What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-08-09 compared with 2022-05-10 · 338 added, 228 removed, 361 unchanged (61% of the section changed)

8 unchanged sentences

Such forward-looking statements are based on assumptions and estimates, which although believed to be reasonable, may turn out to be incorrect, such as statements about the potential impacts of the COVID-19

Therefore, undue reliance should not be placed upon these estimates and statements.

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.

RECENT DEVELOPMENTS

United Bank (the “Bank”), the wholly-owned bank subsidiary of United, has received a Community Reinvestment Act (“CRA”) Performance Evaluation from the Federal Reserve Bank of Richmond (the “FRB”) with a rating of “Needs to Improve.” Based on its performance on the individual components of the CRA exam, the Bank received a rating of “Satisfactory.” These individual components were a “High Satisfactory” rating for the Lending Test, an “Outstanding” rating for the Investment Test and a “High Satisfactory” rating for the Service Test.

The Bank’s final overall rating, however, was downgraded to “Needs to Improve” as a result of a Fair Housing Act violation cited in the Washington DC Metropolitan Statistical Area following a FRB fair lending examination of the Bank and its wholly-owned subsidiary, George Mason Mortgage, LLC.

This matter is also the subject of an investigation by the Department of Justice.

The FRB Performance Evaluation states that “Bank management has taken action to address the deficiencies and committed to taking further voluntary corrective actions to prevent further violations.”

A “Needs to Improve” rating results in restrictions on certain expansionary activities, including certain mergers and acquisitions and the establishment of bank branches.

These restrictions will remain in place until the FRB issues a higher CRA rating following a subsequent CRA examination.

The next CRA examination is expected to commence in October 2022.

The precise timing of the completion of that examination and any results therefrom will not be known until later.

CORONAVIRUS (“COVID-19”)

4 unchanged sentences

including, among other things, the ongoing impact to our customers, employees and vendors;

the impact to the financial services and

banking industry;

the impact to the financial services and banking industry;

and the impact to the economy as a whole as well as the effect of actions taken, or that may yet be taken, or inaction by governmental authorities to contain the outbreak or to mitigate its impact (both economic and health-related).

18 unchanged sentences

The results of operations of Community Bankers Trust are included in the consolidated results of operations from its date of acquisition.

As a result of the Community Bankers Trust acquisitions, the first quarter of 2022 was impacted by increased levels of average balances, income, and expense as compared to the first quarter of 2021.

In addition, the first quarter of 2022 included $536 thousand of merger-related expenses from the the Community Bankers Trust acquisition.

There were no merger-related expenses incurred in the first quarter of 2021.

As a result of the Community Bankers Trust acquisitions, the second quarter and first six months of 2022 were impacted by increased levels of average balances, income, and expense as compared to the second quarter and first six months of 2021.

TRANSITION FROM THE LONDON INTERBANK OFFERED RATE (LIBOR)

8 unchanged sentences

Additionally, the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation have issued joint supervisory guidance encouraging banks to cease entering into any new contracts using LIBOR by December 31, 2021.

Accordingly, United has taken steps to ensure that no new contracts using LIBOR will be originated after December 31, 2021.

Accordingly, United took steps to ensure compliance with the joint supervisory guidance, and no new contracts using LIBOR have been originated after December 31, 2021.

Working groups comprised of various regulators and other industry groups have been formed in the United States and other countries in order to provide guidance on this topic.

5 unchanged sentences

United has formed a project team comprised of individuals across various lines of business throughout the company to identify risks, monitor market developments, evaluate replacement benchmark alternatives, and manage the company’s transition away from LIBOR.

At this time, United intends to prioritize SOFR and Prime as the preferred alternatives to LIBOR;

At this time, United is prioritizing SOFR and Prime as the preferred alternatives to LIBOR;

however, these preferred alternatives could change over time based on market developments.

8 unchanged sentences

and its wholly-owned subsidiaries, unless otherwise indicated.

Management has evaluated all significant events and transactions that occurred after March 31, 2022, but prior to the date these financial statements were issued, for potential recognition or disclosure required in these financial statements.

Management has evaluated all significant events and transactions that occurred after June 30, 2022, but prior to the date these financial statements were issued, for potential recognition or disclosure required in these financial statements.

This discussion and analysis should be read in conjunction with the unaudited Consolidated Financial Statements and accompanying notes thereto, which are included elsewhere in this document.

42 unchanged sentences

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.

United’s critical accounting policies involving the significant judgments and assumptions used in the preparation of the Consolidated Financial Statements as of March 31, 2022 were unchanged from the policies disclosed in United’s Annual Report on Form 10-K

United’s critical accounting policies involving the significant judgments and assumptions used in the preparation of the Consolidated Financial Statements as of June 30, 2022 were unchanged from the policies disclosed in United’s Annual Report on Form 10-K

for the year ended December 31, 2021 within the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

FINANCIAL CONDITION

United’s total assets as of March 31, 2022 were $29.37 billion, which was an increase of $36.61 million or less than 1% from December 31, 2021.

This increase was mainly due to an increase of $724.96 million or 16.88% in investment securities, and an increase of $368.44 million or 2.04% in portfolio loans.

These increases in assets were mostly offset by a $955.08 million or 25.41% decrease in cash and cash equivalents and a $164.38 million or 32.59% decrease in loans held for sale.

Total liabilities increased $160.10 million or less than 1% from year-end

Deposits increased $124.04 million or less than 1%, accrued expenses and other liabilities increased $28.48 million or 14.56% and borrowings increased $7.37 million or less than 1%.

United’s total assets as of June 30, 2022 were $28.78 billion, which was a decrease of $551.01 million or 1.88% from December 31, 2021.

This decrease was mainly due to a decrease of $2.10 billion or 55.87% in cash and cash equivalents and a decrease of $283.73 million or 56.25% in loans held for sale.

These decreases in assets were partially offset by an increase of $777.87 million or 18.11% in investment securities and an increase of $946.75 million or 5.25% in portfolio loans and leases.

Total liabilities decreased $319.43 million or 1.30% from year-end

Deposits decreased $323.61 million or 1.39% and borrowings decreased $21.04 million or 2.22%.

Accrued expenses and other liabilities increased $21.00 million or 10.73% and the allowance for lending-related commitments increased $11.14 million or 35.42%.

Shareholders’ equity decreased $231.58 million or 4.91%.

1 unchanged sentence

Cash and Cash Equivalents

Cash and cash equivalents at March 31, 2022 decreased $955.08 million or 25.41% from year-end

Cash and cash equivalents at June 30, 2022 decreased $2.10 billion or 55.87% from year-end

In particular, interest-bearing deposits with other banks decreased $2.17 billion or 62.45% as United placed less cash in an interest-bearing account with the Federal Reserve.

1 unchanged sentence

Federal funds sold increased $120 thousand or 12.94%.

During the first three months of 2022, net cash of $283.61 million and $64.91 million were provided by operating and financing activities, respectively, while net cash of $1.30 billion was used in investing activities.

See the unaudited Consolidated Statements of Cash Flows for data on cash and cash equivalents provided and used in operating, investing and financing activities for the first three months of 2022 and 2021.

Total investment securities at March 31, 2022 increased $724.96 million or 16.88%.

During the first six months of 2022, net cash of $490.02 million was provided by operating activities while net cash of $2.08 billion and $511.46 million were used in investing and financing activities, respectively.

See the unaudited Consolidated Statements of Cash Flows for data on cash and cash equivalents provided and used in operating, investing and financing activities for the first six months of 2022 and 2021.

Total investment securities at June 30, 2022 increased $777.87 million or 18.11%.

Securities available for sale increased $770.01 million or 19.05%.

4 unchanged sentences

Securities held to maturity were flat from year-end

Equity securities were $12.36 million at March 31, 2022, a decrease of $47 thousand or less than 1% due mainly to a net decline in fair value.

Equity securities were $13.51 million at June 30, 2022, an increase of $1.11 million or 8.94% due mainly to purchases.

Other investment securities increased $6.75 million or 2.82% from year-end

16 unchanged sentences

net of allowance for credit losses of $18 thousand.

At March 31, 2022, gross unrealized losses on available for sale securities were $195.58 million.

Securities with the most significant gross unrealized losses at March 31, 2022 consisted primarily of agency residential mortgage-backed securities, state and political subdivision securities, agency commercial mortgage-backed securities, asset-backed securities and other corporate securities.

As of March 31, 2022, United’s available for sale mortgage-backed securities had an amortized cost of $2.23 billion, with an estimated fair value of $2.12 billion.

net of allowance for credit losses of $19 thousand.

At June 30, 2022, gross unrealized losses on available for sale securities were $341.91 million.

Securities with the most significant gross unrealized losses at June 30, 2022 consisted primarily of agency residential mortgage-backed securities, state and political subdivision securities, agency commercial mortgage-backed securities, asset-backed securities and other corporate securities.

As of June 30, 2022, United’s available for sale mortgage-backed securities had an amortized cost of $2.23 billion, with an estimated fair value of $2.05 billion.

The portfolio consisted primarily of $1.42 billion in agency residential mortgage-backed securities with a fair value of $1.30 billion, $114.69 million in non-agency

residential mortgage-backed securities with an estimated fair value of $108.64 million, and $686.47 million in commercial agency mortgage-backed securities with an estimated fair value of $641.59 million.

As of March 31, 2022, United’s available for sale state and political subdivisions securities had an amortized cost of $838.38 million, with an estimated fair value of $795.51 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 March 31, 2022.

As of March 31, 2022, United’s available for sale corporate securities had an amortized cost of $1.51 billion, with an estimated fair value of $1.48 billion.

As of June 30, 2022, United’s available for sale state and political subdivisions securities had an amortized cost of $836.62 million, with an estimated fair value of $751.08 million.

As of June 30, 2022, United’s available for sale corporate securities had an amortized cost of $1.59 billion, with an estimated fair value of $1.52 billion.

The portfolio consisted of $17.32 million in single issue trust preferred securities with an estimated fair value of $16.20 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 $953.35 million and a fair value of $917.62 million and other corporate securities, with an amortized cost of $617.17 million and a fair value of $589.32 million.

United’s available for sale single issue trust preferred securities had a fair value of $16.67 million as of March 31, 2022.

United’s available for sale single issue trust preferred securities had a fair value of $16.20 million as of June 30, 2022.

Of the $16.20 million, $7.73 million or 47.71% were investment grade;

4 unchanged sentences

All single issue trust preferred securities are currently receiving full scheduled principal and interest payments.

During the first quarter of 2022, 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 March 31, 2022 is impaired.

During the second quarter of 2022, 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 June 30, 2022 is impaired.

United believes the decline in value resulted from changes in market interest rates, credit spreads and liquidity, not a deterioration of credit.

1 unchanged sentence

United has the intent and the ability to hold these securities until such time as the value recovers or the securities mature.

As of March 31, 2022, there was no allowance for credit losses related to the Company’s available for sale securities.

As of June 30, 2022, 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.

1 unchanged sentence

Loans held for sale

Loans held for sale were $340.04 million at March 31, 2022, a decrease of $164.38 million or 32.59% from year-end

Loan sales in the secondary market exceeded originations during the first three months of 2022.

Loan originations for the first three months of 2022 were $927.80 million while loans sales were $1.11 billion.

Loans held for sale were $220.69 million at June 30, 2022, a decrease of $283.73 million or 56.25% from year-end

Loan sales in the secondary market exceeded originations during the first six months of 2022.

Loan originations for the first six months of 2022 were $1.49 billion while loans sales were $1.78 billion.

Portfolio Loans

1 unchanged sentence

Since year-end

2021, commercial, financial and agricultural loans increased $126.85 million or 1.14% as a result of a $55.30 million or less than 1 % increase in commercial real estate loans and a $71.55 million or 2.07% increase in commercial loans (not secured by real estate).

Construction and land development loans increased $171.96 million or 8.54%, residential real estate loans increased $13.98 million or less than 1%, and consumer loans increased $55.19 million or 4.63% due to an increase in indirect automobile financing.

2021, commercial, financial and agricultural loans were flat, decreasing $1.86 million or less than 1%.

In particular, commercial real estate loans decreased $20.65 million or less than 1% while commercial loans (not secured by real estate) increased $18.80 million or less than 1%.

Construction and land development loans increased $381.12 million or 18.92%, residential real estate loans increased $413.29 million or 11.20%, and consumer loans increased $150.27 million or 12.60% due to an increase in indirect automobile financing.

The following table summarizes the changes in the major loan classes since year-end

15 unchanged sentences

Derivative assets increased $30.00 million due to an increase in fair value and deferred tax assets increased $76.23 million due to a decrease in the fair value of available-for-sale

Partially offsetting these increases were decreases of $18.14 million in income tax receivable due to timing differences, $1.18 million in other real estate owned properties (“OREO”) due to sales and write downs, and $1.38 million in core deposit intangibles due to amortization.

Partially offsetting these increases were decreases of $786 thousand in income tax receivable due to timing differences, $976 thousand in other real estate owned properties (“OREO”) due to sales and write downs, and $2.76 million in core deposit intangibles due to amortization.

Deposits represent United’s primary source of funding.

Total deposits at March 31, 2022 increased $124.04 million or less than 1%.

In terms of composition, noninterest-bearing deposits increased $26.41 million or less than 1% while interest-bearing deposits increased $97.62 million or less than 1% from December 31, 2021.

Noninterest-bearing deposits consist of demand deposit and noninterest bearing money market (“MMDA”) account balances.

The $26.41 million increase in noninterest-bearing deposits was due mainly to a $99.22 million or 1.41% increase in commercial noninterest-bearing deposits.

Partially offsetting this increase in commercial noninterest-bearing deposits was a decrease in public noninterest-bearing deposits of $8.42 million or 4.28% and a decrease of $62.64 million in items in-process.

Total deposits at June 30, 2022 decreased $323.61 million or 1.39%.

In terms of composition, noninterest-bearing deposits were flat, increasing $50.39 million or less than 1% while interest-bearing deposits decreased $374.01 million or 2.60% from December 31, 2021.

Noninterest-bearing deposits, which consist of demand deposit and noninterest bearing money market (“MMDA”) account balances, were flat from year-end

2021, increasing $50.39 million due to an increase in commercial noninterest-bearing deposits.

Interest-bearing deposits consist of interest-bearing checking (“NOW”), regular savings, interest-bearing MMDA, and time deposit account balances.

NOW accounts increased $88.37 billion or 2.37% since year-end

2021 as the result of increases of $52.41 million in personal NOW accounts, $12.78 million in commercial NOW accounts, and $23.18 million in public funds NOW accounts.

NOW accounts increased $123.86 million or 3.32% since year-end

2021 as the result of increases of $65.50 million in commercial NOW accounts and $86.24 million in public funds NOW accounts.

Regular savings accounts increased $81.82 million or 4.98% mainly as a result of a $72.06 million increase in personal savings accounts and a $9.45 million increase in commercial savings accounts.

Interest-bearing MMDAs increased $186.26 million or 2.93%.

In particular, personal MMDAs increased $67.80 million, commercial MMDAs increased $42.03 million, brokered MMDAs increased $68.78 million, and public funds MMDAs increased $7.65 million.

Interest-bearing MMDAs decreased $114.49 million or 1.80%.

In particular, commercial MMDAs decreased $186.60 million, brokered MMDAs decreased $31.37 million, and public funds MMDAs decreased $11.22 million while personal MMDAs increased $114.70 million.

Time deposits under $100,000 decreased $94.44 million or 9.16% from year-end

1 unchanged sentence

Since year-end

2021, time deposits over $100,000 decreased $191.75 million or 11.98% as fixed rate CDs decreased $125.09 million, CDARS over $100,000 decreased $33.64 million, brokered certificates of deposits decreased $7.04 million, and public funds CDs over $100,000 decreased $25.74 million.

2021, time deposits over $100,000 decreased $370.75 million or 23.16% as fixed rate CDs decreased $246.06 million, CDARS over $100,000 decreased $59.16 million, public funds CDs over $100,000 decreased $58.24 million, and brokered certificates of deposits decreased $7.06 million.

The table below summarizes the changes by deposit category since year-end

7 unchanged sentences

Total deposits

Includes time deposits of $250,000 or more of $556,426 and $640,752 at March 31, 2022 and December 31, 2021, respectively.

Total borrowings at March 31, 2022 increased $7.37 million or less than 1% since year-end

During the first three months of 2022, short-term borrowings increased $7.53 million or 5.84% due to an increase in securities sold under agreements to repurchase.

Long-term borrowings were flat, decreasing $159 thousand or less than 1% from year-end

Includes time deposits of $250,000 or more of $446,584 and $640,752 at June 30, 2022 and December 31, 2021, respectively.

Total borrowings at June 30, 2022 decreased $21.04 million or 2.22% since year-end

During the first six months of 2022, short-term borrowings were flat, decreasing $602 thousand or less than 1% due to a decrease in securities sold under agreements to repurchase.

Long-term borrowings decreased $20.43 million or 2.50% from year-end

2021 due to a decrease in long-term advances of $21.28 million.

The table below summarizes the change in the borrowing categories since year-end

7 unchanged sentences

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities at March 31, 2022 increased $28.48 million or 14.56% from year-end

In particular, a $24.66 million liability owed to a derivative counterparty in relation to FHLB swaps was recorded during the first quarter of 2022.

In addition, accounts payable associated with George Mason increased $8.84 million and income tax payable increased $3.18 million, both due to timing differences, while accrued mortgage escrow liabilities increased $3.90 million, and business franchise taxes increased $2.79 million.

Partially offsetting these increases was a decrease of $10.03 million in incentives payables due to payments.

Accrued expenses and other liabilities at June 30, 2022 increased $21.00 million or 10.73% from year-end

In particular, a $36.49 million liability related to clearing house variation margin cash collateral on FHLB swaps was recorded during the first six months of 2022 while accrued mortgage escrow liabilities increased $8.46 million.

Partially offsetting these increases was a $5.41 million decrease in business franchise taxes, a $2.63 million decrease in income tax payable, both due to timing differences, and a $5.80 million decrease in incentives payables due to payments.

Shareholders’ Equity

Shareholders’ equity at March 31, 2022 was $4.60 billion, which was a decrease of $123.49 million or 2.62% from year-end

Shareholders’ equity at June 30, 2022 was $4.49 billion, which was a decrease of $231.58 million or 4.91% from year-end

Retained earnings increased $79.47 million or 5.71% from year-end

Earnings net of dividends for the first three months of 2022 were $32.40 million.

Earnings net of dividends for the first six months of 2022 were $79.47 million.

Accumulated other comprehensive income decreased $242.47 million or 4,960.50% from year-end

2021 due to a decrease of $155.11 million in United’s available for sale investment portfolio, net of deferred income taxes.

2021 due to a decrease of $269.82 million in United’s available for sale investment portfolio, net of deferred income taxes primarily the result of an increase in market interest rates.

Partially offsetting this decrease was a $26.07 million increase in the fair value of cash flow hedges, net of deferred income taxes.

The after-tax

accretion of pension costs was $641 thousand for the first quarter of 2022.

accretion of pension costs was $1.28 million for the first six months of 2022.

Treasury stock increased $79.76 million or 46.75% from year-end

During the first quarter of 2022, United repurchased 710,785 shares of its common stock on the open market under a repurchase plan approved by United’s Board of Directors at a cost of $24.98 million or an average price per share of $35.15.

During the first six months of 2022, United repurchased 2,259,546 shares of its common stock on the open market under repurchase plans approved by United’s Board of Directors at a cost of $78.37 million or an average price per share of $34.69.

RESULTS OF OPERATIONS

Net income for the first quarter of 2022 was $81.66 million as compared to earnings of $106.90 million for the first quarter of 2021.

Earnings for the first quarter of 2022, as compared to the first quarter of 2021, decreased primarily due to lower income from mortgage banking activities mainly as a result of the rising rate environment partially offset by lower noninterest expense associated with decreased mortgage banking production.

Diluted earnings per share were $0.60 for the first quarter of 2022 and $0.83 for the first quarter of 2021.

United’s annualized return on average assets for the first three months of 2022 was 1.13% and return on average shareholders’ equity was 6.96% as compared to 1.64% and 9.97%, respectively, for the first three months of 2021.

For the first three months of 2022, United’s annualized return on average tangible equity was 11.63%, as compared to 17.20% for the first three months of 2021.

Below is a summary of United’s consolidated results of operations for the time periods presented:

Three Months Ended

Six Months Ended

(Dollars in thousands except per share amounts)

Interest income

Interest expense

Net interest income

Provision for credit losses

Noninterest income

Noninterest expense

Income before income taxes

PER COMMON SHARE:

Net income for the second quarter of 2022 was $95.61 million or $0.71 per diluted share, as compared to $94.84 million or $0.73 per diluted share for the prior year second quarter.

Net income for the first quarter of 2022 was $81.66 million or $0.60 per diluted share.

Net income for the first six months of 2022 was $177.28 million or $1.30 per diluted share compared to $201.73 million or $1.56 per share for the first six months of 2021.

Earnings for the second quarter and first half of 2022, as compared to the second quarter and first half of 2021 decreased primarily due to lower income from mortgage banking activities primarily as a result of a rising rate environment partially offset by increased net interest income due primarily to the acquisition of Community Bankers Trust Corporation (“Community Bankers Trust”).

The increase in earnings for the second quarter of 2022 from the first quarter of 2022 was due mainly to loan growth and net interest margin expansion.

For the second quarter of 2022, United’s annualized return on average assets was 1.32% and return on average shareholders’ equity was 8.33% as compared to 1.41% and 8.69% for the second quarter of 2021.

United’s annualized return on average assets was 1.13% and return on average shareholders’ equity was 6.96% for the first quarter of 2022.

United’s annualized return on average assets for the first six months of 2022 was 1.23% and return on average shareholders’ equity was 7.63% as compared to 1.52% and 9.32% for the first six months of 2021.

For the second quarter and first half of 2022, United’s annualized return on average tangible equity was 14.23% and 12.90%, respectively, as compared to 14.95% and 16.06% for the second quarter and first half of 2021, respectively.

United’s annualized return on average tangible equity was 11.63% for the first quarter of 2022.

Three Months Ended

Six Months Ended

(Dollars in thousands)

March 31, 2022

March 31, 2021

Return on Average Tangible Equity:

3 unchanged sentences

Average Total Intangibles

(b) Average Tangible Equity (non-GAAP)

Return on Tangible Equity (non-GAAP)

Return on Average Tangible Equity (non-GAAP)

[(a) / (b)] x 365/ (c)

Net interest income for the first quarter of 2022 was relatively flat from the first quarter of 2021, increasing $542 thousand, or less than 1%, to $191.50 million from net interest income of $190.96 million for the first three months of 2021.

The slight increase of $542 thousand in net interest income occurred because total interest income decreased $2.86 million while total interest expense decreased $3.40 million from the first quarter of 2021.

The provision for credit losses was a net benefit of $3.41 million for the first quarter of 2022 as compared to a provision for credit losses expense of $143 thousand for the first quarter of 2021.

The decrease in the provision for credit losses was mainly due to the impact of better performance trends within the loan portfolio.

Noninterest income was $46.02 million for the first three months of 2022, a decrease of $46.55 million or 50.28% from the first three months of 2021 due mainly to decreased income from mortgage banking activities due to a lower volume of mortgage loan originations and sales in the secondary market mainly the result of a rising interest rate environment.

Noninterest expense for the first three months of 2022 decreased $9.75 million or 6.55% from the first three months of 2021 due mainly to lower employee compensation expense as a result of lower employee commissions, incentives and overtime related to mortgage banking production and lower OREO expense due to fewer declines in the fair value of OREO properties.

Income taxes decreased $7.47 million or 27.09% for the first three months of 2022 as compared to the first three months of 2021 primarily due to lower earnings and a lower effective tax rate.

The effective tax rate was 19.75% and 20.50% for the first quarter of 2022 and 2021, respectively.

Net interest income for the second quarter of 2022 was $214.90 million, which was an increase of $28.39 million, or 15.22%, from the second quarter of 2021.

Net interest income for the first half of 2022 was $406.41 million, an increase of $28.93 million or 7.66% from the first half of 2021.

Mainly, these increases in net interest income for 2022 compared to 2021 were due to the impact of higher average earning assets driven primarily by the Community Bankers Trust acquisition.

Net interest income for the second quarter of 2022 increased $23.40 million, or 12.22%, from the first quarter of 2022.

This increase in net interest income was primarily due to higher interest income on earning assets driven by rising market interest rates and a change in the asset mix to higher earning assets.

The provision for credit losses was a net benefit of $1.81 million and $5.22 million for the second quarter and first half of 2022, respectively, while the provision for credit losses was a net benefit of $8.88 million and $8.74 million for the second quarter and first half of 2021.

The provision for credit losses was a net benefit of $3.41 million for the first quarter of 2022.

The lower net benefit amounts for 2022 compared to 2021 were mainly due to an increase in total loans outstanding.

For the second quarter of 2022, noninterest income was $43.61 million, which was a decrease of $19.26 million or 30.63% from the second quarter of 2021.

Noninterest income for the first six months of 2022 was $89.63 million which was a decrease of $65.81 million or 42.34% from the first six months of 2021.

Noninterest income for the second quarter of 2022 decreased $2.42 million, or 5.25%, from the first quarter of 2022.

These decreases in noninterest income were primarily due to decreased income from mortgage banking activities due to a lower volume of mortgage loan originations and sales in the secondary market mainly the result of a rising interest rate environment.

For the second quarter of 2022, noninterest expense increased $2.21 million or 1.59% from the second quarter of 2021 due mainly to an increase in the expense for the reserve for unfunded loan commitments as well as higher amounts of certain general operating expenses.

For the first six months of 2022, noninterest expense decreased $7.55 million or 2.62% from the first six months of 2021 mainly due to lower employee compensation expense as a result of lower employee commissions, incentives and overtime related to mortgage banking production.

Noninterest expense for the second quarter of 2022 increased $2.00 million, or 1.44%, from the first quarter of 2022 due mainly to higher amounts of certain general operating expenses including an increase in the expense for reserve for unfunded loan commitments.

Income taxes for the second quarter of 2022 were $23.53 million as compared to $24.46 million for the second quarter of 2021.

Income tax expense was $20.10 million for the first quarter of 2022.

For the first six months of 2022 and 2021 income tax expense was $43.63 million and $52.02 million, respectively.

For the quarters ended June 30, 2022 and March 31, 2022, United’s effective tax rate was 19.75%.

For the quarter ended June 30, 2021, United’s effective tax rate was 20.50%.

The effective tax rate for the first six months of 2022 and 2021 was 19.75% and 20.50%, respectively.

Business Segments

2 unchanged sentences

Community Banking

Net income attributable to the community banking segment for the first quarter of 2022 was $83.03 million compared to net income of $82.22 million for the first quarter of 2021.

The slightly higher net income within the community banking segment was due primarily to the impact of the Community Bankers Trust acquisition and a lower provision for credit losses.

Net interest income of $189.68 million for the first quarter of 2022 was an increase of $2.49 million or 1.33% from $187.20 million for the first quarter of 2021.

Generally, net interest income for the first quarter of 2022 increased from the first quarter of 2021 due to an increase in average earning assets as a result of the Community Bankers Trust acquisition and lower interest expense on deposits driven by rate repricing.

The provision for credit losses was a net benefit of $3.41 million for the first quarter of 2022 as compared to a provision for credit losses expense of $143 thousand for the first quarter of 2021, a decrease of $3.55 million.

As previously mentioned, the decrease was due mainly to better performance trends within the loan portfolio.

Noninterest income decreased $1.49 million for the first quarter of 2022 to $24.90 million as compared to $26.39 million for the first quarter of 2021.

The decrease of $1.49 million was due mainly to declines in net gains on the sales and calls of investment securities and net gains on the sales of mortgage loans within the community banking segment.

Partially offsetting these declines were increases in fees from deposit services and income from bank-owned life insurance policies (“BOLI”).

Noninterest expense was $114.54 million for the first quarter of 2022, compared to $110.02 million for the same period of 2021.

The increase of $4.52 million in noninterest expense was primarily attributable to the additional employees and branch offices from the Community Bankers Trust acquisition as most major categories of noninterest expense showed increases.

Net income attributable to the community banking segment for the second quarter of 2022 was $97.14 million compared to net income of $89.77 million for the second quarter of 2021.

Net income attributable to the community banking segment for the first half of 2022 was $180.17 million compared to net income of $172.00 million for the first half of 2021.

The higher net income within the community banking segment in 2022 was due primarily to the impact of the Community Bankers Trust acquisition.

On a linked quarter basis, net income attributable to the community banking segment for the second quarter of 2022 increased $14.12 million from the first quarter of 2022 primarily due to loan growth and net interest margin expansion.

Net interest income increased $28.19 million to $211.59 million for the second quarter of 2022, compared to $183.40 million for the same period of 2021.

Net interest income increased $30.68 million to $401.27 million for the first half of 2022, compared to $370.60 million for the same period of 2021.

Generally, net interest income for the second quarter and first six months of 2022 increased from the second quarter and first six months of 2021 due to an increase in average earning assets as a result of the Community Bankers Trust acquisition as well as lower interest expense on deposits driven by rate repricing.

On a linked quarter basis, net interest income for the second quarter of 2022 increased $21.91 million from the first quarter of 2022 primarily due to higher interest income on earning assets driven by rising market interest rates and a change in the asset mix to higher earning assets.

Provision for credit losses was a net benefit of $1.81 million for the three months ended June 30, 2022 compared to a net benefit of $8.88 million for the three months ended June 30, 2021.

Provision for credit losses was a net benefit of $5.22 million for the six months ended June 30, 2022, compared to a net benefit of $8.74 million for the six months ended June 30, 2021.

As previously mentioned, the reduced net benefit amounts for the second quarter and first half of 2022 were due mainly to loan growth.

The provision for credit losses was a net benefit of $3.41 million for the first quarter of 2022.

Noninterest income increased $2.81 million for the second quarter of 2022 to $26.90 million as compared to $24.09 million for the second quarter of 2021.

Noninterest income for the first half of 2022 increased $1.32 million to $51.80 million for the first half of 2022 as compared to $50.49 million for the first half of 2021.

On a linked quarter basis, noninterest income for the second quarter of 2022 increased $2.00 million from the first quarter of 2022.

All of these increases were due mainly to increases in fees from deposit services and income from bank-owned life insurance policies (“BOLI”).

Noninterest expense was $119.25 million for the second quarter of 2022, compared to $103.45 million for the same period of 2021.

Noninterest expense was $233.79 million for the six months ended June 30, 2022, compared to $213.47 million for the same period of 2021.

These increases in noninterest expense for the first six months of 2022 were primarily attributable to the additional employees and branch offices from the Community Bankers Trust acquisition as most major categories of noninterest expense showed increases.

On a linked quarter basis, noninterest expense for the second quarter of 2022 increased $4.71 million from the first quarter of 2022 due mainly to higher amounts of certain general operating expenses including an increase in the expense for reserve for unfunded loan commitments.

Mortgage Banking

The mortgage banking segment reported net income of $209 thousand for the first quarter of 2022, compared to net income of $23.03 million for the first quarter of 2021.

Noninterest income, which consists mainly of realized and unrealized gains associated with the fair value of commitments and loans held for sale, was $23.40 million for the first quarter of 2022, compared to $67.51 million for the first quarter of 2021.

The decrease of $44.11 million in the first quarter of 2022 was due mainly to decreased sales of mortgage loans in the secondary market primarily as a result of a rising interest rate environment .

Noninterest expense was $25.45 million for the first three months of 2022 as compared to $41.18 million for the first three months of 2021.

The mortgage banking segment reported net losses of $1.15 million and $944 thousand for the second quarter and the first half of 2022, respectively, as compared to net income of $4.97 million and $28.00 million for the second quarter and first half of 2021.

The mortgage banking segment reported net income of $209 thousand in the first quarter of 2022.

Noninterest income, which consists mainly of realized and unrealized gains associated with the fair value of commitments and loans held for sale, was $21.47 million for the second quarter of 2022 as compared to $39.77 million for the second quarter of 2021.

Noninterest income for the first half of 2022 was $44.87 million as compared to $107.27 million for the first half of 2021.

On a linked quarter basis, noninterest income for the second quarter of 2022 decreased $1.93 million from the first quarter of 2022.

All of these decreases in noninterest income were due mainly to decreased sales of mortgage loans in the secondary market primarily as a result of a rising interest rate environment.

Noninterest expense was $25.78 million and $51.22 million for the second quarter and first half of 2022 as compared to $36.39 million and $77.57 million for the second quarter and first half of 2021.

Noninterest expense consists mainly of salaries, commissions and benefits of mortgage segment employees.

The decrease of $15.74 million in the first quarter of 2022 was due mainly to lower employee commissions, incentives and overtime related to the decreased mortgage banking production.

The following table sets forth certain consolidated income statement information of United:

Three Months Ended

(Dollars in thousands)

Income Statement Summary

Interest income

Interest expense

Net interest income

Provision for credit losses

Other expense

Income before income taxes

The decreases in 2022 were due mainly to lower employee commissions, incentives and overtime related to the decreased mortgage banking production.

On a linked quarter basis, noninterest expense for the second quarter of 2022 increased $328 thousand from the first quarter of 2022 due mainly to higher amounts of certain general operating expenses.

The following discussion explains in more detail the consolidated results of operations by major category.

4 unchanged sentences

Such changes, and their impact on net interest income in 2022 and 2021, are presented below.

Net interest income for the first quarter of 2022 was $191.50 million, which was relatively flat from the first quarter of 2021, increasing $542 thousand, or less than 1%.

The $542 thousand increase in net interest income occurred because total interest income decreased $2.86 million while total interest expense decreased $3.40 million from the first quarter of 2021.

On a linked-quarter basis, net interest income for the first quarter of 2022 increased $7.82 million, or 4.26%, from the fourth quarter of 2021.

The $7.82 million increase in net interest income occurred because total interest income increased $7.60 million while total interest expense decreased $223 thousand from the fourth quarter of 2021.

Net interest income for the second quarter of 2022 was $214.90 million, which was an increase of $28.39 million or 15.22% from the second quarter of 2021.

The $28.39 million increase in net interest income occurred because total interest income increased $27.59 million while total interest expense decreased $801 thousand from the second quarter of 2021.

Net interest income for the first half of 2022 was $406.41 million, which was an increase of $28.93 million or 7.66% from the first half of 2021.

The $28.93 million increase in net interest income occurred because total interest income increased $24.72 million while total interest expense decreased $4.21 million from the first half of 2021.

On a linked-quarter basis, net interest income for the second quarter of 2022 increased $23.40 million or 12.22% from the first quarter of 2022.

The $23.40 million increase in net interest income occurred because total interest income increased $24.98 million while total interest expense increased $1.58 million from the first quarter of 2022.

For the purpose of this remaining discussion, net interest income is presented on a tax-equivalent

7 unchanged sentences

Tax-equivalent

net interest income for the first quarter of 2022 was $192.61 million, which was also relatively flat from the first quarter of 2021, increasing $604 thousand, or less than 1%.

The slight increase in net interest income and tax-equivalent

net interest income was primarily due to the impact of higher average earnings assets, driven by the Community Bankers Trust acquisition and lower interest expense on deposits.

net interest income for the second quarter of 2022 was $216.01 million, an increase of $28.42 million or 15.15% from the second quarter of 2021.

The increase in net interest income and tax-equivalent

net interest income was primarily due to the impact of higher average earnings assets, driven by the Community Bankers Trust acquisition, as well as the impact of rising market interest rates on earning assets and a change in the asset mix to higher earning assets.

These increases were mostly offset by lower accretion on acquired loans, lower fee income from Paycheck Protection Program (“PPP”) loans and higher average interest-bearing deposit balances as a result of the Community Bankers Trust acquisition.

Average earning assets for the first quarter of 2022 increased $2.54 billion, or 10.83% from the first quarter of 2021 due to a $1.49 billion increase in average investment securities, a $739.28 million increase in average short-term investments and a $312.46 million increase in average net loans and loans held for sale.

Average interest-bearing deposits for the first quarter of 2022 increased $1.17 billion, or 8.30%, from the first quarter of 2021;

however, the yield on interest-bearing deposits decreased 13 basis points from the first quarter of 2021 to 0.24% for the first quarter of 2022.

The net interest spread for the first quarter of 2022 decreased 28 basis points from the first quarter of 2021 to 2.86% due to a 40 basis point decrease in the average yield on earning assets partially offset by a 12 basis point decrease in the average cost of funds.

Loan accretion on acquired loans was $4.14 million and $9.80 million for the first quarter of 2022 and 2021, respectively, a decrease of $5.66 million.

Net PPP loan fee income of $4.10 million was recognized in the first quarter of 2022 as compared to $11.31 million for the first quarter of 2021.

The net interest margin of 2.99% for the first quarter of 2022 was a decrease of 31 basis points from the net interest margin of 3.30% for the first quarter of 2021.

On a linked-quarter basis, tax-equivalent

net interest income for the first quarter of 2022 increased $7.90 million, or 4.28%, from the fourth quarter of 2021.

Average earning assets for the second quarter of 2022 increased $1.66 billion or 6.92% from the second quarter of 2021 due to a $1.62 billion increase in average investment securities and a $1.21 billion increase in average net loans and loans held for sale, partially offset by a $1.17 billion decrease in average short-term investments.

The interest rate spread for the second quarter of 2022 increased 26 basis points from the second quarter of 2021 to 3.24% due to a 21 basis point increase in the average yield on earning assets and a 5 basis point decrease in the average cost of funds.

Net PPP loan fee income was $3.56 million and $9.02 million for the second quarter of 2022 and 2021, respectively, a decrease of $5.46 million.

The decline was driven primarily by loan forgiveness by the SBA.

Loan accretion on acquired loans and leases was $5.40 million and $9.67 million for the second quarter of 2022 and 2021, respectively, a decrease of $4.27 million.

Average interest-bearing liabilities for the second quarter of 2022 increased $914.13 million, or 6.45%, from the second quarter of 2021.

The net interest margin of 3.38% for the second quarter of 2022 was an increase of 24 basis points from the net interest margin of 3.14% for the second quarter of 2021.

Tax-equivalent

net interest income for the first six months of 2022 was $408.62 million, an increase of $29.02 million or 7.64% from the first six months of 2021.

The increase in net interest income and tax-equivalent

net interest income was primarily due to an increase in average earning assets due to the full-quarter impact of the Community Bankers Trust acquisition and organic growth partially offset by lower acquired loan accretion and PPP loan fee income.

Average earning assets increased $1.12 billion, or 4.48%, from the fourth quarter of 2021 due to increases in average net loans and loans held for sale of $900.87 million and average securities of $796.29 million partially offset by a decrease in average short-term investments of $580.24 million.

The net interest spread for the first quarter of 2022 of 2.86% increased 4 basis points from the fourth quarter of 2021 due to a 3 basis point increase in the average yield on earning assets and a 1 basis point decrease in the average cost of funds.

Loan accretion on acquired loans decreased $2.10 million from the fourth quarter of 2021.

Net PPP loan fee income for the first quarter of 2022 decreased $936 thousand from the fourth quarter of 2021.

The net interest margin of 2.99% for the first quarter of 2022 was an increase of 5 basis points from the net interest margin of 2.94% for the fourth quarter of 2021.

Average earning assets increased $2.10 billion or 8.84% from the first six months of 2021 due to a $1.56 billion increase in average investment securities and a $763.75 million or 4.29% increase in average net loans and loans held for sale partially offset by a $219.86 million decrease in average short-term investments.

Average interest-bearing liabilities for the first six months of 2022 increased $1.04 billion, or 7.37% from the first six months of 2021;

however, the average cost of funds decreased 8 basis points from the six months of 2021 to 0.32% for the first six months of 2022.

The interest rate spread for the first six months of 2022 decreased a basis point from the first six months of 2021 to 3.05% due to a 9 basis point decrease in the average yield on earning assets partially offset by the 8 basis point decrease in the average cost of funds.

Loan accretion on acquired loans was $9.54 million and $19.47 million for the first half of 2022 and 2021, respectively, a decrease of $9.93 million.

Net PPP loan fee income of $7.66 million was recognized in the first half of 2022 driven primarily by loan forgiveness, as compared to $20.33 million for the first half of 2021.

The net interest margin of 3.18% for the first half of 2022 was a decrease of 4 basis points from the net interest margin of 3.22% for the first half of 2021.

On a linked-quarter basis, net interest income for the second quarter of 2022 increased $23.40 million, or 12.22%, from the first quarter of 2022.

Tax-equivalent

net interest income for the second quarter of 2022 increased $23.40 million, or 12.15% from the first quarter of 2022.

The increase in net interest income and tax-equivalent

net interest income was primarily due to higher interest income on earning assets driven by rising market interest rates and a change in the asset mix to higher earning assets.

The interest rate spread of 3.24% for the second quarter of 2022 increased 38 basis points from the first quarter of 2022 due to a 42 basis point increase in the average yield on earning assets partially offset by a 4 basis point increase in the average cost of funds.

A decrease in average earning assets of $425.99 million, or 1.64%, from the first quarter of 2022 driven by a decrease of $1.29 billion in short-term investments was partially offset by increases in higher yielding average net loans and loans held for sale of $489.88 million and average investment securities of $375.81 million.

Acquired loan accretion income increased $1.26 million to $5.40 million for the second quarter of 2022.

Net PPP loan fee income decreased $542 thousand to $3.56 million for the second quarter of 2022.

The net interest margin of 3.38% for the second quarter of 2022 was an increase of 39 basis points from the net interest margin of 2.99% for the first quarter of 2022.

United’s tax-equivalent

1 unchanged sentence

The following table provides the discount/premium and net accretion impact to tax-equivalent

net interest income for the three months ended March 31, 2022, March 31, 2021 and December 31, 2021:

net interest income for the three months ended June 30, 2022, June 30, 2021 and March 31, 2022 and the six months ended June 30, 2022 and June 30, 2021:

Three Months Ended

3 unchanged sentences

Long-term borrowings

Six Months Ended

(Dollars in thousands)

Loan accretion

Certificates of deposit

Long-term borrowings

Tax-equivalent

net interest income

The following tables reconcile the difference between net interest income and tax-equivalent

net interest income for the three months ended March 31, 2022, March 31, 2021 and December 31, 2021.

net interest income for the three months ended June 30, 2022, June 30, 2021 and March 31, 2022 and the six months ended June 30, 2022 and June 30, 2021.

Three Months Ended

5 unchanged sentences

net interest income

Six Months Ended

(Dollars in thousands)

Net interest income, GAAP basis

Tax-equivalent

adjustment (1)

Tax-equivalent

net interest income

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 the three months ended March 31, 2022 and 2021 and December 31, 2021.

adjustment combines amounts of interest income on federally nontaxable loans and investment securities using the statutory federal income tax rate of 21% for the three months and six months ended June 30, 2022 and 2021 and the three months ended March 31, 2022.

All interest income on loans and investment securities was subject to state income taxes.

The following tables show the unaudited consolidated daily average balance of major categories of assets and liabilities for the three-month periods ended March 31, 2022 and 2021, respectively, with the interest and rate earned or paid on such amount.

The following tables show the unaudited consolidated daily average balance of major categories of assets and liabilities for the three-month and six-month

periods ended June 30, 2022 and 2021, respectively, with the 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 three-month period ended March 31, 2022 and 2021.

basis using the statutory federal income tax rate of 21% for the three-month and six-month

period ended June 30, 2022 and 2021.

Interest income on all loans and investment securities was subject to state income taxes.

Three Months Ended

March 31, 2022

June 30, 2022

Three Months Ended

March 31, 2021

June 30, 2021

(Dollars in thousands)

6 unchanged sentences

Total earning assets

Interest-Bearing Funds:

Interest-Bearing Liabilities:

Interest-bearing deposits

1 unchanged sentence

Long-term borrowings

Total Interest-Bearing Funds

Total Interest-Bearing Liabilities

Noninterest-bearing deposits

4 unchanged sentences

NET INTEREST INCOME

INTEREST SPREAD

INTEREST RATE SPREAD

NET INTEREST MARGIN

2 unchanged sentences

Nonaccruing loans are included in the daily average loan amounts outstanding.

Six Months Ended

June 30, 2022

Six Months Ended

June 30, 2021

(Dollars in thousands)

Earning Assets:

Federal funds sold and securities repurchased under agreements to resell and other short-term investments

Investment Securities:

Total Securities

Loans, net of unearned income (2)

Allowance for loan losses

Total earning assets

Interest-Bearing Liabilities:

Interest-bearing deposits

Short-term borrowings

Long-term borrowings

Total Interest-Bearing Liabilities

bearing deposits

Accrued expenses and other liabilities

TOTAL LIABILITIES

SHAREHOLDERS’ EQUITY

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

NET INTEREST INCOME

INTEREST RATE SPREAD

NET INTEREST MARGIN

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%.

Nonaccruing loans are included in the daily average loan amounts outstanding.

Provision for Credit Losses

The provision for credit losses was a net benefit of $3.41 million for the first quarter of 2022 as compared to a provision for credit losses expense of $143 thousand for the first quarter of 2021.

On a linked-quarter basis, the provision for credit losses for the fourth quarter of 2021 was a net benefit of $7.41 million.

United’s provision for credit losses was a net benefit of $1.81 million and $5.22 million for the second quarter and first half of 2022, respectively, while the provision for credit losses was a net benefit of $8.88 million and $8.74 million for the second quarter and first half of 2021.

United’s provision for credit losses relates to its portfolio of loans and leases, held-to-maturity

securities and interest receivable on loans which are discussed in more detail in the following paragraphs.

For the quarter ended March 31, 2022, the provision for loan and lease losses was a net benefit of $3.40 million as compared to provision expense of $294 thousand for the quarter ended March 31, 2021.

The lower amount of provision expense for the first quarter of 2022 compared to the first quarter of 2021 was mainly due to better performance trends within the loan portfolio to include lower historical loss rates, improvements in criticized loan totals and payoff of a large loan with a significant individual allocation as well as improved collateral values on several loans with individual allocations.

Net recoveries were $1.98 million for the first quarter of 2022 compared to net charge-offs of $4.54 million for the first quarter of 2021.

The lower amount of net charge-offs for 2022 as compared to 2021 was primarily due to charge-offs recognized on several large commercial credits in the first quarter of 2021.

On a linked-quarter basis, the provision for loan and lease losses for the fourth quarter of 2021 was a net benefit of $7.38 million.

Net charge-offs were $125 thousand for the fourth quarter of 2021.

Annualized net recoveries as a percentage of average loans were (0.04%) for the first quarter of 2022 compared to annualized net charge-offs of 0.10% for the first quarter of 2021 and 0.003% for the fourth quarter of 2021, respectively.

As of March 31, 2022, nonperforming loans and leases were $79.85 million or 0.43% of loans and leases, net of unearned income as compared to $90.76 million or 0.50% of loans, net of unearned income at December 31, 2021.

For the quarter ended June 30, 2022, the provision for loan and lease losses was a net benefit of $1.81 million as compared to a net benefit of $8.82 million for the quarter ended June 30, 2021.

The provision for loan and lease losses for the first six months of 2022 was a net benefit of $5.21 million as compared to a net benefit of $8.52 million for the first six months of 2021.

The higher amount of provision expense for 2022 compared to 2021 was mainly due to an increase in overall loans outstanding.

Net recoveries were $941 thousand for the second quarter of 2022 as compared to net charge-offs of $5.22 million for the same quarter in 2021.

Net recoveries for the first six months of 2022 were $2.92 million as compared to net charge-offs of $9.76 million for the first six months of 2021.

The lower amount of net charge-offs for 2022 as compared to 2021 was primarily due to charge-offs recognized on several large commercial credits in the second quarter and first half of 2021.

On a linked-quarter basis, the provision for loan and lease losses the provision for loan and lease losses was a net benefit of $3.40 million for the first quarter of 2022.

Net recoveries were $1.98 million for the first quarter of 2022.

Annualized net recoveries as a percentage of average loans and leases, net of unearned income were (0.02%) and (0.03%) for the second quarter and first half of 2022, respectively, compared to annualized net charge-offs of 0.12% and 0.11% for the second quarter and first half of 2021.

Annualized net recoveries as a percentage of average loans were (0.04%) for the first quarter of 2022.

As of June 30, 2022, nonperforming loans and leases were $70.33 million or 0.37% of loans and leases, net of unearned income as compared to $90.76 million or 0.50% of loans, net of unearned income at December 31, 2021.

The components of nonperforming loans and leases include:

1) nonaccrual loans and leases, 2) loans and leases which are contractually past due 90 days or more as to interest or principal, but have not been put on a nonaccrual basis and 3) loans and leases whose terms have been restructured for economic or legal reasons due to financial difficulties of the borrowers.

Loans past due 90 days or more were $15.18 million at March 31, 2022, a decrease of $3.70 million or 19.60% from $18.88 million at year-end

This decrease was primarily due to a reduction in past due mortgage and installment loans.

At March 31, 2022, nonaccrual loans were $34.09 million, which was a decrease of $1.94 million or 5.37% from $36.03 million at year-end

This decrease was due to the repayment of three large commercial nonaccrual loans as well as the charge-off

of three commercial relationships.

Restructured loans were $30.58 million at March 31, 2022, a decrease of $5.27 million or 14.71% from $35.86 million at year-end

The decrease was mainly due to the repayment of two large commercial relationships and removal of TDR status for one commercial relationship during the first quarter of 2022.

Loans past due 90 days or more were $16.44 million at June 30, 2022, a decrease of $2.44 million or 12.90% from $18.88 million at year-end

This decrease was primarily due to a large delinquent commercial credit being brought current.

At June 30, 2022, nonaccrual loans were $28.39 million, which was a decrease of $7.64 million or 21.21% from $36.03 million at year-end

This decrease was due to the repayment of several mid-sized

commercial nonaccrual loans as well as the return to accrual status for two commercial relationships.

Restructured loans were $25.50 million at June 30, 2022, a decrease of $10.35 million or 28.87% from $35.86 million at year-end

The decrease was mainly due to the repayment of four large commercial relationships and removal of TDR status for one commercial relationship during the first half of 2022.

The loss potential on these loans has been properly evaluated and allocated within the Company’s allowance for loan losses.

Nonperforming assets include nonperforming loans and real estate acquired in foreclosure or other settlement of loans (“OREO”).

Total nonperforming assets of $93.50 million, including OREO of $13.64 million at March 31, 2022, represented 0.32% of total assets as compared to non-performing

Total nonperforming assets of $84.18 million, including OREO of $13.85 million at June 30, 2022, represented 0.29% of total assets as compared to non-performing

assets of $105.59 million, including OREO of $14.82 million, or 0.36% of total assets at December 31, 2021.

1 unchanged sentence

The combined allowance for loan losses and reserve for lending-related commitments is considered the allowance for credit losses.

At March 31, 2022, the allowance for credit losses was $251.27 million as compared to $247.46 million at December 31, 2021.

At March 31, 2022, the allowance for loan and lease losses was $214.59 million as compared to $216.02 million at December 31, 2021.

The decrease in the allowance for loan and lease losses was due to improved trends within the loan portfolio that included lower historical loss rates and improvements in criticized loan totals.

As a percentage of loans and leases, net of unearned income, the allowance for loan losses was 1.17% at March 31, 2022 and 1.20% at December 31, 2021.

The ratio of the allowance for loan and lease losses to nonperforming loans and leases or coverage ratio was 268.73% and 238.00% at March 31, 2022 and December 31, 2021, respectively.

At June 30, 2022, the allowance for credit losses was $256.31 million as compared to $247.46 million at December 31, 2021.

At June 30, 2022, the allowance for loan and lease losses was $213.73 million as compared to $216.02 million at December 31, 2021.

The slight decrease in the allowance for loan and lease losses was due to improved trends within the loan portfolio that included lower historical loss rates and improvements in criticized loan totals.

As a percentage of loans and leases, net of unearned income, the allowance for loan losses was 1.13% at June 30, 2022 and 1.20% at December 31, 2021.

The ratio of the allowance for loan and lease losses to nonperforming loans and leases or coverage ratio was 303.88% and 238.00% at June 30, 2022 and December 31, 2021, respectively.

The increase in this ratio was due mainly to a decline in nonperforming loans.

3 unchanged sentences

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 first quarter of 2022 qualitative adjustments include analyses of the following:

– This includes portfolio trends related to business conditions;

past due, nonaccrual, and graded loans and leases;

and concentrations.

The second quarter of 2022 qualitative adjustments include analyses of the following:

– This includes portfolio trends related to economic and business conditions;

past due, nonaccrual, and adversely classified loans and leases;

and concentrations of credit.

Current conditions

– United considered the impact of inflation, supply chain issues, labor shortages and the conflict in eastern Europe when making determinations related to factor adjustments, such as changes in economic and business conditions, collateral values and external factors.

– United considered the impact of inflation, supply chain disruptions, rising interest rates, increased oil and gas prices and the conflict in eastern Europe when making determinations related to factor adjustments, such as changes in economic and business conditions, collateral values and external factors.

Reasonable and supportable forecasts

3 unchanged sentences

Assumptions for the economic variables were the following:

The forecast for real GDP shifted downward in the first quarter, from a projection of 4.00% for 2022 at the end of 2021 to 2.80% for 2022 with a more level downward future trendline as compared to the end of 2021.

The unemployment rate remained fairly consistent to the end of 2021 with a steady trend expected throughout 2022 and 2023.

Greater risk of loss is probable in the hotel and accommodations portfolio due to weakened economic conditions brought on by the pandemic and labor shortages which resulted in a more negative forecast relative to other portfolios and a longer projected recovery period to extend into late 2023 or 2024.

The forecast for real GDP shifted downward in the second quarter, from a projection of 2.80% for 2022 as of mid-March

2022 to 1.70% for 2022 as of mid-June

with a level future trendline as compared to the first quarter of 2022.

The unemployment rate forecast shifted upward compared to the first quarter of 2022 with an increasing trend expected throughout 2024.

Reversion to historical loss data occurs via a straight-line method during the year following the one-year

reasonable and supportable forecast period.

United’s review of the allowance for loan and lease losses at March 31, 2022 produced increased reserves in three of the four loan categories as compared to December 31, 2021.

United’s review of the allowance for loan and lease losses at June 30, 2022 produced increased reserves in three of the four loan categories as compared to December 31, 2021.

The real estate construction and development loan pool reserve increased $4.44 million.

The residential real estate reserve increased $705 thousand.

The consumer loan pool reserve increased $208 thousand.

The residential real estate reserve increased $1.72 million.

The consumer loan pool reserve increased $1.77 million.

Each of these increases were primarily due to increased outstanding balances.

7 unchanged sentences

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 $4.38 million at March 31, 2022 and $6.53 million at December 31, 2021.

The allowance for loans and leases that were individually assessed was $2.93 million at June 30, 2022 and $6.53 million at December 31, 2021.

In comparison to the prior year-end,

this element of the allowance decreased $3.61 million primarily due to repayment of individually assessed loans as well as improved collateral valuations.

Management believes that the allowance for credit losses of $251.27 million at March 31, 2022 is adequate to provide for expected losses on existing loans and lending-related commitments based on information currently available.

Management believes that the allowance for credit losses of $256.31 million at June 30, 2022 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.

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 first quarter of 2022 and 2021 was immaterial.

The allowance for credit losses related to held to maturity securities was $19 thousand as of March 31, 2022 and December 31, 2021.

There was no provision for credit losses recorded on available for sale investment securities for the first quarter of 2022 and 2021 and no allowance for credit losses on available for sale investment securities as of March 31, 2022 and December 31, 2021.

Due to loan interest payment deferrals granted by United under the CARES Act, United assessed the collectability of the accrued interest receivables on these deferring loans as of March 31, 2022.

As a result of this assessment, United released all of its remaining $8 thousand in reserves for the first quarter of 2022 as compared to the release of $151 thousand in reserves for the first quarter of 2021.

The provision for credit losses related to held to maturity securities for the second quarter and first half of 2022 and 2021 was immaterial.

The allowance for credit losses related to held to maturity securities was $18 thousand as of June 30, 2022 and $19 thousand as December 31, 2021.

There was no provision for credit losses recorded on available for sale investment securities for the second quarter and first half of 2022 and 2021 and no allowance for credit losses on available for sale investment securities as of June 30, 2022 and December 31, 2021.

Due to loan interest payment deferrals granted by United under the CARES Act, United assessed the collectability of the accrued interest receivables on these deferring loans as of June 30, 2022.

As a result of this assessment, United released all of its remaining $8 thousand in reserves for the first half of 2022 as compared to the release of $221 thousand in reserves for the first half of 2021.

The allowance for accrued interest receivables not expected to be collected as of December 31, 2021 was $8 thousand.

4 unchanged sentences

Recognizing the importance, management continues to evaluate areas where noninterest income can be enhanced.

Noninterest income for the first quarter of 2022 was $46.02 million, a decrease of $46.55 million or 50.28% from the first quarter of 2021.

The decrease was due mainly to a decrease in income from mortgage banking activities primarily as a result of a rising interest rate environment and a lower margin on loans sold in the secondary market.

Income from mortgage banking activities totaled $19.20 million for the first quarter of 2022 compared to $65.40 million for the first quarter of 2021.

The decrease of $46.19 million or 70.64% for the first quarter of 2022 was mainly due to decreased loan sales.

Mortgage loan sales were $1.09 billion in the first quarter of 2022 as compared to $1.84 billion in the first quarter of 2021.

Mortgage loans originated for sale were $927.80 million for the first quarter of 2022 as compared to $1.93 billion for the first quarter of 2021.

Fees from deposit services for the first quarter of 2022 increased $1.25 million or 14.07% from the first quarter of 2021.

The increase was due primarily to higher income from overdraft fees and debit card fee income.

Income from bank-owned life insurance (“BOLI”) for the first quarter of 2022 was $2.19 million, an increase of $791 thousand or 56.38% from the first quarter of 2021 due to mainly to purchases of $85 million in BOLI policies since March 31, 2021 and the addition of approximately $31 million in BOLI from the Community Bankers Trust acquisition.

In addition, United recognized death benefits from BOLI of $287 thousand for the first quarter of 2022.

On a linked-quarter basis, noninterest income for the first quarter of 2022 decreased $8.03 million, or 14.85%, from the fourth quarter of 2021.

The decrease in noninterest income was primarily driven by a decrease of $8.13 million in income from mortgage banking activities mainly due to lower mortgage loan origination and sale volume driven by the rising interest rate environment and a lower loan pipeline valuation.

BOLI income increased $971 thousand from the fourth quarter of 2021 to $2.19 million mainly due to the addition of BOLI from the Community Bankers Trust acquisition and the death benefits of $287 thousand for the first quarter of 2022.

Fees from brokerage services increased $853 thousand from the fourth quarter of 2021 to $4.55 million as a result of increased volume.

Noninterest income for the second quarter of 2022 was $43.61 million, a decrease of $19.26 million or 30.63% from the second quarter of 2021.

Noninterest income for the first half of 2022 was $89.63 million, a decrease of $65.81 million or 42.34% from the first half of 2021.

Both differences from the second quarter and first half of 2021 were due mainly to a decrease in income from mortgage banking activities primarily as a result of a rising interest rate environment and a lower margin on loans sold in the secondary market.

Income from mortgage banking activities totaled $12.45 million for the second quarter of 2022 compared to $36.94 million for the same period of 2021, a decline of $24.50 million or 66.31%.

For the first half of 2022 and 2021, income from mortgage banking activities was $31.65 million and $102.34 million, respectively.

The decreases for 2022 as compared to 2021 were due mainly to lower mortgage loan origination and sale volume driven by the rising rate environment and a lower margin on loans sold in the secondary market.

For the three months ended June 30, 2022 and 2021, mortgage loan sales were $683.73 million and $1.88 billion, respectively.

For the six months ended June 30, 2022 and 2021, mortgage loan sales were $1.78 billion and $3.72 billion, respectively.

Fees from deposit services for the second quarter and first half of 2022 increased $1.43 million or 15.26% and $2.69 million or 14.68%, respectively, from the second quarter and first half of 2021.

The increases were due primarily to higher income from overdraft fees and debit card fee income.

Income from bank-owned life insurance (“BOLI”) for the second quarter and first half of 2022 increased $2.46 million and $3.25 million, respectively, from the second quarter and first half of 2021.

These increases were due mainly to the purchase of $85 million in policies since June 30, 2021, the addition of approximately $31 million in BOLI from the Community Bankers Trust acquisition and proceeds from death benefits.

For the second quarter and first half of 2022, United recognized death benefits from BOLI of $2.48 million and $2.76 million, respectively.

On a linked-quarter basis, noninterest income for the second quarter of 2022 decreased $2.41 million, or 5.25%, from the first quarter of 2022.

The decrease in noninterest income was primarily due to a decrease of $6.76 million in income from mortgage banking activities mainly due to lower mortgage loan origination and sale volume driven by the rising rate environment and a lower margin on loans sold in the secondary market.

Income from BOLI increased $1.93 million from the first quarter of 2022 due to an increase of $2.19 million in the recognition of death benefits partially offset by a decline in the cash surrender value of policies.

Other Expenses

1 unchanged sentence

Other expenses include all items of expense other than interest expense, the provision for credit losses, and income taxes.

Noninterest expense for the first quarter of 2022 was $139.17 million, which was a decrease of $9.75 million or 6.55% from the first quarter of 2021.

Employee compensation for the first quarter of 2022 decreased $9.79 million or 13.52% when compared to the first quarter of 2021.

This decrease was due mainly to lower employee commissions, incentives and overtime related to a decline in mortgage banking production partially offset by additional employees from the Community Bankers Trust acquisition.

Employee benefits expense for the first quarter of 2022 decreased $2.60 million or 16.82% from the first quarter of 2021.

This decrease was primarily due to lower amounts of expense for postretirement benefits.

OREO expense for the first quarter of 2022 decreased $3.48 million or 95.94% due mainly to fewer declines in the fair value of OREO properties.

Equipment expense increased $1.29 million or 21.36% for the first quarter of 2022, as compared to the same time period in 2021.

The increase was due mainly to higher maintenance costs and depreciation expense primarily due to the Community Bankers Trust acquisition.

Mortgage loan servicing expense and impairment for the first quarter of 2022 decreased $1.53 million or 48.28% from the same time period in 2021 due to the recovery of past temporary impairment and lower amortization expense of mortgage servicing rights.

Federal Deposit Insurance Corporation (“FDIC”) expense increased $673 thousand or 33.65% from the first quarter of 2021 due a higher assessment base.

Other expense for the first quarter of 2022 increased $5.07 million or 18.20% from the first quarter of 2021.

Within other expenses, the most significant increases were the expense for the reserve for unfunded loan commitments of $4.46 million, consulting and legal expenses of $521 thousand and merger-related expenses associated with the Community Bankers Trust acquisition of $508 thousand.

On a linked-quarter basis, noninterest expense for the first quarter of 2022 decreased $12.62 million, or 8.31%, from the fourth quarter of 2021 primarily due to a decrease of $8.92 million in employee compensation and $3.48 million in data processing.

The decrease in employee compensation was primarily due to fewer employees as well as lower employee commissions, incentives and overtime related to lower mortgage banking production.

The fourth quarter of 2021 also included $2.53 million of merger-related employee compensation expenses from the Community Bankers Trust acquisition.

The decrease in data processing expense was primarily due to $3.47 million of merger-related expenses associated with the Community Bankers Trust acquisition recognized in the fourth quarter of 2021.

For the first quarter of 2022, income tax expense was $20.10 million as compared to $27.57 million for the first quarter of 2021.

The decrease of $7.47 million was primarily due to lower earnings and a lower effective tax rate.

On a linked-quarter basis, income tax expense increased $607 thousand primarily due to higher earnings partially offset by a lower effective tax rate.

United’s effective tax rate was 19.75% for the first quarter of 2022, 20.50% for the first quarter of 2021 and 20.88% for the fourth quarter of 2021.

Noninterest expense increased $2.21 million or 1.59% for the second quarter of 2022 compared to the same period in 2021.

For the first half of 2022, noninterest expense was $280.35 million, which was a decrease of $7.55 million or 2.62% from the first half of 2021.

Employee compensation for the second quarter and first half of 2022 decreased $5.93 million or 8.64% and $15.72 million or 11.15%, respectively, from the second quarter and first half of 2021.

The decreases for 2022 were due mainly to lower employee commissions, incentives and overtime related to a decline in mortgage banking production partially offset by additional employees from the Community Bankers Trust acquisition.

Employee benefits expense for the second quarter of 2022 decreased $2.42 million or 16.74% from the second quarter of 2021.

Employee benefits expense for the first half of 2022 decreased $5.02 million or 16.78% as compared to the first half of 2021.

These decreases were primarily due to lower amounts of expense for postretirement benefits.

Net occupancy expense for the second quarter and first half of 2022 increased $1.11 million or 10.94% and $1.35 million or 6.42%, respectively, as compared to the same time periods in 2021.

The increases were due primarily to increases in building depreciation and maintenance expenses mainly as a result of the offices added in the Community Bankers Trust acquisition.

OREO expense for the first half of 2022 decreased $3.83 million or 94.38% due mainly to fewer declines in the fair value of OREO properties.

Equipment expense increased $1.48 million or 25.39% and $2.77 million or 23.34% for the second quarter and first half of 2022, respectively, as compared to the same time periods in 2021.

The increases were due mainly to higher maintenance costs and depreciation expense primarily due to the Community Bankers Trust acquisition.

Mortgage loan servicing expense and impairment for the second quarter and first half of 2022 decreased $1.82 million or 50.46% and $3.35 million or 49.44%, respectively, from the same time periods in 2021 due to the recovery of past temporary impairment and lower amortization expense of mortgage servicing rights.

Federal Deposit Insurance Corporation (“FDIC”) expense for the second quarter and first half of 2022 increased $1.20 million or 66.89% and $1.88 million or 49.39%, respectively, from the second quarter and first half of 2021 due a higher assessment base.

Other expense for the second quarter of 2022 increased $8.78 million or 32.76% from the second quarter of 2021.

For the first half of 2022, other expense increased $13.84 million or 25.34% from the first half of 2021.

Within other expenses, the most significant increase for second quarter and first half of 2022 as compared to the same time periods in 2021 was in the expense for the reserve for unfunded loan commitments of $5.03 million and $9.49 million, respectively.

In addition, consulting and legal expenses as well as advertising expense increased significantly in 2022 from 2021.

On a linked-quarter basis, noninterest expense for the second quarter of 2022 increased $2.00 million, or 1.44% from the first quarter of 2022.

The increase in noninterest expense resulted from higher amounts of certain general operating expenses including an increase in the expense for reserve for unfunded loan commitments of $662 thousand.

For the second quarter and first half of 2022, income tax expense was $23.53 million and $43.63 million, respectively, as compared to $24.46 million and $52.02 million, respectively, in the second quarter and first half of 2021.

These decreases were due to lower earnings and a lower effective tax rate.

On a linked-quarter basis, income tax expense increased $3.43 million due to higher earnings from the first quarter of 2022.

United’s effective tax rate was 19.75% for the second quarter of 2022, 20.50% for the second quarter of 2021 and 19.75% for the first quarter of 2022.

For the first half of 2022 and 2021, United’s effective tax rate was 19.75% and 20.50%, respectively.

For further details related to income taxes, see Note 17 of the unaudited Notes to Consolidated Financial Statements contained within this document.

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.

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.

15 unchanged sentences

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.

For the three months ended March 31, 2022, cash of $283.61 million was provided by operating activities due mainly to the addition of $164.38 million in net cash from mortgage banking activities as proceeds from the sales of mortgage loans in the secondary market exceeded originations.

In addition, net income was $81.66 million for the quarter and accrued expenses increased $27.37 million.

Net cash of $1.30 billion was used in investing activities which was primarily due to $936.33 million of purchases of investment securities over proceeds from sales and portfolio loan growth of $366.41 million.

During the first three months of 2022, net cash of $64.91 million was provided by financing activities due primarily to net growth of $125.08 million in deposits.

These funding activities were partially offset by cash dividends paid of $46.66 million and net repurchases of $26.06 million in treasury stock for the quarter.

The net effect of the cash flow activities was a decrease in cash and cash equivalents of $955.08 million for the first three months of 2022.

For the first six months ended June 30, 2022, cash of $490.02 million was provided by operating activities due mainly to net income of $177.28 million.

In addition, mortgage banking activities added cash of $283.73 million to the net income amount as sales of mortgage loans in the secondary market exceeded originations.

Net cash of $2.08 billion was used in investing activities which was primarily due to purchases of investment securities over proceeds from sales of $1.15 billion and net loan growth of $939.33 million.

During the first half of 2022, net cash of $511.46 million was used in financing activities due primarily to a net withdrawal of $321.84 million in deposits, cash dividends paid of $95.94 million, net repurchases of $79.45 million in treasury stock and the net repayment of $20.00 million in FHLB advances.

The net effect of the cash flow activities was a decrease in cash and cash equivalents of $2.10 billion for the first six months of 2022.

United anticipates it can meet its obligations over the next 12 months and has no material commitments for capital expenditures.

7 unchanged sentences

United is well-capitalized based upon regulatory guidelines.

United’s risk-based capital ratio is 15.13% at March 31, 2022 while its Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 13.00%, 13.00% and 10.42%, respectively.

The March 31, 2022 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

United’s risk-based capital ratio is 14.75% at June 30, 2022 while its Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 12.65%, 12.65% and 10.45%, respectively.

The June 30, 2022 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 $4.60 billion at March 31, 2022, which was a decrease of $123.49 million or 2.62% from December 31, 2021.

Total shareholders’ equity was $4.49 billion at June 30, 2022, which was a decrease of $231.58 million or 4.91% from December 31, 2021.

This decrease is primarily due to a decrease of $242.47 million in accumulated other comprehensive income due mainly to an after-tax

decrease in the fair value of available for sale securities as a result of a rising interest rate environment.

In addition, treasury stock increased $26.28 million or 15.41% due to the repurchase of 710,785 shares of United common stock under a stock repurchase plan approved by United’s Board of Directors in November of 2019.

In addition, treasury stock increased $79.76 million or 46.75% due to the repurchase of 2,259,546 shares of United common stock under stock repurchase plans approved by United’s Board of Directors.

Partially offsetting these decreases was an increase of $79.47 million in retained earnings (net income less dividends declared).

United’s equity to assets ratio was 15.65% at March 31, 2022 as compared to 16.09% at December 31, 2021.

The primary capital ratio, capital and reserves to total assets and reserves, was 16.36% at March 31, 2022 as compared to 16.79% at December 31, 2021.

United’s average equity to average asset ratio was 16.22% for the first quarter of 2022 as compared to 16.41% the first quarter of 2021.

United’s equity to assets ratio was 15.59% at June 30, 2022 as compared to 16.09% at December 31, 2021.

The primary capital ratio, capital and reserves to total assets and reserves, was 16.34% at June 30, 2022 as compared to 16.79% at December 31, 2021.

United’s average equity to average asset ratio was 15.88% for the second quarter of 2022 as compared to 16.21% the second quarter of 2021.

United’s average equity to average asset ratio was 16.05% for the first half of 2022 as compared to 16.31% for the first half of 2021.

All of these financial measurements reflect a financially sound position.

During the first quarter of 2022, United’s Board of Directors declared a cash dividend of $0.36 per share.

Total cash dividends declared were $49.27 million for the first quarter of 2022 which was an increase of $4.01 million or 8.87% from dividends declared of $45.25 million for the first quarter of 2021.

During the second quarter of 2022, United’s Board of Directors declared a cash dividend of $0.36 per share.

Cash dividends were $0.72 per common share for the first six months of 2022.

Total cash dividends declared were $48.54 million for the second quarter of 2022 and $97.81 million for the first six months of 2022 as compared to $45.27 million for the second quarter of 2021 and $90.52 million for the first six months of 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis