v3.26.3
Allowance for Credit Losses
 9 Months Ended
Sep. 30, 2026
Receivables [Abstract]  
Allowance for Credit Losses
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 of $88,374 and $95,960 at September 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 September 30, 2026 and December 31, 2025:
 
     Accrued Interest Receivable  
     At September 30, 2026      At December 31, 2025  
Commercial Real Estate:
      
Owner-occupied
    $ 6,147      $ 6,922  
Nonowner-occupied
      33,254        37,086  
Other Commercial
      10,739        11,822  
Residential Real Estate
      22,218        21,643  
Construction
      13,491        16,046  
Consumer:
      
Bankcard
      0        0  
Other consumer
      2,525        2,441  
  
 
 
     
 
 
  
Total
    $ 88,374      $ 95,960  
  
 
 
     
 
 
  
The following table represents the accrued interest receivables written off by reversing interest income for the three months and nine months ended September 30, 2026 and 2025:
 
     Accrued Interest Receivables Written Off by Reversing Interest Income  
     Three Months Ended
September 30		      Nine Months Ended
September 30		  
     2026      2025      2026      2025  
Commercial real estate:
            
Owner-occupied
    $ 1      $ 0      $ 5      $ 68  
Nonowner-occupied
      289        1,112        553        1,212  
Other commercial
      4        3        212        80  
Residential real estate
      56        28        278        434  
Construction & land development
      0        9        76        216  
Consumer:
            
Bankcard
      0        0        0        0  
Other consumer
      23        41        88        190  
  
 
 
     
 
 
     
 
 
     
 
 
  
Total
    $ 373      $ 1,193      $ 1,212      $ 2,200  
  
 
 
     
 
 
     
 
 
     
 
 
  
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 $40,067 and $35,075
at September 30, 2026 and December 31, 2025, 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’s allowance for loan and lease losses at September 30, 2026 decreased $3,372 or 1.13% from December 31, 2025.
The third quarter of 2026 qualitative adjustments include analyses of the following:
 
 
•
 
Current conditions
– United considered the impact of 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 increased slightly in the third quarter, from a projection of 2.20% for 2026 as of
mid-June
2026 to 2.30% for 2026 as of
mid-September
with a projection of 2.40% for 2027. The unemployment rate forecast improved slightly in the third quarter with a projection of 4.30% for 2026 as of
mid-June
2026 to 4.10% as of
mid-September
2026 with projection of 4.10% for 2027. The forecast for the house price index increased in the third quarter with a projection of 1.01% for 2026 and 1.41% for 2027 compared to 0.67% and 0.70% for 2026 and 2027, respectively, in the second quarter. Similarly, the mortgage rate increased to 6.56% for 2026 and 6.59% for 2027 during the third quarter compared to 6.32% in 2026 and 2027 in the second quarter. The real disposable personal income forecast declined for 2026 from 0.87% in the second quarter to 0.43% in the third quarter but improved for 2027 from 2.40% in the second quarter to 2.48% in the third quarter. The outlook for the commercial real estate price index experienced minimal change in the third quarter as compared to the second 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 September 30, 2026  
     Commercial Real Estate     Other
Commercial		     Residential
Real
Estate		     Construction
& Land
Development		      Bankcard           Total  
   Owner-
occupied		     Nonowner-
occupied		     Other
Consumer		  
Allowance for Loan and Lease Losses:
                  
Beginning balance
    $ 13,753     $ 107,602     $ 58,676     $ 53,572     $ 51,320      $ 1,029     $ 13,552     $ 299,504  
Charge-offs
      0       (10,642 )      (627 )      (76 )      0        (59 )      (879 )      (12,283 ) 
Recoveries
      16       1       294       14       0        7       351       683  
Provision
      (2,757 )      8,886       (837 )      (257 )      624        33       550       6,242  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
     
 
 
    
 
 
    
 
 
  
Ending balance
    $ 11,012     $ 105,847     $ 57,506     $ 53,253     $ 51,944      $ 1,010     $ 13,574     $ 294,146  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
     
 
 
    
 
 
    
 
 
  
 
     Allowance for Loan and Lease Losses and Carrying Amount of Loans and Leases  
     For the Nine Months Ended September 30, 2026  
     Commercial Real Estate     Other
Commercial		     Residential
Real
Estate		     Construction
& Land
Development		     Bankcard           Total  
   Owner-
occupied		     Nonowner-
occupied		     Other
Consumer		  
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       (15,560 )      (6,203 )      (351 )      0       (174 )      (2,938 )      (25,226 ) 
Recoveries
      251       75       993       100       352       27       1,075       2,873  
Provision
      (2,803 )      24,616       987       (445 )      (6,375 )      268       2,733       18,981  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Ending balance
    $ 11,012     $ 105,847     $ 57,506     $ 53,253     $ 51,944     $ 1,010     $ 13,574     $ 294,146  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
 
     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
Consumer		  
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