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Item 1. Financial Statements

2023-08-09 compared with 2023-05-10 · 452 added, 352 removed, 1430 unchanged (36% of the section changed)

FINANCIAL STATEMENTS (UNAUDITED)

The March 31, 2023 and December 31, 2022, consolidated balance sheets of United

Bankshares, Inc.

and Subsidiaries

(“United” or the “Company”), consolidated statements of income and comprehensive income for the three months ended March 31, 2023 and 2022, the related consolidated statement of changes in shareholders’ equity for the three months ended March 31, 2023 and 2022, the related condensed consolidated statements of cash flows for the three months ended March 31, 2023 and 2022, and the notes to consolidated financial statements appear on the following pages.

CONSOLIDATED BALANCE SHEETS (Unaudited)

The June 30, 2023 and December 31, 2022, consolidated balance sheets of United Bankshares, Inc.

and Subsidiaries (“United” or the “Company”), consolidated statements of income and comprehensive income for the three and six months ended June 30, 2023 and 2022, the related consolidated statement of changes in shareholders’ equity for the three and six months ended June 30, 2023 and 2022, the related condensed consolidated statements of cash flows for the six months ended June 30, 2023 and 2022, and the notes to consolidated

financial statements appear on the following pages.

CONSOLIDATED BALANCE SHEETS

UNITED BANKSHARES, INC.

5 unchanged sentences

Total cash and cash equivalents

Securities available for sale at estimated fair value (amortized cost-$ 4,830,343 at March 31, 2023 and $ 5,011,729 at December 31, 2022, allowance for credit losses of $ 0 at March 31, 2023 and December 31, 2022)

Securities held to maturity, net of allowance for credit losses of $ 18 at March 31, 2023 and December 31, 2022 (estimated fair value-$ 1,020 at March 31, 2023 and December 31, 2022)

Securities available for sale at estimated fair value (amortized cost-$ 4,443,106 at June 30, 2023 and $ 5,011,729 at December 31, 2022, allowance for credit losses of $ 0 at June 30, 2023 and December 31, 2022)

Securities held to maturity, net of allowance for credit losses of $ 19 at June 30, 2023 and $ 18 at December 31, 2022 (estimated fair value-$ 1,020 at June 30, 2023 and December 31, 2022)

Equity securities at estimated fair value

28 unchanged sentences

issued- 142,240,858

and 142,011,560 at March 31, 2023 and December 31, 2022, respectively, including 7,301,495 and 7,266,438 shares in treasury at March 31, 2023 and December 31, 2022, respectively

and 142,011,560 at June 30, 2023 and December 31, 2022, respectively, including 7,306,000 and 7,266,438 shares in treasury at June 30, 2023 and December 31, 2022, respectively

Retained earnings

9 unchanged sentences

Three Months Ended

Six Months Ended

Interest income

19 unchanged sentences

Mortgage loan servicing income

Net investment securities losses

Net investment securities (losses) gains

Total other income

4 unchanged sentences

Other real estate owned (“OREO”) expense

Net gains on the sales of OREO properties

Net losses (gains) on the sales of OREO properties

Equipment expense

10 unchanged sentences

(Dollars in thousands, except per share data)

Three Months Ended

Ended June 30

Six Months Ended

Earnings per common share:

6 unchanged sentences

Three Months Ended

Change in net unrealized gain (loss) on available for sale (“AFS”) securities, net of tax

Change in net unrealized (loss) gain on cash flow hedge, net of tax

Change in defined benefit pension plan, net of tax

Six Months Ended

Change in net unrealized (loss) gain on available-for-sale

(“AFS”) securities, net of tax

Change in net unrealized gain (loss) on cash flow hedge, net of tax

Change in pension plan assets, net of tax

Comprehensive income (loss), net of tax

See notes to consolidated unaudited financial statements

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

UNITED BANKSHARES, INC.

AND SUBSIDIARIES

(Dollars in thousands, except per share data)

Three Months Ended March 31, 2023

Six Months Ended June 30, 2023

Comprehensive

Shareholders’

(Loss) Income

Income (Loss)

Balance at January 1, 2023

8 unchanged sentences

Balance at March 31, 2023

Three Months Ended March 31, 2022

Comprehensive income:

Other comprehensive loss, net of tax

Total comprehensive income, net of tax

Stock based compensation expense

Purchase of treasury stock ( 60 shares)

Cash dividends ($ 0.36 per share)

Stock grant forfeiture ( 4,445 shares)

Net issuance of common stock under stock-based compensation plans ( 2,812 shares)

Balance at June 30, 2023

See notes to consolidated unaudited financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

UNITED BANKSHARES, INC.

AND SUBSIDIARIES

(Dollars in thousands, except per share data)

Six Months Ended June 30, 2022

Comprehensive

Shareholders’

Income (Loss)

Balance at January 1, 2022

8 unchanged sentences

Balance at March 31, 2022

Comprehensive income:

Other comprehensive loss, net of tax

Total comprehensive loss, net of tax

Stock based compensation expense

Purchase of treasury stock ( 1,548,767 shares)

Cash dividends ($ 0.36 per share)

Stock grant forfeiture ( 2,445 shares)

Net issuance of common stock under stock-based compensation plans ( 63,419 shares)

Balance at June 30, 2022

See notes to consolidated unaudited financial statements.

3 unchanged sentences

(Dollars in thousands)

Three Months Ended

Six Months Ended

NET CASH PROVIDED BY OPERATING ACTIVITIES

10 unchanged sentences

Proceeds from sales of bank premises and equipment

Proceeds from sales of mortgage servicing rights

Proceeds from the sales of OREO properties

Net change in loans and leases

Net change in loans

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

3 unchanged sentences

Proceeds from exercise of stock options

Redemption of subordinated debt

Repayment of long-term Federal Home Loan Bank borrowings

Proceeds from issuance of long-term Federal Home Loan Bank borrowings

Redemption of subordinated debt

Federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings

NET CASH PROVIDED BY FINANCING ACTIVITIES

NET CASH USED IN FINANCING ACTIVITIES

Increase (Decrease) in cash and cash equivalents

14 unchanged sentences

Basis of Presentation

The accompanying unaudited consolidated interim financial statements of United Bankshares

and Subsidiaries

(“United” or “the Company”) have been prepared in accordance with accounting principles for interim financial information generally accepted in the United States (“GAAP”) and with the instructions for Form 10-Q

and Article 10 of Regulation S-X.

The accompanying unaudited consolidated interim financial statements of United Bankshares, Inc.

and Subsidiaries (“United” or “the Company”) have been prepared in accordance with accounting principles for interim financial information generally accepted in the United States (“GAAP”) and with the instructions for Form

and Article 10 of Regulation

Accordingly, the financial statements do not contain all of the information and footnotes required by accounting principles generally accepted in the United States.

1 unchanged sentence

Actual results could differ from those estimates.

The financial statements presented as of March 31, 2023 and 2022 and for the three-month periods then ended have not been audited.

The Notes to Consolidated Financial Statements appearing in United’s 2022 Annual Report on Form 10-K,

The financial statements presented as of June 30, 2023 and 2022 and for the three-month and

periods then ended have not been audited.

The Notes to Consolidated Financial Statements appearing in United’s 2022 Annual Report on Form

which includes descriptions of significant accounting policies, should be read in conjunction with these interim financial statements.

15 unchanged sentences

The amendments in this update must be applied on either a modified retrospective or a retrospective basis except for LIHTC investments not accounted for using the proportional amortization method.

The adoption of ASU 2023-02

The adoption of

is not expected to have a material impact on the Company’s financial condition or results of operations.

6 unchanged sentences

At the time ASU

was issued, the United Kingdom’s Financial Conduct Authority (“FCA”) had established the intent that it would no longer be necessary to

persuade, or compel, banks to submit to LIBOR after December 31, 2021.

was issued, the United Kingdom’s Financial Conduct Authority (“FCA”) had established the intent that it would no longer be necessary to persuade, or compel, banks to submit to LIBOR after December 31, 2021.

As a result, the sunset provision was set for December 31, 2022;

12 months after the expected cessation date of all currencies and tenors of LIBOR.

In March 2021, the FCA announced that the intended cessation date of LIBOR in the United States would be June 30, 2023.

In March 2021, the

FCA announced that the intended cessation date of LIBOR in the United States would be June 30, 2023.

Accordingly, ASU

defers the expiration date of ASU 848 to December 31, 2024.

United has implemented a transition plan to identify and modify its loans and other financial instruments with attributes that are either directly or indirectly influenced by LIBOR.

United implemented a transition plan to identify and modify its loans and other financial instruments with attributes that are either directly or indirectly influenced by LIBOR.

In addition, United took steps to ensure that no new contracts using LIBOR were originated after December 31, 2021.

3 unchanged sentences

03, “Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.” ASU 2022-03

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.”

clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

1 unchanged sentence

will be effective for United on January 1, 2024 though early adoption is permitted.

The adoption of ASU 2022-03

The adoption of

is not expected to have a material impact on the Company’s financial condition or results of operations.

In March 2022, the FASB issued ASU No.

In March 2022, the FASB issued ASU

“Troubled Debt Restructurings and Vintage Disclosures”.

6 unchanged sentences

The adoption did not have a material impact on the Company’s financial condition or results of operations.

However, ASU No.

did affect the Company’s disclosures.

For additional information, see Notes to Consolidated Financial Statements, Note 4, “Credit Quality,” in this Form 10-Q.

In March 2022, the FASB issued ASU No.

For additional information, see Notes to Consolidated Financial Statements, Note 4, “Credit Quality,” in this Form

In March 2022, the FASB issued ASU

“Derivatives and Hedging (Topic 815):

Fair Value Hedging – Portfolio Layer Method”.

further aligns risk management objectives with hedge accounting results on the application of the last-of-layer

method, which was first introduced in ASU No.

The enhanced guidance further improves the last-of-layer

further aligns risk management objectives with hedge accounting results on the application of the

last-of-layer

method, which was first introduced in ASU

The enhanced guidance further improves the

last-of-layer

concepts to expand to nonprepayable financial assets and allows more flexibility in the derivative structures used to hedge the interest rate risk.

5 unchanged sentences

The adoption did not have a material impact on the Company’s financial condition or results of operations.

In October 2021, the FASB issued ASU No.

In October 2021, the FASB issued ASU

“Business Combinations (Topic 805):

7 unchanged sentences

The adoption did not have a material impact on the Company’s financial condition or results of operations.

In January 2021, the FASB issued ASU No.

“Reference Rate Reform (Topic 848).” This update to ASU No.

“Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” refines the scope of ASC Topic 848 and permits entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by change in the interest rates used for discounting cash flows, for computing variation margin settlements, and for calculating price alignment interest in connection with reference rate reform activities under way in global financial markets.

is effective for public business entities upon issuance through December 31, 2022.

The Company has implemented a transition plan to identify and modify its loans and other financial instruments with attributes that are either directly or indirectly influenced by LIBOR.

In addition, the Company took steps to ensure that no new contracts using LIBOR were originated after December 31, 2021.

At this time, United is prioritizing the Secured Overnight Financing Rate (“SOFR”) and Prime as the preferred alternatives to LIBOR;

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

In March 2020, the FASB issued ASU No.

“Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides “optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued.” ASU No.

was effective for public business entities on March 12, 2020 through December 31, 2022.

United is implementing a transition plan to identify and modify its loans and other financial instruments with attributes that are either directly or indirectly influenced by LIBOR.

The Company is assessing ASU No.

and its impact on the Company’s transition away from LIBOR for its loan and other financial instruments.

INVESTMENT SECURITIES

2 unchanged sentences

The amortized cost, estimated fair values, and allowance for credit losses of securities available for sale are summarized as follows.

March 31, 2023

June 30, 2023

Treasury securities and obligations of U.S.

15 unchanged sentences

Other corporate securities

United excludes

accrued interest from the amortized cost basis of available-for-sale

debt securities and report accrued interest separately in “Accrued interest receivable” in the consolidated balance sheets.

United excludes accrued interest from the amortized cost basis of available-for-sale

debt securities and report s

accrued interest separately in “Accrued interest receivable” in the consolidated balance sheets.

Available-for-sale

4 unchanged sentences

debt securities.

The table above excludes accrued interest receivable of $ 23,579 and $ 23,955 at March 31, 2023 and December 31, 2022, respectively, that is recorded in “Accrued interest receivable.”

The following is a summary of securities available for sale which were in an unrealized loss position at March 31, 2023 and December 31, 2022.

The table above excludes accrued interest receivable of $ 21,353 and $ 23,955 at June 30, 2023 and December 31, 2022, respectively, that is recorded in “Accrued interest receivable.”

following is a summary of securities available for sale which were in an unrealized loss position

at June 30, 2023 and December 31, 2022.

Less than 12 months

12 months or longer

March 31, 2023

June 30, 2023

Treasury securities and obligations of U.S.

20 unchanged sentences

Three Months Ended

Proceeds from maturities, sales and calls

Six Months Ended

Proceeds from sales and calls

Gross realized gains

Gross realized losses

At March 31, 2023, gross unrealized losses on available for sale securities were $ 411,192 on 1,382 securities of a total portfolio of 1,462 available for sale securities.

Securities with the most significant gross unrealized losses at March 31, 2023 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.

June 30, 2023, gross unrealized losses on available for sale securities were $ 437,847 on 1,138 securities of a total portfolio of 1,179 available for sale securities.

Securities with the most significant gross unrealized losses at June 30, 2023 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.

In determining whether or not a security is impaired, management considered the severity of the loss in conjunction with United’s positive intent and the more likely than not ability to hold these securities to recovery of their cost basis or maturity.

Generally, the significant amount of gross unrealized losses on available for sale securities at March 31, 2023 was the result of rising interest rates.

Generally, the significant amount of gross unrealized losses on available for sale securities at June 30, 2023 was the result of rising interest rates.

State and political subdivisions

United’s state and political subdivisions portfolio relates to securities issued by various municipalities located throughout the United States.

The total amortized cost of available for sale state and political subdivision securities was $ 812,022 at March 31, 2023.

As of March 31, 2023, approximately 53 % of the portfolio was supported by the general obligation of the issuing municipality, which allows for the securities to be repaid by any means available to the municipality.

The majority of the portfolio was rated AA or higher, and no securities within the portfolio were rated below investment grade as of March 31, 2023.

The total amortized cost of available for sale state and political subdivision securities was $ 620,356 at June 30, 2023.

As of June 30, 2023, approximately 48 % of the portfolio was supported by the general obligation of the issuing municipality, which allows for the securities to be repaid by any means available to the municipality.

The majority of the portfolio was rated AA or higher, and no securities within the portfolio were rated below investment grade as of June 30, 2023.

In addition to monitoring the credit ratings of these securities, management also evaluates the financial performance of the underlying issuers on an ongoing basis.

Based upon management’s analysis and judgment, it was determined that none of the state and political subdivision securities had credit losses at March 31, 2023.

Based upon management’s analysis and judgment, it was determined that none of the state and political subdivision securities had credit losses at June 30, 2023.

Mortgage-backed securities

7 unchanged sentences

United had a net unrealized loss of $ 265,644 on mortgage-backed

securities at March 31, 2023.

securities June 30, 2023.

Below is a detailed discussion of mortgage-backed securities by type.

United’s agency mortgage-backed securities portfolio relates to securities issued by Fannie Mae, Freddie Mac, and Ginnie Mae.

The total amortized cost of available for sale agency mortgage-backed securities was $ 1,933,421 at March 31, 2023.

The total amortized cost of available for sale agency mortgage-backed securities was $ 1,846,519 at June 30, 2023.

Of the $ 1,846,519 amount, $ 547,847 was related to agency commercial mortgage-backed securities and $ 1,298,672 was related to agency residential mortgage-backed securities.

Each of the agency mortgage-backed securities provides a guarantee of full and timely payments of principal and interest by the issuing agency.

Based upon management’s analysis and judgment, it was determined that none of the agency mortgage-backed securities had credit losses at March 31, 2023.

Based upon management’s analysis and judgment, it was determined that none of the agency mortgage-backed securities had credit losses at June 30, 2023.

United’s non-agency

1 unchanged sentence

The total amortized cost of available for sale non-agency

residential mortgage-backed securities was $ 121,001 at March 31, 2023.

residential mortgage-backed securities was $ 109,373 at June 30, 2023.

Of the $ 109,373 , 100 % was rated AAA.

Based upon management’s analysis and judgment, it was determined that no ne of the non-agency

residential mortgage-backed securities had credit losses at March 31, 2023.

residential mortgage-backed securities had credit losses at June 30, 2023.

Asset-backed securities

As of March 31, 2023, United’s asset-backed securities portfolio had a total amortized cost balance of $ 922,890 .

100 % of the portfolio was investment grade rated as of March 31, 2023.

As of June 30, 2023, United’s asset-backed securities portfolio had a total amortized cost balance of $ 909,879 .

100 % of the portfolio was investment grade rated as of June 30, 2023.

Approximately 25 % of the portfolio relates to securities that are backed by Federal Family Education Loan Program (“FFELP”) student loan collateral which includes a minimum of a 97 % government repayment guaranty, as well as additional credit support and subordination in excess of the government guaranteed portion.

Approximately 75 % of the portfolio relates to collateralized loan obligation securities that are all AAA rated.

Upon reviewing this portfolio as of March 31, 2023, it was determined that no ne of the asset-backed securities had credit losses.

Upon reviewing this portfolio as of June 30, 2023, it was determined that no ne of the asset-backed securities had credit losses.

Single issue trust preferred securities

2 unchanged sentences

All single issue trust preferred securities are currently receiving interest payments.

The amortized cost of available for sale single issue trust preferred securities as of March 31, 2023 consisted of $ 8,470 in investment grade bonds, $ 3,091 in split rated bonds, and $ 5,791 in unrated bonds.

The amortized cost of available for sale single issue trust preferred securities as of June 30, 2023 consisted of $ 8,472 in investment grade bonds, $ 3,095 in split rated bonds, and $ 5,794 in unrated bonds.

Management reviews each issuer’s current and projected earnings trends, asset quality, capitalization levels, and other key factors.

Upon completing the review for the first quarter of 2023, it was determined that none of the single issue trust preferred securities had credit losses.

Upon completing the review for the second quarter of 2023, it was determined that none of the single issue trust preferred securities had credit losses.

Other corporate securities

As of March 31, 2023, United’s other corporate securities portfolio had a total amortized cost balance of $ 477,355 .

As of June 30, 2023, United’s other corporate securities portfolio had a total amortized cost balance of $ 394,573 .

The majority of the portfolio consisted of debt issuances of corporations representing a variety of industries, including financial institutions.

1 unchanged sentence

For other corporate securities, management has evaluated the near-term prospects of the investment in relation to the severity of any unrealized loss.

Based upon management’s analysis and judgment, it was determined that none of the other corporate securities had credit losses at March 31, 2023.

The amortized cost and estimated fair value of securities available for sale at March 31, 2023 and December 31, 2022 by contractual maturity are shown as follows.

Based upon management’s analysis and judgment, it was determined that none of the other corporate securities had credit losses at June 30, 2023.

amortized cost and estimated fair value of securities available for sale at June 30, 2023 and December 31, 2022 by contractual maturity are shown as follows.

Expected maturities may differ from contractual maturities because the issuers may have the right to call or prepay obligations without penalties.

March 31, 2023

June 30, 2023

December 31, 2022

5 unchanged sentences

Equity securities consist mainly of mutual funds of equity securities within a rabbi trust for the payment of benefits under a deferred compensation plan for certain key officers of United and its subsidiaries.

The fair value of United’s equity securities was $ 7,792 at March 31, 2023 and $ 7,629 at December 31, 2022.

Three Months Ended

The fair value of United’s equity securities was $ 8,443 at June 30, 2023 and $ 7,629 at December 31, 2022.

Net gains recognized during the period on equity securities sold

1 unchanged sentence

Unrealized losses recognized during the period on equity securities still held at period end

Net gains (losses) recognized during the period

Net losses recognized during the period

Other investment securities

During the first quarter of 2023, United evaluated all of its cost method investments to determine if certain events or changes in circumstances during the first quarter of 2023 had a significant adverse effect on the recorded value of any of its cost method securities.

United determined that there was no individual security that experienced an adverse event during the first quarter.

There were no other events or changes in circumstances during the first quarter which would have an adverse effect on the recorded fair value of its cost method securities.

The carrying value of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes as required or permitted by law, approximated $ 3,116,743 and $ 2,412,820 at March 31, 2023 and December 31, 2022, respectively.

During the second quarter of 2023, United evaluated all of its cost method investments to determine if certain events or changes in circumstances during the second quarter of 2023 had a significant adverse effect on the recorded value of any of its cost method securities.

United determined that there was no individual security that experienced an adverse event during the second quarter.

There were no other events or changes in circumstances during the second quarter which would have an adverse effect on the recorded fair value of its cost method securities.

carrying value of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes as required or permitted by law, approximated $ 2,799,341 and $ 2,412,820 at June 30, 2023 and December 31, 2022, respecti vely.

LOANS AND LEASES

Major classes of loans and leases are as follows:

March 31, 2023

December 31, 2022

June 30, 2023

Commercial, financial and agricultural:

8 unchanged sentences

Total gross loans

The table above does not include loans held for sale of $ 68,176 and $ 56,879 at March 31, 2023 and December 31, 2022, respectively.

table above does not include loans held for sale of $ 91,296 and $ 56,879 at June 30, 2023 and December 31, 2022, respectively.

Loans held for sale consist of single-family residential real estate loans originated for sale in the secondary market.

United’s subsidiary bank has made loans to the directors and officers of United and its subsidiaries, and to their affiliates.

The aggregate dollar amount of these loans was $ 24,409 and $ 24,901 at March 31, 2023 and December 31, 2022, respectively.

The aggregate dollar amount of these loans was $ 68,238 and $ 24,901 at June 30, 2023 and December 31, 2022, respectively.

CREDIT QUALITY

9 unchanged sentences

Nonaccrual loans and leases will not normally be returned to accrual status unless all past due principal and interest has been paid and the borrower has evidenced their ability to meet the contractual provisions of the note.

The following table sets forth United’s age analysis of its past due loans and leases, segregated by class of loans and leases:

following table sets forth United’s age analysis of its past due loans and leases, segregated by class of loans

Age Analysis of Past Due Loans and Leases

As of March 31, 2023

As of June 30, 2023

Commercial real estate:

15 unchanged sentences

The following table sets forth United’s nonaccrual loans and leases, segregated by class of loans and leases:

At March 31, 2023

At June 30, 2023

At December 31, 2022

11 unchanged sentences

Other consumer

Interest income recognized on nonaccrual loans was insignificant during the three months ended March 31, 2023 and 2022.

Interest income recognized on nonaccrual loans was insignificant during the three and six months ended June 30, 2023 and 2022.

In some cases, United will modify a loan to a borrower experiencing financial difficulty by providing multiple types of concessions such as a term extension, principal forgiveness, an interest rate reduction or a combination thereof.

The following table presents the amortized cost of loans and leases to borrowers experiencing financial difficulty modified on or after January 1, 2023, the date United adopted ASU 2022-02,

through March 31, 2023, by class of financing receivable and by type of modification.

The percentage of the amortized cost basis of loans and leases that were modified to borrowers experiencing financial difficulty as compared to the amortized cost basis of each class of financing receivable is also represented below.

following table presents the amortized cost of loans and leases to borrowers experiencing financial difficulty modified on or after January 1, 2023, the date United adopted ASU 2022-02,

through June 30, 2023, by class of financing receivable and by type of modification.

Amortized Cost Basis of Loan Modifications Made to Borrowers Experiencing Financial Difficulty

For the Three Months Ended March 31, 2023

For the Three Months Ended June 30, 2023

Interest Rate

8 unchanged sentences

Other consumer

As of March 31, 2023, United did not have any commitments to lend additional funds on the loans above modified due to the debtors experiencing financial difficulty.

Amortized Cost Basis of Loan Modifications Made to Borrowers Experiencing Financial Difficulty

For the Six Months Ended June 30, 2023

Commercial real estate:

Owner-occupied

Nonowner-occupied

Other commercial

Residential real estate

Construction & land development

Other consumer

As of June 30, 2023, United did not have any commitments to lend additional funds on the above loans modified due to the debtors experiencing financial difficulty.

United’s estimate of future credit losses uses a lifetime methodology, derived from modeled loan performance based on the extensive historical experience of loans with similar risk characteristics, adjusted to reflect current conditions and reasonable and supportable forecasts.

1 unchanged sentence

United closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table presents an aging analysis of loans and leases to borrowers experiencing financial difficulty modified on or after January 1, 2023 through March 31, 2023, presented by class of financing receivable:

The following table presents an aging analysis of loans and leases to borrowers experiencing financial difficulty modified on or after January 1, 2023 through June 30, 2023, presented by class of financing receivable:

Payment Status (Amortized Cost Basis)

As of March 31, 2023

As of June 30, 2023

Commercial real estate:

5 unchanged sentences

Other consumer

The following table presents the financial effect of loan and lease modifications to borrowers experiencing financial difficulty for the three months ended March 31, 2023.

For the Three Months Ended March 31, 2023

The following table presents the financial effect of loan and lease modifications to borrowers experiencing financial difficulty for the three and six months ended June 30, 2023.

For the Three Months Ended

June 30, 2023

For the Six Months Ended

June 30, 2023

Interest Rate

Commercial Real Estate:

5 unchanged sentences

Other consumer

No loan or lease modifications completed on or after January 1, 2023 through March 31, 2023 to borrowers experiencing financial difficulty had a payment default during the first three months ended March 31, 2023.

United elects the practical expedient to measure expected credit

losses on collateral dependent loans and leases based on the difference between the loan’s amortized cost and the collateral’s fair value, adjusted for selling costs.

The following table presents the amortized cost basis of collateral-dependent loans and leases in which repayment is expected to be derived substantially through the operation or sale of the collateral and where the borrower is experiencing financial difficulty, by class of loans and leases as of March 31, 2023 and December 31, 2022:

No loan or lease modifications completed on or after January 1, 2023 through June 30, 2023 to borrowers experiencing financial difficulty had a payment default during the three and six months ended June 30, 2023.

United elected the practical expedient to measure expected credit losses on collateral dependent loans and leases based on the difference between the loan’s amortized cost and the collateral’s fair value, adjusted for selling costs.

Collateral Dependent Loans and Leases

At March 31, 2023

At June 30, 2023

Commercial real estate:

3 unchanged sentences

Residential real estate

Collateral Dependent Loans and Leases

At June 30, 2023

Construction & land development

25 unchanged sentences

days are generally considered special mention.

A substandard loan with a corporate credit exposure is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any.

A substandard loan with a corporate credit exposure is inadequately protected by the current sound worth and paying

of the obligor or of the collateral pledged, if any.

Loans so classified have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt by the borrower.

14 unchanged sentences

Commercial Real Estate—Owner-occupied

Origination Year

Revolving loans

amortized cost

Origination Year

As of March 31, 2023

As of June 30, 2023

Internal Risk Grade:

Special Mention

Current-period

Current-period charge-offs

Current-period recoveries

Current-period net recoveries

Current-period net recoveries (charge-offs)

Origination Year

Revolving loans

1 unchanged sentence

loans and leases

Origination Year

As of December 31, 2022

5 unchanged sentences

Commercial Real Estate—Nonowner-occupied

Origination Year

Revolving loans

amortized cost

Origination Year

As of March 31, 2023

As of June 30, 2023

Internal Risk Grade:

Special Mention

Current-period

Current-period net

Current-period charge-offs

Current-period recoveries

Current-period net recoveries

Origination Year

Revolving loans

1 unchanged sentence

loans and leases

Origination Year

As of December 31, 2022

1 unchanged sentence

Special Mention

Current-period

net recoveries

Current-period charge-offs

Current-period recoveries

Current-period net recoveries

Other commercial

Term Loans and leases

Origination Year

Revolving loans

1 unchanged sentence

loans and leases

Origination Year

As of March 31, 2023

As of June 30, 2023

Internal Risk Grade:

2 unchanged sentences

Current-period recoveries

Current-period net (charge-offs)

Current-period net (charge-offs) recoveries

Term Loans and leases

Origination Year

Revolving loans

1 unchanged sentence

loans and leases

Origination Year

As of December 31, 2022

3 unchanged sentences

Current-period recoveries

Current-period

net (charge-offs)

Current-period net (charge-offs) recoveries

Residential Real Estate

Origination Year

Revolving loans

amortized cost

Origination Year

As of March 31, 2023

As of June 30, 2023

Internal Risk Grade:

2 unchanged sentences

Current-period recoveries

Current-period net (charge-offs)

Current-period net recoveries

Origination Year

Revolving loans

amortized cost

Origination Year

As of December 31, 2022

3 unchanged sentences

Current-period recoveries

Current-period net (charge-offs)

Current-period net (charge-offs) recoveries

Construction and Land Development

Origination Year

Revolving loans

amortized cost

Origination Year

As of March 31, 2023

As of June 30, 2023

Internal Risk Grade:

3 unchanged sentences

Current-period net recoveries

Origination Year

Revolving loans

amortized cost

Origination Year

As of December 31, 2022

4 unchanged sentences

Current-period net recoveries

Origination Year

Revolving loans

amortized cost

Origination Year

As of March 31, 2023

As of June 30, 2023

Internal Risk Grade:

3 unchanged sentences

Current-period net charge-offs

Origination Year

Revolving loans

amortized cost

Origination Year

As of December 31, 2022

5 unchanged sentences

Other Consumer

Origination Year

Revolving loans

amortized cost

Origination Year

As of March 31, 2023

As of June 30, 2023

Internal Risk Grade:

3 unchanged sentences

Current-period net (charge- offs) recoveries

Origination Year

Revolving loans

amortized cost

Origination Year

As of December 31, 2022

3 unchanged sentences

Current-period recoveries

Current-period net (charge-offs)

At March 31, 2023 and December 31, 2022, other real estate owned (“OREO”) included in other assets in the Consolidated Balance Sheets was $ 4,086 and $ 2,052 , respectively.

Current-period net (charge- offs) recoveries

At June 30, 2023 and December 31, 2022, other real estate owned (“OREO”) included in other assets in the Consolidated Balance Sheets was $ 3,756 and $ 2,052 , respectively.

OREO consists of real estate acquired in foreclosure or other settlement of loans.

Such assets are carried at the lower of the investment in the assets or the fair value of the assets less estimated selling costs.

Such assets are carried at the lower of the investment in the assets or the fair value of the assets less

estimated selling costs.

Any adjustment to the fair value at the date of transfer is charged against the allowance for loan losses.

Any subsequent valuation adjustments as well as any costs relating to operating, holding or disposing of the property are recorded in other expense in the period incurred.

At March 31, 2023 and December 31, 2022, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process was $ 1,090 and $ 1,309 , respectively.

At June 30, 2023 and December 31, 2022, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process was $

639 and $ 1,309 , respectively.

ALLOWANCE FOR CREDIT LOSSES

7 unchanged sentences

United made a policy election to present the accrued interest receivable balance separately in its consolidated balance sheets from the amortized cost of a loan.

Accrued interest receivable was $ 72,922 and $ 70,332 at March 31, 2023 and December 31, 2022, respectively, related to loans and leases are included separately in “Accrued interest receivable” in the consolidated balance sheets.

For all classes of loans and leases receivable, the accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days past due, unless the loan is well secured and in the process of collection.

Accrued interest receivable was $ 74,384 and $ 70,332 at June 30, 2023 and December 31, 2022, respectively, related to loans and leases that are included separately in “Accrued interest receivable” in the consolidated balance sheets.

For all classes of loans and leases receivable, the accrual of interest is discontinued when the contractual payment of principal or interest has become

90 days past due, unless the loan is well secured and in the process of collection.

Interest received on nonaccrual loans and leases, generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal.

The following table represents the accrued interest receivable as of March 31, 2023 and December 31, 2022:

The following table represents the accrued interest receivable as of June 30, 2023 and December 31, 2022:

Accrued Interest Receivable

At March 31, 2023

At June 30, 2023

At December 31, 2022

5 unchanged sentences

Other consumer

The following table represents the accrued interest receivables written off by reversing interest income for the three months ended March 31, 2023 and 2022:

Accrued Interest Receivables Written Off

by Reversing Interest Income

The following table represents the accrued interest receivables written off by reversing interest income for the three months and six months ended June 30, 2023 and 2022:

Accrued Interest Receivables Written Off by Reversing Interest Income

Three Months Ended

Six Months Ended

Commercial real estate:

3 unchanged sentences

Residential real estate

Construction & land development

Other consumer

14 unchanged sentences

Commercial real estate nonowner-occupied loans differ in that cash flow to service debt is normally dependent on external income from third parties for use of the real estate such as rents, leases and room rates.

Residential real estate loans are dependent upon

individual borrowers who are affected by changes in general economic conditions, demand for housing and resulting residential real estate valuation.

Residential real estate loans are dependent upon individual borrowers who are affected by changes in general economic conditions, demand for housing and resulting residential real estate valuation.

Construction and land development loans are impacted mainly by demand whether for new residential housing or for retail, industrial, office and other types of commercial construction within a given area.

12 unchanged sentences

United maintains an allowance for loan losses and a reserve for lending-related commitments such as unfunded loan commitments and letters of credit.

The reserve for lending-related commitments of $ 48,789 and $ 46,189 at March 31, 2023 and December 31, 2022, respectively, is separately classified on the balance sheet and is included in other liabilities.

The reserve for lending-related commitments of $ 46,768 and $ 46,189 at June 30, 2023 and December 31, 2022, respectively, is separately classified on the balance sheet and is included in other liabilities.

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

United’s allowance for credit losses at March 31, 2023 increased $ 8,345 or 2.97 % from December 31, 2022.

United’s allowance for credit losses at June 30, 2023 increased $ 16,554 or 5.89 % from December 31, 2022.

The overall increase in the allowance was driven primarily by a change in qualitative factors and as well as an expected worsening of future economic performance within the reasonable and supportable forecast.

This increase was offset slightly due to improvement in historical loss rates and a decrease in allocations established for individually assessed loans.

The first quarter of 2023 qualitative adjustments include analyses of the following:

The second quarter of 2023 qualitative adjustments include analyses of the following:

Current conditions

– United considered the impact of inflation, interest rates, the regulatory environment due to recent bank failures and geopolitical conflict when making determinations related to factor adjustments for the external environment.

– United considered the impact of inflation, rising

interest rates, the regulatory environment due to recent bank failures and geopolitical conflict when making determinations related to factor adjustments for the external environment.

United also considered portfolio trends related to economic and business conditions, collateral values for dependent loans;

2 unchanged sentences

Reasonable and supportable forecasts

– The forecast is determined on a portfolio-by-portfolio basis by relating the correlation of real GDP and the unemployment rate to loss rates to forecasts of those variables.

– The forecast is determined on a portfolio-by-portfolio

basis by relating the correlation of real GDP and the unemployment rate to loss rates to forecasts of those variables.

The reasonable and supportable forecast selection is subjective in nature and requires more judgment compared to the other components of the allowance.

Assumptions for the economic variables were the following:

The forecast for real GDP in 2023 shifted slightly downward in the first quarter, from a projection of 0.50 % for 2023 at the end of 2022 to 0.40 % for 2023 with a larger downward shift for 2024, from a projection of 1.60 % for 2024 at the end of 2022 to 1.20 % for 2023.

The unemployment rate remained fairly consistent to the end of 2022 with a steady trend expected throughout 2023 and 2024.

Greater risk of loss is probable in the office portfolio due to continued hybrid and remote work that may be exacerbated by future economic conditions and in the construction portfolio due to weakened economic conditions.

The forecast for real GDP in 2023 improved in the second quarter, from a projection of 0.40 % for 2023 in the first quarter to 1.00 % for 2023 with a slight downward shift for 2024, from a projection of 1.20 % for 2024 in the first quarter to 1.10 % for 2024 in the second quarter.

The unemployment rate improved for 2023 between first and second quarter, 4.50 % to 4.10 %, while remaining fairly consistent for 2024 with a slight improvement from 4.60 % to 4.50 %.

The forecast for 2025 changed minimally for both real GDP and the unemployment rate – both experienced a 10 bps decrease compared to the first quarter.

Greater risk of loss is probable in the office portfolio due to continued hybrid and remote work that may be exacerbated by future economic conditions and in the commercial other and construction portfolios due to weakened economic conditions.

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

2 unchanged sentences

Allowance for Loan and Lease Losses and Carrying Amount of Loans and Leases

For the Three Months Ended March 31, 2023

For the Three Months Ended June 30, 2023

Commercial Real Estate

4 unchanged sentences

Allowance for Loan and Lease Losses and Carrying Amount of Loans and Leases

For the Six Months Ended June 30, 2023

Commercial Real Estate

Construction &

Allowance for Loan and Lease Losses:

Beginning balance

Ending balance

Allowance for Loan and Lease Losses and Carrying Amount of Loans and Leases

For the Year Ended December 31, 2022

6 unchanged sentences

The following is a summary of intangible assets subject to amortization and those not subject to amortization:

March 31, 2023

June 30, 2023

Community Banking

17 unchanged sentences

Goodwill not subject to amortization

United incurred amortization expense of $ 1,279 and $ 1,379 for the quarters ended March 31, 2023 and 2022, respectively.

United incurred amortization expense of $ 1,279 and $ 2,558 for the three and six months ended June 30, 2023 as compared to $ 1,379 and $ 2,758 for the three and six months ended June 30, 2022, respectively.

The following table sets forth the anticipated amortization expense for intangible assets for the years subsequent to 2022:

3 unchanged sentences

The value of mortgage servicing rights (“MSRs”) is included on the Company’s Consolidated Balance Sheets.

The Company initially measures servicing assets and liabilities retained related to the sale of residential loans held for sale (“MSRs”) at fair value, if practicable.

The Company initially measures servicing assets and liabilities retained related to the sale of residential loans at fair value, if practicable.

For subsequent measurement purposes, the Company measures servicing assets and liabilities based on the lower of cost or market using the amortization method.

8 unchanged sentences

Amortization of MSRs and mortgage servicing costs are charged to expense when incurred.

The unpaid principal balances of loans serviced for others were approximately $ 3,280,741 at March 31, 2023 and $ 3,381,485 at December 31, 2022.

The estimated fair value of the mortgage servicing rights was $ 39,699 and $ 41,880 at March 31, 2023 and December 31, 2022, respectively.

The estimated fair value of servicing rights at March 31, 2023 was determined using a net servicing fee of 0.25 %, average discount rates ranging from 9.54 % to 11.63 % with a weighted average discount rate of 10.60 %, average constant prepayment rates (“CPR”) ranging from 5.32 % to 6.25 % with a weighted average prepayment rate of 5.79 %, depending upon the stratification of the specific servicing right, and a delinquency rate, including loans on forbearance of 1.83 %.

The unpaid principal balances of loans serviced for others were approximately $ 1,242,441 at June 30, 2023 and $ 3,381,485 at December 31, 2022.

The estimated fair value of the mortgage servicing rights was $ 13,950 and $ 41,880 at June 30, 2023 and December 31, 2022, respectively.

The estimated fair value of servicing rights at June 30, 2023 was determined using a net servicing fee of 0.25 %, average discount rates ranging from 10.50 % to

10.96 % with a weighted average discount rate of 10.58 %, average constant prepayment rates (“CPR”) ranging from 4.83 % to 11.35 % with a weighted average prepayment rate of 5.70 %, depending upon the stratification of the specific servicing right, and a delinquency rate, including loans on forbearance of 2.94 %.

The estimated fair value of servicing rights at December 31, 2022 was determined using a net servicing fee of 0.25 %, average discount rates ranging from 10.50 % to 10.74 % with a weighted average discount rate of 10.62 %, average CPR ranging from 5.66 % to 7.62 % with a weighted average prepayment rate of 6.30 %, depending upon the stratification of the specific servicing right, and a delinquency rate, including loans on forbearance of 2.19 %.

Please refer to Note 13 in these Notes to Consolidated Financial Statements for additional information concerning the fair value of MSRs.

The following presents the activity in mortgage servicing rights, including their valuation allowance for the three months ended March 31, 2023 and 2022:

Three Months Ended

March 31, 2023

The following presents the activity in mortgage servicing rights, including their valuation allowance for the three and six months ended June 30, 2023 and 2022:

Three Months Ended

March 31, 2022

Six Months Ended

MSRs beginning balance

7 unchanged sentences

MSRs, net of valuation allowance

The Company did no t record any temporary impairments on mortgage servicing rights for the three months ended March 31, 2023 and 2022.

For the three and six months ended June 30, 2023, United recognized net gains of $ 8,148 and $ 8,306 on the sale of MSRs.

The Company did no t record any temporary impairments on MSRs for the three and six months ended June 30, 2023 and 2022.

The estimated amortization expense is based on current information regarding future loan payments and prepayments.

17 unchanged sentences

The components of lease expense were as follows:

Three Months Ended

Classification

March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

Operating lease cost

3 unchanged sentences

Net lease cost

Classification

Operating lease cost

Net occupancy expense

Sublease income

Net occupancy expense

Net lease cost

Supplemental balance sheet information related to leases was as follows:

Classification

March 31, 2023

June 30, 2023

December 31, 2022

Operating lease right-of-use

Operating lease right-of-use assets

Operating lease right-of-use

Operating lease liabilities

1 unchanged sentence

Other information related to leases was as follows:

March 31, 2023

June 30, 2023

Weighted-average remaining lease term:

4 unchanged sentences

Three Months Ended

March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

Cash paid for amounts in the measurement of lease liabilities:

1 unchanged sentence

ROU assets obtained in the exchange for lease liabilities

Maturities of lease liabilities by year and in the aggregate, under operating leases with initial or remaining terms of one year or more, for years subsequent to December 31, 2022, consists of the following as of March 31, 2023:

Six Months Ended

June 30, 2023

June 30, 2022

Cash paid for amounts in the measurement of lease liabilities:

Operating cash flows from operating leases

ROU assets obtained in the exchange for lease liabilities

Total lease payments

1 unchanged sentence

SHORT-TERM BORROWINGS

At March 31, 2023 and December 31, 2022, short-term borrowings were as follows:

March 31, 2023

At June 30, 2023 and December 31, 2022, short-term borrowings were as follows:

June 30, 2023

December 31, 2022

11 unchanged sentences

The line requires compliance with various financial and nonfinancial covenants.

At March 31, 2023, United had no outstanding balance under this credit.

At June 30, 2023, United had no outstanding balance under this credit.

LONG-TERM BORROWINGS

2 unchanged sentences

All FHLB borrowings are collateralized by a mix of single-family residential mortgage loans, commercial loans and investment securities.

At March 31, 2023, United had an unused borrowing amount of approximately $ 5,818,883 available subject to delivery of collateral after certain trigger points.

At June 30, 2023, United had an unused borrowing amount of approximately $ 6,653,985 available subject to delivery of collateral after certain trigger points.

Advances may be called by the FHLB or redeemed by United based on predefined factors and penalties.

At March 31, 2023, $ 2,510,703 of FHLB advances with a weighted-average contractual interest rate of 4.84 % and a weighted-average effective interest rate of 3.97 % are scheduled to mature within the next two

The weighted-average effective rate considers the effect of any interest rate swaps designated as cash flow hedges outstanding at March 31, 2023 to manage interest rate risk on its long-term debt.

At June 30, 2023, $ 1,910,631 of FHLB advances with a weighted-average contractual interest rate of 5.19 % and a weighted-average effective interest rate of 3.92 % are scheduled to mature within the next two years.

The weighted-average effective rate considers the effect of any interest rate swaps designated as cash flow hedges outstanding at June 30, 2023 to manage interest rate risk on its long-term debt.

The scheduled maturities of these FHLB borrowings are as follows:

2027 and thereafter

At March 31, 2023, United had a total of twenty statutory business trusts that were formed for the purpose of issuing or participating in pools of trust preferred capital securities (“Capital Securities”) with the proceeds invested in junior subordinated debt securities (“Debentures”) of United.

At June 30, 2023, United had a total of twenty statutory business trusts that were formed for the purpose of issuing or participating in pools of trust preferred capital securities (“Capital Securities”) with the proceeds invested in junior subordinated debt securities (“Debentures”) of United.

The Debentures, which are subordinate and junior in right of payment to all present and future senior indebtedness and certain other financial obligations of United, are the sole assets of the trusts and United’s payment under the Debentures is the sole source of revenue for the trusts.

United assumed $

10,000 in aggregate principal amount of fixed-to-floating rate subordinated notes in the Carolina Financial Corporation acquisition.

During the first quarter of 2023, United redeemed these fixed-to-floating rate subordinated notes.

United assumed $ 10,000 in aggregate principal amount of fixed-to-floating

rate subordinated notes in the Carolina Financial Corporation acquisition.

During the first quarter of 2023, United redeemed these fixed-to-floating

rate subordinated notes.

At December 31, 2022, the outstanding balance of the subordinated notes was $ 9,892 .

At March 31, 2023 and December 31, 2022, the outstanding balance of the Debentures was $

277,400 and $ 276,989 , respectively, and was included in the category of long-term debt on the Consolidated Balance Sheets entitled “Other long-term borrowings.” The Capital Securities are not included as a component of shareholders’ equity in the Consolidated Balance Sheets.

At June 30, 2023 and December 31, 2022, the outstanding balance of the Debentures was $ 277,807 and $ 276,989 , respectively, and was included in the category of long-term debt on the Consolidated Balance Sheets entitled “Other long-term borrowings.” The Capital Securities are not included as a component of shareholders’ equity in the Consolidated Balance Sheets.

United fully and unconditionally guarantees each individual trust’s obligations under the Capital Securities.

18 unchanged sentences

The amount of collateral obtained, if deemed necessary upon the extension of credit, is based on management’s credit evaluation of the counterparty.

United had approximately $ 7,370,125 and $ 7,250,155 of loan commitments outstanding as of March 31, 2023 and December 31, 2022, respectively, approximately 37% of which contractually expire within one year .

Excluded in the March 31, 2023 and December 31, 2022 amounts above are commitments to extend credit of $ 696,412 and $ 719,841 respectively, related to mortgage loan funding commitments of United’s mortgage banking segment which are of a short-term nature.

United had approximately $ 7,171,216 and $ 7,250,155 of loan commitments outstanding as of June 30, 2023 and December 31, 2022, respectively, approximately 38

% of which contractually expire within one year .

Excluded in the June 30, 2023 and December 31, 2022 amounts above are commitments to extend credit of $ 410,696 and $ 719,841 respectively, related to mortgage loan funding commitments of United’s mortgage banking segment which are of a short-term nature.

Commercial and standby letters of credit are agreements used by United’s customers as a means of improving their credit standing in their dealings with others.

2 unchanged sentences

Typically, under the terms of a commercial letter of credit, a commitment is drawn upon when the underlying transaction is consummated as intended between the customer and a third party.

As of March 31, 2023 and December 31, 2022, United had $ 16,389 of commercial letters of credit outstanding.

As of June 30, 2023 and December 31, 2022, United had $ 16,389 of commercial letters of credit outstanding.

A standby letter of credit is generally contingent upon the failure of a customer to perform according to the terms of an underlying contract with a third party.

United has issued standby letters of credit of $ 151,778 and $ 147,511 as of March 31, 2023 and December 31, 2022, respectively.

United has issued standby letters of credit of $ 158,193 and $ 147,511 as of June 30, 2023 and December 31, 2022, respectively.

In accordance with the Contingencies Topic of the FASB Accounting Standards Codification, United has determined that substantially all of its letters of credit are renewed on an annual basis and the fees associated with these letters of credit are immaterial.

2 unchanged sentences

United evaluates the merits of each claim and estimates its reserve based on actual and expected claims received and considers the historical amounts paid to settle such claims.

United’s mortgage banking segment had a reserve of $ 1,081 as of March 31, 2023 and December 31, 2022.

United’s mortgage banking segment reserve was immaterial as of June 30, 2023 and December 31, 2022.

United has derivative counter-party risk that may arise from the possible inability of United’s mortgage banking segment’s third party investors to meet the terms of their forward sales contracts.

16 unchanged sentences

DERIVATIVE FINANCIAL INSTRUMENTS

United uses derivative instruments to help aid against adverse price changes or interest rate movements on the value of certain assets or liabilities and on future cash flows.

United uses derivative instruments to help aid against adverse price changes or interest rate movements on the value of

certain assets or liabilities and on future cash flows.

These derivatives may consist of interest rate swaps, caps, floors, collars, futures, forward contracts, written and purchased options.

7 unchanged sentences

The derivatives are intended to hedge the changes in cash flows associated with floating rate FHLB borrowings.

As of March 31, 2023, United has determined that no forecasted transactions related to its cash flow hedges resulted in gains or losses pertaining to cash flow hedge reclassification from AOCI to income because the forecasted transactions became probable of not occurring.

As of June 30, 2023, United has determined that no forecasted transactions related to its cash flow hedges resulted in gains or losses pertaining to cash flow hedge reclassification from AOCI to income because the forecasted transactions became probable of not occurring.

United estimates that $ 24,421 will be reclassified from AOCI as a decrease to interest expense over the next 12-months

following March 31, 2023 related to the cash flow hedges.

As of March 31, 2023, the maximum length of time over which forecasted transactions are hedged is seven years.

following June 30, 2023 related to the cash flow hedges.

As of June 30, 2023, the maximum length of time over which forecasted transactions are hedged is seven years.

At inception of a hedge relationship, United formally documents the hedged item, the particular risk management objective, the nature of the risk being hedged, the derivative being used, how effectiveness of the hedge will be assessed and how the ineffectiveness of the hedge will be measured.

7 unchanged sentences

The daily settlement of the derivative exposure does not change or reset the contractual terms of the instrument.

The total notional amount of interest rate swap derivatives designated as cash flow hedges cleared through the LCH include $

500,000 for asset derivatives as of March 31, 2023.

The total notional amount of interest rate swap derivatives designated as cash flow hedges cleared through the LCH include $ 500,000 for asset derivatives as of June 30, 2023.

Balances related to LCH are presented as a single unit of account with the fair value of the designated cash flow interest rate swap asset being reduced by variation margin posted by (with) the applicable counterparty and reported in the following table on a net basis.

10 unchanged sentences

Income from mortgage banking activities includes the gain recognized for the period presented and associated elements of fair value.

The following tables disclose the derivative instruments’ location on the Company’s Consolidated Balance Sheets and the notional amount and fair value of those instruments at March 31, 2023 and December 31, 2022.

Asset Derivatives

March 31, 2023

June 30, 2023

December 31, 2022

1 unchanged sentence

Fair Value Hedges:

Interest rate swap contracts

(hedging commercial loans)

Interest rate swap contracts (hedging commercial loans)

Total Fair Value Hedges

Cash Flow Hedges:

Interest rate swap contracts

(hedging FHLB borrowings)

Interest rate swap contracts (hedging FHLB borrowings)

Total Cash Flow Hedges

7 unchanged sentences

Liability Derivatives

March 31, 2023

June 30, 2023

December 31, 2022

11 unchanged sentences

Total liability derivatives

The following table represents the carrying amount of the hedged assets/(liabilities) and the cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets/(liabilities) that are designated as a fair value accounting relationship as of March 31, 2023 and December 31, 2022.

March 31, 2023

Derivatives in Fair Value

1 unchanged sentence

Location in the Statement of

June 30, 2023

Carrying Amount of

15 unchanged sentences

Loans, net of unearned income

December 31, 2022

Derivatives in Fair Value

Hedging Relationships

Location in the Statement of

Location in the Statement

December 31, 2022

Carrying Amount of

the Hedged Assets/

(Liabilities)

Assets/(Liabilities)

Cumulative Amount

18 unchanged sentences

Additionally, the Company attempts to minimize credit risk through certain approval processes established by management.

The effect of United’s derivative financial instruments on its unaudited Consolidated Statements of Income for the three months ended March 31, 2023 and 2022 are presented as follows:

The effect of United’s derivative financial instruments on its unaudited Consolidated Statements of Income for the three and six months ended June 30, 2023 and 2022 are presented as follows:

Three Months Ended

1 unchanged sentence

Derivatives in hedging relationships

Cash flow Hedges:

Interest rate swap contracts

on long-term borrowings

Fair Value Hedges:

1 unchanged sentence

Interest and fees on loans

Total derivatives in hedging relationships

Derivatives not designated as hedging instruments

Forward loan sales commitments

Income from Mortgage Banking Activities

TBA mortgage-backed securities

Income from Mortgage Banking Activities

Interest rate lock commitments

Income from Mortgage Banking Activities

Total derivatives not designated as hedging instruments

Total derivatives

Six Months Ended

Income Statement

Derivatives in hedging relationships

Cash flow Hedges:

1 unchanged sentence

Interest on long-term borrowings

Fair Value Hedges:

Interest rate swap contracts

Interest and fees on loans

Total derivatives in hedging relationships

8 unchanged sentences

Total derivatives

For the three months ended March 31, 2023 and 2022, changes in the fair value of any interest rate swaps attributed to hedge ineffectiveness were recorded, but not significant to United’s Consolidated Statements of Income.

For the three and six months ended June 30, 2023 and 2022, changes in the fair value o f a

ny interest rate swaps attributed to hedge ineffectiveness were recorded, but not significant to United’s Consolidated Statements of Income.

FAIR VALUE MEASUREMENTS

7 unchanged sentences

When determining the fair value measurements for assets and liabilities, United looks to active and observable markets to price identical assets or liabilities whenever possible and classifies such items in Level 1.

When identical assets and liabilities are no t traded in active markets, United looks to market observable data for similar assets and liabilities and classifies such items as Level 2.

Nevertheless, certain assets and liabilities are no t actively traded in observable markets and United must use alternative valuation techniques using unobservable inputs to determine a fair value and classifies such items as Level 3.

For assets and liabilities that are no t actively traded, the fair value measurement is based primarily upon estimates that require significant judgment.

Therefore, the results may no t be realized in an actual sale or immediate settlement of the asset or liability.

Additionally, there are inherent weaknesses in any calculation technique, and changes in

the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future values.

When identical assets and liabilities are

no t traded in active markets, United looks to market observable data for similar assets and liabilities and classifies such items as Level 2.

Nevertheless, certain assets and liabilities are

no t actively traded in observable markets and United must use alternative valuation techniques using unobservable inputs to determine a fair value and classifies such items as Level 3.

For assets and liabilities that are

no t actively traded, the fair value measurement is based primarily upon estimates that require significant judgment.

Therefore, the results may

no t be realized in an actual sale or immediate settlement of the asset or liability.

Additionally, there are inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future values.

The level within the fair value hierarchy is based on the lowest level of input that is significant in the fair value measurement.

11 unchanged sentences

Management also obtains an independent service auditor’s report from third party vendors to provide reasonable assurance that appropriate controls are in place over the valuation process.

Upon completing its review of the pricing from third party vendors at March 31, 2023, management determined that the prices provided by its third party pricing sources were reasonable and in line with management’s expectations for the market values of these securities.

Therefore, prices obtained from third party vendors that did not reflect forced liquidation or distressed sales were not adjusted materially by management at March 31, 2023.

Upon completing its

review of the pricing from third party vendors at June 30, 2023, management determined that the prices provided by its third party pricing sources were reasonable and in line with management’s expectations for the market values of these securities.

Therefore, prices obtained from third party vendors that did not reflect forced liquidation or distressed sales were not adjusted materially by management at June 30, 2023.

Management utilizes a number of factors to determine if a market is inactive, all of which may require a significant level of judgment.

8 unchanged sentences

The unobservable input for Level 3 valuations is the Company’s historical sales prices.

For March 31, 2023, the range of historical sales prices increased the investor’s indicated pricing by a range of

0.03 % to 0.96 % with a weighted average increase of 0.13 %.

For June 30, 2023, the range of historical sales prices increased the investor’s indicated pricing by a range of 0.06 % to 0.81 % with a weighted average increase of 0.22 %.

United utilizes interest rate swaps to hedge exposure to interest rate risk and variability of cash flows associated to changes in the underlying interest rate of the hedged item.

21 unchanged sentences

The interest rate lock commitments are recorded at fair value which is measured using valuations from investors for loans with similar characteristics (“Level 2”) with some adjusted for the Company’s actual sales experience versus the investor’s indicated pricing (“Level 3”).

The unobservable input for Level 3 valuations is the Company’s historical sales prices.

For March 31, 2023, the range of historical sales prices increased the investor’s indicated pricing by a range of

0.03 % to 0.96 % with a weighted average increase of 0.13 %.

input for Level 3 valuations is the Company’s historical sales prices.

For June 30, 2023, the range of historical sales prices increased the investor’s indicated pricing by a range of 0.06 % to 0.81 % with a weighted average increase of 0.22 %.

For interest rate swap derivatives that are not designated in a hedge relationship within the mortgage banking segment, changes in the fair value of the derivatives are recognized in income from mortgage banking activities in the same period as the change in the fair value.

Unrealized gains and losses due to changes in the fair value of other derivative financial instruments not in hedge relationships are included in noninterest income and noninterest expense, respectively.

The following tables present the balances of financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022, segregated by the level of the valuation inputs within the fair value hierarchy.

Fair Value at March 31, 2023 Using

The following tables present the balances of financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022, segregated by the level of the valuation inputs within the fair value hierarchy.

Fair Value at June 30, 2023 Using

Balance as of

1 unchanged sentence

Available for sale debt securities:

Treasury securities and

obligations of U.S.

corporations and agencies

Treasury securities and obligations of U.S.

Government corporations and agencies

State and political subdivisions

2 unchanged sentences

Asset-backed securities

Fair Value at March 31, 2023 Using

Balance as of

Quoted Prices

Single issue trust preferred securities

4 unchanged sentences

Equity mutual funds (1)

Other equity securities

Fixed income mutual funds

Total equity securities

3 unchanged sentences

Forward sales commitments

TBA mortgage-backed securities

Interest rate lock commitments

1 unchanged sentence

Derivative financial liabilities:

TBA mortgage-backed securities

Forward sales commitments

Interest rate lock commitments

Total derivative financial liabilities

16 unchanged sentences

Equity mutual funds (1)

Other equity securities

Fixed income mutual funds

Total equity securities

5 unchanged sentences

Interest rate lock commitments

Fair Value at December 31, 2022 Using

Balance as of

Quoted Prices

Total derivative financial assets

3 unchanged sentences

Total derivative financial liabilities

There were no transfers between Level 1 and Level 2 for financial assets and liabilities measured at fair value on a recurring basis during the three months ended March 31, 2023 and the year ended December 31, 2022.

The following tables present additional information about financial assets and liabilities measured at fair value at March 31, 2023 and December 31, 2022 on a recurring basis and for which United has utilized Level 3 inputs to determine fair value.

The equity mutual funds are within a rabbi trust for the payment of benefits under a deferred compensation plan for certain key officers of United and its subsidiaries.

no transfers between Level 1 and Level 2 for financial assets and liabilities measured at fair value on a recurring basis during the six months ended June 30, 2023 and the year ended December 31, 2022.

The following tables present additional information about financial assets and liabilities measured at fair value at June 30, 2023 and December 31, 2022 on a recurring basis and for which United has utilized Level 3 inputs to determine fair value.

The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses related to assets still held at the reporting date are recorded in Income from mortgage banking activities in the Consolidated Statements of Income.

34 unchanged sentences

Balance, end of period

The amount of total gains for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at reporting date

The amount of total gains for the period included in earnings (or changes

assets) attributable to the change in unrealized gains or losses relating to

assets still held at reporting date

Derivative financial liabilities

5 unchanged sentences

Fair Value Option

The following table reflects the change in fair value included in earnings of financial instruments for which the fair value option has been elected:

The following table reflects the change in fair value included in ear nin

gs of financial instruments for which the fair value option has been elected:

Three Months Ended

March 31, 2023

June 30, 2023

Three Months Ended

March 31, 2022

Income from mortgage banking

June 30, 2022

Income from mortgage banking activities

Six Months Ended

June 30, 2023

Six Months Ended

June 30, 2022

Income from mortgage banking activities

No loans held for sale were past due or on nonaccrual status as of June 30, 2023 and December 31, 2022.

The following table reflects the difference between the aggregate fair value and the remaining contractual principal outstanding for financial instruments for which the fair value option has been elected:

March 31, 2023

June 30, 2023

December 31, 2022

25 unchanged sentences

Once the property is subsequently vacated, a formal appraisal is obtained and the recorded asset value appropriately adjusted.

hand, if the OREO property has been vacated and an appraisal can be conducted, the fair value of the property is determined based upon the appraisal using a market approach.

On the other hand, if the OREO property has been vacated and an appraisal can be conducted, the fair value of the property is determined based upon the appraisal using a market approach.

An authorized independent appraiser conducts appraisals for United.

19 unchanged sentences

Management reviews core deposit intangible assets on an annual basis, or sooner if indicators of impairment exist, and evaluates changes in facts and circumstances that may indicate impairment in the carrying value.

No fair value measurement of intangible assets was made during the first three months of 2023 and 2022.

Mortgage Servicing Rights (“MSRs”):

A mortgage servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans are expected to more than adequately compensate the Company for performing the servicing.

No fair value measurement of intangible assets was made during the first six months of 2023 and 2022.

Mortgage Servicing Rights:

servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans are expected to more than adequately compensate the Company for performing the servicing.

The Company initially measures servicing assets and liabilities retained related to the sale of residential loans held for sale (“mortgage servicing rights”) at fair value.

4 unchanged sentences

The unobservable inputs for Level 3 valuations are market discount rates, anticipated prepayment speeds, projected delinquency rates, and ancillary fee income net of servicing costs.

For the unobservable inputs used in the valuation of mortgage servicing rights at March 31, 2023 and December 31, 2022, refer to Note 7 of these Notes to Consolidated Financial Statements.

The Company did no t record any temporary impairment of mortgage servicing rights in the quarter ended March 31, 2023 and 2022.

For the unobservable inputs used in the valuation of mortgage servicing rights at June 30, 2023 and December 31, 2022, refer to Note 7 of these Notes to Consolidated Financial Statements.

The Company did no t record any temporary impairment of mortgage servicing rights in the second quarter and first six months of June 30, 2023 and 2022.

The following table summarizes United’s financial assets that were measured at fair value on a nonrecurring basis during the period:

Balance as of

March 31, 2023

Fair Value at March 31, 2023

Quoted Prices

June 30, 2023

Fair Value at June, 2023

Individually assessed loans

30 unchanged sentences

Quoted Prices

March 31, 2023

June 30, 2023

Cash and cash equivalents

15 unchanged sentences

Other securities

Fair Value Measurements

Quoted Prices

Loans held for sale

8 unchanged sentences

An award granted under the 2020 LTI Plan may consist of any non-qualified

stock options or incentive stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units, performance units or other-stock-based award.

stock options or incentive s tock

options, stock appreciation rights (“SARs”), restricted stock, restricted stock units, performance units or other-stock-based award.

These awards all relate to the common stock of United.

6 unchanged sentences

The maximum number of shares of restricted stock or shares subject to a restricted stock units award that may be granted during any calendar year is 225,000 shares to any individual key employee and 10,000 shares to any individual non-employee

Subject to certain change in control provisions,

the 2020 LTI Plan provides that all awards of will vest as the Committee determines in the award agreement, provided that no awards will vest sooner than 1/3 per year over the first three anniversaries of the award.

Subject to certain change in control provisions, the 2020 LTI Plan provides that all awards of will vest as the Committee determines in the award agreement, provided that no awards will vest sooner than 1/3 per year over the first three anniversaries of the award.

United adopted a clawback policy that applies to named executive officers and other executive officers and permits the Committee to cancel certain awards and to recoup gains realized from previous awards should United be required to prepare an accounting restatement due to materially inaccurate performance metrics.

1 unchanged sentence

The 2020 LTI Plan replaces the 2016 LTI Plan.

Compensation expense of $ 2,713 and $ 2,061 related to the nonvested awards under United’s Long-Term Incentive Plans was incurred for the first quarter of 2023 and 2022, respectively.

Compensation expense of $ 3,295 and $ 6,008 related to the nonvested awards under United’s Long-Term Incentive Plans was incurred for the second quarter and first six months of 2023, respectively, as compared to the compensation expense of $ 2,543 and $ 4,604 related to the nonvested awards under United’s Long-Term Incentive Plans incurred for the second quarter and first six months of 2022, respectively.

Compensation expense was included in employee compensation in the unaudited Consolidated Statements of Income.

1 unchanged sentence

United currently has options outstanding from various option plans other than the 2020 LTI Plan (the “Prior Plans”);

however, no common shares of United stock are available for grants under the Prior Plans as these plans have expired.

common shares of United stock are available for grants under the Prior Plans as these plans have expired.

Awards outstanding under the Prior Plans will remain in effect in accordance with their respective terms.

The maximum term for options granted under the plans is ten ( 10 ) years.

A summary of activity under United’s stock option plans as of March 31, 2023, and the changes during the first three months of 2023 are presented below:

Three Months Ended March 31, 2023

The maximum term for options granted under the plans is ten ( 10

A summary of activity under United’s stock option plans as of June 30, 2023, and the changes during the first six months of 2023 are presented below:

Six Months Ended June 30, 2023

Weighted Average

1 unchanged sentence

Forfeited or expired

Outstanding at March 31, 2023

Exercisable at March 31, 2023

The following table summarizes the status of United’s nonvested stock option awards during the first three months of 2023:

Outstanding at June 30, 2023

Exercisable at June 30, 2023

The following table summarizes the status of United’s nonvested stock option awards during the first six months of 2023:

Weighted-Average

2 unchanged sentences

Forfeited or expired

Nonvested at March 31, 2023

During the three months ended March 31, 2023 and 2022, 55,796 and 258,574 shares, respectively, were issued in connection with stock option exercises.

All shares issued in connection with stock option exercises for the three months ended March 31, 2023 and 2022 were issued from authorized and unissued stock.

The total intrinsic value of options exercised under the Plans during the three months ended March 31, 2023 and 2022 was $ 722 and $ 3,856 respectively.

As of March 31, 2023, the total unrecognized compensation cost related to nonvested stock option awards was $ 270 with a weighted-average expense recognition period of 0.9 years.

Nonvested at June 30, 2023

During the six months ended June 30, 2023 and 2022, 58,608 and 319,573 shares, respectively, were issued in connection with stock option exercises.

All shares issued in connection with stock option exercises for the six months ended June 30, 2023 and 2022 were issued from authorized and unissued stock.

The total intrinsic value of options exercised under the Plans during the six months ended June 30, 2023 and 2022 was $ 763 and $ 4,619 respectively.

As of June 30, 2023, the total unrecognized compensation cost related to nonvested stock option awards was $ 196 with a weighted-average expense recognition period of 0.7 years.

Restricted Stock

3 unchanged sentences

Presently, these nonvested participating securities have an immaterial impact on diluted earnings per share.

As of March 31, 2023, the total unrecognized compensation cost related to nonvested restricted stock awards was $

11,838 with a weighted-average expense recognition period of 1.5 years.

The following summarizes the changes to United’s nonvested restricted common shares for the period ended March 31, 2023:

As of June 30, 2023, the total unrecognized compensation cost related to nonvested restricted stock awards was $ 9,982 with a weighted-average expense recognition period of 1.2 years.

The following summarizes the changes to United’s nonvested restricted common shares for the period ended June 30, 2023:

Weighted-Average

Grant Date Fair

Value Per Share

Grant Date Fair Value

Nonvested at January 1, 2023

Nonvested at March 31, 2023

Nonvested at June 30, 2023

Restricted Stock Units

14 unchanged sentences

The Company recognizes expense on the RSUs in accordance with ASC Topic 718.

The following table summarizes the status of United’s nonvested RSUs during the first three months of 2023:

The following table summarizes the status of United’s nonvested RSUs during the first six months of 2023:

Weighted-Average

Grant Date Fair

Value Per Share

Grant Date Fair Value

Nonvested at January 1, 2023

Nonvested at March 31, 2023

As of March 31, 2023, the total unrecognized compensation cost related to nonvested restricted stock units was $ 11,126 with a weighted-average expense recognition period of 1.5 years.

Forfeited or expired

Nonvested at June 30, 2023

As of June 30, 2023, the total unrecognized compensation cost related to nonvested restricted stock units was $ 9,508 with a weighted-average expense recognition period of 1.3 years.

EMPLOYEE BENEFIT PLANS

United has a defined benefit retirement plan covering qualified employees hired prior to October 1, 2007.

Pension benefits are based on years of service and the average of the employee’s highest five consecutive plan years of basic compensation paid during the ten plan years preceding the date of determination.

Pension benefits are based on years of ser vice

and the average of the employee’s highest five consecutive plan years of basic compensation paid during the ten plan years preceding the date of determination.

Contributions are intended to provide not only for benefits attributed to service to date, but also for those expected to be earned in the future.

No discretionary contributions were made during the first quarter of 2023 and 2022.

No discretionary contributions were made during the first six months of 2023 and 2022.

Included in accumulated other comprehensive income at December 31, 2022 are unrecognized actuarial losses of $ 38,530 ($ 29,553 net of tax) that have not yet been recognized in net periodic pension cost.

Net periodic pension cost for the three months ended March 31, 2023 and 2022 included the following components:

Three Months Ended March 31

Net periodic pension cost for the three and six months ended June 30, 2023 and 2022 included the following components:

Three Months Ended

Six Months Ended

Interest cost

1 unchanged sentence

Recognized net actuarial loss

Net periodic pension cost (benefit)

Net periodic pension cost

Three Months Ended

Six Months Ended

Weighted-average assumptions:

6 unchanged sentences

and a measurement attribute for all tax positions taken on a tax return, in order for those tax positions to be recognized in the financial statements.

As of March 31, 2023 and 2022, the total amount of accrued interest related to uncertain tax positions was $ 525 and $ 753 , respectively.

As of June 30, 2023 and 2022, the total amount of accrued interest related to uncertain tax positions was $ 788 and $ 780 , respectively.

United accounts for interest and penalties related to uncertain tax positions as part of its provision for federal and state income taxes.

United is currently open to audit under the statute of limitations by the Internal Revenue Service for the years ended December 31, 2019, 2020 and 2021 and certain State Taxing authorities for the years ended December 31, 2019 through 2021.

United’s effective tax rate was 19.92 % for the first quarter of 2023 and 19.75 % for the first quarter of 2022.

United’s effective tax rate was 20.23 % and 20.07 % for the second quarter and first six months of 2023, respectively, and 19.75 % for both the second quarter and first six months of 2022.

COMPREHENSIVE INCOME

The components of total comprehensive income for the three months ended March 31, 2023 and 2022 are as follows:

The components of total comprehensive income for the three and six months ended June 30, 2023 and 2022 are as follows:

Three Months Ended

Six Months Ended

Available for sale (“AFS”) securities:

Change in net unrealized loss on AFS securities arising during the period

Related income tax effect

Net reclassification adjustment for gains included in net income

Change in net unrealized (loss) gain on AFS securities arising during the period

Related income tax effect

Net reclassification adjustment for losses included in net income

Related income tax expense

Net effect of AFS securities on other comprehensive income

Cash flow hedge derivatives:

Unrealized (loss) gain on cash flow hedge before reclassification to interest expense

Unrealized gain on cash flow hedge before reclassification to interest

Related income tax effect

8 unchanged sentences

Total Comprehensive Income (Loss)

The components of accumulated other comprehensive income for the three months ended March 31, 2023 are as follows:

The components of accumulated other comprehensive income for the six months ended June 30, 2023 are as follows:

Changes in Accumulated Other Comprehensive Income (AOCI) by Component (a)

For the Three Months Ended March 31, 2023

For the Six Months Ended June 30, 2023

Balance at January 1, 2023

1 unchanged sentence

Amounts reclassified from accumulated other comprehensive income

Net current-period other comprehensive income, net of tax

Balance at March 31, 2023

Net current-period other comprehensive income (loss), net of tax

Balance at June 30, 2023

All amounts are net-of-tax.

Reclassifications out of Accumulated Other Comprehensive Income (AOCI)

For the Three Months Ended March 31, 2023

For the Six Months Ended June 30, 2023

Details about AOCI Components

2 unchanged sentences

Available for sale (“AFS”) securities:

Net reclassification adjustment for gains included in net income

Net investment securities gains

Net reclassification adjustment for losses included in net income

Net investment securities (losses) gains

Total before tax

1 unchanged sentence

Cash flow hedge:

Net reclassification adjustment for losses included in net income

Net reclassification adjustment for gains included in net

Interest expense

3 unchanged sentences

Recognized net actuarial loss

Employee benefits

Total before tax

5 unchanged sentences

Three Months Ended

Six Months Ended

Distributed earnings allocated to common stock

2 unchanged sentences

Average common shares outstanding

Common stock equivalents

Equivalents from stock options

Average diluted shares outstanding

1 unchanged sentence

Earnings per diluted common share

Antidilutive stock options and restricted stock outstanding of 563,127 for the three months ended March 31, 2023 were excluded from the earnings per diluted common share calculation as compared to 1,143,182 for the three months ended March 31, 2022.

Antidilutive stock options and restricted stock outstanding of 1,548,913 and 1,078,040 for the three months and six months ended June 30, 2023, respectively, were excluded from the earnings per diluted common share calculation as compared to 847,758 and 1,144,734 for the three months and six months ended June 30, 2022, respectively.

VARIABLE INTEREST ENTITIES

3 unchanged sentences

For United, the business purpose of these relationships primarily consists of funding activities in the form of issuing trust preferred securities.

United currently sponsors twenty statutory business trusts that were created for the purpose of raising funds that originally qualified for Tier I regulatory capital.

United currently sponsors twenty

statutory business trusts that were created for the purpose of raising funds that originally qualified for Tier I regulatory capital.

As previously discussed, these trusts now are considered Tier II regulatory capital.

6 unchanged sentences

The enterprise with a controlling financial interest, known as the primary beneficiary, consolidates the VIE.

At March 31, 2023 and December

31, 2022, United’s

investment (maximum exposure to loss) in these trusts were $ 11,388 and $ 11,277 , respectively.

At June 30, 2023 and December 31, 2022, United’s investment (maximum exposure to loss) in these trusts were $ 11,508 and $ 11,277 , respectively.

Information related to United’s statutory trusts is presented in the table below:

9 unchanged sentences

December 19, 2003

3-month LIBOR + 2.85%

LIBOR + 2.85%

January 23, 2034

1 unchanged sentence

July 12, 2007

3-month LIBOR + 1.55%

LIBOR + 1.55%

October 1, 2037

1 unchanged sentence

September 20, 2007

3-month LIBOR + 1.30%

LIBOR + 1.30%

December 15, 2037

1 unchanged sentence

September 25, 2003

3-month LIBOR + 3.10%

LIBOR + 3.10%

October 8, 2033

4 unchanged sentences

June 20, 2006

3-month LIBOR + 1.55%

LIBOR + 1.55%

September 23, 2036

1 unchanged sentence

December 14, 2006

3-month LIBOR + 1.61%

LIBOR + 1.61%

March 1, 2037

1 unchanged sentence

September 20, 2004

3-month LIBOR + 2.29%

LIBOR + 2.29%

September 20, 2034

1 unchanged sentence

June 15, 2006

3-month LIBOR + 1.65%

LIBOR + 1.65%

VCBI Capital Trust II

December 19, 2002

6-month LIBOR + 3.30%

LIBOR + 3.30%

December 19, 2032

1 unchanged sentence

December 20, 2005

3-month LIBOR + 1.42%

LIBOR + 1.42%

February 23, 2036

1 unchanged sentence

July 27, 2004

3-month LIBOR + 2.40%

LIBOR + 2.40%

September 15, 2034

3 unchanged sentences

March 15, 2035

Issuance Date

Securities Issued

Stated Interest Rate

Maturity Date

Carolina Financial Capital Trust I

4 unchanged sentences

November 5, 2003

3-month LIBOR + 3.05%

LIBOR + 3.05%

January 7, 2034

1 unchanged sentence

October 12, 2004

3-month LIBOR + 2.20%

LIBOR + 2.20%

October 18, 2034

1 unchanged sentence

December 28, 2006

3-month LIBOR + 1.73%

LIBOR + 1.73%

January 30, 2037

1 unchanged sentence

September 26, 2003

3-month LIBOR + 2.95%

LIBOR + 2.95%

September 30, 2033

1 unchanged sentence

December 12, 2003

3-month LIBOR + 3.00%

LIBOR + 3.00%

December 12, 2033

4 unchanged sentences

however, these partnerships are not consolidated as United is not deemed to be the primary beneficiary.

At March 31, 2023 and December 31, 2022, United’s investment (maximum exposure to loss) in these low income housing and community development partnerships were $ 76,870 and $ 75,021 , respectively, while related unfunded commitments were $

75,956 and $ 77,143 , respectively.

As of March 31, 2023, United expects to recover its remaining investments through the use of the tax credits that are generated by the investments.

At June 30, 2023 and December 31, 2022, United’s investment (maximum exposure to loss) in these low income housing and community development partnerships were $ 80,727 and $ 75,021 , respectively, while related unfunded commitments were $ 63,514 and $ 77,143 , respectively.

As of June 30, 2023, United expects to recover its remaining investments through the use of the tax credits that are generated by the investments.

SEGMENT INFORMATION

15 unchanged sentences

The “Other” represents an overhead function rather than an operating segment.

Information about the reportable segments and reconciliation of this information to the consolidated financial statements at and for the three months ended March 31, 2023 and 2022 is as follows:

At and For the Three Months Ended March 31, 2023

Information about the reportable segments and reconciliation of this information to the consolidated financial statements at and for the three and six months ended June 30, 2023 and 2022 is as follows:

At and For the Three Months Ended June 30, 2023

Net interest income

4 unchanged sentences

Average assets (liabilities)

At and For the Three Months Ended March 31, 2022

At and For the Three Months Ended June 30, 2022

Net interest income

4 unchanged sentences

Average assets (liabilities)

At and For the Six Months Ended June 30, 2023

Net interest income

Provision for credit losses

Other expense

Net income (loss)

Total assets (liabilities)

Average assets (liabilities)

At and For the Six Months Ended June 30, 2022

Net interest income

Provision for credit losses

Other expense

Net income (loss)

Total assets (liabilities)

Average assets (liabilities)

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 1. Financial Statements