Regulatory Matters

12 Months Ended

Dec. 31, 2017

Banking and Thrift [Abstract]

Regulatory Matters

NOTE T—REGULATORY MATTERS

The subsidiary banks are required to maintain average reserve balances with their respective Federal Reserve Bank. The average amount of those consolidated reserve balances maintained and required for the year ended December 31, 2017, were approximately $1,251,806,000 and $471,763,000, respectively. The average amount of those consolidated reserve balances maintained and required for the year ended December 31, 2016, was approximately $606,898,000 and $361,521,000, respectively.

The primary source of funds for the dividends paid by United to its shareholders is dividends received from its subsidiary banks. Dividends paid by United’s subsidiary banks are subject to certain regulatory limitations. Generally, the most restrictive provision requires regulatory approval if dividends declared in any year exceed that year’s net income, as defined, plus the retained net profits of the two preceding years.

During 2018, the retained net profits available for distribution to United by United Bank as dividends without regulatory approval, are approximately $127,674,000, plus net income for the interim period through the date of declaration.

Under Federal Reserve regulation, United Bank is also limited as to the amount they may loan to affiliates, including the parent company. Loans from United Bank to the parent company are limited to 10% of the banking subsidiaries’ capital and surplus, as defined, or $282,863,000 at December 31, 2017, and must be secured by qualifying collateral.

United’s subsidiary banks are subject to various regulatory capital requirements administered by federal banking agencies. Pursuant to capital adequacy guidelines, United’s subsidiary banks must meet specific capital guidelines that involve various quantitative measures of the banks’ assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. United’s subsidiary banks’ capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

As previously mentioned, the new Basel III Capital Rules became effective for United and United Bank on January 1, 2015 (subject to a phase-in period). These new quantitative measures established by regulation to ensure capital adequacy require United and United Bank to maintain minimum amounts and ratios of total, Tier I capital, and common Tier I capital as defined in the regulations, to risk-weighted assets, as defined, and of Tier I capital, as defined, to average assets, as defined. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on United’s financial statements. As of December 31, 2017, United exceeds all capital adequacy requirements to which it is subject.

At December 31, 2017, the most recent notification from its regulators, United and United Bank were categorized as well-capitalized. To be categorized as well-capitalized, United must maintain minimum total risk-based, Tier I risk-based,

Common Tier I risk-based, and Tier I leverage ratios as set forth in the following table. There are no conditions or events since that notification that management believes would impact United’s well-capitalized status.

United’s and United Bank, capital amounts (in thousands of dollars) and ratios are presented in the following table.

(Dollars in thousands)	Actual					For Capital Adequacy  Purposes				To Be Well- Capitalized
	Amount		Ratio			Amount		Ratio		Amount		Ratio
As of December 31, 2017:
Total Capital (to Risk- Weighted Assets):
United Bankshares	$	2,093,369		14.2	%	$	1,177,952		³8.0%	$	1,472,439		³10.0%
United Bank		2,013,852		13.7	%		1,174,099		³8.0%		1,467,624		³10.0%
Tier I Capital (to Risk- Weighted Assets):
United Bankshares	$	1,759,189		12.0	%	$	883,464		³6.0%	$	1,177,952		³8.0%
United Bank		1,936,546		13.2	%		880,575		³6.0%		1,174,099		³8.0%
Common Tier I Capital (to Risk Weighted Assets):
United Bankshares	$	1,759,189		12.0	%	$	662,598		³4.5%	$	957,086		³6.5%
United Bank		1,936,546		13.2	%		660,431		³4.5%		953,956		³6.5%
Tier I Capital (to Average Assets):
United Bankshares	$	1,759,189		10.1	%	$	698,388		³4.0%	$	872,985		³5.0%
United Bank		1,936,546		11.0	%		702,311		³4.0%		877,888		³5.0%
As of December 31, 2016:
Total Capital (to Risk-
Weighted Assets):
United Bankshares	$	1,699,984		14.9	%	$	915,479		³8.0%	$	1,144,348		³10.0%
United Bank		1,592,647		13.9	%		915,956		³8.0%		1,144,945		³10.0%
Tier I Capital (to Risk-
Weighted Assets):
United Bankshares	$	1,625,543		14.2	%	$	686,609		³6.0%	$	915,479		³8.0%
United Bank		1,518,831		13.3	%		686,967		³6.0%		915,956		³8.0%
Common Tier I Capital (to Risk Weighted Assets):
United Bankshares	$	1,393,743		12.2	%	$	514,957		³4.5%	$	743,826		³6.5%
United Bank		1,518,831		13.3	%		515,225		³4.5%		744,214		³6.5%
Tier I Capital (to Average Assets):
United Bankshares	$	1,625,543		12.2	%	$	535,227		³4.0%	$	669,033		³5.0%
United Bank		1,518,831		11.4	%		535,361		³4.0%		669,201		³5.0%

United’s mortgage banking entity, George Mason, is subject to net worth requirements issued by the U.S. Department of Housing and Urban Development (HUD). Failure to meet minimum capital requirements of HUD can result in certain mandatory and possibly additional discretionary actions that, if undertaken, could have a direct material effect on George Mason’s operations.

The minimum net worth requirement of HUD at December 31, 2017 was $2,500,000. George Mason’s net worth was $4,955,000 at December 31, 2017, which exceeded the HUD requirements.