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Mergers and Acquisitions | 12 Months Ended
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Dec. 31, 2025
Business Combinations [Abstract] |
Mergers and Acquisitions | NOTE B--MERGERS AND ACQUISITIONS On January 10, 2025 (“Acquisition Date”), United consummated its acquisition of Piedmont Bancorp, Inc. (“Piedmont”). Piedmont was merged with and into United (the “Merger”), pursuant to the terms of the Agreement and Plan of Merger, dated May 9, 2024, by and between United and Piedmont (the “Agreement”). The Merger was accounted for under the acquisition method of accounting. Piedmont was the holding company for The Piedmont Bank, a Georgia state-chartered bank, with sixteen locations in the State of Georgia. Under the terms of the Agreement, each outstanding share of common stock of Piedmont was converted into the right to receive 0.300 shares of United common stock, par value $2.50 per share (the “Exchange Ratio”). Also pursuant to the Agreement, as of the effective time of the Merger, each option to purchase shares of Piedmont Common Stock (each, a “Piedmont Stock Option”) that was outstanding under the Piedmont Bancorp, Inc. 2009 Stock Option Plan (the “Piedmont Stock Plan”) immediately prior to the effective time of the Merger, was, to the extent not vested, became fully vested and exercisable and was canceled in consideration for the right to receive a lump sum cash payment with respect thereto equal to the product of: (i) the excess, if any, of the product of (A) the volume-weighted average of the closing sales price on Nasdaq of United Common Stock for the 10 full trading days ending on the second trading day immediately preceding the effective date of the Merger (the “Average United Closing Price”) multiplied by (B) the Exchange Ratio, over the applicable exercise price of such Piedmont Stock Option; and (ii) the number of shares of Piedmont Common Stock subject to such Piedmont Stock Option, less any required withholding taxes. Also pursuant to the Agreement, as of the effective time of the Merger, each warrant to purchase shares of Piedmont Common Stock (each, a “Piedmont Stock Warrant”) that was outstanding under the Piedmont Stock Plan or individual award agreement immediately prior to the Effective Time, was, to the extent not vested, became fully vested and exercisable and canceled, and in consideration therefor, received a lump sum cash payment with respect thereto equal to the product of: (A) the excess, if any, of the product of (x) the Average United Closing Price multiplied by (y) the Exchange Ratio, over the applicable exercise price of such Piedmont Stock Warrant; and (B) the number of shares of Piedmont Common Stock subject to such Piedmont Stock Warrant, less any required withholding taxes. In addition, at the effective time of the Merger, each restricted stock grant, restricted stock unit grant and any other award in respect of a share of Piedmont Common Stock subject to vesting, repurchase or other lapse restriction under a Piedmont Stock Plan that was outstanding immediately prior to the Effective Time other than a Piedmont Option or a Piedmont Stock Warrant (each, a “Piedmont Stock Award”) became fully vested, cancelled and converted automatically into the right to receive the Merger Consideration (with any fractional share being entitled to receive cash in lieu thereof) in respect of each share of Piedmont Common Stock underlying such Piedmont Stock Award, less any required withholding taxes. Immediately following the Merger, The Piedmont Bank, a wholly-owned subsidiary of Piedmont, merged with and into United Bank, a wholly-owned subsidiary of United (the “Bank Merger”) pursuant to an Agreement and Plan of Merger dated May 9, 2024 (the “Bank Plan of Merger”). United Bank survived the Bank Merger and continues to exist as a Virginia banking corporation. The former Piedmont offices operate under the DBA United Bankshares. The Piedmont Merger was accounted for under the acquisition method of accounting. The results of operations of Piedmont are included in the consolidated results of operations from the Acquisition Date. At the Acquisition Date, Piedmont had $2,356,883,000 in total assets, $ 2,079,933,000 in loans and leases, net of unearned income and $2,105,402,000 in deposits. For the year of 2025, United recorded acquisition-related costs for the Piedmont merger of $31,407,000, including a provision for credit losses of $18,726,000 for purchased non-credit deteriorated (“non-PCD”) loans. The aggregate purchase price was $280,967,000, including common stock valued at $280,946,000 and cash paid for fractional shares of $21,000. The number of shares issued in the transaction was 7,860,831, which were valued based on the closing market price of $35.74 for United’s common shares on January 10, 2025. The purchase price has been allocated to the identifiable tangible and intangible assets resulting in additions to goodwill, and core deposit intangibles of $129,959,000 and $32,764,000, respectively. The goodwill recognized results from the expected synergies and potential earnings from the combination of United and Piedmont. None of the goodwill from the Piedmont acquisition is expected to be deductible for tax purposes. The core deposit intangible is expected to be amortized on an accelerated basis over ten years from the date of the merger. United used an independent third party to help determine the fair values of the assets and liabilities acquired from Piedmont. As a result of the merger, United recorded fair value discounts of $64,065,000 on the loans and leases acquired, $24,977,000 on available-for-sale investment securities acquired, and $3,492,000 on land acquired, respectively, and premiums of $1,469,000 on buildings acquired and $408,000 on interest-bearing time deposits, respectively. United also recorded an allowance for loan and lease losses of $36,244,000 on the loans acquired split between $17,518,000 for purchased credit deteriorated (“PCD”) loans which is part of the acquisition date fair value, and $18,726,000 for non-PCD loans recorded to the provision for credit losses. In addition, United also recorded a reserve for lending-related commitments of $4,058,000 on the loan commitments acquired with an offset within other expense. The discounts and premium amounts, except for discount on the land acquired, are being accreted or amortized on an accelerated or straight-line basis, based on the type of asset or liability, over each asset’s or liability’s estimated remaining life at the time of acquisition. At December 31, 2025, the premium on the buildings had an average estimated remaining life of 30.50 years. Portfolio loans acquired from Piedmont were recorded at their fair value at the Acquisition Date based on a discounted cash flow methodology. The estimated fair value incorporates adjustments related to market loss assumptions and prevailing market interest rates for comparable assets and other market factors such as liquidity from the perspective of a market participant. Also, acquired portfolio loans and leases were evaluated upon acquisition and classified as either PCD, which indicates that the loan has experienced a more-than-insignificant deterioration in credit quality since origination, or non-PCD. United considered a variety of factors in evaluating the acquired loans and leases for a more-than-insignificant deterioration in credit quality, including but not limited to risk grades, delinquency, nonperforming status, current or previous troubled debt restructurings or bankruptcies, watch list credits and other qualitative factors that indicated a deterioration in credit quality since origination. For PCD loans and leases, an initial allowance is determined based on the same methodology as other portfolio loans and leases. This initial allowance for loan and lease losses is allocated to individual PCD loans and leases and added to the acquisition date fair values to establish the initial amortized cost basis for the PCD loans and leases. The difference between the unpaid principal balance (“UPB”), or par value, of PCD loans and leases and the amortized cost basis is considered to relate to noncredit factors and resulted in a discount of $20,906,000 at Acquisition Date. This discount will be recognized through interest income on a level-yield method over the life of the loans which is estimated at December 31, 2025 to be a weighted-average of 5.50 years. For non-PCD acquired loans and leases, the differences between the initial fair value and the UPB, or par value, are recognized as interest income on a level-yield basis over the lives of the related loans and leases which at December 31, 2025 is estimated to be a weighted-average of 4.80 years. The total fair value mark on the non-PCD loans at the Acquisition Date was $ 43,159,000 . At the Acquisition Date, an initial allowance for expected loan and lease losses of $ 18,726,000 was recorded with a corresponding charge to the provision for credit losses in the Consolidated Statements of Income. Subsequent changes in the allowance for credit losses related to PCD and non-PCD loans and leases are recognized in the provision for credit losses. The following table provides a reconciliation of the difference between the purchase price and the par value of portfolio PCD loans and leases acquired from Piedmont as of the Acquisition Date:
(Dollars in thousands) |  |  |
Purchase price of PCD loans and leases at acquisition |  | $ | 409,872 |
Allowance for credit losses at acquisition |  |  | 17,518 |
Non-credit discount at acquisition |  |  | 20,906 |
Par value (UPB) of acquired PCD loans and leases at acquisition |  | $ | 448,296 |
The consideration paid for Piedmont’s common equity and the amounts of acquired identifiable assets and liabilities assumed as of the Piedmont Acquisition Date were as follows:
(Dollars in thousands) |  |  |
Purchase price: |  |  |  |
Value of common shares issued (7,860,831 shares) |  | $ | 280,946 |
Cash for fractional shares |  |  | 21 |
Total purchase price |  |  | 280,967 |
Identifiable assets: |  |  |  |
Cash and cash equivalents |  |  | 77,497 |
Investment securities |  |  | 94,426 |
Net loans and leases |  |  | 1,998,350 |
Premises and equipment |  |  | 23,816 |
Operating lease right-of-use assets |  |  | 5,124 |
BOLI |  |  | 40,801 |
Core deposit intangible |  |  | 32,764 |
Other assets |  |  | 30,573 |
Total identifiable assets |  | $ | 2,303,351 |
Identifiable liabilities: |  |  |  |
Deposits |  | $ | 2,105,810 |
Long-term borrowings |  |  | 20,000 |
Operating lease liabilities |  |  | 5,744 |
Other liabilities |  |  | 20,789 |
Total identifiable liabilities |  |  | 2,152,343 |
Fair value of net assets acquired including identifiable intangible assets |  |  | 151,008 |
Resulting goodwill |  | $ | 129,959 |
During the twelve month period subsequent to the Acquisition Date (“Measurement Period”) the Company reviewed information relating to events and circumstances existing as of the Acquisition Date that impacted the preliminary fair value estimates of the acquired assets and liabilities. In the table of acquired net assets above, the amount of net assets acquired reflect Measurement Period adjustments made since the Acquisition Date that resulted in a net increase in net assets acquired of $ 4,756,000 and therefore, a corresponding decrease in resulting goodwill from the acquisition. The increase in net assets acquired was primarily driven by an increase of $ 5,910,000 in deferred taxes on fair value adjustments partially offset by an increase of $ 1,024,000 in accrued liabilities based on factors that were determined to be in existence as of the Acquisition Date. The operating results of United include operating results of acquired assets and assumed liabilities subsequent to the Acquisition Date. The operations of United’s Georgia geographic area, which comprises the acquired operations of Piedmont provided $ 151,925,000 in total revenues (net interest income plus other income), and $ 102,675,000 in net income, excluding non-allocated items, since the Acquisition Date. These amounts are included in United’s consolidated financial statements as of December 31, 2025 and for the year of 2025. Piedmont’s results of operations prior to the Acquisition Date are not included in United’s consolidated results of operations. The following table presents certain unaudited pro forma information for the results of operations for the year ended December 31, 2025 and 2024, as if the Piedmont merger had occurred on January 1, 2025 and 2024, respectively. These results combine the historical results of Piedmont into United’s consolidated statement of income and, while certain adjustments were made for the estimated impact of certain fair valuation adjustments and other acquisition-related activity, they are not indicative of what would have occurred had the acquisition taken place on the indicated date nor are they intended to represent or be indicative of future results of operations. In particular, no adjustments have been made to eliminate the amount of Piedmont’s provision for credit losses for 2025 and 2024 that may not have been necessary had the acquired loans been recorded at fair value as of the beginning of 2025 and 2024. Additionally, United expects to achieve operating cost savings and other business synergies as a result of the acquisition which are not reflected in the pro forma amounts.
|  | Proforma Year Ended December 31 |
(Dollars in thousands) |  | 2025 |  |  | 2024 |
Total Revenues (1) |  | $ | 1,240,758 |  |  | $ | 1,152,368 |
Net Income |  |  | 452,896 |  |  |  | 416,376 |
(1) Represents net interest income plus other income |  |  |  |  |  |  |  |

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