What changed in this filing

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Item 1. Business

2023-03-01 compared with 2022-03-01 · 105 added, 125 removed, 367 unchanged (39% of the section changed)

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United’s web site address is “www.ubsi-inc.com”.

United makes available free of charge on its web site the annual report on Form 10-K,

quarterly reports on Form 10-Q,

current reports on Form 8-K,

and amendments thereto, as soon as reasonably practicable after United files such reports with the Securities and Exchange Commission (“SEC”).

United makes available free of charge on its web site the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments thereto, as soon as reasonably practicable after United files such reports with the Securities and Exchange Commission (“SEC”).

The reference to United’s web site does not constitute incorporation by reference of the information contained in the web site and should not be considered part of this document.

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United is permitted to acquire other banks and bank holding companies, as well as thrift institutions.

United is also permitted to engage in certain non-banking

activities which are closely related to banking under the provisions of the Bank Holding Company Act and the Federal Reserve Board’s Regulation Y.

Management continues to consider such opportunities as they arise, and in this regard, management from time to time makes inquiries, proposals, or expressions of interest as to potential opportunities, although no agreements or understandings to acquire other banks or bank holding companies or non-banking

subsidiaries or to engage in other nonbanking activities, other than those identified herein, presently exist.

United is also permitted to engage in certain non-banking activities which are closely related to banking under the provisions of the Bank Holding Company Act and the Federal Reserve Board’s Regulation Y.

On December 3, 2021, United completed its acquisition of Community Bankers Trust Corporation (“Community Bankers Trust”), the parent company of Essex Bank (“Essex”) with $1.8 billion in assets, headquartered in Richmond, Virginia.

The acquisition of Community Bankers Trust enhanced United’s existing presence in the DC Metro MSA and took United into new markets including Baltimore, Annapolis, Lynchburg, Richmond, and the Northern Neck of Virginia.

It also strategically connects our Mid-Atlantic

and Southeast footprints.

It also strategically connected our Mid-Atlantic and Southeast footprints.

See Note B—Notes to Consolidated Financial Statements for a discussion of United’s merger with Community Bankers Trust.

On May 1, 2020, United completed its acquisition of Carolina Financial Corporation (“Carolina Financial”), the parent company of CresCom Bank (“CresCom”) with $5.0 billion in assets, headquartered in Charleston, South Carolina.

The acquisition of Carolina Financial broadened United’s footprint in the Southeast region with some of the most desirable banking markets in the nation.

See Note B—Notes to Consolidated Financial Statements for a discussion of United’s mergers with Community Bankers Trust and Carolina Financial.

Prior to Carolina Financial, United more than doubled its size through three acquisitions in less than three and a half years.

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Much like George Mason, Crescent is also engaged in the operation of a general mortgage and agency business, including the origination and acquisition of residential real estate loans for resale and the activities commonly conducted by a mortgage banking company.

However, depending on the pricing of residential real estate loans sold, Crescent may retain the servicing rights.

In addition, at certain times, Crescent may purchase rights to service mortgage loans from third parties.

Depending on the pricing of residential real estate loans sold, Crescent may retain the servicing rights.

In addition, at certain times, Crescent may purchase or sell rights to service mortgage loans from or to third parties.

United Brokerage Services, Inc., a wholly-owned subsidiary of United Bank, is a fully-disclosed broker/dealer and a Registered Investment Advisor with the Financial Industry Regulatory Authority (“FINRA”), the Securities and Exchange Commission, and a member of the Securities Investor Protection Corporation.

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The NYCE is an interbank network connecting the ATMs of various financial institutions in the United States and Canada.

United Bank offers an Internet banking service, Smart Touch Online Banking, which allows customers to perform various transactions using a computer or tablet from any location or from a mobile device such as a smart phone or other cellular device as long as they have access to the Internet, applicable software and a secure browser.

Specifically, customers can check personal account balances, receive information about transactions within their accounts, make transfers between accounts, stop payment on a check, and reorder checks.

Customers may also pay bills online and can make payments to virtually any business or individual.

Customers can set up recurring fixed payments, one-time

future payments or a one-time

immediate payment.

Customers can also set up their own merchants, view and modify that merchant list, view pending transactions and view their bill payment history with approximately three (3) months of history.

United Bank offers secure Digital Banking for consumer and commercial customers.

Digital Banking is available on a multitude of devices to include a browser-based experience, mobile (Apple, Android) and tablet applications.

Digital Banking allows customers to manage their financial lives from any place they can access the internet (cellular or Wi-Fi).

Customers can quickly check balances, pay bills, complete internal and Zelle ® transfers;

all from the convenience of their devices.

They can also set-up text and email alerts to notify them of large transactions and help them avoid overdraft fees.

Commercial customers have many of the same services, including balance inquiry, cash management, sweeps and wire transfers.

Consumers can also research United Bank products and open deposits accounts online and apply for mortgages from United Bank’s website.

United Bank also offers an automated telephone banking system, Telebanc, which allows customers to access their personal account(s) or business account(s) information from a touch-tone telephone.

Lending Activities

United’s loan and lease portfolio, net of unearned income, increased $432.2 million or 2.46% in 2021 due mainly to the acquisition of Community Bankers Trust partially offset by a decline in Payment Protection Program (“PPP”) loans.

United’s loan and lease portfolio, net of unearned income, increased $2.5 billion or 14.06% in 2022 due mainly to substantial loan growth in almost all major categories of loans.

The loan and lease portfolio is mainly comprised of commercial, real estate and consumer loans including credit card and home equity loans.

Commercial, financial and agricultural loans and leases increased $458.0 million or 4.28% as commercial real estate loans increased $1.1 billion or 15.81% while commercial loans and leases (not secured by real estate) decreased $592.1 million or 14.60%.

Construction and land development loans increased $187.8 million or 10.28%.

Residential real estate loans decreased $208.3 million or 5.34%.

Consumer loans were flat, decreasing $8.8 million or less than 1%.

Since year-end 2021, commercial, financial and agricultural loans increased $471.6 million or 4.23%.

In particular, commercial real estate loans increased $321.4 million or 4.18% while commercial loans (not secured by real estate) increased $150.2 million or 4.34%.

Within commercial loans (not secured by real estate), Payment Protection Program (“PPP”) loans declined $267.4 million.

Construction and land development loans increased $912.8 million or 45.32%, residential real estate loans increased $971.4 million or 26.31%, and consumer loans increased $173.1 million or 14.51% due to an increase in indirect automobile financing.

Commercial Loans and Leases

The commercial loan and lease portfolio consists of loans and leases to corporate borrowers primarily in small to mid-size

industrial and commercial companies, as well as automobile dealers, service, retail and wholesale merchants.

The commercial loan and lease portfolio consists of loans and leases to corporate borrowers primarily in small to mid-size industrial and commercial companies, as well as automobile dealers, service, retail and wholesale merchants.

Collateral securing these loans includes equipment, machinery, inventory, receivables, vehicles and commercial real estate.

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Real estate mortgage loans to consumers are secured primarily by a first lien deed of trust.

These loans are traditional one-to-four

family residential mortgages.

These loans are traditional one-to-four family residential mortgages.

The loans generally do not exceed an 80% loan to value ratio at the loan origination date and most are at a variable rate of interest.

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Also included in the category of real estate mortgage loans are home equity loans.

As of December 31, 2021, approximately $366.7 million or 2.03% of United’s loan portfolio were real estate loans that met the regulatory definition of a high loan-to-value

A high loan-to-value

real estate loan is defined as any loan, line of credit, or combination of credits secured by liens on or interests in real estate that equals or exceeds a certain percentage established by United’s primary regulator of the real estate’s appraised value, unless the loan has other appropriate credit support.

As of December 31, 2022, approximately $406.8 million or 1.98% of United’s loan portfolio were real estate loans that met the regulatory definition of a high loan-to-value loan.

A high loan-to-value real estate loan is defined as any loan, line of credit, or combination of credits secured by liens on or interests in real estate that equals or exceeds a certain percentage established by United’s primary regulator of the real estate’s appraised value, unless the loan has other appropriate credit support.

The certain percentage varies depending on the loan type and collateral.

Appropriate credit support may include mortgage insurance, readily marketable collateral, or other acceptable collateral that reduces the loan-to-value

ratio below the certain percentage.

Appropriate credit support may include mortgage insurance, readily marketable collateral, or other acceptable collateral that reduces the loan-to-value ratio below the certain percentage.

Consumer Loans

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Therefore, it is the intent of United’s underwriting standards to ensure that adequate primary repayment capacity exists to address both future increases in interest rates, and fluctuations in the underlying cash flows available for repayment.

Historically, and at December 31, 2021, United has not offered “teaser rate” loans, and had no loan portfolio products which were specifically designed for “sub-prime”

Management defines “sub-prime”

borrowers as consumer borrowers with a credit score of less than 660.

Historically, and at December 31, 2022, United has not offered “teaser rate” loans, and had no loan portfolio products which were specifically designed for “sub-prime” borrowers.

Management defines “sub-prime” borrowers as consumer borrowers with a credit score of less than 660.

The above guidelines are adhered to and subject to the experience, background and personal judgment of the loan officer assigned to the loan application.

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United categorizes these commercial loans by industry according to the North American Industry Classification System (“NAICS”) to monitor the portfolio for possible concentrations in one or more industries.

As of the most recent fiscal year-end,

United has one such industry classification that exceeded 10% of total loans.

As of the most recent fiscal year-end, United has one such industry classification that exceeded 10% of total loans.

As of December 31, 2022, approximately $9.6 billion or 46.38% of United’s total loan portfolio were for real estate and construction.

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These include federal funds purchased, securities sold under agreements to repurchase and FHLB borrowings.

United’s investment portfolio is comprised of a significant amount of mortgage-backed securities, asset-backed securities and corporate securities.

United’s investment portfolio is comprised of a significant amount of mortgage-backed securities, asset-backed securities, obligations of states and political subdivisions, U.S.

Treasury securities and obligations of U.S.

Government corporations and agencies and corporate securities.

Obligations of states and political subdivisions are comprised of primarily “investment grade” rated municipal securities.

Interest and dividends on securities for the years of 2022, 2021, and 2020 were $114.5 million, $61.9 million, and $66.8 million, respectively.

For the year of 2021, United realized net gains on sales of securities of $2.8 million.

For the years of 2020 and 2019, United realized net gains on sales of securities of $3.2 million and $373 thousand, respectively.

In the year 2019, United recognized other-than-temporary impairment (“OTTI”) charges of $198 thousand.

For the year of 2022, United realized net gains on sales of securities of $2 thousand.

For the years of 2021 and 2020, United realized net gains on sales of securities of $2.8 million and $3.2 million, respectively.

Human Capital

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Investment in our human capital is a top priority for the Company.

As of December 31, 2021, United and its subsidiaries had approximately 2,966 employees and officers.

Of the 2,966 employees and officers, approximately 2,342 are employed in the community banking segment, 557 are employed in the mortgage banking segment and 67 are in a general support and administrative function for the Company.

As of December 31, 2022, United and its subsidiaries had 2,765 employees and officers.

Of the 2,765 employees and officers, 2,331 are employed in the community banking segment, 366 are employed in the mortgage banking segment and 68 are in a general support and administrative function for the Company.

None of these employees are represented by a collective bargaining unit and management considers employee relations to be excellent.

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Our human capital management strategy focuses on recruiting, developing, and engaging a talented and diverse workforce.

We emphasize embodying our core values of integrity, teamwork, hard work, and caring, and foster positive attitudes, communication, goal attainment, personal growth, and the pursuit of United’s mission of excellence in service to our shareholders, our customers, our communities, and our employees.

Our strategy embodies our core values of integrity, teamwork, hard work, and caring, and foster positive attitudes, communication, goal attainment, personal growth, and the pursuit of United’s mission of excellence in service to our shareholders, our customers, our communities, and our employees.

Focusing on talent selection and developing top talent remains a strong pillar of our organization.

Our primary focus is to attract and advance the careers of employees with different backgrounds, experiences, ideas, and skills.

We host exceptional college recruiting and internship programs that attract candidates from a variety of colleges and universities within our footprint.

These two programs build a continuous talent pipeline and prioritize these individuals for internal openings.

Our Leadership Development Program provides an opportunity for the Company’s rising talent from across our footprint and various business lines to strengthen their leadership and communication skills, increase their visibility within the organization, and establish internal networks, helping to cultivate a future pipeline of leaders across the institution.

Our primary focus is to attract and advance the careers of employees with diverse backgrounds, experiences, ideas, and skills.

We host college recruiting and internship programs that attract candidates from a variety of colleges and universities within our footprint.

These two programs build a talent pipeline and prioritize these individuals for internal openings.

This program helps to cultivate a future pipeline of leaders across the institution.

Over a period of four years, these individuals are empowered to work on pertinent projects designed to enhance revenue, reduce expenses, and improve risk management functions, while developing the members’ leadership, interactive, and managerial skills.

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The Company’s executives constantly review and evaluate personnel to identify pools of candidates with high levels of leadership potential and promote their progress by engineering their range of work experiences.

We also have an expansive internal and external training platform to ensure our employees have the necessary tools to fill these key positions effectively.

We also have an internal and external training platform to ensure our employees have the necessary tools to fill these key positions effectively.

United also has an effective and efficient onboarding program, introducing new team members to the culture and enabling an environment that helps them be engaged in their roles.

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High-performing employees are given opportunities to attend state and national banking schools, conferences, industry peer groups, and training webinars.

All United employees have access to career development and skills-based training through our internal online Human Resources Management System.

All United employees have access to career development and skills-based training through our internal online Human Resources (“HR”) management system.

United makes every effort to ensure that our compensation and benefits packages are inclusive and competitive to attract and retain talent.

Our comprehensive benefit plans are designed to fully support our full-time and eligible part-time employees and their families through every stage of their life cycle, recognizing our employees’ individual needs and offering flexible benefit options.

As an enhanced benefit, we recently increased our parental leave and family medical leave and added coverage for enhanced infertility coverage.

We provide comprehensive health and wellness plans for all eligible employees as well as retirees of United.

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The Company also provides financial wellness benefits to all employees through our 401K Plan in which the Company provides a competitive match of employee contributions.

Employees may also take advantage of United’s Employee Stock Purchase Plan through payroll deductions.

All employees are eligible to take advantage of United’s Employee Stock Purchase Plan through payroll deductions.

United Bank’s annual performance evaluation process provides the opportunity for discussing, planning, and reviewing the performance of each employee.

The goal is to help employees clearly define and understand the responsibilities and expectations of their position while also identifying employees with high potential for advancement within the company.

Performance evaluations also provide an opportunity for employees to be awarded additional compensation based on merit.

Managers are expected to maintain open communication throughout the year as it pertains to the performance and mentorship of their employees.

Training is provided to managers annually to prepare them for difficult conversations, analyzing team compensation, and maintaining fairness, among other topics.

We are committed to providing a safe and healthy work environment for our employees and offer services to foster the best physical, mental, and social well-being of our workforce.

United’s comprehensive Employee Assistance Program provides all employees a comprehensive and personalized process with a tailored approach to meet employees where they are and supports them through whatever journey they may be facing.

United’s Employee Assistance Program provides all employees a comprehensive and personalized process with a tailored approach to meet employees where they are and supports them through whatever journey they may be facing.

The Employee Assistance Program provides unlimited phone access for information, resources, and referrals and provides sessions with a counselor for the employee and their family members.

The employee, and their family, can also take advantage of a host of web-based

resources the program provides as well.

The commitment to our employees and their family’s well-being remains at the forefront for United and allows us to remain competitive in attracting and retaining top talent and ensuring our employee benefits remain competitive when compared with other institutions.

The employee, and their family, can also take advantage of a host of web-based resources the program provides.

The commitment to our employees and their family’s well-being is at the forefront for United and allows us to be competitive in attracting and retaining top talent and ensuring our employee benefits remain competitive when compared with other institutions.

In addition, at United, we are committed to nurturing an inclusive culture that:

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United added a diversity trainer to the Learning & Talent Development Team who facilitates workshops available to all employees.

In 2021, 100% of employees participated in DE&I training on topics such as implicit bias and cultivating inclusive teams.

In 2022, 100% of new hires completed implicit bias training and new supervisors participated in cultivating inclusive team workshops.

DE&I employee liaisons were selected through an application process, received training on courageous conversations, and then held open forums with local colleagues related to various DE&I topics.

The MIS team has collaborated with the Human Resources department to apply best practices in data governance to the metrics that are so critical to measuring success in DE&I.

The Management Information System (“MIS”) team has collaborated with the HR department to apply best practices in data governance to the metrics that are so critical to measuring success in DE&I.

To continue to cultivate our inclusive culture, United offers employees a way to report confidential and anonymous issues of concern through our website.

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With certain exceptions, a bank holding company also is prohibited from acquiring direct or indirect ownership or control of more than five percent of the voting shares of any company which is not a bank, and from engaging directly or indirectly in business unrelated to the business of banking, or managing or controlling banks.

The Board of Governors, in its Regulation Y, permits financial holding companies to engage in preapproved non-banking

activities closely related to banking or managing or controlling banks.

Approval of the Board of Governors is necessary to engage in certain other non-banking

activities which are not preapproved or to make acquisitions of corporations engaging in these activities.

In addition, on a case-by-case

basis, the Board of Governors may approve other non-banking

The Board of Governors, in its Regulation Y, permits financial holding companies to engage in preapproved non-banking activities closely related to banking or managing or controlling banks.

Approval of the Board of Governors is necessary to engage in certain other non-banking activities which are not preapproved or to make acquisitions of corporations engaging in these activities.

In addition, on a case-by-case basis, the Board of Governors may approve other non-banking activities.

A financial holding company may also engage in financial activities, including securities underwriting and dealing, insurance agency and underwriting activities, and merchant banking activities.

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Further, any acquisition application that United must submit to the Board of Governors must also be submitted to the West Virginia Banking Board for approval.

The Board of Governors has broad authority to prohibit activities of financial holding companies and their non-banking

subsidiaries that represent unsafe and unsound banking practices or which constitute violations of laws or regulations.

The Board of Governors has broad authority to prohibit activities of financial holding companies and their non-banking subsidiaries that represent unsafe and unsound banking practices or which constitute violations of laws or regulations.

The Board of Governors also can assess civil money penalties for certain activities conducted on a knowing and reckless basis, if those activities caused a substantial loss to a depository institution.

The penalties can be as high as $1 million for each day the activity continues.

United Bank, as a Virginia state member bank, is subject to supervision, examination, and regulation by the Federal Reserve System, and as such, are subject to applicable provisions of the Federal Reserve Act and regulations issued thereunder.

United Bank, as a Virginia state member bank, is subject to supervision, examination, and regulation by the Federal Reserve System, and as such, is subject to applicable provisions of the Federal Reserve Act and regulations issued thereunder.

United Bank is subject to the Virginia banking statutes and regulations, and is primarily regulated by the Virginia Bureau of Financial Institutions.

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We are required to file annual, quarterly and current reports with the SEC.

We prepare and file an annual report on Form 10-K

with the SEC that contains detailed financial and operating information, as well as a management response to specific questions about United’s operations.

We prepare and file an annual report on Form 10-K with the SEC that contains detailed financial and operating information, as well as a management response to specific questions about United’s operations.

SEC regulations require that our annual reports to shareholders contain certified financial statements and other specific items such as management’s discussion and analysis of our financial condition and results of operations.

We must also file quarterly reports with the SEC on Form 10-Q

that contain detailed financial and operating information for the prior quarter and we must file current reports on Form 8-K

to provide the pubic with information on recent material events.

We must also file quarterly reports with the SEC on Form 10-Q that contain detailed financial and operating information for the prior quarter and we must file current reports on Form 8-K to provide the pubic with information on recent material events.

In addition to periodic reporting to the SEC, we are subject to proxy rules and tender offer rules issued by the SEC.

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Any redemption or repurchase of preferred stock or subordinated debt remains subject to the prior approval of the Federal Reserve Board.

The Inflation Reduction Act of 2022 (the “IRA”) imposes a new 1% excise tax on the fair market value of stock repurchased after December 31, 2022 by publicly traded U.S.

corporations.

With certain exceptions, the value of stock repurchased is determined net of stock issued in the year, including shares issued pursuant to compensatory arrangements.

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

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The Dodd-Frank Act includes, among other things, provisions creating a Financial Services Oversight Council to identify emerging systemic risks and improve interagency cooperation;

centralizing the responsibility for consumer financial protection by creating a new agency, the Consumer Financial Protection Bureau, which is responsible for implementing, examining and enforcing compliance with federal consumer financial laws;

centralizing the responsibility for

consumer financial protection by creating a new agency, the Consumer Financial Protection Bureau, which is responsible for implementing, examining and enforcing compliance with federal consumer financial laws;

permanently raising the current standard maximum deposit insurance amount to $250,000;

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The risk matrix utilizes four risk categories which are distinguished by capital levels and supervisory ratings.

In October 2010, the FDIC adopted a new DIF restoration plan to ensure that the fund reserve ratio reaches 1.35% by September 30, 2020, as required by the Dodd-Frank Act.

Under the new restoration plan, the FDIC will update its loss and income projections at least semi-annually for the fund and, if needed, will increase or decrease assessment rates, following notice-and-comment

rulemaking if required.

In April 2011, the FDIC implemented rulemaking under the Dodd-Frank Act to reform the deposit insurance assessment system.

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United benefited from both these changes.

On October 18, 2022, the FDIC adopted a final rule to increase initial base deposit insurance assessment rates for insured depository institutions by 2 basis points, beginning with the first quarterly assessment period of 2023.

The increased assessment rate schedules would remain in effect unless and until the reserve ratio of the Deposit Insurance Fund meets or exceeds 2 percent.

As a result of the new rule, the FDIC insurance costs of insured depository institutions, including United Bank, would generally increase.

United’s FDIC insurance expense totaled $12.0 million, $8.3 million, and $10.1 million in 2022, 2021 and 2020, respectively.

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The Basel III Capital Rules and the Capital Simplification Rules also provide for a number of deductions from and adjustments to CET1.

These include, for example, the requirement that certain deferred tax assets and significant investments in non-consolidated

financial entities be deducted from CET1 to the extent that any one such category exceeds 25% of CET1.

These include, for example, the requirement that certain deferred tax assets and significant investments in non-consolidated financial entities be deducted from CET1 to the extent that any one such category exceeds 25% of CET1.

Prior to the adoption of the Capital Simplification Rules in July 2019, amounts were deducted from CET1 to the extent that any one such category exceeded 10% of CET1 or all such items, in the aggregate, exceeded 15% of CET1.

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Under the Basel III Capital Rules, the effects of certain accumulated other comprehensive income items are not excluded;

however, non-advanced

approaches banking organizations, including United and United Bank, were able to make a one-time

permanent election to continue to exclude these items.

Both United and United Bank made this election in order to avoid significant variations in the level of capital depending upon the impact of interest rate fluctuations on the fair value of their available-for-sale

securities portfolio.

however, non-advanced approaches banking organizations, including United and United Bank, were able to make a one-time permanent election to continue to exclude these items.

Under the Basel III Capital Rules, trust preferred securities no longer included in our Tier 1 capital may nonetheless be included as a component of Tier 2 capital on a permanent basis without phase-out.

In February 2019, the federal bank regulatory agencies issued a final rule (the “2019 CECL Rule”) that revised certain capital regulations to account for changes to credit loss accounting under U.S.

The 2019 CECL Rule included a transition option that allows banking organizations to phase in, over a three-year period, the day-one

adverse effects of adopting a new accounting standard related to the measurement of current expected credit losses (“CECL”) on their regulatory capital ratios (three-year transition option).

The 2019 CECL Rule included a transition option that allows banking organizations to phase in, over a three-year period, the day-one adverse effects of adopting a new accounting standard related to the measurement of current expected credit losses (“CECL”) on their regulatory capital ratios (three-year transition option).

In March 2020, the federal bank regulatory agencies issued an interim final rule that maintains the three-year transition option of the 2019 CECL Rule and also provides banking organizations that were required under U.S.

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The Community Reinvestment Act of 1977 (“CRA”) requires depository institutions to assist in meeting the credit needs of their market areas consistent with safe and sound banking practice.

Under the CRA, each depository institution is required to help meet the credit needs of its market areas by, among other things, providing credit to low-

and moderate-income individuals and communities.

Under the CRA, each depository institution is required to help meet the credit needs of its market areas by, among other things, providing credit to low- and moderate-income individuals and communities.

Depository institutions are periodically examined for compliance with the CRA and are assigned ratings.

Banking regulators take into account CRA ratings when considering approval of a proposed transaction.

United Bank received a rating of “outstanding” in its most recent CRA examination.

In December 2019, the FDIC and the Office of the Comptroller of the Currency (“OCC”) jointly proposed rules that would significantly change existing CRA regulations.

The proposed rules are intended to increase bank activity in low-

and moderate-income communities where there is significant need for credit, more responsible lending, greater access to banking services, and improvements to critical infrastructure.

The proposals change four key areas:

(i) clarifying what activities qualify for CRA credit;

(ii) updating where activities count for CRA credit;

(iii) providing a more transparent and objective method for measuring CRA performance;

and (iv) revising CRA-related

data collection, record keeping, and reporting.

The OCC issued a final rule effective October 1, 2020;

however, the FDIC did not join with the OCC when it issued the final rules.

In September 2020, the FRB issued an Advance Notice of Proposed Rulemaking (“ANPR”) that invites public comment on an approach to modernize the regulations that implement the CRA by strengthening, clarifying, and tailoring them to reflect the current banking landscape and better meet the core purpose of the CRA.

The ANPR sought feedback on ways to evaluate how banks meet the needs of low-

and moderate-income communities and address inequities in credit access.

In December 2021, the OCC issued a final rule to rescind its June 2020 final rule in favor of working with other agencies to put forward a joint rule.

In the third quarter of 2022, United Bank 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, United 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.

United 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 United Bank and its wholly-owned subsidiary, George Mason Mortgage, LLC.

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

The Department of Justice, however, has advised United Bank in writing that it has completed its review of this matter and determined that the circumstances of this matter do not require enforcement action by the Department of Justice at this time.

The FRB Performance Evaluation states that “United 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 commenced in October 2022 and United Bank is awaiting the results.

The precise timing of any results therefrom will not be known until later.

The Office of the Comptroller of the Currency (“OCC”), the Federal Reserve Board and the FDIC issued a joint notice of proposed rulemaking on May 5, 2022, proposing revisions to the CRA regulations.

Comments on the proposed rulemaking were due by August 5, 2022.

In September, 2022, legislation was introduced to significantly revise the CRA to add a number of new substantive and procedural requirements.

This legislation may delay the pending proposed rulemaking by the banking regulators.

We will continue to evaluate the impact of any changes to the regulations implementing the CRA and their impact to our financial condition, results of operations, and/or liquidity, which cannot be predicted at this time.

The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”)

The CARES Act, which became law on March 27, 2020, provided over $2 trillion to combat the coronavirus (“COVID-19”)

and stimulate the economy.

The CARES Act, which became law on March 27, 2020, provided over $2 trillion to combat the coronavirus (“COVID-19”) and stimulate the economy.

Many of the CARES Act’s programs, including the Paycheck Protection Program (“PPP”), are dependent upon the direct involvement of U.S.

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Department of Treasury, the Federal Reserve and other federal banking agencies, including those with direct supervisory jurisdiction over United and United Bank.

Furthermore, as the on-going

pandemic evolves, federal regulatory authorities continue to issue additional guidance with respect to the implementation, lifecycle, and eligibility requirements for the various CARES Act programs as well as industry-specific recovery procedures for COVID-19.

On December 27, 2020, then President Trump signed into law the 2021 Consolidated Appropriations Act (the “CAA”), an approximately $900 billion bill, which extended several provisions of the CARES Act as well as provided additional COVID-19

Furthermore, as the on-going COVID-19 pandemic evolves, federal regulatory authorities continue to issue additional guidance with respect to the implementation, lifecycle, and eligibility requirements for the various CARES Act programs as well as industry-specific recovery procedures for COVID-19.

In particular, the CAA extended weekly unemployment benefits, provided another round of economic stimulus payments to individuals and families, lengthened temporary suspensions and modifications of several-bank related provisions and provided more aid to small businesses.

On March 11, 2021, newly elected President Joe Biden signed into law the $1.9 trillion American Rescue Plan Act of 2021.

The legislation included additional stimulus checks to eligible individuals and an extension of the $300-per-week

supplement to federal unemployment benefits through September 6, 2021.

The legislation also allocates funding to small businesses, state and local governments, and COVID-19

vaccination and testing and tracing efforts.

On March 11, 2021, President Joe Biden signed into law the $1.9 trillion American Rescue Plan Act of 2021.

The legislation included additional stimulus checks to eligible individuals and an extension of the $300-per-week supplement to federal unemployment benefits through September 6, 2021.

The legislation also allocates funding to small businesses, state and local governments, and COVID-19 vaccination and testing and tracing efforts.

The legislation also modified the PPP to clarify that the SBA affiliation rules would not apply to certain applicants.

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However, the legislation did not extend the March 31, 2021 application deadline.

On March 27, 2021, the COVID-19

Bankruptcy Relief Extension Act of 2021 was enacted, extending the bankruptcy relief provisions enacted in the CARES Act of 2020 bill until March 27, 2022.

On March 27, 2021, the COVID-19 Bankruptcy Relief Extension Act of 2021 was enacted, extending the bankruptcy relief provisions enacted in the CARES Act of 2020 bill until March 27, 2022.

These provisions provide financially distressed small businesses and individuals greater access to bankruptcy relief.

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President Biden emphasized that this was the final extension.

The Company continues to assess the impact of the CARES Act and other statues, regulations and supervisory guidance related to the COVID-19

On January 30, 2023, President Biden announced that he intends to end both the national emergency and the public health emergency declarations related to COVID-19 on May 11, 2023.

Cybersecurity

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If we fail to observe such regulatory guidance or standards, we could be subject to various regulatory sanctions, including financial penalties.

Recently, in November 2021, the federal banking agencies adopted a final rule, with compliance required by May 1, 2022, that requires banking organizations to notify their primary banking regulator within 36 hours of determining that a “computer-security incident” has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, the banking organization’s ability to carry out banking operations or deliver banking products and services to a material portion of its customer base, its businesses and operations that would result in material loss, or its operations that would impact the stability of the United States.

In November 2021, the federal banking agencies adopted a final rule, with compliance by May 1, 2022, that requires banking organizations to notify their primary banking regulator within 36 hours of determining that a “computer-security incident” has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, the banking organization’s ability to carry out banking operations or deliver banking products and services to a material portion of its customer base, its businesses and operations that would result in material loss, or its operations that would impact the stability of the United States.

In the ordinary course of business, United relies on electronic communications and information systems to conduct its operations and to store sensitive data.

United employs an in-depth,

layered, defensive approach that leverages people, processes and technology to manage and maintain cybersecurity controls.

United employs an in-depth, layered, defensive approach that leverages people, processes and technology to manage and maintain cybersecurity controls.

United employs a variety of preventative and detective tools to monitor, block, and provide alerts regarding suspicious activity, as well as to report on any suspected advanced persistent threats.

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In addition to the banking laws and regulations discussed above, bank subsidiaries are also subject to certain consumer laws and regulations that are designed to protect consumers in transactions with banks.

Among the more prominent of such laws and regulations are the Truth in Lending Act, the Home Mortgage Disclosure Act, the Truth in Savings Act, the Electronic Funds Transfer Act, the Expedited Funds Availability Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection Act, the Right to Financial Privacy Act and the Fair Housing Act.

Among the more prominent of such laws and regulations are the Truth in Lending Act, the Home Mortgage Disclosure Act, the Truth in Savings Act, the Electronic Funds Transfer Act, the Expedited Funds Availability Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Right to Financial Privacy Act and the Fair Housing Act.

These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must deal with customers when taking deposits or making loans to such customers.

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requires the U.S.

Department of the Treasury to promulgate priorities for anti-money laundering and

countering the financing of terrorism policy;

Department of the Treasury to promulgate priorities for anti-money laundering and countering the financing of terrorism policy;

requires the development of standards for testing technology and internal processes for BSA compliance;

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The proposed rule requires covered institutions to establish policies and procedures for monitoring and evaluating their compensation practices.

As of February 2022, final rules have not been adopted.

If these or other regulations are adopted in a form similar to that initially proposed, they will impose limitations on the manner in which we may structure compensation for our executives.

In August 2022, the SEC adopted final rules requiring public companies to disclose the relationship between the executive compensation actually paid to the company’s named executive officers (“NEOs”) and the company’s financial performance.

The final rules implement the “pay versus performance” disclosure requirements mandated by Section 953(a) of the Dodd-Frank Act.

Disclosure related to these final rules will be effective for United’s proxy statement filed in 2023.

In October 2022, the SEC adopted the final “clawback” rule mandated by Section 954 of the Dodd-Frank Act directing national securities exchanges and associations, including the NASDAQ, to implement listing standards that require listed companies to adopt policies mandating the recovery or “clawback” of excess incentive-based compensation earned by a current or former executive officer during the three fiscal years preceding the date the listed company is required to prepare an accounting restatement, including to correct an error that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.

The final rule requires United to adopt a clawback policy within 60 days after such listing standard becomes effective.

The scope and content of the U.S.

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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-K

Item 1. Business