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Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.01pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Real-time Form 4 intelligence. Smarter insider tracking.
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.02pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
fraud+8
failure+4
losses+3
fraudulent+3
harm+2
Positive rising
successfully+2
successful+1
success+1
satisfy+1
advances+1
Risk Factors (Item 1A)
7,950 words
Item 1A.
RISK FACTORS
United is subject to risks inherent to the Company’s business. The material risks and uncertainties that management believes affect the Company are described below. Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all of the other information included or incorporated by reference in this report. The risks and uncertainties described below are not the only ones facing the Company. Additional risks and uncertainties that management is not aware of or focused on or that management currently deems immaterial may also impair United’s business operations. This report is qualified in its entirety by these risk factors.
REGULATORY AND LITIGATION RISKS
United is subject to extensive government regulation and supervision.
United is subject to extensive federal and state regulation, supervision and examination which vests significant discretion in the various regulatory authorities. Banking regulations are primarily intended to protect depositors’ funds, federal deposit insurance funds and the banking system as a whole, not shareholders. These regulations affect United’s lending practices, capital structure, investment practices, dividend policy, operations, growth, and the fees we can charge for certain products or transactions, among other things. These regulations also impose obligations to maintain appropriate policies, procedures and controls, among other things, to detect, prevent and report money and terrorist financing and to verify the identities of United’s customers. Congress and federal regulatory agencies continually review banking laws, regulations and policies for possible changes. The Dodd-Frank Act, enacted in July 2010, instituted major changes to the banking and financial institutions regulatory regimes. Other changes to statutes, regulations or regulatory policies, including changes in interpretation or implementation of statutes, regulations or policies, could affect United in substantial and ways. Such changes could subject the Company to additional costs, limit the types of financial services and products United may offer and/or increase the ability of nonbanks to offer competing financial services and products, among other things. United expends substantial effort and incurs costs to its systems, audit capabilities, staffing and training in order to seek to regulatory requirements and meet supervisory expectations, but the regulatory authorities may determine that such efforts are . to comply with relevant laws, regulations or policies or meet supervisory expectations could result in enforcement and other legal actions, sanctions by regulatory agencies, civil money and , the of FDIC insurance, the of a banking charter, significant and/or reputation , which could have a material effect on United’s business, financial condition and results of operations. In this regard, government authorities, including the bank regulatory agencies, are pursuing aggressive enforcement actions with respect to compliance and other legal matters involving financial activities, which heightens the risks associated with actual and perceived compliance . Directives issued to enforce such actions may be confidential and thus, in some instances, we are not permitted to publicly these actions. actions or regulations by Federal or state authorities could, depending on the outcome, significantly affect the regulatory and supervisory framework affecting our operations. For example, there is pending to the Federal Reserve Board’s regulation on permissible interchange fees on the ground that the regulation allows higher interchange fees than permitted by statute, which, if , could significantly and affect the fees banks can charge on debit card transactions. In August 2025, a district court ruled the Federal Reserve and vacated the regulation, but its order is stayed pending appeal to the circuit court. Any of the foregoing could have a material effect on our business, financial condition and results of operations. See the section captioned “Regulation and Supervision” included in Item 1. While the Company has policies and procedures designed to prevent any of applicable laws or regulations, there can be no assurance that such will not occur.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
decline+3
losses+1
nonperforming+1
adverse+1
liquidation+1
Positive rising
gains+3
effective+2
beautiful+2
greater+1
improved+1
MD&A (Item 7)
14,981 words
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 unwarrantedlitigation 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 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.
In the normal course of business, United and its subsidiaries are routinely subject to examinations and challenges from federal and state tax authorities regarding the amount of taxes due in connection with investments that the Company has made and the businesses in which United has engaged. Federal and state taxing authorities routinely challenge tax positions taken by financial institutions. These tax positions may relate to tax compliance, sales and use, franchise, gross receipts, payroll, property and income tax issues, including tax base, apportionment and tax credit planning. The challenges made by tax authorities may result in adjustments to the timing or amount of taxable income or deductions or the allocation of income among tax jurisdictions. If any such challenges are made and are not resolved in the Company’s favor, they could have a material adverse effect on United’s financial condition and results of operations.
United is subject to regulatory capital requirements and failure to comply with these standards may impact dividend payments, equity repurchases and executive compensation.
United and United Bank are each required to comply with applicable capital adequacy standards established by the Federal Reserve Board. From time to time, the Federal Reserve Board changes these capital adequacy standards. In particular, the capital requirements applicable to United under the Basel III rules became fully effective on January 1, 2019. Under the Basel III rules, United is required to maintain a common equity Tier 1 capital ratio of 4.5%, a Tier 1 capital ratio of 6%, a total capital ratio of 8%, and a leverage ratio of 4%. In addition, United must maintain an additional capital conservation buffer of 2.5% of total risk weighted assets.
Banking institutions that fail to meet the effective minimum ratios including the capital conservation buffer will be subject to constraints on capital distributions, including dividends and share repurchases, and certain discretionary executive compensation. 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 changes have resulted in generally higher minimum capital ratios than in the past, including due to the need for United and its subsidiaries to maintain capital buffers above minimum requirements to avoid restrictions on capital distributions and executive bonus payments. In addition, the application of more stringent capital requirements for United could, among other things, result in lower returns on invested capital, require the raising of additional capital and result in additional regulatory actions if United were to be unable to comply with such requirements. Implementation of changes to asset risk weightings for risk based capital calculations, items included or deducted in calculating regulatory capital and/or additional capital conservation buffers could result in management modifying its business strategy and could limit United’s ability to make distributions, including paying dividends.
United’s earnings are significantly affected by the fiscal and monetary policies of the federal government and its agencies .
The policies of the Federal Reserve Board impact United significantly. The Federal Reserve Board regulates the supply of money and credit in the United States. Its policies directly and indirectly influence the rate of interest earned on loans and paid on borrowings and interest-bearing deposits and can also affect the value of financial instruments we hold. Those policies determine to a significant extent our cost of funds for lending and investing. Changes in those policies are beyond our control and are difficult to predict. Federal Reserve Board policies can also affect our borrowers, potentially increasing the risk that they may fail to repay their loans. For example, a tightening of the money supply by the Federal Reserve Board could reduce the demand for a borrower’s products and services. This could adversely affect the borrower’s earnings and ability to repay its loan, which could have a material adverse effect on our financial condition and results of operations.
United may be required to repurchase mortgage loans or indemnify buyers againstlosses in some circumstances, which could harm liquidity, results of operations and financial condition .
When mortgage loans are sold, whether as whole loans or pursuant to a securitization, United is required to make customary representations and warranties to purchasers, guarantors and insurers, including the government sponsored enterprises, about the mortgage loans and the manner in which they were originated. Whole loan sale agreements require repurchase or substitute mortgage loans, or indemnification of buyers againstlosses, in the event United breaches these representations or warranties. In addition, United may be required to repurchase mortgage loans as a result of early payment default of the borrower on a mortgage loan. If repurchase and indemnity demands increase and such demands are valid claims and are in excess of United’s provision for potential losses, its liquidity, results of operations and financial condition may be adversely affected.
CREDIT RISKS
There are no assurances as to adequacy of the allowance for credit losses.
The accounting for credit losses on loans, leases and other financial assets held by banks, financial institutions and other organizations requires the recognition of credit losses on loans, leases and other financial assets based on an entity’s current estimate of expected losses over the lifetime of each loan, lease or other financial asset, referred to as the Current Expected Credit Loss (“CECL”) model. Under the CECL model, United is required to present certain financial assets, carried at amortized cost, at the net amount expected to be collected over the life of the financial asset. The measurement of expected credit losses is based on information about past events, including credit quality, our historical experience, current conditions, and reasonable and supportable macroeconomic forecasts that may affect the collectability of the reported amount. This measurement will take place at the time a financial asset is first added to the balance sheet and at least quarterly thereafter.
CECL requires management judgment that is supported by models and data elements, including macroeconomic forecasts. The complexity and associated risk of CECL, particularly in times of economic uncertainty or other unforeseen circumstances, could impact United’s results of operations and capital levels as well as place stress on our internal controls over financial reporting.
The determination of the appropriate level of allowance for credit losses inherently involves a high degree of subjectivity and requires us to make significant estimates related to current and expected future credit risks and trends, all of which may undergo material changes. Deterioration in economic conditions affecting borrowers and securities issuers; new information regarding existing loans, credit commitments and securities holdings; global pandemics; natural disasters and risks related to climate change; and identification of additional problem loans, ratings down-grades and other factors, both within and outside of our control, may require an increase in the allowances for credit losses on loans, securities and off-balance sheet credit exposures. In addition, federal and state regulators, as an integral part of their respective supervisory functions, periodically review United’s allowance for credit losses on loans, and may require an increase in the provision for credit losses or the recognition of further loan charge-offs, based on judgments different than those of management. Any increases in the allowance for credit losses on loans will result in a decrease in net income and, possibly, capital, and may have a material adverse effect on United’s business, financial condition and results of operations.
See the section captioned “Provision for Credit Losses” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Part II, Item 7 of this Form 10-K for further discussion related to our process for determining the appropriate level of the allowance for credit losses.
United is subject to credit risk in its loan portfolio.
There are risks inherent in making any loan, including risks with respect to the period of time over which the loan may be repaid, risks resulting from changes in economic and industry conditions, risks inherent in dealing with individual borrowers and risks resulting from uncertainties as to the future value of collateral. United seeks to mitigate the risk inherent in its loan portfolio by adhering to prudent loan approval practices. Although United believes that its loan approval criteria are appropriate for the various kinds of loans the Company makes, United may incur losses on loans that meet our loan approval criteria. A significant decline in general economic conditions caused by inflation or deflation, recession, unemployment, changes in government fiscal and monetary policies, acts of terrorism, or other factors beyond our control could cause our borrowers to default on their loan payments, and the collateral values securing such loans to decline and be insufficient to repay any outstanding indebtedness. In such events, we could experience significant loan losses, which could have a material adverse effect on our financial condition and results of operations.
Certain of our credit exposures are concentrated in industries that may be more susceptible to the long-term risks of climate change, natural disasters or global pandemics. To the extent that these risks may have a negative impact on the financial condition of borrowers, it could also have a material adverse effect on our business, financial condition and results of operations. See the section captioned “Loans” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations elsewhere in this report for further discussion related to commercial and industrial, energy, construction and commercial real estate loans.
OPERATIONAL RISKS
United’s information systems may experience failure, interruption, or breach of security.
United relies heavily on communications and information systems to conduct its business. In addition, as part of its business, United collects, processes and retains sensitive and confidential client and customer information. United’s facilities and systems, and those of our third-party service providers, may be vulnerable to interruptions, failures or security breaches, arising from cyber-attacks, criminal activity, acts of war or terrorism, severe weather or other natural disasters, acts of vandalism, computer viruses, misplaced or lost data, programming and/or human errors, or other similar events. Any failure, interruption or breach in security of these systems could result in failures or disruptions in the Company’s customer relationship management, general ledger, deposit, loan and other systems. While United has policies and procedures designed to prevent or limit the effect of the failure, interruption or security breach of its information systems, there can be no assurance that any such failures, interruptions or security breaches will not occur or, if they do occur, that they will be adequately addressed. It is also possible that employees, merchants or United’s third-party vendors may not follow United’s policies and procedures, which may expose United to a security breach. The occurrence of any failures, interruptions or security breaches of the Company’s information systems could damage United’s reputation, result in a loss of customer business, subject United to additional regulatory scrutiny, or expose the Company to civil litigation and possible financial liability, any of which could have a material adverse effect on United’s financial condition and results of operations.
Unauthorized disclosure of sensitive or confidential client or customer information, whether through a cyber-attack, other breach of our computer systems or otherwise, could severelyharm our business.
In the normal course of our business, we collect, process and retain sensitive and confidential client and customer information on our behalf and on behalf of other third parties. Despite the security measures we have in place, our facilities and systems may be vulnerable to cyber-attacks, security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming and/or human errors, or other similar events.
Information security risks for financial institutions like us have increased recently in part because of new technologies, such as artificial intelligence and quantum computing, the use of the internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions, employees working from home, the increased connectivity of third parties (including contractors) and electronic devices to United’s systems, and the increased sophistication and activities of organized crime, perpetrators of fraud, hackers, terrorists and others. Even well protected information, networks, systems and facilities remain potentially vulnerable to attempted security breaches or disruptions because the techniques used in such attempts are constantly evolving, including as a result of artificial intelligence, and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected. In addition to cyber-attacks or other security breaches involving the theft of sensitive and confidential information, hackers have engaged in attacks against large financial institutions, particularly denial of service attacks, designed to disrupt key business services such as customer-facing web sites. We are not able to anticipate or implement effective preventive measures against all security breaches of these types. Although we employ detection and response mechanisms designed to contain and mitigate security incidents, early detection may be thwarted by persistent sophisticated attacks and malware designed to avoid detection.
We also face risks related to cyber-attacks and other security breaches in connection with card transactions that typically involve the transmission of sensitive information regarding our customers through various third parties. Some of these parties have in the past been the target of security breaches and cyber-attacks, and because the transactions involve third parties and environments that we do not control or secure, future security breaches or cyber-attacks affecting any of these third parties could impact us through no fault of our own, and in some cases we may have exposure and sufferlosses for breaches or attacks relating to them. We also rely on numerous other third-party service providers to conduct other aspects of our business operations and face similar risks relating to them. While we conduct security assessments on our higher risk third parties, we cannot be sure that their information security protocols are sufficient to withstand a cyber-attack or other security breach.
Any cyber-attack or other security breach involving the misappropriation, loss or other unauthorized disclosure of confidential customer information could severelydamage our reputation, erode confidence in the security of our systems, products and services, expose us to the risk of litigation and liability, disrupt our operations and have a material adverse effect on our business.
Increasing fraud risk could adversely affect our business, financial condition, and reputation.
We are exposed to an increasing risk of fraud, including cyber fraud, identity theft, account takeover, and other fraudulent activities targeting financial institutions and their customers. The sophistication and frequency of these schemes continue to grow, driven by advances in technology and the proliferation of digital banking channels. Fraudulent activity can result in financial losses for us or our customers, increased operational costs, and potential legal exposure.
Although we employ robust security measures, including authentication protocols, transaction monitoring, and fraud detection systems, these controls may not be sufficient to prevent all fraudulent activity. Criminals continuously adapt their methods to circumvent existing safeguards, and emerging technologies such as artificial intelligence may further enhance their ability to perpetratefraud.
Significant fraud-related losses could negatively impact our earnings, capital, and liquidity. In addition, fraudincidents may harm our reputation, erode customer trust, and lead to regulatory scrutiny or enforcement actions. Failure to effectively manage and mitigate fraud risk could have a material adverse effect on our business, financial condition, and results of operations.
Technological advancements may subject us to additional risks.
The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, including the increased usage of intelligent automation within the industry. Our future success depends, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in our operations. Many of our competitors have substantially greater resources to invest in technological improvements. We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers. In addition, our implementation of certain new technologies, such as those related to artificial intelligence, automation and algorithms, in our business processes may have unintended consequences due to their limitations or our failure to use them effectively. In addition, cloud technologies are critical to the operation of our systems, and our reliance on cloud technologies is growing. Failure to successfully keep pace with technological change affecting the financial services industry could have a material adverse effect on our business, financial condition and results of operations.
Furthermore, any new line of business, new product or service and/or new technology could have a significant impact on the effectiveness of our system of internal controls. Failure to successfully manage these risks in the development and implementation of new lines of business, new products or services and/or new technologies could have a material adverse effect on our business, financial condition and results of operations.
Our growth-oriented business strategy could be adversely affected if we are not able to attract and retain skilled employees or if we lose the services of our senior management team.
Our ability to manage growth will depend upon our ability to continue to attract, hire and retain skilled employees. The unanticipatedloss of members of our senior management team, could have a material adverse effect on our results of operations and ability to execute our strategic goals. Our success will also depend on the ability of our officers and key employees to continue to implement and improve our operational and other systems, to manage multiple, concurrent customer relationships and to hire, train and manage our employees.
United’s vendors could fail to fulfill their contractual obligations, resulting in a material interruption in, or disruption to, its business and a negative impact on results of operations.
United is dependent upon third parties for certain information system, data management and processing services and to provide key components of its business infrastructure. United has entered into subcontracts for the supply of current and future services, such as data processing, mortgage loan processing and servicing, and certain property management functions. These services must be available on a continuous and timely basis and be in compliance with any regulatory requirements. Failure to do so could substantially harm United’s business.
United often obtains services from vendors under contractual agreements that may be subject to renewal, termination, service limitations, minimum usage or spending commitments, or other restrictions. There can be no assurance that vendors continue to provide services on acceptable terms, perform in accordance with contractual or regulatory requirements, or remain financially viable. If a vendor relationship is terminated, expires, or a service is discontinued or degraded, United may experience service disruptions, delays in delivering products to customers, increased costs, or difficulties in transitioning to alternative providers.
In addition, United’s reliance on third party service providers also exposes it to operational, cybersecurity and informational risks. Vendors may experience system failures, operational errors, coding errors, information system interruptions or breaches, and unauthorized disclosures of sensitive or confidential client or customer information and United may have limited ability to control, monitor or promptly remediate such events. In addition, deficiencies in vendor performance, service quality or compliance could result in regulatory scrutiny, customer dissatisfaction, reputational harm, litigation exposure or financial losses.
Any significant failure, interruption, termination or security incident involving a third party vendor could have a significant adverse effect on United’s business, lead to higher costs and damage its reputation with its customers and, in turn, have a material adverse effect on its financial condition and results of operations.
MARKET, LIQUIDITY AND INTEREST RATE RISKS
Changes in economic and political conditions could adversely affect our earnings, as our borrowers’ ability to repay loans and the value of the collateral securing our loans decline .
United’s success depends, to a certain extent, upon local and national economic and political conditions, as well as governmental monetary policies. Conditions such as an economic recession, rising unemployment, changes in interest rates, money supply reductions in government spending or the size of the government workforce, concerns relating to the U.S. debt ceiling, the imposition of tariffs and retaliatory responses, changes in trade or immigration policy and other factors beyond its control may adversely affect United’s and United Bank’s asset quality, deposit levels and loan demand and, therefore, its earnings. Because United has a significant amount of real estate loans, decreases in real estate values could adversely affect the value of property used as collateral. Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which could have an adverse impact on our earnings. Consequently, declines in the economy in our market area could have a material adverse effect on our financial condition and results of operations.
In addition, economic and 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 also have a material adverse effect on the credit quality of our loans and our business, financial condition and results of operations.
Concern regarding the ability of Congress to reach agreement on federal budgetary matters (including the debt ceiling), or total or partial governmental shutdowns, also can adversely affect the economy and increase the risk of economic instability or market volatility, which could have adverse consequences on United’s business, financial condition, liquidity and results of operations.
The value of certain investment securities is volatile and future declines in value could have a materially adverse effect on future earnings and regulatory capital.
Continued volatility in the fair value for certain investment securities, whether caused by changes in market conditions, interest rates, credit risk of the issuer, the expected yield of the security, or actual defaults in the portfolio could result in significant fluctuations in the value of the securities as well as any regulatory rulemaking could exclude or limit the holdings of certain investment securities. This could have a material adverse impact on United’s accumulated other comprehensive income and shareholders’ equity depending on the direction of the fluctuations. Furthermore, future downgrades, defaults or prepayments, including the liquidation of the underlying collateral in certain securities, could result in the recording of an allowance for credit losses related to these securities. This could have a material impact on United’s future earnings, although the impact on shareholders’ equity will be offset by any amount already included in other comprehensive income.
United operates in a highly competitive market.
United faces a high degree of competition in all of the markets it serves. United faces strong competition in gathering deposits, making loans and obtaining client assets for management by its investment or trust operations. There is significant competition among commercial banks in our market areas as well as with other providers of financial services, such as savings and loan associations, credit unions, consumer finance companies, securities firms, private equity and debt funds, commercial finance and leasing companies, full service brokerage firms, discount brokerage firms, and financial/wealth technology firms. Some of our competitors have greater resources and, as such, may have higher lending limits and may offer other services that are not provided by us. United generally competes on the basis of customer service, responsiveness to customer needs, available loan and deposit products, the rates of interest charged on loans, the rates of interest paid for funds, and the availability and pricing of trust and brokerage services.
There is a risk that aggressive competition could result in United controlling a smaller share of these markets. A decline in market share could lead to a decline in net income which would have a negative impact on shareholder value.
In addition, technology and other changes have made it possible for non-banks to offer products and services traditionally provided by banks. In particular, the activity of fintechs/wealthtechs has grown significantly over recent years and is expected to continue to grow. Some fintechs/wealthtechs are not subject to the same regulation as we are, which may allow them to be more competitive. Fintechs/wealthtechs have and may continue to offer bank or bank-like products and a number of such organizations have applied for bank or industrial loan charters while others have partnered with existing banks to allow them to offer deposit products to their customers. Increased competition from fintechs/wealthtechs and the growth of digital banking may also lead to pricing pressures as competitors offer more low-fee and no-fee products.
United is subject to liquidity risk.
We require liquidity to meet our deposit and debt obligations as they come due. Our access to funding sources in amounts adequate to finance our activities or on terms that are acceptable to us could be impaired by factors that affect us specifically or the financial services industry or economy generally. A substantial majority of our liabilities are demand, savings, interest checking and money market deposits, which are payable on demand or upon several days’ notice, while by comparison, a substantial portion of our assets are loans, which cannot be called or sold in the same time frame. We may not be able to replace maturing deposits and advances as necessary in the future, especially if a large number of our depositors sought to withdraw their accounts, regardless of the reason. Our access to deposits may be negatively impacted by, among other factors, periods of low interest rates or higher interest rates, which could promote increased competition for deposits or provide customers with alternative investment options. Additionally, negative news about us or the banking industry in general could negatively impact market and/or customer perceptions of our company, which could lead to a loss of depositor confidence and an increase in deposit withdrawals, particularly among those with uninsured deposits. Furthermore, as we and other regional banking organizations experienced in 2023, the failure of other financial institutions may cause deposit outflows as customers spread deposits among several different banks so as to maximize their amount of FDIC insurance, move deposits to banks deemed “too big to fail” or remove deposits from the banking system entirely. A failure to maintain adequate liquidity could have a material adverse effect on our business, financial condition and results of operations.
United may be adversely affected by the soundness of other financial institutions.
Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships. United has exposure to many different industries and counterparties, and routinely executes transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, mutual and hedge funds, or other institutional clients. Defaults by financial services institutions, and even rumors or questions about a financial institution or the financial services industry in general, may lead to market wide liquidity problems and could lead to losses or defaults by United or other institutions. Any such losses could adversely affect United’s financial condition or results of operations.
Changes in interest rates may adversely affect United’s business.
United’s earnings, like most financial institutions, are significantly dependent on its net interest income. Net interest income is the difference between the interest income United earns on loans and other assets which earn interest and the interest expense incurred to fund those assets, such as on savings deposits and borrowed money. Therefore, changes in general market interest rates, such as a change in the monetary policy of the Federal Reserve Board or otherwise beyond those which are contemplated by United’s interest rate risk model and policy, could have an effect on net interest income. For more information concerning United’s interest rate risk model and policy, see the discussion in Quantitative and Qualitative Disclosures About Market Risk included in Part II, under Item 7A of this Form 10-K.
RISKS RELATED TO ACQUISITION ACTIVITY
Potential acquisitions may disrupt our business and dilute shareholder value.
We generally seek merger or acquisition partners that are culturally similar and have experienced management and possess either significant market presence or have potential for improvedprofitability through financial management, economies of scale or expanded services. Acquiring other banks, businesses, or branches involves various risks commonly associated with acquisitions, including, among other things, (i) potential exposure to unknown or contingent liabilities of the target company; (ii) exposure to potential asset quality issues of the target company; (iii) potential disruption to our business; (iv) potential diversion of our management’s time and attention; (v) the possible loss of key employees and customers of the target company; (vi) difficulty in estimating the value of the target company; and (vii) potential changes in banking or tax laws or regulations that may affect the target company.
Acquisitions typically involve the payment of a premium over book and market values, and, therefore, some dilution of our tangible book value and net income per common share may occur in connection with any future transaction. Acquisitions may also result in potential dilution to existing shareholders of our earnings per share if we issue common stock in connection with the acquisition. Furthermore, we may incur substantial costs in pursuing acquisition opportunities, and we cannot guarantee that such acquisition opportunities will be successful or result in the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits from an acquisition. Failure to realize these benefits could have a material adverse effect on our business, financial condition and results of operations. Moreover, there can be no guarantee that post-acquisition integration efforts will be successful, or that after giving effect to an acquisition, we will achieve financial results comparable to, or better than, our historical performance. In addition, from time to time, bank regulators may restrict the Company from making acquisitions. See “Regulation and Supervision” in Item 1, “Business,” of this Form 10-K for additional detail and further discussion of these matters.
Acquisitions may be delayed, impeded, or prohibited due to regulatory issues.
Acquisitions by financial institutions, including us, are subject to approval by a variety of federal and state regulatory agencies (collectively, “regulatory approvals”). The process for obtaining these required regulatory approvals involves a comprehensive application review process, and our ability to engage in certain merger or acquisition transactions depends on the bank regulators’ views at the time as to our capital levels, quality of management, and overall
condition, in addition to their assessment of a variety of other factors, including our compliance with law. Regulatory approvals could be delayed, impeded, restrictively conditioned or denied due to existing or new regulatory issues we have, or may have, with regulatory agencies, including, without limitation, issues related to BSA compliance, CRA issues, fair lending laws, fair housing laws, consumer protection laws, unfair, deceptive, or abusive acts or practices regulations and other laws and regulations. We may fail to pursue, evaluate or complete strategic and competitively significant acquisition opportunities as a result of our inability, or perceived or anticipated inability, to obtain regulatory approvals in a timely manner, under reasonable conditions or at all. Difficulties associated with potential acquisitions that may result from these factors could have a material adverse effect on our business, financial condition and results of operations.
SECURITY OWNERSHIP RISKS
United’s stock price can be volatile .
Stock price volatility may make it more difficult for United shareholders to resell their common stock when they want and at prices they find attractive. United’s stock price can fluctuate significantly in response to a variety of factors, including, among other things:
Actual or anticipated negative variations in quarterly results of operations;
Negative recommendations by securities analysts;
Poor operating and stock price performance of other companies that investors deem comparable to United;
News reports relating to negative trends, concerns and other issues in the financial services industry or the economy in general;
Negative perceptions in the marketplace regarding United and/or its competitors;
New technology used, or services offered, by competitors;
Adverse changes in interest rates or a lending environment with prolonged low interest rates;
Adverse changes in the real estate market;
Negative economic news;
Failure to integrate acquisitions or realize anticipated benefits from acquisitions;
Adverse changes in government regulations;
Political uncertainty in the United States; and
Geopolitical conditions such as acts or threats of terrorism or military conflicts.
General market fluctuations, industry factors and general economic and political conditions and events, such as economic slowdowns or recessions, interest rate changes or credit loss trends, could also cause United’s stock price to decrease regardless of operating results.
Dividend payments by United’s subsidiaries to United and by United to its shareholders can be restricted.
The declaration and payment of future cash dividends will depend on, among other things, United’s earnings, the general economic and regulatory climate, United’s liquidity and capital requirements, and other factors deemed relevant by United’s board of directors. Federal Reserve Board policy limits the payment of cash dividends by bank holding companies, without regulatory approval, and requires that a holding company serve as a source of strength to its banking subsidiaries.
United’s principal source of funds to pay dividends on its common stock is cash dividends from its subsidiaries. The payment of these dividends by its subsidiaries is also restricted by federal and state banking laws and regulations. As of December 31, 2025, approximately $510.1 million was available for dividend payments from United Bank to United without regulatory approval.
An investment in United common stock is not an insured deposit.
United common stock is not a bank deposit and, therefore, is not insured againstloss by the FDIC, any other deposit insurance fund or by any other public or private entity. Investment in United common stock is inherently risky for the reasons described in this section and elsewhere in this report and is subject to the same market forces that affect the price of common stock in any company. As a result, someone who acquires United common stock, could lose some or all of their investment.
Failure to maintain effective internal controls over financial reporting in the future could impair United’s ability to accurately and timely report its financial results or prevent fraud, resulting in loss of investor confidence and adversely affecting United’s business and stock price .
Effective internal controls over financial reporting are necessary to provide reliable financial reports and prevent fraud. Management believes that United’s internal controls over financial reporting are currently effective. Management will continually review and analyze the Company’s internal controls over financial reporting for Sarbanes-Oxley Section 404 compliance. Any failure to maintain, in the future, an effective internal control environment could impact United’s ability to report its financial results on an accurate and timely basis, which could result in regulatory actions, loss of investor confidence, and adversely impact United’s business and stock price.
Certain banking laws may have an anti-takeover effect.
Provisions of federal banking laws, including regulatory approval requirements, could make it more difficult to be acquired by a third party, even if perceived to be beneficial to United’s shareholders. These provisions effectively inhibit a non-negotiated merger or other business combination, which could adversely affect the market price of United’s common stock.
GENERAL RISKS
United may elect or be compelled to seek additional capital in the future, but capital may not be available when it is needed.
United is required by federal and state regulatory authorities to maintain adequate levels of capital to support the Company’s operations. In addition, United may elect to raise additional capital to support the Company’s business or to finance acquisitions, if any, or United may otherwise elect to raise additional capital.
United’s ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions and a number of other factors, many of which are outside the Company’s control, and on United’s financial performance. Accordingly, United cannot be assured of its ability to raise additional capital if needed or on terms acceptable to the Company. If United cannot raise additional capital when needed, it may have a material adverse effect on the Company’s financial condition, results of operations and prospects.
New accounting or tax pronouncements or interpretations may be issued by the accounting profession, regulators or other government bodies which could change existing accounting methods. Changes in accounting methods could negatively impact United’s results of operations and financial condition.
Current accounting and tax rules, standards, policies and interpretations influence the methods by which financial institutions conduct business, implement strategic initiatives and tax compliance, and govern financial reporting and disclosures. These laws, regulations, rules, standards, policies, and interpretations are constantly evolving and may change significantly over time and are difficult to predict. Events that may not have a direct impact on United, such as the bankruptcy of major U.S. companies, have resulted in legislators, regulators and authoritative bodies, such as the Financial Accounting Standards Board, the SEC, the Public Company Accounting Oversight Board, and various taxing authorities, responding by adopting and/or proposing substantive revision to laws, regulations, rules, standards, policies, and interpretations. New accounting pronouncements and varying interpretations of accounting pronouncements have occurred and may occur in the future. A change in accounting standards may adversely affect reported financial condition and results of operations.
United could face unanticipated environmental liabilities or costs related to real property owned or acquired through foreclosure. Compliance with federal, state and local environmental laws and regulations, including those related to investigation and clean-up of contaminated sites, could have a negative effect on expenses and results of operations.
A significant portion of United’s loan portfolio is secured by real property. During the ordinary course of business, United may foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties. If hazardous or toxic substances are found, United may be liable for remediation costs, as well as for personal injury and property damage. Environmental laws may require United to incur substantial expenses and may materially reduce the affected property’s value or limit United’s ability to use or sell the affected property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase exposure to environmental liability. Although United has policies and procedures to perform an environmental review before initiating any foreclosure action on real property, these reviews may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on results of operations.
Severe weather, natural disasters, public health issues, acts of war or terrorism, and other external events could significantly impact United’s ability to conduct business.
Severe weather, natural disasters, public health issues, acts of war or terrorism, and other external events could affect the stability of United’s deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, adversely impact United’s employee base, cause significant property damage, result in loss of revenue, and/or cause the Company to incur additional expenses. Although management has established disaster recovery policies and procedures, the occurrence of any such event could have a material adverse effect on United’s business, which, in turn, could have a material adverse effect on the Company’s financial condition and results of operations.
The negative economic effects caused by terrorist attacks, including cyber-attacks, potential attacks and other destabilizing events would likely contribute to the deterioration of the quality of United’s loan portfolio and could reduce its customer base, level of deposits, and demand for its financial products such as loans.
High inflation, natural disasters, acts of terrorism, including cyber-attacks, an escalation of hostilities or other international or domestic occurrences, and other factors could have a negative impact on the economy of the Mid-Atlantic and Southeast regions in which United operates. An additional economic downturn in its markets would likely contribute to the deterioration of the quality of United’s loan portfolio by impacting the ability of its customers to repay loans, the value of the collateral securing loans, and may reduce the level of deposits in its bank and the stability of its deposit funding sources. An additional economic downturn could also have a significant impact on the demand for United’s products and services. The cumulative effect of these matters on United’s results of operations and financial condition would likely be adverse and material.
Climate-related physical and transition risks may materially affect United’s business and results of operations, and divergent and evolving laws and regulations and stakeholder expectations regarding climate-related matters may subject United to additional, different and potentially conflicting requirements and expectations and result in higher regulatory and compliance and other risks and costs.
We may be subject to climate-related physical and transition risks from climate change. Both physical and transition risks from climate change may have negative impacts on the financial condition or creditworthiness of our customers and may negatively affect our business and result of operations.
Physical risks refer to the harm arising from acute, climate-related events, such as hurricanes, wildfires, floods, and heatwaves, and chronic shifts in climate, including higher average temperatures, changes in precipitation patterns, sea level rise, and ocean acidification. Specifically, unpredictable and more frequent weather disasters may adversely impact the value of our properties and the value of real property securing the loans in our portfolios. Additionally, if insurance obtained by our borrowers is insufficient to cover any losses sustained to the collateral, or if insurance coverage is otherwise unavailable to our borrowers, the collateral securing our loans may be negatively impacted by climate change, which could impact our financial condition and results of operations. Further, the effects of physical risks may negatively impact regional and local economic activity, which could lead to an adverse effect on our customers and impact the communities in which we operate.
We and our customers are also exposed to transition risks associated with the transition to a less carbon-dependent economy. Transition risks may result from changes in policies; laws and regulations; technologies; and/or market preferences to address climate change. Such changes could materially, negatively impact our business, results of operations, financial condition and/or our brand, in addition to having a similar impact on our customers. We have customers who operate in carbon-intensive industries like oil and gas that are exposed to climate risks, such as those risks related to the transition to a less carbon-dependent economy, as well as customers who operate in low-carbon industries that may be subject to risks associated with new technologies. In addition, ongoing legislative or regulatory uncertainties and changes regarding climate risk management and practices, including the shifting sentiment against climate and sustainability initiatives, may subject us to different and potentially conflicting requirements and result in higher regulatory, compliance, credit and reputational risks and costs.
In addition, ongoing legislative or regulatory uncertainties and changes, as well as divergent stakeholder expectations, regarding climate-related matters, may subject us to additional, different and potentially conflicting requirements and expectations and result in higher regulatory, compliance and other risks and costs. For example, certain states have enacted or proposed laws addressing climate change and other sustainability issues, including greenhouse gas emissions data and climate-related financial risk disclosure requirements. On the other hand, certain states have enacted or proposed laws or regulations or taken other actions to prohibit the consideration of environmental and social factors in state investments and contracting. In addition, in August 2025, President Trump signed Executive Order 14331, “Guaranteeing Fair Banking Access for All Americans,” which states that it is the policy of the United States that no American should be denied access to financial services because of their constitutionally or statutorily protected beliefs, affiliations, or political views.
We may also be subject to negative public opinion, and our business, brand and ability to attract and retain employees may be harmed, due to shareholder perceptions of our, actual or perceived, action or inaction in response to climate-related matters, including our carbon footprint and our business relationships with customers who operate in carbon-intensive industries.
assure
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 losses, management considers the risk arising in part from, but not limited to, qualitative factors which include charge-off and delinquency 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 losses is described in Note A, Notes to Consolidated Financial Statements. A discussion of the factors leading to changes in the amount of the allowance for loan and lease losses is included in the Provision for Credit Losses 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 forcedliquidation 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, unanticipated 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. Nonperforming loans increased $28.07 million or 38.24% while the allowance for loan losses 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 loss potential requiring individually assessed reserves. There were collateral weaknesses identified in several relationships which necessitated additional individually assessed reserves that offset part of the reductions from collateral liquidation.
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 effective tax rate. For the quarters ended June 30, 2025 and 2024, United’s effective 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 effective tax rate. For the quarters ended September 30, 2025 and 2024, United’s effective 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 efficientlysatisfy 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 againstadverse 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.
