to the prior year-end, this element of the allowance decreased $1.94 million due to liquidation of collateral securing a commercial relationship which has reduced the balance outstanding for the relationship as well as the loss potential requiring individually assessed reserves.
Management believes that the allowance for credit losses of $306.75 million at December 31, 2024 is adequate to provide for expected losses on existing loans and lending-related commitments based on information currently available. United’s loan administration policies are focused on the risk characteristics of the loan portfolio in terms of loan approval and credit quality. The commercial loan portfolio is monitored for possible concentrations of credit in one or more industries. Management has lending limits as a percentage of capital per type of credit concentration in an effort to ensure adequate diversification within the portfolio. Most of United’s commercial loans are secured by real estate located in West Virginia, southeastern Ohio, Pennsylvania, Virginia, Maryland, North Carolina, South Carolina, and the District of Columbia. It is the opinion of management that these commercial loans do not pose any unusual risks and that adequate consideration has been given to these loans in establishing the allowance for credit losses.
The provision for credit losses related to held to maturity securities for the year of 2024 and 2023 was immaterial. The allowance for credit losses related to held to maturity securities was $18 thousand as of December 31, 2024 as compared to $17 thousand as of December 31, 2023. There was no provision for credit losses recorded on available for sale investment securities for the year of 2024 and 2023 and no allowance for credit losses on available for sale investment securities as of December 31, 2024 and 2023.
Management is not aware of any potential problem loans or leases, trends or uncertainties, which it reasonably expects, will materially impact future operating results, liquidity, or capital resources which have not been disclosed.
Other Income
Other income consists of all revenues, which are not included in interest and fee income related to earning assets. Noninterest income has been and will continue to be an important factor for improving United’s profitability. Recognizing the importance, management continues to evaluate areas where noninterest income can be enhanced.
Noninterest income for the year of 2024 was $123.70 million, which was a decrease of $11.56 million or 8.55% from the year of 2023. This decrease was driven by decreases in mortgage loan servicing income and mortgage banking income partially offset by an increase in fees from brokerage services and higher income from bank-owned life insurance.
For the year of 2024, net losses on investment securities were $7.72 million as compared to net losses on investment securities of $7.65 million for the year of 2023. The net losses in 2024 were mainly due a loss of $16.30 million during the year of 2024 as United sold approximately $470 million of AFS investment securities. Additionally,
during the year of 2024, United recognized a $6.85 million gain on the VISA share exchange and a $1.72 million change in fair value gain on an equity security. In the year of 2023, United sold approximately $187 million of AFS investment securities resulting in a net loss of $7.24 million. United did not recognize any impairment on investment securities for the year of 2024 and 2023.
Income from mortgage banking activities totaled $16.06 million for the year of 2024 compared to $26.59 million for the year of 2023. The decrease of $10.54 million or 39.62% for the year of 2024 was primarily due mainly to lower mortgage loan production. Mortgage loan sales were $657.84 million in the year of 2024 as compared to $861.52 million in the year of 2023. Mortgage loans originated for sale were $645.94 million for the year of 2024 as compared to $860.90 million for the year of 2023.
Mortgage loan servicing income for the year of 2024 decreased $4.79 million or 34.83% from the year of 2023. The year of 2024 included the $7.09 million net gain on the sale of MSRs while the year of 2023 included net gains on the sale of MSRs of $8.31 million. In addition, mortgage loan servicing income declined in the year of 2024 due to lower mortgage balances serviced since the sale of the MSRs in 2023 and 2024.
Fees from brokerage services for the year of 2024 increased $3.37 million or 19.90%, from the year of 2023. The increase was primarily due to higher volume.
Fees from trust services for the year of 2024 were $19.45 million, an increase of $1.13 million or 6.18% from the year of 2023 due to an increase in managed assets.
Income from bank-owned life insurance (“BOLI”) for the year of 2024 increased $2.90 million or 34.75% from the year of 2023. This increase was due mainly to an increase in the cash surrender value of insurance policies as well as death proceeds of $1.39 million recognized in 2024. Death benefits were $571 thousand for the year of 2023.
Other income for the year of 2024 decreased $3.34 million or 30.16% from the year of 2023. Included in the year of 2023 was a gain of $2.66 million from the payoff of a fixed rate commercial loan that had an associated interest rate swap.
Other Expense
Just as management continues to evaluate areas where noninterest income can be enhanced, it strives to improve the efficiency of its operations to reduce costs. Other expense includes all items of expense other than interest expense, the provision for credit losses and income tax expense. Noninterest expense for the year of 2024 was $545.03 million, which was a decrease of $15.19 million or 2.71% from the year of 2023 driven by decreases in FDIC insurance expense, mortgage loan servicing expense and impairment, OREO expense and other noninterest expense. Partially offsetting these decreases were increases in employee benefits expense and employee compensation expense.
OREO expense for the year of 2024 decreased $779 thousand or 57.49% from the year of 2023 due mainly to fewer declines in the fair value of OREO properties.
Mortgage loan servicing expense and impairment for the year of 2024 decreased $2.90 million or 51.86% from the year of 2023. The decrease was due primarily to a lower amount of mortgage loans serviced as a result of the sale of MSRs in 2024 and 2023.
FDIC expense for the year of 2024 decreased $10.64 million or 35.03% from the year of 2023. The decrease in FDIC insurance expense was driven by $11.99 million of expense recognized in 2023 as compared to $1.51 million of expense recognized in 2024 for a FDIC special assessment levied on banking organizations to recover losses to the Deposit Insurance Fund.
Employee compensation for the year of 2024 increased $3.81 million or 1.65% from the year of 2023. The increase in employee compensation was driven by higher employee incentives, base salaries and employee severance related to the consolidation of the mortgage delivery channels. Partially offsetting these increases was a decrease in commissions related to lower mortgage banking production.
Employee benefits expense for the year of 2024 increased $5.25 million or 10.86% as compared to the year of 2023. For the year of 2024, postretirement expense, which includes expense associated with United’s pension plan, non-qualified deferred compensation plan, supplemental early retirement plans (“SERPs”) and Savings and Stock Investment Plan (“401K plan”), increased $5.58 million from the year of 2023. United uses certain valuation methodologies to measure the fair value of the assets within United’s pension plan which are presented in Note P, Notes to Consolidated Financial Statements. The funded status of United’s pension plan is based upon the fair value of the plan assets compared to the projected benefit obligation. The determination of the projected benefit obligation and the associated periodic benefit expense involves significant judgment and estimation of future employee compensation levels, the discount rate and the expected long-term rate of return on plan assets. If United assumes a 1% increase or decrease in the estimation of future employee compensation levels while keeping all other assumptions constant, the benefit cost associated with the pension plan would increase by approximately $599 thousand and decrease by approximately $578 thousand, respectively. If United assumes a 1% increase or decrease in the discount rate while keeping all other assumptions constant, the benefit cost associated with the pension plan would decrease by approximately $2.13 million and increase by approximately $2.58 million, respectively. If United assumes a 1% increase or decrease in the expected long-term rate of return on plan assets while keeping all other assumptions constant, the benefit cost associated with the pension plan would decrease by and increase by approximately $1.69 million and $1.71 million, respectively.
Other expense for the year of 2024 decreased $10.08 million or 7.41% from the year of 2023. Within other expenses, the most significant decrease was $8.31 million in the expense for the reserve for unfunded loan commitments. In addition, amortization of intangibles declined $1.48 million, consulting and legal expense decreased $1.27 million and advertising expense decreased $994 thousand. Partially offsetting these decreases were increases in the merger expenses of $2.87 million as well as higher amounts of certain other general operating expenses.
Income Taxes
For the year ended December 31, 2024, income taxes were $91.58 million, compared to $97.49 million for 2023, a decrease of $5.91 million or 6.06%. This decrease was primarily due to the impact of discrete tax benefits recognized in the second quarter of 2024. United’s effective tax rate was approximately 19.7% and 21.0% for years ended December 31, 2024 and 2023, respectively. For further details related to income taxes, see Note O, Notes to Consolidated Financial Statements.
Quarterly Results
Net income for the first quarter of 2024 was $86.81 million as compared to earnings of $98.31 million for the first quarter of 2023. Earnings for the first quarter of 2024, as compared to the first quarter of 2023, decreased primarily due to lower net interest income as a result of the impact of higher market interest rates on interest-bearing liabilities. Diluted earnings per share were $0.64 for the first quarter of 2024 and $0.73 for the first quarter of 2023. Net interest income for the first quarter of 2024 decreased $11.83 million, or 5.05%, to $222.49 million from net interest income of $234.32 million for the first three months of 2023. The decrease of $11.83 million in net interest income occurred because total interest income increased $39.88 million while total interest expense increased $51.71 million from the first quarter of 2023. The provision for credit losses was $5.74 million for the first quarter of 2024 as compared to a provision for credit losses of $6.89 million for the first quarter of 2023. The decrease in the provision for credit losses was mainly due to a change in qualitative factors and the impact of reasonable and supportable forecasts of future macroeconomic conditions. Noninterest income was $32.21 million for the first three months of 2024, a decrease of $532 thousand or 1.62% from the first three months of 2023 due mainly to a decrease in mortgage loan servicing income of $1.49 million partially offset by increased fees of $1.07 million from brokerage services. Noninterest expense for the first quarter of 2024 was $140.74 million, an increase of $3.32 million or 2.42% from the first quarter of 2023 primarily due to increases in employee compensation and FDIC insurance expense partially offset by a decrease in other noninterest expense. Income taxes decreased $3.04 million or 12.45% for the first three months of 2024 as compared to the first three months of 2023 primarily due to decreased earnings and a slightly lower effective tax rate. United’s effective tax rate was 19.8% and 19.9% for the first quarter of 2024 and 2023, respectively.
Net income for the second quarter of 2024 was $96.51 million, as compared to earnings of $92.46 million for the second quarter of 2023. Earnings for the second quarter of 2024 as compared to the second quarter of 2023 increased primarily due to lower provision for credit losses and income tax expense. Diluted earnings per share were $0.71 for the second quarter of 2024 and $0.68 for the second quarter of 2023. As previously mentioned, United announced during the second quarter of 2024 that it entered into a definitive merger agreement with Piedmont. Expenses of $1.27 million related to the announced Piedmont acquisition were recorded in the second quarter of 2024. United also recognized a $6.87 million gain on a VISA share exchange during the second quarter of 2024, of which $4.65 million was realized through the sale of eligible shares and the remainder of which related to shares held at fair value at quarter-end. Additionally, during the second quarter of 2024, United sold $102.72 million of AFS investment securities at a loss of $6.81 million. The first quarter of 2024 included $1.81 million of noninterest expense related to the FDIC’s revised loss estimates to the Deposit Insurance Fund. For the second quarter of 2024, United’s annualized return on average assets was 1.32% and return on average shareholders’ equity was 7.99% as compared to 1.26% and 7.96% for the second quarter of 2023. Net interest income for the second quarter of 2024 was $225.72 million, which was relatively flat from the second quarter of 2023, decreasing $1.75 million or less than 1%. The slight decrease of $1.75 million in net interest income occurred because total interest income increased $28.25 million while total interest expense increased $30.00 million from the second quarter of 2023. The provision for credit losses was $5.78 million for the second quarter of 2024, respectively, while the provision for credit losses was $11.44 million for the second quarter of 2023. The decrease in the provision for credit losses was mainly due to a more substantial increase in reserves for future expected losses in 2023 as compared to 2024. For the second quarter of 2024, noninterest expense was relatively flat from the second quarter of 2023, decreasing $514 thousand or less than 1%. Several categories of noninterest expense decreased which were largely offset by increases in other categories, none of which were significant. Income taxes for the second quarter of 2024 were $18.88 million as compared to $23.45 million for the second quarter of 2023. United’s effective tax rate was 16.4% and 20.2% for the second quarter of 2024 and second quarter of 2023, respectively.
Net income for the third quarter of 2024 was $95.27 million, as compared to earnings of $96.16 million for the third quarter of 2023. Earnings for the third quarter of 2024 as compared to the third quarter of 2023 decreased primarily due to higher provision for credit losses and lower noninterest income partially offset by a higher net interest income and a lower income tax expense. Diluted earnings per share were $0.70 for the third quarter of 2024 and $0.71 for the third quarter of 2023. Net interest income for the third quarter of 2024 was $230.26 million, which was relatively flat from the third quarter of 2023, increasing $1.80 million or less than 1%. The slight increase of $1.80 million in net interest income occurred because total interest income increased $25.81 million while total interest expense increased $24.01 million from the third quarter of 2023. The provision for credit losses was $6.94 million for the third quarter of 2024, while the provision for credit losses was $5.95 million for the third quarter of 2023. For the third quarter of 2024, noninterest income was $31.94 million, which was a decrease of $1.72 million or 5.11% from the third quarter of 2023. This decrease in noninterest income for the third quarter of 2024 was due mainly to decreases of $6.53 million and $3.01 million, respectively, in net losses on investment securities transactions and in income from mortgage banking activities driven by lower mortgage loan sales volume partially offset by the gain on the sale of MSRs. For the third quarter of 2024, noninterest expense was relatively flat from the third quarter of 2023, increasing $109 thousand. This increase was less than 1%. For the third quarter of 2024 compared to the third quarter of 2023, several categories of noninterest expense increased which were largely offset by decreases in other categories. Income taxes for the third quarter of 2024 were $24.65 million as compared to $24.78 million for the third quarter of 2023. For the quarters ended September 30, 2024 and 2023, United’s effective tax rate was 20.6% and 20.5%, respectively.
Net income for the fourth quarter of 2024 was $94.41 million or $0.69 per diluted share as compared to earnings of $79.39 million or $0.59 per diluted share for the fourth quarter of 2023. Net interest income for the fourth quarter of 2024 was $232.61 million, which was an increase of $2.92 million or 1.27% from the fourth quarter of 2023. The $2.92 million increase in net interest income occurred because total interest income increased $6.86 million while total interest expense increased $3.94 million from the fourth quarter of 2023. The provision for credit losses was $6.69 million for the fourth quarter of 2024 as compared to a provision for credit losses of $6.88 million for the fourth quarter of 2023. Noninterest income for the fourth quarter of 2024 was $29.32 million, which was a decrease of $4.36 million, or 12.94% from the fourth quarter of 2023. This decrease in noninterest income was driven by decreases in other noninterest income of $3.26 million and income from mortgage banking activities of $2.43 million due to lower mortgage loan origination and sale volume partially offset by an increase in income from BOLI of $1.37 million due to the impact of higher market values of underlying investments and higher amounts of death benefits recognized in the fourth quarter of 2024. Other
noninterest income for the fourth quarter of 2023 included a $2.66 million gain from the payoff of a fixed rate commercial loan that had an associated interest rate swap derivative. Noninterest expense for the fourth quarter of 2024 was $134.18 million, a decrease of $18.11 million, or 11.89%, from the fourth quarter of 2023. The decrease in noninterest expense was driven by decreases in FDIC insurance expense of $12.74 million and other noninterest expense of $8.66 million due to a lower expense for the reserve for unfunded loan commitments partially offset by increases in employee benefits of $3.95 million. FDIC insurance expense for the fourth quarter of 2023 included $11.99 million for the FDIC special assessment. The decrease in the expense for the reserve for unfunded loan commitments was mainly due to a decrease in loan commitments. The increase in employee benefits was driven by higher health insurance costs and higher postretirement benefit costs. For the fourth quarter of 2024, income tax expense was $26.65 million as compared to $24.81 million for the fourth quarter of 2023. The increase was driven by higher pre-tax earnings partially offset by a lower effective tax rate. United’s effective tax rate was 22.0% and 23.8% for the fourth quarter of 2024 and fourth quarter of 2023, respectively. The effective tax rates for the fourth quarter of 2024 and 2023 reflect the impact of provision to return adjustments during each period.
Additional quarterly financial data for 2024 and 2023 may be found in Note Z, Notes to Consolidated Financial Statements.
The Effect of Inflation
United’s income statements generally reflect the effects of inflation. Since interest rates, loan demand and deposit levels are impacted by inflation, the resulting changes in the interest-sensitive assets and liabilities are included in net interest income. Similarly, operating expenses such as salaries, rents and maintenance include changing prices resulting from inflation. One item that would not reflect inflationary changes is depreciation expense. Subsequent to the acquisition of depreciable assets, inflation causes price levels to rise; therefore, historically presented dollar values do not reflect this inflationary condition. Inflationary pressure on consumers and uncertainty regarding the economy could result in changes in consumer and business spending, borrowing and savings habits. Such conditions could have a material adverse effect on the credit quality of our loans and our business, financial condition and results of operations. Management will monitor the impact of inflation as conditions warrant.
The Effect of Regulatory Policies and Economic Conditions
United’s business and earnings are affected by the monetary and fiscal policies of the United States government, its agencies and various other governmental regulatory authorities. The Federal Reserve Board regulates the supply of money in order to influence general economic conditions. Among the instruments of monetary policy available to the Federal Reserve Board are (i) conducting open market operations in United States government obligations, (ii) changing the discount rate on financial institution borrowings, (iii) imposing or changing reserve requirements against financial institution deposits, and (iv) restricting certain borrowings and imposing or changing reserve requirements against certain borrowings by financial institutions and their affiliates. These methods are used in varying degrees and combinations to affect directly the availability of bank loans and deposits, as well as the interest rates charged on loans and paid on deposits.
United’s business and earnings are also affected by general and local economic conditions. Certain credit markets can experience difficult conditions and volatility. Downturns in the credit market can cause a decline in the value of certain loans and securities, a reduction in liquidity and a tightening of credit. A downturn in the credit market often signals a weakening economy that can cause job losses and thus distress on borrowers and their ability to repay loans. Uncertainties in credit markets and the economy present significant challenges for the financial services industry.
Regulatory policies and economic conditions have had a significant effect on the operating results of financial institutions in the past and are expected to continue to do so in the future; however, United cannot accurately predict the nature, timing or extent of any effect such policies or economic conditions may have on its future business and earnings.
Liquidity and Capital Resources
In the opinion of management, United maintains liquidity that is sufficient to satisfy its depositors’ requirements and the credit needs of its customers. Like all banks, United depends upon its ability to renew maturing deposits and other liabilities on a daily basis and to acquire new funds in a variety of markets. A significant source of funds available to United is “core deposits”. Core deposits include certain demand deposits, statement and special savings and NOW accounts. These deposits are relatively stable, and they are the lowest cost source of funds available to United. Short-term borrowings have also been a significant source of funds. These include federal funds purchased and securities sold under agreements to repurchase as well as advances from the FHLB. Repurchase agreements represent funds which are obtained as the result of a competitive bidding process.
Liquid assets are cash and those items readily convertible to cash. All banks must maintain sufficient balances of cash and near-cash items to meet the day-to-day demands of customers and United’s cash needs. Other than cash and due from banks, the available for sale securities portfolio and maturing loans are the primary sources of liquidity.
The goal of liquidity management is to ensure the ability to access funding which enables United to efficiently satisfy the cash flow requirements of depositors and borrowers and meet United’s cash needs. Liquidity is managed by monitoring funds’ availability from a number of primary sources. Substantial funding is available from cash and cash equivalents, unused short-term borrowing and a geographically dispersed network of branches providing access to a diversified and substantial retail deposit market.
Short-term needs can be met through a wide array of outside sources such as correspondent and downstream correspondent federal funds and utilization of Federal Home Loan Bank advances.
Other sources of liquidity available to United to provide long-term as well as short-term funding alternatives, in addition to FHLB advances, are long-term certificates of deposit, lines of credit, borrowings that are secured by bank premises or stock of United’s subsidiaries and issuances of trust preferred securities. In the normal course of business, United through its Asset Liability Committee evaluates these as well as other alternative funding strategies that may be utilized to meet short-term and long-term funding needs. See Notes L and M, Notes to Consolidated Financial Statements.
During the year of 2024, United increased its interest-bearing deposit balance at the FRB by $727.91 million to $1.97 billion. The change in the balance at the FRB was mostly the result of net sales, maturities, and paydowns in the available for sale debt securities portfolio of $867.21 million and an increase in deposits of $1.14 billion partially offset by loan growth of $318.05 million and the net repayment of $1.25 billion in FHLB advances.
Cash flows provided by operations in 2024 were $445.45 million due mainly to net income of $373.00 million for the year of 2024. In 2023, cash flows provided by operations were $435.24 million due mainly to net income of $366.31 million for the year of 2023. In 2024, net cash of $571.49 million was provided by investing activities which was primarily due to proceeds of $882.85 million from sales, calls and maturities of investment securities over purchases partially offset by loan growth of $318.05 million. In 2023, net cash of $38.99 million was provided by investing activities which was primarily due to proceeds of $819.87 million from sales, calls and maturities of investment securities over purchases partially offset by loan growth of $800.97 million. During the year of 2024, net cash of $323.64 million was used in financing activities due primarily to net repayments of $1.25 billion from long-term FHLB borrowings partially offset by an increase of $1.14 billion in deposits. Other uses of cash within funding activities for the year of 2024 were $200.73 million for cash dividends paid. During the year of 2023, net cash of $51.94 million was used in financing activities due primarily to net repayments of $400.00 million from long-term FHLB borrowings partially offset by an increase of $517.27 million in deposits. Other uses of cash within funding activities for the year of 2023 were $194.73 million for cash dividends paid. The net effect of the cash flow activities was an increase in cash and cash equivalents of $693.30 million for the year of 2024 as compared to increase in cash and cash equivalents of $422.29 million for the year of 2023. See the Consolidated Statement of Cash Flows in the Consolidated Financial Statements.
At December 31, 2024, United had an unused borrowing amount at the FHLB of approximately $8.14 billion subject to delivery of collateral after certain trigger points and $4.24 billion without the delivery of additional collateral. United has various unused lines of credit available from certain of its correspondent banks in the aggregate amount of $280 million, all of which was available at December 31, 2024. United also has a $20 million unsecured, revolving line of credit with an unrelated financial institution to provide for general liquidity needs, all of which were available at December 31, 2024. At December 31, 2024, United’s borrowing capacity for the FRB Discount Window was $4.83 billion. United did not have any borrowings from the FRB’s Discount Window, or its Bank Term Funding Program, during the year of 2024.
United enters into derivative contracts, mainly to protect against adverse interest rate movements on the value of certain assets or liabilities, under which it is required to either pay cash to or receive cash from counterparties depending on changes in interest rates. Derivative contracts are carried at fair value and not notional value on the consolidated balance sheet and therefore do not represent the amounts that may ultimately be paid under these contracts. Further discussion of derivative instruments is included in Note S, Notes to Consolidated Financial Statements.
United is also a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include loan commitments and standby letters of credit. United’s maximum exposure to credit loss in the event of nonperformance by the counterparty to the financial instrument for the loan commitments and standby letters of credit is the contractual or notional amount of those instruments. United uses the same policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.
The following table details the amounts of significant commitments and letters of credit as of December 31, 2024:
(In thousands)
Amount
Commitments to extend credit:
Revolving open-end secured by 1-4 residential
$ 790,689
Credit card and personal revolving lines
267,524
Commercial
4,828,260
Total unused commitments
$ 5,886,473
Financial standby letters of credit
$ 71,893
Performance standby letters of credit
76,981
Commercial letters of credit
15,546
Total letters of credit
$ 164,420
Commitments generally have fixed expiration dates or other termination clauses, generally within one year, and may require the payment of a fee. Further discussion of commitments is included in Note R, Notes to Consolidated Financial Statements.
United anticipates it can meet its obligations over the next 12 months and has no material commitments for capital expenditures. There are no known trends, demands, commitments, or events that will result in or that are reasonably likely to result in United’s liquidity increasing or decreasing in any material way. United also has lines of credit available. See Notes L and M to the accompanying unaudited Notes to Consolidated Financial Statements for more details regarding the amounts available to United under lines of credit.
The Asset Liability Committee monitors liquidity to ascertain that a liquidity position within certain prescribed parameters is maintained. No changes are anticipated in the policies of United’s Asset Liability Committee.
United’s capital position is financially sound. United seeks to maintain a proper relationship between capital and total assets to support growth and sustain earnings. United has historically generated attractive returns on shareholders’ equity. United is well-capitalized based upon regulatory guidelines. United’s risk-based capital ratio is 16.52% at December 31, 2024 while its Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 14.14%, 14.14% and 11.74%, respectively. The December 31, 2024 ratios reflects United’s election of a five-year transition provision, allowed by the Federal Reserve Board and other federal banking agencies in response to the COVID-19 pandemic, to delay for two years the full impact of CECL on regulatory capital, followed by a three-year transition period. The regulatory requirements for a well-capitalized financial institution are a risk-based capital ratio of 10.0%, a Common Equity Tier 1 capital ratio of 6.5%, a Tier 1 capital ratio of 8.0% and a leverage ratio of 5.0%.
Total shareholders’ equity was $4.99 billion at December 31, 2024, which was an increase of $221.98 million or 4.65% from December 31, 2023. This increase is primarily due to increases of $172.11 million in net earnings and $35.78 million in accumulated other comprehensive income due mainly to an after-tax increase in the fair value of available for sale securities.
United’s equity to assets ratio was 16.63% at December 31, 2024 as compared to 15.94% at December 31, 2023. The primary capital ratio, capital and reserves to total assets and reserves, was 17.47% at December 31, 2024 as compared to 16.79% at December 31, 2023. United’s average equity to average asset ratio was 16.57% at December 31, 2024 as compared to 15.89% at December 31, 2023. All of these financial measurements reflect a financially sound position.
During the fourth quarter of 2024, United’s Board of Directors declared a cash dividend of $0.37 per share. Dividends per share of $1.48 for the year of 2024 represented an increase over the $1.45 per share paid for 2023. Total cash dividends declared to common shareholders were $200.89 million for the year of 2024 as compared to $196.12 million for the year of 2023. The year 2024 was the fifty-first consecutive year of dividend increases to United shareholders.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The objective of United’s Asset/Liability Management function is to maintain consistent growth in net interest income within United’s policy guidelines. This objective is accomplished through the management of balance sheet liquidity and interest rate risk exposures due to changes in economic conditions, interest rate levels and customer preferences.
Interest Rate Risk
Management considers interest rate risk to be United’s most significant market risk. Interest rate risk is the exposure to adverse changes in United’s net interest income as a result of changes in interest rates. United’s earnings are largely dependent on the effective management of interest rate risk.
Management of interest rate risk focuses on maintaining consistent growth in net interest income within Board-approved policy limits. United’s Asset/Liability Management Committee (“ALCO”), which includes senior management representatives and reports to the Board of Directors, monitors and manages interest rate risk to maintain an acceptable level of change to net interest income as a result of changes in interest rates. Policy established for interest rate risk is stated in terms of the change in net interest income over a one-year and two-year horizon given an immediate and sustained increase or decrease in interest rates. The current limits approved by the Board of Directors are structured on a staged basis with each stage requiring specific actions.
United employs a variety of measurement techniques to identify and manage its exposure to changing interest rates. One such technique utilizes an earnings simulation model to analyze the sensitivity of net interest income to movements in interest rates. The model is based on actual cash flows and repricing characteristics for on and off-balance sheet instruments and incorporates market-based assumptions regarding the impact of changing interest rates on the prepayment rate of certain assets and liabilities. The model also includes executive management projections for activity levels in product lines offered by United. Assumptions based on the historical behavior of deposit rates and balances in relation to changes in interest rates are also incorporated into the model. Rate scenarios could involve parallel or nonparallel shifts in the yield curve, depending on historical, current, and expected conditions, as well as the need to capture any material effects of explicit or embedded options. These assumptions are inherently uncertain and, as a result, the model cannot precisely measure net interest income or precisely predict the impact of fluctuations in interest rates on net interest income. Actual results will differ from simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and management’s strategies.
Interest sensitive assets and liabilities are defined as those assets or liabilities that mature or are repriced within a designated time frame. The principal function of managing interest rate risk is to maintain an appropriate relationship between those assets and liabilities that are sensitive to changing market interest rates. The difference between rate sensitive assets and rate sensitive liabilities for specified periods of time is known as the “GAP.” Earnings-simulation
analysis captures not only the potential of these interest sensitive assets and liabilities to mature or reprice, but also the probability that they will do so. Moreover, earnings-simulation analysis considers the relative sensitivities of these balance sheet items and projects their behavior over an extended period of time. United closely monitors the sensitivity of its assets and liabilities on an on-going basis and projects the effect of various interest rate changes on its net interest margin.
The following table shows United’s estimated earnings sensitivity profile as of December 31, 2024 and December 31, 2023:
 Change in
Interest Rates
Percentage Change in Net Interest Income
(basis points)
December 31, 2024
December 31, 2023
  +200
2.82%
(0.28%)
  +100
1.75%
0.24%
0.26%
2.66%
0.40%
4.35%
At December 31, 2024, given an immediate, sustained 100 basis point upward shock to the yield curve used in the simulation model, net interest income for United is estimated to increase by 1.75% over one year as compared to an increase by 0.24% at December 31, 2023. A 200 basis point immediate, sustained upward shock in the yield curve would increase net interest income by an estimated 2.82% over one year as of December 31, 2024, as compared to a decrease of 0.28% as of December 31, 2023. A 100 basis point immediate, sustained downward shock in the yield curve would increase net interest income by an estimated 0.26% over one year as of December 31, 2024 as compared to an increase of 2.66%, over one year as of December 31, 2023. A 200 basis point immediate, sustained downward shock in the yield curve would increase net interest income by an estimated 0.40% over one year as of December 31, 2024 as compared to an increase of 4.35% over one year as of December 31, 2023.
In addition to the one year earnings sensitivity analysis, a two-year analysis is also performed. Compared to the one year analysis, United is projected to show improved performance in year two within the upward rate shock scenarios. Given an immediate, sustained 100 basis point upward shock to the yield curve used in the simulation model, net interest income for United is estimated to increase by 3.98% in year two as of December 31, 2024. A 200 basis point immediate, sustained upward shock in the yield curve would increase net interest income by an estimated 7.00% in year two as of December 31, 2024. A 100 basis point immediate, sustained downward shock in the yield curve would decrease net interest income by an estimated 2.37% in year two as of December 31, 2024. A 200 basis point immediate, sustained downward shock in the yield curve would decrease net interest income by an estimated 5.35% in year two as of December 31, 2024.
While it is unlikely market rates would immediately move 100 or 200 basis points upward or downward on a sustained basis, this is another tool used by management and the Board of Directors to gauge interest rate risk. All of these estimated changes in net interest income are and were within the policy guidelines established by the Board of Directors.
To further aid in interest rate management, United’s subsidiary bank is a member of the Federal Home Loan Bank (“FHLB”). The use of FHLB advances provides United with a low risk means of matching maturities of earning assets and interest-bearing funds to achieve a desired interest rate spread over the life of the earning assets. In addition, United uses credit with large regional banks and trust preferred securities to provide funding.
As part of its interest rate risk management strategy, United may use derivative instruments to protect against adverse price or interest rate movements on the value of certain assets or liabilities and on future cash flows. These derivatives commonly consist of interest rate swaps, caps, floors, collars, futures, forward contracts, written and purchased options. Interest rate swaps obligate two parties to exchange one or more payments generally calculated with reference to a fixed or variable rate of interest applied to the notional amount. United accounts for its derivative activities in accordance with the provisions of ASC Topic 815, “Derivatives and Hedging.”
Extension Risk
A key feature of most mortgage loans is the ability of the borrower to repay principal earlier than scheduled. This is called a prepayment. Prepayments arise primarily due to sale of the underlying property, refinancing, or foreclosure. In general, declining interest rates tend to increase prepayments, and rising interest rates tend to slow prepayments. Like other fixed-income securities, when interest rates rise, the value of mortgage- related securities generally declines. The rate of prepayments on underlying mortgages will affect the price and volatility of mortgage-related securities and may shorten or extend the effective maturity of the security beyond what was anticipated at the time of purchase. If interest rates rise, United’s holdings of mortgage-related securities may experience reduced returns if the borrowers of the underlying mortgages pay off their mortgages later than anticipated. This is generally referred to as extension risk.
At December 31, 2024, United’s mortgage related securities portfolio had an amortized cost of $1.7 billion, of which approximately $827.7 million or 49% were fixed rate collateralized mortgage obligations (CMOs). These fixed rate CMOs consisted primarily of planned amortization class (PACs), sequential-pay and accretion directed (VADMs) bonds having an average life of approximately 5.3 years and a weighted average yield of 2.78%, under current projected prepayment assumptions. These securities are expected to have moderate extension risk in a rising rate environment. Current models show that given an immediate, sustained upward shock of 300 basis points, the average life of these securities would only extend to 7 years. The projected price decline of the fixed rate CMO portfolio in rates up 300 basis points would be 16.5%, or less than the price decline of a 7- year treasury note. By comparison, the price decline of a 30-year 5.5% current coupon mortgage backed security (MBS) in rates higher by 300 basis points would be approximately 20.1%.
United had approximately $354.6 million in fixed rate Commercial mortgage backed Securities (CMBS) with a projected yield of 1.81% and a projected average life of 4.6 years on December 31, 2024. This portfolio consisted primarily of Freddie Mac Multifamily K securities and Fannie Mae Delegated Underwriting and Servicing (DUS) securities with a weighted average maturity (WAM) of 8.4 years.
United had approximately $10.8 million in 15-year mortgage backed securities with a projected yield of 2.04% and a projected average life of 4.2 years as of December 31, 2024. This portfolio consisted of seasoned 15-year mortgage paper with a weighted average loan age (WALA) of 5.7 years and a weighted average maturity (WAM) of 10.2 years.
United had approximately $297.7 million in 20-year mortgage backed securities with a projected yield of 1.82% and a projected average life of 6.3 years on December 31, 2024. This portfolio consisted of seasoned 20-year mortgage paper with a weighted average loan age (WALA) of 3.8 years and a weighted average maturity (WAM) of 16 years.
United had approximately $148.8 million in 30-year mortgage backed securities with a projected yield of 2.94% and a projected average life of 8.1 years on December 31, 2024. This portfolio consisted of seasoned 30-year mortgage paper with a weighted average loan age (WALA) of 4.8 years and a weighted average maturity (WAM) of 23.1 years.
The remaining 3% of the mortgage related securities portfolio on December 31, 2024, included floating rate CMO, CMBS and mortgage backed securities.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management of United Bankshares, Inc. (the “Company”) is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation and fair presentation of published financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013 framework). Based on our assessment, we believe that, as of December 31, 2024, the Company’s internal control over financial reporting is effective based on those criteria.
Ernst & Young LLP (“Ernst & Young”), the independent registered public accounting firm who audited the Company’s consolidated financial statements, has also issued an attestation report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024. Ernst & Young’s report on the effectiveness of the Company’s internal control over financial reporting appears on the following page.
/s/ Richard M. Adams, Jr.
/s/ W. Mark Tatterson
Richard M. Adams, Jr.
Chief Executive Officer
W. Mark Tatterson
Executive Vice President and Chief Financial Officer
February 28, 2025
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of United Bankshares, Inc.
Opinion on Internal Control over Financial Reporting
We have audited United Bankshares, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, United Bankshares, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 28, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Charleston, West Virginia
February 28, 2025
http://fasb.org/us-gaap/2024#InterestExpenseDepositshttp://fasb.org/us-gaap/2024#InterestAndDividendIncomeOperating9795000P3YP5YP1YP3Yhttp://fasb.org/us-gaap/2024#InterestIncomeExpenseAfterProvisionForLoanLosshttp://fasb.org/us-gaap/2024#Liabilitieshttp://fasb.org/us-gaap/2024#Assets

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of United Bankshares, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of United Bankshares, Inc. and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Allowance for Loan Losses
Description of
the Matter
The Company’s loan portfolio totaled $21.7 billion as of December 31, 2024, and the associated allowance for loan losses (ALL) for the loan portfolio was $272 million. As discussed in Notes A and F to the consolidated financial statements, the ALL is an estimate of the expected credit losses on loans at amortized cost to present the net amount expected to be collected as of the balance sheet date. The ALL is based on the credit losses expected to arise over the life of the asset. Management pools its loans based on similar risk characteristics and assigns an appropriate calculation method to estimate the expected credit losses. For loans that do not share risk characteristics, management evaluates the ALL on an individual basis based on the present value of expected future cash flows using the loan’s effective interest rate, or as a practical expedient, the fair value of the collateral if the loan is collateral-dependent. For loans not specifically reviewed on an individual basis, management measures the ALL using a probability of default/loss given default method or cohort method based on portfolio segment. Management also records qualitative adjustments to expected credit losses for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level or term as well as reasonable and supportable forecast adjustments for changes in macroeconomic and environmental conditions, such as changes in unemployment rates, gross domestic product or other relevant factors, that have not been fully captured in the allowance calculation.
Auditing management’s estimate used in determining the ALL for the loan portfolio involved a high degree of subjectivity in evaluating management’s determination of the forecast selection used to derive the reasonable and supportable forecast qualitative adjustment.
How We
Addressed the Matter in
Our
Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s ALL process for the loan portfolio. Controls tested included, among others, those over the risk rating process, management’s review and approval of the calculations used to determine the ALL, including the underlying data and data inputs and outputs of those calculations, and management’s evaluation and review of the qualitative adjustments, including the reasonable and supportable forecast qualitative adjustment.
To test the Company’s reasonable and supportable forecast qualitative adjustment for the loan portfolio, we tested the underlying data used in the estimate calculation to determine it was accurate, complete and relevant. Further, we evaluated management’s basis for the adjustment in relation to changes in economic conditions and forecasts. Our procedures included evaluating management’s inputs and assumptions used in determining the qualitative adjustment by comparing the information to internal and external source data including, among others, the economic forecasts utilized by the Company and third-party economic outlook reports. We involved our internal modeling specialists in evaluating the model performance. In addition, we evaluated the overall ALL amount, inclusive of the qualitative adjustments, and whether the amount appropriately reflects losses expected in the loan portfolios as of the consolidated balance sheet date. For example, we evaluated the Company’s analysis of their historical loss experience and peer losses to the Company’s recorded ALL to test the ALL in totality. We also reviewed subsequent events and transactions and considered whether they corroborate or contradict the Company’s conclusion.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1986.
Charleston, West Virginia
February 28, 2025
CONSOLIDATED BALANCE SHEETS
UNITED BANKSHARES, INC. AND SUBSIDIARIES
(Dollars in thousands, except par value)
December 31
December 31 
Assets
Cash and due from banks
$ 240,655  
$ 257,153  
Interest-bearing deposits with other banks
2,050,321
1,340,620
Federal funds sold
1,268
1,170
Total cash and cash equivalents
2,292,244
1,598,943
Securities available for sale at estimated fair value (amortized cost-$3,282,690 at December 31, 2024 and
$4,149,895 at December 31, 2023, allowance for credit losses of $0 at December 31, 2024 and
December 31, 2023)
2,959,719
3,786,377
Securities held to maturity, net of allowance for credit losses of $18 at December 31, 2024 and $17 at
December 31, 2023 (estimated fair value-$1,020 at December 31, 2024 and December 31, 2023)
1,002
1,003
Equity securities at estimated fair value
21,058
8,945
Other investment securities
277,517
329,429
Loans held for sale measured using fair value option
44,360
56,261
Loans and leases
21,680,498
21,373,185
Less: Unearned income
(7,005 )
(14,101 )
Loans and leases, net of unearned income
21,673,493
21,359,084
Less: Allowance for loan and lease losses
(271,844 )
(259,237 )
Net loans and leases
21,401,649
21,099,847
Bank premises and equipment
186,131
190,520
Operating lease right-of-use assets
81,742
86,986
Goodwill
1,888,889
1,888,889
Mortgage servicing rights
4,554
Bank-owned life insurance (“BOLI”)
497,181
486,895
Accrued interest receivable
102,412
111,420
Other assets
269,641
276,413
TOTAL ASSETS
$ 30,023,545
$ 29,926,482
Liabilities
Deposits:
Noninterest-bearing
$ 6,135,413
$ 6,149,080
Interest-bearing
17,826,446
16,670,239
Total deposits
23,961,859
22,819,319
Borrowings:
Securities sold under agreements to repurchase
176,090
196,095
Federal Home Loan Bank (“FHLB”) borrowings
260,199
1,510,487
Other long-term borrowings
280,221
278,616
Reserve for lending-related commitments
34,911
44,706
Operating lease liabilities
86,771
92,885
Accrued expenses and other liabilities
230,271
213,134
TOTAL LIABILITIES
25,030,322
25,155,242
Shareholders’ Equity
Preferred stock, $1.00 par value; Authorized-50,000,000 shares, none issued
Common stock, $2.50 par value; Authorized-200,000,000 shares; issued-142,694,816 and 142,257,646 at
December 31, 2024 and December 31, 2023, respectively, including 7,348,188 and 7,308,583 shares in treasury
at December 31, 2024 and December 31, 2023, respectively
356,737
355,644
Surplus
3,196,154
3,181,764
Retained earnings
1,917,726
1,745,619
Accumulated other comprehensive loss
(223,903 )
(259,681 )
Treasury stock, at cost
(253,491 )
(252,106 )
TOTAL SHAREHOLDERS’ EQUITY
4,993,223
4,771,240
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$ 30,023,545
$ 29,926,482
See notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF INCOME
UNITED BANKSHARES, INC. AND SUBSIDIARIES
(Dollars in thousands, except per share data)
Year Ended December 31
Interest income
Interest and fees on loans and leases
 $  1,302,604  
 $  1,203,186  
 $  864,583  
Interest on federal funds sold and other short-term investments
66,207
47,069
22,950
Interest and dividends on securities:
Taxable
128,731
144,420
105,780
Tax-exempt
4,579
6,645
8,677
Total interest income
1,502,121
1,401,320
1,001,990
Interest expense
Interest on deposits
539,805
391,094
80,237
Interest on short-term borrowings
7,966
6,449
1,785
Interest on long-term borrowings
43,282
83,853
23,537
Total interest expense
591,053
481,396
105,559
Net interest income
911,068
919,924
896,431
Provision for credit losses
25,153
31,153
18,822
Net interest income after provision for credit losses
885,915
888,771
877,609
Other income
Fees from trust services
19,450
18,318
17,216
Fees from brokerage services
20,277
16,911
16,412
Fees from deposit services
37,183
37,076
40,557
Bankcard fees and merchant discounts
7,059
7,013
6,580
Other service charges, commissions, and fees
3,485
3,861
3,267
Income from bank-owned life insurance
11,225
8,330
9,188
Income from mortgage banking activities
16,057
26,593
42,690
Mortgage loan servicing income
8,958
13,746
9,235
Net investment securities (losses) gains
(7,720 )
(7,646 )
Other income
7,721
11,056
7,340
Total other income
123,695
135,258
153,261
Other expense
Employee compensation
234,618
230,809
242,408
Employee benefits
53,621
48,368
45,944
Net occupancy expense
46,084
46,426
45,129
Other real estate owned (“OREO”) expense
1,355
2,138
Net (gains) losses on the sales of OREO properties
(75 )
(60 )
Equipment expense
29,686
29,731
29,320
Data processing expense
29,646
29,395
29,997
Mortgage loan servicing expense and impairment
2,694
5,596
7,099
Bankcard processing expense
2,490
2,192
1,938
FDIC insurance expense
19,735
30,376
11,988
Other expense
125,956
136,036
138,426
Total other expense
545,031
560,224
555,087
Income before income taxes
464,579
463,805
475,783
Income taxes
91,583
97,492
96,156
Net income
 $ 372,996
 $ 366,313
 $ 379,627
CONSOLIDATED STATEMENTS OF INCOME
UNITED BANKSHARES, INC. AND SUBSIDIARIES
(Dollars in thousands, except per share data)
Year Ended December 31
Earnings per common share:
Basic
 $ 2.76  
 $ 2.72  
 $ 2.81  
Diluted
 $ 2.75
 $ 2.71
 $ 2.80
Dividends per common share
 $ 1.48
 $ 1.45
 $ 1.44
Average outstanding shares:
Basic
134,947,592
134,505,058
134,776,241
Diluted
135,225,417
134,753,820
135,117,512
See notes to consolidated financial statements
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
UNITED BANKSHARES, INC. AND SUBSIDIARIES
(Dollars in thousands)
Year Ended December 31
Net income
 $  372,996  
 $  366,313  
 $  379,627  
Other comprehensive income (loss) on available-for-sale
(“AFS”) securities, net of tax
30,855
81,521
(368,934
)
Other comprehensive (loss) income on cash flow hedge, net of tax
(6,249
)
(13,059
)
36,655
Other comprehensive income on defined benefit pension plan, net of tax
11,172
4,589
4,435
Total comprehensive income, net of tax
 $ 408,774
 $ 439,364
 $ 51,783
See notes to consolidated financial statements
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
UNITED BANKSHARES, INC. AND SUBSIDIARIES
(Dollars in thousands, except per share data)
Accumulated
Common Stock
Other
Total
Par
Retained
Comprehensive
Treasury
Shareholders’
Shares
Value
Surplus
Earnings
(Loss) Income
Stock
Equity
Balance at January 1, 2022
141,360,266
$ 353,402
$ 3,149,955
$ 1,390,777
$ (4,888 )
$ (170,618 )
$ 4,718,628
Comprehensive income:
Net income
379,627
379,627
Other comprehensive loss, net of tax
(327,844 )
(327,844 )
Total comprehensive income, net of tax
51,783
Stock based compensation expense
9,881
9,881
Stock grant forfeiture (9,071 shares)
(326 )
Purchase of treasury stock (2,289,859 shares)
(79,460 )
(79,460 )
Cash dividends ($1.44 per share)
(194,978 )
(194,978 )
Net issuance of common stock under stock-based compensation plans (651,294 shares)
651,294
1,627
8,712
10,339
Balance at December 31, 2022
142,011,560
355,029
3,168,874
1,575,426
(332,732 )
(250,404 )
4,516,193
Comprehensive income:
Net income
366,313
366,313
Other comprehensive income, net of tax
73,051
73,051
Total comprehensive income, net of tax
439,364
Stock based compensation expense
12,463
12,463
Stock grant forfeiture (8,295 shares)
(320 )
Purchase of treasury stock (33,850 shares)
(1,382 )
(1,382 )
Cash dividends ($1.45 per share)
(196,120 )
(196,120 )
Net issuance of common stock under stock-based compensation plans (246,086 shares)
246,086
Balance at December 31, 2023
142,257,646
355,644
3,181,764
1,745,619
(259,681 )
(252,106 )
4,771,240
Comprehensive income:
Net income
372,996
372,996
Other comprehensive income, net of tax
35,778
35,778
Total comprehensive income, net of tax
408,774
Stock based compensation expense
12,130
12,130
Stock grant forfeiture (9,413 shares)
(345 )
Purchase of treasury stock (30,192 shares)
(1,040 )
(1,040 )
Cash dividends ($1.48 per share)
(200,889 )
(200,889 )
Net issuance of common stock under stock-based compensation plans (437,170 shares)
437,170
1,093
1,915
3,008
Balance at December 31, 2024
142,694,816
$ 356,737
$ 3,196,154
$ 1,917,726
$ (223,903 )
$ (253,491 )
$ 4,993,223
See notes to consolidated financial statements
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNITED BANKSHARES, INC. AND SUBSIDIARIES
(Dollars in thousands)
Year Ended December 31
OPERATING ACTIVITIES
Net income
$ 372,996
$ 366,313
$ 379,627
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
25,153
31,153
18,822
Amortization and accretion
(5,313 )
5,915
5,433
Loss on sales of bank premises, OREO, leases and equipment
Write-downs on bank premises, OREO, leases and equipment
2,007
Depreciation
15,709
17,191
18,237
Loss (gain) on securities
7,720
7,646
(776 )
Loans originated for sale
(645,942 )
(860,901 )
(1,903,981 )
Proceeds from sales of loans
673,906
887,398
2,238,093
Gain on sales of loans
(16,063 )
(25,879 )
(41,274 )
Mortgage repurchase loan losses paid, net of recoveries
(304 )
(69 )
Stock-based compensation
12,130
12,463
9,881
Excess tax benefits from stock-based compensation arrangements
1,040
Deferred income tax (benefit) expense
(3,368 )
(2,921 )
6,887
Amortization of tax credit investments
15,277
15,238
13,567
Originations of mortgage servicing rights
(715 )
(1,417 )
Recoveries of impairment on mortgage servicing rights
(883 )
Gain on sale of mortgage servicing rights
(7,086 )
(8,306 )
Increase in cash surrender value of bank-owned life insurance policies
(14,150 )
(9,267 )
(14,064 )
Accretion (amortization) of net periodic pension costs
(1,640 )
Changes in:
Interest receivable
9,008
(16,530 )
(30,370 )
Other assets
2,056
(3,618 )
57,380
Accrued expenses and other liabilities
2,593
18,784
3,865
NET CASH PROVIDED BY OPERATING ACTIVITIES
445,454
435,237
760,822
INVESTING ACTIVITIES
Proceeds from sales of securities available for sale
454,993
181,824
Proceeds from maturities and calls of securities available for sale
2,459,102
770,389
575,338
Purchases of securities available for sale
(2,062,441 )
(107,866 )
(1,572,482 )
Proceeds from sales of equity securities
8,113
6,782
Purchases of equity securities
(1,159 )
(1,647 )
(2,596 )
Proceeds from sales and redemptions of other investment securities
160,637
155,299
4,829
Purchases of other investment securities
(136,392 )
(178,476 )
(99,435 )
Redemption of bank-owned life insurance policies
3,864
2,556
11,947
Purchases of bank premises and equipment
(12,128 )
(11,687 )
(16,862 )
Proceeds from sales of bank premises and equipment
2,542
Proceeds from sales of mortgage servicing rights
12,489
23,450
Proceeds from sales of OREO properties
2,355
3,240
10,571
Net change in loans and leases
(318,049 )
(800,974 )
(2,367,060 )
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
571,485
38,994
(3,447,656 )
FINANCING ACTIVITIES
Cash dividends paid
(200,727 )
(194,727 )
(193,041 )
Acquisition of treasury stock
(1,040 )
(1,382 )
(79,460 )
Proceeds from exercise of stock options
5,274
1,750
10,295
Repayment of long-term Federal Home Loan Bank borrowings
(1,500,000 )
(1,900,000 )
(520,000 )
Proceeds from issuance of long-term Federal Home Loan Bank borrowings
250,000
1,500,000
1,900,000
Redemption of subordinated debt
(10,250 )
Changes in:
Time deposits
254,936
1,318,577
(623,254 )
Other deposits
887,924
(801,305 )
(421,078 )
Federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings
(20,005 )
35,397
31,854
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES
(323,638 )
(51,940 )
105,316
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
693,301
422,291
(2,581,518 )
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
1,598,943
1,176,652
3,758,170
CASH AND CASH EQUIVALENTS AT END OF YEAR
$ 2,292,244
$ 1,598,943
$ 1,176,652
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNITED BANKSHARES, INC. AND SUBSIDIARIES
(Dollars in thousands)
Year Ended December 31
Supplemental information
Cash paid for:
Interest on deposits and borrowed funds
$ 590,635
$ 468,123
$ 98,161
Income taxes
91,689
106,083
93,680
Amounts in the measurement of lease liabilities
19,900
21,581
21,240
Noncash investing activities:
Transfers of loans held for sale to loans
154,699
Transfers of loans to OREO
4,941
1,546
Right-of-use assets obtained in the exchange for lease liabilities
8,896
33,403
9,184
Acquisition of subsidiaries and purchase price adjustments:
Assets acquired, net of cash
(345 )
Liabilities assumed
2,050
Goodwill
2,395
See notes to consolidated financial statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNITED BANKSHARES, INC. AND SUBSIDIARIES
December 31, 2024
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations:
United Bankshares, Inc. (“United”, the “Company”) is a financial holding company headquartered in Charleston, West Virginia. United considers all of West Virginia to be included in its market area. This area includes the five largest West Virginia Metropolitan Statistical Areas (“MSA”): the Parkersburg MSA, the Charleston MSA, the Huntington MSA, the Morgantown MSA and the Wheeling MSA. United serves the Ohio counties of Lawrence, Belmont, Jefferson and the Pennsylvania counties of Washington and Fayette, primarily because of their close proximity to the Ohio and Pennsylvania borders and United banking offices located in those counties in nearby West Virginia. United’s Virginia markets include the Maryland, northern Virginia and Washington, D.C. MSA, the Winchester MSA, the Harrisonburg MSA, and the Charlottesville MSA. Through its acquisition of Carolina Financial, United’s market also includes the Coastal, Midlands, and Upstate regions of South Carolina, including the Charleston (Charleston, Dorchester and Berkeley Counties), Myrtle Beach (Horry and Georgetown Counties), Columbia (Richland and Lexington Counties), and the Upstate (Greenville and Spartanburg Counties) areas as well as areas in North Carolina including Wilmington (New Hanover County), Raleigh-Durham (Durham and Wake Counties), Charlotte-Concord-Gastonia (NC and SC) and the southeastern coastal region of North Carolina (Bladen, Brunswick, Columbus, Cumberland, Duplin and Robeson Counties). Through its acquisition of Community Bankers Trust, United added new markets in Baltimore and Annapolis, Maryland and Lynchburg and Richmond, Virginia as well as the Northern Neck of Virginia. United considers all of the above locations to be the primary market areas for its business.
Operating and Reporting Segments
As of December 31, 2024, United’s business activities are confined to one operating segment, United Bank, and one reportable segment, community banking. As a community banking entity, United, through United Bank, offers a full range of products and services through various delivery channels. Included among the banking products and services offered are the acceptance of deposits in checking, savings, time and money market accounts; the making and servicing of personal, credit card, commercial, and floor plan loans; and the making of construction and real estate loans as well as the origination and sale of residential mortgages in the secondary market. Also offered are trust and brokerage services, safe deposit boxes, and wire transfers. United’s chief operating decision maker regularly reviews the operating results of United Bank in order to assess performance and make decisions about resource allocation. At December 31, 2023, United had three operating segments: United Bank, George Mason Mortgage, LLC (“George Mason”) and Crescent Mortgage Company (“Crescent”), and two reporting segments: community banking and mortgage banking. However, during the first quarter of 2024, United consolidated the mortgage origination and sales business of George Mason and Crescent with that of United Bank. United previously exited the third-party origination (“TPO”) business during the fourth quarter of 2023.
Basis of Presentation:
The consolidated financial statements and the notes to consolidated financial statements include the accounts of United and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements.
As defined in applicable accounting standards, variable interest entities (“VIEs”) are entities that lack one or more of the characteristics of a voting interest entity. A controlling financial interest in a VIE is present when an enterprise has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The enterprise with a controlling financial interest, known as the primary beneficiary, consolidates the VIE. United’s wholly owned and indirect wholly owned statutory trust subsidiaries are VIEs for which United is not the primary beneficiary. Accordingly, its accounts are not included in United’s consolidated financial statements.
The accounting and reporting policies of United conform with U.S. generally accepted accounting principles. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. To conform to the 2024 presentation, certain reclassifications have been made to prior period amounts, which had no impact on net income, comprehensive income or shareholders’ equity. In the opinion of management, all adjustments necessary for a fair presentation of financial position and results of operations have been made. Such adjustments are of a normal and recurring nature. In the opinion of management, all adjustments necessary for a fair presentation of financial position and results of operations have been made.
The Company has evaluated events and transactions subsequent to December 31, 2024 through the date these financial statements were issued. Based on definitions and requirements of generally accepted accounting principles for “Subsequent Events,” the Company has not identified any events that would require adjustments to, or disclosure in the financial statements other than information related to the acquisition of Piedmont Bancorp, Inc. (“Piedmont”) disclosed in Note B, Notes to Consolidated Financial Statements.
Cash and Cash Equivalents:
United considers cash and due from banks, interest-bearing deposits with other banks and federal funds sold as cash and cash equivalents.
Debt securities
: The Company accounts for debt securities in two categories: held to maturity (“HTM”) and available for sale (“AFS”). Premiums and discounts on debt securities are deferred and recognized into income over the contractual life of the asset using the effective interest method.
HTM securities are accounted for at amortized cost, but the Company must have both the positive intent and the ability to hold those securities to maturity. There are very limited circumstances under which securities in the HTM category can be sold without jeopardizing the cost basis of accounting for the remainder of the securities in this category. Substantially all of the Company’s HTM debt securities are issued by state and political subdivisions (municipalities). As of December 31, 2024, United considers its HTM debt securities portfolio to be immaterial.
AFS securities are accounted for at fair value. Gains and losses realized on the sale of these securities are accounted for based on the specific identification method. Unrealized gains and losses for AFS securities are excluded from earnings and reported net of the related tax effect in the accumulated other comprehensive income component of shareholders’ equity.
Allowance for Credit Losses (HTM Debt Securities)
: For HTM debt securities, the Company is required to utilize a current expected credit losses (“CECL”) methodology to estimate expected credit losses. As of December 31, 2024 and 2023, the Company recorded an allowance for credit losses of $18,000 and $17,000, respectively, on its HTM debt securities portfolio.
Allowance for Credit Losses (AFS Debt Securities)
: The impairment model for available-for-sale (“AFS”) debt securities differs from the CECL methodology applied for HTM debt securities because AFS debt securities are measured at fair value rather than amortized cost. Although ASC Topic 326, “Financial Instruments - Credit Losses” replaced the legacy other-than-temporary impairment (“OTTI”) model with a credit loss model, it retained the fundamental nature of the legacy OTTI model. For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more-likely-than-not that it will be required to sell, the security before recovery of its amortized cost basis. If either criteria is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities where neither of the criteria are met, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the credit rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited to the amount that the fair value is less than the amortized cost basis. Any remaining discount that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. An entity may no longer consider the length of time fair value has been less than amortized cost. Changes in the allowance for credit losses are recorded as a provision (or release) for credit losses. Losses are charged against the allowance when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met. As of December 31, 2024, the Company determined that the unrealized loss positions in AFS securities were not the result of credit losses, and therefore, an allowance for credit losses was not recorded. United has the intent and the ability to hold these securities until such time as the value recovers or the securities mature.
Equity securities:
Investments in equity securities with readily determinable fair values (marketable) are measured at fair value, with changes in the fair value recognized in Net investment securities gains in the Consolidated Statements of Income.
Other investment securities:
Certain security investments such as Federal Reserve Bank stock and Federal Home Loan Bank stock that do not have readily determinable fair values (non-marketable) are accounted for at cost minus impairment, if any. For other security investments
that do not have readily determinable fair values (non-marketable), they are accounted for at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer, also referred to as the measurement alternative. Any adjustments to the carrying value of these investments are recorded in Other income in the Consolidated Statements of Income.
Securities Purchased Under Resale Agreements and Securities Sold Under Agreements to Repurchase:
Securities purchased under agreements to resell and securities sold under agreements to repurchase are accounted for as collateralized financing transactions. They are recorded at the amounts at which the securities were acquired or sold plus accrued interest. Securities, generally U.S. government and federal agency securities, pledged as collateral under these financing arrangements cannot be repledged or sold, unless replaced, by the secured party. The fair value of the collateral either received from or provided to a third party is continually monitored and additional collateral is obtained or is requested to be returned to United as deemed appropriate.
Loans:
Loans are reported at the principal amount outstanding, net of unearned income, except loans acquired through transfer (see below). Interest on loans is accrued and credited to operations using methods that produce a level yield on individual principal amounts outstanding. Loan origination and commitment fees and related direct loan origination costs are deferred and amortized as an adjustment of loan yield over the estimated life of the related loan. Loan fees net of costs accreted and included in interest income were $36,937,000, $39,509,000, and $57,424,000, for the years of 2024, 2023 and 2022, respectively.
For all loan classes, past due loans and leases are reviewed on a monthly basis to identify loans and leases for nonaccrual status. Generally, when collection in full of the principal and interest is jeopardized, the loan is placed on nonaccrual status. The accrual of interest income on commercial and most consumer loans generally is discontinued when a loan becomes 90 to 120 days past due as to principal or interest. However, regardless of delinquency status, if a loan is fully secured and in the process of collection and resolution of collection is expected in the near term (generally less than 90 days), then the loan will not be placed on nonaccrual status. When interest accruals are discontinued, unpaid interest recognized in income in the current year is reversed, and unpaid interest accrued in prior years is charged to the allowance for credit losses. United’s method of income recognition for loans and leases that are classified as nonaccrual is to recognize interest income on a cash basis or apply the cash receipt to principal when the ultimate collectibility of principal is in doubt. Nonaccrual loans and leases will not normally be returned to accrual status unless all past due principal and interest has been paid and the borrower has evidenced their ability to meet the contractual provisions of the note.
Loans Acquired Through Transfer:
Acquired loans are recorded at fair value at the date of acquisition based on a discounted cash flow methodology that considers various factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and a discount rate reflecting the Company’s assessment of risk inherent in the cash flow estimates. Certain purchased loans are individually evaluated while certain purchased loans are grouped together according to similar risk characteristics and are treated in the aggregate when applying various valuation techniques. These cash flow evaluations are inherently subjective as they require material estimates, all of which may be susceptible to significant change.
Loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial allowance for credit losses is added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans.
For loans and leases acquired after the adoption of ASC Topic 326, United will likely take several factors into consideration when determining if loans and leases meet the definition of PCD. ASC Topic 326 lists some, but not all, factors for consideration in the bifurcation of PCD versus non-PCD assets:
·
Financial assets that are delinquent as of the acquisition date
·
Financial assets that have been downgraded since origination
·
Financial assets that have been placed on nonaccrual status
For acquired loans not deemed purchased credit deteriorated at acquisition, the differences between the initial fair value and the unpaid principal balance are recognized as interest income on a level-yield basis over the lives of the related loans.
Loans Held for Sale:
Loans held for sale consist of one-to-four family conforming residential real estate loans originated for sale in the secondary market.
Loans held for sale are recorded under the fair value option at a fair value measured using valuations from investors for loans with similar characteristics adjusted for the Company’s actual sales experience versus the investor’s indicated pricing.
Gains and losses on sale of loans are recorded within income from mortgage banking activities.
Allowance for Loan and Lease Losses:
The allowance for loan losses is an estimate of the expected credit losses on financial assets measured at amortized cost to present the net amount expected to be collected as of the balance sheet date. Such allowance is based on the credit losses expected to arise over the life of the asset (contractual term). Assets are charged off when United determines that such financial assets are deemed uncollectible or based on regulatory requirements, whichever is earlier. Charge-offs are recognized as a deduction from the allowance for loan losses. Expected recoveries of amounts previously charged-off, not to exceed the aggregate of the amount previously charged-off, are included in determining the necessary reserve at the balance sheet date.
United made a policy election to present the accrued interest receivable balance separately in its consolidated balance sheets from the amortized cost of a loan. United estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level or term as well as reasonable and supportable forecast adjustments for changes in environmental conditions, such as changes in unemployment rates, property values or other relevant factors. A reversion to historical loss data occurs via a straight-line method during the year following the one-year reasonable and supportable forecast period.
United pools its loans and leases based on similar risk characteristics in estimating expected credit losses. United has identified the following portfolio segments and measures the allowance for credit losses using the following methods:
·
Method: Probability of Default/Loss Given Default (PD/LGD)
Ø
Commercial Real Estate Owner-Occupied
Ø
Commercial Real Estate Nonowner-Occupied
Ø
Commercial Other
·
Method: Cohort
Ø
Residential Real Estate
Ø
Construction & Land Development
Ø
Consumer
Ø
Bankcard
Risk characteristics of commercial real estate owner-occupied loans and commercial other loans and leases are similar in that they are normally dependent upon the borrower’s internal cash flow from operations to service debt. Commercial real estate nonowner-occupied loans differ in that cash flow to service debt is normally dependent on external income from third parties for use of the real estate such as rents, leases and room rates. Residential real estate loans are dependent upon individual borrowers who are affected by changes in general economic conditions, demand for housing and resulting residential real estate valuation. Construction and land development loans are impacted mainly by demand whether for new residential housing or for retail, industrial, office and other types of commercial construction within a given area. Consumer loan pool risk characteristics are influenced by general, regional and local economic conditions.
Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral but may also include other non-performing loans, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. These individually evaluated loans are removed from their respective pools and typically represent collateral dependent loans.
Expected credit losses are estimated over the contractual term of the loans and leases, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals and modifications unless management has a reasonable expectation at the reporting date that the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancelable by United.
At the acquisition date, an initial allowance for expected credit losses for non-PCD loans is estimated and recorded as credit loss expense. The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans. For allowance for credit losses under ASC Topic 326 calculation purposes, United includes its acquired loans and leases in their relevant pool unless they meet the criteria for specific review.
Bank Premises and Equipment:
Bank premises and equipment are stated at cost, less allowances for depreciation and amortization. The provision for depreciation is computed principally by the straight-line method over the estimated useful lives of the respective assets. Useful lives range primarily from three
to 15 years for furniture, fixtures and equipment and five
to 40 years for buildings and improvements. Leasehold improvements are generally amortized over the lesser of the term of the respective leases or the estimated useful lives of the improvements.
Other Real Estate Owned
: At December 31, 2024 and 2023, other real estate owned (“OREO”) included in other assets in the Consolidated Balance Sheets was $327,000 and $2,615,000, respectively. OREO consists of real estate acquired in foreclosure or other settlement of loans. Such assets are carried at the lower of the investment in the assets or the fair value of the assets less estimated selling costs. Any adjustment to the fair value at the date of transfer is charged against the allowance for loan losses. Any subsequent valuation adjustments as well as any costs relating to operating, holding or disposing of the property are recorded in other expense in the period incurred. At December 31, 2024 and 2023, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process was $795,000 and $142,000, respectively.
Intangible Assets:
Intangible assets relating to the estimated fair value of the deposit base of the acquired institutions are being amortized on an accelerated basis over a one
to ten-year period. Management reviews intangible assets on an annual basis, or sooner if indicators of impairment exist, and evaluates changes in facts and circumstances that may indicate impairment in the carrying value. United incurred amortization expense of $3,639,000, $5,116,000, and $5,516,000, in 2024, 2023, and 2022, respectively, related to all intangible assets.
Goodwill is tested for impairment at least annually or sooner if indicators of impairment exist. United may elect to perform a qualitative analysis to determine whether or not it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If United elects to bypass this qualitative analysis, or concludes via qualitative analysis that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, United may use either a market or income quantitative approach, whichever is more practical, to determine the fair value of the reporting unit to compare to its carrying value. If the estimated fair value of the reporting unit is less than its carrying value, an
impairment charge would be recorded for the excess, not to exceed the amount of goodwill allocated to the reporting unit. At each reporting date, the Company considers potential indicators of impairment. United bypassed a qualitative assessment and utilized a quantitative approach to test goodwill for impairment as of September 30, 2024. The goodwill impairment test did not identify any indicators of goodwill impairment. As of December 31, 2024, and 2023, total goodwill approximated
$
1,888,889,000.
Mortgage Servicing Rights, Fees and Costs:
The Company initially measures servicing assets and liabilities retained related to the sale of residential loans held for sale (“MSRs”) at fair value. For subsequent measurement purposes, the Company measures servicing assets and liabilities using the amortization method.
MSRs are amortized in proportion to, and over the period of, estimated net servicing income. The amortization of the MSRs is analyzed periodically and is adjusted to reflect changes in prepayment rates and other estimates.
The Company evaluates potential impairment of MSRs based on the difference between the carrying amount and current estimated fair value of the servicing rights. In determining impairment, the Company aggregates all servicing rights and stratifies them into tranches based on predominant risk characteristics. If impairment exists, a valuation allowance is established for any excess of amortized cost over the current estimated fair value by a charge to income. If the Company later determines that all or a portion of the impairment no longer exists for a particular tranche, a reduction of the allowance may be recorded as an increase to income.
Service fee income is recorded for fees earned for servicing mortgage loans under servicing agreements with the Federal National Mortgage Association (“FNMA”), the Federal Home Loan Mortgage Corporation (“FHLMC”) and certain private investors. The fees are based on a contractual percentage of the outstanding principal balance of the loans serviced and are recorded in noninterest income. Amortization of MSRs and mortgage servicing costs are charged to expense when incurred. During the third quarter of 2024, United sold its remaining balance of MSRs.
Accrued Interest Receivable
:
In accordance with ASC Topic 326, the Company made the following elections regarding accrued interest receivable (“AIR”):
•
Presenting accrued interest receivable balances separately from their underlying instruments within the consolidated statements of financial condition.
•
Excluding accrued interest receivable that is included in the amortized cost of financing receivables from related disclosure requirements.
•
Continuing our policy to write off accrued interest receivable by reversing interest income in cases where the Company does not reasonably expect to receive payment.
•
Not measuring an allowance for credit losses for accrued interest receivable due to the Company’s policy of writing off uncollectible accrued interest receivable balances in a timely manner.
Revenue Recognition
: Interest and dividend income, loan fees, fees from trust and brokerage services, deposit services and bankcard fees are recognized and accrued as earned.
Descriptions of our revenue-generating activities that are within the scope of ASC Topic 606, which are presented in our Consolidated Statements of Income as components of Other Income are discussed below. There are no significant judgements relating to the amount and timing of revenue recognition for those revenue streams under the scope of ASC Topic 606.
Fees from Trust Services
Revenue from trust services primarily is comprised of fees earned from the management and administration of trusts and other customer assets. Trust services include custody of assets, investment management, escrow services, and similar fiduciary activities. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days after month end through a direct charge to customers’ accounts.
Fees from Brokerage Services
Revenue from brokerage services are recorded as the income is earned at the time the related service is performed. In return for such services, the Company charges a commission for the sales of various securities products primarily consisting of investment company shares, annuity products, and corporate debt and equity securities, for its selling and administrative efforts. For account supervision, advisory and administrative services, revenue is recognized over a period of time as earned based on customer account balances and activity.
Fees from Deposit Services
Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders, ATM activity fees, debit card fees, and other deposit account related fees. Revenue is recognized when our performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (ATM or debit card activity).
Bankcard Fees and Merchant Discounts
Bankcard fees and merchant discounts are primarily comprised of credit card income and merchant services income. Credit card income is primarily comprised of interchange fees earned whenever the Company’s credit cards are processed through card payment networks such as Visa. Merchant services income mainly represents fees charged to merchants to process their credit card transactions. The Company’s performance obligation for bankcard fees and interchange are largely satisfied, and related revenue recognized at the time services are rendered. Payment is typically received immediately or in the following month.
Advertising Costs:
Advertising costs are generally expensed as incurred and included in Other Expense on the Consolidated Statements of Income. Advertising expense was $8,336,000, $9,330,000, and $8,160,000, for the years of 2024, 2023, and 2022, respectively.
Income Taxes:
Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities (excluding deferred tax assets and liabilities related to business combinations or components of other comprehensive income). Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the expected amount most likely to be realized. Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years. Although realization is not assured, management believes it is more-likely-than-not that all of the deferred tax assets will be realized. Interest and/or penalties related to income taxes are reported as a component of income tax expense.
For uncertain income tax positions, United records a liability based on a recognition threshold of more-likely-than-not, and a measurement attribute for all tax positions taken on a tax return, in order for those tax positions to be recognized in the financial statements.
United files a consolidated income tax return with its subsidiaries. Federal income tax expense or benefit has been allocated to subsidiaries on a separate return basis.
Derivative Financial Instruments:
United accounts for its derivative financial instruments in accordance with ASC Topic 815 which requires all derivative instruments to be carried at fair value on the balance sheet. United has designated certain derivative instruments used to manage interest rate risk as hedge relationships with certain assets, liabilities or cash flows being hedged. Certain derivatives used for interest rate risk management are not designated in a hedge relationship.
Derivative instruments designated in a hedge relationship to mitigate exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivative instruments designated in a hedge relationship to mitigate exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.
For a fair value hedge, the fair value of the interest rate swap is recognized on the balance sheet as either a freestanding asset or liability with a corresponding adjustment to the hedged financial instrument. Subsequent adjustments due to changes in the fair value of a derivative that qualifies as a fair value hedge are offset in current period earnings either in interest income or interest expense depending on the nature of the hedged financial instrument. For a cash flow hedge, the fair value of the interest rate swap is recognized on the balance sheet as either a freestanding asset or liability with a corresponding adjustment to accumulated other comprehensive income within shareholders’ equity, net of tax. Subsequent adjustments due to changes in the fair value of a derivative that qualifies as a cash flow hedge are offset to accumulated other comprehensive income, net of tax and reclassified into earnings in the same line associated with the forecasted transaction when the forecasted transaction affects earnings. Fair value hedges may be eligible for offset on the consolidated balance sheets because they are subject to master netting arrangements or similar agreements. United has elected not to offset the assets and liabilities subject to such arrangements on the consolidated financial statements.
At inception of a hedge relationship, United formally documents the hedged item, the particular risk management objective, the nature of the risk being hedged, the derivative being used, how effectiveness of the hedge will be assessed and how the ineffectiveness of the hedge will be measured. United also assesses hedge effectiveness at inception and on an ongoing basis using regression analysis. Hedge ineffectiveness is measured by using the change in fair value method. The change in fair value method compares the change in the fair value of the hedging derivative to the change in the fair value of the hedged exposure, attributable to changes in the benchmark rate.
United enters into interest rate lock commitments to finance residential mortgage loans with its customers. These commitments, which contain fixed expiration dates, offer the borrower an interest rate guarantee provided the loan meets underwriting guidelines and closes within the timeframe established by United. Interest rate risk arises on these commitments and subsequently closed loans if interest rates change between the time of the interest rate lock and the delivery of the loan to the investor. Market risk on interest rate lock commitments and mortgage loans held for sale is managed using corresponding forward mortgage loan sales contracts. United is a party to these forward mortgage loan sales contracts to sell loans with servicing released and short sales of mortgage-backed securities. When the interest rate is locked with the borrower, the rate lock commitment, forward sale agreement, and mortgage-backed security position are undesignated derivatives and marked to fair value through earnings. The fair value of the rate lock derivative is measured using valuations from investors for loans with similar characteristics as well as considering the probability of the loan closing (i.e. the “pull-through” rate) with some adjusted for the Company’s actual sales experience versus the investor’s indicated pricing. Fair values of TBA mortgage-backed securities are measured using valuations from investors for mortgage-backed securities with similar characteristics. Income from mortgage banking activities includes the gain recognized for the period presented and associated elements of fair value.
United is subject to the Dodd-Frank Act clearing requirement for eligible derivatives. United has executed and cleared eligible derivatives through the London Clearing House (“LCH”). Variation margin at the LCH is distinguished as settled-to-market and settled daily based on the prior day value, rather than collateralized-to-market. The daily settlement of the derivative exposure does not change or reset the contractual terms of the instrument.
For derivatives that are not designated in a hedge relationship, changes in the fair value of the derivatives are recognized in earnings in the same period as the change in the fair value.
Cash flows from derivative financial instruments are classified as cash flows from operating activities on the consolidated statements of cash flows.
Off-balance-sheet credit exposures
:
United maintains a reserve for lending-related commitments such as unfunded loan commitments and letters of credit. United estimates expected credit losses over the contractual period in which United is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by United. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. Methodology is based on a loss rate approach that starts with the probability of funding based on historical experience. Similar to methodology discussed previously related to the loans and leases receivable portfolio, adjustments are made to the historical losses for current conditions and reasonable and supportable forecast. Adjustments to the reserve for lending-related commitments on off-balance sheet credit exposures is recorded as other expense in the consolidated statements of income. The reserve for lending-related commitments is separately classified on the balance sheet and is included in other liabilities. The combined allowance for loan losses and reserve for lending-related commitments is considered the allowance for credit losses on loans and leases.
Stock-Based Compensation
: Compensation expense related to stock options, restricted stock awards (“RSA”) and restricted stock units (“RSU”) issued to participants is based upon the fair value of the award at the date of grant. The fair value of stock options is estimated at the date of grant using a binomial lattice option pricing model, while the fair value of RSAs is based upon the stock price at the date of grant. RSU grants could be time-vested RSUs, performance-vested RSUs, or a combination of both. The value of the time-vested RSUs and the performance-vested, based on a performance condition, RSUs awarded is established as the fair market value of the stock at the time of the grant. The value of the performance-vested, based on a market condition, RSUs awarded is estimated through the use of a Monte Carlo valuation model as of the grant date. Compensation expense is recognized on a straight-line basis over the vesting period for all stock-based awards and grants.
Stock-based compensation expense was $12,130,000 in 2024, $12,463,000 in 2023, and $9,881,000 in 2022.
Treasury Stock
: United records common stock purchased for treasury at cost. At the date of subsequent reissuance, the treasury stock account is reduced by the cost of such stock using the weighted-average cost method.
Trust Assets and Income:
Assets held in a fiduciary or agency capacity for customers are not included in the balance sheets since such items are not assets of the company. Trust income is reported on an accrual basis.
Earnings Per Common Share:
United calculates earnings per common share in accordance with ASC Topic 260, “Earnings Per Share,” which provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. United has determined that its outstanding non-vested restricted stock awards are participating securities.
Under the two-class method, basic earnings per common share is computed by dividing net earnings allocated to common stock by the weighted-average number of common shares outstanding during the applicable period, excluding outstanding participating securities. Diluted earnings per common share is computed using the weighted-average number of shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method. Antidilutive stock options and restricted stock outstanding of 590,395, 1,410,389, and 656,432 for the years ended December 31, 2024, 2023 and 2022, respectively, were excluded from the earnings per diluted common share calculation.
The reconciliation of the numerator and denominator of basic earnings per share with that of diluted earnings per share is presented as follows:
Year Ended December 31
(Dollars in thousands, except per share)
Distributed earnings allocated to common
stock
  $ 200,156
  $ 195,167
  $ 194,052
Undistributed earnings allocated to common
stock
172,006
170,267
184,572
Net earnings allocated to common
shareholders
  $ 372,162
  $ 365,434
  $ 378,624
Average common shares outstanding
134,947,592
134,505,058
134,776,241
Dilutive effect of stock compensation
277,825
248,762
341,271
Average diluted shares outstanding
135,225,417
134,753,820
135,117,512
Earnings per basic common share
  $ 2.76
  $ 2.72
  $ 2.81
Earnings per diluted common share
  $ 2.75
  $ 2.71
  $ 2.80
Fair Value Measurements
: United determines the fair values of its financial instruments based on the fair value hierarchy established in ASC Topic 820, which also clarifies that fair value of certain assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.
ASC Topic 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect United’s market assumptions.
The three levels of the fair value hierarchy based on these two types of inputs are as follows:
Level 1
- 
Valuation is based on quoted prices in active markets for identical assets and liabilities.
Level 2
- 
Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the market.
Level 3
- 
Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market.
When determining the fair value measurements for assets and liabilities, United looks to active and observable markets to price identical assets or liabilities whenever possible and classifies such items in Level 1. When identical assets and liabilities are not traded in active markets, United looks to market observable data for similar assets and liabilities and classifies such items as Level 2. Nevertheless, certain assets and liabilities are not actively traded in observable markets and United must use alternative valuation techniques using unobservable inputs to determine a fair value and classifies such items as Level 3. For assets and liabilities that are not actively traded, the fair value measurement is based primarily upon estimates that require significant judgment. Therefore, the results may not be realized in an actual sale or immediate settlement of the asset or liability. Additionally, there are inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future values. The level within the fair value hierarchy is based on the lowest level of input that is significant in the fair value measurement.
Recent Accounting Pronouncements
:
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-04,
“Induced Conversions of Convertible Debt Instruments.” ASU 2024-04
provides additional guidance on whether induced conversion or extinguishment accounting should be applied to certain settlements of convertible debt instruments that do not occur in accordance with the instruments’ preexisting terms. ASU 2024-04
requires entities to apply a preexisting contract approach. To qualify for induced conversion accounting under this approach, the inducement offer is required to preserve the form of consideration and result in an amount of consideration that is not less than that issuable pursuant to the preexisting conversion privileges. ASU 2024-04
clarifies how entities should assess the form and amount of consideration when applying this approach. ASU 2024-04
is effective for public business entities for annual periods beginning after December 15, 2025, with early adoption permitted, and can be adopted either on a prospective or retrospective basis. The adoption of ASU 2024-04
is not expected to have an impact on the Company’s financial condition or results of operations.
In November 2024, the FASB issued Accounting Standards Update ASU 2024-03, “Disaggregation of Income Statement Expenses.” ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 adds ASC 220-40 to require a footnote disclosure about specific expenses by requiring public business entities to disaggregate, in a tabular presentation, each relevant expense caption on the face of the income statement that includes any of the following natural expenses: purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities or other types of depletion expenses. Certain other expenses and gains or losses that must be disclosed under existing U.S. GAAP, and that are recorded in a relevant expense caption, must be presented in the same tabular disclosure. ASU 2024-03 does not change or remove existing expense disclosure requirements; however, it may affect where that information appears in the footnote to the financial statements. ASU 2024-03 is effective for public business entities for annual periods beginning after December 15, 2026. Entities are permitted to early adopt the standard and apply retrospectively for annual financial statements that have not yet been issued or made available for issuance. The adoption of ASU 2024-03 is not expected to have an impact on the Company’s financial condition or results of operations but could change certain disclosures in United’s SEC filings.
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09,
“Improvements to Income Tax Disclosures.” ASU 2023-09
enhances annual income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. ASU 2023-09
also includes certain other amendments to improve the
effectiveness of income tax disclosures. ASU 2023-09
is effective for public business entities for annual periods beginning after December 15, 2024. Entities are permitted to early adopt the standard for annual financial statements that have not yet been issued or made available for issuance. The adoption of ASU 2023-09
is not expected to have an impact on the Company’s financial condition or results of operations but could change certain disclosures in United’s SEC filings.
In November 2023, the FASB issued ASU 2023-07,
“Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The amendments in ASU 2023-07
improve reportable segment disclosure requirements, mainly through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments will enable investors to better understand an entity’s overall performance and assess potential future cash flows. ASU No. 2023-07
is effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption of the amendment is permitted. The adoption of ASU 2023-07
did not have an impact on the Company’s financial condition or results of operations but changed certain disclosures in United’s SEC filings starting with this Annual Report on Form 10-K.
In October 2023, the FASB issued ASU 2023-06,
“Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative,” which adopts certain disclosure requirements referred by the SEC. For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X
or Regulation S-K
becomes effective, with early adoption prohibited. For all other entities, the amendments will be effective two years later. The adoption of ASU 2023-06
did not have an impact on the Company’s financial condition or results of operations.
In August 2023, the FASB issued ASU 2023-05, “Business Combinations - Joint Venture Formations (Subtopic 805-60).” ASU 2023-05 requires a joint venture to apply a new basis of accounting at its formation date by valuing the net assets contributed at fair value for both business and asset transactions. The value of the net assets in total is then allocated to individual assets and liabilities by applying Topic 805 with certain exceptions. ASU 2023-05 requires certain disclosures to aid the user of the financial statements in understanding the implications of the joint venture formation. ASU 2023-05 is effective for joint venture formations with a formation date on or after January 1, 2025. The adoption of ASU 2023-05 is not expected to have an impact on the Company’s financial condition or results of operations.
In July 2023, the FASB issued ASU No. 2023-03, “Presentation of Financial Statements (Topic 205), Income Statement-Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation-Stock Compensation (Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280-General Revision of Regulation S-X: Income or Loss Applicable to Common Stock.” ASU 2023-03 amends the ASC for SEC updates pursuant to SEC Staff Accounting Bulletin No. 120; SEC Staff Announcement at the March 24, 2022 Emerging Issues Task Force (“EITF”) Meeting; and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280-General Revision of Regulation S-X: Income or Loss Applicable to Common Stock. These updates were immediately effective and did not have a significant impact on the Company’s financial statements.
In March 2023, the FASB issued Accounting ASU 2023-02, “Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” ASU 2023-02 permits reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. The amendments in this ASU apply to all reporting entities that hold tax equity investments that meet the conditions for and elect to account for them using the proportional amortization method or an investment in a low income housing tax credit (“LIHTC”) structure through a limited liability entity that is not accounted for using the proportional amortization method and to which certain LIHTC-specific guidance removed from Subtopic 323-740 has been applied. Additionally, the disclosure requirements apply to investments that generate income tax credits and other income tax benefits from a tax credit program for which the entity has elected to apply the
proportional amortization method (including investments within that elected program that do not meet the conditions to apply the proportional amortization method). ASU 2023-02
was effective for United on January 1, 2024. The amendments in this update must be applied on either a modified retrospective or a retrospective basis except for LIHTC investments not accounted for using the proportional amortization method. At January 1, 2024, United chose not to elect to account for its tax equity investments using the proportional amortization method.
In December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848.” ASU 2022-06 extends the period of time financial statement preparers can utilize the reference rate reform relief guidance. In 2020, the FASB issued ASU 2020-04 to provide temporary, optional expedients related to the accounting for contract modifications and hedging transactions as a result of the global markets’ anticipated transition away from the use of LIBOR and other interbank offered rates to alternative reference rates. At the time ASU 2020-04 was issued, the United Kingdom’s Financial Conduct Authority (“FCA”) had established the intent that it would no longer be necessary to persuade, or compel, banks to submit to LIBOR after December 31, 2021. As a result, the sunset provision was set for December 31, 2022; 12 months after the expected cessation date of all currencies and tenors of LIBOR. In March 2021, the FCA announced that the intended cessation date of LIBOR in the United States would be June 30, 2023, which has now taken effect as intended. Accordingly, ASU 2022-06 defers the expiration date of ASU 848 to December 31, 2024. United implemented a comprehensive project plan to execute the transition of its LIBOR-based financial instruments to alternative reference rates. United utilized the Secured Overnight Financing Rate (“SOFR”) and Prime as the preferred alternatives to LIBOR.
In June 2022, the FASB issued ASU 2022-
03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.” ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. ASU 2022-03 also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction and requires certain new disclosures for equity securities subject to contractual sale restrictions. ASU 2022-03 was effective for United on January 1, 2024. The adoption of ASU 2022-03 did not have a material impact on the Company’s financial condition or results of operations.
In March 2022, the FASB issued ASU No. 2022-02, “Troubled Debt Restructurings and Vintage Disclosures”. ASU 2022-02 updates the requirements for accounting for credit losses under ASC 326, eliminates the accounting guidance on troubled debt restructurings for creditors in ASC 310-40, and enhances creditors’ disclosure requirements related to loan refinancings and restructurings for borrowers experiencing financial difficulty. ASU 2022-02 also amends the guidance on “vintage disclosures” to require disclosure of gross write-offs by year of origination. ASU No. 2022-02 was effective for public business entities that have adopted Topic 326 for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendment was permitted. ASU No. 2022-02 was adopted by United prospectively for the period beginning January 1, 2023. The adoption did not have a material impact on the Company’s financial condition or results of operations. However, ASU No. 2022-02 did affect the Company’s disclosures. For additional information, see notes to Consolidated Financial Statements, Note E, “Credit Quality,” in this Form 10-K.
In March 2022, the FASB issued ASU No. 2022-01,
“Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method”. ASU 2022-01
further aligns risk management objectives with hedge accounting results on the application of the last-of-layer
method, which was first introduced in ASU No. 2017-12.
The enhanced guidance further improves the last-of-layer
concepts to expand to nonprepayable financial assets and allows more flexibility in the derivative structures used to hedge the interest rate risk. ASU 2022-01
also provides guidance on the relationship between the portfolio layer method requirements and other areas of GAAP. ASU No. 2022-01
is effective for public business entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendment is permitted if an entity has adopted ASU 2017-12
for the corresponding period. ASU No. 2022-01
was adopted by United on January 1, 2023. The adoption did not have a material impact on the Company’s financial condition or results of operations.
In October 2021, the FASB issued ASU No. 2021-08,
“Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”. ASU 2021-08
amends ASC 805 to add contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations and to require that an entity acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. As a result of these amendments, it is expected that an acquirer
will generally recognize and measure acquired contract assets and contract liabilities in a manner consistent with how the acquiree recognized and measured them in its preacquisition financial statements. ASU No. 2021-08
is effective for public business entities
for fiscal years beginning after December
15,
2022, including interim periods within those fiscal years. The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption of the amendments is permitted. ASU
No.
2021-08 was adopted by the Company on January
1,
2023. The adoption did
not
have a
material
impact on the Company’s financial condition or results of operations.
NOTE B--MERGERS
AND ACQUISITIONS
On January 10, 2025, United consummated its acquisition of Piedmont. Piedmont was merged with and into United (the “Merger”), pursuant to the terms of the Agreement and Plan of Merger, dated May 9, 2024, by and between United and Piedmont (the “Agreement”). The Merger was accounted for under the acquisition method of accounting.
Piedmont, headquartered in Atlanta, Georgia had total assets of approximately $2.4 billion, total loans of approximately $2.1 billion, total liabilities of approximately $2.2 billion, total deposits of approximately $2.1 billion, and total shareholders’ equity of approximately $202 million as of January 10, 2025. Piedmont was the holding company for The Piedmont Bank, a Georgia state-chartered bank, with sixteen locations in the
State of Georgia. 
Under the terms of the Agreement, each outstanding share of common stock of Piedmont was converted into the right to receive 0.3 shares of United common stock, par value $2.50 per share.
Also pursuant to the Agreement, as of the effective time of the Merger, each option to purchase shares of Piedmont Common Stock (each, a “Piedmont Stock Option”) that is outstanding under the Piedmont Bancorp, Inc. 2009 Stock Option Plan (the “Piedmont Stock Plan”) immediately prior to the Effective Time, was, to the extent not vested, became fully vested and exercisable and was canceled in consideration for the right to receive a lump sum cash payment with respect thereto equal to the product of: (i) the excess, if any, of the product of (A) the volume-weighted average of the closing sales price on Nasdaq of United Common Stock for the 10 full trading days ending on the second trading day immediately preceding the Effective Date (the “Average United Closing Price”) multiplied by (B) the Exchange Ratio, over the applicable exercise price of such Piedmont Stock Option; and (ii) the number of shares of Piedmont Common Stock subject to such Piedmont Stock Option, less any required withholding taxes.
Also pursuant to the Agreement, as of the effective time of the Merger, each warrant to purchase shares of Piedmont Common Stock (each, a “Piedmont Stock Warrant”) that was outstanding under the Piedmont Stock Plan or individual award agreement immediately prior to the Effective Time, was, to the extent not vested, became fully vested and exercisable and canceled, and in consideration therefor, at the election of the holder (i) converted into a warrant to purchase shares of United common stock with adjustments to the exercise price and number of shares to take into account the Exchange Ratio or (ii) received a lump sum cash payment with respect thereto equal to the product of: (A) the excess, if any, of the product of (x) the Average United Closing Price multiplied by (y) the Exchange Ratio, over the applicable exercise price of such Piedmont Stock Warrant; and (B) the number of shares of Piedmont Common Stock subject to such Piedmont Stock Warrant, less any required withholding taxes.
In addition, at the Effective Time, each restricted stock grant, restricted stock unit grant and any other award in respect of a share of Piedmont Common Stock subject to vesting, repurchase or other lapse restriction under a Piedmont Stock Plan that was outstanding immediately prior to the Effective Time other than a Piedmont Option or a Piedmont Stock Warrant (each, a “Piedmont Stock Award”) became fully vested, cancelled and converted automatically into the right to receive the Merger Consideration (with any fractional share being entitled to receive cash in lieu thereof) in respect of each share of Piedmont Common Stock underlying such Piedmont Stock Award, less any required withholding taxes.
Immediately following the Merger, The Piedmont Bank, a wholly-owned subsidiary of Piedmont, merged with and into United Bank, a wholly-owned subsidiary of United (the “Bank Merger”) pursuant to an Agreement and Plan of Merger dated May 9, 2024 (the “Bank Plan of Merger”). United Bank survived the Bank Merger and continues to exist as a Virginia banking corporation. For the year of 2024, United recorded acquisition-related costs of $2,870,000.
NOTE C--INVESTMENT
SECURITIES
Securities Available for Sale
Securities held for indefinite periods of time are classified as available for sale and carried at estimated fair value. The amortized cost and estimated fair values of securities available for sale are summarized as follows.
December 31, 2024
Gross
Gross
Allowance
Estimated
(Dollars in thousands)
Amortized
Unrealized
Unrealized
For Credit
Fair
Cost
Gains
Losses
Losses
Value
U.S. Treasury securities and obligations of U.S. Government corporations and agencies
$ 248,867
$
$ 3,084
$
$ 245,842
State and political subdivisions
574,580
79,515
495,073
Residential mortgage-backed securities
Agency
1,226,400
167,114
1,059,719
Non-agency
88,392
6,531
82,123
Commercial mortgage-backed securities
Agency
372,646
42,698
329,986
Asset-backed securities
476,863
2,047
474,982
Single issue trust preferred securities
13,296
1,377
11,919
Other corporate securities
281,646
21,571
260,075
Total
$
3,282,690
$
$ 323,937
$
$
2,959,719
December 31, 2023
Gross
Gross
Allowance
Estimated
(Dollars in thousands)
Amortized
Unrealized
Unrealized
For Credit
Fair
Cost
Gains
Losses
Losses
Value
U.S. Treasury securities and obligations of U.S. Government corporations and agencies
$ 492,638
$
$ 7,692
$
$ 484,950
State and political subdivisions
613,588
79,768
533,831
Residential mortgage-backed securities
Agency
1,217,744
167,810
1,049,941
Non-agency
100,364
9,753
90,611
Commercial mortgage-backed securities
Agency
511,560
52,275
459,298
Asset-backed securities
872,048
11,454
860,638
Single issue trust preferred securities
16,380
1,239
15,141
Other corporate securities
325,573
33,606
291,967
Total
$
4,149,895
$
$ 363,597
$
$  3,786,377
For the adoption of ASC Topic 326, “Financial Instruments-Credit Losses,” United made a policy election to exclude accrued interest from the amortized cost basis of available-for-sale debt securities and report accrued interest separately in “Accrued interest receivable” in the consolidated balance sheets. Available-for-sale debt securities are placed on non-accrual status when we no longer expect to receive all contractual amounts due, which is generally at 90 days past due. Accrued interest receivable is reversed against interest income when a security is placed on non-accrual status. Accordingly, United does not currently recognize an allowance for credit loss against accrued interest receivable on available-for-sale debt securities. The table above excludes accrued interest receivable of $14,776,000 and $20,878,000 at December 31, 2024 and December 31, 2023, respectively, that is recorded in “Accrued interest receivable.”
The following is a summary of securities available for sale which were in an unrealized loss position at December 31, 2024 and December 31, 2023.
Less than 12 months
12 months or longer
Total
Fair
Unrealized
Fair
Unrealized
Fair
Unrealized
(Dollars in thousands)
Value
Losses
Value
Losses
Value
Losses
December 31, 2024
U.S. Treasury securities and obligations of U.S. Government corporations and agencies
$ 1,476
$
$ 42,886
$ 3,081
$ 44,362
$ 3,084
State and political subdivisions
3,314
479,681
79,493
482,995
79,515
Residential mortgage-backed securities
Agency
128,655
1,660
856,448
165,454
985,103
167,114
Non-agency
59,668
6,531
59,668
6,531
Commercial mortgage-backed securities
Agency
319,506
42,698
319,506
42,698
Asset-backed securities
83,188
215,886
1,997
299,074
2,047
Single issue trust preferred securities
11,919
1,377
11,919
1,377
Other corporate securities
2,476
252,634
21,547
255,110
21,571
Total
$ 219,109
$ 1,759
$ 2,238,628
$ 322,178
$ 2,457,737
$ 323,937
Less than 12 months
12 months or longer
Total
Fair
Unrealized
Fair
Unrealized
Fair
Unrealized
(Dollars in thousands)
Value
Losses
Value
Losses
Value
Losses
December 31, 2023
U.S. Treasury securities and obligations of U.S. Government corporations and agencies
$ 4,625
$
$ 477,615
$ 7,681
$ 482,240
$ 7,692
State and political subdivisions
2,050
517,186
79,575
519,236
79,768
Residential mortgage-backed securities
Agency
9,755
1,038,632
167,759
1,048,387
167,810
Non-agency
8,964
81,647
9,652
90,611
9,753
Commercial mortgage-backed securities
Agency
456,866
52,275
456,866
52,275
Asset-backed securities
15,866
829,778
11,238
845,644
11,454
Single issue trust preferred securities
2,922
12,219
1,057
15,141
1,239
Other corporate securities
274,308
33,606
274,308
33,606
Total
$ 44,182
$
$ 3,688,251
$ 362,843
$ 3,732,433
$ 363,597
The following table shows the proceeds from maturities, sales and calls of available for sale securities and the gross realized gains and losses on sales and calls of those securities that have been included in earnings as a result of any sales and calls. Gains or losses on sales and calls of available for sale securities were recognized by the specific identification method.
Year Ended
(In thousands)
Proceeds from maturities, sales and calls
$ 2,914,095
$  952,213 
$  575,748 
Gross realized gains
 
 
 
Gross realized losses
16,296 
7,659 
At December 31, 2024, gross unrealized losses on available for sale securities were $323,937,000 on 958 securities of a total portfolio of 1,029 available for sale securities. Securities with the most significant gross unrealized losses at December 31, 2024 consisted primarily of agency residential mortgage-backed securities, state and political subdivision securities, agency commercial mortgage-backed securities, and other corporate securities.
In determining whether or not a security is impaired, management considered the severity of the loss in conjunction with United’s positive intent and the more likely than not ability to hold these securities to recovery of their cost basis or maturity. Generally, the significant amount of gross unrealized losses on available for sale securities at December 31, 2024 was the result of rising interest rates.
State and political subdivisions
United’s state and political subdivisions portfolio relates to securities issued by various municipalities located throughout the United States. The total amortized cost of available for sale state and political subdivision securities was $574,580,000 at December 31, 2024. As of December 31, 2024, approximately 46% of the portfolio was supported by the general obligation of the issuing municipality, which allows for the securities to be repaid by any means available to the municipality. The majority of the portfolio was rated AA or higher, and no securities within the portfolio were rated below investment grade as of December 31, 2024. In addition to monitoring the credit ratings of these securities, management also evaluates the financial performance of the underlying issuers on an ongoing basis. Based upon management’s analysis and judgment, it was determined that none of the state and political subdivision securities had credit losses at December 31, 2024.
Mortgage-backed securities
The fair value of mortgage-backed
securities is affected by changes in interest rates and prepayment speeds. When interest rates decline, prepayment speeds generally accelerate due to homeowners refinancing their mortgages at lower interest rates. This may result in the proceeds being reinvested at lower interest rates. Rising interest rates may decrease the assumed prepayment speed. Slower prepayment speeds may extend the maturity of the security beyond its estimated maturity. Therefore, investors may not be able to invest at current higher market rates due to the extended expected maturity of the security. United had a net unrealized loss of $215,610,000 on mortgage-backed
securities at December 31, 2024. Below is a detailed discussion of mortgage-backed securities by type.
United’s agency mortgage-backed securities portfolio relates to securities issued by Fannie Mae, Freddie Mac, and Ginnie Mae. The total amortized cost of available for sale agency mortgage-backed securities was $1,599,046,000 at December 31, 2024. Of the $1,599,046,000 amount, $372,646,000 was related to agency commercial mortgage-backed securities and $1,226,400,000 was related to agency residential mortgage-backed securities. Each of the agency mortgage-backed securities provides a guarantee of full and timely payments of principal and interest by the issuing agency. Based upon management’s analysis and judgment, it was determined that none of the agency mortgage-backed securities had credit losses at December 31, 2024.
United’s non-agency residential mortgage-backed securities portfolio relates to securities of various private label issuers. The total amortized cost of available for sale non-agency residential mortgage-backed securities was $88,392,000 at December 31, 2024. Of the $88,392,000, 100% was rated AAA. Based upon management’s analysis and judgment, it was determined that none of the non-agency residential mortgage-backed securities had credit losses at December 31, 2024.
Asset-backed securities
As of December 31, 2024, United’s asset-backed securities portfolio had a total amortized cost balance of $476,863,000. 100% of the portfolio was investment grade rated as of December 31, 2024. Approximately 34% of the portfolio relates to securities that are backed by Federal Family Education Loan Program (“FFELP”) student loan collateral which includes a minimum of a 97% government repayment guaranty, as well as additional credit support and subordination in excess of the government guaranteed portion. Approximately 66% of the portfolio relates to collateralized loan obligation securities that are all AAA rated. Upon reviewing this portfolio as of December 31, 2024, it was determined that none of the asset-backed securities had credit losses.
Single issue trust preferred securities
The majority of United’s single issue trust preferred portfolio consists of obligations from large cap banks (i.e. banks with market capitalization in excess of $10 billion). All single issue trust preferred securities are currently receiving interest payments. The amortized cost of available for sale single issue trust preferred securities as of December 31, 2024 consisted of $7,481,000 in investment grade bonds and $5,815,000 in unrated bonds. Management reviews each issuer’s current and projected earnings trends, asset quality, capitalization levels, and other key factors. Upon completing the review for the fourth quarter of 2024, it was determined that none of the single issue trust preferred securities had credit losses.
Corporate securities
As of December 31, 2024, United’s other corporate securities portfolio had a total amortized cost balance of $281,646,000. The majority of the portfolio consisted of debt issuances of corporations representing a variety of industries, including financial institutions. Of the $281,646,000, 95% had at least one rating above investment grade, 2% were below investment grade rated, and 3% were unrated. For other corporate securities, management has evaluated the near-term prospects of the investment in relation to the severity of any unrealized loss. Based upon management’s analysis and judgment, it was determined that none of the other corporate securities had credit losses at December 31, 2024.
The amortized cost and estimated fair value of securities available for sale at December 31, 2024 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because the issuers may have the right to call or prepay obligations without penalties.
Maturities of mortgage-backed securities with an amortized cost of $1,687,438,000 and an estimated fair value of $1,471,828,000 at December 31, 2024 are included below based upon contractual maturity.
(In thousands)
 Amortized 
Cost
 Estimated 
Fair Value
Due in one year or less
$ 262,093
$ 261,458
Due after one year through five years
405,617
375,276
Due after five years through ten years
863,601
779,069
Due after ten years
1,751,379
1,543,916
Total
$ 3,282,690
$ 2,959,719
Equity securities at fair value
Equity securities consist mainly of equity securities of financial institutions, mutual funds of Community Reinvestment Act (“CRA”) qualified investments and equity securities within a rabbi trust for the payment of benefits under a deferred compensation plan for certain key officers of United and its subsidiaries. The fair value of United’s equity securities was $21,058,000 at December 31, 2024 and $8,945,000 at December 31, 2023.
Year Ended
(In thousands)
December 31, 2024
December 31, 2023
Net gains recognized during the period on equity securities sold
$ 4,602
$
Unrealized gains recognized during the period on equity securities still held at period end
4,259
Unrealized losses recognized during the period on equity securities still held at period end
(285 )
(345 )
Net gains (losses) recognized during the period
$ 8,576
$
Other investment securities
During the fourth quarter of 2024, United evaluated all of its cost method investments to determine if certain events or changes in circumstances during the fourth quarter of 2024 had a significant adverse effect on the recorded value of any of its cost method securities. United determined that there was no individual security that experienced an adverse event during the fourth quarter. There were no other events or changes in circumstances during the fourth quarter which would have an adverse effect on the recorded fair value of its cost method securities.
The carrying value of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes as required or permitted by law, approximated $2,038,864,000 and $2,307,591,000 at December 31, 2024 and December 31, 2023, respectively.
NOTE D-LOANS AND LEASES
Major classes of loans and leases are as follows:
(In thousands)
December 31,
December 31,
Commercial, financial and agricultural:
Owner-occupied commercial real estate
$ 1,590,002
$ 1,598,231
Nonowner-occupied commercial real estate
6,939,641
6,718,343
Other commercial
3,351,362
3,572,440
Total commercial, financial & agricultural
11,881,005
11,889,014
Residential real estate
5,507,384
5,271,236
Construction & land development
3,509,034
3,148,245
Consumer:
Bankcard
9,998
9,962
Other consumer
773,077
1,054,728
Less: Unearned income
(7,005 )
(14,101 )
Loans and leases, net of unearned income
$ 21,673,493
$ 21,359,084
The table above does not include loans held for sale of $44,360,000 and $56,261,000 at December 31, 2024 and December 31, 2023, respectively. Loans held for sale consist of single-family residential real estate loans originated for sale in the secondary market.
At December 31, 2024 and 2023, loans-in-process of $5,569,000 and $6,370,000 and overdrafts from deposit accounts of $4,919,000 and $7,146,000, respectively, are included within the appropriate loan classifications above. The outstanding loan balances in the table above also include unamortized net discounts of $26,322,000 and $35,586,000 at December 31, 2024 and December 31, 2023, respectively.
United’s subsidiary bank has made loans, in the normal course of business, to the directors and officers of United and its subsidiaries, and to their associates. The aggregate dollar amount of these loans was $22,702,000 and $68,460,000 at December 31, 2024 and 2023, respectively. During 2024, $1,014,000 of new loans were made and repayments totaled $46,772,000.
NOTE E--CREDIT
QUALITY
Management monitors the credit quality of its loans and leases on an ongoing basis. Measurement of delinquency and past due status are based on the contractual terms of each loan. United considers a loan to be past due when it is 30 days or more past its contractual payment due date.
For all loan classes, past due loans and leases are reviewed on a monthly basis to identify loans and leases for nonaccrual status. Generally, when collection in full of the principal and interest is jeopardized, the loan is placed on nonaccrual status. The accrual of interest income on commercial and most consumer loans generally is discontinued when a loan becomes 90 to 120 days past due as to principal or interest. However, regardless of delinquency status, if a loan is fully secured and in the process of collection and resolution of collection is expected in the near term (generally less than 90 days), then the loan will not be placed on nonaccrual status. When interest accruals are discontinued, unpaid interest recognized in income in the current year is reversed, and unpaid interest accrued in prior years is charged to the allowance for credit losses. United’s method of income recognition for loans and leases that are classified as nonaccrual is to recognize interest income on a cash basis or apply the cash receipt to principal when the ultimate collectability of principal is in doubt. Nonaccrual loans and leases will not normally be returned to accrual status unless all past due principal and interest has been paid and the borrower has evidenced their ability to meet the contractual provisions of the note.
The following table sets forth United’s age analysis of its past due loans and leases, segregated by class of loans and leases:
Age Analysis of Past Due Loans and Leases
As of December 31, 2024
(In thousands)
30-89
 Days Past 
Due
90 Days or
more Past
Due
 Total Past 
Due
Current &
Other
Total
Financing
 Receivables 
90 Days or
More Past
Due &
Accruing
Commercial real estate:
Owner-occupied
$ 3,767
$ 1,284
$ 5,051
$ 1,584,951
$ 1,590,002
$
Nonowner-occupied
11,931
23,379
35,310
6,904,331
6,939,641
Other commercial
5,594
19,019
24,613
3,326,749
3,351,362
Residential real estate
33,783
20,946
54,729
5,452,655
5,507,384
12,429
Construction & land
development
4,265
4,655
3,504,379
3,509,034
1,677
Consumer:
Bankcard
9,874
9,998
Other consumer
28,414
4,446
32,860
740,217
773,077
2,342
Total
$    83,942
$    73,400
$    157,342
$    21,523,156
$    21,680,498
$    16,940
Age Analysis of Past Due Loans and Leases
As of December 31, 2023
(In thousands)
30-89
 Days Past 
Due
90 Days or
more Past
Due
 Total Past 
Due
Current &
Other
Total
Financing
 Receivables 
90 Days or
More
Past Due &
 Accruing 
Commercial real estate:
Owner-occupied
$ 6,361
$ 6,335
$ 12,696
$ 1,585,535
$ 1,598,231
$
Nonowner-occupied
10,373
13,146
23,519
6,694,824
6,718,343
2,460
Other commercial
3,218
1,224
4,442
3,567,998
3,572,440
Residential real estate
26,523
12,136
38,659
5,232,577
5,271,236
6,244
Construction & land
development
6,423
7,302
3,140,943
3,148,245
Consumer:
Bankcard
9,690
9,962
Other consumer
36,451
6,107
42,558
1,012,170
1,054,728
5,078
Total
$ 83,950
$ 45,498
$ 129,448
$ 21,243,737
$ 21,373,185
$ 14,579
The following table sets forth United’s nonaccrual loans and leases, segregated by class of loans and leases:
At December 31, 2024
At December 31, 2023
(In thousands)
Nonaccruals
With No
Related
Allowance
for Credit
Losses
Nonaccruals
With No
Related
Allowance
for Credit
Losses
Commercial Real Estate:
Owner-occupied
$ 1,284
$ 1,284
$ 6,225
$ 6,225
Nonowner-occupied
23,379
8,475
10,686
10,686
Other Commercial
18,588
Residential Real Estate
8,517
5,562
5,892
5,892
Construction
2,588
2,589
6,423
6,423
Consumer:
Bankcard
Other consumer
2,104
2,104
1,029
1,029
Total
$ 56,460
$ 20,598
$ 30,919
$ 30,919
Interest income recognized on nonaccrual loans was insignificant during the year ended December 31, 2024 and 2023.
In some cases, United will modify a loan to a borrower experiencing financial difficulty by providing multiple types of concessions such as a term extension, principal forgiveness, an interest rate reduction or a combination thereof. The following table presents the amortized cost of loans and leases to borrowers experiencing financial difficulty modified during the years of 2024 and 2023, respectively, by class of financing receivable and by type of modification. The percentage of the amortized cost basis of loans and leases that were modified to borrowers experiencing financial difficulty as compared to the amortized cost basis of each class of financing receivable is also represented below.
Amortized Cost Basis of Lo
an Modifications Made to Borrowers Experiencing Financial Difficulty
For the Year ended December 31, 2024
Term
 Extension 
 Interest Rate 
Reduction
Term Extension &
 Interest Rate 
Reduction
Term Extension &
Payment Delay
% of Total Class of
Financing Receivable
Commercial real estate:
Owner-occupied
$
$
$
$
0.03 %
Nonowner-occupied
5,765
0.08 %
Other commercial
2,400
0.00 %
Residential real
estate
0.06 %
Construction & land
development
0.00 %
Consumer:
Bankcard
0.00 %
Other consumer
0.00 %
Total
$   6,447
$
$   2,400
$
0.04 %
Amortized Cost Basis of Loan Modifications Made to Borrowers Experiencing Financial Difficulty
For the Year ended December 31, 2023
Term
 Extension 
 Interest Rate 
Reduction
Term Extension &
 Interest Rate 
Reduction
Term Extension &
Payment Delay
% of Total Class of
Financing Receivable
Commercial real estate:
Owner-occupied
$
$
$
$
0.03 %
Nonowner-occupied
31,633
1,737
0.50 %
Other commercial
0.00 %
Residential real
estate
0.01 %
Construction & land
development
0.00 %
Consumer:
Bankcard
0.00 %
Other consumer
0.00 %
Total
$   32,788
$   1,737
$
$
0.16 %
As of December 31, 2024, there was a commitment to lend additional funds of $1,199,000 to two debtors owing a loan receivable whose terms have been modified.
United’s estimate of future credit losses uses a lifetime methodology, derived from modeled loan performance based on the extensive historical experience of loans with similar risk characteristics, adjusted to reflect current conditions and reasonable and supportable forecasts. The historical loss experience used in United’s credit loss models includes the impact of loan modifications provided to borrowers experiencing financial difficulty, and also includes the impact of projected loss severities as a result of loan defaults.
United closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance in the 12 months after a modification made to borrowers experiencing financial difficulty presented by class of financing receivable:
Payment Status (Amortized Cost Basis)
As of December 31, 2024
As of December 31, 2023
Current
30-89
 Days Past 
Due
90+
 Days Past 
Due
Current
30-89
 Days Past 
Due
90+
 Days Past 
Due
Commercial real estate:
Owner-occupied
$
$
$
$
$
$
Nonowner-occupied
1,366
4,399
33,370
Other commercial
2,400
Residential real estate
Construction & land development
Consumer:
Bankcard
Other consumer
Total
$
4,560
$
4,455
$
$
34,425
$
$
The following table presents the financial effect of loan and lease modifications to borrowers experiencing financial difficulty for the year ended December 31, 2024 and 2023.
For the Year Ended
December 31, 2024
December 31, 2023
Weighted-
Average
 Interest Rate 
Reduction
Weighted
 Average Term 
Extension
(in years)
Weighted-
Average
Interest Rate
Reduction
Weighted
 Average Term 
Extension 
(in years)
Commercial Real Estate:
Owner-occupied
  0.00 %
  0.3
  0.00 %
  1.0
Nonowner-occupied
0.00 %
0.5
1.50 %
1.4
Other Commercial
1.00 %
0.3
0.00 %
1.8
Residential Real Estate
0.00 %
4.9
0.00 %
4.6
Construction & land development
0.00 %
4.5
0.00 %
Consumer:
Bankcard
0.00 %
0.00 %
Other consumer
  0.00 %
0.00 %
The following table presents loan or lease modifications completed within the last 12 months to borrowers experiencing financial difficulty had a payment default during the year ended December 31, 2024. No loan or lease modifications completed within the last 12 months to borrowers experiencing financial difficulty had a payment default during the year ended December 31, 2023.
Amortized Cost Basis of Modified Loans That Subsequently Defaulted
For the Year ended December 31, 2024
Term
 Extension 
 Interest Rate 
Reduction
Term
Extension &
Interest Rate
Reduction
Term
Extension &
Payment
Delay
% of Total Class of
 Financing Receivable 
Commercial real estate:
Owner-occupied
$
$
$
$
0.00 %
Nonowner-occupied
0.00 %
Other commercial
0.00 %
Residential real estate
0.00 %
Construction & land development
0.02 %
Consumer:
Bankcard
0.00 %
Other consumer
0.00 %
Total
$
$
$
$
0.00 %
United elected the practical expedient to measure expected credit losses on collateral dependent loans and leases based on the difference between the loan’s amortized cost and the collateral’s fair value, adjusted for selling costs.
The following table presents the amortized cost basis of collateral-dependent loans and leases in which repayment is expected to be derived substantially through the operation or sale of the collateral and where the borrower is experiencing financial difficulty, by class of loans and leases as of December 31, 2024 and December 31, 2023:
Collateral Dependent Loans and Leases
At December 31, 2024
(In thousands)
Residential
Property
Business
Assets
Land
Commercial
Property
Other
Total
Commercial real estate:
Owner-occupied
$
$
$
$ 3,119
$ 6,465
$ 9,589
Nonowner-occupied
7,037
23,975
2,367
33,379
Other commercial
15,816
5,041
21,385
Residential real estate
7,348
7,359
Construction & land development
2,492
3,365
Consumer:
Bankcard
Other consumer
Total
$ 14,390
$ 15,816
$ 2,492
$ 32,135
$ 10,244
$ 75,077
Collateral Dependent Loans and Leases
At December 31, 2023
(In thousands)
Residential
Property
Business
Assets
Land
Commercial
Property
Other
Total
Commercial real estate:
Owner-occupied
$
$
$
$ 5,208
$ 9,272
$ 14,507
Nonowner-occupied
11,200
13,555
1,810
26,565
Other commercial
5,193
6,340
Residential real estate
9,775
9,775
Construction & land
development
3,661
3,314
7,929
Consumer:
Bankcard
Other consumer
Total
$ 21,956
$
$ 3,661
$ 23,956
$ 14,652
$ 65,116
United categorizes loans and leases into risk categories based on relevant information about the ability of borrowers to service their debt: current financial information, historical payment experience, credit documentation, underlying collateral (if any), public information and current economic trends, among other factors.
United uses the following definitions for risk ratings:
·
Pass
·
Special Mention
·
Substandard
·
Doubtful
For United’s loans with a corporate credit exposure, United analyzes loans individually to classify the loans as to credit risk. Review and analysis of criticized (special mention-rated loans in the amount of $1,000,000 or greater) and classified (substandard-rated and worse in the amount of $500,000 and greater) loans is completed once per quarter. Review of notes with committed exposure of $3,000,000 or greater is completed at least annually. For loans with a consumer credit exposure, United internally assigns a grade based upon an individual loan’s delinquency status. United reviews and updates, as necessary, these grades on a quarterly basis.
Special mention loans, with a corporate credit exposure, have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loans or in the Company’s credit position at some future date. Borrowers may be experiencing adverse operating trends (declining revenues or margins) or an ill proportioned balance sheet (e.g., increasing inventory without an increase in sales, high leverage, tight liquidity). Adverse economic or market conditions, such as interest rate increases or the entry
of a new competitor, may also support a special mention rating. Nonfinancial reasons for rating a credit exposure special mention include management problems, pending litigation, an ineffective loan agreement or other material structural weakness, and any other significant deviation from prudent lending practices. For loans with a consumer credit exposure, loans that are past due
30-89 days are generally considered special mention.
A substandard loan with a corporate credit exposure is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt by the borrower. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. They require more intensive supervision by management. Substandard loans are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity, or marginal capitalization. Repayment may depend on collateral or other credit risk mitigants. For some substandard loans, the likelihood of full collection of interest and principal may be in doubt and thus, placed on nonaccrual. For loans with a consumer credit exposure, loans that are 90 days or more past due or that have been placed on nonaccrual are considered substandard.
A loan with corporate credit exposure is classified as doubtful if it has all the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection in full, on the basis of currently existing facts, conditions, and values, highly questionable. A doubtful loan has a high probability of total or substantial loss, but because of specific pending events that may strengthen the loan, its classification as loss is deferred. Doubtful borrowers are usually in default, lack adequate liquidity or capital, and lack the resources necessary to remain an operating entity. Pending events can include mergers, acquisitions, liquidations, capital injections, the perfection of liens on additional collateral, the valuation of collateral, and refinancing. Generally, there are not any loans with a consumer credit exposure that are classified as doubtful. Usually, they are charged-off
prior to such a classification.
Based on the most recent analysis performed, the risk category of loans and leases as well as charge-offs and recoveries by class of loans is as follows. Loans originated in any year may be renewals of existing loans and not necessarily new loans.
Commercial Real Estate - Owner-occupied
Revolving
loans
converted to
(In thousands)
Term Loans
Origination Year
Revolving loans
amortized cost
As of December 31, 2024
Prior
basis
term loans
Total
Internal Risk Grade:
Pass
$ 236,547
$ 132,095
$ 243,103
$ 225,152
$ 205,461
$ 467,417
$ 29,900
$
$ 1,539,675
Special Mention
15,199
8,545
23,744
Substandard
3,493
21,744
26,357
Doubtful
Total
$ 236,794
$ 132,095
$ 246,596
$ 225,152
$ 205,768
$ 504,586
$ 38,890
$
$ 1,590,002
Current-period charge-offs
(116 )
(116 )
Current-period recoveries
1,168
1,183
Current-period net recoveries
 $
$
$
$
$
$     1,052
$
$
$   1,067
(In thousands)
Term Loans
Origination Year
Revolving loans
amortized cost
Revolving
loans and
leases
converted
to
As of December 31, 2023
Prior
basis
term loans
Total
Internal Risk Grade:
Pass
$
132,376
  $
316,117
  $
246,635
$
248,861
$
109,182
$
465,223
$
29,619
$
$
1,548,013
Special Mention
2,460
15,423
18,008
Substandard
1,734
28,469
31,966
Doubtful
Total
$
132,376
$
317,851
$
246,909
$
249,336
$
112,078
$
509,359
$
 30,193
$
$
1,598,231
Current-period charge-offs
(855
)
(855
)
Current-period recoveries
Current-period net recoveries (charge-offs)
$
$
$
$
$
$
    (681)
$
$
$
    (668)
Commercial Real Estate - Nonowner-occupied
(In thousands)
Term Loans
Origination Year
Revolving loans
amortized cost
Revolving loans
converted to
As of December 31, 2024
Prior
basis
term loans
Total
Internal Risk Grade:
Pass
$
741,996
$
485,437
$
1,623,423
$
1,294,232
$
639,143
$
1,584,833
$
160,243
$
$
6,529,385
Special Mention
8,465
82,240
29,940
210,912
331,557
Substandard
4,085
4,020
48,633
21,818
78,699
Doubtful
Total
$
741,996
$
485,437
$
1,635,973
$
1,380,492
$
669,226
$
1,844,378
$
182,061
$
$
6,939,641
Current-period charge-offs
(751
)
(1,830
)
(2,581
)
Current-period recoveries
Current-period net recoveries
(charge-offs)
$
$
$
$
$
(751
)
$
(1,630
)
$
$
$
(2,381
)
(In thousands)
Term Loans
Origination Year
Revolving loans
amortized cost
basis
Revolving loans
and leases
converted to
term loans
As of December 31, 2023
Internal
Risk
Grade:
Prior
Total
Pass
$
455,399
$
1,428,880
$
1,587,315
$
717,189
$
695,492
$
1,335,526
$
228,743
$
$
6,448,650
Special Mention
4,614
2,381
25,437
43,017
104,997
30,651
211,097
Substandard
4,020
4,736
3,493
46,347
58,596
Doubtful
Total
$
455,399
$
1,433,494
$
1,593,716
$
747,362
$
742,002
$
1,486,870
$
259,394
$
$
6,718,343
Current-period charge-offs
(24
)
(24
)
Current-period recoveries
1,233
1,233
Current-period net recoveries
$
$
$
$
$
$
1,209
$
$
$
1,209
Other commercial
(In thousands)
Term Loans and leases
Origination Year
Revolving
loans and leases
amortized cost
Revolving
loans and leases
converted to
As of December 31, 2024
Prior
basis
term loans
Total
Internal Risk Grade:
Pass
$
403,641
$
505,947
$
378,072
$
394,412
$
164,671
$
519,488
$
912,293
$
$
3,278,524
Special Mention
1,129
18,941
4,652
25,429
Substandard
18,927
7,029
11,262
8,706
47,384
Doubtful
Total
$
403,928
$
506,402
$
398,128
$
401,780
$
165,757
$
549,716
$
925,651
$
$
3,351,362
Current-period charge-offs
(464
)
(252
)
(156
)
(148
)
(1,352
)
(1,217
)
(3,589
)
Current-period recoveries
1,512
1,650
Current-period net (charge-
offs) recoveries
$
$
(397
)
$
(243
)
$
(111
)
$
(148
)
$
$
(1,210
)
$
$
(1,939
)
(In thousands)
Term Loans and leases
Origination Year
Revolving
loans and leases
amortized cost
Revolving
loans and leases
converted to
As of December 31, 2023
Prior
basis
Total
Internal Risk Grade:
Pass
$
593,153
$
596,258
$
477,457
$
197,173
$
187,560
$
447,430
$
988,809
$
$
3,487,853
Special Mention
4,798
1,775
1,611
2,093
16,901
27,956
Substandard
1,059
16,248
11,923
25,597
56,585
Doubtful
Total
$
594,433
$
617,304
$
478,305
$
199,740
$
189,831
$
461,492
$
1,031,307
$
$
3,572,440
Current-period charge-offs
(88
)
(163
)
(233
)
(661
)
(567
)
(217
)
(78
)
(2,007
)
Current-period recoveries
1,699
1,729
Current-period net (charge-
offs) recoveries
$
(88
)
$
(163
)
$
(233
)
$
$
(636
)
$
1,132
$
(212
)
$
(78
)
$
(278
)
Residential Real Estate
(In thousands)
Term Loans
Origination Year
Revolving
loans
amortized cost
basis
Revolving
loans
converted to
term loans
As of December 31, 2024
Prior
Total
Internal Risk Grade:
Pass
$ 407,430
$ 820,059
$ 1,617,541
$ 827,395
$ 396,094
$ 971,226
$ 447,363
$ 2,467
$ 5,489,575
Special Mention
2,466
1,326
4,281
Substandard
12,430
13,528
Doubtful
Total
$ 407,812
$ 820,166
$ 1,617,541
$ 827,903
$ 396,094
$ 986,122
$ 449,196
$ 2,550
$ 5,507,384
Current-period charge-offs
(7 )
(2 )
(359 )
(113 )
(481 )
Current-period recoveries
Current-period net (charge- offs) recoveries
$
$ (7 )
$ (2 )
$
$
$
$ (112 )
$
$
(In thousands)
Term Loans
Origination Year
Revolving loans a
mortized cost
Revolving
loans
converted to
term loans
As of December 31, 2023
Prior
basis
Total
Internal Risk Grade:
Pass
$ 783,866
$ 1,618,774
$ 850,760
$ 443,514
$ 262,524
$ 863,186
$ 423,302
$ 2,568
$ 5,248,494
Special Mention
3,561
1,710
5,336
Substandard
14,827
1,121
17,406
Doubtful
Total
$ 783,917
$ 1,618,849
$ 851,146
$ 443,772
$ 263,188
$ 881,574
$ 426,133
$ 2,657
$ 5,271,236
Current-period charge-offs
(785 )
(785 )
Current-period recoveries
Current-period net recoveries (charge-offs)
$
$
$
$
$ (97 )
$
$
$
$ (88 )
Construction and Land Development
(In thousands)
Term Loans
Origination Year
Revolving loans
amortized cost
Revolving
loans
converted to
term loans
As of December 31, 2024
Prior
basis
Total
Internal Risk Grade:
Pass
$ 628,186
$ 837,662
$ 1,253,480
$ 426,662
$ 18,559
$ 18,542
$ 302,302
$
$ 3,485,393
Special Mention
1,455
18,356
20,021
Substandard
1,607
1,813
3,620
Doubtful
Total
$ 628,186
$ 837,662
$ 1,254,935
$ 445,218
$ 20,223
$ 20,508
$ 302,302
$
$ 3,509,034
Current-period charge-offs
(29 )
(29 )
Current-period recoveries
Current-period net (charge- offs) recoveries
$
$
$
$
$
$
$
$
$
(In thousands)
Term Loans Origination Year
Revolving loans
amortized cost
Revolving
loans
converted to
As of December 31, 2023
Prior
basis
term loans
Total
Internal Risk Grade:
Pass
$ 628,047
$ 1,308,793
$ 827,138
$ 53,004
$ 16,062
$ 60,920
$ 239,390
$
$ 3,133,354
Special Mention
2,902
3,386
6,608
Substandard
1,091
2,490
2,470
2,232
8,283
Doubtful
Total
$ 628,047
$ 1,312,786
$ 829,628
$ 55,536
$ 19,448
$ 63,410
$ 239,390
$
$ 3,148,245
Current-period charge-offs
(14 )
(14 )
Current-period recoveries
Current-period net recoveries
$
$
$
$
$
$
$
$
$
Bankcard
Revolving loans
converted to
Term Loans
Origination Year
Revolving loans
(In thousands)
amortized
cost
As of December 31, 2024
Prior
basis
term loans
Total
Internal Risk Grade:
Pass
 $
$
$
$
$
$
$ 9,874
$
$   9,874
Special Mention
Substandard
Doubtful
Total
 $
$
$
$
$
$
$ 9,998
$
$ 9,998
Current-period charge-offs
(431 )
(431 )
Current-period recoveries
Current-period net charge-offs
 $
$
$
$
$
$
$ (412 )
$
$ (412 )
Revolving
Term Loans
Origination Year
Revolving loans
loans
(In thousands)
amortized cost
 
 converted to  
As of December 31, 2023
Prior
basis
term loans
Total
Internal Risk Grade:
Pass
 $
$
$
$
$
$
$ 9,690
$
$   9,690
Special Mention
Substandard
Doubtful
Total
 $
$
$
$
$
$
$ 9,962
$
$ 9,962
Current-period charge-offs
(263 )
(263 )
Current-period recoveries
Current-period net charge-offs
 $
$
$
$
$
$
$ (235 )
$
$ (235 )
Other Consumer
Revolving
Term Loans
Origination Year
Revolving loans
loans
(In thousands)
amortized cost
 
 converted to  
As of December 31, 2024
Prior
basis
term loans
Total
Internal Risk Grade:
Pass
 $  139,908
$ 131,108
$ 276,041
$ 118,478
$ 49,553
$ 22,913
$ 2,215
$
$ 740,216
Special Mention
1,805
13,462
8,485
2,704
1,440
28,414
Substandard
2,454
1,106
4,447
Doubtful
Total
 $ 140,479
$ 133,095
$ 291,957
$ 128,069
$ 52,615
$ 24,614
$ 2,248
$
$ 773,077
Current-period charge-offs
(28 )
(206 )
(5,724 )
(3,096 )
(869 )
(380 )
(10,303 )
Current-period recoveries
1,119
Current-period net charge-offs
 $ (28 )
$ (185 )
$ (5,322 )
$ (2,855 )
$ (744 )
$ (50 )
$
$
$ (9,184 )
Revolving
Term Loans
Origination Year
Revolving loans
loans
(In thousands)
amortized cost
 
 converted to 
 
As of December 31, 2023
Prior
basis
term loans
Total
Internal Risk Grade:
Pass
 $  192,184
$ 428,295
$ 205,015
$ 102,300
$ 62,861
$ 18,876
$ 2,638
$
$ 1,012,169
Special Mention
16,031
12,220
4,454
2,050
36,452
Substandard
3,010
2,207
6,107
Doubtful
Total
 $ 192,858
$ 447,336
$ 219,442
$ 107,401
$ 65,037
$ 19,949
$ 2,705
$
$ 1,054,728
Current-period charge-offs
(9 )
(3,205 )
(2,699 )
(933 )
(319 )
(191 )
(7,356 )
Current-period recoveries
Current-period net (charge-
offs) recoveries
 $ (9 )
$ (2,986 )
$ (2,574 )
$ (879 )
$ (265 )
$
$
$
$ (6,669 )
NOTE F-ALLOWANCE FOR CREDIT LOSSES
The allowance for loan losses is an estimate of the expected credit losses on financial assets measured at amortized cost to present the net amount expected to be collected as of the balance sheet date. Such allowance is based on the credit losses expected to arise over the life of the asset (contractual term). Assets are charged off when United determines that such financial assets are deemed uncollectible or based on regulatory requirements, whichever is earlier. Charge-offs are recognized as a deduction from the allowance for credit losses. Expected recoveries of amounts previously charged-off,
not to exceed the aggregate of the amount previously charged-off,
are included in determining the necessary reserve at the balance sheet date.
United made a policy election to present the accrued interest receivable balance separately in its consolidated balance sheets from the amortized cost of a loan. Accrued interest receivable was $87,062,000 and $88,963,000 at December 31, 2024 and December 31, 2023, respectively, related to loans and leases are included separately in “Accrued interest receivable” in the consolidated balance sheets. For all classes of loans and leases receivable, the accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days past due, unless the loan is well secured and in the process of collection. Interest received on nonaccrual loans and leases, generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal.
The following table represents the accrued interest receivable as of December 31, 2024 and December 31, 2023:
Accrued Interest Receivable
(In thousands)
At December 31, 2024
At December 31, 2023
Commercial Real Estate:
Owner-occupied
$ 4,700
$ 4,751
Nonowner-occupied
30,582
27,507
Other Commercial
10,512
14,562
Residential Real Estate
21,662
20,718
Construction
17,174
18,504
Consumer:
Bankcard
Other consumer
2,432
2,921
Total
$ 87,062
$ 88,963
The following table represents the accrued interest receivables written off by reversing interest income for the year ended December 31, 2024 and December 31, 2023:
Accrued Interest Receivables Written Off
by Reversing Interest Income
(In thousands)
Year Ended
Commercial Real Estate:
Owner-occupied
$
$
Nonowner-occupied
Other Commercial
Residential Real Estate
Construction
Consumer:
Bankcard
Other consumer
Total
$ 2,375
$ 1,025
United maintains an allowance for loan losses and a reserve for lending-related commitments such as unfunded loan commitments and letters of credit. For a detailed discussion of the methodology used to estimate the reserve for lending-related commitments, see Note A, “Summary of Significant Accounting Policies.” The reserve for lending-related commitments of $34,911,000 and $44,706,000 at December 31, 2024 and December 31, 2023, respectively, is separately classified on the balance sheet and is included in other liabilities. The combined allowance for loan losses and reserve for lending-related commitments is considered the allowance for credit losses.
United continuously evaluates any risks which may impact its loan and lease portfolios. Reserves are initially determined based on losses identified from the PD/LGD and Cohort models which utilize the Company’s historical information. Then any qualitative adjustments are applied to account for the Company’s view of the future and other factors. If current conditions underlying any qualitative adjustment factor were deemed to be materially different than historical conditions, then an adjustment was made for that factor.
United’s allowance for loan and lease losses at December 31, 2024 increased $12,607,000 or 4.86% from December 31, 2023. The increase in the allowance for loan and lease losses was primarily driven by increased outstanding loan balances for the real estate construction and development and residential real estate loan segments as well as increased reasonable and supportable forecast adjustments for the commercial real estate nonowner-occupied loan segment.
The year of 2024 qualitative adjustments include analyses of the following:
·
Current conditions
- United considered the impact of changes in economic and business conditions; collateral values for dependent loans; past due, nonaccrual and adversely classified loans and leases; and concentrations of credit and external factors.
·
Reasonable and supportable forecasts
- The forecast is determined on a portfolio-by-portfolio basis by relating the correlation of real GDP and the unemployment rate to loss rates to forecasts of those variables. The reasonable and supportable forecast selection is subjective in nature and requires more judgment compared to the other components of the allowance. Assumptions for the economic variables were the following:
Ø
The forecast for real GDP shifted slightly in the fourth quarter, from a projection of 2.00% for 2025 as of mid-September 2024 to 2.10% for 2025 as of mid-December with a projection of 2.00% for 2026. The unemployment rate forecast also shifted slightly in the fourth quarter from a projection of 4.40% for 2025 as of mid-September 2024 to 4.30% for 2025 as of mid-December with a projection of 4.30% for 2026.
Ø
Greater risk of loss in the office portfolio due to continued hybrid and remote work that may be exacerbated by future economic conditions.
Ø
Reversion to historical loss data occurs via a straight-line method during the year following the one-year reasonable and supportable forecast period.
A progression of the allowance for loan losses, by portfolio segment, for the periods indicated is summarized as follows:
Allowance for Loan and Lease Losses and Carrying Amount of Loans and Leases
For the Year Ended December 31, 2024
(In thousands)
Commercial Real
Estate
Other
Commercial
Residential
Real
Estate
Construction &
Land
Development
Bankcard
Total
Owner-
occupied
Nonowner-
occupied
Other
Consumer
Allowance for Loan and Lease Losses:
Beginning balance
$ 11,895
$ 57,935
$ 75,007
$ 41,167
$ 59,913
$
$ 12,510
$ 259,237
Charge-offs
(116)
(2,581)
(3,589)
(481)
(29)
(431)
(10,303)
(17,530)
Recoveries
1,183
1,650
1,119
4,985
Provision
(1,110)
18,968
(7,963)
5,192
3,418
6,154
25,152
Ending balance
$ 11,852
$ 74,522
$ 65,105
$ 46,373
$ 63,621
$
$ 9,480
$ 271,844
Allowance for Loan and Lease Losses and Carrying Amount of Loans and Leases
For the Year Ended December 31, 2023
(In thousands)
Commercial Real
Estate
Other
Commercial
Residential
Real
Estate
Construction &
Land
Development
Bankcard
Total
Owner-
occupied
Nonowner-
occupied
Other
Consumer
Allowance for Loan and Lease Losses:
Beginning balance
$ 13,945
$ 38,543
$ 79,706
$ 36,227
$ 48,390
$
$ 17,374
$ 234,746
Charge-offs
(855)
(24)
(2,007)
(785)
(14)
(263)
(7,356)
(11,304)
Recoveries
1,233
1,729
4,641
Provision
(1,382)
18,183
(4,421)
5,028
11,457
1,805
31,154
Ending balance
$ 11,895
$ 57,935
$ 75,007
$ 41,167
$ 59,913
$
$ 12,510
$ 259,237
A progression of the allowance for credit losses, which includes the allowance for loan losses and the reserve for lending-related commitments, for the periods presented is summarized as follows:
Year Ended December 31
(In thousands)
Balance of allowance for loan and lease losses at beginning of period
$ 259,237
$ 234,746
$ 216,016
Gross charge-offs
(17,530 )
(11,304 )
(9,650 )
Recoveries
4,985
4,641
9,549
Net charge-offs
(12,545 )
(6,663 )
(101 )
Provision for loan and lease losses
25,152
31,154
18,831
Balance of allowance for loan and lease losses at end of period
$ 271,844
$ 259,237
$ 234,746
Reserve for lending-related commitments
34,911
44,706
46,189
Balance of allowance for credit losses at end of period
$ 306,755
$ 303,943
$ 280,935
NOTE G-BANK PREMISES AND EQUIPMENT
Bank premises and equipment are summarized as follows:
December 31
(In thousands)
Land
$ 62,506
$ 62,506
Buildings and improvements
206,281
204,841
Leasehold improvements
43,971
42,752
Furniture, fixtures and equipment
109,510
118,514
422,268
428,613
Less allowance for depreciation and amortization
(236,137 )
(238,093 )
Bank premises and equipment
$ 186,131
$ 190,520
Depreciation expense was $15,709,000, $17,191,000, and $18,237,000 for years ending December 31, 2024, 2023 and 2022, respectively, while amortization expense was $310,000, $310,000 and $343,000 for the years ended December 31, 2024, 2023 and 2022, respectively.
NOTE H-LEASES
United determines if an arrangement is a lease at inception. United and certain subsidiaries have entered into various noncancelable-operating leases for branch and loan production offices as well as operating facilities. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities on the Consolidated Balance Sheets. Operating leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. Presently, United does not have any finance leases.
United’s operating leases are subject to renewal options under various terms. United’s operating leases have remaining terms of 1 to 14 years, some of which include options to extend leases generally for periods of 5 years. United rents or subleases certain real estate to third parties. Our sublease portfolio generally consists of operating leases to other organizations for former branch offices.
ROU assets represent United’s right to use an underlying asset for the lease term and lease liabilities represent United’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of United’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend the lease when it is reasonably certain that United will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
The components of lease expense were as follows:
Year Ended
Year Ended
(In thousands)
Classification
December 31,
December 31,
Operating lease cost
Net occupancy expense
$ 20,367
$ 21,280
Sublease income
Net occupancy expense
(184 )
(244 )
Net lease cost
$ 20,183
$ 21,036
Supplemental balance sheet information related to leases was as follows:
(In thousands)
Classification
December 31,
December 31,
Operating lease right-of-use assets
Operating lease right-of-use assets
$ 81,742
$ 86,986
Operating lease liabilities
Operating lease liabilities
$ 86,771
$ 92,885
Other information related to leases was as follows:
December 31,
Weighted-average remaining lease term:
Operating leases
7.46 years
Weighted-average discount rate:
Operating leases
3.18 %
Supplemental cash flow information related to leases was as follows:
Year Ended
(In thousands)
December 31, 2024
December 31, 2023
Cash paid for amounts in the measurement of lease liabilities:
Operating cash flows from operating leases
$ 19,900
$ 21,581
ROU assets obtained in the exchange for lease liabilities
8,896
33,403
Maturities of lease liabilities by year and in the aggregate, under operating leases with initial or remaining terms of one year or more, for years subsequent to December 31, 2024, consists of the following:
Year
Amount
(Dollars in thousands)
$ 17,115
15,501
13,597
11,628
9,700
Thereafter
30,807
Total lease payments
98,348
Less: imputed interest
(11,577 )
Total
$ 86,771
NOTE I-INTANGIBLE ASSETS
The following is a summary of intangible assets subject to amortization and those not subject to amortization:
December 31, 2024
Community Banking
Total
(In thousands)
Gross Carrying
Amount
Accumulated
Amortization
Gross Carrying
Amount
Accumulated
Amortization
Amortized intangible assets:
Core deposit intangible assets
$ 105,165
($ 96,299 )
$ 105,165
($ 96,299 )
Community Banking
Total
(In thousands)
Gross Carrying
Amount
Accumulated
Amortization
Gross Carrying
Amount
Accumulated
Amortization
Goodwill not subject to amortization
$ 1,888,889
$ 1,888,889
December 31, 2023
Community Banking
Mortgage Banking
Total
(In thousands)
Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Amortized intangible assets:
Core deposit intangible assets
$ 105,165
($ 92,660 )
$
$
$ 105,165
($ 92,660 )
Goodwill not subject to amortization
$ 1,883,574
$ 5,315
$ 1,888,889
The following table sets forth the anticipated amortization expense for intangible assets for the years subsequent to 2024:
Year
Amount
(Dollars in thousands)
$ 3,282
2,758
1,152
2030 and thereafter
NOTE J-MORTGAGE SERVICING RIGHTS
Mortgage loans serviced for others are not included in the accompanying Consolidated Balance Sheets. The value of mortgage servicing rights (“MSRs”) is included on the Company’s Consolidated Balance Sheets.
During the third quarter of 2024, United sold its remaining MSRs at a net gain of $7,086,000. The unpaid principal balances of loans serviced for others was approximately $1,202,448,000 at December 31, 2023.
Because of the sale of its remaining MSRs during the third quarter of 2024, there was no estimated fair value of the MSRs at December 31, 2024. The estimated fair value of the mortgage servicing rights was $13,427,000 at December 31, 2023. The estimated fair value of servicing rights at December 31, 2023 was determined using a net servicing fee of 0.25%, average discount rates ranging from 10.50% to 10.82% with a weighted average discount rate of 10.58%, average constant prepayment rates (“CPR”) ranging from 7.84% to 10.25% with a weighted average prepayment rate of 9.43%, depending upon the stratification of the specific servicing right, and a delinquency rate, including loans on forbearance of 3.29%. Please refer to Note W in these Notes to Consolidated Financial Statements for additional information concerning the fair value of MSRs.
The following presents the activity in mortgage servicing rights, including their valuation allowance for the year ended December 31, 2024 and 2023:
(In thousands)
Year Ended
December 31, 2024
Year Ended
December 31, 2023
MSRs beginning balance
$ 4,554
$ 21,022
Amount sold
(3,934 )
(15,001 )
Amount capitalized
Amount amortized
(620 )
(2,182 )
MSRs ending balance
$
$ 4,554
MSRs valuation allowance beginning balance
$
$
Aggregate additions charged and recoveries credited to operations
MSRs impairment
MSRs valuation allowance ending balance
$
$
MSRs, net of valuation allowance
$
$ 4,554
In determining impairment, the Company aggregated all servicing rights and stratified them into tranches based on predominant risk characteristics. The estimated amortization expense was based on information regarding future loan payments and prepayments.
NOTE K-DEPOSITS
The book value of deposits consisted of the following:
December 31
(In thousands)
Noninterest-bearing accounts
$ 6,135,413
$ 6,149,080
Interest-bearing transaction accounts
5,936,925
5,648,135
Regular savings
1,250,295
1,345,258
Interest-bearing money market accounts
7,056,897
6,349,453
Time deposits under $100,000
1,172,462
1,066,092
Time deposits over $100,000
2,409,867
2,261,301
Total deposits
$ 23,961,859
$ 22,819,319
Included in time deposits over $100,000 at December 31, 2024 and 2023 were time deposits of $250,000 or more of $1,115,748,000 and $842,118,000, respectively. Interest paid on deposits approximated $537,661,000, $377,008,000, and $77,271,000 in 2024, 2023 and 2022, respectively.
United’s subsidiary banks have received deposits, in the normal course of business, from the directors and officers of United and its subsidiaries, and their associates. Such related party deposits were accepted on substantially the same terms, including interest rates and maturities, as those prevailing at the time for comparable transactions with unrelated persons. The aggregate dollar amount of these deposits was $34,197,000 and $47,857,000 at December 31, 2024 and 2023, respectively.
NOTE L-SHORT-TERM BORROWINGS
At December 31, 2024 and 2023, short-term borrowings were as follows:
December 31
(In thousands)
Federal funds purchased
$
$
Securities sold under agreements to repurchase
176,090
196,095
Total short-term borrowings
$ 176,090
$ 196,095
Federal funds purchased and securities sold under agreements to repurchase have not been a significant source of funds for the company. United has various unused lines of credit available from certain of its correspondent banks in the aggregate amount of $280,000,000. These lines of credit, which bear interest at prevailing market rates, permit United to borrow funds in the overnight market, and are renewable annually subject to certain conditions.
At December 31, 2024, all the repurchase agreements were in overnight accounts. The rates offered on these funds vary according to movements in the federal funds and short-term
investment market rates.
United has a $20,000,000 line of credit with an unrelated financial institution to provide for general liquidity needs. The line is an unsecured, revolving line of credit. The line is renewable on a 360 day basis and carries an indexed, floating-rate of interest. The line requires compliance with various financial and nonfinancial covenants. At December 31, 2024, United had no outstanding balance under this credit.
Interest paid on short-term borrowings approximated $8,063,000, $6,390,000, and $1,747,000 in 2024, 2023 and 2022, respectively.
NOTE M-LONG-TERM BORROWINGS
United’s subsidiary bank is a member of the Federal Home Loan Bank (“FHLB”). Membership in the FHLB makes available short-term and long-term borrowings from collateralized advances. All FHLB borrowings are collateralized by a mix of single-family residential mortgage loans, commercial loans and investment securities. At December 31, 2024, the total carrying value of loans pledged as collateral for FHLB advances approximated $7,408,250,000. United had an unused borrowing amount as of December 31, 2024 of approximately $8,144,327,000 available subject to delivery of collateral after certain trigger points.
Advances may be called by the FHLB or redeemed by United based on predefined factors and penalties.
At December 31, 2024 and 2023, FHLB advances and the related weighted-average interest rates were as follows:
(Dollars in thousands)
 Amount 
Weighted-
Average
Contractual
Rate
Weighted-
Average
Effective
Rate
 Amount 
Weighted-
Average
Contractual
Rate
Weighted-
Average
Effective
Rate
FHLB advances
$ 260,199
4.62 %
0.63 %
$ 1,510,487
5.43 %
3.75 %
No overnight funds were included in the $260,199,000 and $1,510,487,000 above at December 31, 2024 and 2023, respectively. At December 31, 2024, FHLB advances of $260,199,000 mature in 2025. The weighted-average effective rate considers the effect of any interest rate swaps designated as cash flow hedges outstanding at year-end 2024 and 2023 to manage interest rate risk on its long-term debt. Additional information is provided in Note S, Notes to Consolidated Financial Statements.
At December 31, 2024, United had a total of twenty statutory business trusts that were formed for the purpose of issuing or participating in pools of trust preferred capital securities (“Capital Securities”) with the proceeds invested in junior subordinated debt securities (“Debentures”) of United. The Debentures, which are subordinate and junior in right of payment to all present and future senior indebtedness and certain other financial obligations of United, are the sole assets of the trusts and United’s payment under the Debentures is the sole source of revenue for the trusts. United assumed $10,000,000 in aggregate principal amount of fixed-to-floating rate subordinated notes in the Carolina Financial Corporation acquisition. During the first quarter of 2023, United redeemed these fixed-to-floating rate subordinated notes. At December 31, 2024 and 2023, the outstanding balance of the Debentures was $280,221,000 and $278,616,000, respectively, and was included the category of long-term debt on the Consolidated Balance Sheets entitled “Other long-term borrowings.” The Capital Securities are not included as a component of shareholders’ equity in the Consolidated Balance Sheets. United fully and unconditionally guarantees each individual trust’s obligations under the Capital Securities.
Under the provisions of the subordinated debt, United has the right to defer payment of interest on the subordinated debt at any time, or from time to time, for periods not exceeding five years. If interest payments on the subordinated debt are deferred, the dividends on the Capital Securities are also deferred. Interest on the subordinated debt is cumulative.
In accordance with the fully-phased in “Basel III Capital Rules” as published by United’s primary federal regulator, the Federal Reserve, United is unable to consider the Capital Securities as Tier 1 capital, but rather the Capital Securities are included as a component of United’s Tier 2 capital. United can include the Capital Securities in its Tier 2 capital on a permanent basis.
Information related to United’s statutory trusts is presented in the table below:
(Dollars in thousands)
Description
Issuance Date
Amount of
Capital
Securities
Issued
Stated Interest Rate (1)
Maturity Date
United Statutory Trust III
December 17, 2003
$ 20,000
3-month CME Term SOFR + 2.85%
December 17, 2033
United Statutory Trust IV
December 19, 2003
$ 25,000
3-month CME Term SOFR + 2.85%
January 23, 2034
United Statutory Trust V
July 12, 2007
$ 50,000
3-month CME Term SOFR + 1.55%
October 1, 2037
United Statutory Trust VI
September 20, 2007
$ 30,000
3-month CME Term SOFR + 1.30%
December 15, 2037
Premier Statutory Trust II
September 25, 2003
$ 6,000
3-month CME Term SOFR + 3.10%
October 8, 2033
Premier Statutory Trust III
May 16, 2005
$ 8,000
3-month CME Term SOFR + 1.74%
June 15, 2035
Premier Statutory Trust IV
June 20, 2006
$ 14,000
3-month CME Term SOFR + 1.55%
September 23, 2036
Premier Statutory Trust V
December 14, 2006
$ 10,000
3-month CME Term SOFR + 1.61%
March 1, 2037
Centra Statutory Trust I
September 20, 2004
$ 10,000
3-month CME Term SOFR + 2.29%
September 20, 2034
Centra Statutory Trust II
June 15, 2006
$ 10,000
3-month CME Term SOFR + 1.65%
July 7, 2036
VCBI Capital Trust II
December 19, 2002
$ 15,000
6-month CME Term SOFR + 3.30%
December 19, 2032
VCBI Capital Trust III
December 20, 2005
$ 25,000
3-month CME Term SOFR + 1.42%
February 23, 2036
Cardinal Statutory Trust I
July 27, 2004
$ 20,000
3-month CME Term SOFR + 2.40%
September 15, 2034
UFBC Capital Trust I
December 30, 2004
$ 5,000
3-month CME Term SOFR + 2.10%
March 15, 2035
Carolina Financial Capital Trust I
December 19, 2002
$ 5,000
Prime + 0.50%
December 31, 2032
Carolina Financial Capital Trust II
November 5, 2003
$ 10,000
3-month CME Term SOFR + 3.05%
January 7, 2034
Greer Capital Trust I
October 12, 2004
$ 6,000
3-month CME Term SOFR + 2.20%
October 18, 2034
Greer Capital Trust II
December 28, 2006
$ 5,000
3-month CME Term SOFR + 1.73%
January 30, 2037
First South Preferred Trust I
September 26, 2003
$ 10,000
3-month CME Term SOFR + 2.95%
September 30, 2033
BOE Statutory Trust I
December 12, 2003
$ 4,000
3-month CME Term SOFR + 3.00%
December 12, 2033
(1) The 3-month CME Term SOFR rates have a spread adjustment of 0.26161% and the 6-month CME Term SOFR rate has a spread adjustment of 0.42826%.
At December 31, 2024 and 2023, the Debentures and their related weighted-average interest rates were as follows:
(Dollars in thousands)
Amount
Weighted-
Average
Rate
Amount
Weighted-
Average
Rate
United Statutory Trust III
 $ 20,619
7.46 %
 $ 20,619
8.49 %
United Statutory Trust IV
25,774
7.70 %
25,774
8.50 %
United Statutory Trust V
51,547
6.40 %
51,547
7.21 %
United Statutory Trust VI
30,928
5.92 %
30,928
6.95 %
Premier Statutory Trust II
6,186
8.02 %
6,186
8.76 %
Premier Statutory Trust III
8,248
6.95 %
8,248
7.39 %
Premier Statutory Trust IV
14,433
6.15 %
14,433
7.17 %
Premier Statutory Trust V
10,310
6.37 %
10,310
7.25 %
Centra Statutory Trust I
10,000
6.91 %
10,000
7.92 %
Centra Statutory Trust II
10,000
6.57 %
10,000
7.31 %
Virginia Commerce Trust II
13,627
8.31 %
13,397
8.88 %
Virginia Commerce Trust III
19,899
6.20 %
19,373
7.06 %
Cardinal Statutory Trust I
16,812
7.02 %
16,414
8.05 %
UFBC Capital Trust I
4,076
6.72 %
3,971
7.75 %
Carolina Financial Capital Trust I
5,046
8.00 %
5,034
9.00 %
Carolina Financial Capital Trust II
9,641
7.97 %
9,572
8.71 %
Greer Capital Trust I
5,419
7.09 %
5,341
7.86 %
Greer Capital Trust II
4,275
6.58 %
4,184
7.38 %
First South Preferred Trust I
9,587
7.54 %
9,513
8.54 %
BOE Statutory Trust I
3,794
7.59 %
3,772
8.59 %
Total
$ 280,221
6.88 %
$ 278,616
7.75 %
At December 31, 2024, the scheduled maturities of long-term borrowings were as follows:
Year
Amount
(Dollars in thousands)
 $ 260,199
2030 and thereafter
280,221
Total
 $  540,420
Interest paid on long-term borrowings approximated $44,911,000, $84,775,000, and $19,143,000 in 2024, 2023 and 2022, respectively.
NOTE N-OTHER EXPENSE
The following details certain items of other expense for the periods indicated:
Year Ended December 31
(In thousands)
Legal, consulting & other professional services
 $  24,330
 $  25,604
 $  24,403
Franchise & other taxes not on income
16,916
16,202
13,537
Expense for reserve on lending-related commitments
(9,795
)
(1,483 )
14,747
Automated Teller Machine (“ATM”) expenses
11,885
10,914
10,250
Amortization of income tax credits
15,277
15,238
13,567
NOTE O-INCOME TAXES
The income tax provisions included in the consolidated statements of income are summarized as follows:
Year Ended December 31
(In thousands)
Current expense:
Federal
 $  77,347
 $  84,441
 $  86,799
State
17,604
15,972
16,244
Deferred expense (benefit):
Federal
(2,053 )
(6,016 )
State
(3,702 )
(868 )
(871 )
Total income taxes
 $ 91,583
 $ 97,492
 $ 96,156
The following is a reconciliation of income tax expense to the amount computed by applying the statutory federal income tax rate to income before income taxes:
Year Ended December 31
(Dollars in thousands)
Amount
%
Amount
%
Amount
%
Tax on income before taxes at statutory federal rate
 $  97,562
21.0 %
 $  97,399
21.0 %
 $  99,914
21.0 %
Plus: State income taxes net of federal tax benefits
13,591
2.9
11,847
2.6
12,431
2.6
111,153
23.9
109,246
23.6
112,345
23.6
Increase (decrease) resulting from:
Tax-exempt interest income
(2,439 )
(0.5 )
(2,974 )
(0.6 )
(3,477 )
(0.7 )
Tax credits
(16,520 )
(3.5 )
(15,196 )
(3.3 )
(14,326 )
(3.0 )
Other items-net
(611 )
(0.2 )
6,416
1.3
1,614
0.3
Income taxes
 $ 91,583
19.7 %
 $ 97,492
21.0 %
 $ 96,156
20.2 %
For year ended 2024 and 2023, United incurred a federal income tax benefit of $2,456,000 and $1,608,000, respectively, as compared to federal income tax expense
of $287,000 for the year ended 2022, applicable to the sales and calls of securities. Income taxes paid approximated $91,689,000, $106,083,000, and $93,680,000 in 2024, 2023 and 2022, respectively. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. At December 31, 2024, United had no federal or state net operating loss carryforwards.
Taxes not on income, which consists mainly of business franchise taxes, were $16,916,000, $16,202,000, and $13,537,000, for the years ended December 31, 2024, 2023 and 2022, respectively. These amounts are recorded in other expense in the Consolidated Statements of Income.
Significant components of United’s deferred tax assets and liabilities (included in other assets in the Consolidated Balance Sheets) at December 31, 2024 and 2023 are as follows:
(In thousands)
Deferred tax assets:
Allowance for credit losses
 $ 73,315
 $ 70,818
Accrued benefits payable
20,256
18,287
Other accrued liabilities
1,857
2,857
Unrealized loss on securities available for sale
77,189
84,683
Other real estate owned
Lease liabilities under operating leases
20,738
21,642
Income tax credit carryforward
4,415
Deferred mortgage points
2,081
Total deferred tax assets
198,322
200,880
Deferred tax liabilities:
Premises and equipment
8,307
8,789
Right-of-use assets under operating leases
19,536
20,267
Pension plan accruals
10,743
7,251
Derivatives
10,487
12,137
Purchase accounting intangibles
6,626
5,940
Other
1,063
1,497
Total deferred tax liabilities
56,762
55,881
Net deferred tax assets
 $ 141,560
 $ 144,999
At December 31, 2024 and 2023, United believes that all of the deferred tax amounts shown above are more likely than not to be realized based on an assessment of all available positive and negative evidence and therefore no valuation allowance has been recorded.
In accordance with ASC Topic 740, “Income Taxes,” United records a liability for uncertain income tax positions based on a recognition threshold of more-likely-than-not, and a measurement attribute for all tax positions taken on a tax return, in order for those tax positions to be recognized in the financial statements.
Below is a reconciliation of the total amounts of unrecognized tax benefits:
December 31
(In thousands)
Unrecognized tax benefits at beginning of year
 $ 2,599
 $ 2,521
Increase in unrecognized tax benefits as a result of tax positions taken during the current period
Decreases in the unrecognized tax benefits as a result of a
lapse of the applicable statute of limitations
(778 )
(164 )
Unrecognized tax benefits at end of year
 $ 2,144
 $ 2,599
The entire amount of unrecognized tax benefits, if recognized, would impact United’s effective tax rate. Over the next 12 months, the statute of limitations will close on certain income tax returns. However, at this time, United cannot reasonably estimate the amount of tax benefits, if any, it may recognize over the next 12 months.
United is currently open to audit under the statute of limitations by the Internal Revenue Service for the years ended December 31, 2021, 2022 and 2023 and certain State Taxing authorities for the years ended December 31, 2021 through 2023.
As of December
31,
2024, and
2023, the
total amount of accrued interest related to uncertain tax positions was $
651,000 and $
747,000, respectively. United accounts for interest and penalties related to uncertain tax positions as part of its provision for federal and state income taxes.
No interest or penalties were recognized in the results of operations for the years of
2024,
2023 and
2022.
NOTE P-EMPLOYEE BENEFIT PLANS
United has a defined benefit retirement plan covering qualified employees. Pension benefits are based on years of service and the average of the employee’s highest five consecutive plan years of basic compensation paid during the ten plan years preceding the date of determination. Contributions by United are intended to provide not only for benefits attributed to service to date, but also for those expected to be earned in the future.
In September of 2007, after a recommendation by United’s Pension Committee and approval by United’s Board of Directors, the United Bankshares, Inc. Pension Plan (the “Plan”) was amended to change the participation rules. The decision to change the participation rules for the Plan followed industry trends, as many large and medium size companies took similar steps. The amendment provided that employees hired on or after October 1, 2007, will not be eligible to participate in the Plan. However, new employees will continue to be eligible to participate in United’s Savings and Stock Investment 401(k) plan. This change had no impact on employees hired prior to October 1, 2007 as they will continue to participate in the Plan, with no change in benefit provisions, and will continue to be eligible to participate in United’s Savings and Stock Investment 401(k) Plan.
Net periodic pension costs, except for service cost, are recognized in employee benefits on the consolidated statements of income. Service cost is recognized in employee compensation. Net consolidated periodic pension cost included the following components:
(Dollars in thousands)
Year Ended December 31,
Service cost
 $ 1,387
 $ 1,440
 $ 2,669
Interest cost
6,967
7,134
4,988
Expected return on plan assets
(10,659 )
(11,762 )
(12,942 )
Amortization of net actuarial loss
2,315
3,347
3,645
Net periodic pension cost (income)
 $
 $
 $ (1,640 )
Weighted-Average Assumptions:
Discount rate
5.07 %
5.26 %
3.08 %
Expected return on assets
6.25 %
7.25 %
6.25 %
Rate of compensation increase (prior to age 40)
5.00 %
5.00 %
5.00 %
Rate of compensation increase (ages 40-54)
4.00 %
4.00 %
4.00 %
Rate of compensation increase (otherwise)
3.50 %
3.50 %
3.50 %
Amounts related to the Plan recognized as a component of other comprehensive income were as follows:
(In thousands)
Year Ended December 31,
Net actuarial gain
 $ (12,348 )
 $ (2,635 )
 $ (2,195 )
Amortization of actuarial loss
(2,315 )
(3,347 )
(3,645 )
Total recognized in other comprehensive income
 $ (14,663 )
 $ (5,982 )
 $ (5,840 )
Included in accumulated other comprehensive income at December 31, 2024 are unrecognized actuarial losses of $17,884,000 ($9,645,000 net of tax) that have not yet been recognized in net periodic pension cost.
The reconciliation of the beginning and ending balances of the projected benefit obligation and the fair value of plan assets for the years ended December 31, 2024 and 2023 and the accumulated benefit obligation at December 31, 2024 and 2023 are as follows:
(Dollars in thousands)
December 31,
Change in Projected Benefit Obligation
Projected Benefit Obligation at the Beginning of the Year
 $   143,306
 $   140,609
Service Cost
1,387
1,440
Interest Cost
6,967
7,134
Actuarial (Gain) Loss
(7,506 )
4,918
Lump Sum Window Payments
(4,546 )
Benefits Paid
(6,307 )
(6,249 )
Projected Benefit Obligation at the End of the Year
 $ 137,847
 $ 143,306
Accumulated Benefit Obligation at the End of the Year
 $ 125,429
 $ 131,758
Change in Plan Assets
Fair Value of Plan Assets at the Beginning of the Year
 $ 173,840
 $ 165,320
Actual Return on Plan Assets
15,502
19,315
Lump Sum Window Payments
(4,546 )
Benefits Paid
(6,307 )
(6,249 )
Fair Value of Plan Assets at End of Year
 $ 183,035
 $ 173,840
Net Amount Recognized
Funded Status
 $ 45,187
 $ 30,534
Unrecognized Actuarial Net Loss
17,884
32,548
Net Amount Recognized
 $ 63,071
 $ 63,082
Weighted-Average Assumptions at the End of the Year
Discount Rate
5.76 %
5.07 %
Rate of compensation Increase (prior to age 40)
6.00 %
5.00 %
Rate of compensation Increase (ages 40-49)
5.50 %
- 
Rate of compensation Increase (ages 50-54)
5.00 %
- 
Rate of compensation Increase (ages 40-54)
- 
4.00 %
Rate of compensation Increase (ages 55-64)
4.00 %
- 
Rate of compensation Increase (otherwise)
3.00 %
3.50 %
Asset allocation for the defined benefit pension plan as of the measurement date, by asset category, is as follows:
Plan Assets
Target Allocation
Allowable
Allocation Range
Percentage of
Plan Assets at
December 31,
December 31,
Equity Securities
%
20-70
%
56%
56%
Fixed Income Securities
%
20-50
%
41%
41%
Other
%
0-25
%
3%
3%
Total
100%
100%
Equity securities include United common stock in the amounts of $3,974,000 (4%) at December 31, 2024 and $3,974,000 (4%) at December 31, 2023.
The policy, as established by the Pension Committee, primarily consisting of United’s Executive Management, is to invest assets based upon the target allocations stated above. The assets are reallocated periodically to meet the above target allocations. The investment policy is reviewed at least annually, subject to the approval of the Pension Committee, to determine if the policy should be changed. Prohibited investments include, but are not limited to, futures contracts, private placements, uncovered options, real estate, the use of margin, short sales, derivatives for speculative purposes, and other investments that are speculative in nature. In order to achieve a prudent level of portfolio diversification, the securities of any one company are not to exceed
10% of the total plan assets, and no more than the 15% of total plan
assets is to be invested in any one industry (other than securities of U.S. Government or Agencies). Additionally, no more than 15% of the plan assets is to be invested in foreign securities, both equity and fixed. The expected long-term rate of return for the plan’s total assets is based on the expected return of each of the above categories, weighted based on the median of the target allocation for each class. United uses the corridor approach based on 10% of the greater of the projected benefit obligation and the market-related value of plan assets to amortize actuarial gains and losses.
At December 31, 2024, the benefits expected to be paid in each of the next five fiscal years, and in the aggregate for the five years thereafter are as follows:
Year
 Amount 
(Dollars in thousands)
$ 7,361
7,381
7,775
8,274
8,633
2030 through 2034
47,114
United did not contribute to the plan in 2024, 2023 or in 2022 as no contributions were required by funding regulations or law. For 2025, no contributions to the plan are required by funding regulations or law. However, United may make a discretionary contribution in 2025, the amount of which cannot be reasonably estimated at this time.
In accordance with ASC Topic 715 and using the guidance contained in ASC Topic 820, the following is a description of the valuation methodologies used to measure the plan assets at fair value.
Cash and Cash Equivalents:
These underlying assets are highly liquid U.S. government obligations. The fair value of cash and cash equivalents approximates cost (Level 1).
Debt Securities
: Securities of the U.S. Government, municipalities, private issuers and corporations are valued at the closing price reported in the active market in which the individual security is traded, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data. Using a market approach valuation methodology, third party vendors compile prices from various sources and may determine the fair value of identical or similar securities by using pricing models that considers observable market data (Level 2).
Common and Preferred Stock:
These securities are valued at the closing price on the respective stock exchange (Level 1).
Mutual Funds:
Generally, these securities are valued at the closing price reported in the active market in which the individual mutual fund is traded (Level 1).
The following tables present the balances of the plan assets, by fair value hierarchy level, as of December 31, 2024 and 2023:
Fair Value Measurements at December 31, 2024 Using
(In thousands)
Description
Balance as of
December 31,
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Cash and Cash equivalents
 $ 5,829
 $ 5,829
 $
 $
Fixed Income Debt Securities:
U.S. Government and agencies
24,874
24,874
Mortgage backed securities
6,588
6,588
Collateralized mortgage obligations
Municipal obligations
Corporate bonds
8,394
8,394
Fixed Income Mutual Funds:
General
33,537
33,537
Fair Value Measurements at December 31, 2024 Using
(In thousands)
Description
Balance as of
December 31,
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Equity Securities:
Common stock
19,539
19,539
Equity Mutual Funds:
Domestic equity large cap
37,990
37,990
Domestic equity small cap
13,332
13,332
Alternative equity
16,145
16,145
International emerging equity
3,993
3,993
International equity developed
11,484
11,484
Total
 $   183,035
 $   183,035
 $
 $
Fair Value Measurements at December 31, 2023 Using
(In thousands)
Description
Balance as of
December 31,
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Cash and Cash equivalents
 $ 4,565
 $ 4,565
 $
 $
Fixed Income Debt Securities:
U.S. Government and agencies
20,052
20,052
Mortgage backed securities
7,440
7,440
Municipal obligations
1,551
1,551
Corporate bonds
8,030
8,030
Fixed Income Mutual Funds:
General
34,083
34,083
Equity Securities:
Common stock
23,868
23,868
Equity Mutual Funds:
Domestic equity large cap
29,894
29,894
Domestic equity small cap
13,256
13,256
Alternative equity
15,376
15,376
International emerging equity
3,990
3,990
International equity developed
11,735
11,735
Total
 $   173,840
 $   173,840
 $
 $
Common stock investments are diversified amongst various industries with no industry representing more than 5% of the total plan assets.
The United Bankshares, Inc. Savings and Stock Investment Plan (the Plan) is a defined contribution plan under Section 401(k) of the Internal Revenue Code. Each employee of United, who completes ninety (90) days of qualified service, is eligible to participate in the Plan. Each participant may contribute from 1% to 100% of compensation to his/her account, subject to Internal Revenue Service maximum deferral limits. United matches 100% of the first 5% of salary deferred with United stock, subject to certain imposed limitations. Vesting is 100% for employee deferrals and the company match at the time the employee makes his/her deferral. United’s expense relating to the Plan approximated $7,332,000, $7,590,000, and $8,242,000 in 2024, 2023 and 2022, respectively.
The assets of United’s defined benefit plan and 401(k) Plan each include investments in United common stock. At December 31, 2024 and 2023, the combined plan assets included 1,810,400 and 1,828,171 shares, respectively, of United common stock with an approximate fair value of $67,981,000 and $68,648,000, respectively. Dividends paid on United common stock held by the plans approximated $2,727,000, $2,468,000, and $2,340,000 for the years ended December 31, 2024, 2023, and 2022, respectively.
United has certain other supplemental deferred compensation plans covering various key employees. Periodic charges are made to operations so that the liability due each employee is fully recorded as of the date of their retirement. Amounts charged to expense have not been significant in any year.
NOTE Q-STOCK BASED COMPENSATION
On May 12, 2020, United’s shareholders approved the 2020 Long-Term Incentive Plan (“2020 LTI Plan”). The 2020 LTI Plan became effective May 13, 2020. An award granted under the 2020 LTI Plan may consist of any non-qualified stock options or incentive stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units, performance units or other-stock-based award. These awards all relate to the common stock of United. The maximum number of shares of United common stock which may be issued under the 2020 LTI Plan is 2,300,000. The 2020 LTI Plan will be administered by a board committee appointed by United’s Board of Directors (the “Board”). Unless otherwise determined by the Board, the Compensation Committee of the Board (the “Committee”) shall administer the 2020 LTI Plan. The maximum number of options and stock appreciation rights, in the aggregate, which may be awarded to any individual key employee during any calendar year is 100,000. The maximum number of options and stock appreciation rights, in the aggregate, which may be awarded to any non-employee director during any calendar year is 10,000 or, if such Award is payable in cash, the Fair Market Value equivalent thereof. The maximum number of shares of restricted stock or shares subject to a restricted stock units award that may be granted during any calendar year is 225,000 shares to any individual key employee and 10,000 shares to any individual non-employee director. Subject to certain change in control provisions, the 2020 LTI Plan provides that all awards of will vest as the Committee determines in the award agreement, provided that no awards will vest sooner than 1/3 per year over the first three anniversaries of the award. United adopted a clawback policy that applies to named executive officers and other executive officers and permits the Committee to cancel certain awards and to recoup gains realized from previous awards should United be required to prepare an accounting restatement due to materially inaccurate performance metrics. A Form S-8 was filed on May 29, 2020 with the Securities and Exchange Commission to register all the shares which were available for the 2020 LTI Plan. The 2020 LTI Plan replaces the 2016 LTI Plan.
During the year of 2024, a total of 184,458 shares of restricted stock and 254,592 of restricted stock units were granted under the 2020 LTI Plan. No non-qualified stock options were granted under the 2020 LTI Plan during the year of 2024. Compensation expense of $12,130,000, $12,463,000, and $9,881,000 related to all share-based grants and awards under United’s Long-Term Incentive Plans was incurred for the years 2024, 2023 and 2022, respectively. Compensation expense was included in employee compensation in the Consolidated Statements of Income.
Stock Options
United currently has options outstanding from various option plans other than the 2020 LTI Plan (the “Prior Plans”); however, no common shares of United stock are available for grants under the Prior Plans as these plans have expired. Awards outstanding under the Prior Plans will remain in effect in accordance with their respective terms. The maximum term for options granted under the plans is ten (10) years.
A summary of activity under the United’s stock option plans as of December 31, 2024, and the changes during the year of 2024 are presented below:
Year ended December 31, 2024
Weighted Average
(Dollars in thousands, except per share amounts)
Aggregate
Intrinsic
Remaining
Contractual
Exercise
Shares
Value
Term (Yrs.)
Price
Outstanding at January 1, 2024
1,337,382
$ 35.47
Exercised
(183,888 )
30.18
Forfeited or expired
(103,826 )
36.54
Outstanding at December 31, 2024
1,049,668
 $  3,275
3.2
 $  36.29
Exercisable at December 31, 2024
1,049,668
 $  3,275
3.2
 $  36.29
The following table summarizes the status of United’s nonvested awards for the year ended December 31, 2024:
Shares
Weighted-Average
Grant Date Fair Value
Per Share
Nonvested at January 1, 2024
56,526
 $ 5.65
Vested
(56,526 )
   5.65
Forfeited or expired
   0.00
Nonvested at December 31, 2024
 $ 0.00
As of December 31, 2024, there was no unrecognized compensation cost related to nonvested option awards. The total fair value of awards vested during the year ended December 31, 2024, was $319,000.
Cash received from options exercised under the Plans for the years ended December 31, 2024, 2023 and 2022 was $5,274,000, $1,750,000, and $10,295,000, respectively. During 2024 and 2023, 183,888 and 75,361 shares, respectively, were issued in connection with stock option exercises. All shares issued in connection with stock option exercises for 2024 and 2023 were issued from authorized and unissued stock. No options were granted in 2024,
2023, and 2022. The total intrinsic value of options exercised under the Plans during the years ended December 31, 2024, 2023, and 2022 was $1,881,000, $947,000, and $6,325,000, respectively.
ASC Topic 230, “Statement of Cash Flows,” requires the benefits of tax deductions in excess of recognized compensation cost to be reported as an operating cash flow. This requirement reduces net operating cash flows. While the company cannot estimate what those amounts will be in the future (because they depend on, among other things, the date employees exercise stock options), United recognized cash flows used in operating activities of $258,000, $128,000, and $1,040,000 from excess tax benefits related to share-based compensation arrangements for the year of 2024, 2023 and 2022, respectively.
Restricted Stock
Under the 2020 LTI Plan, United may award restricted common shares to key employees and non-employee directors. Restricted shares granted to participants will vest no sooner than 1/3 per year over the first three
anniversaries of the award. Unless determined by the Committee or the Board and provided in the award agreement, recipients of restricted shares do not pay any consideration to United for the shares, have the right to vote all shares subject to such grant and receive all dividends with respect to such shares, whether or not the shares have vested. Presently, these nonvested participating securities have an immaterial impact on diluted earnings per share. As of December 31, 2024, the total unrecognized compensation cost related to nonvested restricted stock awards was $6,572,000 with a weighted-average expense recognition period of 0.9 years.
The following summarizes the changes to United’s restricted common shares for the year ended December 31, 2024:
Number of
Shares
Weighted-Average
Grant Date Fair Value
Per Share
Outstanding at January 1, 2024
333,932
 $ 37.75
Granted
184,458
  34.37
Vested
(198,950 )
  36.49
Forfeited
(9,413 )
  36.67
Outstanding at December 31, 2024
310,027
 $ 36.58
Restricted Stock Units
Under the 2020 LTI Plan, United may grant restricted stock units (“RSUs”) to key employees. These awards help align the interests of these employees with the interests of the shareholders of United by providing economic value directly related to the performance of the Company. These RSU grants could be time-vested RSUs, performance-vested RSUs, or a combination of both. Currently, time-vested RSUs vest ratably over three years from the date of grant. Performance-vested RSUs cliff-vest after assessment of the Company’s performance over a period of three years. The number of performance-vested RSUs that vest is determined by two metrics measured relative to peers: Return on Average Tangible Common Equity (“ROATCE”) and Total Shareholder Return (“TSR”). Based on ASC Topic 718, the ROATCE comparison is considered a performance condition while the TSR comparison is considered a market condition. There
will be no payout of the performance-vested awards if the threshold performance is not achieved. United communicates the specific threshold, target, and maximum performance-vested RSU awards and performance targets to the applicable key employees at the beginning of a performance period. Dividends are accrued but not paid in respect to the awards until the RSUs vest. The holder does not have the right to vote the shares during the time and performance periods. The value of the time-vested RSUs and the performance-vested, based on the performance condition, RSUs awarded is established as the fair market value of the stock at the time of the grant. The value of the performance-vested, based on the market condition, RSUs awarded is estimated through the use of a Monte Carlo valuation model as of the grant date. The Company recognizes expense on the RSUs in accordance with ASC Topic 718.
The following table summarizes the status of United’s nonvested RSUs during the year ended December 31, 2024:
Shares
Weighted-Average
Grant Date Fair Value
Per Share
Nonvested at January 1, 2024
363,502
 $  37.53
Granted
254,592
    32.80
Vested
(127,536 )
    36.28
Forfeited or expired
(439 )
    34.72
Nonvested at December 31, 2024
490,119
 $  35.41
As of December 31, 2024, the total unrecognized compensation cost related to nonvested restricted stock units was $8,500,000 with a weighted-average expense recognition period of 1.2 years.
NOTE R-COMMITMENTS AND CONTINGENT LIABILITIES
Lending-related Commitments
United is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers and to alter its own exposure to fluctuations in interest rates. These financial instruments include loan commitments, standby letters of credit, and interest rate swap agreements. The instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the financial statements.
United’s maximum exposure to credit loss in the event of nonperformance by the counterparty to the financial instrument for the loan commitments and standby letters of credit is the contractual or notional amount of those instruments. United uses the same policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Collateral may be obtained, if deemed necessary, based on management’s credit evaluation of the counterparty.
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the commitment contract. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily, and historically do not, represent future cash requirements. The amount of collateral obtained, if deemed necessary upon the extension of credit, is based on management’s credit evaluation of the counterparty. United had approximately $5,886,473,000 and $6,851,890,000 of loan commitments outstanding as of December 31, 2024 and December 31, 2023, respectively, approximately 38% of which contractually expire within one year. Excluded in the December 31, 2023 amount above are commitments to extend credit of $416,095,000 related to mortgage loan funding commitments.
Commercial and standby letters of credit are agreements used by United’s customers as a means of improving their credit standing in their dealings with others. Under these agreements, United guarantees certain financial commitments of its customers. A commercial letter of credit is issued specifically to facilitate trade or commerce. Typically, under the terms of a commercial letter of credit, a commitment is drawn upon when the underlying transaction is consummated as intended between the customer and a third party. As of December 31, 2024 and December 31, 2023, United had $15,546,000 and $16,233,000 of commercial letters of credit outstanding. A standby letter of credit is generally contingent upon the failure of a customer to perform according to the terms of an underlying contract with a third party. United has issued standby letters of credit of $148,874,000 and $147,705,000 as of December 31, 2024 and December 31, 2023, respectively. In accordance with the Contingencies Topic of the FASB Accounting Standards Codification, United has determined that substantially all of its letters of credit are renewed on an annual basis and the fees associated with these letters of credit are immaterial.
Mortgage Banking
Related to its mortgage banking activities, United provides for its estimated exposure to repurchase loans previously sold to investors for which borrowers failed to provide full and accurate information on their loan application or for which appraisals have not been acceptable or where the loan was not underwritten in accordance with the loan program specified by the loan investor, and for other exposure to its investors related to loan sales activities. United evaluates the merits of each claim and estimates its reserve based on actual and expected claims received and considers the historical amounts paid to settle such claims. United’s repurchase reserve was immaterial as of December 31, 2024 and December 31, 2023.
United has derivative counter-party risk that may arise from the possible inability of United’s third party investors to meet the terms of their forward sales contracts. United’s third-party investors that are generally well-capitalized, are investment grade and exhibit strong financial performance to mitigate this risk. United does not expect any third-party investor to fail to meet its obligation.
Legal Proceedings
United and its subsidiaries are currently involved in various legal proceedings in the normal course of business. On at least a quarterly basis, United assesses its liabilities and contingencies in connection with all pending or threatened claims and litigation, utilizing the most recent information available. On a matter-by-matter basis, an accrual for loss is established for those matters which United believes it is probable that a loss may be incurred and that the amount of such loss can be reasonably estimated. Once established, each accrual is adjusted as appropriate to reflect any subsequent developments. Accordingly, management’s estimate will change from time to time, and actual losses may be more or less than the current estimate. For matters where a loss is not probable, or the amount of the loss cannot be estimated, no accrual is established.
Management is vigorously pursuing all its legal and factual defenses and, after consultation with legal counsel, believes that all such litigation will be resolved with no material effect on United’s financial statements.
Regulatory Matters
A variety of consumer products, including mortgage and deposit products, and certain fees and charges related to such products, have come under increased regulatory scrutiny. It is possible that regulatory authorities could bring enforcement actions, including civil money penalties, or take other actions against United in regard to these consumer products. United could also determine of its own accord, or be required by regulators, to refund or otherwise make remediation payments to customers in connection with these products. It is not possible at this time for management to assess the probability of a material adverse outcome or reasonably estimate the amount of any potential loss related to such matters.
NOTE S-DERIVATIVE FINANCIAL INSTRUMENTS
United uses derivative instruments to help aid against adverse price changes or interest rate movements on the value of certain assets or liabilities and on future cash flows. These derivatives may consist of interest rate swaps, caps, floors, collars, futures, forward contracts, written and purchased options. United also executes derivative instruments with its commercial banking customers to facilitate its risk management strategies.
During 2020, United entered into two interest rate swap derivatives designated as cash flow hedges. The notional amount of these cash flow hedge derivatives totaled $500,000,000. The derivatives are intended to hedge the changes in cash flows associated with floating rate FHLB borrowings. One of these two interest rate swap derivatives matured during the third quarter of 2024.
As of December 31, 2024, United has determined that no forecasted transactions related to its cash flow hedges resulted in gains or losses pertaining to cash flow hedge reclassification from AOCI to income because the forecasted transactions became probable of not occurring. United estimates that $9,131,000 will be reclassified from AOCI as a decrease to interest expense over the next 12-months following December 31, 2024 related to the cash flow hedges. As of December 31, 2024, the maximum length of time over which forecasted transactions are hedged is six years.
United is subject to the Dodd-Frank Act clearing requirement for eligible derivatives. United has executed and cleared eligible derivatives through the London Clearing House (“LCH”). Variation margin at the LCH is distinguished as settled-to-market and settled daily based on the prior day value, rather than collateralized-to-market. The daily settlement of the derivative exposure does not change or reset the contractual terms of the instrument. The total notional amount of interest rate swap derivatives designated as cash flow hedges cleared through the LCH include $250,000,000 for asset derivatives as of December 31, 2024. Balances related to LCH are presented as a single unit of account with the fair value of the designated cash flow interest rate swap asset being reduced by variation margin posted by (with) the applicable counterparty and reported in the following table on a net basis. The related fair value on a net basis approximates zero.
The following tables disclose the derivative instruments’ location on the Company’s Consolidated Balance Sheets and the notional amount and fair value of those instruments at December 31, 2024 and December 31, 2023.
Asset Derivatives
December 31, 2024
December 31, 2023
(In thousands)
Balance
Sheet
Location
Notional
Amount
Fair
Value
Balance
Sheet
Location
Notional
Amount
Fair
Value
Derivatives designated as hedging instruments
Fair Value Hedges:
Interest
rate swap contracts (hedging commercial loans)
Other assets
 $ 10,770
 $
Other assets
 $ 12,032
 $
Total Fair Value Hedges
 $ 10,770
 $
 $ 12,032
 $
Cash Flow Hedges:
Interest rate swap contracts (hedging FHLB borrowings)
Other assets
 $ 250,000
 $
Other assets
 $ 500,000
 $
Total Cash Flow Hedges
 $ 250,000
 $
 $ 500,000
 $
Total derivatives designated as hedging instruments
 $ 260,770
 $
 $ 512,032
 $
Derivatives not designated as hedging instruments
Forward loan sales commitments
Other assets
 $
 $
Other assets
 $ 3,880
 $
TBA mortgage-backed securities
Other assets
54,826
Other assets
Interest rate lock commitments
Other assets
21,553
Other assets
99,278
1,144
Total derivatives not designated as hedging instruments
 $ 76,379
 $
 $ 103,158
 $ 1,237
Total asset derivatives
 $ 337,149
 $ 1,261
 $ 615,190
 $ 1,848
Liability Derivatives
December 31, 2024
December 31, 2023
Balance
Sheet
Location
Notional
Amount
Fair
Value
Balance
Sheet
Location
Notional
Amount
Fair
Value
Derivatives not designated as hedging instruments
TBA mortgage-backed securities
Other liabilities
 $
 $
Other liabilities
 $
77,115
 $
Forward loan sales commitments
Other liabilities
3,186
Other liabilities
Total derivatives not designated as hedging instruments
 $
3,186
 $
 $
77,115
 $
Total liability derivatives
 $
3,186
 $
 $
77,115
 $
The following table represents the carrying amount of the hedged assets/(liabilities) and the cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets/(liabilities) that are designated as a fair value accounting relationship as of December 31, 2024 and December 31, 2023.
December 31, 2024
(In thousands)
Derivatives in Fair Value
Hedging Relationships
Location in the Statement of
Condition
Carrying Amount of
the Hedged Assets/
(Liabilities)
Cumulative Amount
of Fair Value Hedging
Adjustment Included
in the Carrying
Amount of the Hedged
Assets/(Liabilities)
Cumulative Amount of
Fair Value Hedging
Adjustment Remaining for
any Hedged Assets/
(Liabilities) for which
Hedge Accounting has
been Discontinued
Interest rate swaps
Loans, net of unearned income
 $ 10,770
 $  (657)
 $
December 31, 2023
(In thousands)
Derivatives in Fair Value
Hedging Relationships
Location in the Statement
of Condition
Carrying Amount of
the Hedged
Assets/(Liabilities)
Cumulative Amount
of Fair Value Hedging
Adjustment Included
in the Carrying
Amount of the Hedged
Assets/(Liabilities)
Cumulative Amount of
Fair Value Hedging
Adjustment Remaining for
any Hedged Assets/
(Liabilities) for which
Hedge Accounting has
been Discontinued
Interest rate swaps
Loans, net of unearned income
 $  12,032
 $  (632)
 $
Derivative contracts involve the risk of dealing with both bank customers and institutional derivative counterparties and their ability to meet contractual terms. Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. United’s exposure is limited to the replacement value of the contracts rather than the notional amount of the contract. The Company’s agreements generally contain provisions that limit the unsecured exposure up to an agreed upon threshold. Additionally, the Company attempts to minimize credit risk through certain approval processes established by management.
The effect of United’s derivative financial instruments on its Consolidated Statements of Income for the years ended December 31, 2024, 2023 and 2022 is presented as follows:
Year Ended
(In thousands)
Income Statement
Location
December 31,
December 31,
December 31,
Derivatives in hedging relationships
Cash Flow Hedges:
Interest rate swap contracts
Interest on long-term
borrowings (1)
$ 20,932
$ 23,574
$ 5,782
Fair Value Hedges:
Interest rate swap contracts
Interest and fees on loans and leases
$
$
$ (177)
Total derivatives in hedging relationships
$ 20,940
$ 23,691
$ 5,605
Derivatives not designated as hedging instruments
Forward loan sales commitments
Income from Mortgage Banking Activities
(114 )
(127 )
(174 )
TBA mortgage-backed securities
Income from Mortgage Banking Activities
(611 )
Interest rate lock commitments
Income from Mortgage Banking Activities
(489 )
(240 )
(8,373 )
Total derivatives not designated as hedging instruments
$
$ (978 )
$ (8,271 )
Total derivatives
$ 21,293
$ 22,713
$ (2,666 )
(1) Decreases or increases in interest expense are expressed as positive or negative amounts, respectively, based on their impact to net income.
For the years ended December 31, 2024, 2023 and 2022, changes in the fair value of any interest rate swaps attributed to hedge ineffectiveness were recorded, but were not significant to United’s Consolidated Statements of Income.
NOTE T--COMPREHENSIVE
INCOME
The changes in accumulated other comprehensive income are as follows:
For the Years Ended December 31
(In thousands)
Net Income
 $
  372,996
 $
  366,313
 $
379,627
Available for sale (“AFS”) securities:
Change in net unrealized gains (losses) on AFS securities arising during the period
24,251
98,627
(481,007 )
Related income tax effect
(5,840 )
(22,980 )
112,075
Net reclassification adjustment for losses (gains) included in net income
16,296
7,659
(2 )
Related income tax effect
(3,852 )
(1,785 )
30,855
81,521
(368,934 )
Net effect of AFS securities on other comprehensive income
30,855
81,521
(368,934
)
Cash flow hedge derivatives:
Unrealized gain on cash flow hedge before reclassification to interest expense
12,744
6,548
53,572
Related income tax effect
(2,987 )
(1,526 )
(12,482 )
Net reclassification adjustment for gains included in net income
(20,932 )
(23,574 )
(5,782 )
Related income tax effect
4,926
5,493
1,347
Net effect of cash flow hedge derivatives on other comprehensive income
(6,249
)
(13,059
)
36,655
Defined benefit pension plan:
Net actuarial gain during the period
12,348
2,635
2,195
Related income tax expense
(2,951 )
(613 )
(512 )
Amortization of net actuarial loss recognized in net income
2,315
3,347
3,645
Related income tax effect
(540 )
(780 )
(893 )
Net effect of change in defined benefit pension plan on other comprehensive income
11,172
4,589
4,435
Total change in other comprehensive income, net of tax
35,778
73,051
(327,844
)
Total Comprehensive Income
 $
    408,774
 $
  439,364
 $
  51,783
The components of accumulated other comprehensive income for the year ended December 31, 2024 are as follows:
Changes in Accumulated Other Comprehensive Income (AOCI) by Component (a)
For the Year Ended December 31, 2024
(Dollars in thousands)
Unrealized
Gains/
Losses on
AFS
Securities
Unrealized
Gains/
Losses on
Cash Flow
Hedges
Defined
Benefit
Pension
Items
Total
Balance at January 1, 2024
$ (278,819)
$ 39,955
$ (20,817)
$ (259,681)
Other comprehensive income before reclassification
18,411
9,757
28,168
Amounts reclassified from accumulated other comprehensive income
12,444
(16,006 )
11,172
7,610
Net current-period other comprehensive income (loss), net of tax
30,855
(6,249 )
11,172
35,778
Balance at December 31, 2024
$ (247,964)
$ 33,706
$ (9,645)
$ (223,903)
(a) All amounts are net-of-tax.
United has adopted the portfolio approach for purposes of releasing residual tax effects within AOCI.
Reclassifications out of Accumulated Other Comprehensive Income (AOCI)
For the Year Ended December 31, 2024
(In thousands)
Details about AOCI Components
Amount
Reclassified
from AOCI
Affected Line Item in the Statement Where
Net Income is Presented
Available for sale (“AFS”) securities:
Net reclassification adjustment for losses included in net income
$ 16,296
Net investment securities losses
16,296
Total before tax
Related income tax effect
(3,852 )
Tax expense
12,444
Net of tax
Cash flow hedge:
Net reclassification adjustment for gains included in net income
$ (20,932 )
Interest expense
(20,932 )
Total before tax
Related income tax effect
4,926
Tax expense
(16,006 )
Net of tax
Pension plan:
Recognized net actuarial gain
12,348 (a)
Amortization of net actuarial loss
2,315 (b)
14,663
Total before tax
Related income tax effect
(3,491 )
Tax expense
11,172
Net of tax
Total reclassifications for the period
$ 7,610
(a)   This AOCI component is included in the computation of changes in plan assets (see Note P, Employee Benefit Plans)
(b)   This AOCI component is included in the computation of net periodic pension cost (see Note P, Employee Benefit Plans)
   
   
NOTE U--UNITED
BANKSHARES, INC. (PARENT COMPANY ONLY) FINANCIAL INFORMATION
Condensed Balance Sheets
December 31
(In thousands)
Assets
Cash and due from banks
$ 249,515
$ 238,256
Securities available for sale
5,663
5,846
Securities held to maturity
Equity securities
15,897
3,735
Other investment securities
11,400
20,704
Investment in subsidiaries:
Bank subsidiaries
5,024,692
4,818,320
Nonbank subsidiaries
55,755
54,556
Goodwill
(16,715 )
(16,715 )
Other assets
32,152
28,315
Total Assets
$ 5,378,379
$ 5,153,037
Liabilities and Shareholders’ Equity
Junior subordinated debentures of subsidiary trusts
$ 280,221
$ 278,617
Accrued expenses and other liabilities
104,935
103,180
Shareholders’ equity (including other accumulated comprehensive losses of
$223,903 and $259,681 at December 31, 2024 and 2023, respectively)
4,993,223
4,771,240
Total Liabilities and Shareholders’ Equity
$ 5,378,379
$ 5,153,037
Condensed Statements of Income
Year Ended December 31
(In thousands)
Income
Dividends from banking subsidiaries
$ 231,000
$ 217,000
$ 272,500
Net interest income
Management fees:
Bank subsidiaries
48,307
43,852
35,931
Nonbank subsidiaries
Other income
5,064
2,167
3,053
Total Income
285,355
264,016
311,957
Condensed Statements of Income
Year Ended December 31
(In thousands)
Expenses
Operating expenses
80,922
67,968
50,242
Income Before Income Taxes and Equity in Undistributed Net Income of Subsidiaries
204,433
196,048
261,715
Applicable income tax benefit
(5,589 )
(4,521 )
(2,196 )
Income Before Equity in Undistributed Net
Income of Subsidiaries
210,022
200,569
263,911
Equity in undistributed net income of subsidiaries:
Bank subsidiaries
169,778
170,997
117,594
Nonbank subsidiaries
(6,804 )
(5,253 )
(1,878 )
Net Income
$ 372,996
$ 366,313
$ 379,627
Condensed Statements of Cash Flows
Year Ended December 31
(In thousands)
Operating Activities
Net income
$ 372,996
$ 366,313
$ 379,627
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed net income of subsidiaries
(162,974 )
(165,744 )
(115,716 )
Amortization of net periodic pension costs
Stock-based compensation
12,130
12,463
9,881
Excess tax benefits from stock-based compensation arrangements
1,040
Net change in other assets and liabilities
(5,925 )
(5,420 )
(6,118 )
Net Cash Provided by Operating Activities
216,626
207,944
268,934
Investing Activities
Net proceeds from sales (purchases) of debt securities
(426 )
Net proceeds from sales (purchases) of equity
securities
(1,303 )
4,186
Increase in investment in subsidiaries
(8,000 )
(16,000 )
(13,000 )
Change in other investment securities
(1,187 )
(1,525 )
(6,144 )
Net Cash Used in Investing Activities
(8,874 )
(18,490 )
(15,384 )
Financing Activities
Repayment of subordinated notes
(10,250 )
Cash dividends paid
(200,727 )
(194,727 )
(193,041 )
Acquisition of treasury stock
(1,040 )
(1,382 )
(79,460 )
Proceeds from exercise of stock options
5,274
1,750
10,295
Net Cash Used in Financing Activities
(196,493 )
(204,609 )
(262,206 )
Increase (Decrease) in Cash and Cash Equivalents
11,259
(15,155 )
(8,656 )
Cash and Cash Equivalents at Beginning of Year
238,256
253,411
262,067
Cash and Cash Equivalents at End of Year
$ 249,515
$ 238,256
$ 253,411
NOTE V--REGULATORY
MATTERS
United Bank maintains average reserve balances with its Federal Reserve Bank. The average amount of those consolidated reserve balances maintained for the year ended December 31, 2024 and 2023 were approximately $1,184,007,000 and $813,480,000, respectively. No reserve balance for the year ended December 31, 2024 and 2023 was required.
The primary source of funds for the dividends paid by United to its shareholders is dividends received from United Bank. Dividends paid by United Bank are subject to certain regulatory limitations. Generally, the most restrictive provision requires regulatory approval if dividends declared in any year exceed that year’s net income, as defined, plus the retained net profits of the two preceding years.
During 2025, the retained net profits available for distribution to United by United Bank as dividends without regulatory approval, are approximately $340,775,000, plus net income for the interim period through the date of declaration.
Under Federal Reserve regulation, United Bank is also limited as to the amount they may loan to affiliates, including the parent company. Loans from United Bank to the parent company are limited to 10% of the banking subsidiaries’ capital and surplus, as defined, or $395,066,000 at December 31, 2024, and must be secured by qualifying collateral.
United’s subsidiary banks are subject to various regulatory capital requirements administered by federal banking agencies. Pursuant to capital adequacy guidelines, United’s subsidiary banks must meet specific capital guidelines that involve various quantitative measures of the banks’ assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. United’s subsidiary banks’ capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
As previously mentioned, in December 2017, the Basel Committee published standards that it described as the finalization of the Basel III post-crisis regulatory reforms. The quantitative measures established by the Basel III regulation to ensure capital adequacy require United and United Bank to maintain minimum amounts and ratios of total, Tier I capital, and common Tier I capital as defined in the regulations, to risk-weighted assets, as defined, and of Tier I capital, as defined, to average assets, as defined. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on United’s financial statements. As of December 31, 2024, United exceeds all capital adequacy requirements to which it is subject.
At December 31, 2024, the most recent notification from its regulators, United and United Bank were categorized as well-capitalized. To be categorized as well-capitalized, United must maintain minimum total risk-based, Tier I risk-based, Common Tier I risk-based, and Tier I leverage ratios as set forth in the following table. There are no conditions or events since that notification that management believes would impact United’s well-capitalized status.
United’s and United Bank’s capital amounts (in thousands of dollars) and ratios are presented in the following table.
(Dollars in thousands)
Actual
For Capital
Adequacy Purposes
To Be Well-
Capitalized
 Amount 
 Ratio 
 Amount 
 Ratio 
 Amount 
 Ratio 
As of December 31, 2024:
Total Capital (to Risk- Weighted Assets):
United Bankshares
$ 3,897,755
16.5 %
$ 1,887,433
≥ 8.0 %
$ 2,359,292
≥ 10.0 %
United Bank
3,620,657
15.4 %
1,877,704
≥ 8.0 %
2,347,131
≥ 10.0 %
Tier I Capital (to Risk- Weighted Assets):
United Bankshares
$ 3,335,667
14.1 %
$ 1,415,575
≥ 6.0 %
$ 1,887,433
≥ 8.0 %
United Bank
3,348,071
14.3 %
1,408,278
≥ 6.0 %
1,877,704
≥ 8.0 %
Common Tier I Capital (to Risk Weighted Assets):
United Bankshares
$ 3,335,667
14.1 %
$ 1,061,681
≥ 4.5 %
$ 1,533,540
≥ 6.5 %
United Bank
3,348,071
14.3 %
1,056,209
≥ 4.5 %
1,525,635
≥ 6.5 %
Tier I Capital (to Average Assets):
United Bankshares
$ 3,335,667
11.7 %
$ 1,136,661
≥ 4.0 %
$ 1,420,827
≥ 5.0 %
United Bank
3,348,071
11.8 %
1,132,023
≥ 4.0 %
1,415,029
≥ 5.0 %
As of December 31, 2023:
Total Capital (to Risk- Weighted Assets):
United Bankshares
$ 3,700,453
15.4 %
$ 1,924,541
≥ 8.0 %
$ 2,405,676
≥ 10.0 %
United Bank
3,440,096
14.4 %
1,916,834
≥ 8.0 %
2,396,043
≥ 10.0 %
Tier I Capital (to Risk- Weighted Assets):
United Bankshares
$ 3,162,118
13.1 %
$ 1,443,405
≥ 6.0 %
$ 1,924,541
≥ 8.0 %
United Bank
3,190,950
13.3 %
1,437,626
≥ 6.0 %
1,916,834
≥ 8.0 %
(Dollars in thousands)
Actual
For Capital
Adequacy Purposes
To Be Well-
Capitalized
 Amount 
 Ratio 
 Amount 
 Ratio 
 Amount 
 Ratio 
Common Tier I Capital (to Risk Weighted Assets):
United Bankshares
$ 3,162,118
13.1 %
$ 1,082,554
≥ 4.5 %
$ 1,563,689
≥ 6.5 %
United Bank
3,190,950
13.3 %
1,078,219
≥ 4.5 %
1,557,428
≥ 6.5 %
Tier I Capital (to Average Assets):
United Bankshares
$ 3,162,118
11.4 %
$
1,110,296
≥ 4.0 %
$ 1,387,870
≥ 5.0 %
United Bank
3,190,950
11.5 %
1,108,321
≥ 4.0 %
1,385,401
≥ 5.0 %
NOTE W--FAIR
VALUES OF FINANCIAL INSTRUMENTS
In accordance with ASC Topic 820, the following describes the valuation techniques used by United to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements.
Securities available for sale and equity securities
: Securities available for sale and equity securities are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (“Level 1”). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data. Using a market approach valuation methodology, third party vendors compile prices based on observable market inputs, which include benchmark yields, reported trades, issuer spreads, benchmark securities, and “To Be Announced” prices (“Level 2”). Management internally reviews the fair values provided by third party vendors on a monthly basis. Management also performs a quarterly price testing analysis at the individual security level which compares the pricing provided by the third party vendors to an independent pricing source’s valuation of the same securities. Variances that are deemed to be material are reviewed by management. Additionally, to further assess the reliability of the information received from third party vendors, management obtains documentation from third party vendors related to the sources, methodologies, and inputs utilized in valuing securities classified as Level 2. Management analyzes this information to ensure the underlying assumptions appear reasonable. Management also obtains an independent service auditor’s report from third party vendors to provide reasonable assurance that appropriate controls are in place over the valuation process. Upon completing its review of the pricing from third party vendors at December 31, 2024, management determined that the prices provided by its third party pricing sources were reasonable and in line with management’s expectations for the market values of these securities. Therefore, prices obtained from third party vendors that did not reflect forced liquidation or distressed sales were not adjusted materially by management at December 31, 2024. Management utilizes a number of factors to determine if a market is inactive, all of which may require a significant level of judgment. Factors that management considers include: a significant widening of the bid-ask spread, a considerable decline in the volume and level of trading activity in the instrument, a significant variance in prices among market participants, and a significant reduction in the level of observable inputs. Any securities available for sale not valued based upon quoted market prices or third party pricing models that consider observable market data are considered Level 3. Currently, United does not have any available-for-sale securities considered as Level 3.
Loans held for sale
: For residential mortgage loans sold, the loans closed are recorded at fair value using the fair value option which is measured using valuations from investors for loans with similar characteristics (“Level 2”) with some adjusted for the Company’s actual sales experience versus the investor’s indicated pricing (“Level 3”). The unobservable input for Level 3 valuations is the Company’s historical sales prices. For December 31, 2024, the range of historical sales prices increased the investor’s indicated pricing by a range of 0.12% to 0.64% with a weighted average increase of 0.20%.
Derivatives
: United utilizes interest rate swaps to hedge exposure to interest rate risk and variability of cash flows associated to changes in the underlying interest rate of the hedged item. These hedging interest rate swaps are classified as either a fair value hedge or a cash flow hedge. United utilizes third-party vendors for derivative valuation purposes. These vendors determine the appropriate fair value based on a net present value calculation of the cash flows related to the interest rate swaps using primarily observable market inputs such as interest rate yield curves (“Level 2”). Valuation adjustments to derivative fair values for liquidity and credit risk are also taken into consideration, as well as the likelihood of default by United and derivative counterparties, the net counterparty exposure and the remaining maturities of the positions. Values obtained from third party vendors are typically not adjusted by management. Management internally reviews the derivative values provided by third party vendors on a quarterly basis.
For a fair value hedge, the fair value of the interest rate swap is recognized on the balance sheet as either a freestanding asset or liability with a corresponding adjustment to the hedged financial instrument. Subsequent adjustments due to changes in the fair value of a derivative that qualifies as a fair value hedge are offset in current period earnings either in interest income or interest expense depending on the nature of the hedged financial instrument. For a cash flow hedge, the fair value of the interest rate swap is recognized on the balance sheet as either a freestanding asset or liability with a corresponding adjustment to accumulated other comprehensive income within shareholders’ equity, net of tax. Subsequent adjustments due to changes in the fair value of a derivative that qualifies as a cash flow hedge are offset to accumulated other comprehensive income, net of tax and reclassified into earnings in the same line associated with the forecasted transaction when the forecasted transaction affects earnings.
The Company records its interest rate lock commitments and forward loan sales commitments at fair value determined as the amount that would be required to settle each of these derivative financial instruments at the balance sheet date. In the normal course of business, United enters into contractual interest rate lock commitments to extend credit to borrowers with fixed expiration dates. The commitments become effective when the borrowers “lock-in”
a specified interest rate within the timeframes established by United. All borrowers are evaluated for credit worthiness prior to the extension of the commitment. Market risk arises if interest rates move adversely between the time of the interest rate lock by the borrower and the sale date of the loan to the investor. To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, United may enter into either a forward sales contract to sell loans to investors or a TBA mortgage-backed security. Fair values of TBA mortgage-backed securities are measured using valuations from investors for mortgage-backed securities with similar characteristics (“Level 2”). The forward sales contracts lock in an interest rate and price for the sale of loans similar to the specific rate lock commitments. The rate lock commitments to borrowers and the forward sales contracts to investors are undesignated derivatives and accordingly, are marked to fair value through earnings. The interest rate lock commitments are recorded at fair value which is measured using valuations from investors for loans with similar characteristics as well as considering the probability of the loan closing (i.e. the “pull-through” rate) (“Level 2”) with some adjusted for the Company’s actual sales experience versus the investor’s indicated pricing (“Level 3”). The unobservable input for Level 3 valuations is the Company’s historical sales prices. For December 31, 2024, the range of historical sales prices increased the investor’s indicated pricing
by a range of
0.12% to
0.64% with a weighted average increase of
0.20%.
For derivatives that are not designated in a hedge relationship, changes in the fair value of these derivatives are recognized in income from mortgage banking activities in the same period as the change in the fair value. Unrealized gains and losses due to changes in the fair value of other derivative financial instruments not in hedge relationship, if any, are included in noninterest income and noninterest expense, respectively.
The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2024 and 2023, segregated by the level of the valuation inputs within the fair value hierarchy:
Fair Value at December 31, 2024 Using
(In thousands)
Description
Balance as of
December 31,
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets
Available for sale debt securities:
U.S. Treasury securities and obligations of U.S. Government corporations and agencies
$ 245,842
$
$ 245,842
$
State and political subdivisions
495,073
495,073
Residential mortgage-backed securities
Agency
1,059,719
1,059,719
Non-agency
82,123
82,123
Commercial mortgage-backed securities
Agency
329,986
329,986
Asset-backed securities
474,982
474,982
Single issue trust preferred securities
11,919
11,919
Fair Value at December 31, 2024 Using
(In thousands)
Description
Balance as of
December 31,
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Other corporate securities
260,075
4,965
255,110
Total available for sale securities
2,959,719
4,965
2,954,754
Equity securities:
Financial services industry
12.504
12,504
Equity mutual funds (1)
3,394
3,394
Fixed income mutual funds
5,160
5,160
Total equity securities
21,058
21,058
Loans held for sale
44,360
44,360
Derivative financial assets:
Interest rate swap contracts
TBA mortgage-backed securities
Interest rate lock commitments
Total derivative financial assets
1,261
Liabilities
Derivative financial liabilities:
Forward sales commitments
Total derivative financial liabilities
Fair Value at December 31, 2023 Using
(In thousands)
Description
Balance as of
December 31,
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets
Available for sale debt securities:
U.S. Treasury securities and obligations of U.S. Government corporations and agencies
$ 484,950
$
$ 484,950
$
State and political subdivisions
533,831
533,831
Residential mortgage-backed securities
Agency
1,049,941
1,049,941
Non-agency
90,611
90,611
Commercial mortgage-backed securities
Agency
459,298
459,298
Asset-backed securities
860,638
860,638
Single issue trust preferred securities
15,141
15,141
Other corporate securities
291,967
5,159
286,808
Total available for sale securities
3,786,377
5,159
3,781,218
Equity securities:
Financial services industry
Equity mutual funds (1)
3,524
3,524
Fixed income mutual funds
5,210
5,210
Total equity securities
8,945
8,945
Loans held for sale
56,261
4,283
51,978
Derivative financial assets:
Interest rate swap contracts
Forward sales commitments
Interest rate lock commitments
1,144
1,005
Total derivative financial assets
1,848
1,038
Liabilities
Derivative financial liabilities
:
TBA mortgage-backed securities
Total derivative financial liabilities
(1)
The equity mutual funds are within a rabbi trust for the payment of benefits under a deferred compensation plan for certain key
officers of United and its subsidiaries.
There were no transfers between Level 1, Level 2 and Level 3 for financial assets and liabilities measured at fair value on a recurring basis during the year ended December 31, 2024 and 2023.
The following tables present additional information about financial assets and liabilities measured at fair value at December 31, 2024 and 2023 on a recurring basis and for which United has utilized Level 3 inputs to determine fair value. The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses related to assets still held at the reporting date are recorded in Income from mortgage banking activities in the Consolidated Statements of Income.
Derivative Assets
Derivative Liabilities
December31, 2024
Loans
Held for
Sale
TBA
Securities
Forward Sales
Commitments
Interest Rate
Lock
Commitments
TBA
Securities
Forward
Sales
Commitments
Balance, beginning of period
 $
51,978
 $
 $
 $
1,005
 $
 $
Originations
607,383
Sales
(630,244
)
Transfers other
(33
)
(666
)
(667
)
Total gains during the period recognized in earnings
15,243
Balance, end of period
 $
44,360
$
 $
 $
 $
 $
The amount of total (losses) gains for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at reporting date
 $
(1,133
)
 $
 $
 $
 $20
Derivative Assets
Derivative Liabilities
December 31, 2023
Loans
Held for Sale
TBA
Securities
Forward Sales
Commitments
Interest Rate
Lock
Commitments
TBA
Securities
Interest Rate
Lock
Commitments
Balance, beginning of period
 $
44,871
 $
 $
 $
 $
 $
Originations
1,156,616
Sales
(1,179,612
)
Transfers other
(26
)
(348
)
Total gains during the period recognized in earnings
30,103
Balance, end of period
 $
51,978
 $
 $
 $
1,005
 $
 $
The amount of total gains for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at reporting date
 $
1,142
 $
 $
 $
1,005
 $
 $
Fair Value Option
The following table reflects the change in fair value included in earnings of financial instruments for which the fair value option has been elected:
(In thousands)
Description
Year Ended
December 31, 2024
Year Ended
December 31, 2023
Income from mortgage banking activities
$ (1,222)
$ 1,175
The following table reflects the difference between the aggregate fair value and the remaining contractual principal outstanding for financial instruments for which the fair value option has been elected:
December 31, 2024
December 31, 2023
(In thousands)
Description
Unpaid
Principal
Balance
Fair Value
Fair Value
Over/(Under)
Unpaid
Principal
Balance
Unpaid
Principal
Balance
Fair Value
Fair Value
Over/(Under)
Unpaid
Principal
Balance
Loans held for sale
 $  43,698
 $  44,360
 $
 $  54,377
 $  56,261
 $  1,884
No loans held for sale were past due or on nonaccrual status as of December 31, 2024 and 2023.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Certain financial assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets.
The following describes the valuation techniques used by United to measure certain financial assets recorded at fair value on a nonrecurring basis in the financial statements.
Individually assessed loans
: In the determination of the allowance for loan losses, loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. Fair value is measured using a market approach based on the value of the collateral securing the loans. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the collateral is real estate. The value of real estate collateral is determined utilizing an appraisal conducted by an independent, licensed appraiser outside of the Company using comparable property sales (“Level 2”). However, if the collateral is a house or building in the process of construction or if an appraisal of the real estate property is over two years old, then the fair value is considered Level 3. The value of business equipment is based upon an outside appraisal if deemed significant, or the net book value on the applicable business’ financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (“Level 3”). For individually assessed loans, a specific reserve is established through the allowance for loan losses, if necessary, by estimating the fair value of the underlying collateral on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for credit losses expense on the Consolidated Statements of Income.
OREO
: OREO consists of real estate acquired in foreclosure or other settlement of loans. Such assets are carried on the balance sheet at the lower of the investment in the assets or the fair value of the assets less estimated selling costs. Fair value is determined by one of two market approach methods depending on whether the property has been vacated and an appraisal can be conducted. If the property has yet to be vacated and thus an appraisal cannot be performed, a Brokers Price Opinion (i.e. BPO), is obtained. A BPO represents a best estimate valuation performed by a realtor based on knowledge of current property values and a visual examination of the exterior condition of the property. Once the property is subsequently vacated, a formal appraisal is obtained and the recorded asset value appropriately adjusted. On the other hand, if the OREO property has been vacated and an appraisal can be conducted, the fair value of the property is
determined based upon the appraisal using a market approach. An authorized independent appraiser conducts appraisals for United. Appraisals for property other than ongoing construction are based on consideration of comparable property sales (“Level 2”). In contrast, valuation of ongoing construction assets requires some degree of professional judgment. In conducting an appraisal for ongoing construction property, the appraiser develops two appraised amounts: an “as is” appraised value and a “completed” value. Based on professional judgment and their knowledge of the particular situation, management determines the appropriate fair value to be utilized for such property (“Level 3”). As a matter of policy, valuations are reviewed at least annually and appraisals are generally updated on a bi-annual
basis with values lowered as necessary.
Intangible Assets
: For United, intangible assets consist of goodwill and core deposit intangibles. Goodwill is tested for impairment at least annually or sooner if indicators of impairment exist. United may elect to perform a qualitative analysis to determine whether or not it is more-likely-than not that the fair value of a reporting unit is less than its carrying amount. If United elects to bypass this qualitative analysis, or concludes via qualitative analysis that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, United may use either a market or income quantitative approach to determine the fair value of the reporting unit. If the fair value of the reporting unit is less than its carrying value, an impairment charge would be recorded for the difference, not to exceed the amount of goodwill allocated to the reporting unit. At each reporting date, the Company considers potential indicators of impairment. United performed its annual goodwill impairment test on the Company’s reporting units as of September 30, 2024. The goodwill impairment test did not identify any goodwill impairment. In subsequent periods, economic uncertainty, market volatility and the performance of the Company’s stock as well as possible other impairment indicators could cause us to perform a goodwill impairment test which could result in an impairment charge being recorded for that period if the carrying value of goodwill was found to exceed fair value. Core deposit intangibles relate to the estimated value of the deposit base of acquired institutions. Management reviews core deposit intangible assets on an annual basis, or sooner if indicators of impairment exist, and evaluates changes in facts and circumstances that may indicate impairment in the carrying value. During the fourth quarter of 2023, United’s management formulated a plan to consolidate its mortgage delivery channels by consolidating George Mason’s and Crescent’s mortgage banking business into United Bank. As a result of this consolidation decision, United impaired the trade names intangibles at George Mason and Crescent to zero at December 31, 2023.
No other fair value measurement of intangible assets was made during the year of 2024 and 2023.
Mortgage Servicing Rights (“MSRs”):
A mortgage servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans are expected to more than adequately compensate the Company for performing the servicing. The Company initially measures servicing assets and liabilities retained related to the sale of residential loans held for sale at fair value. For subsequent measurement purposes, the Company measures servicing assets and liabilities using the amortization method on a quarterly basis. The quarterly determination of fair value of servicing rights is provided by a third party and is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy. The unobservable inputs for Level 3 valuations are market discount rates, anticipated prepayment speeds, projected delinquency rates, and ancillary fee income net of servicing costs. During the third quarter of 2024, United sold its remaining balance of MSRs. For the unobservable inputs used in the valuation of MSRs at December 31, 2023, refer to Note J of these Notes to Consolidated Financial Statements. The Company did not record any temporary impairment of MSRs in during the year of 2024 and 2023.
The following table summarizes United’s financial assets that were measured at fair value on a nonrecurring basis during the period:
(In thousands)
Description
Fair Value at December 31, 2024
Balance as of
December 31,
 Quoted Prices 
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
 Observable 
Inputs
(Level 2)
Significant
 Unobservable 
Inputs
(Level 3)
YTD
Gains
 (Losses) 
Assets
Individually assessed loans
$ 40,701
$
$ 21,725
$ 18,976
$ (231 )
OREO
(In thousands)
Description
Fair Value at December 31, 2023
Balance as of
December 31,
 Quoted Prices 
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
 Observable 
Inputs
(Level 2)
Significant
 Unobservable 
Inputs
(Level 3)
YTD
Gains
 (Losses) 
Assets
Individually assessed loans
$ 45,308
$
$ 44,722
$
$
OREO
2,615
2,615
(67 )
Fair Value of Other Financial Instruments
The following methods and assumptions were used by United in estimating its fair value disclosures for other financial instruments:
Cash and Cash Equivalents:
The carrying amounts reported in the balance sheet for cash and cash equivalents approximate those assets’ fair values.
Securities held to maturity and other securities
: The estimated fair values of securities held to maturity are based on quoted market prices, where available. If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data. Third party vendors compile prices from various sources and may determine the fair value of identical or similar securities by using pricing models that consider observable market data. Any securities held to maturity, not valued based upon the methods above, are valued based on a discounted cash flow methodology using appropriately adjusted discount rates reflecting nonperformance and liquidity risks. Other securities consist mainly of shares of Federal Home Loan Bank and Federal Reserve Bank stock as well as investment tax credits that do not have readily determinable fair values and are carried at cost.
Loans and leases
: The fair values of certain mortgage loans (e.g., one-to-four family residential), credit card loans, and other consumer loans are based on quoted market prices of similar loans sold in conjunction with securitization transactions, adjusted for differences in loan characteristics. The fair values of other loans and leases (e.g., commercial real estate and rental property mortgage loans, commercial and industrial loans, financial institution loans and agricultural loans) are estimated using discounted cash flow analyses, using market interest rates currently being offered for loans and leases with similar terms to borrowers of similar creditworthiness, which include adjustments for liquidity concerns. For acquired PCD loans, fair value is assumed to equal United’s carrying value, which represents the present value of expected future principal and interest cash flows, as adjusted for any Allowance for Credit Losses recorded for these loans.
Deposits
: The fair values of demand deposits (e.g., interest and noninterest checking, regular savings and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). The carrying amounts of variable-rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date. Fair values of fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits.
Short-term Borrowings:
The carrying amounts of federal funds purchased, borrowings under repurchase agreements and any other short-term borrowings approximate their fair values.
Long-term Borrowings:
The fair values of United’s Federal Home Loan Bank borrowings and trust preferred securities are estimated using discounted cash flow analyses, based on United’s current incremental borrowing rates for similar types of borrowing arrangements.
Summary of Fair Values for All Financial Instruments
The estimated fair values of United’s financial instruments are summarized below:
Fair Value at Measurement
(In thousands)
 Carrying 
Amount
  Fair Value  
 Quoted Prices 
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
 Observable 
Inputs
(Level 2)
Significant
 Unobservable 
Inputs
(Level 3)
December 31, 2024
Cash and cash equivalents
$ 2,292,244
$ 2,292,244
$
$ 2,292,244
$
Securities available for sale
2,959,719
2,959,719
4,965
2,954,754
Securities held to maturity
1,002
1,020
1,020
Equity securities
21,058
21,058
21,058
Other securities
277,517
263,641
263,641
Loans held for sale
44,360
44,360
44,360
Net loans
21,401,649
20,868,239
20,868,239
Derivative financial assets,
1,261
1,261
Mortgage servicing rights
Deposits
23,961,859
23,922,063
23,922,063
Short-term borrowings
176,090
176,090
176,090
Long-term borrowings
540,420
505,305
505,305
Derivative financial liabilities
December 31, 2023
Cash and cash equivalents
$ 1,598,943
$ 1,598,943
$
$ 1,598,943
$
Securities available for sale
3,786,377
3,786,377
5,159
3,781,218
Securities held to maturity
1,003
1,020
1,020
Equity securities
8,945
8,945
8,945
Other securities
329,429
312,958
312,958
Loans held for sale
56,261
56,261
4,283
51,978
Net loans
21,099,847
20,463,710
20,463,710
Derivative financial assets,
1,848
1,848
1,038
Mortgage servicing rights
4,554
13,427
13,427
Deposits
22,819,319
22,760,310
22,760,310
Short-term borrowings
196,095
196,095
196,095
Long-term borrowings
1,789,103
1,769,123
1,769,123
Derivative financial liabilities
NOTE X--VARIABLE
INTEREST ENTITIES
Variable interest entities (“VIEs”) are entities that either have a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest (i.e., ability to make significant decisions, through voting rights, right to receive the expected residual returns of the entity, and obligation to absorb the expected losses of the entity). VIEs can be structured as corporations, trusts, partnerships, or other legal entities. United’s business practices include relationships with certain VIEs. For United, the business purpose of these relationships primarily consists of funding activities in the form of issuing trust preferred securities.
United currently sponsors twenty statutory business trusts that were created for the purpose of raising funds that originally qualified for Tier I regulatory capital. As previously discussed, these trusts now are considered Tier II regulatory capital. These trusts, of which several were acquired through bank acquisitions, issued or participated in pools of trust preferred capital securities to third-party investors with the proceeds invested in junior subordinated debt securities of United. The Company, through a small capital contribution, owns 100% of the voting equity shares of each trust. The assets, liabilities, operations, and cash flows of each trust are solely related to the issuance, administration, and repayment of the preferred equity securities held by third-party investors. United fully and unconditionally guarantees the obligations of each trust and is obligated to redeem the junior subordinated debentures upon maturity.
As defined in applicable accounting standards, VIEs are entities that lack one or more of the characteristics of a voting interest entity. A controlling financial interest in a VIE is present when an enterprise has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The enterprise with a controlling financial interest, known as the primary beneficiary, consolidates the VIE. United’s wholly owned and indirect wholly owned statutory trust subsidiaries are VIEs for which United is not the primary beneficiary. Accordingly, its accounts are not included in United’s consolidated financial statements. At December 31, 2024 and 2023, United’s investment (maximum exposure to loss) in these trusts were $12,238,000 and $11,751,000, respectively.
United, through its banking subsidiary, also makes limited partner equity investments in various low income housing and community development partnerships sponsored by independent third-parties. United invests in these partnerships to either realize tax credits on its consolidated federal income tax return or for purposes of earning a return on its investment. These partnerships are considered VIEs as the limited partners lack a controlling financial interest in the entities through their inability to make decisions that have a significant effect on the operations and success of the partnerships. These partnerships are not consolidated as United is not deemed to be the primary beneficiary. At December 31, 2024 and 2023, United’s investment (maximum exposure to loss) in these low income housing and community development partnerships were $98,441,000 and $87,554,000, respectively, while related unfunded commitments were $89,292,000 and $63,539,000, respectively. As of December 31, 2024, United expects to recover its remaining investments through the use of the tax credits that are generated by the investments.
NOTE Y--SEGMENT
INFORMATION
United operates in one reportable segment, community banking. Through its community banking segment, United offers a full range of products and services through various delivery channels. Included among the banking products and services offered are the acceptance of deposits in checking, savings, time and money market accounts; the making and servicing of personal, credit card, commercial, and floor plan loans; and the making of construction and real estate loans as well as the origination and sale of residential mortgages in the secondary market. Also offered are trust and brokerage services, safe deposit boxes, and wire transfers. The community banking segment derives revenues mainly from interest income on loans to customers, investment securities held and other short-term investments in addition to fees and income derived related to the services listed above.
The accounting policies of the community banking segment are the same as those described in the summary of significant accounting policies. United’s chief operating decision maker (“CODM”) is its chief executive officer who maintains responsibility for the day-to-day
management of the Company including regularly reviewing the operating results of the community banking segment in order to assess performance and make decisions about resource allocation based on net income that also is reported on the income statement as consolidated net income. The measure of community banking segment assets is reported on the Consolidated Balance Sheets as total assets.
The CODM uses net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the community banking segment or into other parts of the entity, such as for acquisitions or to pay dividends. Net income is used to monitor budget versus actual results as well as comparing to prior year’s results. The comparative analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment.
Information about the community banking segment for the years ended December 31, 2024, 2023 and 2022 is as follows:
For the Year Ended December 31
(In thousands)
Total Assets
$
30,023,545
$
29,926,482
$
29,489,380
Net interest income
$ 911,068
$ 919,924
$ 896,431
Provision for credit losses
25,153
31,153
18,822
Other income
123,695
135,258
153,261
Other expense
Employee compensation
234,618
230,809
242,408
Employee benefits
53,621
48,368
45,944
Net occupancy expense
46,084
46,426
45,129
OREO expense
1,355
2,138
Net (gains) losses on the sales of OREO properties
(75 )
(60 )
Equipment expense
29,686
29,731
29,320
Data processing expense
29,646
29,395
29,997
Mortgage loan servicing expense and impairment
2,694
5,596
7,099
Bankcard processing expense
2,490
2,192
1,938
FDIC insurance expense
19,735
30,376
11,988
Other segment expense (a)
125,956
136,036
138,426
Total other expense
545,031
560,224
555,087
Income before income taxes
464,579
463,805
475,783
Income taxes
91,583
97,492
96,156
Segment net income
372,996
366,313
379,627
Reconciliation of profit or loss
Adjustments and reconciling items
Consolidated net income
$ 372,996
$ 366,313
$ 379,627
(a)
Other segment expense includes legal, consulting and other professional services expense, franchise and other taxes not on income, expense for reserve on lending-related commitments, ATM expenses, marketing expense, core deposits amortization, and other general operating expenses.
NOTE Z--QUARTERLY
FINANCIAL DATA (UNAUDITED)
Quarterly financial data for 2024 and 2023 is summarized below:
(Dollars in thousands, except per share data)
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Interest income
$ 369,180
$ 374,184
$ 382,723
$ 376,034
Interest expense
146,691
148,469
152,467
143,426
Net interest income
222,489
225,715
230,256
232,608
Provision for credit losses
5,740
5,779
6,943
6,691
Mortgage banking income
5,298
3,901
4,544
2,314
Securities (losses) gains, net
(99 )
(218 )
(6,715 )
(688 )
Other noninterest income
27,013
26,540
34,113
27,692
Noninterest expense
140,742
134,774
135,339
134,176
Income taxes
21,405
18,878
24,649
26,651
Net income (1)
86,814
96,507
95,267
94,408
Per share data:
Average shares outstanding (000s):
Basic
134,809
135,138
135,158
135,236
Diluted
135,121
135,315
135,505
135,732
Net income per share:
Basic
$ 0.64
$ 0.71
$ 0.70
$ 0.70
Diluted
$ 0.64
$ 0.71
$ 0.70
$ 0.69
Dividends per share
$ 0.37
$ 0.37
$ 0.37
$ 0.37
Interest income
$ 329,303
$ 345,932
$ 356,910
$ 369,175
Interest expense
94,983
118,471
128,457
139,485
Net interest income
234,320
227,461
228,453
229,690
Provision for credit losses
6,890
11,440
5,948
6,875
Mortgage banking income
6,384
7,907
7,556
4,746
Securities (losses) gains, net
(405 )
(7,336 )
(181 )
Other noninterest income
26,765
34,607
26,286
28,653
Noninterest expense
137,419
135,288
135,230
152,287
Income taxes
24,448
23,452
24,779
24,813
Net income (1)
98,307
92,459
96,157
79,390
Per share data:
Average shares outstanding (000s):
Basic
134,411
134,683
134,685
134,691
Diluted
134,840
134,850
134,888
134,985
Net income per share:
Basic
$
0.73
$
0.68
$
0.71
$
0.59
Diluted
$
0.73
$
0.68
$
0.71
$
0.59
Dividends per share
$
0.36
$
0.36
$
0.36
$
0.37
(1) For further information, see the related discussion “Quarterly Results” included in Management’s Discussion and Analysis.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
This item is omitted since it is not applicable.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A.
CONTROLS
AND PROCEDURES
Disclosure Controls and Procedures
United Bankshares, Inc. (the “Company”) maintains
controls and procedures designed to ensure that it is able to collect the information it is required to disclose in the reports it files with the SEC, and to process, summarize and disclose this information within the time periods specified in the rules of the SEC. Based on an evaluation of the Company’s disclosure controls and procedures as of the end of the period covered by this report conducted by the Company’s management, with the participation of the Chief Executive and Chief Financial Officer, the Chief Executive and Chief Financial Officer believe that these controls and procedures are effective to ensure that the Company is able to collect, process and disclose the information it is required to disclose in the reports it files with the SEC within the required time periods.
Management’s Report on Internal Control over Financial Reporting
Management’s Report on internal control over financial reporting and the audit report of Ernst & Young LLP, the Company’s independent registered public accounting firm, on internal control over financial reporting is included on pages 61-62 of this report and are incorporated in this Item 9A by reference.
Changes In Internal Control Over Financial Reporting
There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f)
under the Exchange Act) during the fiscal quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
Item 9B.
OTHER INFORMATION
United’s directors and executive officers may from time to time enter into plans or other arrangements for the purchase or sale of United’s shares that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Securities Exchange Act of 1934, as amended. During the quarter ended December 31, 2024,
none of our directors or executive officers adopted, modified or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement”, as each term is defined in Rule 408(e) of Regulation S-K.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information regarding directors and executive officers of the registrant including their reporting compliance under Section 16(a) of the Securities Exchange Act of 1934 is incorporated by reference from United’s definitive proxy statement for the 2025 Annual Meeting of Shareholders under the caption “Directors Whose Terms Expire in 2025 and Nominees for Directors” under the heading “PROPOSAL 1: ELECTION OF DIRECTORS”, under the caption “Delinquent Section 16(a) Reports” under the heading “COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT” and under the captions “Executive Officers” and “Family Relationships” under the heading “GOVERNANCE OF THE COMPANY.”
United has adopted a code of ethics for its Chief Executive Officer, Chief Financial Officer, Controller and persons performing similar functions of the registrant in accordance with Section 406 of the Sarbanes-Oxley Act of 2002. A copy of the code of ethics is posted on United’s web site at www.ubsi-inc.com.
Information related to the registrant’s audit committee and its financial expert in accordance with Section 407 of the Sarbanes-Oxley Act of 2002 is incorporated by reference from United’s definitive proxy statement for the 2025 Annual Meeting of Shareholders under the captions “The Audit Committee” and the “Audit Committee Financial Expert” under the heading “GOVERNANCE OF THE COMPANY.”
Since the disclosure of the procedures in the definitive proxy statement for the 2024 Annual Meeting of Shareholders, United has not adopted any changes to the procedures by which shareholders may recommend nominees to United’s Board of Directors as set forth in Article II, Section 5 of the Restated Bylaws of United.
United adopted an Insider Trading Policy on August 5, 2024, a copy of which is included as Exhibit 19 to this Form 10-K.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11.
EXECUTIVE COMPENSATION
Information regarding executive compensation is incorporated by reference from United’s definitive proxy statement for the 2025 Annual Meeting of Shareholders under the heading of “EXECUTIVE COMPENSATION”, excluding the information under the subheading “Pay Versus Performance Table”, under the heading “COMPENSATION DISCUSSION AND ANALYSIS (CD&A)”, and under the heading “REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION.”

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information regarding security ownership of certain beneficial owners and management and securities authorized under equity compensation plans is incorporated by reference from United’s definitive proxy statement for the 2025 Annual Meeting of Shareholders under the caption “Directors Whose Terms Expire in 2025 and Nominees for Directors” under the heading “PROPOSAL 1: ELECTION OF DIRECTORS” and under the captions “Beneficial Ownership of Directors and Named Executive Officers”, “Principal Shareholders of United” and “Related Shareholder Matters” under the heading “COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.”

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information regarding certain relationships and related transactions is incorporated by reference from United’s definitive proxy statement for the 2025 Annual Meeting of Shareholders under the captions of “Related Party Transactions” and “Independence of Directors” under the heading “GOVERNANCE OF THE COMPANY.”

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Information regarding approval of audit and non-audit services by the Audit Committee as well as fees paid to auditors is incorporated by reference from United’s definitive proxy statement for the 2025 Annual Meeting of Shareholders under the captions “Pre-Approval Policies and Procedures” and “Independent Registered Public Accounting Firm Fees Information” under the heading “AUDIT COMMITTEE AND INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.”
UNITED BANKSHARES, INC.
FORM 10-K, PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) List of Documents Filed as Part of This Report:
(1) Financial Statements
United’s consolidated financial statements required in response to this Item are incorporated by reference from Item 8 of this Annual Report on Form 10-K.
(2) Financial Statement Schedules
United is not filing separate financial statement schedules because of the absence of conditions under which they are required or because the required information is included in the consolidated financial statements or notes thereto.
(3) Exhibits Required by Item 601
Listing of Exhibits - See the Index to Exhibits on page 136 of this Form 10-K.
(b) Exhibits - The exhibits to this Form 10-K begin on page 140.
(c) Consolidated Financial Statement Schedules - All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable or pertain to items as to which the required disclosures have been made elsewhere in the financial statements and notes thereto, and therefore have been omitted.
All reports filed electronically by United with the Securities and Exchange Commission (SEC), including the annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, as well as any amendments to those reports, are accessible at no cost on United’s web site at www.ubsi-inc.com. These filings are also accessible on the SEC’s web site at www.sec.gov.
UNITED BANKSHARES, INC.
FORM 10-K
INDEX TO EXHIBITS
Exhibit
No.
Description
2.1
Agreement and Plan of Merger, dated May 9, 2024, by and between United Bankshares, Inc. and Piedmont Bancorp, Inc. (incorporated into this filing by reference to Exhibit 2.1 to the Form 8-K dated May 9, 2024 and filed May 10, 2024 for United Bankshares, Inc., File No. 002-86947)
2.2
Agreement and Plan of Reorganization, dated June 2, 2021, by and between United Bankshares, Inc. and Community Bankers Trust Corporation (incorporated into this filing by reference to Exhibit 2.1 to the Form 8-K dated December 3, 2021 and filed December 3, 2021 for United Bankshares, Inc., File No. 002-86947)
3.1
Amended and Restated Articles of Incorporation (incorporated into this filing by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q dated March 31, 2017 and filed May 9, 2017 for United Bankshares, Inc., File No.002-86947)
3.2
Restated Bylaws (incorporated into this filing by reference to Exhibit 3.1 to the Current Report on Form 8-K dated and filed on March 20, 2020 for United Bankshares, Inc., File No.002-86947)
4.1
Description of Registrant’s Securities (incorporated into this filing by reference to the Annual Report on Form 10-K dated December 31, 2019 and filed March 2, 2020 for United Bankshares, Inc., File No.002-86947)
10.1
Fifth Amended and Restated Employment Agreement between United Bankshares, Inc. and Richard M. Adams (incorporated into this filing by reference to Exhibit 10.1 to the Current Report on Form 8-K dated February 28, 2022 and filed March 1, 2022 for United Bankshares, Inc., File No. 002-86947)
10.2
Second Amended and Restated Supplemental Retirement Agreement for Richard M. Adams (incorporated into this filing by reference to Exhibit 10.4 to the Form 8-K dated November 24, 2008 and filed November 26, 2008 for United Bankshares, Inc., File No. 002-86947)
10.3
First Amendment to Second Amended and Restated Supplemental Retirement Agreement for Richard M. Adams (incorporated into this filing by reference to Exhibit 10.6 to the 2011 Form 10-K dated December 31, 2011 and filed February 29, 2012 for United Bankshares, Inc., File No. 002-86947)
10.4
Amended and Restated Change of Control Agreement for Richard M. Adams, Jr. and James J. Consagra, Jr. (incorporated into this filing by reference to Exhibit 10.9 to the Form 8-K dated November 24, 2008 and filed November 26, 2008 for United Bankshares, Inc., File No. 002-86947)
10.5
Form of 2017 Amendment to Amended and Restated Change of Control Agreement for Richard M. Adams, Jr. and James J. Consagra, Jr. (incorporated into this filing by reference to Exhibit 10.6 to the 2017 Form 10-K dated December 31, 2017 and filed March 1, 2018 for United Bankshares, Inc. File No.002-86947)
Exhibit
No.
Description
10.6
Form of the Amendment and First Restatement of the United Bankshares, Inc. Supplemental Executive Retirement Agreement (Tier 2 SERP) for Richard M. Adams, Jr. and James J. Consagra, Jr., Executive Vice-President (incorporated into this filing by reference to Exhibit 10.6 to the Form 8-K dated November 24, 2008 and filed November 26, 2008 for United Bankshares, Inc., File No. 002-86947)
10.7
Form of Second Amendment to 2008 Amended and Restated United Bankshares, Inc. Supplemental Executive Retirement Agreement for Richard M. Adams, Jr. and James J. Consagra, Jr. (incorporated into this filing by reference to Exhibit 10.8 to the 2017 Form 10-K dated December 31, 2017 and filed March 1, 2018 for United Bankshares, Inc. File No.002-86947)
10.8
Employment Agreement with J. Paul McNamara (incorporated into this filing by reference to Exhibit 10.3 to Form S-4 Registration Statement of United Bankshares, Inc., Registration No. 33-106890 filed July 9, 2003)
10.9
Supplemental Executive Retirement Agreement for Mark Tatterson (incorporated into this filing by reference to Exhibit 10.2 to the 2013 Form 10-K dated December 31, 2013 and filed on March 3, 2014 for United Bankshares, Inc., File No. 002-86947)
10.10
Form of First Amendment to United Bankshares, Inc. Supplemental Executive Retirement Agreement for Mark Tatterson (incorporated into this filing by reference to Exhibit 10.12 to the 2017 Form 10-K dated December 31, 2017 and filed March 1, 2018 for United Bankshares, Inc. File No.002-86947)
10.11
Form of Independent Contractor Agreement with Peter A. Converse (incorporated into this filing by reference to Exhibit 10.1 to the Form 10-Q dated March 31, 2016 and filed May 9, 2016 for United Bankshares, Inc., File No. 002-86947)
10.12
Amended and Restated Employment Agreement by and between United Bankshares, Inc., United Bank and Michael P. Fitzgerald (incorporated into this filing by reference to Exhibit 10.2 to the Form 8-K dated June 3, 2016 and filed June 6, 2016 for United Bankshares, Inc., File No.002-86947)
10.13
Form of Supplemental Executive Retirement Agreement with Darren K. Williams and Douglas B. Ernest (incorporated into this filing by reference to Exhibit 10.15 to the 2017 Form 10-K dated December 31, 2017 and filed March 1, 2018 for United Bankshares, Inc. File No.002-86947)
10.14
Second Amended and Restated United Bankshares, Inc. Non-Qualified Retirement and Savings Plan (incorporated into this filing by reference to Exhibit 10.3 to the Form 8-K dated November 24, 2008 and filed November 26, 2008 for United Bankshares, Inc., File No. 002-86947)
10.15
Amended and Restated United Bankshares, Inc. Management Stock Bonus Plan (incorporated into this filing by reference to Exhibit 10.10 to the Form 8-K dated November 24, 2008 and filed November 26, 2008 for United Bankshares, Inc., File No. 002-86947)
10.16
United Bankshares, Inc., United Bank, Inc. and United Bank Deferred Compensation Plan for Directors (incorporated into this filing by reference to Exhibit 10.12 to the Form 8-K dated November 24, 2008 and filed November 26, 2008 for United Bankshares, Inc., File No. 002-86947)
Exhibit
No.
Description
10.17
United Bankshares, Inc., United Bank, Inc. and United Bank Rabbi Trust Agreement for Deferred Compensation Plan for Directors (incorporated into this filing by reference to Exhibit 10.13 to the Form 8-K dated November 24, 2008 and filed November 26, 2008 for United Bankshares, Inc., File No. 002-86947)
10.18
United Bankshares, Inc. 2016 Long-term Incentive Plan (incorporated into this filing by reference to Exhibit A to 2016 Proxy Statement dated April 4, 2016 and filed April 1, 2016 for United Bankshares, Inc., File No. 002-86947)
10.19
United Bankshares, Inc. 2020 Long-term Incentive Plan (incorporated into this filing by reference to Exhibit A to 2020 Proxy Statement dated March 30, 2020 and filed March 30, 2020 for United Bankshares, Inc., File No. 002-86947)
United Bankshares, Inc. Insider Trading Policy (filed herewith)
21.1
Subsidiaries of the Registrant (filed herewith)
23.1
Consent of Ernst & Young LLP (filed herewith)
31.1
Certification as Adopted Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer (filed herewith)
31.2
Certification as Adopted Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer (filed herewith)
32.1
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer (furnished herewith)
32.2
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer (furnished herewith)
United Bankshares, Inc. Compensation Recoupment Policy (incorporated into this filing by reference to Exhibit 97 to the Annual Report on Form 10-K for the period ended December 31, 2003 and filed February 29, 2024 for United Bankshares, Inc. File No. 002-86947)
Interactive data file (Inline XBRL) (filed herewith)
Cover Page Interactive Data File (embedded within the Inline XBRL document)