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Item 1. Financial Statements

2023-11-09 compared with 2023-08-09 · 382 added, 342 removed, 1540 unchanged (32% of the section changed)

FINANCIAL STATEMENTS (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.

The September 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 nine months ended September 30, 2023 and 2022, the related consolidated statement of changes in shareholders’ equity for the three and nine months ended September 30, 2023 and 2022, the related condensed consolidated statements of cash flows for the nine months ended September 30, 2023 and 2022, and the notes to consolidated financial statements appear on the following pages.

CONSOLIDATED BALANCE SHEETS

6 unchanged sentences

Total cash and cash equivalents

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)

Securities available for sale at estimated fair value (amortized cost-$ 4,241,930 at September 30, 2023 and $ 5,011,729 at December 31, 2022, allowance for credit losses of $ 0 at September 30, 2023 and December 31, 2022)

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

Equity securities at estimated fair value

24 unchanged sentences

Authorized- 50,000,000

shares, no ne issued

shares, none issued

Common stock, $ 2.50 par value;

1 unchanged sentence

issued- 142,241,408

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

and 142,011,560 at September 30, 2023 and December 31, 2022, respectively, including 7,308,393 and 7,266,438 shares in treasury at September 30, 2023 and December 31, 2022, respectively

Retained earnings

9 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Interest income

39 unchanged sentences

(Dollars in thousands, except per share data)

Ended June 30

Six Months Ended

Three Months Ended

Nine Months Ended

Earnings per common share:

6 unchanged sentences

Three Months Ended

Six Months Ended

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

Nine Months Ended

Change in net unrealized loss on available-for-sale

(“AFS”) securities, net of tax

5 unchanged sentences

UNITED BANKSHARES, INC.

AND SUBSIDIARIES

(Dollars in thousands, except per share data)

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Comprehensive

Shareholders’

Income (Loss)

Balance at January 1, 2023

17 unchanged sentences

Balance at June 30, 2023

Comprehensive income:

Other comprehensive loss, net of tax

Total comprehensive income, net of tax

Stock based compensation expense

Purchase of treasury stock ( 232 shares)

Cash dividends ($ 0.36 per share)

Stock grant forfeiture ( 2,161 shares)

Net issuance of common stock under stock-based compensation plans ( 550 shares)

Balance at September 30, 2023

See notes to consolidated unaudited financial statements.

3 unchanged sentences

(Dollars in thousands, except per share data)

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Comprehensive

Shareholders’

Income (Loss)

Balance at January 1, 2022

17 unchanged sentences

Balance at June 30, 2022

Comprehensive income:

Other comprehensive loss, net of tax

Total comprehensive loss, net of tax

Stock based compensation expense

Purchase of treasury stock ( 214 shares)

Cash dividends ($ 0.36 per share)

Stock grant forfeiture ( 207 shares)

Net issuance of common stock under stock-based compensation plans ( 51,422 shares)

Balance at September 30, 2022

See notes to consolidated unaudited financial statements.

3 unchanged sentences

(Dollars in thousands)

Six Months Ended

Nine Months Ended

NET CASH PROVIDED BY OPERATING ACTIVITIES

40 unchanged sentences

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

and Article 10 of Regulation S-X.

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 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

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

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

7 unchanged sentences

New Accounting Standards

In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06,

“Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative,” which adopts certain disclosure requirements referred by the SEC.

For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X

or Regulation S-K

becomes effective, with early adoption prohibited.

For all other entities, the amendments will be effective two years later.

The adoption of ASU 2023-06

is not expected to have an impact on the Company’s financial condition or results of operations but could change certain disclosures in United’s SEC filings.

In August 2023, the FASB issued ASU 2023-05,

“Business Combinations – Joint Venture Formations (Subtopic 805-60).”

requires a joint venture to apply a new basis of accounting at its formation date by valuing the net assets contributed at fair value for both business and asset transactions.

The value of the net assets in total is then allocated to individual assets and liabilities by applying Topic 805 with certain exceptions.

requires certain disclosures to aid the user of the financial statements in understanding the implications of the joint venture formation.

is effective for joint venture formations with a formation date on or after January 1, 2025.

The adoption of ASU 2023-05

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

In July 2023, the FASB issued ASU No.

“Presentation of Financial Statements (Topic 205), Income Statement—Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation—Stock Compensation (Topic 718):

Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280—General Revision of Regulation S-X:

Income or Loss Applicable to Common Stock.” ASU 2023-03

amends the ASC for SEC updates pursuant to SEC Staff Accounting Bulletin No.

Announcement at the March 24, 2022 Emerging Issues Task Force (“EITF”) Meeting;

and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280—General Revision of Regulation S-X:

Income or Loss Applicable to Common Stock.

These updates were immediately effective and did not have a significant impact on the Company’s financial statements.

In March 2023, the FASB issued Accounting ASU 2023-02,

“Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” ASU 2023-02

5 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

The adoption of ASU 2023-02

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

9 unchanged sentences

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, which has now taken effect as intended.

Accordingly, ASU 2022-06

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

United implemented a 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.

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.

United implemented a comprehensive project plan to execute the transition of its LIBOR-based financial instruments to alternative reference rates.

United utilized the Secured Overnight Financing Rate (“SOFR”) and Prime as the preferred alternatives to LIBOR.

In June 2022, the FASB issued ASU 2022 -

03, “Fair Value Measurement (Topic 820):

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

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

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

1 unchanged sentence

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

The adoption of

The adoption of ASU 2022-03

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

In March 2022, the FASB issued ASU No.

“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

In March 2022, the FASB issued ASU

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.

“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

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 No.

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

In October 2021, the FASB issued ASU No.

“Business Combinations (Topic 805):

11 unchanged sentences

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

June 30, 2023

September 30, 2023

Treasury securities and obligations of U.S.

Government corporations and agencies

corporations and agencies

State and political subdivisions

6 unchanged sentences

Treasury securities and obligations of U.S.

Government corporations and agencies

corporations and agencies

State and political subdivisions

5 unchanged sentences

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.

debt securities and reports 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 $ 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.

The table above excludes accrued interest receivable of $ 21,320 and $ 23,955 at September 30, 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 September 30, 2023 and December 31, 2022.

Less than 12 months

12 months or longer

June 30, 2023

September 30, 2023

Treasury securities and obligations of U.S.

Government corporations and agencies

corporations and agencies

State and political subdivisions

18 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Proceeds from sales and calls

1 unchanged sentence

Gross realized losses

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.

At September 30, 2023, gross unrealized losses on available for sale securities were $ 492,626 on 1,123 securities of a total portfolio of 1,148 available for sale securities.

Securities with the most significant gross unrealized losses at September 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 June 30, 2023 was the result of rising interest rates.

Generally, the significant amount of gross unrealized losses on available for sale securities at September 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 $ 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.

The total amortized cost of available for sale state and political subdivision securities was $ 615,840 at September 30, 2023.

As of September 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 September 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 June 30, 2023.

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

Mortgage-backed securities

7 unchanged sentences

United had a net unrealized loss of $ 305,933 on mortgage-backed

securities June 30, 2023.

securities September 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 $ 1,846,519 at June 30, 2023.

The total amortized cost of available for sale agency mortgage-backed securities was $ 1,771,709 at September 30, 2023.

Of the $ 1,771,709 amount, $ 516,345 was related to agency commercial mortgage-backed securities and $ 1,255,364 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 June 30, 2023.

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

United’s non-agency

1 unchanged sentence

The total amortized cost of available for sale non-agency

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

residential mortgage-backed securities was $ 101,514 at September 30, 2023.

Of the $ 101,514 , 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 June 30, 2023.

Based upon management’s analysis and judgment, it was determined that none of the non-agency

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

Asset-backed securities

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.

As of September 30, 2023, United’s asset-backed securities portfolio had a total amortized cost balance of $ 888,959 .

100 % of the portfolio was investment grade rated as of September 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 June 30, 2023, it was determined that no ne of the asset-backed securities had credit losses.

Upon reviewing this portfolio as of September 30, 2023, it was determined that none 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 June 30, 2023 consisted of $ 8,472 in investment grade bonds, $ 3,095 in split rated bonds, and $ 5,794 in unrated bonds.

The amortized cost of available for sale single issue trust preferred securities as of September 30, 2023 consisted of $ 7,473 in investment grade bonds, $ 3,100 in split rated bonds, and $ 5,798 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 second quarter of 2023, it was determined that none of the single issue trust preferred securities had credit losses.

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

Other corporate securities

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

As of September 30, 2023, United’s other corporate securities portfolio had a total amortized cost balance of $ 354,393 .

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 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.

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

The amortized cost and estimated fair value of securities available for sale at September 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.

June 30, 2023

September 30, 2023

December 31, 2022

4 unchanged sentences

Equity securities at fair value

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 $ 8,443 at June 30, 2023 and $ 7,629 at December 31, 2022.

Equity securities consist mainly of mutual funds of Community Reinvestment Act (“CRA”) qualified investments and equity securities within a rabbi trust for the payment of benefits under a deferred compensation plan for certain key officers of United and its subsidiaries.

The fair value of United’s equity securities was $ 8,548 at September 30, 2023 and $ 7,629 at December 31, 2022.

Three Months Ended

Nine Months Ended

Net gains recognized during the period on equity securities sold

3 unchanged sentences

Other investment securities

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.

During the third quarter of 2023, United evaluated all of its cost method investments to determine if certain events or changes in circumstances during the third 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 third quarter.

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

The carrying value of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes as required or permitted by law, approximated $ 2,327,103 and $ 2,412,820 at September 30, 2023 and December 31, 2022, respectively.

LOANS AND LEASES

Major classes of loans and leases are as follows:

June 30, 2023

September 30, 2023

December 31, 2022

Commercial, financial and agricultural:

5 unchanged sentences

Construction & land development

September 30, 2023

December 31, 2022

Other consumer

1 unchanged sentence

Total gross loans

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

The table above does not include loans held for sale of $ 59,614 and $ 56,879 at September 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 $ 68,238 and $ 24,901 at June 30, 2023 and December 31, 2022, respectively.

The aggregate dollar amount of these loans was $ 68,552 and $ 24,901 at September 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.

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

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

Age Analysis of Past Due Loans and Leases

As of June 30, 2023

As of September 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 June 30, 2023

At September 30, 2023

At December 31, 2022

11 unchanged sentences

Other consumer

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

Interest income recognized on nonaccrual loans was insignificant during the three and nine months ended September 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.

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.

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 September 30, 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 as follows.

No loans were modified for the three months ended September 30, 2023.

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

For the Three Months Ended June 30, 2023

For the Nine Months Ended September 30, 2023

Interest Rate

8 unchanged sentences

Other consumer

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.

As of September 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 June 30, 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 September 30, 2023, presented by class of financing receivable:

Payment Status (Amortized Cost Basis)

As of June 30, 2023

As of September 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 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

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

No loans were modified for the three months ended September 30, 2023.

For the Nine Months Ended

September 30, 2023

Interest Rate

6 unchanged sentences

Other consumer

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.

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

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 June 30, 2023 and December 31, 2022:

Collateral Dependent Loans and Leases

At June 30, 2023

At September 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

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

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

17 unchanged sentences

amortized cost

As of June 30, 2023

As of September 30, 2023

Internal Risk Grade:

2 unchanged sentences

Current-period recoveries

Current-period net recoveries (charge-offs)

Origination Year

Current-period net recoveries

(charge-offs)

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

As of June 30, 2023

Origination Year

As of September 30, 2023

Internal Risk Grade:

3 unchanged sentences

Current-period net recoveries

Origination Year

Revolving loans

1 unchanged sentence

loans and leases

Origination Year

As of December 31, 2022

6 unchanged sentences

Term Loans and leases

Origination Year

Revolving loans

1 unchanged sentence

loans and leases

As of June 30, 2023

Origination Year

As of September 30, 2023

Internal Risk Grade:

4 unchanged sentences

Term Loans and leases

Origination Year

Revolving loans

1 unchanged sentence

loans and leases

Origination Year

As of December 31, 2022

5 unchanged sentences

Residential Real Estate

Origination Year

Revolving loans

amortized cost

As of June 30, 2023

Origination Year

As of September 30, 2023

Internal Risk Grade:

3 unchanged sentences

Current-period net recoveries

Origination Year

(charge-offs)

Revolving loans

amortized cost

Origination Year

As of December 31, 2022

5 unchanged sentences

Construction and Land Development

Origination Year

Revolving loans

amortized cost

As of June 30, 2023

Origination Year

As of September 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

As of June 30, 2023

Origination Year

As of September 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

As of June 30, 2023

Origination Year

As of September 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) 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.

Current-period net (charge- offs)

At September 30, 2023 and December 31, 2022, other real estate owned (“OREO”) included in other assets in the Consolidated Balance Sheets was $ 3,181 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 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.

At September 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 $ 708 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 $ 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.

Accrued interest receivable was $ 83,160 and $ 70,332 at September 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 June 30, 2023 and December 31, 2022:

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

Accrued Interest Receivable

At June 30, 2023

At September 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 and six months ended June 30, 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 nine months ended September 30, 2023 and 2022:

Accrued Interest Receivables Written Off

by Reversing Interest Income

Three Months Ended

Six Months Ended

Nine Months Ended

Commercial real estate:

25 unchanged sentences

Loans evaluated individually are not also included in the collective evaluation.

When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral but may also include other non-performing

operation or sale of the collateral but may also include other non-performing

loans, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

7 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 $ 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 reserve for lending-related commitments of $ 43,766 and $ 46,189 at September 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 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 second quarter of 2023 qualitative adjustments include analyses of the following:

United’s allowance for credit losses at September 30, 2023 increased $ 20,140 or 8.58 % from December 31, 2022.

The increase in the allowance for loan and lease losses was due mainly to increased reserves for several loan segments including nonowner-occupied commercial real estate, residential real estate, and construction and land development driven primarily by loan growth in those particular segments as well as reserves for uncertainty surrounding collateral values for dependent loans and current and future economic and business conditions.

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

Current conditions

– 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.

interest rates, the banking regulatory environment 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;

3 unchanged sentences

– 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.

basis based on projections of real GDP and the unemployment rate.

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 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.

The forecast for real GDP in 2023 improved in the third quarter, from a projection of 1.00 % for 2023 in the second quarter to 2.10 % for 2023 in the third quarter and improvement in 2024, from a projection of 1.10 % for 2024 in the second quarter to 1.50 % for 2024 in the third quarter.

The unemployment rate improved for 2023 between second and third quarter, 4.10 % to 3.80 %, and in 2024 with improvement from 4.50 % to 4.10 %.

The forecast for 2025 remained consistent at 1.80 % for GDP while the unemployment rate reflected a similar decrease to 2024, from 4.50 % to 4.10 %.

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.

3 unchanged sentences

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

For the Three Months Ended June 30, 2023

For the Three Months Ended September 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

For the Nine Months Ended September 30, 2023

Commercial Real

Construction &

4 unchanged sentences

For the Year Ended December 31, 2022

Commercial Real Estate

Commercial Real

Construction &

4 unchanged sentences

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

June 30, 2023

September 30, 2023

Community Banking

17 unchanged sentences

Goodwill not subject to amortization

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.

United incurred amortization expense of $ 1,279 and $ 3,837 for the three and nine months ended September 30, 2023 as compared to $ 1,379 and $ 4,137 for the three and nine months ended September 30, 2022, respectively.

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

14 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 $ 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 unpaid principal balances of loans serviced for others were approximately $ 1,216,805 at September 30, 2023 and $ 3,381,485 at December 31, 2022.

The estimated fair value of the mortgage servicing rights was $ 14,652 and $ 41,880 at September 30, 2023 and December 31, 2022, respectively.

The estimated fair value of servicing rights at September 30, 2023 was determined using a net servicing fee of 0.25 %, average discount rates ranging from 10.50 % to 11.01 % with a weighted average discount rate of 10.60 %, average constant prepayment rates (“CPR”) ranging from 4.59 % to 9.11 % with a weighted average prepayment rate of 5.41 %, depending upon the stratification of the specific servicing right, and a delinquency rate, including loans on forbearance of 3.14 %.

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 and six months ended June 30, 2023 and 2022:

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

Three Months Ended

Six Months Ended

Nine Months Ended

MSRs beginning balance

7 unchanged sentences

MSRs, net of valuation allowance

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.

For the nine months ended September 30, 2023, United recognized a net gain of $ 8,306 on the sale of MSRs.

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

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

18 unchanged sentences

Classification

June 30, 2023

June 30, 2022

September 30,

Operating lease cost

4 unchanged sentences

Classification

September 30,

Operating lease cost

5 unchanged sentences

Classification

June 30, 2023

September 30, 2023

December 31, 2022

Operating lease right-of-use

Operating lease right-of-use assets

Operating lease liabilities

1 unchanged sentence

Other information related to leases was as follows:

June 30, 2023

September 30, 2023

Weighted-average remaining lease term:

4 unchanged sentences

Three Months Ended

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

Cash paid for amounts in the measurement of lease liabilities:

1 unchanged sentence

ROU assets obtained in the exchange for lease liabilities

Six Months Ended

June 30, 2023

June 30, 2022

Nine Months Ended

September 30, 2023

September 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 June 30, 2023:

Total lease payments

1 unchanged sentence

SHORT-TERM BORROWINGS

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

June 30, 2023

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

September 30, 2023

December 31, 2022

11 unchanged sentences

The line requires compliance with various financial and nonfinancial covenants.

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

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

At September 30, 2023, United had an unused borrowing amount of approximately $ 7,304,090 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 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.

At September 30, 2023, $ 1,110,559 of FHLB advances with a weighted-average contractual interest rate of 5.43 % and a weighted-average effective interest rate of 3.15 % 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 September 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 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.

At September 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.

4 unchanged sentences

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

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.

At September 30, 2023 and December 31, 2022, the outstanding balance of the Debentures was $ 278,211 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 $ 7,171,216 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.

United had approximately $ 7,064,910 and $ 7,250,155 of loan commitments outstanding as of September 30, 2023 and December 31, 2022, respectively, approximately 40% of which contractually expire within one year .

Excluded in the September 30, 2023 and December 31, 2022 amounts above are commitments to extend credit of $ 475,571 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 June 30, 2023 and December 31, 2022, United had $ 16,389 of commercial letters of credit outstanding.

As of September 30, 2023 and December 31, 2022, United had $ 16,326 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 $ 158,193 and $ 147,511 as of June 30, 2023 and December 31, 2022, respectively.

United has issued standby letters of credit of $ 155,516 and $ 147,511 as of September 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 reserve was immaterial as of June 30, 2023 and December 31, 2022.

United’s mortgage banking segment reserve was immaterial as of September 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 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.

As of September 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 $ 23,922 will be reclassified from AOCI as a decrease to interest expense over the next 12-months

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.

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

As of September 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 June 30, 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 September 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 June 30, 2023 and December 31, 2022.

Asset Derivatives

June 30, 2023

September 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

June 30, 2023

September 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 June 30, 2023 and December 31, 2022.

Derivatives in Fair Value

1 unchanged sentence

Location in the Statement of

June 30, 2023

September 30, 2023

Carrying Amount of

17 unchanged sentences

Hedging Relationships

Location in the Statement

Location in the Statement of

December 31, 2022

21 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 and six months ended June 30, 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 nine months ended September 30, 2023 and 2022 are presented as follows:

Three Months Ended

Income Statement

September 30,

Derivatives in hedging relationships

1 unchanged sentence

Interest rate swap contracts

on long-term borrowings

Interest on long-term

Fair Value Hedges:

11 unchanged sentences

Total derivatives

Six Months Ended

Nine Months Ended

Income Statement

September 30,

Derivatives in hedging relationships

15 unchanged sentences

Total derivatives

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.

For the three and nine months ended September 30, 2023 and 2022, changes in the fair value of certain 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.

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.

12 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 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.

Upon completing its review of the pricing from third party vendors at September 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 September 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 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 September 30, 2023, the range of historical sales prices increased the investor’s indicated pricing by a range of 0.05 % to 0.77 % with a weighted average increase of 0.31 %.

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.

8 unchanged sentences

Subsequent adjustments due to changes in the fair value of a derivative that qualifies as a fair value hedge are offset in current period earnings either in interest income or interest expense depending on the nature of the hedged financial instrument.

For a cash flow hedge, the fair value of the interest rate swap is recognized on the balance sheet as either a freestanding asset or liability with a corresponding adjustment to accumulated other comprehensive income within shareholders’ equity, net of tax.

For a cash flow hedge, the fair value of the interest rate swap is recognized on the balance sheet as either a freestanding asset or liability with a

corresponding adjustment to accumulated other comprehensive income within shareholders’ equity, net of tax.

Subsequent adjustments due to changes in the fair value of a derivative that qualifies as a cash flow hedge are offset to accumulated other comprehensive income, net of tax and reclassified into earnings in the same line associated with the forecasted transaction when the forecasted transaction affects earnings.

9 unchanged sentences

These valuations fall into a Level 2 category.

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”).

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 %.

The interest rate lock commitments are recorded at fair value which is measured using valuations from investors for loans with similar characteristics as well as considering the probability of the loan closing (i.e.

the “pull-through” rate)(“Level 2”) with some adjusted for the Company’s actual sales experience versus the investor’s indicated pricing (“Level 3”).

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

For September 30, 2023, the range of historical sales prices increased the investor’s indicated pricing by a range of 0.05 % to 0.77 % with a weighted average increase of 0.31 %.

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 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

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

Fair Value at September 30, 2023 Using

Balance as of

September 30,

Quoted Prices

4 unchanged sentences

Residential mortgage-backed securities

Commercial mortgage-backed securities

Commercial mortgage-backed securities Agency

Asset-backed securities

7 unchanged sentences

Total equity securities

Fair Value at September 30, 2023 Using

Balance as of

September 30,

Quoted Prices

Loans held for sale

40 unchanged sentences

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.

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 nine months ended September 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 September 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.

Loans held for sale

September 30,

Balance, beginning of period

5 unchanged sentences

TBA securities

September 30,

Balance, beginning of period

4 unchanged sentences

Forward sales commitments

September 30,

Balance, beginning of period

3 unchanged sentences

Derivative financial assets

Interest rate lock

Interest rate lock commitments

September 30,

Balance, beginning of period

4 unchanged sentences

Forward sales commitments

September 30,

Balance, beginning of period

4 unchanged sentences

TBA securities

September 30,

Balance, beginning of period

1 unchanged sentence

Balance, end of period

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

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

Derivative financial liabilities

Interest rate lock

Interest rate lock commitments

September 30,

Balance, beginning of period

3 unchanged sentences

Fair Value Option

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:

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

Three Months Ended

June 30, 2023

September 30, 2023

Three Months Ended

June 30, 2022

September 30, 2022

Income from mortgage banking activities

Six Months Ended

June 30, 2023

Six Months Ended

June 30, 2022

Nine Months Ended

September 30, 2023

Nine Months Ended

September 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.

No loans held for sale were past due or on nonaccrual status as of September 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:

June 30, 2023

September 30, 2023

December 31, 2022

47 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 six months of 2023 and 2022.

No other fair value measurement of intangible assets was made during the first nine 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.

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

The Company initially measures servicing assets and liabilities retained related to the sale of residential loans held for sale (“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 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.

For the unobservable inputs used in the valuation of mortgage servicing rights at September 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 third quarter and first nine months of September 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

June 30, 2023

Fair Value at June, 2023

September 30, 2023

Fair Value at September 30, 2023

Quoted Prices

Individually assessed loans

30 unchanged sentences

Quoted Prices

June 30, 2023

September 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 s tock

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

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

These awards all relate to the common stock of United.

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 $ 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 of $ 3,148 and $ 9,156 related to all share-based grants and awards under United’s Long-Term Incentive Plans was incurred for the third quarter and first nine months of 2023, respectively, as compared to the compensation expense of $ 2,462 and $ 7,066 related to all share-based grants and awards under United’s Long-Term Incentive Plans incurred for the third quarter and first nine 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”);

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

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

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

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

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

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 September 30, 2023, and the changes during the first nine months of 2023 are presented below:

Nine Months Ended September 30, 2023

Weighted Average

1 unchanged sentence

Forfeited or expired

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

Grant Date Fair Value

Outstanding at September 30, 2023

Exercisable at September 30, 2023

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

Weighted-Average Grant

Date Fair Value

Nonvested at January 1, 2023

Forfeited or expired

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.

Nonvested at September 30, 2023

During the nine months ended September 30, 2023 and 2022, 59,123 and 370,995 shares, respectively, were issued in connection with stock option exercises.

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

The total intrinsic value of options exercised under the Plans during the nine months ended September 30, 2023 and 2022 was $ 767 and $ 5,095 respectively.

As of September 30, 2023, the total unrecognized compensation cost related to nonvested stock option awards was $ 130 with a weighted-average expense recognition period of 0.4 years.

Restricted Stock

3 unchanged sentences

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

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:

As of September 30, 2023, the total unrecognized compensation cost related to nonvested restricted stock awards was $ 8,309 with a weighted-average expense recognition period of 1.0 years.

The following summarizes the changes to United’s nonvested restricted common shares for the nine months ended September 30, 2023:

Weighted-Average

1 unchanged sentence

Nonvested at January 1, 2023

Nonvested at June 30, 2023

Nonvested at September 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 six months of 2023:

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

Weighted-Average

2 unchanged sentences

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.

Nonvested at September 30, 2023

As of September 30, 2023, the total unrecognized compensation cost related to nonvested restricted stock units was $ 8,192 with a weighted-average expense recognition period of 1.4 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 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.

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

Contributions 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 six months of 2023 and 2022.

No discretionary contributions were made during the first nine 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 and six months ended June 30, 2023 and 2022 included the following components:

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

Three Months Ended

Six Months Ended

Nine Months Ended

Interest cost

2 unchanged sentences

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

As of September 30, 2023 and 2022, the total amount of accrued interest related to uncertain tax positions was $ 815 and $ 807 , 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 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.

United’s effective tax rate was 20.49 % and 20.21 % for the third quarter and first nine months of 2023, respectively, as compared to 20.17 % and 19.90 % for the third quarter and first nine months of 2022, respectively.

COMPREHENSIVE INCOME

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

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

Three Months Ended

Six Months Ended

Nine Months Ended

Available for sale (“AFS”) securities:

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

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

Related income tax effect

3 unchanged sentences

Cash flow hedge derivatives:

Unrealized gain on cash flow hedge before reclassification to interest

Unrealized gain on cash flow hedge before reclassification to interest expense

Related income tax effect

8 unchanged sentences

Total Comprehensive Income (Loss)

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 Six Months Ended June 30, 2023

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

Changes in Accumulated Other Comprehensive Income (AOCI) by Component (1)

For the Nine Months Ended September 30, 2023

Balance at January 1, 2023

2 unchanged sentences

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

Balance at June 30, 2023

Balance at September 30, 2023

(1) All amounts are net-of-tax.

Reclassifications out of Accumulated Other Comprehensive Income (AOCI)

For the Six Months Ended June 30, 2023

For the Nine Months Ended September 30, 2023

Details about AOCI Components

6 unchanged sentences

Related income tax effect

Reclassifications out of Accumulated Other Comprehensive Income (AOCI)

For the Nine Months Ended September 30, 2023

Details about AOCI Components

Affected Line Item in the Statement Where

Net Income is Presented

Cash flow hedge:

Net reclassification adjustment for gains included in net

Net reclassification adjustment for

gains included in net income

Interest expense

11 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Distributed earnings allocated to common stock

6 unchanged sentences

Earnings per diluted common share

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.

Antidilutive stock options and restricted stock outstanding of 1,413,862 and 1,411,484 for the three months and nine months ended September 30, 2023, respectively, were excluded from the earnings per diluted common share calculation as compared to 678,879 and 1,117,428 for the three months and nine months ended September 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 June 30, 2023 and December 31, 2022, United’s investment (maximum exposure to loss) in these trusts were $ 11,508 and $ 11,277 , respectively.

At September 30, 2023 and December 31, 2022, United’s investment (maximum exposure to loss) in these trusts were $ 11,635 and $ 11,277 , respectively.

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

Issuance Date

Amount of Capital

Securities Issued

3 unchanged sentences

December 17, 2003

3-month LIBOR + 2.85%

3-month CME Term SOFR + 2.85%

December 17, 2033

1 unchanged sentence

December 19, 2003

LIBOR + 2.85%

3-month CME Term SOFR + 2.85%

January 23, 2034

1 unchanged sentence

July 12, 2007

LIBOR + 1.55%

3-month CME Term SOFR + 1.55%

October 1, 2037

1 unchanged sentence

September 20, 2007

LIBOR + 1.30%

3-month CME Term SOFR + 1.30%

December 15, 2037

1 unchanged sentence

September 25, 2003

LIBOR + 3.10%

3-month CME Term SOFR + 3.10%

October 8, 2033

Premier Statutory Trust III

3-month LIBOR + 1.74%

3-month CME Term SOFR + 1.74%

June 15, 2035

1 unchanged sentence

June 20, 2006

LIBOR + 1.55%

3-month CME Term SOFR + 1.55%

September 23, 2036

1 unchanged sentence

December 14, 2006

LIBOR + 1.61%

3-month CME Term SOFR + 1.61%

March 1, 2037

1 unchanged sentence

September 20, 2004

LIBOR + 2.29%

3-month CME Term SOFR + 2.29%

September 20, 2034

1 unchanged sentence

June 15, 2006

LIBOR + 1.65%

3-month CME Term SOFR + 1.65%

VCBI Capital Trust II

December 19, 2002

LIBOR + 3.30%

6-month CME Term SOFR + 3.30%

December 19, 2032

1 unchanged sentence

December 20, 2005

LIBOR + 1.42%

3-month CME Term SOFR + 1.42%

February 23, 2036

1 unchanged sentence

July 27, 2004

LIBOR + 2.40%

3-month CME Term SOFR + 2.40%

September 15, 2034

1 unchanged sentence

December 30, 2004

LIBOR + 2.10%

3-month CME Term SOFR + 2.10%

March 15, 2035

Issuance Date

Securities Issued

Stated Interest Rate

Maturity Date

Carolina Financial Capital Trust I

4 unchanged sentences

November 5, 2003

LIBOR + 3.05%

3-month CME Term SOFR + 3.05%

January 7, 2034

1 unchanged sentence

October 12, 2004

LIBOR + 2.20%

3-month CME Term SOFR + 2.20%

October 18, 2034

1 unchanged sentence

December 28, 2006

LIBOR + 1.73%

3-month CME Term SOFR + 1.73%

January 30, 2037

1 unchanged sentence

September 26, 2003

LIBOR + 2.95%

3-month CME Term SOFR + 2.95%

September 30, 2033

1 unchanged sentence

December 12, 2003

LIBOR + 3.00%

3-month CME Term SOFR + 3.00%

December 12, 2033

CME Term SOFR rates have a spread adjustment of 0.26161 % and the 6-month

CME Term SOFR rate has a spread adjustment of 0.42826 %.

United, through its banking subsidiary, also makes limited partner equity investments in various low income housing and community development partnerships sponsored by independent third-parties.

3 unchanged sentences

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

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.

At September 30, 2023 and December 31, 2022, United’s investment (maximum exposure to loss) in these low income housing and community development partnerships were $ 84,701 and $ 75,021 , respectively, while related unfunded commitments were $ 56,382 and $ 77,143 , respectively.

As of September 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 and six months ended June 30, 2023 and 2022 is as follows:

At and For the Three Months Ended June 30, 2023

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

At and For the Three Months Ended September 30, 2023

Net interest income

4 unchanged sentences

Average assets (liabilities)

At and For the Three Months Ended June 30, 2022

At and For the Three Months Ended September 30, 2022

Net interest income

4 unchanged sentences

Average assets (liabilities)

At and For the Six Months Ended June 30, 2023

At and For the Nine Months Ended September 30, 2023

Net interest income

4 unchanged sentences

Average assets (liabilities)

At and For the Six Months Ended June 30, 2022

At and For the Nine Months Ended September 30, 2022

Net interest income

5 unchanged sentences

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