XML 28 R17.htm IDEA: XBRL DOCUMENT v3.25.4
Allowance for Credit Losses
 12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
Allowance for Credit Losses
N
OTE F—ALLOWANCE FOR CREDIT LOSSES
The allowance for loan losses is an estimate of the expected credit losses on financial assets measured at amortized cost to present the net amount expected to be collected as of the balance sheet date. Such allowance is based on the credit losses expected to arise over the life of the asset (contractual term). Assets are charged off when United determines that such financial assets are deemed uncollectible or based on regulatory requirements, whichever is earlier. Charge-offs are recognized as a deduction from the allowance for credit losses. Expected recoveries of amounts previously charged-off, not to exceed the aggregate of the amount previously charged-off, are included in determining the necessary reserve at the balance sheet date.
United
made a policy election to present the balance separately in its consolidated balance sheets from the amortized cost of a loan. Accrued interest receivable was $95,960,000 and $87,062,000 at December 31, 2025 and December 31, 2024, respectively, related to loans and leases are included separately in “Accrued interest receivable” in the consolidated balance sheets. For all classes of loans and leases receivable, the accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days past due, unless the loan is well secured and in the process of collection. Interest received on nonaccrual loans and leases, generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal.
 
The following table represents the accrued interest receivable as of December 31, 2025 and December 31, 2024:
 
 
 
 
 
 
 
 
 
 
 
  
Accrued Interest Receivable
 
(In thousands)
  
At December 31, 2025
 
  
At December 31, 2024
 
Commercial Real Estate:
  
      
  
      
Owner-occupied
    $ 6,922      $ 4,700  
Nonowner-occupied
      37,086        30,582  
Other Commercial
      11,822        10,512  
Residential Real Estate
      21,643        21,662  
Construction
      16,046        17,174  
Consumer:
      
Bankcard
      0        0  
Other consumer
      2,441        2,432  
  
 
 
     
 
 
  
Total
    $ 95,960      $ 87,062  
  
 
 
     
 
 
  
The following table represents the accrued interest receivables written off by reversing interest income for the year ended December 31, 2025 and December 31, 2024:
 
 
 
 
 
 
 
 
 
 
 
  
Accrued Interest Receivables Written Off
by Reversing Interest Income
 
(In thousands)
  
Year Ended
 
 
  
 2025 
 
  
 2024 
 
Commercial Real Estate:
  
      
  
      
Owner-occupied
    $ 90      $ 186  
Nonowner-occupied
      1,481        853  
Other Commercial
      82        736  
Residential Real Estate
      577        232  
Construction
      267        23  
Consumer:
      
Bankcard
      0        0  
Other consumer
      241        345  
  
 
 
     
 
 
  
Total
    $ 2,738      $ 2,375  
  
 
 
     
 
 
  
United maintains an allowance for loan losses and a reserve for lending-related commitments such as unfunded loan commitments and letters of credit. For a detailed discussion of the methodology used to estimate the reserve for lending-related commitments, see Note A, “Summary of Significant Accounting Policies.” The reserve for lending-related commitments of $35,075,000 and $34,911,000 at December 31, 2025 and December 31, 2024, respectively, is separately classified on the balance sheet within liabilities. The combined allowance for loan losses and reserve for lending-related commitments is considered the allowance for credit losses.
United continuously evaluates any risks which may impact its loan and lease portfolios. Reserves are initially determined based on losses identified from the PD/LGD and Cohort models which utilize the Company’s historical information. Then any qualitative adjustments are applied to account for the Company’s view of the future and other factors. If current conditions underlying any qualitative adjustment factor were deemed to be materially different than historical conditions, then an adjustment was made for that factor.
United’s allowance for loan and lease losses at December 31, 2025 increased $25,674,000 or 9.44% from December 31, 2024. As previously mentioned, during the year of 2025, United recorded an allowance for loan and lease losses on acquired Piedmont non-PCD loans of $18,726,000 and on acquired Piedmont PCD loans of $17,518,000.
The year of 2025 qualitative adjustments include analyses of the following:
 
 
•
 
Current conditions
– United considered the impact of changes in economic and business conditions; collateral values for dependent loans; past due, nonaccrual and adversely classified loans and leases; external environment; and concentrations of credit.
 
•
 
Reasonable and supportable forecasts
– The forecast is determined on a portfolio-by-portfolio basis by relating the correlation of real GDP and the unemployment rate to loss rates to forecasts of those variables. The reasonable and supportable forecast selection is subjective in nature and requires more judgment compared to the other components of the allowance. Assumptions for the economic variables were the following:
 
 
Ø
  
The forecast for real GDP improved in the fourth quarter, from a projection of 1.80% for 2026 as of mid-September 2025 to 2.30% for 2026 as of mid-December with a projection of 2.00% for 2027. The unemployment rate forecast remained consistent in the fourth quarter with a projection of 4.40% for 2026 as of mid-September 2025 and as of mid-December with a projection of 4.20% for 2027.
 
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.
A progression of the allowance for loan losses, by portfolio segment, for the periods indicated is summarized as follows:

Allowance for Loan and Lease Losses and Carrying Amount of Loans and Leases
For the Year Ended December 31, 2025
 
 
  
Commercial Real

Estate
 
 
Other
Commercial
 
 
Residential
Real
Estate
 
 
Construction
& Land
Development
 
 
Bankcard
 
 
Other
Consumer
 
 
Total
 
(In thousands)
  
Owner-

occupied
 
 
Nonowner-
occupied
 
Allowance for Loan and Lease Losses:
  
 
 
 
 
 
 
Beginning balance
   $ 11,852     $ 74,522     $ 65,105     $ 46,373     $ 63,621     $ 891     $ 9,480     $ 271,844  
Initial allowance for PCD loans (acquired during the period)
     795       11,059       872       208       4,584       0       0       17,518  
Charge-offs
     (228 )      (35,798 )      (5,424 )      (999 )      (408 )      (320 )      (7,735 )      (50,912 ) 
Recoveries
     318       160       2,309       704       225       55       1,429       5,200  
Provision
     827       46,773       (1,133 )     7,663       (10,055 )     263       9,530       53,868  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Ending balance
   $ 13,564     $ 96,716     $ 61,729     $ 53,949     $ 57,967     $ 889     $ 12,704     $ 297,518  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
 
Allowance for Loan and Lease Losses and Carrying Amount of Loans and Leases
For the Year Ended December 31, 2024
 
(In thousands)
  
Commercial Real
Estate
 
 
Other
Commercial
 
 
Residential
Real
Estate
 
 
Construction
& Land
Development
 
 
Bankcard
 
 
Other
Consumer
 
 
Total
 
  
Owner-
occupied
 
 
Nonowner-
occupied
 
Allowance for Loan and Lease Losses:
  
 
 
 
 
 
 
Beginning balance
   $ 11,895     $ 57,935     $ 75,007     $ 41,167     $ 59,913     $ 810     $ 12,510     $ 259,237  
Charge-offs
     (116 )      (2,581 )      (3,589 )      (481 )      (29 )      (431 )      (10,303 )      (17,530 ) 
Recoveries
     1,183       200       1,650       495       319       19       1,119       4,985  
Provision
     (1,110 )     18,968       (7,963 )     5,192       3,418       493       6,154       25,152  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Ending balance
   $ 11,852     $ 74,522     $ 65,105     $ 46,373     $ 63,621     $ 891     $ 9,480     $ 271,844  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
 
A progression of the allowance for credit losses, which includes the allowance for loan losses and the reserve for lending-related commitments, for the periods presented is summarized as follows:
 
    
Year Ended December 31
  
(In thousands)
   
2025
     
2024
     
2023
  
Balance of allowance for loan and lease losses at beginning of period
    $ 271,844      $ 259,237      $ 234,746  
Initial allowance for acquired PCD loans
      17,518        0        0  
Gross charge-offs
      (50,912 )       (17,530 )       (11,304 ) 
Recoveries
      5,200        4,985        4,641  
  
 
 
     
 
 
     
 
 
  
Net charge-offs
      (45,712 )       (12,545 )       (6,663 ) 
Provision for loan and lease losses
      53,868        25,152        31,154  
  
 
 
     
 
 
     
 
 
  
Balance of allowance for loan and lease losses at end of period
    $ 297,518      $ 271,844      $ 259,237  
Reserve for lending-related commitments
      35,075        34,911        44,706  
  
 
 
     
 
 
     
 
 
  
Balance of allowance for credit losses at end of period
    $ 332,593      $ 306,755      $ 303,943