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What changed in UNITED BANKSHARES INC/WV's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of UNITED BANKSHARES INC/WV's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+443 added−475 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-29)

Top changes in UNITED BANKSHARES INC/WV's 2024 10-K

443 paragraphs added · 475 removed · 352 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

82 edited+29 added−34 removed96 unchanged
Biggest changeThe guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually or as part of a group, is based upon the key principles that a banking organization’s incentive compensation arrangements should (i) provide incentives that do not encourage risk-taking beyond the organization’s ability to effectively identify and manage risks, (ii) be compatible with effective internal controls and risk management, and (iii) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors. 16 In April and May of 2016, the Federal Reserve Board, other federal banking agencies and the SEC (the “Agencies”) jointly published proposed rulemaking designed to implement provisions of the Dodd-Frank Act prohibiting incentive compensation arrangements that would encourage inappropriate risk taking at a covered institution, which includes a bank or bank holding company with $1 billion or more of assets, such as United.
Biggest changeThe guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually or as part of a group, is based upon the key principles that a banking organization’s incentive compensation arrangements should (i) provide incentives that do not encourage risk-taking beyond the organization’s ability to effectively identify and manage risks, (ii) be compatible with effective internal controls and risk management, and (iii) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors.
Short-term borrowings have also been a significant source of funds. These include federal funds purchased, securities sold under agreements to repurchase and FHLB borrowings. United’s investment portfolio is comprised of a significant amount of mortgage-backed securities, asset-backed securities, obligations of states and political subdivisions, U.S. Treasury securities and obligations of U.S. Government corporations and agencies and corporate securities.
Short-term borrowings have also been a significant source of funds. These include federal funds purchased, securities sold under agreements to repurchase and FHLB borrowings. 6 United’s investment portfolio is comprised of a significant amount of mortgage-backed securities, asset-backed securities, obligations of states and political subdivisions, U.S. Treasury securities and obligations of U.S. Government corporations and agencies and corporate securities.
Our strategy embodies our core values of integrity, teamwork, hard work, and caring, and foster positive attitudes, communication, goal attainment, personal growth, and the pursuit of United’s mission of excellence in service to our shareholders, our customers, our communities, and our employees. 7 Focusing on talent selection and developing top talent remains a strong pillar of our organization.
Our strategy embodies our core values of integrity, teamwork, hard work, and caring, and foster positive attitudes, communication, goal attainment, personal growth, and the pursuit of United’s mission of excellence in service to our shareholders, our customers, our communities, and our employees. Focusing on talent selection and developing top talent remains a strong pillar of our organization.
We also have an internal and external training platform to ensure our employees have the necessary tools to fill these key positions effectively. United also has an effective and efficient onboarding program, introducing new team members to the culture and enabling an environment that helps them be engaged in their roles.
We also have an internal and external training platform to ensure our employees have the necessary tools to fill these key positions effectively. 7 United also has an effective and efficient onboarding program, introducing new team members to the culture and enabling an environment that helps them be engaged in their roles.
The Basel III Capital Rules and the Capital Simplification Rules also provide for a number of deductions from and adjustments to CET1. These include, for example, the requirement that certain deferred tax assets and significant investments in non-consolidated financial entities be deducted from CET1 to the extent that any one such category exceeds 25% of CET1.
The Basel III Capital Rules also provide for a number of deductions from and adjustments to CET1. These include, for example, the requirement that certain deferred tax assets and significant investments in non-consolidated financial entities be deducted from CET1 to the extent that any one such category exceeds 25% of CET1.
Personal loans, student loans and unsecured credit card receivables are also included as consumer loans. United monitors the risk associated with these types of loans by monitoring such factors as portfolio growth, lending policies and economic conditions. Underwriting standards are continually evaluated and modified based upon these factors.
Personal loans and unsecured credit card receivables are also included as consumer loans. United monitors the risk associated with these types of loans by monitoring such factors as portfolio growth, lending policies and economic conditions. Underwriting standards are continually evaluated and modified based upon these factors.
United is listed on the NASDAQ Global Select Market under the quotation symbol “UBSI,” and is subject to the rules of the NASDAQ for listed companies. 10 SEC regulations require us to disclose certain types of business and financial data on a regular basis to the SEC and to our shareholders.
United is listed on the NASDAQ Global Select Market under the quotation symbol “UBSI,” and is subject to the rules of the NASDAQ for listed companies. SEC regulations require us to disclose certain types of business and financial data on a regular basis to the SEC and to our shareholders.
In addition to these regular examinations, United Bank must furnish to regulatory authorities quarterly reports containing full and accurate statements of its affairs. United is also under the jurisdiction of the SEC and certain state securities commissions in regard to the offering and sale of its securities.
In addition to these regular examinations, United Bank must furnish to regulatory authorities quarterly reports containing full and accurate statements of its affairs. 9 United is also under the jurisdiction of the SEC and certain state securities commissions in regard to the offering and sale of its securities.
However, the revised capital requirements of the proposed rule would not apply to United or United Bank because they have less than $100 billion in total consolidated assets and trading assets and liabilities below the threshold for market risk requirements.
However, the revised capital requirements of the proposed rule would not apply to United or United Bank because they each have less than $100 billion in total consolidated assets and trading assets and liabilities below the threshold for market risk requirements.
In August 2016, United announced the Cardinal Financial Corporation acquisition which closed April 2017. 3 Business of Subsidiaries United, through its subsidiaries, engages primarily in community banking and mortgage banking offering most types of business permitted by law and regulation.
In August 2016, United announced the Cardinal Financial Corporation acquisition which closed April 2017. 3 Business of Subsidiaries United, through its subsidiaries, engages primarily in community banking offering most types of business permitted by law and regulation.
United Bank was considered a “well capitalized” institution as of December 31, 2023. Well-capitalized institutions are permitted to engage in a wider range of banking activities, including among other things, the accepting of “brokered deposits,” and the offering of interest rates on deposits higher than the prevailing rate in their respective markets.
United Bank was considered a “well capitalized” institution as of December 31, 2024. Well-capitalized institutions are permitted to engage in a wider range of banking activities, including among other things, the accepting of “brokered deposits,” and the offering of interest rates on deposits higher than the prevailing rate in their respective markets.
The final rule required United to adopt a clawback policy within 60 days after such listing standard became effective. In June 2023, the New York Stock Exchange and Nasdaq Stock Market adopted these required listing standards mandated by Section 954 of the Dodd-Frank Act, which were effective on October 2, 2023.
The final rule required United to adopt a “clawback” policy within 60 days after such listing standard became effective. In June 2023, the New York Stock Exchange and Nasdaq Stock Market adopted these required listing standards mandated by Section 954 of the Dodd-Frank Act, which were effective on October 2, 2023.
Issuers that do not adopt and comply with the compensation recovery policies or those that do not disclose the policy will be subject to delisting. United adopted a “clawback” policy on November 17, 2023 and is filed as Exhibit 97 to this Form 10-K.
Issuers that do not adopt and comply with the compensation recovery policies or those that do not disclose the policy will be subject to delisting. United adopted a “clawback” policy on November 17, 2023. This policy is included as Exhibit 97 to this Form 10-K.
In certain circumstances, United’s repurchases of its common stock may be subject to a prior approval or notice requirement under other regulations, policies or supervisory expectations of the Federal Reserve Board. Any redemption or repurchase of preferred stock or subordinated debt remains subject to the prior approval of the Federal Reserve Board.
In certain circumstances, United’s repurchases of its common stock may be subject to a prior approval or notice requirement under other regulations, policies or supervisory expectations of the Federal Reserve Board. Any redemption or repurchase of preferred stock or subordinated debt is subject to the prior approval of the Federal Reserve Board.
United Bank, as a Virginia state member bank, is subject to supervision, examination, and regulation by the Federal Reserve System, and as such, is subject to applicable provisions of the Federal Reserve Act and regulations issued thereunder. United Bank is subject to the Virginia banking statutes and regulations, and is primarily regulated by the Virginia Bureau of Financial Institutions.
United Bank, as a Virginia state member bank, is subject to supervision, examination, and regulation by the Federal Reserve Board, and as such, is subject to applicable provisions of the Federal Reserve Act and regulations issued thereunder. United Bank is subject to the Virginia banking statutes and regulations, and is primarily regulated by the Virginia Bureau of Financial Institutions.
In March 2020, the federal bank regulatory agencies issued an interim final rule that maintains the three-year transition option of the 2019 CECL Rule and also provides banking organizations that were required under U.S.
In March 2020, the federal bank regulatory agencies issued an interim final rule that maintains the three-year transition option of the 2019 CECL Rule and also provided banking organizations that were required under U.S.
Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations. The Anti-Money Laundering Act of 2020 (“AMLA”), which amends the Bank Secrecy Act of 1970 (“BSA”), was enacted in January 2021. The AMLA is intended to be a comprehensive reform and modernization to U.S. bank secrecy and anti-money laundering laws.
Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations. The Anti-Money Laundering Act of 2020 (the “AMLA”), which amends the BSA, was enacted in January 2021. The AMLA is intended to be a comprehensive reform and modernization to U.S. bank secrecy and anti-money laundering laws.
Further, any acquisition application that United must submit to the Board of Governors must also be submitted to the West Virginia Banking Board for approval. The Board of Governors has broad authority to prohibit activities of financial holding companies and their non-banking subsidiaries that represent unsafe and unsound banking practices or which constitute violations of laws or regulations.
Further, any acquisition application that United must submit to the Federal Reserve Board must also be submitted to the West Virginia Banking Board for approval. The Federal Reserve Board has broad authority to prohibit activities of financial holding companies and their non-banking subsidiaries that represent unsafe and unsound banking practices or which constitute violations of laws or regulations.
The Board of Governors, in its Regulation Y, permits financial holding companies to engage in preapproved non-banking activities closely related to banking or managing or controlling banks. Approval of the Board of Governors is necessary to engage in certain other non-banking activities which are not preapproved or to make acquisitions of corporations engaging in these activities.
The Federal Reserve Board, in its Regulation Y, permits financial holding companies to engage in preapproved non-banking activities closely related to banking or managing or controlling banks. Approval of the Federal Reserve Board is necessary to engage in certain other non-banking activities which are not preapproved or to make acquisitions of corporations engaging in these activities.
Office of the Commissioner of Banks and 99 bank holding companies operating in the State of South Carolina registered with the Federal Reserve System and the South Carolina State Board of Financial Institutions.
Office of the Commissioner of Banks and 65 bank holding companies operating in the State of South Carolina registered with the Federal Reserve System and the South Carolina State Board of Financial Institutions.
The USA PATRIOT Act of 2001, or the USA Patriot Act, substantially broadened the scope of United States anti-money laundering laws and regulations by imposing significant new compliance and due diligence obligations, creating new crimes and penalties and expanding the extra-territorial jurisdiction of the United States.
The USA Patriot Act substantially broadened the scope of United States anti-money laundering laws and regulations by imposing significant 14 new compliance and due diligence obligations, creating new crimes and penalties and expanding the extra-territorial jurisdiction of the United States.
Many of the statutory provisions in the AMLA will require additional rulemakings, reports and other measures, and the impact of the AMLA will depend on, among other things, rulemaking and implementation guidance. In June 2021, the Financial Crimes Enforcement Network, a bureau of the U.S.
Many of the statutory provisions in the AMLA require additional rulemakings, reports and other measures, and the impact of the AMLA depends on, among other things, rulemaking and implementation guidance. In June 2021, the Financial Crimes Enforcement Network, a bureau of the U.S.
United does not have a loan classification concentration in the restaurants, hotel and accommodations industry. As of December 31, 2023, approximately $1.3 billion or 5.98% of United’s total loan portfolio were to hotels and other traveler accommodations. In addition, United does not have a loan classification concentration in the mining, quarrying and oil and gas extraction industry.
United does not have a loan classification concentration in the restaurants, hotel and accommodations industry. As of December 31, 2024, approximately $1.3 billion or 5.92% of United’s total loan portfolio were to hotels and other traveler accommodations. In addition, United does not have a loan classification concentration in the mining, quarrying and oil and gas extraction industry.
The special assessment will be collected at an annual rate of approximately 13.4 basis points for an anticipated total of eight quarterly assessment periods. The special assessment will be collected beginning with the first quarterly assessment period of 2024 (i.e., January 1 through March 31, 2024) with an invoice payment date of June 28, 2024.
The special assessment will be collected at an annual rate of approximately 13.4 basis points for an anticipated total of eight quarterly assessment periods. The collection of this special assessment began with the first quarterly assessment period of 2024 (i.e., January 1 through March 31, 2024) with an invoice payment date of June 28, 2024.
The Bank Holding Company Act prohibits the acquisition by a bank holding company of direct or indirect ownership of more than five percent of the voting shares of any bank within the United States without prior approval of the Board of Governors.
The Bank Holding Company Act prohibits the acquisition by a bank holding company of direct or indirect ownership of more than five percent of the voting shares of any bank within the United States without prior approval of the Federal Reserve Board.
The Board of Governors also can assess civil money penalties for certain activities conducted on a knowing and reckless basis, if those activities caused a substantial loss to a depository institution. The penalties can be as high as $1 million for each day the activity continues.
The Federal Reserve Board also can assess civil money penalties for certain activities conducted on a knowing and reckless basis, if those activities caused a substantial loss to a depository institution. The penalties can be as high as $1 million for each day the activity continues.
Among other things, these standards revise the Basel Committee’s standardized approach for credit risk (including by recalibrating risk weights and introducing new capital requirements for certain “unconditionally cancellable commitments,” such as unused credit card lines of credit) and provides a new standardized approach for operational risk capital.
Among other things, these standards revised the Basel Committee’s standardized approach for credit risk (including by recalibrating risk weights and introduction of new capital requirements for certain “unconditionally cancellable commitments,” such as unused credit card lines of credit) and provides a new standardized approach for operational risk capital.
Regulation and Supervision United, as a financial holding company, is subject to the restrictions of the Bank Holding Company Act of 1956, as amended, and is registered pursuant to its provisions. As such, United is subject to the reporting requirements of and examination by the Board of Governors of the Federal Reserve System (“Board of Governors”).
Regulation and Supervision United, as a financial holding company, is subject to the restrictions of the Bank Holding Company Act of 1956, as amended, and is registered pursuant to its provisions. As such, United is subject to the reporting requirements of and examination by the Board of Governors of the Federal Reserve System (“Federal Reserve Board”).
In 2023, United Bank received a CRA Performance Evaluation from the Federal Reserve Bank of Richmond (the “FRB”) with a rating of “Satisfactory.” On October 24, 2023, the Federal Reserve Board, the FDIC, and the Office of the Comptroller of the Currency (“OCC”) published a final CRA rule that creates a modernized rule for the banking industry.
In 2023, the year of our most recent CRA exam, United Bank received a CRA Performance Evaluation from the Federal Reserve Bank of Richmond (the “FRB”) with a rating of “Satisfactory.” On October 24, 2023, the Federal Reserve Board, the FDIC, and the Office of the Comptroller of the Currency (“OCC”) published a final CRA rule that creates a modernized rule for the banking industry.
The proposal introduces revised credit risk, equity risk, operational risk, credit valuation adjustment risk and market risk requirements, among other changes.
The proposal introduced revised credit risk, equity risk, operational risk, credit valuation adjustment risk and market risk requirements, among other changes.
The principal sources of revenue from United’s mortgage banking business are: (i) loan origination fees; (ii) gains or losses from the sale of loans, (iii) interest earned on mortgage loans during the period that they are held by United pending sale, if any; and (iv) income on mortgage loans with servicing retained.
The principal sources of revenue from United’s mortgage banking business are: (i) loan origination fees; (ii) gains or losses from the sale of loans; and (iii) interest earned on mortgage loans during the period that they are held by United pending sale, if any.
Loan Concentrations United has commercial loans, including real estate and owner-occupied, income-producing real estate and land development loans, of approximately $14.8 billion as of December 31, 2023. These loans are primarily secured by real estate located in West Virginia, southeastern Ohio, southwestern Pennsylvania, Virginia, Maryland, North Carolina, South Carolina and the District of Columbia.
Loan Concentrations United has commercial loans, including real estate and owner-occupied, income-producing real estate and land development loans, of approximately $15.3 billion as of December 31, 2024. These loans are primarily secured by real estate located in West Virginia, southeastern Ohio, southwestern Pennsylvania, Virginia, Maryland, North Carolina, South Carolina and the District of Columbia.
In addition, on a case-by-case basis, the Board of Governors may approve other non-banking activities. A financial holding company may also engage in financial activities, including securities underwriting and dealing, insurance agency and underwriting activities, and merchant banking activities.
In addition, on a case-by-case basis, the Federal Reserve Board may approve other non-banking activities. A financial holding company may also engage in financial activities, including securities underwriting and dealing, insurance agency and underwriting activities, and merchant banking activities.
As of December 31, 2023, approximately $162.6 million or less than 1% of United’s total loan portfolio were for the purpose of extracting, manufacturing and distributing oil, coal and natural gas. Secondary Markets United generally originates loans within the primary market area of United Bank.
As of December 31, 2024, approximately $118.7 million or less than 1% of United’s total loan portfolio were for the purpose of extracting, manufacturing and distributing oil, coal and natural gas. Secondary Markets United generally originates loans within the primary market area of United Bank.
Obligations of states and political subdivisions are comprised of primarily “investment grade” rated municipal securities. Interest and dividends on securities for the years of 2023, 2022, and 2021 were $151.1 million, $114.5 million, and $61.9 million, respectively. For the year of 2023, United realized net losses on sales of securities of $7.7 million.
Obligations of states and political subdivisions are comprised of primarily “investment grade” rated municipal securities. Interest and dividends on securities for the years of 2024, 2023, and 2022 were $133.3 million, $151.1 million, and $114.5 million, respectively. For the year of 2024 and 2023, United realized net losses on sales of securities of $11.7 million and $7.7 million, respectively.
As of December 31, 2023, approximately $9.9 billion or 46.4% of United’s total loan portfolio were for real estate and construction. The loans were originated by United’s subsidiary bank using underwriting standards as set forth by management.
As of December 31, 2024, approximately $10.4 billion or 47.75% of United’s total loan portfolio were for real estate and construction. The loans were originated by United’s subsidiary bank using underwriting standards as set forth by management.
United Bank also offers an automated telephone banking system, Telebanc, which allows customers to access their personal account(s) or business account(s) information from a touch-tone telephone. 4 Lending Activities United’s loan and lease portfolio, net of unearned income, increased $800.9 million or 3.90% in 2023 due mainly to loan growth in almost all major categories of loans.
United Bank also offers an automated telephone banking system, Telebanc, which allows customers to access their personal account(s) or business account(s) information from a touch-tone telephone. Lending Activities United’s loan and lease portfolio, net of unearned income, increased $314.4 million or 1.47% in 2024 due mainly to loan growth in three major loan categories.
Failure to meet statutorily mandated capital guidelines or more restrictive ratios separately established for a financial institution could subject United to a variety of enforcement remedies, including issuance of a capital directive, the termination of deposit insurance by the FDIC, a prohibition on accepting or renewing brokered deposits, limitations on the rates of interest that the institution may pay on its deposits and other restrictions on its business.
The Federal Reserve has indicated that it plans to work with other federal banking regulators on a revised proposal in 2025. 12 Failure to meet statutorily mandated capital guidelines or more restrictive ratios separately established for a financial institution could subject United to a variety of enforcement remedies, including issuance of a capital directive, the termination of deposit insurance by the FDIC, a prohibition on accepting or renewing brokered deposits, limitations on the rates of interest that the institution may pay on its deposits and other restrictions on its business.
FDICIA establishes five capital tiers: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. 14 Effective January 1, 2015, under the Basel III Capital Rules, the current prompt corrective action requirements for an institution to be “well-capitalized” is a total risk-based capital ratio of 10% or greater, a Tier 1 risk-based capital ratio of 8% or greater, a CET1 ratio of 6.5% or greater and a Tier 1 leverage ratio of 5 percent or greater.
Effective January 1, 2015, under the Basel III Capital Rules, the current prompt corrective action requirements for an institution to be “well-capitalized” is a total risk-based capital ratio of 10% or greater, a Tier 1 risk-based capital ratio of 8% or greater, a CET1 ratio of 6.5% or greater and a Tier 1 leverage ratio of 5% or greater.
United Brokerage Services, Inc., a wholly-owned subsidiary of United Bank, is a fully-disclosed broker/dealer and a Registered Investment Advisor with the Financial Industry Regulatory Authority (“FINRA”), the Securities and Exchange Commission, and a member of the Securities Investor Protection Corporation.
United previously exited the third-party origination (“TPO”) business during the fourth quarter of 2023. United Brokerage Services, Inc., a wholly-owned subsidiary of United Bank, is a fully-disclosed broker/dealer and a Registered Investment Advisor with the Financial Industry Regulatory Authority (“FINRA”), the Securities and Exchange Commission, and a member of the Securities Investor Protection Corporation.
As of December 31, 2023, approximately $526.4 million or 2.46% of United’s loan portfolio were real estate loans that met the regulatory definition of a high loan-to-value loan.
As of December 31, 2024, approximately $641.6 million or 2.96% of United’s loan portfolio were real estate loans that met the regulatory definition of a high loan-to-value loan.
Deposit Acquisition Limitation Under West Virginia banking law, an acquisition or merger is not permitted if the resulting depository institution or its holding company, including its affiliated depository institutions, would assume additional deposits to cause it to control deposits in the State of West Virginia in excess of twenty five percent (25%) of such total amount of all deposits held by insured depository institutions in West Virginia.
The final rule is currently enjoined as to the plaintiff trade associations while a federal court considers a lawsuit challenging the rule. 13 Deposit Acquisition Limitation Under West Virginia banking law, an acquisition or merger is not permitted if the resulting depository institution or its holding company, including its affiliated depository institutions, would assume additional deposits to cause it to control deposits in the State of West Virginia in excess of twenty five percent (25%) of such total amount of all deposits held by insured depository institutions in West Virginia.
Business of United As a financial holding company, United’s present businesses are community banking and mortgage banking. As of December 31, 2023, United’s consolidated assets approximated $29.9 billion and total shareholders’ equity approximated $4.8 billion. United is permitted to acquire other banks and bank holding companies, as well as thrift institutions.
Business of United As a financial holding company, United’s present business is community banking. As of December 31, 2024, United’s consolidated assets approximated $30.0 billion and total shareholders’ equity approximated $5.0 billion. United is permitted to acquire other banks and bank holding companies, as well as thrift institutions.
It is the intent of the underwriting guidelines and standards to minimize loan losses by carefully investigating the credit history of each applicant, verify the source of repayment and the ability of the applicant to repay, collateralize those loans in which collateral is deemed to be required, exercise care in the documentation of the application, review, approval, and origination process, and administer a comprehensive loan collection program. 5 United’s underwriting standards and practices are designed to originate both fixed and variable rate loan products in a manner which is consistent with the prudent banking practices applicable to these exposures.
It is the intent of the underwriting guidelines and standards to minimize loan losses by carefully investigating the credit history of each applicant, verify the source of repayment and the ability of the applicant to repay, collateralize those loans in which collateral is deemed to be required, exercise care in the documentation of the application, review, approval, and origination process, and administer a comprehensive loan collection program.
Commercial loans and leases are considered to contain a higher level of risk than other loan types although care is taken to minimize these risks.
Collateral securing these loans includes equipment, machinery, inventory, receivables, vehicles and commercial real estate. Commercial loans and leases are considered to contain a higher level of risk than other loan types although care is taken to minimize these risks.
Through its acquisition of Community Bankers Trust, United added new markets in Baltimore and Annapolis, Maryland and Lynchburg and Richmond, Virginia as well as the Northern Neck of Virginia. United considers all of the above locations to be the primary market areas for the business of its banking and mortgage banking subsidiaries.
Through its acquisition of Community Bankers Trust, United added new markets in Baltimore and Annapolis, Maryland and Lynchburg and Richmond, Virginia as well as the Northern Neck of Virginia. United considers all of the above locations to be the primary market areas for its business. 8 With prior regulatory approval, Virginia banks are permitted unlimited branch banking throughout each state.
Among other things, FDICIA authorizes regulatory authorities to take “prompt corrective action” with respect to depository institutions that do not meet minimum capital requirements.
Among other things, FDICIA authorizes regulatory authorities to take “prompt corrective action” with respect to depository institutions that do not meet minimum capital requirements. FDICIA establishes five capital tiers: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.
These limitations did not impact our regulatory capital during any of the reported periods. 13 In addition, under the general risk-based capital rules, the effects of accumulated other comprehensive income items included in capital were excluded for the purposes of determining regulatory capital ratios.
In addition, under the general risk-based capital rules, the effects of accumulated other comprehensive income items included in capital were excluded for the purposes of determining regulatory capital ratios.
Since fully phased in on January 1, 2019, the Basel III Capital Rules require United and United Bank to maintain the following: • A minimum ratio of Common Equity Tier 1 (“CET1”) to risk-weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer” (resulting in a minimum ratio of CET1 to risk-weighted assets of 7.0%); • A minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the capital conservation buffer (resulting in a minimum Tier 1 capital ratio of 8.5%); • A minimum ratio of total capital (Tier 1 capital plus Tier 2 capital) to risk-weighted assets of at least 8.0%, plus the capital conservation buffer (resulting in a minimum total capital ratio of 10.5%); and • A minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known as the “leverage ratio”).
Since fully phased in on January 1, 2019, the Basel III Capital Rules require United and United Bank to maintain the following: • A minimum ratio of Common Equity Tier 1 (“CET1”) to risk-weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer” (resulting in a minimum ratio of CET1 to risk-weighted assets of 7.0%); • A minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the capital conservation buffer (resulting in a minimum Tier 1 capital ratio of 8.5%); • A minimum ratio of total capital (Tier 1 capital plus Tier 2 capital) to risk-weighted assets of at least 8.0%, plus the capital conservation buffer (resulting in a minimum total capital ratio of 10.5%); and • A minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known as the “leverage ratio”). 11 Banking institutions that fail to meet the effective minimum ratios once the capital conservation buffer is taken into account, as detailed above, will be subject to constraints on capital distributions, including dividends and share repurchases, and certain discretionary executive compensation.
Our primary focus is to attract and advance the careers of employees with diverse backgrounds, experiences, ideas, and skills. We host college recruiting and internship programs that attract candidates from a variety of colleges and universities within our footprint. These two programs build a talent pipeline and prioritize these individuals for internal openings.
We host college recruiting and internship programs that attract candidates from a variety of colleges and universities within our footprint. These two programs build a talent pipeline and prioritize these individuals for internal openings.
These conditions serve to intensify competition within United’s market. 9 As of December 31, 2023, there were 58 bank holding companies operating in the State of West Virginia registered with the Federal Reserve System and the West Virginia Board of Banking and Financial Institutions, 64 bank holding companies operating in the Commonwealth of Virginia registered with the Federal Reserve System and the Virginia State Corporation Commission, 66 bank holding companies operating in the State of North Carolina registered with the Federal Reserve System and the N.C.
As of December 31, 2024, there were 60 bank holding companies operating in the State of West Virginia registered with the Federal Reserve System and the West Virginia Board of Banking and Financial Institutions, 97 bank holding companies operating in the Commonwealth of Virginia registered with the Federal Reserve System and the Virginia State Corporation Commission, 64 bank holding companies operating in the State of North Carolina registered with the Federal Reserve System and the N.C.
The above guidelines are adhered to and subject to the experience, background and personal judgment of the loan officer assigned to the loan application. A loan officer may grant, with justification, a loan with variances from the underwriting guidelines and standards.
Management defines “sub-prime” borrowers as consumer borrowers with a credit score of less than 660. 5 The above guidelines are adhered to and subject to the experience, background and personal judgment of the loan officer assigned to the loan application. A loan officer may grant, with justification, a loan with variances from the underwriting guidelines and standards.
These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must deal with customers when taking deposits or making loans to such customers.
These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must deal with customers when taking deposits or making loans to such customers. United Bank must comply with the applicable provisions of these consumer protection laws and regulations as part of its ongoing customer relations.
United considers all of West Virginia to be included in its market area. This area includes the five largest West Virginia Metropolitan Statistical Areas (“MSA”): the Parkersburg MSA, the Charleston MSA, the Huntington MSA, the Morgantown MSA and the Wheeling MSA.
This area includes the five largest West Virginia Metropolitan Statistical Areas (“MSA”): the Parkersburg MSA, the Charleston MSA, the Huntington MSA, the Morgantown MSA and the Wheeling MSA.
These holding companies are headquartered in various states and control banks throughout West Virginia, Virginia, North Carolina and South Carolina, which compete for business as well as for the acquisition of additional banks.
These holding companies are headquartered in various states and control banks throughout West Virginia, Virginia, North Carolina and South Carolina, which compete for business as well as for the acquisition of additional banks. For further discussion, see the section captioned “United operates in a highly competitive market” in Item 1A. Risk Factors.
Historically, and at December 31, 2023, United has not offered “teaser rate” loans, and had no loan portfolio products which were specifically designed for “sub-prime” borrowers. Management defines “sub-prime” borrowers as consumer borrowers with a credit score of less than 660.
Historically, and at December 31, 2024, United has not offered “teaser rate” loans, and had no loan portfolio products which were specifically designed for “sub-prime” borrowers.
For the years of 2022 and 2021, United realized net gains on sales of securities of $2 thousand and $2.8 million, respectively. Human Capital At United, one of our key competitive advantages is our people. Investment in our human capital is a top priority for the Company.
For the year of 2022, United realized net gains on sales of securities of $2 thousand. Human Capital At United, one of our key competitive advantages is our people. Investment in our human capital is a top priority for the Company. As of December 31, 2024, United and its subsidiaries had 2,553 actual employees and officers.
The Inflation Reduction Act of 2022 (the “IRA”) imposes a new 1% excise tax on the fair market value of stock repurchased after December 31, 2022 by publicly traded U.S. corporations. With certain exceptions, the value of stock repurchased is determined net of stock issued in the year, including shares issued pursuant to compensatory arrangements.
The Inflation Reduction Act of 2022 (the “IRA”) imposes a 1% excise tax on the fair market value of stock repurchased after December 31, 2022 by publicly traded U.S. corporations.
United may from time to time make loans to borrowers and/or on properties outside of its primary market area as an accommodation to its existing customers. United Bank, George Mason, and Crescent originate and acquire residential real estate loans for resale in the secondary market.
United may from time to time make loans to borrowers and/or on properties outside of its primary market area as an accommodation to its existing customers. United Bank originates residential real estate loans for resale in the secondary market. Mortgage loan originations are generally intended to be sold in the secondary market on a best efforts or mandatory basis.
Depending on the pricing in the marketplace, servicing rights are either sold or retained. 6 During 2023, United originated $860.9 million of real estate loans for sale in the secondary market and sold $861.5 million of loans designated as held for sale in the secondary market. Net gains on the sales of these loans during 2023 were $25.9 million.
Servicing rights are not retained. During 2024, United originated $645.9 million of real estate loans for sale in the secondary market and sold $657.8 million of loans designated as held for sale in the secondary market. Net gains on the sales of these loans during 2024 were $16.1 million.
As a result of the new rule, the FDIC insurance costs of insured depository institutions, including United Bank, would generally increase. 12 On November 16, 2023, the FDIC Board of Directors approved a final rule to implement a special assessment to recover the loss to the DIF associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.
On November 16, 2023, the FDIC issued a final rule to implement a special assessment to recover the loss to the DIF associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.
Training is provided to managers annually to prepare them for difficult conversations, analyzing team compensation, and maintaining fairness, among other topics. 8 We are committed to providing a safe and healthy work environment for our employees and offer services to foster the best physical, mental, and social well-being of our workforce.
We are committed to providing a safe and healthy work environment for our employees and offer services to foster the best physical, mental, and social well-being of our workforce.
Deposit Insurance The deposits of United Bank are insured by the FDIC to the extent provided by law. Accordingly, United Bank is also subject to regulation by the FDIC. United Bank is subject to deposit insurance assessments to maintain the Deposit Insurance Fund (“DIF”) of the FDIC.
United Bank is subject to deposit insurance assessments to maintain the Deposit Insurance Fund (“DIF”) of the FDIC.
Whether it is a compliance or regulatory violation, wrongdoing, improper conduct, or harassment, the confidential report will be instantly and discreetly forwarded for review. Competition United faces a high degree of competition in all of the markets it serves. We face strong competition in gathering deposits, making loans and obtaining client assets for management by our investment or trust operations.
Competition United faces a high degree of competition in all of the markets it serves. We face strong competition in gathering deposits, making loans and obtaining client assets for management by our investment or trust operations. United considers all of West Virginia to be included in its market area.
United benefited from both these changes. On October 18, 2022, the FDIC adopted a final rule to increase initial base deposit insurance assessment rates for insured depository institutions by 2 basis points, beginning with the first quarterly assessment period of 2023.
The risk matrix utilizes four risk categories which are distinguished by capital levels and supervisory ratings. On October 18, 2022, the FDIC adopted a final rule that increased the initial base deposit insurance assessment rates for insured depository institutions by 2 basis points, beginning with the first quarterly assessment period of 2023.
None of these employees are represented by a collective bargaining unit and management considers employee relations to be excellent. We emphasize positive attitudes, communication, teamwork, goal attainment, personal growth, and the pursuit of excellence when it comes to delivering high-quality service to our customers and fellow employees.
We emphasize positive attitudes, communication, teamwork, goal attainment, personal growth, and the pursuit of excellence when it comes to delivering high-quality service to our customers and fellow employees. Our human capital management strategy focuses on recruiting, developing, and engaging a talented workforce.
United Bank provides services to its correspondent banks such as the buying and selling of federal funds.
United Bank provides services to its correspondent banks such as the buying and selling of federal funds. As of December 31, 2024, United’s business activities are confined to one operating segment, United Bank, and one reportable segment, community banking.
In November 2021, the federal banking agencies adopted a final rule, with compliance by May 1, 2022, that requires banking organizations to notify their primary banking regulator within 36 hours of determining that a “computer-security incident” has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, the banking organization’s ability to carry out banking operations or deliver banking products and services to a material portion of its customer base, its businesses and operations that would result in material loss, or its operations that would impact the stability of the United States. 17 In July 2023, the SEC issued a final rule, “Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure,” which requires registrants to provide investors, through enhanced and standardized disclosures, greater insight into material cybersecurity incidents and the registrants’ cybersecurity risk management, strategy and governance.
Banking organizations are required to notify their primary banking regulator within 36 hours of determining that a “computer-security incident” has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, the banking organization’s ability to carry out banking operations or deliver banking products and services to a material portion of its customer base, its businesses and operations that would result in material loss, or its operations that would impact the stability of the United States.
Banks with more than $10 billion in assets, such as United Bank, are subject to supervision by the CFPB with respect to these federal consumer financial laws. Anti-Money Laundering and the USA Patriot Act A major focus of governmental policy on financial institutions in recent years has been aimed at combating money laundering and terrorist financing.
Anti-Money Laundering and the USA Patriot Act A major focus of governmental policy on financial institutions in recent years has been aimed at combating money laundering and terrorist financing. The U.S.
Managers are expected to maintain open communication throughout the year as it pertains to the performance and mentorship of their employees.
Managers are expected to maintain open communication throughout the year as it pertains to the performance and mentorship of their employees. Training is provided to managers annually to prepare them for difficult conversations, analyzing team compensation, and maintaining fairness, among other topics.
Because the estimated loss pursuant to the systemic risk determination will be periodically adjusted, the FDIC could: (1) cease collection early, if it has collected enough to recover actual or estimated losses; (2) extend the special assessment collection period one or more quarters beyond the initial eight-quarter collection period, if actual or estimated losses exceed the amounts collected; and (3) impose a final shortfall special assessment on a one-time basis after the receiverships for Silicon Valley Bank and Signature Bank terminate, if actual losses exceed the amounts collected.
The FDIC can also: (1) cease collection early and (2) impose a final shortfall special assessment on a one-time basis after the receiverships for Silicon Valley Bank and Signature Bank terminate, if actual losses exceed the amounts collected.
With prior regulatory approval, Virginia banks are permitted unlimited branch banking throughout each state. In addition, interstate acquisitions of and by Virginia banks and bank holding companies are permissible on a reciprocal basis, as well as reciprocal interstate acquisitions by thrift institutions.
In addition, interstate acquisitions of and by Virginia banks and bank holding companies are permissible on a reciprocal basis, as well as reciprocal interstate acquisitions by thrift institutions. These conditions serve to intensify competition within United’s market.
The FDIC estimated that of the total cost of the failures of Silicon Valley Bank and Signature Bank of approximately $16.3 billion was attributable to the protection of uninsured depositors.
The FDIC estimated in November 2023 that of the total cost of the failures of Silicon Valley Bank and Signature Bank of approximately $16.3 billion was attributable to the protection of uninsured depositors. As of September 30, 2024, the FDIC’s total loss estimate was $24.1 billion, of which $18.9 billion will be recovered through the special assessment.
The increased assessment rate schedules would remain in effect unless and until the reserve ratio of the Deposit Insurance Fund meets or exceeds 2 percent.
The increased assessment rate schedules remain in effect unless and until the reserve ratio of the DIF meets or exceeds 2 percent. As a result of the new rule, the FDIC insurance costs of insured depository institutions, including United Bank, have generally increased.
The loan and lease portfolio is mainly comprised of commercial, real estate and consumer loans including credit card and home equity loans. Since year-end 2022, commercial, financial and agricultural loans increased $264.5 million or 2.28%. In particular, commercial real estate loans increased $304.7 million or 3.80% while commercial loans (not secured by real estate) decreased $40.1 million or 1.11%.
The loan and lease portfolio is mainly comprised of commercial, real estate and consumer loans including credit card and home equity loans. Since year-end 2023, commercial, financial and agricultural loans were flat, decreasing $8.0 million or less than 1%.
The final rules implement the “pay versus performance” disclosure requirements mandated by Section 953(a) of the Dodd-Frank Act. Disclosure related to these final rules was effective for United’s proxy statement filed in 2023.
Disclosure related to these final rules was effective for United’s proxy statement filed in 2023.
The CFPB has broad rulemaking, supervisory and enforcement authority over consumer financial products and services, including deposit products, residential mortgages, home-equity loans, and credit cards. The CFPB’s functions include investigating consumer complaints, rulemaking, supervising and examining banks’ consumer transactions, and enforcing rules related to consumer financial products and services.
The Dodd-Frank Act centralized responsibility for consumer financial protection by creating the CFPB, and giving it responsibility for implementing, examining and enforcing compliance with federal consumer protection laws. The CFPB has broad rulemaking, supervisory and enforcement authority over consumer financial products and services, including deposit products, residential mortgages, home-equity loans, and credit cards.
The proposed rule requires covered institutions to establish policies and procedures for monitoring and evaluating their compensation practices. In August 2022, the SEC adopted final rules requiring public companies to disclose the relationship between the executive compensation actually paid to the company’s named executive officers (“NEOs”) and the company’s financial performance.
The proposed rule has not been finalized. 15 In August 2022, the SEC adopted final rules requiring public companies to disclose the relationship between the executive compensation actually paid to the company’s named executive officers (“NEOs”) and the company’s financial performance. The final rules implement the “pay versus performance” disclosure requirements mandated by Section 953(a) of the Dodd-Frank Act.
Commercial Loans and Leases The commercial loan and lease portfolio consists of loans and leases to corporate borrowers primarily in small to mid-size industrial and commercial companies, as well as automobile dealers, service, retail and wholesale merchants. Collateral securing these loans includes equipment, machinery, inventory, receivables, vehicles and commercial real estate.
Construction and land development loans increased $360.8 million or 11.46%, residential real estate loans increased $236.1 million or 4.48%, and consumer loans decreased $281.6 million or 26.45% due mainly to a decrease in indirect automobile financing. 4 Commercial Loans and Leases The commercial loan and lease portfolio consists of loans and leases to corporate borrowers primarily in small to mid-size industrial and commercial companies, as well as automobile dealers, service, retail and wholesale merchants.
Capital Requirements United and United Bank are each required to comply with applicable capital adequacy standards established by the Federal Reserve Board (the “Basel III Capital Rules”).
In June 2024, the FDIC announced that it projects that the special assessment will be collected for an additional two quarters beyond the initial eight-quarter collection period, at a lower rate. Capital Requirements United and United Bank are each required to comply with applicable capital adequacy standards established by the Federal Reserve Board (the “Basel III Capital Rules”).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf 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. 18 The Consumer Financial Protection Bureau (“CFPB”) may reshape the consumer financial laws through rulemaking and enforcement of the prohibitions against unfair, deceptive and abusive business practices.
Biggest changeThe Consumer Financial Protection Bureau (“CFPB”) may reshape the consumer financial laws through rulemaking and enforcement of the prohibitions against unfair, deceptive and abusive business practices. Compliance with any such change may impact the business operations of depository institutions offering consumer financial products or services, including United Bank .
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.
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 25 Board, and various taxing authorities, responding by adopting and/or proposing substantive revision to laws, regulations, rules, standards, policies, and interpretations.
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.
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. 24 United’s principal source of funds to pay dividends on its common stock is cash dividends from its subsidiaries.
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.
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. 18 CREDIT RISKS There are no assurances as to adequacy of the allowance for credit losses.
Federal Reserve 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 could reduce the demand for a borrower’s products and services.
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.
Any cyber-attack or other security breach involving the misappropriation, loss or other unauthorized disclosure of confidential customer information could severely damage 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. 22 United’s business continuity plans or data security systems could prove to be inadequate, resulting in a material interruption in, or disruption to, its business and a negative impact on results of operations.
Any cyber-attack or other security breach involving the misappropriation, loss or other unauthorized disclosure of confidential customer information could severely damage 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. 20 United’s business continuity plans or data security systems could prove to be inadequate, resulting in a material interruption in, or disruption to, its business and a negative impact on results of operations.
Deterioration in economic conditions affecting borrowers and securities issuers; new information regarding existing loans, credit commitments and securities holdings; 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.
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.
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 impact United significantly. The Federal Reserve regulates the supply of money and credit in the United States.
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.
Under the CECL model, United is required to present these certain financial assets, carried at amortized cost, at the net amount expected to be collected over the life of the financial asset.
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.
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; 26 • 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; and • Geopolitical conditions such as acts or threats of terrorism or military conflicts.
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.
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. 21 OPERATIONAL RISKS United’s information systems may experience an interruption or breach in security.
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. 19 OPERATIONAL RISKS United’s information systems may experience an interruption or breach in security.
Specifically, unpredictable and more frequent weather disasters may adversely impact the value of real property securing the loans in our portfolios.
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.
Therefore, changes in general market interest rates, such as a change in the monetary policy of the Board of Governors of the Federal Reserve System or otherwise beyond those which are contemplated by United’s interest rate risk model and policy, could have an effect on net interest income.
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.
Failure to comply with relevant laws, regulations or policies could result in enforcement and other legal actions, sanctions by regulatory agencies, civil money and criminal penalties, the loss of FDIC insurance, the revocation of a banking charter, significant fines and/or reputation damage, which could have a material adverse effect on United’s business, financial condition and results of operations.
Failure 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 criminal penalties, the loss of FDIC insurance, the revocation of a banking charter, significant fines and/or reputation damage, which could have a material adverse effect on United’s business, financial condition and results of operations.
Poor quality services could damage United’s reputation with its customers. 23 In addition, these third party service providers are sources of operational and informational security risk to United, including risks associated with operational errors, information system interruptions or breaches, and unauthorized disclosures of sensitive or confidential client or customer information.
Poor quality services could damage United’s reputation with its customers. In addition, these third party service providers are sources of operational, cybersecurity and informational security risk to United, including risks associated with operational errors, coding errors, information system interruptions or breaches, and unauthorized disclosures of sensitive or confidential client or customer information.
Any of the foregoing could have a material adverse 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 such violations, there can be no assurance that such violations will not occur.
Any of the foregoing could have a material adverse 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 violations of applicable laws or regulations, there can be no assurance that such violations will not occur.
United common stock is not a bank deposit and, therefore, is not insured against loss by the Federal Deposit Insurance Corporation, any other deposit insurance fund or by any other public or private entity.
United common stock is not a bank deposit and, therefore, is not insured against loss by the FDIC, any other deposit insurance fund or by any other public or private entity.
United expends substantial effort and incurs costs to improve its systems, audit capabilities, staffing and training in order to satisfy regulatory requirements, but the regulatory authorities may determine that such efforts are insufficient.
United expends substantial effort and incurs costs to improve its systems, audit capabilities, staffing and training in order to seek to satisfy regulatory requirements and meet supervisory expectations, but the regulatory authorities may determine that such efforts are insufficient.
The payment of these dividends by its subsidiaries is also restricted by federal and state banking laws and regulations. As of December 31, 2023, approximately $372.1 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.
The payment of these dividends by its subsidiaries is also restricted by federal and state banking laws and regulations. As of December 31, 2024, approximately $458.4 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.
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 Bank Secrecy Act compliance, Community Reinvestment Act issues, fair lending laws, fair housing laws, consumer protection laws, unfair, deceptive, or abusive acts or practices regulations and other laws and regulations.
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.
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.
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 change may materially affect United’s business and results of operations.
These laws, regulations, rules, standards, policies, and interpretations are constantly evolving and may change significantly over time.
These laws, regulations, rules, standards, policies, and interpretations are constantly evolving and may change significantly over time, and are difficult to predict.
The Basel III changes have resulted in generally higher minimum capital ratios than in the past that requires United and its subsidiaries to maintain capital buffers above minimum requirements to avoid restrictions on capital distributions and executive bonus payments.
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.
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 unpredictable ways.
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 unpredictable ways.
The process for obtaining these required regulatory approvals has become substantially more difficult since the global financial crisis, 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.
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.
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.
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.
Information security risks for financial institutions like us have increased recently in part because of new technologies, the use of the internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions, employees working from home and the increased sophistication and activities of organized crime, perpetrators of fraud, hackers, terrorists and others.
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.
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. United is subject to liquidity risk. We require liquidity to meet our deposit and debt obligations as they come due.
A decline in market share could lead to a decline in net income which would have a negative impact on shareholder value. 22 United is subject to liquidity risk. We require liquidity to meet our deposit and debt obligations as they come due.
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.
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.
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.
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. 23 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.
The costs and limitations related to this additional regulatory reporting regimen have yet to be fully determined, although they may be material and the limitations and restrictions that will be placed upon United Bank with respect to its consumer product offering and services may produce significant, material effects on United Bank (and United’s) profitability.
The costs and limitations related to this additional regulatory reporting regimen have yet to be fully determined, although they may be material and the limitations and restrictions that will be placed upon United Bank with respect to its consumer product offering and services may produce significant, material effects on United Bank (and United’s) profitability. 17 United is subject to regulatory capital requirements and failure to comply with these standards may impact dividend payments, equity repurchases and executive compensation.
The severity of the constraints depends on the amount of the shortfall and the institution’s “eligible retained income” (that is, four quarter trailing net income, net of distributions and tax effects not reflected in net income).
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).
Further, the effects of climate change 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.
Further, the effects of climate change 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. 26 Climate change also exposes us and our customers to transition risks associated with the transition to a less carbon-dependent economy.
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.
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.
This increased the complexity and associated risk, particularly in times of economic uncertainty or other unforeseen circumstances, which could impact United’s results of operations and capital levels as well as place stress on our internal controls over financial reporting.
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.
Compliance with any such change may impact the business operations of depository institutions offering consumer financial products or services, including United Bank . The CFPB has broad rulemaking authority to administer and carry out the provisions of the Dodd-Frank Act with respect to financial institutions that offer covered financial products and services to consumers.
The CFPB has broad rulemaking authority to administer and carry out the provisions of the Dodd-Frank Act with respect to financial institutions that offer covered financial products and services to consumers.
Such changes could materially, negatively impact our business, results of operations, financial condition and/or our reputation, in addition to having a similar impact on our customers.
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 reputation, in addition to having a similar impact on our customers.
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. 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.
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.
We are also subject to reputational risk from shareholder concerns about our practices related to climate change, our carbon footprint and our business relationships with customers who operate in carbon-intensive industries. Our business, reputation and ability to attract and retain employees may also be harmed if our response to climate change is perceived to be ineffective or insufficient.
We may also be subject to reputational risk and negative public opinion from shareholder concerns about our, actual or perceived, action, or inaction, in response to climate change, our carbon footprint and our business relationships with customers who operate in carbon-intensive industries.
Conditions such as an economic recession, rising unemployment, changes in interest rates, money supply 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.
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.
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. 25 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 improved profitability through financial management, economies of scale or expanded services.
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 improved profitability through financial management, economies of scale or expanded services.
United may be required to repurchase mortgage loans or indemnify buyers against losses in some circumstances, which could harm liquidity, results of operations and financial condition .
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 against losses in some circumstances, which could harm liquidity, results of operations and financial condition .
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”).
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 new standard 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, 20 referred to as the Current Expected Credit Loss (“CECL”) model as opposed to the previous “incurred loss” model, which required recognition of losses on loans, leases and other financial assets only when those losses had incurred.
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.
Potential problems with vendors such as those discussed above 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.
Potential problems with vendors such as those discussed above 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. 21 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.
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.
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.
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.
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 faces strong competition in gathering deposits, making loans and obtaining client assets for management by its investment or trust operations. United considers all of West Virginia to be included in its market area.
United faces a high degree of competition in all of the markets we serve and thus faces strong competition in gathering deposits, making loans and obtaining client assets for management by its investment or trust operations.
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%.
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.
These regulations affect United’s lending practices, capital structure, investment practices, dividend policy, operations and growth, among other things. These regulations also impose obligations to maintain appropriate policies, procedures and controls, among other things, to detect, prevent and report money laundering and terrorist financing and to verify the identities of United’s customers.
These regulations also impose obligations to maintain appropriate policies, procedures and controls, among other things, to detect, prevent and report money laundering 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.
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. 28 Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to United’s environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.
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 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.
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.
Ongoing legislative or regulatory uncertainties and changes regarding climate risk management and practices may result in higher regulatory, compliance, credit and reputational risks and costs. 29 Item 1B. UNRESOLVED STAFF COMMENTS None
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.
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.
This report is qualified in its entirety by these risk factors. 16 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.
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.
United’s success depends, to a certain extent, upon local and national economic and political conditions, as well as governmental monetary policies.
United is subject to higher 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 (the “FRB”). From time to time, the FRB changes these capital adequacy standards.
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.
These provisions effectively inhibit a non-negotiated merger or other business combination, which could adversely affect the market price of United’s common stock. 27 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.
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.
Removed
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. 19 United may be terminated as a servicer of mortgage loans, be required to repurchase a mortgage loan or reimburse investors for credit losses on a mortgage loan, or incur costs, liabilities, fines and other sanctions if we fail to satisfy our servicing obligations, including our obligations with respect to mortgage loan foreclosure actions .
Added
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.
Removed
United, through its mortgage banking subsidiary, Crescent, acts as servicer for approximately $1.2 billion of mortgage loans owned by third parties as of December 31, 2023. As a servicer for those loans, United has certain contractual obligations, including foreclosing on defaulted mortgage loans or, to the extent applicable, considering alternatives to foreclosure such as loan modifications or short sales.
Added
Litigation challenging actions or regulations by Federal or state authorities could, depending on the outcome, significantly affect the regulatory and supervisory framework affecting our operations.
Removed
If United commits a material breach of its obligations as servicer, United may be subject to termination as servicer if the breach is not cured within a specified period of time following notice, causing United to lose servicing income.
Added
For example, there is litigation pending to challenge 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 successful, could significantly and adversely affect the fees banks can charge on debit card transactions.
Removed
In some cases, United may be contractually obligated to repurchase a mortgage loan or reimburse the investor for credit losses incurred on the loan as a remedy for servicing errors with respect to the loan.
Added
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.
Removed
If United has increased repurchase obligations because of claims that United did not satisfy our obligations as a servicer, or increased loss severity on such repurchases, United may have a significant reduction to net servicing income within its noninterest income.
Added
Like other U.S. financial services companies, United has been and expects to continue to be the target of cyber-attacks and other attempts to disrupt its operations.
Removed
United may incur costs if United is required to, or if United elects to, re-execute or re-file documents or take other action in its capacity as a servicer in connection with pending or completed foreclosures. United may incur litigation costs if the validity of a foreclosure action is challenged by a borrower.
Added
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.
Removed
If a court were to overturn a foreclosure because of errors or deficiencies in the foreclosure process, United may have liability to the borrower and/or to any title insurer of the property sold in foreclosure if the required process was not followed. These costs and liabilities may not be legally or otherwise reimbursable to United.
Added
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.
Removed
In addition, if certain documents required for a foreclosure action are missing or defective, United could be obligated to cure the defect or repurchase the loan. United may incur liability to securitization investors relating to delays or deficiencies in its processing of mortgage assignments or other documents necessary to comply with state law governing foreclosures.
Added
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.
Removed
The fair value of United’s mortgage servicing rights may be negatively affected to the extent our servicing costs increase because of higher foreclosure costs.
Added
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.
Removed
United may be subject to fines and other sanctions imposed by federal or state regulators as a result of actual or perceived deficiencies in our foreclosure practices or in the foreclosure practices of other mortgage loan servicers. Any of these actions may harm United’s reputation or negatively affect its home lending or servicing business.
Added
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.
Removed
With respect to loans that are originated through United’s broker or correspondent channels, the remedies available against the originating broker or correspondent, if any, may not be as broad as the remedies available to purchasers, guarantors and insurers of mortgage loans against United.
Added
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.
Removed
United faces further risk that the originating broker or correspondent, if any, may not have financial capacity to perform remedies that otherwise may be available. Therefore, if a purchaser, guarantor or insurer enforces its remedies against United, it may not be able to recover losses from the originating broker or correspondent.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn addition, United’s CISO has served in various roles in Operations, Physical Security, Fraud Investigations, and Information Security for over 24 years with United. The CISO holds a Bachelor of Science in Criminal Justice and has led the Information Security department since 2014.
Biggest changeThe CISO is responsible for leading and c oordinatin g our daily cybersecurity efforts, including leading a team of qualified individuals with significant relevant experience and certifications. In addition, United’s CISO has served in various roles in Operations, Physical Security, Fraud Investigations, and Information Security for over 24 years with United.
We maintain ongoing relationships with reputable third-party firms specializing in cybersecurity to assess our systems, conduct penetration testing, and audit our processes for compliance with industry standards and regulations. United recognizes the inherent cybersecurity risks associated with third-party service providers.
These experts evaluate the effectiveness of our cybersecurity controls, identify vulnerabilities, and recommend improvements. We maintain ongoing relationships with reputable third-party firms specializing in cybersecurity to assess our systems, conduct penetration testing, and audit our processes for compliance with industry standards and regulations. United recognizes the inherent cybersecurity risks associated with third-party service providers.
Our proactive approach to cybersecurity involves numerous processes including, regular risk assessments, employee training, incident response planning and testing, and continuous improvement in our cybersecurity practices. To ensure the robustness of our cybersecurity processes, we engage qualified assessors, consultants, and auditors on a periodic basis. These experts evaluate the effectiveness of our cybersecurity controls, identify vulnerabilities, and recommend improvements.
Our proactive approach to cybersecurity involves numerous processes including, regular risk assessments, employee training, incident response planning and testing, and continuous improvement in our cybersecurity practices. To ensure the robustness of our cybersecurity processes, we engage qualified assessors, consultants, and auditors on a periodic 28 Table of Contents basis.
The Risk Committee periodically reviews management’s strategies and policies for assessing and managing risk, including, but not limited to, the approval of the overall risk appetite and review of the risk management structure. 30 At the management level, the responsibility for oversight of the risk management function lies with the Chief Risk & Information Officer.
In particular, the Risk Committee is responsible for oversight of information security, including cybersecurity, vendor management, and business continuity planning. The Risk Committee periodically reviews management’s strategies and policies for assessing and managing risk, including, but not limited to, the approval of the overall risk appetite and review of the risk management structure.
The management of the Company’s cybersecurity team has over a 100 years of industry experience combined, holds numerous certifications, and is regularly trained through continuing professional education. Information security, and specifically cyber security, is formally discussed quarterly at the Governance Steering Committee (“GSC”).
The CIRO provides regular risk management reports to the Risk Committee and the full Board of Directors, as well as at meetings of the independent directors. The management of the Company’s cybersecurity team has over a 100 years of industry experience combined, holds numerous certifications, and is regularly trained through continuing professional education.
The Information Security and IT Security teams stay up to date on industry best practices, participate in industry threat intelligence feeds, and maintain multiple professional certifications in the areas of privacy and security. The Information Security department is integrated with vendor management, business continuity planning, disaster recovery, and incident response.
The CISO holds a Bachelor of Science in Criminal Justice and has led the Information Security department since 2014. The Information Security and IT Security teams stay up to date on industry best practices, participate in industry threat intelligence feeds, and maintain multiple professional certifications in the areas of privacy and security.
All employees have a responsibility to report suspected or verified incidents to the Information Security department and/or the CISO, and all employees are trained annually regarding the identification and reporting of incidents. The CISO maintains a centralized record all incidents and reports on these quarterly to the GSC and the Board Risk Committee.
We deploy a variety of preventative and detective tools to monitor, block, and provide alerts regarding suspicious activity. All employees have a responsibility to report suspected or verified incidents to the Information Security department and/or the CISO, and all employees are trained annually regarding the identification and reporting of incidents.
The GSC is comprised of executive management, IT internal audit, digital banking leadership, and United’s Chief Information Security Officer (“CISO”). The activities of the GSC are reported quarterly to the Board Risk Committee. The CISO is responsible for leading and coordinating our daily cybersecurity efforts, including leading a team of qualified individuals with significant relevant experience and certifications.
Information security, and specifically cyber security, is formally discussed quarterly at the Governance Steering Committee (“GSC”). The GSC is comprised of executive management, IT internal audit, digital banking leadership, and United’s Chief Information Security Officer (“CISO”). The activities of the GSC are reported quarterly to the Board Risk Committee.
Additionally, we have a formal cybersecurity program based on the NIST CSF (“National Institute of Standards and Technology Cybersecurity Framework”) and the CIS (“Center for Internet Security”) Benchmarks that identifies and assesses cybersecurity risks. We deploy a variety of preventative and detective tools to monitor, block, and provide alerts regarding suspicious activity.
The Information Security department is integrated with vendor management, business continuity planning, disaster recovery, and incident response. Additionally, we have a formal cybersecurity program based on the NIST CSF (“National Institute of Standards and Technology Cybersecurity Framework”) and the CIS (“Center for Internet Security”) Benchmarks that identifies and assesses cybersecurity risks.
The Chief Risk & Information Officer (“CIRO”) is an executive officer of the Company who reports directly to the Chief Executive Officer. The CIRO provides regular risk management reports to the Risk Committee and the full Board of Directors, as well as at meetings of the independent directors.
At the management level, the responsibility for oversight of the risk management function lies with the Chief Risk & Information Officer. The Chief Risk & Information Officer (“CIRO”) is an executive officer of the Company who reports directly to the Chief Executive Officer.
The CIRO is also immediately notified of any incident that exceeds pre-defined thresholds.
The CISO maintains a centralized record all incidents and reports on these quarterly to the GSC and the Board Risk Committee. The CIRO is also immediately notified of any incident that exceeds pre-defined thresholds. 29
Removed
In particular, the Risk Committee is responsible for oversight of information security, including cybersecurity, vendor management, and business continuity planning.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn Washington, DC, United leases all seven (7) of its branch facilities under operating leases. United leases twenty-five (25) of its branch offices in North Carolina under operating leases while owning eighteen (18) branches. In South Carolina, United owns twenty-one (21) of its facilities while leasing under operating leases four (4) branch offices.
Biggest changeIn Washington, DC, United leases all nine (9) of its branch facilities under operating leases. United leases twenty-five (25) of its branch offices in North Carolina under operating leases while owning eighteen (18) branches. In South Carolina, United owns twenty-one (21) of its facilities while leasing under operating leases four (4) branch offices.
United owns all four (4) of its Pennsylvania facilities. In Ohio, United owns its one branch. United leases operations centers in the Charleston, West Virginia and Chantilly, Virginia areas and owns two operations centers in the Morgantown, West Virginia area and Washington, North Carolina. 31
United owns all four (4) of its Pennsylvania facilities. In Ohio, United owns its one branch. United leases operations centers in the Charleston, West Virginia and Chantilly, Virginia areas and owns two operations centers in the Morgantown, West Virginia area and Washington, North Carolina.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMINE SAFETY DISCLOSURES Not applicable. 32 UNITED BANKSHARES, INC. FORM 10-K, PART II
Biggest changeMINE SAFETY DISCLOSURES Not applicable. 30 UNITED BANKSHARES, INC. FORM 10-K, PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Ending 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 United Bankshares, Inc. 100.00 128.82 114.05 132.70 153.99 149.17 NASDAQ Bank Index 100.00 124.37 115.04 164.41 137.64 132.91 S&P Mid-Cap Index 100.00 126.17 143.39 178.85 155.42 180.90 34 Issuer Repurchases The table below includes certain information regarding United’s purchase of its common shares during the three months ended December 31, 2023: Period Total Number of Shares Purchased (1) (2) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans (3) Maximum Number of Shares that May Yet be Purchased Under the Plans (3) 10/01 – 10/31/2023 0 $ 00.00 0 4,371,239 11/01 – 11/30/2023 7 $ 27.37 0 4,371,239 12/01 – 12/31/2023 0 $ 00.00 0 4,371,239 Total 7 $ 27.37 (1) Includes shares exchanged in connection with the exercise of stock options or the vesting of restricted stock under United’s long-term incentive plans.
Biggest changePeriod Ending 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 United Bankshares, Inc. 100.00 88.54 103.02 119.54 115.80 120.69 NASDAQ Bank Index 100.00 92.50 132.19 110.67 106.87 128.85 S&P Mid-Cap Index 100.00 113.65 141.76 123.19 143.38 163.30 32 Issuer Repurchases The table below includes certain information regarding United’s purchase of its common shares during the three months ended December 31, 2024: Period Total Number of Shares Purchased (1) (2) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans (3) Maximum Number of Shares that May Yet be Purchased Under the Plans (3) 10/01 – 10/31/2024 0 $ 00.00 0 4,371,239 11/01 – 11/30/2024 5 $ 35.96 0 4,371,239 12/01 – 12/31/2024 0 $ 00.00 0 4,371,239 Total 5 $ 35.96 (1) Includes shares exchanged in connection with the exercise of stock options or the vesting of restricted stock under United’s long-term incentive plans.
The cumulative total shareholder return assumes a $100 investment on December 31, 2018 in the common stock of United and each index and the cumulative return is measured as of each subsequent fiscal year-end. There is no assurance that United’s common stock performance will continue in the future with the same or similar trends as depicted in the graph.
The cumulative total shareholder return assumes a $100 investment on December 31, 2019 in the common stock of United and each index and the cumulative return is measured as of each subsequent fiscal year-end. There is no assurance that United’s common stock performance will continue in the future with the same or similar trends as depicted in the graph.
As of December 31, 2023, United still has 4,371,239 shares available for repurchase under the 2022 Plan. The Board of Directors believes that the availability of authorized but unissued common stock of United is of considerable value if opportunities should arise for the acquisition of other businesses through the issuance of United’s stock.
As of December 31, 2024, United still has 4,371,239 shares available for repurchase under the 2022 Plan. The Board of Directors believes that the availability of authorized but unissued common stock of United is of considerable value if opportunities should arise for the acquisition of other businesses through the issuance of United’s stock.
On May 11, 2022, the Board of Directors approved a new repurchase plan (the “2022 Plan”) to repurchase up to 4,750,000 shares of United’s common stock on the open market. The 2022 Plan replaced the 2019 Plan. During 2022, United repurchased 378,761 shares under the 2022 Plan. United did not repurchase any shares in 2023.
On May 11, 2022, the Board of Directors approved a new repurchase plan (the “2022 Plan”) to repurchase up to 4,750,000 shares of United’s common stock on the open market. The 2022 Plan replaced the 2019 Plan. During 2022, United repurchased 378,761 shares under the 2022 Plan. United did not repurchase any shares in 2023 or 2024.
Holders of the common stock will not have preemptive rights with respect to the preferred stock. 33 There are no preemptive or conversion rights or, redemption or sinking fund provisions with respect to United’s stock. All of the issued and outstanding shares of United’s stock are fully paid and non-assessable.
Holders of the common stock will not have preemptive rights with respect to the preferred stock. 31 There are no preemptive or conversion rights or, redemption or sinking fund provisions with respect to United’s stock. All of the issued and outstanding shares of United’s stock are fully paid and non-assessable.
The following graph compares United’s cumulative total shareholder return (assuming reinvestment of dividends) on its common stock for the five-year period ending December 31, 2023, with the cumulative total return (assuming reinvestment of dividends) of the Standard and Poor’s Midcap 400 Index and with the NASDAQ Bank Index.
The following graph compares United’s cumulative total shareholder return (assuming reinvestment of dividends) on its common stock for the five-year period ending December 31, 2024, with the cumulative total return (assuming reinvestment of dividends) of the Standard and Poor’s Midcap 400 Index and with the NASDAQ Bank Index.
Shares are purchased pursuant to the terms of the applicable plan and not pursuant to a publicly announced stock repurchase plan. For the quarter ended December 31, 2023 – no shares were exchanged by participants in United’s long-term incentive plans.
Shares are purchased pursuant to the terms of the applicable plan and not pursuant to a publicly announced stock repurchase plan. For the quarter ended December 31, 2024 – no shares were exchanged by participants in United’s long-term incentive plans.
United’s common stock is traded over the counter on the National Association of Securities Dealers Automated Quotations System, Global Select Market (“NASDAQ”) under the trading symbol UBSI. The closing sale price reported for United’s common stock on February 22, 2024, the last practicable date, was $34.36.
United’s common stock is traded over the counter on the National Association of Securities Dealers Automated Quotations System, Global Select Market (“NASDAQ”) under the trading symbol UBSI. The closing sale price reported for United’s common stock on February 20, 2025, the last practicable date, was $36.77.
For the quarter ended December 31, 2023, the following shares were purchased for the deferred compensation plan: November 2023 – 7 shares at an average price of $27.37. (3) In May of 2022, United’s Board of Directors approved a repurchase plan to repurchase up to 4,750,000 shares of United’s common stock on the open market (the “2022 Plan”).
For the quarter ended December 31, 2024, the following shares were purchased for the deferred compensation plan: November 2024 – 5 shares at an average price of $35.96. (3) In May of 2022, United’s Board of Directors approved a repurchase plan to repurchase up to 4,750,000 shares of United’s common stock on the open market (the “2022 Plan”).
The outstanding shares are held by approximately 9,233 shareholders of record, as well as 43,255 shareholders in street name as of January 31, 2024. The unissued portion of United’ s authorized common stock (subject to registration approval by the SEC) and the treasury shares are available for issuance as the Board of Directors determines advisable.
The outstanding shares are held by approximately 9,265 shareholders of record, as well as 47,319 shareholders in street name as of January 31, 2025. The unissued portion of United’ s authorized common stock (subject to registration approval by the SEC) and the treasury shares are available for issuance as the Board of Directors determines advisable.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stock As of January 31, 2024, 200,000,000 shares of common stock, par value $2.50 per share, were authorized for United, of which 134,952,678 were issued, including 7,308,583 shares held as treasury shares.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stock As of January 31, 2025, 200,000,000 shares of common stock, par value $2.50 per share, were authorized for United, of which 150,560,338 were issued, including 7,348,188 shares held as treasury shares.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. [RESERVED] 35 Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 35 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 61 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 66 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES 135 Item 9A. CONTROLS AND PROCEDURES 135 Item 9B.
Biggest changeItem 6. [RESERVED] 33 Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 33 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 58 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 63 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES 132 Item 9A. CONTROLS AND PROCEDURES 132 Item 9B.
Added
OTHER INFORMATION 132 Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 132 Part III Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 133 Item 11. EXECUTIVE COMPENSATION 133 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 133 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 133 Item 14.
Added
PRINCIPAL ACCOUNTING FEES AND SERVICES 134 Part IV Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 135 Item 16. FORM 10-K SUMMARY 138 2 UNITED BANKSHARES, INC. FORM 10-K, PART I

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table summarizes United’s credit loss experience for loan and leases losses, based on loan categories, for the year of 2023 and 2022: (Dollars in thousands) 2023 2022 Commercial, financial and agricultural: Owner-occupied commercial real estate Loans & leases charged off $ 855 $ 68 Recoveries 187 489 Net loans & leases charged off (recovered) $ 668 $ (421 ) Average gross loans & leases outstanding 1,687,029 1,716,201 Net charge-offs (recoveries) as a percentage of average gross loans & leases outstanding 0.04 % (0.02 %) Nonowner-occupied commercial real estate Loans & leases charged off $ 24 $ 0 Recoveries 1,233 234 Net loans & leases (recovered) charged off $ (1,209 ) $ (234 ) Average gross loans & leases outstanding 6,472,608 6,042,221 Net (recoveries) charge-offs as a percentage of average gross loans & leases outstanding (0.02 %) 0.00 % 51 (Dollars in thousands) 2023 2022 Other Commercial Loans & leases charged off $ 2,007 $ 4,308 Recoveries 1,729 5,367 Net loans & leases charged off (recovered) $ 278 $ (1,059 ) Average gross loans & leases outstanding 3,568,986 3,613,204 Net charge-offs (recoveries) as a percentage of average gross loans & leases outstanding 0.01 % (0.03 %) Residential Real Estate Loans & leases charged off $ 785 $ 1,546 Recoveries 697 1,507 Net loans & leases charged off $ 88 $ 39 Average gross loans & leases outstanding 4,894,091 4,080,515 Net charge-offs as a percentage of average gross loans & leases outstanding 0.00 % 0.00 % Construction Loans & leases charged off $ 14 $ 2 Recoveries 80 1,414 Net loans & leases recovered $ (66 ) $ (1,412 ) Average gross loans & leases outstanding 3,025,815 2,517,561 Net recoveries as a percentage of average gross loans & leases outstanding 0.00 % (0.06 %) Consumer: Bankcard Loans & leases charged off $ 263 $ 355 Recoveries 28 9 Net loans & leases charged off $ 235 $ 346 Average gross loans & leases outstanding 9,290 8,766 Net charge-offs as a percentage of average gross loans & leases outstanding 2.53 % 3.95 % Other consumer Loans & leases charged off $ 7,356 $ 3,371 Recoveries 687 529 Net loans & leases charged off $ 6,669 $ 2,842 Average gross loans & leases outstanding 1,211,568 1,309,773 Net charge-offs as a percentage of average gross loans & leases outstanding 0.55 % 0.22 % Total Loans & leases charged off $ 11,304 $ 9,650 Recoveries 4,641 9,549 Net loans & leases charged off $ 6,663 $ 101 Average gross loans & leases outstanding 20,869,387 19,288,241 Net charge-offs as a percentage of average gross loans & leases outstanding 0.03 % 0.00 % Nonaccrual loans & leases $ 30,919 $ 30,871 Allowance for loan & lease losses 259,237 234,746 Loans & leases (net of unearned income) 21,359,084 20,558,166 Allowance for loan & lease losses as a percentage of loans (net of unearned income) 1.21 % 1.14 % Nonaccrual loans as a percentage of loans & leases (net of unearned income) 0.14 % 0.15 % Allowance for loan & lease losses as a percentage of nonaccrual loans & leases 838.45 % 760.41 % 52 United continues to evaluate risks which may impact its loan and lease portfolios.
Biggest changeThe following table summarizes United’s credit loss experience for loan and leases losses, based on loan categories, for the year of 2024 and 2023: (Dollars in thousands) 2024 2023 Commercial, financial and agricultural: Owner-occupied commercial real estate Loans & leases charged off $ 116 $ 855 Recoveries 1,183 187 Net loans & leases charged off (recovered) $ (1,067 ) $ 668 Average gross loans & leases outstanding 1,580,499 1,687,029 Net (recoveries) charge-offs as a percentage of average gross loans & leases outstanding (0.07 %) 0.04 % Nonowner-occupied commercial real estate Loans & leases charged off $ 2,581 $ 24 Recoveries 200 1,233 Net loans & leases (recovered) charged off $ 2,381 $ (1,209 ) Average gross loans & leases outstanding 6,947,311 6,472,608 Net charge-offs (recoveries) as a percentage of average gross loans & leases outstanding 0.03 % (0.02 %) Other Commercial Loans & leases charged off $ 3,589 $ 2,007 Recoveries 1,650 1,729 Net loans & leases charged off (recovered) $ 1,939 $ 278 Average gross loans & leases outstanding 3,483,589 3,568,986 Net charge-offs as a percentage of average gross loans & leases outstanding 0.06 % 0.01 % Residential Real Estate Loans & leases charged off $ 481 $ 785 48 (Dollars in thousands) 2024 2023 Recoveries 495 697 Net loans & leases charged off $ (14 ) $ 88 Average gross loans & leases outstanding 5,384,411 4,894,091 Net charge-offs as a percentage of average gross loans & leases outstanding 0.00 % 0.00 % Construction Loans & leases charged off $ 29 $ 14 Recoveries 319 80 Net loans & leases recovered $ (290 ) $ (66 ) Average gross loans & leases outstanding 3,260,085 3,025,815 Net (recoveries) charge-offs as a percentage of average gross loans & leases outstanding (0.01 %) 0.00 % Consumer: Bankcard Loans & leases charged off $ 431 $ 263 Recoveries 19 28 Net loans & leases charged off $ 412 $ 235 Average gross loans & leases outstanding 9,696 9,290 Net charge-offs as a percentage of average gross loans & leases outstanding 4.25 % 2.53 % Other consumer Loans & leases charged off $ 10,303 $ 7,356 Recoveries 1,119 687 Net loans & leases charged off $ 9,184 $ 6,669 Average gross loans & leases outstanding 908,570 1,211,568 Net charge-offs as a percentage of average gross loans & leases outstanding 1.01 % 0.55 % Total Loans & leases charged off $ 17,530 $ 11,304 Recoveries 4,985 4,641 Net loans & leases charged off $ 12,545 $ 6,663 Average gross loans & leases outstanding 21,574,161 20,869,387 Net charge-offs as a percentage of average gross loans & leases outstanding 0.06 % 0.03 % Nonaccrual loans & leases $ 56,460 $ 30,919 Allowance for loan & lease losses 271,844 259,237 Loans & leases (net of unearned income) 21,673,493 21,359,084 Allowance for loan & lease losses as a percentage of loans (net of unearned income) 1.25 % 1.21 % Nonaccrual loans as a percentage of loans & leases (net of unearned income) 0.26 % 0.14 % Allowance for loan & lease losses as a percentage of nonaccrual loans & leases 481.48 % 838.45 % United continues to evaluate risks which may impact its loan and lease portfolios.
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.
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 35 factors.
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 37 significant change.
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.
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.
United uses this measure to monitor net interest income performance and to manage its balance sheet composition. 34 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.
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. 36 Net interest income is presented in this discussion on a tax-equivalent basis.
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.
United cannot assure that any of these statements, estimates, or beliefs will be realized and actual results may differ from those contemplated in these “forward-looking statements.” United undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise. 35 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.
United cannot assure that any of these statements, estimates, or beliefs will be realized and actual results may differ from those contemplated in these “forward-looking statements.” United undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise. 33 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.
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. 58 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.
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. 55 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.
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.
See Notes L and M 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.
The December 31, 2023 ratios reflects United’s election of a five-year transition provision, allowed by the Federal Reserve Board and other federal banking agencies in response to the COVID-19 pandemic, to delay for two years the full impact of CECL on regulatory capital, followed by a three-year transition period.
The December 31, 2024 ratios reflects United’s election of a five-year transition provision, allowed by the Federal Reserve Board and other federal banking agencies in response to the COVID-19 pandemic, to delay for two years the full impact of CECL on regulatory capital, followed by a three-year transition period.
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 2023 and 2022 was immaterial.
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 2024 and 2023 was immaterial.
Derivative contracts are carried at fair value and not 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.
Derivative contracts are carried at fair value and not 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 S, Notes to Consolidated Financial Statements.
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.
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 L and M, Notes to Consolidated Financial Statements.
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, 2023, 2022, and 2021. Interest income on all loans and investment securities was subject to state taxes.
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, 2024, 2023, and 2022. Interest income on all loans and investment securities was subject to state taxes.
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, 2023, there was no allowance for credit losses related to the Company’s available for sale 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, 2024, there was no allowance for credit losses related to the Company’s available for sale securities.
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.
Further discussion of commitments is included in Note R, 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.
Management has evaluated all significant events and transactions that occurred after December 31, 2023, but prior to the date these financial statements were issued, for potential recognition or disclosure required in these financial statements.
Management has evaluated all significant events and transactions that occurred after December 31, 2024, but prior to the date these financial statements were issued, for potential recognition or disclosure required in these financial statements.
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.
The potential impact to United’s operating results for any of the changes cannot be reasonably estimated. See Note O, Notes to Consolidated Financial Statements for information regarding United’s ASC Topic 740 disclosures.
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 $1.62 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 $1.69 million and $1.71 million, respectively.
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 55 United’s pension plan is based upon the fair value of the plan assets compared to the projected benefit obligation.
United uses certain valuation methodologies to measure the fair value of the assets within United’s pension plan which are presented in Note P, 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.
Generally, interest income increased in 2023 due to the impact of rising market interest rates on earning assets, organic loan growth and a change in the asset mix to higher earning assets while interest expense increased mainly due to higher funding costs as a result of the rising market interest rates on higher interest-bearing balances.
Generally, interest income increased in 2024 due to the impact of rising market interest rates on earning assets, loan growth and a change in the asset mix to higher earning assets while interest expense increased mainly due to higher funding costs as a result of the rising market interest rates on higher interest-bearing balances.
There was no provision for credit losses recorded on available for sale investment securities for the year of 2023 and 2022 and no allowance for credit losses on available for sale investment securities as of December 31, 2023 and 2022.
There was no provision for credit losses recorded on available for sale investment securities for the year of 2024 and 2023 and no allowance for credit losses on available for sale investment securities as of December 31, 2024 and 2023.
All interest income on loans and investment securities was subject to state income taxes. 48 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, 2023, 2022, and 2021 with the consolidated interest and rate earned or paid on such amount.
All interest income on loans and investment securities was subject to state income taxes. 45 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, 2024, 2023, and 2022 with the consolidated interest and rate earned or paid on such amount.
The allowance for credit losses related to held to maturity securities was $17 thousand as of December 31, 2023 as compared to $18 thousand as of December 31, 2022.
The allowance for credit losses related to held to maturity securities was $18 thousand as of December 31, 2024 as compared to $17 thousand as of December 31, 2023.
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 $604 thousand and decrease by approximately $572 thousand, respectively.
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 $599 thousand and decrease by approximately $578 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 decrease by approximately $2.18 million and increase by approximately $2.61 million, 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 decrease by approximately $2.13 million and increase by approximately $2.58 million, respectively.
Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 (Dollars in thousands) Average Balance Interest (1) Avg. Rate (1) Average Balance Interest (1) Avg. Rate (1) Average Balance Interest (1) Avg.
Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022 (Dollars in thousands) Average Balance Interest (1) Avg. Rate (1) Average Balance Interest (1) Avg. Rate (1) Average Balance Interest (1) Avg.
Management believes that the allowance for credit losses of $303.94 million at December 31, 2023 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.
Management believes that the allowance for credit losses of $306.75 million at December 31, 2024 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.
During the fourth quarter of 2023, United’s Board of Directors declared a cash dividend of $0.37 per share. Dividends per share of $1.45 for the year of 2023 represented an increase over the $1.44 per share paid for 2022.
During the fourth quarter of 2024, United’s Board of Directors declared a cash dividend of $0.37 per share. Dividends per share of $1.48 for the year of 2024 represented an increase over the $1.45 per share paid for 2023.
At December 31, 2023, the allowance for loan and lease losses was $259.24 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.
At December 31, 2024, the allowance for loan and lease losses was $271.84 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.
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, 2023. At December 31, 2023, United’s borrowing capacity for the FRB Discount Window was $2.67 billion.
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, 2024. At December 31, 2024, United’s borrowing capacity for the FRB Discount Window was $4.83 billion.
Prices and values obtained from third party vendors that do not reflect forced liquidation or distressed sales are not adjusted by management. When quoted prices or observable market data are not available, management’s judgment is necessary to estimate fair value. At December 31, 2023, approximately 13.04% of total assets, or $3.90 billion, consisted of financial instruments recorded at fair value.
Prices and values obtained from third party vendors that do not reflect forced liquidation or distressed sales are not adjusted by management. When quoted prices or observable market data are not available, management’s judgment is necessary to estimate fair value. At December 31, 2024, approximately 10.22% of total assets, or $3.07 billion, consisted of financial instruments recorded at fair value.
United has various unused lines of credit available from certain of its correspondent banks in the aggregate amount of $230 million, all of which was available at December 31, 2023.
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, 2024.
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 March 1, 2023 (the 2022 Form 10-K ) for a discussion and analysis of the more significant factors that affected periods prior to 2022.
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 29, 2024 (the 2023 Form 10-K ) for a discussion and analysis of the more significant factors that affected periods prior to 2024.
(2) 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 $31.15 million for the year of 2023 while the provision for credit losses was $18.82 million for the year of 2022.
(2) 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 $ 25.15 million for the year of 2024 while the provision for credit losses was $31.15 million for the year of 2023.
The primary capital ratio, capital and reserves to total assets and reserves, was 16.79% at December 31, 2023 as compared to 16.11% at December 31, 2022. United’s average equity to average asset ratio was 15.89% at December 31, 2023 as compared to 15.83% at December 31, 2022. All of these financial measurements reflect a financially sound position.
The primary capital ratio, capital and reserves to total assets and reserves, was 17.47% at December 31, 2024 as compared to 16.79% at December 31, 2023. United’s average equity to average asset ratio was 16.57% at December 31, 2024 as compared to 15.89% at December 31, 2023. All of these financial measurements reflect a financially sound position.
Quarterly Results Net income for the first quarter of 2023 was $98.31 million as compared to earnings of $81.66 million for the first quarter of 2022.
Quarterly Results Net income for the first quarter of 2024 was $86.81 million as compared to earnings of $98.31 million for the first quarter of 2023.
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 $25.92 million in additional allowance (funded by additional provision for loan and lease losses), which would have negatively impacted the year of 2023 net income by approximately $20.48 million, after-tax or $0.15 diluted earnings per common share.
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 $27.18 million in additional allowance (funded by additional provision for loan and lease losses), which would have negatively impacted the year of 2024 net income by approximately $21.48 million, after-tax or $0.16 diluted earnings per common share.
United’s provision for credit losses relates to its portfolio of loans and leases, held to maturity securities and interest receivable on loans which are discussed in more detail in the following paragraphs. The provision for loan and lease losses for the year of 2023 was $31.15 million as compared to $18.83 million for the year of 2022.
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 2024 was $25.15 million as compared to $31.15 million for the year of 2023.
The regulatory requirements for a well-capitalized financial institution are a risk-based capital ratio of 10.0%, a Common Equity Tier 1 capital ratio of 6.5%, a Tier 1 capital ratio of 8.0% and a leverage ratio of 5.0%. 60 Total shareholders’ equity was $4.77 billion at December 31, 2023, which was an increase of $255.05 million or 5.65% from December 31, 2022.
The regulatory requirements for a well-capitalized financial institution are a risk-based capital ratio of 10.0%, a Common Equity Tier 1 capital ratio of 6.5%, a Tier 1 capital ratio of 8.0% and a leverage ratio of 5.0%. 57 Total shareholders’ equity was $4.99 billion at December 31, 2024, which was an increase of $221.98 million or 4.65% from December 31, 2023.
As of December 31, 2023, United’s available for sale state and political subdivisions securities had an amortized cost of $613.59 million, with an estimated fair value of $533.83 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, 2023.
As of December 31, 2024, United’s available for sale state and political subdivisions securities had an amortized cost of $574.58 million, with an estimated fair value of $495.07 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, 2024.
Most of these financial instruments valued using unobservable market information were loans held for sale at our mortgage banking segment. At December 31, 2023, only $678 thousand or less than 1% of total liabilities were recorded at fair value. This entire amount was valued using methodologies involving observable market data.
Most of these financial instruments valued using unobservable market information were loans held for sale. At December 31, 2024, only $20 thousand or less than 1% of total liabilities were recorded at fair value. This entire amount was valued using methodologies involving unobservable market data.
(2) net of allowance for credit losses of $18 thousand. At December 31, 2023, gross unrealized losses on available for sale securities were $363.60 million. Securities with the most significant gross unrealized losses at December 31, 2023 consisted primarily of agency residential mortgage-backed securities, state and political subdivision securities, agency commercial mortgage-backed securities, asset-backed securities and other corporate securities.
(2) net of allowance for credit losses of $17 thousand. At December 31, 2024, gross unrealized losses on available for sale securities were $323.94 million. Securities with the most significant gross unrealized losses at December 31, 2024 consisted primarily of agency residential mortgage-backed securities, state and political subdivision securities, agency commercial mortgage-backed securities and other corporate securities.
As a percentage of loans and leases, net of unearned income, the allowance for loan losses was 1.21% at December 31, 2023 and 1.14% at December 31, 2022. The ratio of the allowance for loan and lease losses to nonperforming loans and leases or coverage ratio was 569.78% and 400.33% at December 31, 2023 and December 31, 2022, respectively.
As a percentage of loans and leases, net of unearned income, the allowance for loan losses was 1.25% at December 31, 2024 and 1.21% at December 31, 2023. The ratio of the allowance for loan and lease losses to nonperforming loans and leases or coverage ratio was 370.36% and 569.78% at December 31, 2024 and December 31, 2023, respectively.
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.
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.
Year Ended (Dollars in thousands) December 31 2023 December 31 2022 December 31 2021 Net interest income (GAAP) $ 919,924 $ 896,431 $ 742,734 Tax-equivalent adjustment (non-GAAP) (1) 4,014 4,467 4,218 Tax-equivalent net interest income (non-GAAP) $ 923,938 $ 900,898 $ 746,952 (1) 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 2023, 2022, and 2021.
Year Ended (Dollars in thousands) December 31 2024 December 31 2023 December 31 2022 Net interest income (GAAP) $ 911,068 $ 919,924 $ 896,431 Tax-equivalent adjustment (non-GAAP) (1) 3,362 4,014 4,467 Tax-equivalent net interest income (non-GAAP) $ 914,430 $ 923,938 $ 900,898 (1) 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 2024, 2023, and 2022.
As of December 31, 2023, United’s available for sale mortgage-backed securities had an amortized cost of $1.83 billion, with an estimated fair value of $1.60 billion.
As of December 31, 2024, United’s available for sale mortgage-backed securities had an amortized cost of $1.69 billion, with an estimated fair value of $1.47 billion.
This increase is primarily due to increases of $170.19 million in net earnings and $73.05 million in accumulated other comprehensive income due mainly to an after-tax increase in the fair value of available for sale securities. United’s equity to assets ratio was 15.94% at December 31, 2023 as compared to 15.31% at December 31, 2022.
This increase is primarily due to increases of $172.11 million in net earnings and $35.78 million in accumulated other comprehensive income due mainly to an after-tax increase in the fair value of available for sale securities. United’s equity to assets ratio was 16.63% at December 31, 2024 as compared to 15.94% at December 31, 2023.
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 2023 was $135.26 million, which was a decrease of $18.00 million or 11.75% from the year of 2022.
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 2024 was $123.70 million, which was a decrease of $11.56 million or 8.55% from the year of 2023.
Assumptions for the economic variables were the following: Ø The forecast for real GDP shifted slightly in the fourth quarter, from a projection of 1.50% for 2024 as of mid-September 2023 to 1.40% for 2024 as of mid-December with a projection of 1.80% for 2025.
Assumptions for the economic variables were the following: Ø The forecast for real GDP shifted slightly in the fourth quarter, from a projection of 2.00% for 2025 as of mid-September 2024 to 2.10% for 2025 as of mid-December with a projection of 2.00% for 2026.
Year Ended (Dollars in thousands) December 31 2023 December 31 2022 December 31 2021 Loan accretion $ 11,548 $ 18,315 $ 33,857 Certificates of deposit 1,119 2,765 4,305 Long-term borrowings (1,353 ) (262 ) 684 Total $ 11,314 $ 20,818 $ 38,846 The following table reconciles the difference between net interest income and tax-equivalent net interest income for the year ended December 31, 2023, 2022 and 2021.
Year Ended (Dollars in thousands) December 31 2024 December 31 2023 December 31 2022 Loan accretion $ 9,264 $ 11,548 $ 18,315 Certificates of deposit 320 1,119 2,765 Long-term borrowings (1,318 ) (1,353 ) (262 ) Total $ 8,266 $ 11,314 $ 20,818 The following table reconciles the difference between net interest income and tax-equivalent net interest income for the year ended December 31, 2024, 2023 and 2022.
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, 2023, the allowance for credit losses was $303.94 million as compared to $280.94 million at December 31, 2022.
The combined allowance for loan and lease losses and reserve for lending-related commitments is considered the allowance for credit losses. At December 31, 2024, the allowance for credit losses was $306.76 million as compared to $303.94 million at December 31, 2023.
United’s return on average assets for the year of 2023 was 1.25% and the return on average shareholders’ equity was 7.87% as compared to 1.31% and 8.25% for the year of 2022. For the year of 2023, United’s return on average tangible equity, a non-GAAP measure, was 13.33%, as compared to 14.11% for the year of 2022.
United’s return on average assets for the year of 2024 was 1.26% and the return on average shareholders’ equity was 7.61% as compared to 1.25% and 7.87% for the year of 2023. For the year of 2024, United’s return on average tangible equity, a non-GAAP measure, was 12.43%, as compared to 13.33% for the year of 2023.
The consumer loan pool reserve decreased $4.61 million primarily due to a decrease in outstanding balances. 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.
The real estate construction and development loan segment reserve increased $3.71 million due to increased outstanding balances. The consumer loan segment reserve decreased $2.95 million primarily due to a decrease in outstanding balances. 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.
Of this total, approximately 98.63% or $3.85 billion of these financial instruments used valuation methodologies involving observable market data, collectively Level 1 and Level 2 measurements, to determine fair value. Approximately 1.37% or $53.60 million of these financial instruments were valued using unobservable market information or Level 3 measurements.
Of this total, approximately 97.91% or $3.01 billion of these financial instruments used valuation methodologies involving observable market data, collectively Level 1 and Level 2 measurements, to determine fair value. Approximately 2.09% or $64.04 million of these financial instruments were valued using unobservable market information or Level 3 measurements.
Net income for the fourth quarter of 2023 was $79.39 million or $0.59 per diluted share as compared to earnings of $99.77 million or $0.74 per diluted share for the fourth quarter of 2022.
Net income for the fourth quarter of 2024 was $94.41 million or $0.69 per diluted share as compared to earnings of $79.39 million or $0.59 per diluted share for the fourth quarter of 2023.
Income taxes for the third quarter of 2023 were $24.78 million as compared to $25.92 million for the third quarter of 2022. For the quarters ended September 30, 2023 and June 30, 2023, United’s effective tax rate was 20.49% and 20.23%, respectively.
Income taxes for the third quarter of 2024 were $24.65 million as compared to $24.78 million for the third quarter of 2023. For the quarters ended September 30, 2024 and 2023, United’s effective tax rate was 20.6% and 20.5%, respectively.
United will continue to offer mortgage products through its bank mortgage channel and existing George Mason offices (which will be re-branded under the United umbrella). The consolidation will streamline operations and enhance the customer experience.
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.
Total cash dividends declared to common shareholders were $196.12 million for the year of 2023 as compared to $194.98 million for the year of 2022. The year 2023 was the fiftieth consecutive year of dividend increases to United shareholders.
Total cash dividends declared to common shareholders were $200.89 million for the year of 2024 as compared to $196.12 million for the year of 2023. The year 2024 was the fifty-first consecutive year of dividend increases to United shareholders.
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.
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 W for additional information regarding ASC Topic 820 and its impact on United’s financial statements.
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 2023 increased $23.04 million, or 2.56%, from the year of 2022.
United uses this measure to monitor net interest income performance and to manage its balance sheet composition. 44 Tax-equivalent net interest income for the year of 2024 decreased $9.51 million, or 1.04%, from the year of 2023.
United’s risk-based capital ratio is 15.38% at December 31, 2023 while its Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 13.14%, 13.14% and 11.39%, respectively.
United’s risk-based capital ratio is 16.52% at December 31, 2024 while its Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 14.14%, 14.14% and 11.74%, respectively.
Federal funds sold increased $91 thousand or 8.43%. During the year of 2023, net cash of $435.24 million and $38.99 million were provided by operating and investing activities, respectively, while net cash of $51.94 million was used in financing activities. Further details related to changes in cash and cash equivalents are presented in the Consolidated Statements of Cash Flows.
Federal funds sold increased $98 thousand or 8.38%. During the year of 2024, net cash of $445.45 million and $571.49 million were provided by operating and investing activities, respectively, while net cash of $323.64 million was used in financing activities. Further details related to changes in cash and cash equivalents are presented in the Consolidated Statements of Cash Flows.
The year of 2023 qualitative adjustments include analyses of the following: • Current conditions – United considered the impact of inflation, interest rates, the potential impact of the geopolitical situation, the banking regulatory environment and a potential government shutdown when making determinations related to factor adjustments, such as changes in economic and business conditions; collateral values for dependent loans; past due, nonaccrual and adversely classified loans and leases; concentrations of credit and external factors. • 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 year of 2024 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; and concentrations of credit. 49 • 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.
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.
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. During 2024, United sold approximately $470 million of available for sale securities at a loss of $16.30 million.
For the year of 2023, postretirement expense, which includes expense associated with United’s pension plan, supplemental early retirement plans (“SERPs”) and Savings and Stock Investment Plan (“401K plan”), decreased $2.09 million from the year of 2022.
For the year of 2024, 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”), increased $5.58 million from the year of 2023.
During the year of 2023, United increased its interest-bearing deposit balance at the FRB by $438.02 million to $1.24 billion.
During the year of 2024, United increased its interest-bearing deposit balance at the FRB by $727.91 million to $1.97 billion.
Cash flows provided by operations in 2023 were $435.24 million due mainly to net income of $366.31 million for the year of 2023. In 2022, cash flows provided by operations were $760.82 million due mainly to net income of $379.63 million for the year of 2022.
Cash flows provided by operations in 2024 were $445.45 million due mainly to net income of $373.00 million for the year of 2024. In 2023, cash flows provided by operations were $435.24 million due mainly to net income of $366.31 million for the year of 2023.
United utilized the Secured Overnight Financing Rate (“SOFR”) and Prime as the preferred alternatives to LIBOR. INTRODUCTION The following discussion and analysis presents the more significant changes in financial condition as of December 31, 2023 and 2022 and the results of operations of United and its subsidiaries for each of the years then ended.
INTRODUCTION The following discussion and analysis presents the more significant changes in financial condition as of December 31, 2024 and 2023 and the results of operations of United and its subsidiaries for each of the years then ended.
United enters into derivative contracts, mainly to protect against adverse interest rate movements on the value of certain assets or liabilities, under which it is required to either pay cash to or receive cash from counterparties depending on changes in interest rates.
United did not have any borrowings from the FRB’s Discount Window, or its Bank Term Funding Program, during the year of 2024. 56 United enters into derivative contracts, mainly to protect against adverse interest rate movements on the value of certain assets or liabilities, under which it is required to either pay cash to or receive cash from counterparties depending on changes in interest rates.
Mortgage loan sales were $861.52 million in the year of 2023 as compared to $2.20 billion in the year of 2022. Mortgage loans originated for sale were $860.90 million for the year of 2023 as compared to $1.90 billion for the year of 2022.
Mortgage loan sales were $657.84 million in the year of 2024 as compared to $861.52 million in the year of 2023. Mortgage loans originated for sale were $645.94 million for the year of 2024 as compared to $860.90 million for the year of 2023.
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 $952.01 million and an increase in deposits of $516.15 million partially offset by loan growth of $800.97 million and the net repayment of $400.29 million in FHLB advances.
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 $867.21 million and an increase in deposits of $1.14 billion partially offset by loan growth of $318.05 million and the net repayment of $1.25 billion in FHLB advances.
The following table provides the discount/premium and net accretion impact to tax-equivalent net interest income for the year ended December 31, 2023, 2022 and 2021.
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, 2024, 2023 and 2022.
The increase in this ratio was due an increase in the allowance for loan losses and a decline in nonperforming loans.
The decrease in this ratio was due to a larger increase in nonperforming loans than the allowance for loan losses.
The following table presents the allocation of United’s allowance for credit losses for the years ended December 31: 2023 2022 (in thousands) Commercial, financial & agricultural: Owner-occupied commercial real estate $ 11,895 $ 13,945 Nonowner-occupied commercial real estate 57,935 38,543 Other commercial 75,007 79,706 Total commercial, financial & agricultural 144,837 132,194 Residential real estate 41,167 36,227 Construction & land development 59,913 48,390 Consumer: Bankcard 810 561 Other consumer 12,510 17,374 Allowance for loan losses $ 259,237 $ 234,746 Reserve for lending-related commitments 44,706 46,189 Allowance for credit losses $ 303,943 $ 280,935 The following is a summary of loans and leases outstanding as a percent of gross loans at December 31: 2023 2022 Commercial, financial & agricultural: Owner-occupied commercial real estate 7.48 % 8.38 % Nonowner-occupied commercial real estate 31.43 % 30.55 % Other commercial 16.72 % 17.55 % Total commercial, financial & agricultural 55.63 % 56.48 % Residential real estate 24.66 % 22.66 % Construction & land development 14.73 % 14.22 % Consumer: Bankcard 0.05 % 0.05 % Other consumer 4.93 % 6.59 % Total 100.00 % 100.00 % 53 United’s review of the allowance for loan and lease losses at December 31, 2023 produced increased reserves in three of the four loan categories as compared to December 31, 2022.
The following table presents the allocation of United’s allowance for credit losses for the years ended December 31: 2024 2023 (in thousands) Commercial, financial & agricultural: Owner-occupied commercial real estate $ 11,852 $ 11,895 Nonowner-occupied commercial real estate 74,522 57,935 Other commercial 65,105 75,007 Total commercial, financial & agricultural 151,479 144,837 Residential real estate 46,373 41,167 Construction & land development 63,621 59,913 Consumer: Bankcard 891 810 Other consumer 9,480 12,510 Allowance for loan losses $ 271,844 $ 259,237 Reserve for lending-related commitments 34,911 44,706 Allowance for credit losses $ 306,755 $ 303,943 The following is a summary of loans and leases outstanding as a percent of gross loans at December 31: 2024 2023 Commercial, financial & agricultural: Owner-occupied commercial real estate 7.33 % 7.48 % Nonowner-occupied commercial real estate 32.01 % 31.43 % Other commercial 15.46 % 16.72 % Total commercial, financial & agricultural 54.80 % 55.63 % Residential real estate 25.40 % 24.66 % Construction & land development 16.19 % 14.73 % Consumer: Bankcard 0.05 % 0.05 % Other consumer 3.56 % 4.93 % Total 100.00 % 100.00 % United’s review of the allowance for loan and lease losses at December 31, 2024 produced increased reserves in three of the four loan categories as compared to December 31, 2023.
The unemployment rate forecast for 2024 and 2025 remained the same at 4.10%. Ø Greater risk of loss in the office portfolio due to continued hybrid and remote work that may be exacerbated by future economic conditions and in the commercial other and construction portfolios due to weakened economic conditions. Ø Reversion to historical loss data occurs via a straight-line method during the year following the one-year reasonable and supportable forecast period.
The unemployment rate forecast also shifted slightly in the fourth quarter from a projection of 4.40% for 2025 as of mid-September 2024 to 4.30% for 2025 as of mid-December with a projection of 4.30% for 2026. Ø Greater risk of loss in the office portfolio due to continued hybrid and remote work that may be exacerbated by future economic conditions. Ø Reversion to historical loss data occurs via a straight-line method during the year following the one-year reasonable and supportable forecast period.
The allowance related to the commercial, financial & agricultural loan pool increased $12.64 million due to increased outstanding balances and increased reasonable and supportable forecast adjustments particularly as it pertains to office loans.
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 $6.64 million due to increased reasonable and supportable forecast adjustments particularly as it pertains to office loans.
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 B, Notes to Consolidated Financial Statements. Loans Held For Sale Loans held for sale decreased $618 thousand or 1.09% from year-end 2022.
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. 38 Loans Held for Sale Loans held for sale were $44.36 million at December 31, 2024, a decrease of $11.90 million or 21.15% from year-end 2023.
The increase in the provision for credit losses was mainly due to a change in qualitative factors and the impact of reasonable and supportable forecasts of future macroeconomic conditions.
The provision for credit losses was $5.74 million for the first quarter of 2024 as compared to a provision for credit losses of $6.89 million for the first quarter of 2023. The decrease in the provision for credit losses was mainly due to a change in qualitative factors and the impact of reasonable and supportable forecasts of future macroeconomic conditions.
Rate (1) ASSETS Earning Assets: Federal funds sold, securities repurchased under agreements to resell & other short-term investments $ 900,077 $ 47,069 5.23 % $ 1,597,108 $ 22,950 1.44 % $ 3,162,814 $ 8,734 0.28 % Investment Securities: Taxable 4,125,467 144,420 3.50 % 4,532,713 105,780 2.33 % 3,193,414 54,678 1.71 % Tax-exempt 294,802 8,411 2.85 % 410,037 10,983 2.68 % 352,843 9,129 2.59 % Total Securities 4,420,269 152,831 3.46 % 4,942,750 116,763 2.36 % 3,546,257 63,807 1.80 % Loans and leases, net of unearned income (2) 20,909,248 1,205,434 5.77 % 19,389,485 866,744 4.47 % 17,714,288 726,794 4.10 % Allowance for credit losses (245,386 ) (216,104 ) (225,740 ) Net loans and leases 20,663,862 5.83 % 19,173,381 4.52 % 17,488,548 4.16 % Total earning assets 25,984,208 $ 1,405,334 5.41 % 25,713,239 $ 1,006,457 3.91 % 24,197,619 $ 799,335 3.30 % Other assets 3,311,450 3,360,609 3,058,476 TOTAL ASSETS $ 29,295,658 $ 29,073,848 $ 27,256,095 LIABILITIES Interest-Bearing Funds: Interest-bearing deposits (3) $ 15,782,761 $ 391,094 2.48 % $ 15,466,386 $ 80,237 0.52 % $ 14,927,845 $ 41,620 0.28 % Short-term borrowings 182,936 6,449 3.53 % 140,773 1,785 1.27 % 132,489 693 0.52 % Long- term borrowings 1,923,924 83,853 4.36 % 1,014,655 23,537 2.32 % 819,440 10,070 1.23 % Total Interest-Bearing Funds 17,889,621 481,396 2.69 % 16,621,814 105,559 0.64 % 15,879,774 52,383 0.33 % Noninterest-bearing deposits (3) 6,475,051 7,580,624 6,709,510 Accrued expenses and other liabilities 276,883 269,970 236,123 TOTAL LIABILITIES 24,641,555 24,472,408 22,825,407 SHAREHOLDERS’ EQUITY 4,654,103 4,601,440 4,430,688 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 29,295,658 $ 29,073,848 $ 27,256,095 NET INTEREST INCOME $ 923,938 $ 900,898 $ 746,952 INTEREST SPREAD 2.72 % 3.27 % 2.97 % NET INTEREST MARGIN 3.56 % 3.50 % 3.09 % (1) 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 2023, 2022 and 2021.
Rate (1) ASSETS Earning Assets: Federal funds sold, securities repurchased under agreements to resell & other short-term investments $ 1,253,832 $ 66,207 5.28 % $ 900,077 $ 47,069 5.23 % $ 1,597,108 $ 22,950 1.44 % Investment Securities: Taxable 3,424,113 128,731 3.76 % 4,125,467 144,420 3.50 % 4,532,713 105,780 2.33 % Tax-exempt 205,427 5,796 2.82 % 294,802 8,411 2.85 % 410,037 10,983 2.68 % Total Securities 3,629,540 134,527 3.71 % 4,420,269 152,831 3.46 % 4,942,750 116,763 2.36 % Loans and leases, net of unearned income (2) 21,612,707 1,304,749 6.04 % 20,909,248 1,205,434 5.77 % 19,389,485 866,744 4.47 % Allowance for credit losses (265,171 ) (245,386 ) (216,104 ) Net loans and leases 21,347,536 6.11 % 20,663,862 5.83 % 19,173,381 4.52 % Total earning assets 26,230,908 $ 1,505,483 5.74 % 25,984,208 $ 1,405,334 5.41 % 25,713,239 $ 1,006,457 3.91 % Other assets 3,349,451 3,311,450 3,360,609 TOTAL ASSETS $ 29,580,359 $ 29,295,658 $ 29,073,848 LIABILITIES Interest-Bearing Funds: Interest-bearing deposits (3) $ 17,171,286 $ 539,805 3.14 % $ 15,782,761 $ 391,094 2.48 % $ 15,466,386 $ 80,237 0.52 % Short-term borrowings 195,406 7,966 4.08 % 182,936 6,449 3.53 % 140,773 1,785 1.27 % Long- term borrowings 1,017,823 43,282 4.25 % 1,923,924 83,853 4.36 % 1,014,655 23,537 2.32 % Total Interest-Bearing Funds 18,384,515 591,053 3.21 % 17,889,621 481,396 2.69 % 16,621,814 105,559 0.64 % Noninterest-bearing deposits (3) 5,994,009 6,475,051 7,580,624 Accrued expenses and other liabilities 300,766 276,883 269,970 TOTAL LIABILITIES 24,679,290 24,641,555 24,472,408 SHAREHOLDERS’ EQUITY 4,901,069 4,654,103 4,601,440 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 29,580,359 $ 29,295,658 $ 29,073,848 NET INTEREST INCOME $ 914,430 $ 923,938 $ 900,898 INTEREST SPREAD 2.53 % 2.72 % 3.27 % NET INTEREST MARGIN 3.49 % 3.56 % 3.50 % (1) 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 2024, 2023 and 2022.
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 $872.05 million and a fair value of $860.64 million and other corporate securities, with an amortized cost of $325.57 million and a fair value of $291.97 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 $476.86 million and a fair value of $474.98 million and other corporate securities, with an amortized cost of $281.65 million and a fair value of $260.08 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThese assumptions are inherently uncertain and, as a result, the model cannot precisely measure net interest income or precisely predict the impact of fluctuations in interest rates on net interest income.
Biggest changeThese assumptions are inherently uncertain and, as a result, the model cannot precisely measure net interest income or precisely predict the impact of fluctuations in interest rates on net interest income. Actual results will differ from simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and management’s strategies.
The difference between rate sensitive assets and rate sensitive liabilities for specified periods of time is known as the “GAP.” Earnings-simulation analysis captures not only the potential of these interest sensitive assets and liabilities to mature or reprice, but also the probability that they will do so.
The difference between rate sensitive assets and rate sensitive liabilities for specified periods of time is known as the “GAP.” Earnings-simulation 58 analysis captures not only the potential of these interest sensitive assets and liabilities to mature or reprice, but also the probability that they will do so.
United accounts for its derivative activities in accordance with the provisions of ASC Topic 815, “Derivatives and Hedging.” 62 Extension Risk A key feature of most mortgage loans is the ability of the borrower to repay principal earlier than scheduled. This is called a prepayment. Prepayments arise primarily due to sale of the underlying property, refinancing, or foreclosure.
United accounts for its derivative activities in accordance with the provisions of ASC Topic 815, “Derivatives and Hedging.” 59 Extension Risk A key feature of most mortgage loans is the ability of the borrower to repay principal earlier than scheduled. This is called a prepayment. Prepayments arise primarily due to sale of the underlying property, refinancing, or foreclosure.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024.
In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013 framework). Based on our assessment, we believe that, as of December 31, 2023, the Company’s internal control over financial reporting is effective based on those criteria.
In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013 framework). Based on our assessment, we believe that, as of December 31, 2024, the Company’s internal control over financial reporting is effective based on those criteria.
Opinion on Internal Control over Financial Reporting We have audited United Bankshares, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
Opinion on Internal Control over Financial Reporting We have audited United Bankshares, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
Ernst & Young LLP (“Ernst & Young”), the independent registered public accounting firm who audited the Company’s consolidated financial statements, has also issued an attestation report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023.
Ernst & Young LLP (“Ernst & Young”), the independent registered public accounting firm who audited the Company’s consolidated financial statements, has also issued an attestation report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024.
These fixed rate CMOs consisted primarily of planned amortization class (PACs), sequential-pay and accretion directed (VADMs) bonds having an average life of approximately 5.5 years and a weighted average yield of 2.10%, under current projected prepayment assumptions. These securities are expected to have moderate extension risk in a rising rate environment.
These fixed rate CMOs consisted primarily of planned amortization class (PACs), sequential-pay and accretion directed (VADMs) bonds having an average life of approximately 5.3 years and a weighted average yield of 2.78%, under current projected prepayment assumptions. These securities are expected to have moderate extension risk in a rising rate environment.
Current models show that given an immediate, sustained upward shock of 300 basis points, the average life of these securities would only extend to 6.5 years. The projected price decline of the fixed rate CMO portfolio in rates up 300 basis points would be 15.6%, or less than the price decline of a 7- year treasury note.
Current models show that given an immediate, sustained upward shock of 300 basis points, the average life of these securities would only extend to 7 years. The projected price decline of the fixed rate CMO portfolio in rates up 300 basis points would be 16.5%, or less than the price decline of a 7- year treasury note.
In our opinion, United Bankshares, Inc . and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.
In our opinion, United Bankshares, Inc . and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 29, 2024 expressed an unqualified opinion thereon.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 28, 2025 expressed an unqualified opinion thereon.
This portfolio consisted of seasoned 30-year mortgage paper with a weighted average loan age (WALA) of 4.3 years and a weighted average maturity (WAM) of 23.8 years.
This portfolio consisted of seasoned 30-year mortgage paper with a weighted average loan age (WALA) of 4.8 years and a weighted average maturity (WAM) of 23.1 years.
The remaining 3% of the mortgage related securities portfolio on December 31, 2023, included floating rate CMO, CMBS and mortgage backed securities. 63 MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management of United Bankshares, Inc.
The remaining 3% of the mortgage related securities portfolio on December 31, 2024, included floating rate CMO, CMBS and mortgage backed securities. 60 MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management of United Bankshares, Inc.
Compared to the one year analysis, United is projected to show improved performance in year two within the upward rate shock scenarios. Given an immediate, sustained 100 basis point upward shock to the yield curve used in the simulation model, net interest income for United is estimated to increase by 2.47% in year two as of December 31, 2023.
Compared to the one year analysis, United is projected to show improved performance in year two within the upward rate shock scenarios. Given an immediate, sustained 100 basis point upward shock to the yield curve used in the simulation model, net interest income for United is estimated to increase by 3.98% in year two as of December 31, 2024.
A 200 basis point immediate, sustained downward shock in the yield curve would increase net interest income by an estimated 4.35% over one year as of December 31, 2023 as compared to an increase of 2.16% over one year as of December 31, 2022. In addition to the one year earnings sensitivity analysis, a two-year analysis is also performed.
A 200 basis point immediate, sustained downward shock in the yield curve would increase net interest income by an estimated 0.40% over one year as of December 31, 2024 as compared to an increase of 4.35% over one year as of December 31, 2023. In addition to the one year earnings sensitivity analysis, a two-year analysis is also performed.
A 100 basis point immediate, sustained downward shock in the yield curve would increase net interest income by an estimated 2.66% over one year as of December 31, 2023 as compared to an increase of 2.12%, over one year as of December 31, 2022.
A 100 basis point immediate, sustained downward shock in the yield curve would increase net interest income by an estimated 0.26% over one year as of December 31, 2024 as compared to an increase of 2.66%, over one year as of December 31, 2023.
A 200 basis point immediate, sustained upward shock in the yield curve would decrease net interest income by an estimated 0.28% over one year as of December 31, 2023, as compared to a decrease of 6.83% as of December 31, 2022.
A 200 basis point immediate, sustained upward shock in the yield curve would increase net interest income by an estimated 2.82% over one year as of December 31, 2024, as compared to a decrease of 0.28% as of December 31, 2023.
This portfolio consisted primarily of Freddie Mac Multifamily K securities and Fannie Mae Delegated Underwriting and Servicing (DUS) securities with a weighted average maturity (WAM) of 8.4 years. United had approximately $23.8 million in 15-year mortgage backed securities with a projected yield of 1.99% and a projected average life of 4.5 years as of December 31, 2023.
This portfolio consisted primarily of Freddie Mac Multifamily K securities and Fannie Mae Delegated Underwriting and Servicing (DUS) securities with a weighted average maturity (WAM) of 8.4 years. United had approximately $10.8 million in 15-year mortgage backed securities with a projected yield of 2.04% and a projected average life of 4.2 years as of December 31, 2024.
A 200 basis point immediate, sustained downward shock in the yield curve would decrease net interest income by an estimated 1.34% in year two as of December 31, 2023.
A 200 basis point immediate, sustained downward shock in the yield curve would decrease net interest income by an estimated 5.35% in year two as of December 31, 2024.
Mark Tatterson Executive Vice President and Chief Financial Officer February 29, 2024 64 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of United Bankshares, Inc.
Mark Tatterson Executive Vice President and Chief Financial Officer February 28, 2025 61 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of United Bankshares, Inc.
This portfolio consisted of seasoned 15-year mortgage paper with a weighted average loan age (WALA) of 4 years and a weighted average maturity (WAM) of 11.3 years. United had approximately $325.4 million in 20-year mortgage backed securities with a projected yield of 1.82% and a projected average life of 6.6 years on December 31, 2023.
This portfolio consisted of seasoned 15-year mortgage paper with a weighted average loan age (WALA) of 5.7 years and a weighted average maturity (WAM) of 10.2 years. United had approximately $297.7 million in 20-year mortgage backed securities with a projected yield of 1.82% and a projected average life of 6.3 years on December 31, 2024.
The following table shows United’s estimated earnings sensitivity profile as of December 31, 2023 and December 31, 2022: Change in Interest Rates Percentage Change in Net Interest Income (basis points) December 31, 2023 December 31, 2022 +200 (0.28%) (6.83%) +100 0.24% (3.00%) -100 2.66% 2.12% -200 4.35% 2.16% At December 31, 2023, given an immediate, sustained 100 basis point upward shock to the yield curve used in the simulation model, net interest income for United is estimated to increase by 0.24% over one year as compared to a decrease by 3.00% at December 31, 2022.
The following table shows United’s estimated earnings sensitivity profile as of December 31, 2024 and December 31, 2023: Change in Interest Rates Percentage Change in Net Interest Income (basis points) December 31, 2024 December 31, 2023 +200 2.82% (0.28%) +100 1.75% 0.24% -100 0.26% 2.66% -200 0.40% 4.35% At December 31, 2024, given an immediate, sustained 100 basis point upward shock to the yield curve used in the simulation model, net interest income for United is estimated to increase by 1.75% over one year as compared to an increase by 0.24% at December 31, 2023.
By comparison, the price decline of a 30-year 5.5% current coupon mortgage backed security (MBS) in rates higher by 300 basis points would be approximately 12.2%. United had approximately $490.8 million in fixed rate Commercial mortgage backed Securities (CMBS) with a projected yield of 2.01% and a projected average life of 4.8 years on December 31, 2023.
By comparison, the price decline of a 30-year 5.5% current coupon mortgage backed security (MBS) in rates higher by 300 basis points would be approximately 20.1%. United had approximately $354.6 million in fixed rate Commercial mortgage backed Securities (CMBS) with a projected yield of 1.81% and a projected average life of 4.6 years on December 31, 2024.
This portfolio consisted of seasoned 20-year mortgage paper with a weighted average loan age (WALA) of 2.8 years and a weighted average maturity (WAM) of 17 years. United had approximately $154.7 million in 30-year mortgage backed securities with a projected yield of 2.62% and a projected average life of 7.6 years on December 31, 2023.
This portfolio consisted of seasoned 20-year mortgage paper with a weighted average loan age (WALA) of 3.8 years and a weighted average maturity (WAM) of 16 years. United had approximately $148.8 million in 30-year mortgage backed securities with a projected yield of 2.94% and a projected average life of 8.1 years on December 31, 2024.
At December 31, 2023, United’s mortgage related securities portfolio had an amortized cost of $1.8 billion, of which approximately $786.5 million or 43% were fixed rate collateralized mortgage obligations (CMOs).
At December 31, 2024, United’s mortgage related securities portfolio had an amortized cost of $1.7 billion, of which approximately $827.7 million or 49% were fixed rate collateralized mortgage obligations (CMOs).
A 200 basis point immediate, sustained upward shock in the yield curve would increase net interest income by an estimated 3.85% in year two as of December 31, 2023. A 100 basis point immediate, sustained downward shock in the yield curve would increase net interest income by an estimated 0.05% in year two as of December 31, 2023.
A 200 basis point immediate, sustained upward shock in the yield curve would increase net interest income by an estimated 7.00% in year two as of December 31, 2024. A 100 basis point immediate, sustained downward shock in the yield curve would decrease net interest income by an estimated 2.37% in year two as of December 31, 2024.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Charleston, West Virginia February 29, 2024 65
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Charleston, West Virginia February 28, 2025 62 http://fasb.org/us-gaap/2024#InterestExpenseDepositshttp://fasb.org/us-gaap/2024#InterestAndDividendIncomeOperating9795000P3YP5YP1YP3Yhttp://fasb.org/us-gaap/2024#InterestIncomeExpenseAfterProvisionForLoanLosshttp://fasb.org/us-gaap/2024#Liabilitieshttp://fasb.org/us-gaap/2024#Assets
The principal function of managing interest rate risk is to maintain an appropriate relationship between those assets and liabilities that are sensitive to changing market interest rates.
Interest sensitive assets and liabilities are defined as those assets or liabilities that mature or are repriced within a designated time frame. The principal function of managing interest rate risk is to maintain an appropriate relationship between those assets and liabilities that are sensitive to changing market interest rates.
Removed
Actual results will differ from simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and management’s strategies. 61 Interest sensitive assets and liabilities are defined as those assets or liabilities that mature or are repriced within a designated time frame.

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