What changed in this filing

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Item 1. Financial Statements

2024-05-10 compared with 2023-11-09 · 389 added, 568 removed, 1354 unchanged (41% of the section changed)

FINANCIAL STATEMENTS (UNAUDITED)

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.

The March 31, 2024 and December 31, 2023, consolidated balance sheets of United Bankshares, Inc.

and Subsidiaries (“United” or the “Company”), consolidated statements of income and comprehensive income for the three months ended March 31, 2024 and 2023, the related consolidated statement of changes in shareholders’ equity for the three months ended March 31, 2024 and 2023, the related condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023, and the notes to consolidated financial statements appear on the following pages.

CONSOLIDATED BALANCE SHEETS

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Total cash and cash equivalents

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)

Securities available for sale at estimated fair value (amortized cost-$ 3,980,612 at March 31, 2024 and $ 4,149,895 at December 31, 2023, allowance for credit losses of $ 0 at March 31, 2024 and December 31, 2023)

Securities held to maturity, net of allowance for credit losses of $ 19 at March 31, 2024 and $ 17 at December 31, 2023 (estimated fair value-$ 1,020 at March 31, 2024 and December 31, 2023)

Equity securities at estimated fair value

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Authorized- 50,000,000

shares, none issued

shares, no ne issued

Common stock, $ 2.50 par value;

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issued- 142,536,369

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

and 142,257,646 at March 31, 2024 and December 31, 2023, respectively, including 7,343,694 and 7,308,583 shares in treasury at March 31, 2024 and December 31, 2023, respectively

Retained earnings

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AND SUBSIDIARIES

(Dollars in thousands, except per share data)

Three Months Ended

Nine Months Ended

(Dollars in thousands, except per share data)

Interest income

19 unchanged sentences

Mortgage loan servicing income

Net investment securities (losses) gains

Net investment securities losses

Total other income

4 unchanged sentences

Other real estate owned (“OREO”) expense

Net losses (gains) on the sales of OREO properties

Net gains on the sales of OREO properties

Equipment expense

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AND SUBSIDIARIES

(Dollars in thousands, except per share data)

Three Months Ended

Nine Months Ended

(Dollars in thousands, except per share data)

Earnings per common share:

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AND SUBSIDIARIES

(Dollars in thousands)

Three Months Ended

Nine Months Ended

Change in net unrealized loss on available-for-sale

(“AFS”) securities, net of tax

(Dollars in thousands)

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

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

Change in pension plan assets, net of tax

Comprehensive income (loss), net of tax

Change in defined benefit pension plan, net of tax

Comprehensive income, net of tax

See notes to consolidated unaudited financial statements

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

UNITED BANKSHARES, INC.

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(Dollars in thousands, except per share data)

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Comprehensive

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Comprehensive income:

Other comprehensive income, net of tax

Total comprehensive income, net of tax

Stock based compensation expense

Stock grant forfeiture ( 1,506 shares)

Purchase of treasury stock ( 33,551 shares)

Cash dividends ($ 0.36 per share)

Net issuance of common stock under stock-based compensation plans ( 226,486 shares)

Balance at March 31, 2023

Comprehensive income:

Other comprehensive loss, net of tax

1 unchanged sentence

Stock based compensation expense

Purchase of treasury stock ( 60 shares)

Cash dividends ($ 0.36 per share)

Stock grant forfeiture ( 5,215 shares)

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

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 ( 29,896 shares)

Cash dividends ($ 0.37 per share)

Stock grant forfeiture ( 2,161 shares)

Net issuance of common stock under stock-based compensation plans ( 278,723 shares)

Balance at September 30, 2023

See notes to consolidated unaudited financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

UNITED BANKSHARES, INC.

AND SUBSIDIARIES

(Dollars in thousands, except per share data)

Nine Months Ended September 30, 2022

Balance at March 31, 2024

Three Months Ended March 31, 2023

Comprehensive

(Loss) Income

Shareholders’

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Comprehensive income:

Other comprehensive loss, net of tax

Total comprehensive loss, net of tax

Other comprehensive income, net of tax

Total comprehensive income, net of tax

Stock based compensation expense

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Balance at March 31, 2023

Comprehensive income:

Other comprehensive loss, net of tax

Total comprehensive loss, net of tax

Stock based compensation expense

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

Cash dividends ($ 0.36 per share)

Stock grant forfeiture ( 2,445 shares)

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

Balance at June 30, 2022

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

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AND SUBSIDIARIES

Three Months Ended

(Dollars in thousands)

Nine Months Ended

NET CASH PROVIDED BY OPERATING ACTIVITIES

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Purchases of other investment securities

Redemption of bank-owned life insurance policies

Purchases of bank premises and equipment

Proceeds from sales of bank premises and equipment

Proceeds from sales of mortgage servicing rights

Proceeds from the sales of OREO properties

Net change in loans

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

Net change in loans and leases

NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES

FINANCING ACTIVITIES

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Proceeds from exercise of stock options

Redemption of subordinated debt

Repayment of long-term Federal Home Loan Bank borrowings

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

Redemption of subordinated debt

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

NET CASH USED IN FINANCING ACTIVITIES

Increase (Decrease) in cash and cash equivalents

NET CASH PROVIDED BY FINANCING ACTIVITIES

Increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

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Transfers of loans to OREO

Transfers of loans to bank premises and equipment

Acquisition of subsidiaries and purchase price adjustments:

Assets acquired, net of cash

Liabilities assumed

assets obtained in the exchange for lease liabilities

See notes to consolidated unaudited financial statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudite d)

UNITED BANKSHARES, INC.

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Actual results could differ from those estimates.

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 financial statements presented as of March 31, 2024 and 2023 and for the three-month periods then ended have not been audited.

The consolidated balance sheet as of December 31, 2023 has been extracted from the audited financial statements included in United’s 2023 Annual Report to Shareholders.

The Notes to Consolidated Financial Statements appearing in United’s 2023 Annual Report on Form 10-K,

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The accompanying consolidated interim financial statements include the accounts of United and its wholly owned subsidiaries.

United operates in two business segments:

community banking and mortgage banking.

All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements.

Information is presented in these notes to the unaudited consolidated interim financial statements with dollars expressed in thousands, except per share or unless otherwise noted.

Operating and Reporting Segments

As of March 31, 2024, United’s business activities are confined to one operating segment, United Bank, and one reportable segment, community banking.

As a community banking entity, United, through United Bank, offers a full range of products and services through various delivery channels.

Included among the banking products and services offered are the acceptance of deposits in checking, savings, time and money market accounts;

the making and servicing of personal, credit card, commercial, and floor plan loans;

and the making of construction and real estate loans as well as the origination and sale of residential mortgages in the secondary market.

Also offered are trust and brokerage services, safe deposit boxes, and wire transfers.

United’s chief operating decision maker regularly reviews the operating results of United Bank in order to assess performance and make decisions about resource allocation.

Previously, United had three operating segments:

United Bank, George Mason Mortgage, LLC (“George Mason”) and Crescent Mortgage Company (“Crescent”), and two reporting segments:

community banking and mortgage banking.

However, during the first quarter of 2024, United consolidated the mortgage origination and sales business of George Mason and Crescent with that of United Bank.

United previously exited the third-party origination (“TPO”) business during the fourth quarter of 2023.

New Accounting Standards

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

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09,

“Improvements to Income Tax Disclosures.” ASU 2023-09

enhances annual income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.

also includes certain other amendments to improve the effectiveness of income tax disclosures.

is effective for public business entities for annual periods beginning after December 15, 2024.

For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025.

Entities are permitted to early adopt the standard for annual financial statements that have not yet been issued or made available for issuance.

The adoption of ASU 2023-09

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

In November 2023, the FASB issued ASU 2023-07,

“Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” The amendments in ASU 2023-07

improve reportable segment disclosure requirements, mainly through enhanced disclosures about significant segment expenses.

In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements.

The purpose of the amendments will enable investors to better understand an entity’s overall performance and assess potential future cash flows.

is effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption of the amendment is permitted.

The adoption of ASU 2023-07

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 starting with its 2024 Annual Report on Form 10-K.

In October 2023, the FASB issued ASU 2023-06,

“Disclosure Improvements:

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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;

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

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

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permits reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met.

The amendments in this ASU apply to all reporting entities that hold tax equity investments that meet the conditions for and elect to account for them using the proportional amortization method or an investment in a low income housing tax credit (“LIHTC”) structure through a limited liability entity that is not accounted for using the proportional amortization method and to which certain LIHTC-specific guidance removed from Subtopic 323-740

The amendments in this ASU apply to all reporting entities that hold

tax equity investments that meet the conditions for and elect to account for them using the proportional amortization method or an investment in a low income housing tax credit (“LIHTC”) structure through a limited liability entity that is not accounted for using the proportional amortization method and to which certain LIHTC-specific guidance removed from Subtopic 323-740

has been applied.

Additionally, the disclosure requirements apply to investments that generate income tax credits and other income tax benefits from a tax credit program for which the entity has elected to apply the proportional amortization method (including investments within that elected program that do not meet the conditions to apply the proportional amortization method).

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

was effective for United on January 1, 2024.

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

The adoption of ASU 2023-02

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

At January 1, 2024, United chose not to elect to account for its tax equity investments using the proportional amortization method.

In December 2022, the FASB issued ASU 2022-06,

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also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction and requires certain new disclosures for equity securities subject to contractual sale restrictions.

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

was effective for United on January 1, 2024.

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 No.

“Troubled Debt Restructurings and Vintage Disclosures”.

updates the requirements for accounting for credit losses under ASC 326, eliminates the accounting guidance on troubled debt restructurings for creditors in ASC 310-40,

and enhances creditors’ disclosure requirements related to loan refinancings and restructurings for borrowers experiencing financial difficulty.

also amends the guidance on “vintage disclosures” to require disclosure of gross write-offs by year of origination.

was effective for public business entities that have adopted Topic 326 for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption of the amendment was permitted.

was adopted by United prospectively for the period beginning January 1, 2023.

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

However, ASU No.

did affect the Company’s disclosures.

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

In March 2022, the FASB issued ASU No.

“Derivatives and Hedging (Topic 815):

Fair Value Hedging – Portfolio Layer Method”.

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

method, which was first introduced in ASU No.

The enhanced guidance further improves the last-of-layer

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

also provides guidance on the relationship between the portfolio layer method requirements and other areas of GAAP.

is effective for public business entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption of the amendment is permitted if an entity has adopted ASU 2017-12

for the corresponding period.

was adopted by United on January 1, 2023.

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

In October 2021, the FASB issued ASU No.

“Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”.

amends ASC 805 to add contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations and to require that an entity acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.

As a result of these amendments, it is expected that an acquirer will generally recognize and measure acquired contract assets and contract liabilities in a manner consistent with how the acquiree recognized and measured them in its preacquisition financial statements.

is effective for public business entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments.

Early adoption of the amendments is permitted.

was adopted by United on January 1, 2023.

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

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

INVESTMENT SECURITIES

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

September 30, 2023

March 31, 2024

Treasury securities and obligations of U.S.

corporations and agencies

Government corporations and agencies

State and political subdivisions

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Treasury securities and obligations of U.S.

corporations and agencies

Government corporations and agencies

State and political subdivisions

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Other corporate securities

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

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

For the adoption of ASC Topic 326, “Financial Instruments—Credit Losses,” United made a policy election to exclude accrued interest from the amortized cost basis of available-for-sale

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

Available-for-sale

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debt securities.

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.

The table above excludes accrued interest receivable of $ 19,963 and $ 20,878 at March 31, 2024 and December 31, 2023, respectively, that is recorded in “Accrued interest receivable.”

The following is a summary of securities available for sale which were in an unrealized loss position at March 31, 2024 and December 31, 2023.

Less than 12 months

12 months or longer

September 30, 2023

March 31, 2024

Treasury securities and obligations of U.S.

corporations and agencies

Government corporations and agencies

State and political subdivisions

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Three Months Ended

Nine Months Ended

Proceeds from sales and calls

Proceeds from maturities, sales and calls

Gross realized gains

Gross realized losses

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.

At March 31, 2024, gross unrealized losses on available for sale securities were $ 366,788 on 1,071 securities of a total portfolio of 1,124 available for sale securities.

Securities with the most significant gross unrealized losses at March 31, 2024 consisted primarily of agency residential mortgage-backed securities, state and political subdivision securities, agency commercial mortgage-backed securities and other corporate securities.

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

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

Generally, the significant amount of gross unrealized losses on available for sale securities at March 31, 2024 was the result of rising interest rates.

State and political subdivisions

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

The total amortized cost of available for sale state and political subdivision securities was $ 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.

The total amortized cost of available for sale state and political subdivision securities was $ 611,240 at March 31, 2024.

As of March 31, 2024, 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 March 31, 2024.

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

Based upon management’s analysis and judgment, it was determined that none of the state and political subdivision securities had credit losses at September 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 March 31, 2024.

Mortgage-backed securities

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United had a net unrealized loss of $ 239,195 on mortgage-backed

securities September 30, 2023.

securities at March 31, 2024.

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

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

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

The total amortized cost of available for sale agency mortgage-backed securities was $ 1,691,373 at March 31, 2024.

Of the $ 1,691,373 amount, $ 507,889 was related to agency commercial mortgage-backed securities and $ 1,183,484 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 September 30, 2023.

Based upon management’s analysis and judgment, it was determined that none of the agency mortgage-backed securities had credit losses at March 31, 2024.

United’s non-agency

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The total amortized cost of available for sale non-agency

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

residential mortgage-backed securities was $ 83,698 at March 31, 2024.

Of the $ 83,698 , 100 % was rated AAA.

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

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

residential mortgage-backed securities had credit losses at March 31, 2024.

Asset-backed securities

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.

As of March 31, 2024, United’s asset-backed securities portfolio had a total amortized cost balance of $ 837,064 .

100 % of the portfolio was investment grade rated as of March 31, 2024.

Approximately 24 % 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 76 % of the portfolio relates to collateralized loan obligation securities that are all AAA rated.

Upon reviewing this portfolio as of September 30, 2023, it was determined that none of the asset-backed securities had credit losses.

Upon reviewing this portfolio as of March 31, 2024, it was determined that none of the asset-backed securities had credit losses.

Single issue trust preferred securities

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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 September 30, 2023 consisted of $ 7,473 in investment grade bonds, $ 3,100 in split rated bonds, and $ 5,798 in unrated bonds.

The amortized cost of available for sale single issue trust preferred securities as of March 31, 2024 consisted of $ 7,477 in investment grade bonds, $ 3,109 in split rated bonds, and $ 5,804 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 third quarter of 2023, it was determined that none of the single issue trust preferred securities had credit losses.

Upon completing the review for the first quarter of 2024, it was determined that none of the single issue trust preferred securities had credit losses.

Other corporate securities

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

As of March 31, 2024, United’s other corporate securities portfolio had a total amortized cost balance of $ 301,199 .

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

Of the $ 354,393 , 98 % had at least one rating above investment grade, none were below investment grade rated, and 2 % were unrated.

Of the $ 301,199 , 96 % had at least one rating above investment grade, 1 % were below investment grade rated, and 3 % were unrated.

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

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

Based upon management’s analysis and judgment, it was determined that none of the other corporate securities had credit losses at March 31, 2024.

The amortized cost and estimated fair value of securities available for sale at March 31, 2024 and December 31, 2023 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.

September 30, 2023

March 31, 2024

December 31, 2023

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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.

The fair value of United’s equity securities was $

8,762 at March 31, 2024 and $ 8,945 at December 31, 2023.

Three Months Ended

Nine Months Ended

Net gains recognized during the period on equity securities sold

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

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

Net losses recognized during the period

Net (losses) gains recognized during the period

Other investment securities

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.

During the first quarter of 2024, United evaluated all of its cost method investments to determine if certain events or changes in circumstances during the first quarter of 2024 had a significant adverse effect on the recorded value of any of its cost method securities.

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

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

The carrying value of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes as required or permitted by law, approximated $ 2,279,895 and $ 2,307,591 at March 31, 2024 and December 31, 2023, respectively.

LOANS AND LEASES

Major classes of loans and leases are as follows:

September 30, 2023

March 31, 2024

December 31, 2023

6 unchanged sentences

Construction & land development

September 30, 2023

December 31, 2022

Other consumer

1 unchanged sentence

Total gross loans

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.

The table above does not include loans held for sale of $ 44,426 and $ 56,261 at March 31, 2024 and December 31, 2023, respectively.

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

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 $ 68,552 and $ 24,901 at September 30, 2023 and December 31, 2022, respectively.

The aggregate dollar amount of these loans was $ 68,274 and $ 68,460 at March 31, 2024 and December 31, 2023, respectively.

CREDIT QUALITY

7 unchanged sentences

When interest accruals are discontinued, unpaid interest recognized in income in the current year is reversed, and unpaid interest accrued in prior years is charged to the allowance for credit losses.

United’s method of income recognition for loans and leases that are classified as nonaccrual is to recognize interest income on a cash basis or apply the cash receipt to principal when the ultimate collectibility of principal is in doubt.

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

1 unchanged sentence

Age Analysis of Past Due Loans and Leases

As of September 30, 2023

As of March 31, 2024

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 September 30, 2023

At March 31, 2024

At December 31, 2023

2 unchanged sentences

Credit Losses

With No Related

Allowance for

Credit Losses

Commercial Real Estate:

4 unchanged sentences

Other consumer

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

Interest income recognized on nonaccrual loans was insignificant during the three months ended March 31, 2024 and 2023.

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

The following table presents the amortized cost of loans and leases to borrowers experiencing financial difficulty modified 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 Nine Months Ended September 30, 2023

The following table presents the amortized cost of loans and leases to borrowers experiencing financial difficulty modified during the first three months of 2024 and 2023, respectively, by class of financing receivable and by type of modification.

Amortized Cost Basis of Loan Modifications Made to Borrowers Experiencing Financial

For the Three Months ended March 31, 2024

Term Extension &

Interest Rate

Term Extension &

Payment Delay

% of Total Class of

Financing Receivable

Commercial real estate:

5 unchanged sentences

Other consumer

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.

Amortized Cost Basis of Loan Modifications Made to Borrowers Experiencing Financial

For the Three Months ended March 31, 2023

Term Extension &

Interest Rate

Term Extension &

Payment Delay

% of Total Class of

Commercial real estate:

Owner-occupied

Nonowner-occupied

Other commercial

Residential real estate

Construction & land development

Other consumer

As of March 31, 2024 and December 31, 2023, there were commitments to lend additional funds of $

, respectively, to debtors owing loan receivables whose terms have been modified.

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

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

The following table presents the performance in the 12 months after a modification made to borrowers experiencing financial difficulty presented by class of financing receivable:

Payment Status (Amortized Cost Basis)

As of September 30, 2023

As of March 31, 2024

As of March 31, 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 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

The following table presents the financial effect of loan and lease modifications to borrowers experiencing financial difficulty for the three months ended March 31, 2024 and 2023.

For the Three Months Ended

March 31, 2024

For the Three Months Ended

March 31, 2023

Interest Rate

Commercial Real Estate:

5 unchanged sentences

Other consumer

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 September 30, 2023 and December 31, 2022:

No loan or lease modifications completed within the last 12 months to borrowers experiencing financial difficulty had a payment default during the first three months ended March 31, 2024 and 2023.

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

Collateral Dependent Loans and Leases

At September 30, 2023

Commercial real estate:

At March 31, 2024

Owner-occupied

49 unchanged sentences

amortized cost

As of September 30, 2023

As of March 31, 2024

Internal Risk Grade:

3 unchanged sentences

Current-period net recoveries

(charge-offs)

Origination Year

Revolving loans

1 unchanged sentence

loans and leases

Origination Year

As of December 31, 2023

3 unchanged sentences

Current-period recoveries

Current-period net recoveries

Current-period net recoveries (charge-offs)

Commercial Real Estate – Nonowner-occupied

Origination Year

Revolving loans

amortized cost

Origination Year

As of September 30, 2023

As of March 31, 2024

Internal Risk Grade:

2 unchanged sentences

Current-period recoveries

Current-period net recoveries

Current-period net (charge-offs) recoveries

Origination Year

Revolving loans

1 unchanged sentence

loans and leases

Origination Year

As of December 31, 2023

6 unchanged sentences

Term Loans and leases

Origination Year

Revolving loans

1 unchanged sentence

loans and leases

Origination Year

As of September 30, 2023

As of March 31, 2024

Internal Risk Grade:

2 unchanged sentences

Current-period recoveries

Current-period net (charge-offs) recoveries

Current-period net recoveries (charge-offs)

Term Loans and leases

Origination Year

Revolving loans

1 unchanged sentence

loans and leases

Origination Year

As of December 31, 2023

5 unchanged sentences

Residential Real Estate

Origination Year

Revolving loans

amortized cost

Origination Year

As of September 30, 2023

As of March 31, 2024

Internal Risk Grade:

2 unchanged sentences

Current-period recoveries

Current-period net recoveries

(charge-offs)

Current-period net charge- offs

Origination Year

Revolving loans

amortized cost

Origination Year

As of December 31, 2023

3 unchanged sentences

Current-period recoveries

Current-period net (charge-offs) recoveries

Current-period net recoveries (charge-offs)

Construction and Land Development

Origination Year

Revolving loans

amortized cost

Origination Year

As of September 30, 2023

As of March 31, 2024

Internal Risk Grade:

3 unchanged sentences

Current-period net recoveries

Origination Year

Revolving loans

amortized cost

Origination Year

As of December 31, 2023

4 unchanged sentences

Current-period net recoveries

Origination Year

Revolving loans

amortized cost

Origination Year

As of September 30, 2023

As of March 31, 2024

Internal Risk Grade:

3 unchanged sentences

Current-period net charge-offs

Origination Year

Revolving loans

amortized cost

Origination Year

As of December 31, 2023

5 unchanged sentences

Other Consumer

Origination Year

Revolving loans

amortized cost

Origination Year

As of September 30, 2023

As of March 31, 2024

Internal Risk Grade:

3 unchanged sentences

Current-period net (charge- offs) recoveries

Origination Year

Revolving loans

amortized cost

Origination Year

As of December 31, 2023

3 unchanged sentences

Current-period recoveries

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.

Current-period net (charge- offs) recoveries

At March 31, 2024 and December 31, 2023, other real estate owned (“OREO”) included in other assets in the Consolidated Balance Sheets was $ 2,670 and $ 2,615 , respectively.

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

2 unchanged sentences

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 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.

At March 31, 2024 and December 31, 2023, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process was $ 258 and $ 142 , respectively.

ALLOWANCE FOR CREDIT LOSSES

The allowance for loan losses is an estimate of the expected credit losses on financial assets measured at amortized cost to present the net amount expected to be collected as of the balance sheet date.

Such allowance is based on the credit losses expected to arise over the life of the asset (contractual term).

Such allowance is based on the credit

losses expected to arise over the life of the asset (contractual term).

Assets are charged off when United determines that such financial assets are deemed uncollectible or based on regulatory requirements, whichever is earlier.

Charge-offs are recognized as a deduction from the allowance for credit losses.

Expected recoveries of amounts previously charged-off,

not to exceed the aggregate of the amount previously charged-off,

Expected recoveries of amounts previously

not to exceed the aggregate of the amount previously

are included in determining the necessary reserve at the balance sheet date.

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

Accrued interest receivable was $ 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.

Accrued interest receivable was $ 91,178 and $ 88,963 at March 31, 2024 and December 31, 2023, respectively, related to loans and leases are included separately in “Accrued interest receivable” in the consolidated balance sheets.

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

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

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

The following table represents the accrued interest receivable as of March 31, 2024 and December 31, 2023:

Accrued Interest Receivable

At September 30, 2023

At March 31, 2024

At December 31, 2023

5 unchanged sentences

Other consumer

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:

The following table represents the accrued interest receivables written off by reversing interest income for the three months ended March 31, 2024 and 2023:

Accrued Interest Receivables Written Off

1 unchanged sentence

Three Months Ended

Nine Months Ended

Commercial Real Estate:

3 unchanged sentences

Residential Real Estate

Construction & land development

Other consumer

19 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

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 $ 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 reserve for lending-related commitments of $ 42,915 and $ 44,706 at March 31, 2024 and December 31, 2023, respectively, is separately classified on the balance sheet and is included in other liabilities.

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

United’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:

United’s allowance for credit losses at March 31, 2024 was relatively flat from December 31, 2023, increasing

$ 1,877 or less than

This slight increase was due mainly to increases in the loan loss reserves for the commercial real estate, both owner and non-owner occupied, the residential real estate and the other commercial loans segments due to increased outstanding loan balances and increased adjustments resulting from the reasonable and supportable forecast.

The first quarter of 2024 qualitative adjustments include analyses of the following:

Current conditions

– United considered the impact of inflation, rising

interest rates, the banking regulatory environment and geopolitical conflict when making determinations related to factor adjustments for the external environment.

– United considered the impact of inflation, 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 based on projections of real GDP and the unemployment rate.

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

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

Assumptions for the economic variables were the following:

The forecast for real GDP in 2023 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.

The forecast for real GDP in 2024 increased in the first quarter, from a projection of 1.40 % for 2024 at the end of 2023 to 2.10 % for 2024 with a slightly smaller increase for 2025, from a projection of 1.80 % for 2025 at the end of 2023 to 2.00 % for 2025.

The unemployment rate remained fairly consistent to the end of 2023 with a steady trend expected throughout 2024 and 2025.

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 as well as higher interest rates and cap rates.

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

2 unchanged sentences

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

For the Three Months Ended September 30, 2023

For the Three Months Ended March 31, 2024

Commercial Real Estate

Construction &

Allowance for Loan and Lease Losses:

2 unchanged sentences

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

For the Nine Months Ended September 30, 2023

Commercial Real

Construction &

Allowance for Loan and Lease Losses:

Beginning balance

Ending balance

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

For the Year Ended December 31, 2023

Commercial Real

Construction &

Commercial Real Estate

Allowance for Loan and Lease Losses:

3 unchanged sentences

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

September 30, 2023

March 31, 2024

Community Banking

Mortgage Banking

Amortized intangible assets:

Core deposit intangible assets

Non-amortized

intangible assets:

George Mason trade name

Crescent trade name

Goodwill not subject to amortization

4 unchanged sentences

Core deposit intangible assets

Non-amortized

intangible assets:

George Mason trade name

Crescent trade name

Goodwill not subject to amortization

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.

United incurred amortization expense of $ 910 and $ 1,279 for the quarters ended March 31, 2024 and 2023, respectively.

The following table sets forth the anticipated amortization expense for intangible assets for the years subsequent to 2023:

3 unchanged sentences

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

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

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

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

8 unchanged sentences

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

The unpaid principal balances of loans serviced for others were approximately $ 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 %.

The unpaid principal balances of loans serviced for others were approximately $ 1,173,246 at March 31, 2024 and $ 1,202,448 at December 31, 2023.

The estimated fair value of the mortgage servicing rights was $ 13,439 and $ 13,427 at March 31, 2024 and December 31, 2023, respectively.

The estimated fair value of servicing rights at March 31, 2024 was determined using a net servicing fee of 0.25 %, average discount rates ranging from 10.19 % to 11.15 % with a weighted average discount rate of 10.59 %, average constant prepayment rates (“CPR”) ranging from 7.62 % to 9.96 % with a weighted average prepayment rate of 9.16 %, depending upon the stratification of the specific servicing right, and a delinquency rate, including loans on forbearance of 2.65 %.

The estimated fair value of servicing rights at December 31, 2023 was determined using a net servicing fee of 0.25 %, average discount rates ranging from 10.50 % to 10.82 % with a weighted average discount rate of 10.58 %, average constant prepayment rates (“CPR”) ranging from 7.84 % to 10.25 % with a weighted average prepayment rate of 9.43 %, depending upon the stratification of the specific servicing right, and a delinquency rate, including loans on forbearance of 3.29 %.

Please refer to Note 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 nine months ended September 30, 2023 and 2022:

The following presents the activity in mortgage servicing rights, including their valuation allowance for the three months ended March 31, 2024 and 2023:

Three Months Ended

Nine Months Ended

March 31, 2024

Three Months Ended

March 31, 2023

MSRs beginning balance

7 unchanged sentences

MSRs, net of valuation allowance

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 Company did no t record any temporary impairments on mortgage servicing rights for the three months ended March 31, 2024 and 2023.

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

17 unchanged sentences

The components of lease expense were as follows:

Classification

September 30,

Operating lease cost

Net occupancy expense

Sublease income

Net occupancy expense

Net lease cost

Three Months Ended

Classification

September 30,

March 31, 2024

March 31, 2023

Operating lease cost

5 unchanged sentences

Classification

September 30, 2023

March 31, 2024

December 31, 2023

4 unchanged sentences

Other information related to leases was as follows:

September 30, 2023

March 31, 2024

Weighted-average remaining lease term:

4 unchanged sentences

Three Months Ended

September 30, 2023

September 30, 2022

Cash paid for amounts in the measurement of lease liabilities:

Operating cash flows from operating leases

ROU assets obtained in the exchange for lease liabilities

Nine Months Ended

September 30, 2023

September 30, 2022

March 31, 2024

March 31, 2023

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 September 30, 2023:

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, 2023, consists of the following as of March 31, 2024:

Total lease payments

1 unchanged sentence

SHORT-TERM BORROWINGS

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

September 30, 2023

At March 31, 2024 and December 31, 2023, short-term borrowings were as follows:

March 31, 2024

December 31, 2023

2 unchanged sentences

Total short-term borrowings

Securities sold under agreements to repurchase have not been a significant source of funds for the company.

Federal funds purchased and securities sold under agreements to repurchase have not been a significant source of funds for the company.

The securities sold under agreements to repurchase were accounted for as collateralized financial transactions.

6 unchanged sentences

The line requires compliance with various financial and nonfinancial covenants.

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

At March 31, 2024, 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 September 30, 2023, United had an unused borrowing amount of approximately $ 7,304,090 available subject to delivery of collateral after certain trigger points.

At March 31, 2024, United had an unused borrowing amount of approximately $ 7,001,680 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 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.

At March 31, 2024, $ 1,460,415 of FHLB advances with a weighted-average contractual interest rate of 5.43 % and a weighted-average effective interest rate of 3.70 % 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 March 31, 2024 to manage interest rate risk on its long-term debt.

The scheduled maturities of these FHLB borrowings are as follows:

2028 and thereafter

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.

At March 31, 2024, United had a total of twenty statutory business trusts that were formed for the purpose of issuing or participating in pools of trust preferred capital securities (“Capital Securities”) with the proceeds invested in junior subordinated debt securities (“Debentures”) of United.

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

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

rate subordinated notes in the Carolina Financial Corporation acquisition.

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

rate subordinated notes.

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

At 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.

At March 31, 2024 and December 31, 2023, the outstanding balance of the Debentures was $ 279,019 and $ 278,616 , 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 $ 7,064,910 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.

United had approximately $ 6,817,449 and $ 6,851,890 of loan commitments outstanding as of March 31, 2024 and December 31, 2023, respectively, approximately 41% of which contractually expire within one year .

Excluded in the December 31, 2023 amount above were commitments to extend credit of $ 416,095 related to mortgage loan funding commitments of United’s previous mortgage banking segment which were 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 September 30, 2023 and December 31, 2022, United had $ 16,326 of commercial letters of credit outstanding.

As of March 31, 2024 and December 31, 2023, United had $ 16,113 and $ 16,233 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 $ 155,516 and $ 147,511 as of September 30, 2023 and December 31, 2022, respectively.

United has issued standby letters of credit of $ 155,354 and $ 147,705 as of March 31, 2024 and December 31, 2023, respectively.

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

Mortgage Banking

United’s mortgage banking segment provides for its estimated exposure to repurchase loans previously sold to investors for which borrowers failed to provide full and accurate information on their loan application or for which appraisals have not been acceptable or where the loan was not underwritten in accordance with the loan program specified by the loan investor, and for other exposure to its investors related to loan sales activities.

Related to its mortgage banking activities, United provides for its estimated exposure to repurchase loans previously sold to investors for which borrowers failed to provide full and accurate information on their loan application or for which appraisals have not been acceptable or where the loan was not underwritten in accordance with the loan program specified by the loan investor, and for other exposure to its investors related to loan sales activities.

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

United’s 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.

United’s mortgage banking segment works with third-party investors that are generally well-capitalized, are investment grade and exhibit strong financial performance to mitigate this risk.

United’s reserve was immaterial as of March 31, 2024 and December 31, 2023.

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

United works with mortgage banking third-party investors that are generally well-capitalized, are investment grade and exhibit strong financial performance to mitigate this risk.

United does not expect any third-party investor to fail to meet its obligation.

24 unchanged sentences

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

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.

As of March 31, 2024, United has determined that no forecasted transactions related to its cash flow hedges resulted in gains or losses pertaining to cash flow hedge reclassification from AOCI to income because the forecasted transactions became probable of not occurring.

United estimates that $ 16,625 will be reclassified from AOCI as a decrease to interest expense over the next 12-months

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.

following March 31, 2024 related to the cash flow hedges.

As of March 31, 2024, the maximum length of time over which forecasted transactions are hedged is six years.

and how the ineffectiveness of the hedge will be measured.

United also assesses hedge effectiveness at inception and on an ongoing basis using regression analysis.

6 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 September 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 March 31, 2024.

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

The related fair value on a net basis approximates zero .

United through its mortgage banking subsidiaries enters into interest rate lock commitments to finance residential mortgage loans with its customers.

United through its mortgage banking channel enters into interest rate lock commitments to finance residential mortgage loans with its customers.

These commitments, which contain fixed expiration dates, offer the borrower an interest rate guarantee provided the loan meets underwriting guidelines and closes within the timeframe established by United.

7 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 September 30, 2023 and December 31, 2022.

Asset Derivatives

September 30, 2023

March 31, 2024

December 31, 2023

12 unchanged sentences

TBA mortgage-backed securities

Asset Derivatives

March 31, 2024

December 31, 2023

Interest rate lock commitments

2 unchanged sentences

Liability Derivatives

September 30, 2023

March 31, 2024

December 31, 2023

Derivatives not designated as hedging instruments

Forward loan sales commitments

Other liabilities

TBA mortgage-backed securities

6 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 September 30, 2023 and December 31, 2022.

Derivatives in Fair Value

Hedging Relationships

Location in the Statement of

September 30, 2023

March 31, 2024

Location in the Statement

Carrying Amount of

14 unchanged sentences

Interest rate swaps

Loans, net of unearned income

Loans, net of unearned

Derivatives in Fair Value

Hedging Relationships

Location in the Statement of

December 31, 2023

Location in the Statement

Carrying Amount of

14 unchanged sentences

Interest rate swaps

Loans, net of unearned income

Loans, net of unearned

Derivative contracts involve the risk of dealing with both bank customers and institutional derivative counterparties and their ability to meet contractual terms.

3 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 nine months ended September 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 months ended March 31, 2024 and 2023 are presented as follows:

Three Months Ended

Income Statement

September 30,

Derivatives in hedging relationships

Cash flow Hedges:

Interest rate swap contracts

Interest on long-term

Fair Value Hedges:

Interest rate swap contracts

Derivatives in hedging relationships Fair Value Hedges:

rate swap contracts

Interest and fees on loans

Total derivatives in hedging relationships

Derivatives not designated as hedging instruments

Forward loan sales commitments

Income from Mortgage Banking Activities

TBA mortgage-backed securities

Income from Mortgage Banking Activities

Interest rate lock commitments

Income from Mortgage Banking Activities

Total derivatives not designated as hedging instruments

Total derivatives

Nine Months Ended

Income Statement

September 30,

Derivatives in hedging relationships

Cash flow Hedges:

1 unchanged sentence

Interest on long-term borrowings

Fair Value Hedges:

Interest rate swap contracts

Interest and fees on loans

Total derivatives in hedging relationships

8 unchanged sentences

Total derivatives

For the three 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.

For the three months ended March 31, 2024 and 2023, changes in the fair value of any interest rate swaps attributed to hedge ineffectiveness were recorded, but not significant to United’s Consolidated Statements of Income.

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.

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.

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 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.

Upon completing its review of the pricing from third party vendors at March 31, 2024, management determined that the prices provided by its third party pricing sources were reasonable and in line with management’s expectations for the market values of these securities.

Therefore, prices obtained from third party vendors that did not reflect forced liquidation or distressed sales were not adjusted materially by management at March 31, 2024.

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

6 unchanged sentences

Loans held for sale

For residential mortgage loans sold in the mortgage banking segment, the loans closed are recorded at fair value using the fair value option which is measured using valuations from investors for loans with similar characteristics (“Level 2”) with some adjusted for the Company’s actual sales experience versus the investor’s indicated pricing (“Level 3”).

For residential mortgage loans sold, the loans closed are recorded at fair value using the fair value option which is measured using valuations from investors for loans with similar characteristics (“Level 2”) with some adjusted for the Company’s actual sales experience versus the investor’s indicated pricing (“Level 3”).

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

For 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 March 31, 2024, the range of historical sales prices increased the investor’s indicated pricing by a range of 0.001 % to 0.392 % with a weighted average increase of 0.140 %.

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.

The Company records its interest rate lock commitments and forward loan sales commitments at fair value determined as the amount that would be required to settle each of these derivative financial instruments at the balance sheet date.

In the normal course of business, United’s mortgage banking subsidiaries enter into contractual interest rate lock commitments to extend credit to borrowers with fixed expiration dates.

In the normal course of business, United, through its mortgage banking channel, enters into contractual interest rate lock commitments to extend credit to borrowers with fixed expiration dates.

The commitments become effective when the borrowers “lock-in”

2 unchanged sentences

Interest rate risk arises if interest rates move adversely between the time of the interest rate lock by the borrower and the sale date of the loan to the investor.

To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, United’s mortgage banking subsidiaries enter into either a forward sales contract to sell loans to investors or a TBA mortgage-backed security.

To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, United, through its mortgage banking channel, enters into either a forward sales contract to sell loans to investors or a TBA mortgage-backed security.

Fair values of TBA mortgage-backed securities are measured using valuations from investors for mortgage-backed securities with similar characteristics (“Level 2”).

1 unchanged sentence

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

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

For 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.

For March 31, 2024, the range of historical sales prices increased the investor’s indicated pricing by a range of 0.001 % to 0.392 % with a weighted average increase of 0.140 %.

For interest rate swap derivatives that are not designated in a hedge relationship within United’s mortgage banking activities, 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 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,

The following tables present the balances of financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023, segregated by the level of the valuation inputs within the fair value hierarchy.

Fair Value at March 31, 2024 Using

Quoted Prices

4 unchanged sentences

Residential mortgage-backed securities

Fair Value at March 31, 2024 Using

Quoted Prices

Commercial mortgage-backed securities Agency

6 unchanged sentences

Equity mutual funds (1)

Fixed income mutual funds

Other equity securities

Total equity securities

Fair Value at September 30, 2023 Using

Balance as of

September 30,

Quoted Prices

Loans held for sale

6 unchanged sentences

Derivative financial liabilities

Forward sales commitments

TBA mortgage-backed securities

Interest rate lock commitments

4 unchanged sentences

Available for sale debt securities:

Treasury securities and

obligations of U.S.

corporations and agencies

Treasury securities and obligations of U.S.

Government corporations and agencies

State and political subdivisions

8 unchanged sentences

Equity mutual funds (1)

Fair Value at December 31, 2023 Using

Balance as of

Quoted Prices

Fixed income mutual funds

4 unchanged sentences

Forward sales commitments

TBA mortgage-backed securities

Interest rate lock commitments

2 unchanged sentences

TBA mortgage-backed securities

Interest rate lock commitments

Total derivative financial liabilities

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

There were no transfers between Level 1 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.

There were no transfers between Level 1 and Level 2 for financial assets and liabilities measured at fair value on a recurring basis during the three months ended March 31, 2024 and the year ended December 31, 2023.

The following tables present additional information about financial assets and liabilities measured at fair value at March 31, 2024 and December 31, 2023 on a recurring basis and for which United has utilized Level 3 inputs to determine fair value.

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

Loans held for sale

September 30,

Derivative Assets

Derivative Liabilities

March 31, 2024

Interest Rate

Balance, beginning of period

Transfers to portfolio loans

Transfers other

Total gains during the period recognized in earnings

1 unchanged sentence

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

Derivative financial assets

TBA securities

September 30,

Balance, beginning of period

Transfers other

Balance, end of period

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

Derivative financial assets

Forward sales commitments

September 30,

Balance, beginning of period

Transfers other

Balance, end of period

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

Derivative financial assets

Interest rate lock commitments

September 30,

Balance, beginning of period

Transfers other

Balance, end of period

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

Derivative financial liabilities

Forward sales commitments

September 30,

Balance, beginning of period

Transfers other

Balance, end of period

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

Derivative financial liabilities

TBA securities

September 30,

Balance, beginning of period

Transfers other

Balance, end of period

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

Derivative financial liabilities

Interest rate lock commitments

September 30,

Derivative Assets

Derivative Liabilities

December 31, 2023

Interest Rate

Balance, beginning of period

Transfers other

Total gains during the period recognized in earnings

Balance, end of period

3 unchanged sentences

Three Months Ended

September 30, 2023

March 31, 2024

Three Months Ended

September 30, 2022

Income from mortgage banking activities

Nine Months Ended

September 30, 2023

Nine Months Ended

September 30, 2022

March 31, 2023

Income from mortgage banking activities

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:

September 30, 2023

March 31, 2024

December 31, 2023

44 unchanged sentences

The goodwill impairment test did not identify any goodwill impairment.

In subsequent periods, economic uncertainty and volatility and the performance of the Company’s stock as well as possible other impairment indicators could cause us to perform a goodwill impairment test which could result in an impairment charge being recorded for that period if the carrying value of goodwill was found to exceed fair value.

In subsequent periods, economic uncertainty, market volatility and the performance of the Company’s stock as well as possible other impairment indicators could cause us to perform a goodwill impairment test which could result in an impairment charge being recorded for that period if the carrying value of goodwill was found to exceed fair value.

Core deposit intangibles relate to the estimated value of the deposit base of acquired institutions.

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

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

Mortgage Servicing Rights:

Management reviews core deposit intangible assets on an annual basis, or sooner if indicators of

impairment exist, and evaluates changes in facts and circumstances that may indicate impairment in the carrying value.

During the fourth quarter of 2023, United’s management formulated a plan to consolidate its mortgage delivery channels by consolidating George Mason’s and Crescent’s mortgage banking business into United Bank.

As a result of this consolidation decision, United impaired the trade names intangibles at George Mason and Crescent to zero at December 31

No fair value measurement of intangible assets was made during the first three months of 2024 and 2023.

Mortgage Servicing Rights (“MSRs”):

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

5 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 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.

For the unobservable inputs used in the valuation of mortgage servicing rights at March 31, 2024 and December 31, 2023, refer to Note 7 of these Notes to Consolidated Financial Statements.

The Company did no t record any temporary impairment of mortgage servicing rights in the quarter ended March 31, 2024 and 2023.

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

Balance as of

September 30, 2023

Fair Value at September 30, 2023

Fair Value at March 31, 2024

Quoted Prices

1 unchanged sentence

Balance as of

December 31, 2022

Fair Value at December 31, 2023

27 unchanged sentences

Quoted Prices

September 30, 2023

March 31, 2024

Cash and cash equivalents

2 unchanged sentences

Equity securities

Fair Value Measurements

Quoted Prices

Other securities

30 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 $ 3,148 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 of $ 3,266 and $ 2,713 related to the nonvested awards under United’s Long-Term Incentive Plans was incurred for the first quarter of 2024 and 2023, respectively.

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

4 unchanged sentences

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

A summary of activity under United’s stock option plans as of March 31, 2024, and the changes during the first three months of 2024 are presented below:

Three Months Ended March 31, 2024

Weighted Average

1 unchanged sentence

Forfeited or expired

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

Outstanding at March 31, 2024

Exercisable at March 31, 2024

The following table summarizes the status of United’s nonvested stock option awards during the first three months of 2024:

Weighted-Average

Grant Date Fair Value

Nonvested at January 1, 2024

Forfeited or expired

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.

Nonvested at March 31, 2024

During the three months ended March 31, 2024 and 2023, 25,991 and 55,796 shares, respectively, were issued in connection with stock option exercises.

All shares issued in connection with stock option exercises for the three months ended March 31, 2024 and 2023 were issued from authorized and unissued stock.

The total intrinsic value of options exercised under the Plans during the three months ended March 31, 2024 and 2023 was $ 207 and $ 722 respectively.

As of March 31, 2024, there was no

unrecognized compensation cost related to nonvested stock option awards.

Restricted Stock

3 unchanged sentences

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

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:

As of March 31, 2024, the total unrecognized compensation cost related to nonvested restricted stock awards was $ 10,971 with a weighted-average expense recognition period of 1.6 years.

The following summarizes the changes to United’s nonvested restricted common shares for the period ended March 31, 2024:

Weighted-Average

1 unchanged sentence

Nonvested at January 1, 2024

Nonvested at September 30, 2023

Nonvested at March 31, 2024

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 nine months of 2023:

The following table summarizes the status of United’s nonvested RSUs during the first three months of 2024:

Weighted-Average

2 unchanged sentences

Forfeited or expired

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.

Nonvested at March 31, 2024

As of March 31, 2024, the total unrecognized compensation cost related to nonvested restricted stock units was $ 13,314 with a weighted-average expense recognition period of 2.0 years.

EMPLOYEE BENEFIT PLANS

2 unchanged sentences

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 nine months of 2023 and 2022.

No discretionary contributions were made during the first quarter of 2024 and 2023.

Included in accumulated other comprehensive income at December 31, 2023 are unrecognized actuarial losses of $ 32,548 ($ 20,817 net of tax) that have not yet been recognized in net periodic pension cost.

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

Three Months Ended

Nine Months Ended

Net periodic pension cost for the three months ended March 31, 2024 and 2023 included the following components:

Three Months Ended March 31

Interest cost

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

As of March 31, 2024 and 2023, the total amount of accrued interest related to uncertain tax positions was $ 773 and $ 525 , 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, 2020, 2021 and 2022 and certain State Taxing authorities for the years ended December 31, 2020 through 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.

United’s effective tax rate was 19.78 % for the first quarter of 2024 and 19.92 % for the first quarter of 2023.

COMPREHENSIVE INCOME

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

The components of total comprehensive income for the three months ended March 31, 2024 and 2023 are as follows:

Three Months Ended

Nine Months Ended

Available for sale (“AFS”) securities:

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

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

Related income tax effect

Net reclassification adjustment for losses included in net income

Related income tax expense

Net reclassification adjustment for gains included in net income

Related income tax effect

Net effect of AFS securities on other comprehensive income

Three Months Ended

Cash flow hedge derivatives:

Unrealized gain on cash flow hedge before reclassification to interest expense

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

Related income tax effect

Net reclassification adjustment for (gains) losses included in net income

Net reclassification adjustment for gains included in net income

Related income tax effect

5 unchanged sentences

Total change in other comprehensive income

Total Comprehensive Income (Loss)

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

Total Comprehensive Income

The components of accumulated other comprehensive income for the three months ended March 31, 2024 are as follows:

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

For the Three Months Ended March 31, 2024

Balance at January 1, 2024

1 unchanged sentence

Amounts reclassified from accumulated other comprehensive income

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

Balance at September 30, 2023

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

Balance at March 31, 2024

All amounts are net-of-tax.

Reclassifications out of Accumulated Other Comprehensive Income (AOCI)

For the Nine Months Ended September 30, 2023

For the Three Months Ended March 31, 2024

Details about AOCI Components

2 unchanged sentences

Available for sale (“AFS”) securities:

Net reclassification adjustment for gains included in net income

Net investment securities gains

Total before tax

Related income tax effect

Cash flow hedge:

Net reclassification adjustment for losses included in net income

Net investment securities (losses) gains

Interest expense

Total before tax

1 unchanged sentence

Reclassifications out of Accumulated Other Comprehensive Income (AOCI)

For the Nine Months Ended September 30, 2023

For the Three Months Ended March 31, 2024

Details about AOCI Components

1 unchanged sentence

Net Income is Presented

Cash flow hedge:

Net reclassification adjustment for

gains included in net income

Interest expense

Total before tax

Related income tax effect

Pension plan:

Recognized net actuarial loss

Employee benefits

Total before tax

1 unchanged sentence

Total reclassifications for the period

This AOCI component is included in the computation of changes in plan assets (see Note 16, Employee Benefit Plans)

This AOCI component is included in the computation of net periodic pension cost (see Note 15, Employee Benefit Plans)

EARNINGS PER SHARE

1 unchanged sentence

Three Months Ended

Nine Months Ended

Distributed earnings allocated to common stock

2 unchanged sentences

Average common shares outstanding

Equivalents from stock options

Common stock equivalents

Average diluted shares outstanding

1 unchanged sentence

Earnings per diluted common share

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.

Antidilutive stock options and restricted stock outstanding of 1,198,358 for the three months ended March 31, 2024 were excluded from the earnings per diluted common share calculation as compared to 563,127 for the three months ended March 31, 2023.

VARIABLE INTEREST ENTITIES

12 unchanged sentences

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

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.

At March 31, 2024 and December 31, 2023, United’s investment (maximum exposure to loss) in these trusts w ere

$ 11,876 and $ 11,751 , respectively.

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

Issuance Date

Amount of Capital

Securities Issued

86 unchanged sentences

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

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

United operates in two business segments:

community banking and mortgage banking.

Through its community banking segment, United offers a full range of products and services through various delivery channels.

In particular, the community banking segment includes both commercial and consumer lending and provides customers with such products as commercial loans, real estate loans, business financing and consumer loans.

In addition, this segment provides customers with several choices of deposit products including demand deposit accounts, savings accounts and certificates of deposit as well as investment and financial advisory services to businesses and individuals, including financial planning, retirement/estate planning, and investment management.

The mortgage banking segment engages primarily in the origination and acquisition of residential mortgages for sale into the secondary market though United’s mortgage banking subsidiaries, George Mason and Crescent.

Crescent may retain servicing rights on their mortgage loans sold.

At certain times, Crescent may purchase or sell rights to service loans from third parties.

These rights, which are known as mortgage servicing rights, provide the owner with the contractual right to receive a stream of cash flows in exchange for performing specified mortgage servicing functions.

The community banking segment provides the mortgage banking segment (George Mason and Crescent) with short-term funds to originate mortgage loans through a warehouse line of credit and charges the mortgage banking segment interest based on a Fed Funds target rate.

These transactions are eliminated in the consolidation process.

The Company does not have any operating segments other than those reported.

The “Other” category consists of financial information not directly attributable to a specific segment, including interest income from investments and net securities gains or losses of parent companies and their non-banking

subsidiaries, interest expense related to subordinated notes of unconsolidated subsidiaries as well as the elimination of non-segment

related intercompany transactions such as management fees.

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 nine months ended September 30, 2023 and 2022 is as follows:

At and For the Three Months Ended September 30, 2023

Net interest income

Provision for credit losses

Other expense

Net income (loss)

Total assets (liabilities)

Average assets (liabilities)

At and For the Three Months Ended September 30, 2022

Net interest income

Provision for credit losses

Other expense

Net income (loss)

Total assets (liabilities)

Average assets (liabilities)

At and For the Nine Months Ended September 30, 2023

Net interest income

Provision for credit losses

Other expense

Net income (loss)

Total assets (liabilities)

Average assets (liabilities)

At and For the Nine Months Ended September 30, 2022

Net interest income

Provision for credit losses

Other expense

Net income (loss)

Total assets (liabilities)

Average assets (liabilities)

At March 31, 2024 and December 31, 2023, United’s investment (maximum exposure to loss) in these low income housing and community development partnerships were $ 90,919 and $ 87,554 , respectively, while related unfunded commitments were $ 65,039 and $ 63,539 , respectively.

As of March 31, 2024, United expects to recover its remaining investments through the use of the tax credits that are generated by the investments.

SUBSEQUENT EVENT

Agreement to Acquire Piedmont Bancorp, Inc.

On May 9, 2024, United entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Piedmont Bancorp, Inc., a Georgia corporation (“Piedmont”).

The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Piedmont will merge with and into United (the “Merger”), with United as the surviving corporation in the Merger.

Immediately following

the Merger, Piedmont’s wholly-owned subsidiary, The Piedmont Bank, a state bank chartered under the laws of the State of Georgia, will merge with and into United’s wholly-owned subsidiary, United Bank, a state bank chartered under the laws of the Commonwealth of Virginia (the “Bank Merger”), with United Bank as the surviving bank in the Bank Merger.

The Merger Agreement was approved and adopted by the board of directors of each of United and Piedmont.

Piedmont is a well-capitalized, single bank holding company headquartered in Atlanta, Georgia

with total assets of approximately $ 2.1 billion, total loans of approximately $ 1.7 billion, total liabilities of approximately $ 1.9 billion, total deposits of approximately $ 1.8 billion, and total shareholders’ equity of approximately $ 195 million as of March 31, 2024.

Piedmont is the holding company for The Piedmont Bank, a Georgia state-chartered bank, with sixteen locations

in the State of Georgia.

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock, $ 0.01 par value, of Piedmont (“Piedmont Common Stock”) outstanding immediately prior to the Effective Time, other than certain shares of Piedmont Common Stock held by United and its subsidiaries, will be converted into the right to receive, without interest, (a) 0.300 of a share (the “Exchange Ratio”) of common stock, $ 2.50 par value, of United (“United Common Stock” and such consideration is hereinafter referred to as the “Merger Consideration”) and (b) cash in lieu of fractional shares.

At the Effective Time, (i) each option to purchase shares of Piedmont Common Stock will fully vest and will be cashed out based on a formula that takes into account the difference between the exercise price and the volume-weighted average of the closing sales price on Nasdaq of United Common Stock for the 10 full trading days ending on the second trading day immediately preceding the Effective Time and the Exchange Ratio, (ii) each warrant to purchase shares of Piedmont Common Stock will fully vest and holders will have the option to convert into the right to receive shares of United Common Stock based on the exchange ratio or be cashed out based on the same formula applicable to option holders, and (iii) each restricted stock grant, restricted stock unit grant and any other outstanding equity award with respect to Piedmont Common Stock that is subject to vesting will fully vest and be entitled to receive the Merger Consideration.

The completion of the Merger

and the Bank Merger are

subject to the satisfaction of customary closing conditions, including receipt of regulatory approvals from the Board of Governors of the Federal Reserve System and the Virginia Bureau of Financial Institutions, regulatory filings with the Georgia Department of Banking and Finance, and the approval by the stockholders of Piedmont.

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