Allowance for Credit Losses

6 Months Ended

Jun. 30, 2026

5. 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 accrued interest receivable balance separately in its consolidated balance sheets from the amortized cost of a loan. Accrued interest receivable was $85,508 and $95,960 at June 30, 2026 and December 31, 2025, 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 June 30, 2026 and December 31, 2025:


	Accrued Interest Receivable
	At June 30, 2026		At December 31, 2025
Commercial Real Estate:
Owner-occupied	$	6,453	$	6,922
Nonowner-occupied		31,565		37,086
Other Commercial		9,971		11,822
Residential Real Estate		21,763		21,643
Construction		13,376		16,046
Consumer:
Bankcard		0		0
Other consumer		2,380		2,441

Total	$	85,508	$	95,960

The following table represents the accrued interest receivables written off by reversing interest income for the three months and six months ended June 30, 2026 and 2025:


	Accrued Interest Receivables Written Off by Reversing Interest Income
	Three Months Ended June 30				Six Months Ended June 30
	2026		2025		2026		2025
Commercial real estate:
Owner-occupied	$	4	$	41	$	4	$	68
Nonowner-occupied		260		88		264		100
Other commercial		206		44		208		77
Residential real estate		102		182		222		406
Construction & land development		76		163		76		207
Consumer:
Bankcard		0		0		0		0
Other consumer		26		73		65		149

Total	$	674	$	591	$	839	$	1,007

United estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level or term as well as reasonable and supportable forecast adjustments for changes in environmental conditions, such as changes in unemployment rates, property values or other relevant factors. A reversion to historical loss data occurs via a straight-line method during the year following the

one-year

reasonable and supportable forecast period.

United pools its loans and leases based on similar risk characteristics in estimating expected credit losses. United has identified the following portfolio segments and measures the allowance for credit losses using the following methods:

•

Method: Probability of Default/Loss Given Default (PD/LGD)

•

Commercial Real Estate Owner-Occupied

•

Commercial Real Estate Nonowner-Occupied

•

Commercial Other

•

Method: Cohort

•

Residential Real Estate

•

Construction & Land Development

•

Consumer

•

Bankcard

Risk characteristics of commercial real estate owner-occupied loans and commercial other loans and leases are similar in that they are normally dependent upon the borrower’s internal cash flow from operations to service debt. Commercial real estate nonowner-occupied loans differ in that cash flow to service debt is normally dependent on external income from third parties for use of the real estate such as rents, leases and room rates. Residential real estate loans are dependent upon individual borrowers who are affected by changes in general economic conditions, demand for housing and resulting residential real estate valuation. Construction and land development loans are impacted mainly by demand whether for new residential housing or for retail, industrial, office and other types of commercial construction within a given area. Consumer loan pool risk characteristics are influenced by general, regional and local economic conditions.

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral but may also include other

non-performing

loans, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. These individually evaluated loans are removed from their respective pools and typically represent collateral dependent loans.

Expected credit losses are estimated over the contractual term of the loans and leases, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals and modifications unless management has a reasonable expectation at the reporting date that the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancelable by United.

At the acquisition date, an initial allowance for expected credit losses for

non-PCD

loans is estimated and recorded as credit loss expense. The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans. For allowance for credit losses under ASC Topic 326 calculation purposes, United includes its acquired loans and leases in their relevant pool unless they meet the criteria for specific review.

United maintains an allowance for loan losses and a reserve for lending-related commitments such as unfunded loan commitments and letters of credit. The reserve for lending-related commitments of $37,222 and $35,075 at June 30, 2026 and December 31, 2025, respectively, is separately classified on the balance sheet and is included in other liabilities. The combined allowance for loan losses and reserve for lending-related commitments is considered the allowance for credit losses.

United’s allowance for loan and lease losses at June 30, 2026 was relatively flat from December 31, 2025, increasing $1,986 or less than 1%.

The second quarter of 2026 qualitative adjustments include analyses of the following:

•

Current conditions

– United considered the impact of changes in collateral values for dependent loans; past due, nonaccrual and adversely classified loans and leases; 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, the unemployment rate, commercial real estate price index, mortgage rate, house price index and real disposable personal income to loss rates to forecasts of those variables. The reasonable and supportable forecast selection is subjective in nature and requires more judgment compared to the other components of the allowance. Assumptions for the economic variables were the following:

•

The forecast for real GDP declined slightly in the second quarter, from a projection of 2.40% for 2026 as of

mid-March

2026 to 2.20% for 2026 as of

mid-June

with a projection of 2.30% for 2027. The unemployment rate forecast improved slightly in the second quarter with a projection of 4.40% for 2026 as of

mid-March

2026 to 4.30% as of

mid-June

2026 with projection of 4.30% for 2027. The forecast for the house price index declined in the second quarter with a projection of 0.67% for 2026 and 0.70% for 2027 compared to 1.82% and 2.24% for 2026 and 2027, respectively, in the first quarter. Similarly, the mortgage rate increased to 6.32% for 2026 and 2027 during the second quarter compared to 6.13% in 2026 and 6.22% in 2027 in the first quarter. The real disposable personal income forecast declined for 2026 from 2.03% in the first quarter to 0.87% in the second quarter but improved for 2027 from 2.13% in the first quarter to 2.40% in the second quarter. The outlook for the commercial real estate price index experienced minimal change in the second quarter as compared to the first quarter of 2026.

•

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 and lease 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 Three Months Ended June 30, 2026
	Commercial Real Estate						Other Commercial			Residential Real Estate			Construction & Land Development			Bankcard						Total
	Owner- occupied			Nonowner- occupied			Other Commercial			Residential Real Estate			Construction & Land Development			Bankcard			Other Consumer			Total
Allowance for Loan and Lease Losses:
Beginning balance	$	13,643		$	101,745		$	62,373		$	53,630		$	53,877		$	943		$	13,388		$	299,599
Charge-offs		0			(1,054	)		(4,142	)		0			0			(54	)		(863	)		(6,113	)
Recoveries		219			73			121			35			352			15			240			1,055
Provision		(109	)		6,838			324			(93	)		(2,909	)		125			787			4,963

Ending balance	$	13,753		$	107,602		$	58,676		$	53,572		$	51,320		$	1,029		$	13,552		$	299,504


	Allowance for Loan and Lease Losses and Carrying Amount of Loans and Leases For the Six Months Ended June 30, 2026
	Commercial Real Estate						Other Commercial			Residential Real Estate			Construction & Land Development			Bankcard						Total
	Owner- occupied			Nonowner- occupied			Other Commercial			Residential Real Estate			Construction & Land Development			Bankcard			Other Consumer			Total
Allowance for Loan and Lease Losses:
Beginning balance	$	13,564		$	96,716		$	61,729		$	53,949		$	57,967		$	889		$	12,704		$	297,518
Charge-offs		0			(4,918	)		(5,576	)		(275	)		0			(115	)		(2,059	)		(12,943	)
Recoveries		235			74			699			86			352			20			724			2,190
Provision		(46	)		15,730			1,824			(188	)		(6,999	)		235			2,183			12,739

Ending balance	$	13,753		$	107,602		$	58,676		$	53,572		$	51,320		$	1,029		$	13,552		$	299,504


	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						Total
	Owner- occupied			Nonowner- occupied			Other Commercial			Residential Real Estate			Construction & Land Development			Bankcard			Other Consumer			Total
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