Item 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Congress passed the Private Securities Litigation Act of 1995 to encourage corporations to provide investors with information about the company’s anticipated future financial performance, goals, and strategies. The act provides a safe haven for such disclosure; in other words, protection from unwarranted litigation if actual results are not the same as management expectations.
United desires to provide its shareholders with sound information about past performance and future trends. Consequently, any forward-looking statements contained in this report, in a report incorporated by reference to this report, or made by management of United in this report, in any other reports and filings, in press releases and in oral statements, involve numerous assumptions, risks and uncertainties. Forward-looking statements can be identified by the use of the words “expect,” “may,” “could,” “intend,” “project,” “estimate,” “believe,” “anticipate,” and other words of similar meaning. Such forward-looking statements are based on assumptions and estimates, which although believed to be reasonable, may turn out to be incorrect. Therefore, undue reliance should not be placed upon these estimates and statements. United cannot assure that any of these statements, estimates, or beliefs will be realized and actual results may differ from those contemplated in these “forward-looking statements.” United undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.
The discussion in Item 1A, “Risk Factors,” lists some of the factors that could cause United’s actual results to vary materially from those expressed or implied by any forward-looking statements, and such discussion is incorporated into this discussion by reference.
DEVELOPMENTS
On January 10, 2025, United consummated its acquisition of Atlanta-based Piedmont Bancorp, Inc. (“Piedmont”). As of January 10, 2025, Piedmont had 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.
During the first quarter of 2024, United consolidated its mortgage delivery channels by consolidating George Mason’s and Crescent’s mortgage origination and sales business with United Bank. United had previously exited the third-party origination (“TPO”) business during the fourth quarter of 2023 as part of this consolidation. United continues to offer mortgage products through its bank mortgage channel with previous George Mason offices re-branded under the United umbrella. The consolidation streamlined operations and will enhance the customer experience.
ECONOMIC AND TRADE POLICY UNCERTAINTY
United continues to monitor the potential impact of evolving trade policies, including the threat of additional tariffs imposed by the United States. While no specific tariffs have been implemented during the reporting period that materially affect United’s operations, the potential for future changes in cross-border trade arrangements and import/export duties contributes to broader economic uncertainty. Management has considered these risks in its forward-looking assessments and determined that, as of the reporting date, there are no material adverse effects on United’s financial position, results of operations, or estimates related to credit losses or asset impairments.
THE ONE BIG BEAUTIFUL BILL ACT
On July 4, 2025, President Trump signed into law H.R. 1, The One Big Beautiful Bill Act (“OBBBA”). There was no significant financial statement impact reflected in the year of 2025. However, the Company will continue to evaluate and apply the provisions of the OBBBA but does not expect any material impact on its consolidated financial statements.
INTRODUCTION
The following discussion and analysis presents the more significant changes in financial condition as of December 31, 2025 and 2024 and the results of operations of United and its subsidiaries for each of the years then ended. This discussion and the consolidated financial statements and the notes to Consolidated Financial Statements include the accounts of United Bankshares, Inc. and its wholly-owned subsidiaries, unless otherwise indicated. Management has evaluated all significant events and transactions that occurred after December 31, 2025, but prior to the date these financial statements were issued, for potential recognition or disclosure required in these financial statements. Refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K filed with the SEC on February 28, 2025 (the 2024 Form 10-K ) for a discussion and analysis of the more significant factors that affected periods prior to 2025.
This discussion and analysis should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes thereto, which are included elsewhere in this document.
USE OF NON-GAAP FINANCIAL MEASURES
This discussion and analysis contains certain financial measures that are not recognized under GAAP. Under SEC Regulation G, public companies making disclosures containing financial measures that are not in accordance with GAAP must also disclose, along with each “non-GAAP” financial measure, certain additional information, including a reconciliation of the non-GAAP financial measure to the closest comparable GAAP financial measure, as well as a statement of the company’s reasons for utilizing the non-GAAP financial measure.
Generally, United has presented a non-GAAP financial measure because it believes that this measure provides meaningful additional information to assist in the evaluation of United’s results of operations or financial position. Presentation of a non-GAAP financial measure is consistent with how United’s management evaluates its performance internally and this non-GAAP financial measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the banking industry. Specifically, this discussion contains certain references to financial measures identified as tax-equivalent (“FTE”) net interest income and return on average tangible equity. Management believes these non-GAAP financial measures to be helpful in understanding United’s results of operations or financial position.
Net interest income is presented in this discussion on a tax-equivalent basis. The tax-equivalent basis adjusts for the tax-favored status of income from certain loans and investments. Although this is a non-GAAP measure, United’s management believes this measure is more widely used within the financial services industry and provides better comparability of net interest income arising from taxable and tax-exempt sources. United uses this measure to monitor net interest income performance and to manage its balance sheet composition.
Average tangible equity is calculated as GAAP total shareholders’ equity minus total intangible assets. Tangible equity can thus be considered a more conservative valuation of the company. When considering net income, a return on average tangible equity can be calculated. Management provides a return on average equity to facilitate the understanding of as well as to assess the quality and composition of United’s capital structure. This measure, along with others, is used by management to analyze capital adequacy and performance.
However, this non-GAAP information should be considered supplemental in nature and not as a substitute for related financial information prepared in accordance with GAAP. Where the non-GAAP financial measure is used, the comparable GAAP financial measure, as well as reconciliation to that comparable GAAP financial measure, as well as a statement of the company’s reasons for utilizing the non-GAAP financial measure, can be found within this discussion and analysis. Investors should recognize that United’s presentation of this non-GAAP financial measure might not be comparable to a similarly titled measure at other companies.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
The accounting and reporting policies of United conform with U.S. generally accepted accounting principles. In preparing the consolidated financial statements, management is required to make estimates, assumptions and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions and judgments, which are reviewed with the Audit Committee of the Board of Directors, are based on information available as of the date of the financial statements. Actual results could differ from these estimates. These policies, along with the disclosures presented in the financial statement notes and in this financial review, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined. Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, management has identified the determination of the allowance for loan and lease losses, the calculation of the income tax provision, and the use of fair value measurements to account for certain financial instruments to be the accounting areas that require the most subjective or complex judgments, and as such could be most subject to revision as new information becomes available. The most significant accounting policies followed by United are presented in Note A, Notes to Consolidated Financial Statements.
Allowance for Loan and Lease Losses
The allowance for loan and lease 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). Determining the allowance for loan and lease losses requires management to make estimates of expected credit losses that are highly uncertain and require a high degree of judgment. At December 31, 2025, the allowance for loan and lease losses was $297.52 million and is subject to periodic adjustment based on management’s assessment of expected credit losses in the loan portfolio. Such
adjustment from period to period can have a significant impact on United’s consolidated financial statements. To illustrate the potential effect on the financial statements of our estimates of the allowance for loan and lease losses, a 10% increase in the allowance for loan and lease losses would have required $29.75 million in additional allowance (funded by additional provision for loan and lease losses), which would have negatively impacted the year of 2025 net income by approximately $23.50 million, after-tax, or $0.17 diluted earnings per common share. Management’s evaluation of the adequacy of the allowance for loan and lease losses and the appropriate provision for loan and lease losses is based upon a quarterly evaluation of the loan portfolio. This evaluation is inherently subjective and requires significant estimates, including estimates related to the amounts and timing of future cash flows, value of collateral, losses on pools of homogeneous loans and leases based on historical loss experience, and consideration of qualitative factors such as current economic trends, all of which are susceptible to constant and significant change. The allowance allocated to specific credits and loan pools grouped by similar risk characteristics is reviewed on a quarterly basis and adjusted as necessary based upon subsequent changes in circumstances. In determining the components of the allowance for loan and lease , management considers the risk arising in part from, but not limited to, qualitative factors which include charge-off and trends, current business conditions and reasonable and supportable economic forecasts, lending policies and procedures, the size and risk characteristics of the loan portfolio, concentrations of credit, and other various factors. The methodology used to determine the allowance for loan and lease is described in Note A, Notes to Consolidated Financial Statements. A discussion of the factors to changes in the amount of the allowance for loan and lease is included in the Provision for Credit section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”). For a discussion of concentrations of credit risk, see Item 1, under the caption of Loan Concentrations in this Form 10-K.
Income Taxes
United’s calculation of income tax provision is inherently complex due to the various different tax laws and jurisdictions in which we operate and requires management’s use of estimates and judgments in its determination. The current income tax liability also includes income tax expense related to our uncertain tax positions as required in ASC Topic 740, “Income Taxes.” Changes to the estimated accrued taxes can occur due to changes in tax rates, implementation of new business strategies, resolution of issues with taxing authorities and recently enacted statutory, judicial and regulatory guidance. These changes can be material to the Company’s operating results for any particular reporting period. The analysis of the income tax provision requires an assessment of the relative risks and merits of the appropriate tax treatment of transactions, filing positions, filing methods and taxable income calculations after considering statutes, regulations, judicial precedent and other information. United strives to keep abreast of changes in the tax laws and the issuance of regulations which may impact tax reporting and provisions for income tax expense. United is also subject to audit by federal and state authorities. Because the application of tax laws is subject to varying interpretations, results of these audits may produce indicated liabilities which differ from United’s estimates and provisions. United continually evaluates its exposure to possible tax assessments arising from audits and records its estimate of probable exposure based on current facts and circumstances. The potential impact to United’s operating results for any of the changes cannot be reasonably estimated. See Note N, Notes to Consolidated Financial Statements for information regarding United’s ASC Topic 740 disclosures.
Use of Fair Value Measurements
United determines the fair value of its financial instruments based on the fair value hierarchy established in ASC Topic 820, whereby the fair value of certain assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. ASC Topic 820 establishes a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs in the methodology for determining fair value are observable or unobservable. Observable inputs reflect market-based information obtained from independent sources (Level 1 or Level 2), while unobservable inputs reflect management’s estimate of market data (Level 3). For assets and liabilities that are actively traded and have quoted prices or observable market data, a minimal amount of subjectivity concerning fair value is needed. Prices and values obtained from third party vendors that do not reflect forced liquidation or distressed sales are not adjusted by management. When quoted prices or observable market data are not available, management’s judgment is necessary to estimate fair value.
At December 31, 2025, approximately 9.47% of total assets, or $3.19 billion, consisted of financial instruments recorded at fair value. Of this total, approximately 98.95% or $3.15 billion of these financial instruments used valuation methodologies involving observable market data, collectively Level 1 and Level 2 measurements, to determine fair value. Approximately 1.05% or $33.37 million of these financial instruments were valued using unobservable market information or Level 3 measurements. Most of these financial instruments valued using unobservable market information were loans held for sale. At December 31, 2025, only $70 thousand or less than 1% of total liabilities were recorded at fair value. This entire amount was valued using methodologies involving unobservable market data. United does not believe that any changes in the unobservable inputs used to value the financial instruments mentioned above would have a material impact on United’s results of operations, liquidity, or capital resources. See Note V for additional information regarding ASC Topic 820 and its impact on United’s financial statements.
Any material effect on the financial statements related to these critical accounting areas is further discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.
2025 COMPARED TO 2024
United’s total assets as of December 31, 2025 were $33.66 billion, which was an increase of $3.64 billion or 12.11% from December 31, 2024. The acquisition of Piedmont on January 10, 2025 added $2.30 billion in total assets, including purchase accounting amounts. Portfolio loans increased $3.04 billion or 14.01%, investment securities increased $141.10 million or 4.33%, goodwill increased $129.96 million or 6.88%, other assets increased $31.76 million or 11.78%, bank-owned life insurance policies increased $49.95 million or 10.05%, bank premises and equipment increased $22.70 million or 12.20%, operating lease right-of-use assets increased $7.57 million or 9.26%, interest receivable increased $6.82 million or 6.66%, and cash and cash equivalents increased $250.01 million or 10.91%. Loans held for sale decreased $13.08 million or 29.49%. Total liabilities increased $3.13 billion or 12.52% from year-end 2024. This increase in total liabilities reflects an increase of $3.10 billion or 12.93% in deposits, an increase of $12.23 million or 5.31% in accrued and other liabilities, and an increase of $8.62 million or 9.94% in operating lease right-of-use liabilities, all mainly due to the Piedmont acquisition. Borrowings increased $13.88 million or 1.94% from year-end 2024. Shareholders’ equity increased $502.76 million or 10.07% from year-end 2024 due primarily to the acquisition of Piedmont and net earnings.
The following discussion explains in more detail the changes in financial condition by major category.
Cash and Cash Equivalents
Cash and cash equivalents at December 31, 2025 increased $250.01 million or 10.91% from year-end 2024. Net cash acquired in the Piedmont merger was $77.47 million. In particular, cash and due from banks increased $6.96 million or 2.89%, while interest-bearing deposits with other banks increased $242.96 million or 11.85% as United placed more cash in an interest-bearing account with the Federal Reserve. Federal funds sold increased $90 thousand or 7.10%. During the year of 2025, net cash of $498.91 million and $650.41 million were provided by operating and financing activities, respectively, while net cash of $899.31 million was used in investing activities. Further details related to changes in cash and cash equivalents are presented in the Consolidated Statements of Cash Flows.
Securities
Total investment securities at December 31, 2025 increased $141.10 million or 4.33%. Piedmont added $94.43 million in investment securities, including purchase accounting amounts, upon consummation of the acquisition. Securities available for sale increased $99.73 million or 3.37%. This change in securities available for sale reflects $92.99 million related to the acquisition of Piedmont, $2.26 billion in sales, maturities and calls of securities, $2.14 billion in purchases, and an increase of $117.56 million in market value. Equity securities were $34.76 million at December 31, 2025, an increase of $13.70 million or 65.07% due mainly to a net increase in fair value. Other investment securities increased $27.67 million or 9.97% from year-end 2024 due to an increase in Federal Reserve Bank stock as a result of the Piedmont acquisition and net purchases of investment tax credits.
The following table summarizes the changes in the available for sale securities since year-end 2024:
(Dollars in thousands)
December 31
December 31
Change
Change
U.S. Treasury securities and obligations of U.S.
Government corporations and agencies
State and political subdivisions
Mortgage-backed securities
Asset-backed securities
Single issue trust preferred securities
Other corporate securities
Total available for sale securities, at fair value
The following table summarizes the changes in the held to maturity securities since year-end 2024:
(Dollars in thousands)
December 31
December 31
Change
Change
State and political subdivisions
Other corporate securities
Total held to maturity securities, at amortized cost
net of allowance for credit losses of $16 thousand.
net of allowance for credit losses of $18 thousand.
At December 31, 2025, gross unrealized losses on available for sale securities were $216.64 million. Securities with the most significant gross unrealized losses at December 31, 2025 consisted primarily of agency residential mortgage-backed securities, state and political subdivision securities, agency commercial mortgage-backed securities and corporate securities.
As of December 31, 2025, United’s available for sale mortgage-backed securities had an amortized cost of $1.93 billion, with an estimated fair value of $1.79 billion. The portfolio consisted primarily of $1.47 billion in agency residential mortgage-backed securities with a fair value of $1.36 billion, $42.79 million in non-agency residential mortgage-backed securities with an estimated fair value of $38.89 million, and $416.18 million in commercial agency mortgage-backed securities with an estimated fair value of $395.07 million.
As of December 31, 2025, United’s available for sale state and political subdivisions securities had an amortized cost of $572.22 million, with an estimated fair value of $516.93 million. The portfolio relates to securities issued by various municipalities located throughout the United States, and no securities within the portfolio were rated below investment grade as of December 31, 2025.
As of December 31, 2025, United’s available for sale corporate securities had an amortized cost of $483.18 million, with an estimated fair value of $468.28 million. The portfolio consisted of $13.32 million in single issue trust preferred securities with an estimated fair value of $12.66 million. In addition to the single issue trust preferred securities, the Company held positions in various other corporate securities, including asset-backed securities with an amortized cost of $225.62 million and a fair value of $223.25 million and other corporate securities, with an amortized cost of $244.24 million and a fair value of $232.36 million.
United’s available for sale single issue trust preferred securities had a fair value of $12.66 million as of December 31, 2025. Of the $12.66 million, $7.42 million or 58.58% were investment grade rated and $5.24 million or 41.42% were unrated. The two largest exposures accounted for 100% of the $12.66 million. These included Truist Bank at $7.42 million and Emigrant Bank at $5.24 million. All single issue trust preferred securities are currently receiving full scheduled principal and interest payments.
During 2025, United did not recognize any credit losses on its available for sale investment securities. Management does not believe that any individual security with an unrealized loss as of December 31, 2025 is impaired. United believes the decline in value resulted from changes in market interest rates, credit spreads and liquidity, not a deterioration of credit. Based on a review of each of the securities in the available for sale investment portfolio, management concluded that it was more-likely-than-not that it would be able to realize the cost basis investment and appropriate interest payments on such securities. United has the intent and the ability to hold these securities until such time as the value recovers or the securities mature. As of December 31, 2025, there was no allowance for credit losses related to the Company’s available for sale securities. However, United acknowledges that any securities in an unrealized loss position may be sold in future periods in response to significant, unanticipated changes in asset/liability management decisions, future market movements or business plan changes.
Further information regarding the amortized cost and estimated fair value of investment securities, including remaining maturities as well as a more detailed discussion of management’s impairment analysis, is presented in Note C, Notes to Consolidated Financial Statements.
Loans Held for Sale
Loans held for sale were $31.28 million at December 31, 2025, a decrease of $13.08 million or 29.49% from year-end 2024. Loan sales in the secondary market exceeded originations during the year of 2025. Loan originations for the year of 2025 were $370.86 million while loan sales were $383.94 million.
Portfolio Loans
Loans, net of unearned income, increased $3.04 billion or 14.01% mainly as a result of the Piedmont acquisition which added $2.02 billion, including purchase accounting amounts, in portfolio loans. Otherwise, portfolio loans and leases, net of unearned income, grew $1.04 billion from year-end 2024. Since year-end 2024, commercial, financial and agricultural loans increased $2.39 billion or 20.14% as a result of a $1.96 billion or 22.98% increase in commercial real estate loans and a $433.47 million or 12.93% increase in commercial loans (not secured by real estate). Residential real estate loans increased $590.88 million or 10.73% and construction and land development loans increased $61.87 million or 1.76%, while consumer loans remained flat, decreasing $5.89 million or less than 1%.
The following table summarizes the changes in the major loan classes since year-end 2024:
(Dollars in thousands)
December 31
December 31
Change
Change
Loans held for sale
Commercial, financial, and agricultural:
Owner-occupied commercial real estate
Nonowner-occupied commercial real estate
Other commercial loans
Total commercial, financial, and agricultural
Residential real estate
Construction & land development
Consumer:
Bankcard
Other consumer
Total gross loans
Less: Unearned income
Total Loans, net of unearned income
The following table shows the amount of loans acquired and outstanding by major loan classes as of December 31, 2025 and 2024:
December 31, 2025
December 31, 2024
(In thousands)
Originated
Acquired
Total
Originated
Acquired
Total
Commercial, financial, and agricultural:
Owner-occupied commercial real estate
Nonowner-occupied commercial real estate
Other commercial loans
Total commercial, financial, and agricultural
Residential real estate
Construction & land development
Consumer:
Bankcard
Other consumer
Total Loans and leases
The following table shows the maturity of loans and leases, outstanding as of December 31, 2025:
(In thousands)
Less Than
One Year
One To
Five Years
Five to
Fifteen Years
Greater than
Fifteen Years
Total
Commercial, financial and agricultural:
Owner-occupied commercial real estate
Nonowner-occupied commercial real estate
Other commercial loans
Total commercial, financial, and agricultural
Residential real estate
Construction & land development
Consumer:
Bankcard
Other consumer
Total Loans and leases
At December 31, 2025, for loans and leases due after one year, interest rate information is as follows:
(In thousands)
One To
Five Years
Five to
Fifteen Years
Greater than
Fifteen Years
Total
Commercial, financial and agricultural:
Owner-occupied commercial real estate
Outstanding with fixed interest rates
Outstanding with adjustable interest rates
Total owner-occupied
Nonowner-occupied commercial real estate
Outstanding with fixed interest rates
Outstanding with adjustable interest rates
Total non-owner occupied
Other commercial loans
Outstanding with fixed interest rates
Outstanding with adjustable interest rates
Total other commercial
Residential real estate
Outstanding with fixed interest rates
Outstanding with adjustable interest rates
Total residential real estate
(In thousands)
One To
Five Years
Five to
Fifteen Years
Greater than
Fifteen Years
Total
Construction
Outstanding with fixed interest rates
Outstanding with adjustable interest rates
Total construction
Consumer:
Bankcard
Outstanding with fixed interest rates
Outstanding with adjustable interest rates
Total bankcard
Other consumer
Outstanding with fixed interest rates
Outstanding with adjustable interest rates
Total other consumer
Total outstanding with fixed interest rates
Total outstanding with adjustable rates
Total
More information relating to loans is presented in Note D, Notes to Consolidated Financial Statements.
Bank-Owned Life Insurance
The cash surrender value of bank-owned life insurance policies increased $49.95 million, of which $40.80 million was acquired from Piedmont while the remaining increase was due to an increase in the cash surrender value as a result of higher market values of underlying investments.
Other Assets
Other assets increased $31.76 million or 11.78% from year-end 2024. In particular, core deposit intangibles increased $23.40 million as the Piedmont acquisition added $32.76 million. Prepaid assets increased $13.54 million mainly due to a $9.42 million increase in the pension asset and OREO increased $8.53 million. Partially offsetting these increases in other assets was a $18.20 million decrease in deferred tax assets due an increase in fair value of securities and a $1.32 million decrease in accounts receivable.
Deposits
Deposits represent United’s primary source of funding. Total deposits at December 31, 2025 increased $3.10 billion or 12.93% due mainly to the Piedmont acquisition. Piedmont added $2.11 billion in deposits, including purchase accounting amounts. In terms of composition, noninterest-bearing deposits increased $438.22 million or 7.14% ($378.24 million added from Piedmont acquisition) while interest-bearing deposits increased $2.66 billion or 14.93% ($1.73 billion added from Piedmont acquisition) from December 31, 2024. Organically, deposits grew $993.74 million from year-end 2024.
Noninterest-bearing deposits consist of demand deposit and noninterest bearing money market (“MMDA”) account balances. The $438.22 million increase in noninterest-bearing deposits was due to a $327.80 million or 7.36% increase in commercial noninterest-bearing deposits, a $134.16 million or 9.46% increase in personal noninterest-bearing deposits, and a $25.22 million or 14.21% increase in public funds noninterest-bearing deposits. Partially offsetting these increases in noninterest-bearing deposits was a $26.28 million decrease in official checks.
Interest-bearing deposits consist of interest-bearing transactions, regular savings, interest-bearing MMDA, and time deposit account balances. Interest-bearing transaction accounts increased $720.85 million or 12.14% since year-end 2024 as the result of increases of $602.48 million in commercial interest-bearing transaction accounts and $92.47 million in public funds interest-bearing transaction accounts. Regular savings accounts increased $15.04 million or 1.20% mainly as a result of a $17.21 million increase in personal savings accounts. Interest-bearing MMDAs increased $778.90 million or 11.04%. In particular, personal MMDAs increased $62.15 million while commercial MMDAs and public funds MMDAs increased $655.60 million and $61.15 million, respectively.
Time deposits under $100,000 increased $191.42 million or 16.33% from year-end 2024. This increase in time deposits under $100,000 was the result of a $162.18 million increase in fixed rate Certificates of Deposits (“CDs”) under $100,000 and a $31.30 million increase in variable rate CDs.
Since year-end 2024, time deposits over $100,000 increased $954.66 million or 39.61% as fixed rate CDs increased $874.61 million, variable rate CDs increased $21.26 million, and public funds CDs over $100,000 increased $51.05 million.
The table below summarizes the changes by deposit category since year-end 2024:
(Dollars in thousands)
December 31
December 31
Change
Change
Demand deposits
Interest-bearing checking
Regular savings
Money market accounts
Time deposits under $100,000
Time deposits over $100,000 (1)
Total deposits
Includes time deposits of $250,000 or more of $1,724,739 and $1,115,748 at December 31, 2025 and December 31, 2024, respectively.
At December 31, 2025, the scheduled maturities of time deposits are as follows:
Year
Amount
(In thousands)
2030 and thereafter
TOTAL
Maturities of estimated uninsured time deposits of $100,000 or more outstanding at December 31, 2025 are summarized as follows:
(Dollars in thousands)
months
or less
Over 3
through
6 months
Over 6
through
12 months
Over
12 months
Time deposits in amounts in excess of the FDIC Insurance limit
The amounts of uninsured time deposits of $100,000 or more outstanding at December 31, 2025 are based on estimates using the same methodologies and assumptions used for regulatory reporting requirements.
The average daily amount of deposits and rates paid on such deposits is summarized for the years ended December 31:
Amount
Interest
Expense
Rate
Amount
Interest
Expense
Rate
Amount (1)
Interest
Expense
Rate
(Dollars in thousands)
Noninterest-bearing
Interest-bearing transaction and money market
Regular savings
Time deposits
TOTAL
More information relating to deposits is presented in Note J, Notes to Consolidated Financial Statements.
Borrowings
Total borrowings at December 31, 2025 increased $13.88 million or 1.94% since year-end 2024. Piedmont added $20.00 million of subordinated debt upon consummation of the acquisition which was redeemed during the third quarter of 2025. During 2025, short-term borrowings increased $22.48 million or 12.77% due to an increase in securities sold under agreements to repurchase. Long-term borrowings decreased $8.60 million or 1.59% from year-end 2024 as a result of a $10.20 million reduction in long-term FHLB advances.
The table below summarizes the change in the borrowing categories since year-end 2024:
(Dollars in thousands)
December 31
December 31
Change
Change
Short-term securities sold under agreements to repurchase
Long-term FHLB advances
Issuances of trust preferred capital securities
Total borrowings
For a further discussion of borrowings see Notes K and L, Notes to Consolidated Financial Statements.
Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities at December 31, 2025 increased $12.23 million or 5.31% from year-end 2024. Piedmont added $20.79 million. In particular, interest payable increased $2.04 million due to an increase in CDs, accrued loan expenses increased $2.20 million due to an increase in the loan portfolio, incentives payable increased $5.04 million, deferred compensation increased $4.28 million and dividends payable increased $3.00 million. Partially offsetting these increases in accrued expense and other liabilities was a decrease of $5.91 million in other accrued expenses due to timing differences.
Shareholders’ Equity
Shareholders’ equity at December 31, 2025 was $5.50 billion, which was an increase of $502.76 million or 10.07% from year-end 2024, mainly as the result of the Piedmont acquisition and net earnings. The Piedmont transaction added approximately $280.95 million in shareholders’ equity as 7,860,831 shares were issued from United’s authorized but unissued shares for the merger at a cost of $280.95 million.
Retained earnings increased $252.60 million or 13.17% from year-end 2024. Earnings net of dividends for the year of 2025 were $252.60 million.
Accumulated other comprehensive income increased $84.98 million or 37.95% from year-end 2024 due mainly to an increase of $89.47 million in the fair value of United’s available for sale investment portfolio, net of deferred income taxes. In addition, the after-tax pension net actuarial gain was $5.40 million. Partially offsetting these increases was a decrease of $9.94 million in the fair value of cash flow hedges, net of deferred income taxes.
During the first quarter of 2025, United restarted repurchasing its common stock on the open market under a repurchase plan approved by United’s Board of Directors. United repurchased 3,587,948 shares during 2025 at a cost of $126.45 million or an average share price of $35.24.
RESULTS OF OPERATIONS
Overview
The following table sets forth certain consolidated income statement information of United:
Year Ended
Dollars in thousands except per share amounts
Interest income
Interest expense
Net interest income
Provision for credit losses
Noninterest income
Noninterest expense
Income before income taxes
Income taxes
Net income
PER COMMON SHARE:
Net income:
Basic
Diluted
Net income for the year 2025 was $464.60 million or $3.27 per diluted share, an increase of $91.61 million or 24.56% from $373.00 million or $2.75 per diluted share for the year of 2024.
As previously mentioned, United completed its acquisition of Piedmont on January 10, 2025. The financial results of Piedmont are included in United’s results from the acquisition date. As a result of the acquisition, the year of 2025 was impacted for nearly twelve months by increased levels of average balances, income, and expense as compared to the year of 2024. In addition, United recorded acquisition-related costs for the Piedmont merger of $31.41 million for the year of 2025, including a provision for credit losses of $18.73 million for purchased non-PCD loans recorded in the first quarter of 2025, as compared to $2.87 million for the year of 2024.
United’s return on average assets for the year of 2025 was 1.41% and the return on average shareholders’ equity was 8.63% as compared to 1.26% and 7.61% for the year of 2024. For the year of 2025, United’s return on average tangible equity, a non-GAAP measure, was 13.95%, as compared to 12.43% for the year of 2024.
Year Ended
(Dollars in thousands)
December 31,
December 31,
Return on Average Tangible Equity:
(a) Net Income (GAAP)
Average Total Shareholders’ Equity (GAAP)
Less: Average Total Intangibles
(b) Average Tangible Equity (non-GAAP)
Return on Tangible Equity (non-GAAP) [(a) / (b)]
Net interest income for the year of 2025 increased $191.10 million or 20.97% from the year of 2024. The increase of $191.10 million in net interest income occurred because total interest income increased $183.73 million while total interest expense decreased $7.36 million from the year of 2024.
The provision for credit losses was $53.87 million for the year 2025 as compared to $25.15 million for the year 2024. The increase in the provision for credit losses for the year of 2025 was mainly due to the previously mentioned $18.73 million of provision recorded on purchased non-PCD loans from Piedmont. Noninterest income was $135.15 million for the year of 2025, which was an increase of $11.46 million or 9.26% from the year of 2024. Noninterest expense for the year of 2025 was $600.05 million, which was an increase of $55.02 million or 10.10% from the year of 2024.
Income taxes for the year of 2025 were $118.80 million as compared to $91.58 million for the year of 2024. United’s effective tax rate was approximately 20.4% and 19.7% for years ended December 31, 2025 and 2024, respectively, as compared to 21.0% for 2023.
Net Interest Income
Net interest income represents the primary component of United’s earnings. It is the difference between interest income from earning assets and interest expense incurred to fund these assets. Net interest income is impacted by changes in the volume and mix of interest-earning assets and interest-bearing liabilities, as well as changes in market interest rates. Such changes, and their impact on net interest income in 2025 and 2024, are presented below.
Net interest income for the year of 2025 was $1.10 billion which was an increase of $191.10 million or 20.97% from the year of 2024. The $191.10 million increase in net interest income occurred because total interest income increased $183.73 million while total interest expense decreased $7.36 million from the year of 2024. For the purpose of this remaining discussion, net interest income is presented on a tax-equivalent basis to provide a comparison among all types of interest earning assets. The tax-equivalent basis adjusts for the tax-favored status of income from certain loans and investments. Although this is a non-GAAP measure, United’s management believes this measure is more widely used within the financial services industry and provides better comparability of net interest income arising from taxable and tax-exempt sources. United uses this measure to monitor net interest income performance and to manage its balance sheet composition.
Tax-equivalent net interest income for the year of 2025 increased $190.88 million, or 20.87%, from the year of 2024. The increase in tax-equivalent net interest income was primarily due to an increase in average earning assets, a lower average rate paid on deposits, an increase in acquired loan accretion income, and a decrease in average long-term borrowings. These increases to net interest income and tax-equivalent net interest income were partially offset by an increase in average interest-bearing deposits. Average earning assets increased $2.99 billion, or 11.42%, from the year of 2024, driven by increases in average net loans of $2.48 billion and average short-term investments of $896.61 million, partially offset by a decrease in average investment securities of $385.87 million. The cost of average interest-bearing deposits decreased 35 basis points from the year of 2024. Acquired loan accretion income was $33.70 million for the year of 2025 as compared to $9.26 million for the year of 2024. Average long-term borrowings decreased $472.63 million, or 46.44%, from the year of 2024. Average interest-bearing deposits increased $2.69 billion, or 15.64%, from the year of 2024. The net interest margin of 3.78% for the year of 2025 was an increase of 29 basis points from the net interest margin of 3.49% for the year of 2024.
United’s tax-equivalent net interest income also includes the impact of acquisition accounting fair value adjustments. The following table provides the discount/premium and net accretion impact to tax-equivalent net interest income for the year ended December 31, 2025, 2024 and 2023.
Year Ended
(Dollars in thousands)
December 31
December 31
December 31
Loan accretion
Certificates of deposit
Long-term borrowings
Total
The following table reconciles the difference between net interest income and tax-equivalent net interest income for the year ended December 31, 2025, 2024 and 2023.
Year Ended
(Dollars in thousands)
December 31
December 31
December 31
Net interest income (GAAP)
Tax-equivalent adjustment (non-GAAP) (1)
Tax-equivalent net interest income (non-GAAP)
The tax-equivalent adjustment combines amounts of interest income on federally nontaxable loans and investment securities using the statutory federal income tax rate of 21% for 2025, 2024, and 2023. All interest income on loans and investment securities was subject to state income taxes.
The following table shows the consolidated daily average balance of major categories of assets and liabilities for each of the three years ended December 31, 2025, 2024, and 2023 with the consolidated interest and rate earned or paid on such amount. The interest income and yields on federally nontaxable loans and investment securities are presented on a tax-equivalent basis using the statutory federal income tax rate of 21% for the years ended December 31, 2025, 2024, and 2023. Interest income on all loans and investment securities was subject to state taxes.
Year Ended
December 31, 2025
Year Ended
December 31, 2024
Year Ended
December 31, 2023
(Dollars in thousands)
Average
Balance
Interest
Avg.
Rate
Average
Balance
Interest
Avg.
Rate
Average
Balance
Interest
Avg.
Rate
ASSETS
Earning Assets:
Federal funds sold, securities repurchased under agreements to resell & other short-term investments
Investment Securities:
Taxable
Tax-exempt
Total Securities
Loans and leases, net of unearned income (2)
Allowance for credit losses
Net loans and leases
Total earning assets
Other assets
TOTAL ASSETS
LIABILITIES
Interest-Bearing Funds:
Interest-bearing deposits (3)
Short-term borrowings
Long- term borrowings
Total Interest-Bearing Funds
Noninterest-bearing deposits (3)
Accrued expenses and other liabilities
TOTAL LIABILITIES
SHAREHOLDERS’ EQUITY
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
NET INTEREST INCOME
INTEREST SPREAD
NET INTEREST MARGIN
The interest income and the yields on federally nontaxable loans and investment securities are presented on a tax-equivalent basis using the statutory federal income tax rate of 21% for 2025, 2024 and 2023.
Nonaccruing loans and loans held for sale are included in the daily average loan amounts outstanding.
The following table sets forth a summary for the periods indicated of the changes in consolidated interest earned and interest paid detailing the amounts attributable to (i) changes in volume (change in the average volume times the prior year’s average rate), (ii) changes in rate (change in the average rate times the prior year’s average volume), and (iii) changes in rate/volume (change in the average volume times the change in average rate).
2025 Compared to 2024
2024 Compared to 2023
Increase (Decrease) Due to
Increase (Decrease) Due to
(In thousands)
Volume
Rate
Rate/
Volume
Total
Volume
Rate
Rate/
Volume
Total
Interest income:
Federal funds sold, securities purchased under agreements to resell and other short-term investments
Investment securities:
Taxable
Tax-exempt (1)
Loans (1),(2)
TOTAL INTEREST INCOME
Interest expense:
Interest-bearing deposits
Short-term borrowings
Long-term borrowings
TOTAL INTEREST EXPENSE
NET INTEREST INCOME
Yields and interest income on federally tax-exempt loans and investment securities are computed on a fully tax-equivalent basis using the statutory federal income tax rate of 21% for 2025, 2024 and 2023.
Nonaccruing loans and loans held for sale are included in the daily average loan amounts outstanding.
Provision for Credit Losses
United’s provision for credit losses was $53.87 million for the year of 2025 while the provision for credit losses was $25.15 million for the year of 2024. United’s provision for credit losses relates to its portfolio of loans and leases and held to maturity securities which are discussed in more detail in the following paragraphs.
The provision for loan and lease losses for the year of 2025 was $53.87 million as compared to a provision for loan and lease losses of $25.15 million for the year of 2024. The higher amount of provision expense for the year of 2025 compared to the year of 2024 was mainly due to the previously mentioned provision expense of $18.73 million recorded for purchased non-PCD loans from Piedmont as well as increased provision for the commercial real estate non-owner occupied (“CRE NOO”) loan segment. Net charge-offs for the year of 2025 were $45.71 million as compared to net charge-offs of $12.55 million for the year of 2024. During the year of 2025, United recorded $21.77 million of charge-offs reflecting updated collateral valuations on two CRE NOO loans associated with the same sponsor downgraded to nonaccrual status. The loans, originated in 2018 and 2019, are collateralized by office buildings in Northern Virginia and include a full guarantee from the sponsor. During the third quarter of 2025, the sponsor experienced a significant deterioration in financial condition and concerns arose regarding the sponsor’s ability to support the credits on a long-term basis. In addition, the higher amount of net charge-offs for the year of 2025 as compared to the same time period in 2024 was primarily due to additional charge-offs within the CRE NOO loan segment.
The following table shows a summary of United’s nonperforming assets including nonperforming loans and other real estate owned (“OREO”) at December 31, 2025 and December 31, 2024:
(In thousands)
December 31
December 31
Nonaccrual loans
Loans past due 90 days or more
Total nonperforming loans
Other real estate owned
Total nonperforming assets
United maintains an allowance for loan and lease losses and a reserve for lending-related commitments. The combined allowance for loan and lease losses and reserve for lending-related commitments is considered the allowance for credit losses. At December 31, 2025, the allowance for credit losses was $332.59 million as compared to $306.76 million at December 31, 2024.
At December 31, 2025, the allowance for loan and lease losses was $297.52 million as compared to $271.84 million at December 31, 2024. The increase in the allowance for loan and lease losses was primarily driven by allowances recorded for purchased credit deteriorated loans (“PCD”) and non-PCD loans acquired from Piedmont, increased outstanding loan balances for the commercial real estate nonowner-occupied portfolio and residential real estate segments as well as a change in the reasonable and supportable forecast adjustments for the commercial real estate nonowner-occupied segment partially offset by a decline in the allowance allocated to individually assessed loans. As a percentage of loans and leases, net of unearned income, the allowance for loan losses was 1.20% at December 31, 2025 and 1.25% at December 31, 2024. The ratio of the allowance for loan and lease losses to nonperforming loans and leases or coverage ratio was 293.22% and 370.36% at December 31, 2025 and December 31, 2024, respectively. The decrease in this ratio was due to a larger increase in nonperforming loans than the allowance for loan losses. loans increased $28.07 million or 38.24% while the allowance for loan increased $25.68 million or 9.44%.
The following table summarizes United’s credit loss experience for loan and leases losses, based on loan categories, for the years of 2025 and 2024:
(Dollars in thousands)
Commercial, financial and agricultural:
Owner-occupied commercial real estate
Loans & leases charged off
Recoveries
Net loans & leases recovered
Average gross loans & leases outstanding
Net recoveries as a percentage of average gross loans & leases outstanding
Nonowner-occupied commercial real estate
Loans & leases charged off
Recoveries
Net loans & leases charged off
Average gross loans & leases outstanding
Net charge-offs as a percentage of average gross loans & leases outstanding
Other Commercial
Loans & leases charged off
Recoveries
Net loans & leases charged off
Average gross loans & leases outstanding
(Dollars in thousands)
Net charge-offs as a percentage of average gross loans & leases outstanding
Residential Real Estate
Loans & leases charged off
Recoveries
Net loans & leases charged off
Average gross loans & leases outstanding
Net charge-offs as a percentage of average gross loans & leases outstanding
Construction
Loans & leases charged off
Recoveries
Net loans & leases charged-off (recovered)
Average gross loans & leases outstanding
Net charge-offs (recoveries) as a percentage of average gross loans & leases outstanding
Consumer:
Bankcard
Loans & leases charged off
Recoveries
Net loans & leases charged off
Average gross loans & leases outstanding
Net charge-offs as a percentage of average gross loans & leases outstanding
Other consumer
Loans & leases charged off
Recoveries
Net loans & leases charged off
Average gross loans & leases outstanding
Net charge-offs as a percentage of average gross loans & leases outstanding
Total
Loans & leases charged off
Recoveries
Net loans & leases charged off
Average gross loans & leases outstanding
Net charge-offs as a percentage of average gross loans & leases outstanding
Nonaccrual loans & leases
Allowance for loan & lease losses
Loans & leases (net of unearned income)
Allowance for loan & lease losses as a percentage of loans (net of unearned income)
Nonaccrual loans as a percentage of loans & leases (net of unearned income)
Allowance for loan & lease losses as a percentage of nonaccrual loans & leases
United continues to evaluate risks which may impact its loan and lease portfolios. Reserves are initially determined based on losses identified from the PD/LGD and Cohort models which utilize the Company’s historical information. Then, any qualitative adjustments are applied to account for the Company’s view of the future and other factors. If current conditions underlying any qualitative adjustment factor were deemed to be materially different than historical conditions, an adjustment was made for that factor.
The year of 2025 qualitative adjustments include analyses of the following:
Current conditions – United considered the impact of changes in economic and business conditions; collateral values for dependent loans; past due, nonaccrual and adversely classified loans and leases; external environment; and concentrations of credit.
Reasonable and supportable forecasts – The forecast is determined on a portfolio-by-portfolio basis by relating the correlation of real GDP and the unemployment rate to loss rates to forecasts of those variables. The 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 improved in the fourth quarter, from a projection of 1.80% for 2026 as of mid-September 2025 to 2.30% for 2026 as of mid-December with a projection of 2.00% for 2027. The unemployment rate forecast remained consistent in the fourth quarter with a projection of 4.40% for 2026 as of mid-September 2025 and as of mid-December with a projection of 4.20% for 2027.
Greater risk of loss in the office portfolio due to continued hybrid and remote work that may be exacerbated by future economic conditions.
Reversion to historical loss data occurs via a straight-line method during the year following the one-year reasonable and supportable forecast period.
The following table presents the allocation of United’s allowance for credit losses for the years ended December 31:
(in thousands)
Commercial, financial & agricultural:
Owner-occupied commercial real estate
Nonowner-occupied commercial real estate
Other commercial
Total commercial, financial & agricultural
Residential real estate
Construction & land development
Consumer:
Bankcard
Other consumer
Allowance for loan losses
Reserve for lending-related commitments
Allowance for credit losses
The following is a summary of loans and leases outstanding as a percent of gross loans at December 31:
Commercial, financial & agricultural:
Owner-occupied commercial real estate
Nonowner-occupied commercial real estate
Other commercial
Total commercial, financial & agricultural
Residential real estate
Construction & land development
Consumer:
Bankcard
Other consumer
Total
United’s review of the allowance for loan and lease losses at December 31, 2025 produced increased reserves in three of the four loan categories as compared to December 31, 2024. The allowance related to the commercial, financial & agricultural loan pool, consisting of the owner and non-owner occupied commercial real estate and other commercial loan segments, increased $20.53 million due to the first quarter acquisition of Piedmont and increased outstanding balances as well as increased allocations for the reasonable and supportable forecast adjustment. The residential real estate loan segment reserve increased $7.58 million due to increased outstanding balances with the acquisition of Piedmont and the annual evaluation of delay periods utilized in the historical loss rate calculation. The consumer loan segment reserve increased $3.22 million primarily due to an increase in the quarterly maximum loss experience utilized within the reasonable and supportable forecast adjustment. The real estate construction and development loan segment reserve decreased $5.65 million due to reduced concern over collateral values and improvement in expectations for the reasonable and supportable forecast adjustment as well as reduction of the average loss experience in the forecast analysis over the next eight quarters.
An allowance is established for estimated lifetime losses for loans that are individually assessed. Nonperforming commercial loans and leases are regularly reviewed to identify expected credit losses. A loan is individually assessed for expected credit losses when the loan does not share similar characteristics with other loans in the portfolio. Measuring expected credit losses of a loan requires judgment and estimates, and the eventual outcomes may differ from those estimates. Expected credit losses are measured based upon the present value of expected future cash flows from the loan discounted at the loan’s effective rate or the fair value of collateral if the loan is collateral dependent. When the selected measure is less than the recorded investment in the loan, an expected credit loss has occurred. The allowance for loans and leases that were individually assessed was $8.04 million at December 31, 2025 and $11.21 million at December 31, 2024. In comparison to the prior year-end, this element of the allowance decreased $3.17 million due to the liquidation of collateral securing several commercial relationships which reduced the balance outstanding for the relationships as well as the potential requiring individually assessed reserves. There were collateral identified in several relationships which necessitated additional individually assessed reserves that offset part of the reductions from collateral .
Management believes that the allowance for credit losses of $332.59 million at December 31, 2025 is adequate to provide for expected losses on existing loans and lending-related commitments based on information currently available. United’s loan administration policies are focused on the risk characteristics of the loan portfolio in terms of loan approval and credit quality. The commercial loan portfolio is monitored for possible concentrations of credit in one or more industries. Management has lending limits as a percentage of capital per type of credit concentration in an effort to ensure adequate diversification within the portfolio. Most of United’s commercial loans are secured by real estate located in West Virginia, southeastern Ohio, Pennsylvania, Virginia, Maryland, North Carolina, South Carolina, and the District of Columbia. It is the opinion of management that these commercial loans do not pose any unusual risks and that adequate consideration has been given to these loans in establishing the allowance for credit losses.
The provision for credit losses related to held to maturity securities for the year of 2025 and 2024 was immaterial. The allowance for credit losses related to held to maturity securities was $16 thousand as of December 31, 2025 as compared to $18 thousand as of December 31, 2024. There was no provision for credit losses recorded on available for sale investment securities for the year of 2025 and 2024 and no allowance for credit losses on available for sale investment securities as of December 31, 2025 and 2024.
Management is not aware of any potential problem loans or leases, trends or uncertainties, that it reasonably expects, will materially impact future operating results, liquidity, or capital resources that have not been disclosed.
Other Income
Other income consists of all revenues, which are not included in interest and fee income related to earning assets. Noninterest income has been and will continue to be an important factor for improving United’s profitability. Recognizing the importance, management continues to evaluate areas where noninterest income can be enhanced.
Noninterest income for the year of 2025 was $135.15 million, which was an increase of $11.46 million or 9.26% from the year of 2024. This increase in noninterest income was driven by net gains on investment securities for the year of 2025 as compared to net losses on investment securities for the year of 2024 and increases in fees from brokerage services, income from bank-owned life insurance (“BOLI”), and fees from deposit services. Partially offsetting these increases in noninterest income were decreases in mortgage loan servicing income and income from mortgage banking activities.
For the year of 2025, net gains on investment securities were $11.17 million as compared to net losses on investment securities of $7.72 million for the year of 2024. The net gains on investment securities of $11.17 million for the year of 2025 were primarily due to a net unrealized fair value gain on equity securities. The net losses on investment securities of $7.72 million for the year of 2024 included $16.30 million in losses on sales and calls of available for sale (“AFS”) investment securities partially offset by a $6.85 million gain on the VISA share exchange and a $1.72 million gain on a change in fair value of an equity security. United did not recognize any impairment on investment securities for the years of 2025 and 2024.
Fees from brokerage services for the year of 2025 increased $2.45 million or 12.09%, from the year of 2024. The increase was primarily due to higher volume.
Fees from deposit services for the year of 2025 increased $1.82 million or 4.87% from the year of 2024. In particular, debit card, overdraft, and account analysis fees increased for the year of 2025 as compared to the year of 2024.
Income from mortgage banking activities totaled $9.57 million for the year of 2025 compared to $16.06 million for the year of 2024. The decrease of $6.49 million or 40.42% for the year of 2025 was primarily due mainly to lower mortgage loan production. Mortgage loan sales were $383.94 million in the year of 2025 as compared to $657.84 million in the year of 2024. Mortgage loans originated for sale were $370.86 million for the year of 2025 as compared to $645.94 million for the year of 2024.
Mortgage loan servicing income for the year of 2025 decreased $8.96 million from the year of 2024. This 100% decrease in 2025 from the same time period in 2024 was due to the sale of United’s remaining mortgage servicing portfolio in the second half of 2024.
Income from bank-owned life insurance for the year of 2025 increased $1.97 million or 17.59% from the year of 2024. These increases were primarily due to death proceeds of $1.28 million in the year of 2025 as well as income from the bank-owned life insurance policies added from the Piedmont acquisition and an increase in the cash surrender values primarily due to the impact of higher market values of underlying investments.
Other Expense
Just as management continues to evaluate areas where noninterest income can be enhanced, it strives to improve the efficiency of its operations to reduce costs. Other expense includes all items of expense other than interest expense, the provision for credit losses and income tax expense. Noninterest expense for the year of 2025 was $600.05 million, which was an increase of $55.02 million or 10.10% from the year of 2024. Generally, these increases related primarily to the expenses associated with the additional employees and branch offices from the Piedmont acquisition. In addition, merger-related expenses within the non-interest expense category from the Piedmont acquisition increased $4.14 million for the year of 2025 from the year of 2024.
Employee compensation for the year of 2025 increased $17.44 million or 7.43% from the year of 2024, due primarily to the additional employees from the Piedmont acquisition as well as higher employee incentives. In addition, $1.46 million in merger-related expenses were recognized in the year of 2025.
Employee benefits expense for the year of 2025 increased $712 thousand or 1.33% from the year of 2024. This increase was primarily due to increased health insurance costs due to a higher amount of claims and the additional employees from the Piedmont acquisition partially offset by a decline in expenses for postretirement benefits. For the year of 2025, postretirement expense, which includes expense associated with United’s pension plan, non-qualified deferred compensation plan, supplemental early retirement plans (“SERPs”) and Savings and Stock Investment Plan (“401K plan”), decreased $6.24 million from the year of 2024. United uses certain valuation methodologies to measure the fair value of the assets within United’s pension plan which are presented in Note O, Notes to Consolidated Financial Statements. The funded status of United’s pension plan is based upon the fair value of the plan assets compared to the
projected benefit obligation. The determination of the projected benefit obligation and the associated periodic benefit expense involves significant judgment and estimation of future employee compensation levels, the discount rate and the expected long-term rate of return on plan assets. If United assumes a 1% increase or decrease in the estimation of future employee compensation levels while keeping all other assumptions constant, the benefit cost associated with the pension plan would increase by approximately $576 thousand and decrease by approximately $289 thousand, respectively. If United assumes a 1% increase or decrease in the discount rate while keeping all other assumptions constant, the benefit cost associated with the pension plan would increase by approximately $59 thousand and increase by approximately $2.34 million, respectively. If United assumes a 1% increase or decrease in the expected long-term rate of return on plan assets while keeping all other assumptions constant, the benefit cost associated with the pension plan would decrease by and increase by approximately $1.80 million and $1.80 million, respectively.
Net occupancy for the year of 2025 increased $3.71 million or 8.05% from the year of 2024. This increase was due mainly to increased building maintenance, depreciation and utilities costs primarily as a result of the Piedmont acquisition.
Equipment expense for the year of 2025 increased $5.23 million or 17.62% from the year of 2024. This increase was due to higher equipment maintenance and depreciation expense.
Data processing expense for the year of 2025 increased $2.98 million or 10.04% from the year of 2024 due to increased data processing requirements resulting from the Piedmont acquisition.
Mortgage servicing and impairment expense for year of 2025 decreased $2.69 million from the year of 2024 due to the sale of the remaining loans serviced by United in 2024.
FDIC expense for the year of 2025 decreased $2.71 million or 13.75% from the year of 2024 primarily due to a decline in the special assessment resulting from the FDIC’s revised loss estimates to the Deposit Insurance Fund.
Other expense for the year of 2025 increased $30.27 million or 24.03% from the year of 2024. Within other expense, merger-related expenses increased $4.14 million and the expense for the reserve for unfunded commitments increased $9.96 million, which included $4.06 million for the expense related to the reserve for the acquired unfunded loan commitments from Piedmont. In addition, consulting and legal fees increased $5.67 million, amortization of investment tax credits increased $2.61 million, business franchise taxes increased $1.75 million and automated teller machine (“ATM”) fees increased $1.60 million. Amortization of core deposit intangibles increased $5.72 million due mainly to the Piedmont acquisition.
Income Taxes
For the year ended December 31, 2025, income taxes were $118.80 million, compared to $91.58 million for 2024, an increase of $27.21 million or 29.72%. The increase of $27.21 million in income tax expense for the year of 2025 was due mainly to an increase in pre-tax earnings and a higher effective tax rate. United’s effective tax rate was approximately 20.4% and 19.7% for years ended December 31, 2025 and 2024, respectively. For further details related to income taxes, see Note N, Notes to Consolidated Financial Statements.
Quarterly Results
Net income for the first quarter of 2025 was $84.31 million as compared to earnings of $86.81 million for the first quarter of 2024. Diluted earnings per share were $0.59 for the first quarter of 2025 and $0.64 for the first quarter of 2024. As previously mentioned, United completed its acquisition of Piedmont on January 10, 2025. The financial results of Piedmont are included in United’s results from the acquisition date. As a result of the acquisition, the first quarter of 2025 was impacted for nearly three months of increased levels of average balances, income, and expense as compared to the first quarter of 2024. In addition, United recorded acquisition-related costs for the Piedmont merger of $30.04 million, including a provision for credit losses of $18.73 million for purchased non-PCD loans for the first quarter of 2025. Net interest income for the first quarter of 2025 increased $37.57 million, or 16.88% from the first quarter of 2024. The increase of $37.57 million in net interest income occurred because total interest income increased $34.47 million while
total interest expense decreased $3.10 million from the first quarter of 2024. The provision for credit losses was $29.10 million for the first quarter of 2025 as compared to a provision for credit losses of $5.74 million for the first quarter of 2024. The increase in the provision for credit losses was mainly due to the previously mentioned $18.73 million of provision recorded on purchased non-PCD loans from Piedmont. For the first quarter of 2025, noninterest income decreased $2.66 million or 8.25% from the first quarter of 2024. The decrease of $2.66 million was primarily due to a decrease in income from mortgage banking activities as a result of lower mortgage loan origination and sale volume. Noninterest expense for the first quarter of 2025 increased $12.83 million or 9.12% from the first quarter of 2024. The increase of $12.83 million was due mainly to $11.31 million of merger-related expenses incurred during the first quarter of 2025 from the Piedmont acquisition. Income taxes increased $1.22 million or 5.71% for the first three months of 2025 as compared to the first three months of 2024 primarily due to a higher effective tax rate partially offset by lower earnings. The effective tax rate was 21.16% and 19.78% for the first quarter of 2025 and 2024, respectively.
Net income for the second quarter of 2025 was $120.72 million, as compared to earnings of $96.51 million for the second quarter of 2024. As a result of the acquisition of Piedmont, the second quarter of 2025 was impacted for three months of increased levels of average balances, income, and expense as compared to the second quarter of 2024. In addition, United recorded acquisition-related costs for the Piedmont merger of $1.32 million for the second quarter of 2025, as compared to $1.27 million for the second quarter of 2024. Net interest income for the second quarter of 2025 increased $48.82 million, or 21.63% from the second quarter of 2024. The increase of $48.82 million in net interest income occurred because total interest income increased $47.01 million while total interest expense decreased $1.81 million from the second quarter of 2024. The provision for credit losses was $5.89 million for the second quarter of 2025 while the provision for credit losses was $5.78 million for the second quarter of 2024. For the second quarter of 2025, noninterest income increased $1.24 million or 4.09% from the second quarter of 2024 due primarily to increased income from bank-owned life insurance policies due to the impact of higher market values of underlying investments and net proceeds from death benefits. Noninterest expense for the second quarter of 2025 increased $13.25 million or 9.83% from the second quarter of 2024 due mainly to the additional employees and branches from the Piedmont acquisition. Income taxes for the second quarter of 2025 were $31.37 million as compared to $18.88 million for the second quarter of 2024, primarily due to higher earnings and tax rate. For the quarters ended June 30, 2025 and 2024, United’s tax rate was 20.62% and 16.36%, respectively.
Net income for the third quarter of 2025 was $130.75 million, as compared to earnings of $95.27 million for the third quarter of 2024. As a result of the acquisition of Piedmont, the third quarter of 2025 was impacted for three months of increased levels of average balances, income, and expense as compared to the third quarter of 2024. Diluted earnings per share were $0.92 for the third quarter of 2025 and $0.70 for the third quarter of 2024. Net interest income for the third quarter of 2025 increased $49.86 million, or 21.65% from the third quarter of 2024. The increase of $49.86 million in net interest income occurred because total interest income increased $48.23 million while total interest expense decreased $1.63 million from the third quarter of 2024. The provision for credit losses was $12.10 million for the third quarter of 2025, as compared to provision for credit losses of $6.94 million for the third quarter of 2024. For the third quarter of 2025, noninterest income increased $11.26 million or 35.26% from the third quarter of 2024. The increase in noninterest income was driven by net gains on investment securities for the third quarter of 2025 as compared to net losses on investment securities for the third quarter of 2024, an increase in fees from brokerage services, and smaller increases in several other categories of noninterest income. Noninterest expense for the third quarter of 2025 increased $11.40 million or 8.42% from the third quarter of 2024 due mainly to the additional employees and branches from the Piedmont acquisition. Income taxes for the third quarter of 2025 were $33.74 million as compared to $24.65 million for the third quarter of 2024, primarily due to higher earnings partially offset by a slightly lower tax rate. For the quarters ended September 30, 2025 and 2024, United’s tax rate was 20.51% and 20.56%, respectively.
Net income for the fourth quarter of 2025 was $128.83 million or $0.91 per diluted share as compared to earnings of $94.41 million or $0.69 per diluted share for the fourth quarter of 2024. Net interest income for the fourth quarter of 2025 was $287.46 million, which was an increase of $54.85 million or 23.58% from the fourth quarter of 2024. The $54.85 million increase in net interest income occurred because total interest income increased $54.02 million while total interest expense decreased $830 thousand from the fourth quarter of 2024. The provision for credit losses was $6.78 million for the fourth quarter of 2025 as compared to a provision for credit losses of $6.69 million for the fourth quarter of 2024. Noninterest income for the fourth quarter of 2025 was $30.94 million, which was an increase of $1.62 million, or 5.52% from the fourth quarter of 2024. The increase in noninterest income was primarily due to an increase in fees
from brokerage services of $980 thousand driven by higher volume. Noninterest expense for the fourth quarter of 2025 was $151.72 million, an increase of $17.54 million, or 13.07%, from the fourth quarter of 2024. The increase in noninterest expense was driven primarily by increased employee compensation of $5.82 million due to a higher employee headcount from the Piedmont acquisition and higher employee incentives and other expenses of $9.49 million due to increases of $5.50 million in the expense on reserve for unfunded commitments, $2.38 million in the amortization of tax credits and $1.43 million for the amortization of core deposit intangibles partially offset by a decline of $1.26 million in merger expense. Additionally, increases in equipment expense of $1.77 million and net occupancy of $1.11 million were mainly attributable to the acquisition. For the fourth quarter of 2025, income tax expense was $31.07 million as compared to $26.65 million for the fourth quarter of 2024. The increase was driven by higher pre-tax earnings partially offset by a lower effective tax rate. United’s effective tax rate was 19.4% and 22.0% for the fourth quarter of 2025 and fourth quarter of 2024, respectively.
Additional quarterly financial data for 2025 and 2024 may be found in Note Y, Notes to Consolidated Financial Statements.
The Effect of Inflation
United’s income statements generally reflect the effects of inflation. Since interest rates, loan demand and deposit levels are impacted by inflation, the resulting changes in the interest-sensitive assets and liabilities are included in net interest income. Similarly, operating expenses such as salaries, rents and maintenance include changing prices resulting from inflation. One item that would not reflect inflationary changes is depreciation expense. Subsequent to the acquisition of depreciable assets, inflation causes price levels to rise; therefore, historically presented dollar values do not reflect this inflationary condition. Inflationary pressure on consumers and uncertainty regarding the economy could result in changes in consumer and business spending, borrowing and savings habits. Such conditions could have a material adverse effect on the credit quality of our loans and our business, financial condition and results of operations. Management will monitor the impact of inflation as conditions warrant.
The Effect of Regulatory Policies and Economic Conditions
United’s business and earnings are affected by the monetary and fiscal policies of the United States government, its agencies and various other governmental regulatory authorities. The Federal Reserve Board regulates the supply of money in order to influence general economic conditions. Among the instruments of monetary policy available to the Federal Reserve Board are (i) conducting open market operations in United States government obligations, (ii) changing the discount rate on financial institution borrowings, (iii) imposing or changing reserve requirements against financial institution deposits, and (iv) restricting certain borrowings and imposing or changing reserve requirements against certain borrowings by financial institutions and their affiliates. These methods are used in varying degrees and combinations to affect directly the availability of bank loans and deposits, as well as the interest rates charged on loans and paid on deposits.
United’s business and earnings are also affected by general and local economic conditions. Certain credit markets can experience difficult conditions and volatility. Downturns in the credit market can cause a decline in the value of certain loans and securities, a reduction in liquidity and a tightening of credit. A downturn in the credit market often signals a weakening economy that can cause job losses and thus distress on borrowers and their ability to repay loans. Uncertainties in credit markets and the economy present significant challenges for the financial services industry.
Regulatory policies and economic conditions have had a significant effect on the operating results of financial institutions in the past and are expected to continue to do so in the future; however, United cannot accurately predict the nature, timing or extent of any effect such policies or economic conditions may have on its future business and earnings.
Liquidity and Capital Resources
In the opinion of management, United maintains liquidity that is sufficient to satisfy its depositors’ requirements and the credit needs of its customers. Like all banks, United depends upon its ability to renew maturing deposits and other liabilities on a daily basis and to acquire new funds in a variety of markets. A significant source of funds available
to United is “core deposits”. Core deposits include certain demand deposits, statement and special savings and NOW accounts. These deposits are relatively stable, and they are the lowest cost source of funds available to United. Short-term borrowings have also been a source of funds. These include federal funds purchased and securities sold under agreements to repurchase as well as advances from the FHLB. Repurchase agreements represent funds which are obtained as the result of a competitive bidding process.
Liquid assets are cash and those items readily convertible to cash. All banks must maintain sufficient balances of cash and near-cash items to meet the day-to-day demands of customers and United’s cash needs. Other than cash and due from banks, the available for sale securities portfolio and maturing loans are the primary sources of liquidity.
The goal of liquidity management is to ensure the ability to access funding which enables United to efficiently satisfy the cash flow requirements of depositors and borrowers and meet United’s cash needs. Liquidity is managed by monitoring funds’ availability from a number of primary sources. Substantial funding is available from cash and cash equivalents, unused short-term borrowing and a geographically dispersed network of branches providing access to a diversified and substantial retail deposit market.
Short-term needs can be met through a wide array of outside sources such as correspondent and downstream correspondent federal funds and utilization of Federal Home Loan Bank advances.
Other sources of liquidity available to United to provide long-term as well as short-term funding alternatives, in addition to FHLB advances, are long-term certificates of deposit, lines of credit, borrowings that are secured by bank premises or stock of United’s subsidiaries. In the normal course of business, United through its Asset Liability Committee evaluates these as well as other alternative funding strategies that may be utilized to meet short-term and long-term funding needs. See Notes K and L, Notes to Consolidated Financial Statements.
During the year of 2025, United increased its interest-bearing deposit balance at the FRB by $260.19 million to $2.23 billion. The change in the balance at the FRB was mostly the result of net sales, maturities, and paydowns in the available for sale debt securities portfolio of $118.03 million and an increase in deposits of $993.74 million, partially offset by loan growth of $1.04 billion and the net repayment of $10.00 million in FHLB advances.
Cash flows provided by operations in 2025 were $498.91 million due mainly to net income of $464.60 million for the year of 2025. In 2024, cash flows provided by operations were $445.45 million due mainly to net income of $373.00 million for the year of 2024. In 2025, net cash of $899.31 million was used in investing activities which was primarily due to loan growth of $1.04 billion partially offset by proceeds of $74.40 million from sales, calls and maturities of investment securities over purchases. In 2024, net cash of $571.49 million was provided by investing activities which was primarily due to proceeds of $882.85 million from sales, calls and maturities of investment securities over purchases partially offset by loan growth of $318.05 million. During the year of 2025, net cash of $650.41 million was provided by financing activities due primarily to deposit growth of $993.74 million partially offset by cash payments of $209.00 million for dividends and $126.99 million for the acquisition of treasury stock. During the year of 2024, net cash of $323.64 million was used in financing activities due primarily to net repayments of $1.25 billion from long-term FHLB borrowings partially offset by an increase of $1.14 billion in deposits. Other uses of cash within funding activities for the year of 2024 were $200.73 million for cash dividends paid. The net effect of the cash flow activities was an increase in cash and cash equivalents of $250.01 million for the year of 2025 as compared to increase in cash and cash equivalents of $693.30 million for the year of 2024. See the Consolidated Statement of Cash Flows in the Consolidated Financial Statements.
At December 31, 2025, United had an unused borrowing amount at the FHLB of approximately $9.19 billion subject to delivery of collateral after certain trigger points and $5.02 billion without the delivery of additional collateral. United has various unused lines of credit available from certain of its correspondent banks in the aggregate amount of $280 million, all of which was available at December 31, 2025. United also has a $20 million unsecured, revolving line of credit with an unrelated financial institution to provide for general liquidity needs, all of which were available at December 31, 2025. At December 31, 2025, United’s borrowing capacity for the FRB Discount Window was $4.66 billion. United did not have any borrowings from the FRB’s Discount Window, or its Bank Term Funding Program, during the year of 2025.
United enters into derivative contracts, mainly to protect against adverse interest rate movements on the value of certain assets or liabilities, under which it is required to either pay cash to or receive cash from counterparties depending on changes in interest rates. Derivative contracts are carried at fair value and not at notional value on the consolidated balance sheet and therefore do not represent the amounts that may ultimately be paid under these contracts. Further discussion of derivative instruments is included in Note R, Notes to Consolidated Financial Statements.
United is also a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include loan commitments and standby letters of credit. United’s maximum exposure to credit loss in the event of nonperformance by the counterparty to the financial instrument for the loan commitments and standby letters of credit is the contractual or notional amount of those instruments. United uses the same policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.
The following table details the amounts of significant commitments and letters of credit as of December 31, 2025:
(In thousands)
Amount
Commitments to extend credit:
Revolving open-end secured by 1-4 residential
Credit card and personal revolving lines
Commercial
Total unused commitments
Financial standby letters of credit
Performance standby letters of credit
Commercial letters of credit
Total letters of credit
Commitments generally have fixed expiration dates or other termination clauses, generally within one year, and may require the payment of a fee. Further discussion of commitments is included in Note Q, Notes to Consolidated Financial Statements.
United anticipates it can meet its obligations over the next 12 months and has no material commitments for capital expenditures. There are no known trends, demands, commitments, or events that will result in or that are reasonably likely to result in United’s liquidity increasing or decreasing in any material way. United also has lines of credit available. See Notes K and L to the accompanying unaudited Notes to Consolidated Financial Statements for more details regarding the amounts available to United under lines of credit.
The Asset Liability Committee monitors liquidity to ascertain that a liquidity position within certain prescribed parameters is maintained. No changes are anticipated in the policies of United’s Asset Liability Committee.
United’s capital position is financially sound. United seeks to maintain a proper relationship between capital and total assets to support growth and sustain earnings. United has historically generated attractive returns on shareholders’ equity. United is well-capitalized within the meaning of applicable regulatory guidelines. United’s risk-based capital ratio is 15.72% at December 31, 2025 while its Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 13.44%, 13.44% and 11.28%, respectively.
Total shareholders’ equity was $5.50 billion at December 31, 2025, which was an increase of $502.76 million or 10.07% from December 31, 2024. This increase is primarily due to increases of $20.41 million and $272.72 million in common stock and surplus, respectively, primarily as a result of the Piedmont acquisition. In addition, retained earnings increased $252.60 million due to net earnings and accumulated other comprehensive income increased $84.98 million due mainly to an after-tax increase in the fair value of available for sale securities.
United’s equity to assets ratio was 16.33% at December 31, 2025 as compared to 16.63% at December 31, 2024. United’s average equity to average asset ratio was 16.39% at December 31, 2025 as compared to 16.57% at December 31, 2024.
During the fourth quarter of 2025, United’s Board of Directors declared a cash dividend of $0.38 per share. Dividends per share of $1.49 for the year of 2025 represented an increase over the $1.48 per share paid for 2024. Total cash dividends declared to common shareholders were $212.00 million for the year of 2025 as compared to $200.89 million for the year of 2024. The year 2025 was the fifty-second consecutive year of dividend increases to United shareholders.
