What changed in this filing

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Item 1. Business

2025-02-28 compared with 2024-02-29 · 97 added, 126 removed, 326 unchanged (41% of the section changed)

13 unchanged sentences

Business of United

As a financial holding company, United’s present businesses are community banking and mortgage banking.

As a financial holding company, United’s present business is community banking.

As of December 31, 2024, United’s consolidated assets approximated $30.0 billion and total shareholders’ equity approximated $5.0 billion.

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Management continues to consider such opportunities as they arise, and in this regard, management from time to time makes inquiries, proposals, or expressions of interest as to potential opportunities, although no agreements or understandings to acquire other banks or bank holding companies or non-banking subsidiaries or to engage in other nonbanking activities, other than those identified herein, presently exist.

On January 10, 2025, United consummated its acquisition of Piedmont Bancorp, Inc.

(“Piedmont”), the parent company of The Piedmont Bank, a Georgia state-chartered bank, with sixteen locations in the State of Georgia.

Piedmont was a single bank holding company headquartered in Atlanta, Georgia with total assets of approximately $2.4 billion, total loans of approximately $2.1 billion, total liabilities of approximately $2.2 billion, total deposits of approximately $2.1 billion, and total shareholders’ equity of approximately $202 million as of the merger date.

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

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Business of Subsidiaries

United, through its subsidiaries, engages primarily in community banking and mortgage banking offering most types of business permitted by law and regulation.

United, through its subsidiaries, engages primarily in community banking offering most types of business permitted by law and regulation.

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

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United Bank provides services to its correspondent banks such as the buying and selling of federal funds.

George Mason Mortgage, LLC (“George Mason”), a wholly-owned subsidiary of United Bank, is engaged in the operation of a general mortgage and agency business, including the origination and acquisition of residential real estate loans for resale and generally the activities commonly conducted by a mortgage banking company.

Residential real estate loans are sold without the servicing rights retained.

These loans are for single-family, owner-occupied residences with either adjustable or fixed rate terms, with a variety of maturities tailored to effectively serve its markets.

Crescent Mortgage Company (“Crescent”), a wholly-owned subsidiary of United Bank, is a mortgage company approved to originate loans in 48 states partnering with community banks, credit unions and mortgage brokers.

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

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

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

During the fourth quarter of 2023, Crescent exited the third-party origination (“TPO”) business.

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

At December 31, 2023, 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.

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

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Lending Activities

United’s loan and lease portfolio, net of unearned income, increased $800.9 million or 3.90% in 2023 due mainly to loan growth in almost all major categories of loans.

United’s loan and lease portfolio, net of unearned income, increased $314.4 million or 1.47% in 2024 due mainly to loan growth in three major loan categories.

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

Since year-end 2022, commercial, financial and agricultural loans increased $264.5 million or 2.28%.

Since year-end 2023, commercial, financial and agricultural loans were flat, decreasing $8.0 million or less than 1%.

In particular, commercial real estate loans increased $213.1 million or 2.56% while commercial loans (not secured by real estate) decreased $221.1 million or 6.19%.

Within commercial loans (not secured by real estate), Payment Protection Program (“PPP”) loans declined $14.8 million.

Construction and land development loans increased $360.8 million or 11.46%, residential real estate loans increased $236.1 million or 4.48%, and consumer loans decreased $281.6 million or 26.45% due mainly to a decrease in indirect automobile financing.

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Consumer loans are secured by automobiles, boats, recreational vehicles, and other personal property.

Personal loans, student loans and unsecured credit card receivables are also included as consumer loans.

Personal loans and unsecured credit card receivables are also included as consumer loans.

United monitors the risk associated with these types of loans by monitoring such factors as portfolio growth, lending policies and economic conditions.

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United may from time to time make loans to borrowers and/or on properties outside of its primary market area as an accommodation to its existing customers.

United Bank, George Mason, and Crescent originate and acquire residential real estate loans for resale in the secondary market.

United Bank originates residential real estate loans for resale in the secondary market.

Mortgage loan originations are generally intended to be sold in the secondary market on a best efforts or mandatory basis.

Depending on the pricing in the marketplace, servicing rights are either sold or retained.

Servicing rights are not retained.

During 2024, United originated $645.9 million of real estate loans for sale in the secondary market and sold $657.8 million of loans designated as held for sale in the secondary market.

2 unchanged sentences

(i) loan origination fees;

(ii) gains or losses from the sale of loans, (iii) interest earned on mortgage loans during the period that they are held by United pending sale, if any;

and (iv) income on mortgage loans with servicing retained.

Loan Servicing

United through its mortgage banking subsidiary, Crescent, may retain the rights to service a portion of the loans sold in the third-party market, as part of its mortgage banking activities, for which United receives service fee income.

In addition, at certain times United may purchase rights to service from third parties.

These rights are known as mortgage servicing rights, or MSRs, where the owner of the MSR acts on behalf of the mortgage loan owner and has the contractual right to receive a stream of cash flows in exchange for performing specified mortgage servicing functions.

These duties typically include, but are not limited to, performing loan administration, collection, and default activities, including the collection and remittance of loan payments, responding to customer inquiries, accounting for principal and interest, holding custodial (impound) funds for the payment of property taxes and insurance premiums, counseling delinquent mortgagors, modifying loans and supervising foreclosures and property dispositions.

United subservices the duties and responsibilities obligated to the owner of the MSR to a third party provider for which we pay a fee.

(ii) gains or losses from the sale of loans;

and (iii) interest earned on mortgage loans during the period that they are held by United pending sale, if any.

Investment Activities

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Interest and dividends on securities for the years of 2024, 2023, and 2022 were $133.3 million, $151.1 million, and $114.5 million, respectively.

For the year of 2023, United realized net losses on sales of securities of $7.7 million.

For the years of 2022 and 2021, United realized net gains on sales of securities of $2 thousand and $2.8 million, respectively.

For the year of 2024 and 2023, United realized net losses on sales of securities of $11.7 million and $7.7 million, respectively.

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

Human Capital

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

As of December 31, 2023, United and its subsidiaries had 2,635 employees and officers.

Of the 2,635 employees and officers, 2,298 are employed in the community banking segment, 265 are employed in the mortgage banking segment and 72 are in a general support and administrative function for the Company.

As of December 31, 2024, United and its subsidiaries had 2,553 actual employees and officers.

Of the 2,553 actual employees and officers, 2,475 are employed in the community banking segment and 78 are in a general support and administrative function for the Company.

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

We emphasize positive attitudes, communication, teamwork, goal attainment, personal growth, and the pursuit of excellence when it comes to delivering high-quality service to our customers and fellow employees.

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

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

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

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

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

We are committed to providing equal opportunity to and avoiding unlawful discrimination against all applicants and employees and attracting, retaining and promoting top quality talent regardless of personal aspects such as sex, sexual orientation, gender identity, race, color, national origin and age.

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

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

We are dedicated to providing a workplace for our employees that is supportive, and free of any form of unlawful discrimination or harassment;

rewarding and recognizing our employees based on their individual results and performance as well as that of their department and the company overall;

and recognizing and respecting all of the characteristics and differences that make each of our employees unique.

United offers employees a way to report confidential and anonymous issues of concern through our website.

Whether it is a compliance or regulatory violation, wrongdoing, improper conduct, or harassment, the confidential report will be instantly and discreetly forwarded for review.

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

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

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

is reflective of the communities we serve;

celebrates diversity of thought, backgrounds, and experience;

promotes respect and a shared purpose;

and aligns with our core values.

United has a cross-functional Diversity, Equity, and Inclusion Council (“DE&I Council”) to advise executive and senior leadership on the Company’s diversity, equity, and inclusion strategy and to implement and manage programs to accomplish and support these priorities.

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

In 2023, 100% of new hires completed implicit bias training and new supervisors participated in cultivating inclusive team workshops.

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

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

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

Whether it is a compliance or regulatory violation, wrongdoing, improper conduct, or harassment, the confidential report will be instantly and discreetly forwarded for review.

United faces a high degree of competition in all of the markets it serves.

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Through its acquisition of Community Bankers Trust, United added new markets in Baltimore and Annapolis, Maryland and Lynchburg and Richmond, Virginia as well as the Northern Neck of Virginia.

United considers all of the above locations to be the primary market areas for the business of its banking and mortgage banking subsidiaries.

United considers all of the above locations to be the primary market areas for its business.

With prior regulatory approval, Virginia banks are permitted unlimited branch banking throughout each state.

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These holding companies are headquartered in various states and control banks throughout West Virginia, Virginia, North Carolina and South Carolina, which compete for business as well as for the acquisition of additional banks.

For further discussion, see the section captioned “United operates in a highly competitive market” in Item 1A.

Risk Factors.

Regulation and Supervision

United, as a financial holding company, is subject to the restrictions of the Bank Holding Company Act of 1956, as amended, and is registered pursuant to its provisions.

As such, United is subject to the reporting requirements of and examination by the Board of Governors of the Federal Reserve System (“Board of Governors”).

The Bank Holding Company Act prohibits the acquisition by a bank holding company of direct or indirect ownership of more than five percent of the voting shares of any bank within the United States without prior approval of the Board of Governors.

As such, United is subject to the reporting requirements of and examination by the Board of Governors of the Federal Reserve System (“Federal Reserve Board”).

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

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

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

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

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

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

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

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

As a financial holding company doing business in West Virginia, United is also subject to regulation and examination by the West Virginia Board of Banking and Financial Institutions (the “West Virginia Banking Board”) and must submit annual reports to the West Virginia Banking Board.

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

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

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

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

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

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

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

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

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

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

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United Bank is also subject to limitations under Virginia state law regarding the level of dividends that may be paid.

Limitations on United’s ability to receive dividends from United Bank could have a material adverse effect on its liquidity and ability to pay dividends on its common stock or interest and principal on its debt, and ability to fund purchases of its common stock.

In addition, United and United Bank are subject to other regulatory policies and requirements relating to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums.

2 unchanged sentences

In addition, in the current financial and economic environment, the Federal Reserve Board has indicated that bank holding companies should carefully review their dividend policy and has discouraged payment ratios that are at maximum allowable levels unless both asset quality and capital are very strong.

In July 2019, the federal bank regulators adopted final rules (the “Capital Simplifications Rules”) that, among other things, eliminated the standalone prior approval requirement in the Basel III Capital Rules for any repurchase of common stock.

In certain circumstances, United’s repurchases of its common stock may be subject to a prior approval or notice requirement under other regulations, policies or supervisory expectations of the Federal Reserve Board.

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

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

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

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

corporations.

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

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

On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), into law.

The Dodd-Frank Act significantly changes regulation of financial institutions and the financial services industry.

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

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

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

establishing strengthened capital standards for banks, and disallowing trust preferred securities as qualifying for Tier 1 capital (subject to certain grandfather provisions for existing trust preferred securities);

establishing new minimum mortgage underwriting standards;

granting the Federal Reserve Board the power to regulate debit card interchange fees;

and implementing corporate governance changes.

On May 24, 2018, President Trump signed into law the “Economic Growth, Regulatory Relief, and Consumer Protection Act (the EGRRCPA Act)” which provides certain limited amendments to the Dodd-Frank Act, as well as certain targeted modifications to other post-financial crisis regulatory requirements.

In addition, the legislation establishes new consumer protections and amends various securities- and investment company-related requirements.

The EGRRCPA Act primarily amends several other laws, including the Truth in Lending Act (TILA), Federal Credit Union Act, Federal Deposit Insurance Act, Fair Credit Reporting Act (FCRA) and Securities Act of 1933.

The Act is divided into six titles, which aim to:

improve consumer access to mortgage credit (Title I);

provide regulatory relief and protect consumer access to credit (Title II);

protect the credit information of consumers, including veterans and servicemembers (Title III);

tailor regulations for certain bank holding companies, including raising the threshold levels for exemption from certain prudential standards and stress testing (Title IV);

encourage capital formation by reforming certain Securities and Exchange Commission (SEC) regulations (Title V);

and protect student borrowers (Title VI).

Deposit Insurance

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

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

The final rule redefined the assessment base used for calculating deposit insurance assessments.

Specifically, the rule bases assessments on an institution’s total assets less tangible capital, as opposed to total deposits.

Since the new base is larger than the prior base, the FDIC also proposed lowering assessment rates so that the rules would not significantly alter the total amount of revenue collected from the industry.

The new assessment scale ranges from 2.5 basis points for the least risky institutions to 45 basis points for the riskiest.

As part of its changes in April 2011, the FDIC established a new methodology for determining assessment rates for large and highly complex institutions, as defined in the rules.

In October 2012, the FDIC announced revised changes to some of the definitions used to determine assessment rates for these large and highly complex insured depository institutions.

The rule generally applies to FDIC-regulated banks with assets greater than $10 billion and took effect April 1, 2013.

In the second quarter of 2018, United Bank was reclassified as a large institution for deposit insurance assessment purposes.

Generally, this new classification resulted in higher FDIC insurance premiums.

On September 30, 2018, the Deposit Insurance Fund Reserve Ratio reached 1.36%, exceeding the statutorily required minimum reserve ratio of 1.35% ahead of the September 30, 2020, deadline required under the Dodd-Frank Act.

FDIC regulations provide for two changes to deposit insurance assessments upon reaching the minimum:

(1) surcharges on insured depository institutions with total consolidated assets of $10 billion or more (large banks) ceased on December 28, 2018;

and (2) small banks will receive assessment credits for the portion of their assessments that contributed to the growth in the reserve ratio from between 1.15% and 1.35%, to be applied when the reserve ratio is at or above 1.38%.

United benefited from both these changes.

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

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

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

On November 16, 2023, the FDIC Board of Directors approved a final rule to implement a special assessment to recover the loss to the DIF associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.

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

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

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

On November 16, 2023, the FDIC issued a final rule to implement a special assessment to recover the loss to the DIF associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.

The Federal Deposit Insurance Act (“FDI Act”) requires the FDIC to take this action in connection with the systemic risk determination announced on March 12, 2023.

The special assessment did not apply to any banking organization (defined to include FDIC-insured financial institutions that are not subsidiaries of a holding company and FDIC–insured financial institutions that are subsidiaries of a holding company with one or more FDIC–insured financial institution subsidiaries) with less than $5 billion in total consolidated assets.

The FDIC estimated that of the total cost of the failures of Silicon Valley Bank and Signature Bank of approximately $16.3 billion was attributable to the protection of uninsured depositors.

The FDIC estimated in November 2023 that of the total cost of the failures of Silicon Valley Bank and Signature Bank of approximately $16.3 billion was attributable to the protection of uninsured depositors.

As of September 30, 2024, the FDIC’s total loss estimate was $24.1 billion, of which $18.9 billion will be recovered through the special assessment.

The assessment base for the special assessment is equal to an insured depository institution’s (“IDI’s”) estimated uninsured deposits reported as of December 31, 2022, adjusted to exclude the first $5 billion, applicable either to the IDI, if an IDI is not a subsidiary of a holding company, or at the banking organization level, to the extent that an IDI is part of a holding company with one or more subsidiary IDIs.

The special assessment will be collected at an annual rate of approximately 13.4 basis points for an anticipated total of eight quarterly assessment periods.

The special assessment will be collected beginning with the first quarterly assessment period of 2024 (i.e., January 1 through March 31, 2024) with an invoice payment date of June 28, 2024.

Because the estimated loss pursuant to the systemic risk determination will be periodically adjusted, the FDIC could:

(1) cease collection early, if it has collected enough to recover actual or estimated losses;

(2) extend the special assessment collection period one or more quarters beyond the initial eight-quarter collection period, if actual or estimated losses exceed the amounts collected;

and (3) impose a final shortfall special assessment on a one-time basis after the receiverships for Silicon Valley Bank and Signature Bank terminate, if actual losses exceed the amounts collected.

As a result of this final rule, United accrued $12.0 million in the fourth quarter of 2023 to pay the special assessment over the next eight assessment periods.

United expects the special assessments will be tax deductible.

United’s FDIC insurance expense totaled $30.4 million, $12.0 million, and $8.3 million in 2023, 2022 and 2021, respectively.

The collection of this special assessment began with the first quarterly assessment period of 2024 (i.e., January 1 through March 31, 2024) with an invoice payment date of June 28, 2024.

In June 2024, due to the increased estimate of losses, the FDIC announced that it projects that the special assessment will be collected for an additional two quarters beyond the initial eight-quarter collection period, at a lower rate.

The updated assessment was made under the FDIC’s final rule whereby the estimated loss pursuant to the systemic risk determination can periodically be adjusted.

The FDIC can also:

(1) cease collection early and (2) impose a final shortfall special assessment on a one-time basis after the receiverships for Silicon Valley Bank and Signature Bank terminate, if actual losses exceed the amounts collected.

In June 2024, the FDIC announced that it projects that the special assessment will be collected for an additional two quarters beyond the initial eight-quarter collection period, at a lower rate.

Capital Requirements

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The severity of the constraints depends on the amount of the shortfall and the institution’s “eligible retained income” (that is, the greater of (i) net income for the preceding four quarters, net of distributions and associated tax effects not reflected in net income and (ii) the average net income over the preceding four quarters).

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

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

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

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

The Capital Simplification Rules took effect for United and United Bank as of January 1, 2020.

These limitations did not impact our regulatory capital during any of the reported periods.

In addition, under the general risk-based capital rules, the effects of accumulated other comprehensive income items included in capital were excluded for the purposes of determining regulatory capital ratios.

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

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

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

GAAP (as of January 2020) to implement CECL before the end of 2020 the option to delay for two years an estimate of the effect of CECL on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period (five-year transition option).

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In December 2017, the Basel Committee published standards that it described as the finalization of the Basel III post-crisis regulatory reforms.

Among other things, these standards revise the Basel Committee’s standardized approach for credit risk (including by recalibrating risk weights and introducing new capital requirements for certain “unconditionally cancellable commitments,” such as unused credit card lines of credit) and provides a new standardized approach for operational risk capital.

Among other things, these standards revised the Basel Committee’s standardized approach for credit risk (including by recalibrating risk weights and introduction of new capital requirements for certain “unconditionally cancellable commitments,” such as unused credit card lines of credit) and provides a new standardized approach for operational risk capital.

Under the current U.S.

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In July 2023, the federal banking regulators proposed revisions to the Basel III Capital Rules to implement the Basel Committee’s 2017 standards and make other changes to the Basel III Capital Rules.

The proposal introduces revised credit risk, equity risk, operational risk, credit valuation adjustment risk and market risk requirements, among other changes.

However, the revised capital requirements of the proposed rule would not apply to United or United Bank because they have less than $100 billion in total consolidated assets and trading assets and liabilities below the threshold for market risk requirements.

The proposal introduced revised credit risk, equity risk, operational risk, credit valuation adjustment risk and market risk requirements, among other changes.

However, the revised capital requirements of the proposed rule would not apply to United or United Bank because they each have less than $100 billion in total consolidated assets and trading assets and liabilities below the threshold for market risk requirements.

The Federal Reserve has indicated that it plans to work with other federal banking regulators on a revised proposal in 2025.

Failure to meet statutorily mandated capital guidelines or more restrictive ratios separately established for a financial institution could subject United to a variety of enforcement remedies, including issuance of a capital directive, the termination of deposit insurance by the FDIC, a prohibition on accepting or renewing brokered deposits, limitations on the rates of interest that the institution may pay on its deposits and other restrictions on its business.

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well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.

Effective January 1, 2015, under the Basel III Capital Rules, the current prompt corrective action requirements for an institution to be “well-capitalized” is a total risk-based capital ratio of 10% or greater, a Tier 1 risk-based capital ratio of 8% or greater, a CET1 ratio of 6.5% or greater and a Tier 1 leverage ratio of 5 percent or greater.

United Bank was considered a “well capitalized” institution as of December 31, 2024.

Well-capitalized institutions are permitted to engage in a wider range of banking activities, including among other things, the accepting of “brokered deposits,” and the offering of interest rates on deposits higher than the prevailing rate in their respective markets.

If an institution is categorized as undercapitalized, significantly undercapitalized or critically undercapitalized, it is required to submit a capital restoration plan to its appropriate federal bank regulator.

For such capital restoration plan to be accepted by the appropriate federal bank regulator, a bank holding company must guarantee that a subsidiary depository institution will comply with its capital restoration plan, subject to certain limitations and must provide assurances of performance.

The obligation of a controlling bank holding company under the FDI Act to fund a capital restoration plan is limited to the lesser of 5% of an undercapitalized subsidiary’s assets or the amount required to meet regulatory capital requirements.

If a depository institution fails to submit an acceptable capital restoration plan or fails to implement an approved plan, it is treated as if it is significantly undercapitalized.

The FDICIA imposes restrictions and prohibitions on institutions that are undercapitalized, significantly undercapitalized or critically undercapitalized with respect to, among other things, asset size, acquisitions, establishing branches, engaging in new activities, capital distributions and transactions with affiliates.

Community Reinvestment Act

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

In 2023, United Bank received a CRA Performance Evaluation from the Federal Reserve Bank of Richmond (the “FRB”) with a rating of “Satisfactory.”

In 2023, the year of our most recent CRA exam, United Bank received a CRA Performance Evaluation from the Federal Reserve Bank of Richmond (the “FRB”) with a rating of “Satisfactory.”

On October 24, 2023, the Federal Reserve Board, the FDIC, and the Office of the Comptroller of the Currency (“OCC”) published a final CRA rule that creates a modernized rule for the banking industry.

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and (4) tailor CRA evaluations and data collection to bank size and type.

Most of the rule’s requirements will be applicable beginning January 1, 2026.

The remaining requirements, including the data reporting requirements, will be applicable on January 1, 2027.

We will evaluate the impact of these changes to these new CRA rules and their impact to our financial condition, results of operations, and/or liquidity, which is not known at this time.

The final rule is currently enjoined as to the plaintiff trade associations while a federal court considers a lawsuit challenging the rule.

Deposit Acquisition Limitation

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

United’s bank subsidiary must comply with the applicable provisions of these consumer protection laws and regulations as part of its ongoing customer relations.

As discussed above, the Dodd-Frank Act centralized responsibility for consumer financial protection by creating the CFPB, and giving it responsibility for implementing, examining and enforcing compliance with federal consumer protection laws.

United Bank must comply with the applicable provisions of these consumer protection laws and regulations as part of its ongoing customer relations.

The Dodd-Frank Act centralized responsibility for consumer financial protection by creating the CFPB, and giving it responsibility for implementing, examining and enforcing compliance with federal consumer protection laws.

The CFPB has broad rulemaking, supervisory and enforcement authority over consumer financial products and services, including deposit products, residential mortgages, home-equity loans, and credit cards.

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Banks with more than $10 billion in assets, such as United Bank, are subject to supervision by the CFPB with respect to these federal consumer financial laws.

In October 2024, the CFPB issued a final rule requiring providers of payment accounts or products, such as a bank, to make data available to consumers upon request regarding the products or services they obtain from the provider, and to third parties, with the consumer’s express authorization, for the purpose of such third parties providing the consumer with financial products or services requested by the consumer.

Data required to be made available under the rule includes transaction information, account balance, account and routing numbers, terms and conditions, upcoming bill information, and certain account verification data.

For banks with at least $10 billion and less than $250 billion in total assets, compliance with the rule is required by April 1, 2027.

In December 2024, the CFPB issued a final rule that, among other things, amends Regulation Z (otherwise known as the “Truth In Lending Act”) and impacts extensions of overdraft credit offered by financial institutions with more than $10 billion in assets.

The final rule defines overdraft credit as generally including consumer credit extended by a financial institution to pay a transaction from a checking or other transaction account (other than a prepaid account) held at the financial institution when the consumer has insufficient or unavailable funds in that account.

The final rule requires that extensions of overdraft credit adhere to consumer protections required of similarly situated products, unless the overdraft fee is at or below the institution’s costs and losses as determined by (i) calculating its own costs and losses using a standard set forth in the rule;

or (ii) relying on a benchmark flat fee of five dollars.

An overdraft that incurs charges that exceed costs and losses will become a covered overdraft credit and subject to Regulation Z which requires that lenders disclose borrowing costs, interest rates and fees upfront and in clear language so consumers can understand all the terms and make informed decisions.

Furthermore, covered overdraft credit extensions must be put in a credit account and may not be structured as a negative balance on a checking or other transaction account.

The provisions of the final rule become effective on October 1, 2025.

Notwithstanding the forgoing, the recent changes in the U.S.

presidential administration and the composition of the U.S.

Congress is expected to lead to potentially significant changes to the existence, priorities, scope, practices and/or staffing levels of various regulatory agencies.

For example, in February 2025, the Trump administration directed the CFPB to, among other things, suspend rule implementations and cease supervision activities.

Anti-Money Laundering and the USA Patriot Act

A major focus of governmental policy on financial institutions in recent years has been aimed at combating money laundering and terrorist financing.

The USA PATRIOT Act of 2001, or the USA Patriot Act, substantially broadened the scope of United States anti-money laundering laws and regulations by imposing significant new compliance and due diligence obligations, creating new crimes and penalties and expanding the extra-territorial jurisdiction of the United States.

Bank Secrecy Act (the “BSA”) and the USA PATRIOT Act of 2001 (the “USA Patriot Act”) require financial institutions to develop programs to prevent them from being used for, and to detect and deter, money laundering, terrorist financing, and other illegal activities.

The USA Patriot Act substantially broadened the scope of United States anti-money laundering laws and regulations by imposing significant

new compliance and due diligence obligations, creating new crimes and penalties and expanding the extra-territorial jurisdiction of the United States.

Financial institutions are also prohibited from entering into specified financial transactions and account relationships and must use enhanced due diligence procedures in their dealings with certain types of high-risk customers and implement a written customer identification program.

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Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations.

The Anti-Money Laundering Act of 2020 (“AMLA”), which amends the Bank Secrecy Act of 1970 (“BSA”), was enacted in January 2021.

The Anti-Money Laundering Act of 2020 (the “AMLA”), which amends the BSA, was enacted in January 2021.

The AMLA is intended to be a comprehensive reform and modernization to U.S.

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and expands BSA whistleblower incentives and protections.

Many of the statutory provisions in the AMLA will require additional rulemakings, reports and other measures, and the impact of the AMLA will depend on, among other things, rulemaking and implementation guidance.

Many of the statutory provisions in the AMLA require additional rulemakings, reports and other measures, and the impact of the AMLA depends on, among other things, rulemaking and implementation guidance.

In June 2021, the Financial Crimes Enforcement Network, a bureau of the U.S.

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corruption, cybercrime, terrorist financing, fraud, transnational crime, drug trafficking, human trafficking and proliferation financing.

In August 2024, Financial Crimes Enforcement Network (“FinCEN”), which drafts and enforces regulations implementing the BSA and other anti-money laundering legislation, adopted a rule extending anti-money laundering obligations, including maintenance of an anti-money laundering program and filing certain reports with FinCEN, to registered investment advisers.

Compliance with these requirements is required beginning on January 1, 2026.

Incentive Compensation

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In April and May of 2016, the Federal Reserve Board, other federal banking agencies and the SEC (the “Agencies”) jointly published proposed rulemaking designed to implement provisions of the Dodd-Frank Act prohibiting incentive compensation arrangements that would encourage inappropriate risk taking at a covered institution, which includes a bank or bank holding company with $1 billion or more of assets, such as United.

The proposed rule expanded beyond the June 2010 principals based guidance and broadened the scope to include community banks.

The proposed rules (i) prohibit incentive-based compensation arrangements that encourage executive officers, employees, directors or principal shareholders to expose the institution to inappropriate risks by providing excessive compensation (based on the standards for excessive compensation adopted pursuant to the FDIA) and (ii) prohibit incentive-based compensation arrangements for executive officers, employees, directors or principal shareholders that could lead to a material financial loss for the institution.

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

The proposed rule has not been finalized.

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

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Issuers that do not adopt and comply with the compensation recovery policies or those that do not disclose the policy will be subject to delisting.

United adopted a “clawback” policy on November 17, 2023 and is filed as Exhibit 97 to this Form 10-K.

United adopted a “clawback” policy on November 17, 2023.

This policy is included as Exhibit 97 to this Form 10-K.

Cybersecurity

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

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

Banking organizations are required to notify their primary banking regulator within 36 hours of determining that a “computer-security incident” has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, the banking organization’s ability to carry out banking operations or deliver banking products and services to a material portion of its customer base, its businesses and operations that would result in material loss, or its operations that would impact the stability of the United States.

In July 2023, the SEC issued a final rule, “Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure,” which requires registrants to provide investors, through enhanced and standardized disclosures, greater insight into material cybersecurity incidents and the registrants’ cybersecurity risk management, strategy and governance.

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

What changed 10-K

Item 1. Business