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Loans and Leases and Allowance for Credit Losses
 12 Months Ended
Dec. 31, 2021
Receivables [Abstract]  
Loans and Leases and Allowance for Credit Losses Loans and Leases and Allowance for Credit Losses
Major classifications of the loan and lease portfolio (collectively referred to as the “loan portfolio” or “loans”) are summarized as of the dates indicated as follows (in thousands):
 December 31,
 20212020
Owner occupied commercial real estate$2,321,685 $2,090,443 
Income producing commercial real estate2,600,858 2,540,750 
Commercial & industrial(1)
1,910,162 2,498,560 
Commercial construction1,014,830 967,305 
Equipment financing1,083,021 863,830 
Total commercial8,930,556 8,960,888 
Residential mortgage1,637,885 1,284,920 
HELOC694,034 697,117 
Residential construction359,815 281,430 
Consumer138,056 146,460 
Total loans11,760,346 11,370,815 
Less ACL - loans(102,532)(137,010)
Loans, net$11,657,814 $11,233,805 
(1) Commercial and industrial loans as of December 31, 2021 and 2020 included $88.3 million and $646 million of PPP loans, respectively.
 
At December 31, 2021 and 2020, $1.01 million and $2.18 million, respectively, in overdrawn deposit accounts were reclassified as consumer loans.

Accrued interest receivable related to loans totaled $28.5 million and $35.5 million at December 31, 2021 and 2020, respectively, and was reported in accrued interest receivable on the consolidated balance sheets.

At December 31, 2021, the loan portfolio was subject to blanket pledges on certain qualifying loan types with the FHLB to secure contingent funding sources.

The following table presents loans held for investment that were sold in the periods presented (in thousands). The gains and losses on these loan sales were included in noninterest income on the consolidated statements of income.
Loans Sold
202120202019
Guaranteed portion of SBA/USDA loans$90,903 $48,385 $81,158 
Equipment financing receivables59,097 27,018 30,952 
Indirect auto loans— — 102,789 
Total$150,000 $75,403 $214,899 

At December 31, 2021 and 2020, equipment financing assets included leases of $37.7 million and $36.8 million, respectively. The components of the net investment in leases, which included both sales-type and direct financing, are presented below (in thousands). 
December 31,
 20212020
Minimum future lease payments receivable$39,962 $38,934 
Estimated residual value of leased equipment3,216 3,263 
Initial direct costs669 672 
Security deposits(687)(727)
Purchase accounting premium— 117 
Unearned income(5,432)(5,457)
Net investment in leases$37,728 $36,802 
 
Minimum future lease payments expected to be received from equipment financing lease contracts as of December 31, 2021 were as follows (in thousands): 
Year 
2022$15,667 
202311,601 
20247,100 
20254,136 
20261,369 
Thereafter89 
Total$39,962 

Nonaccrual and Past Due Loans
The following table presents the amortized cost basis in loans by aging category and accrual status as of December 31, 2021 and 2020 (in thousands). Loans with active COVID-19 deferrals are not reported as past due to the extent they are in compliance with the deferral terms.
Accruing
 Loans Past Due  
Current Loans30 - 59 Days60 - 89 Days> 90 DaysNonaccrual LoansTotal Loans
As of December 31, 2021
Owner occupied commercial real estate$2,318,944 $27 $— $— $2,714 $2,321,685 
Income producing commercial real estate2,593,124 146 — — 7,588 2,600,858 
Commercial & industrial1,903,730 584 419 — 5,429 1,910,162 
Commercial construction1,014,211 — 276 — 343 1,014,830 
Equipment financing1,079,180 1,415 685 — 1,741 1,083,021 
Total commercial8,909,189 2,172 1,380 — 17,815 8,930,556 
Residential mortgage1,622,754 1,583 235 — 13,313 1,637,885 
HELOC691,814 920 88 — 1,212 694,034 
Residential construction358,741 654 — — 420 359,815 
Consumer137,564 421 19 — 52 138,056 
Total loans$11,720,062 $5,750 $1,722 $— $32,812 $11,760,346 
As of December 31, 2020
Owner occupied commercial real estate$2,079,845 $2,013 $3 $— $8,582 $2,090,443 
Income producing commercial real estate2,522,743 1,608 1,250 — 15,149 2,540,750 
Commercial & industrial2,480,483 1,176 267 — 16,634 2,498,560 
Commercial construction964,947 231 382 — 1,745 967,305 
Equipment financing856,985 2,431 1,009 — 3,405 863,830 
Total commercial8,905,003 7,459 2,911 — 45,515 8,960,888 
Residential mortgage1,265,019 5,549 1,494 — 12,858 1,284,920 
HELOC692,504 1,942 184 — 2,487 697,117 
Residential construction280,551 365 — — 514 281,430 
Consumer145,770 429 36 — 225 146,460 
Total loans$11,288,847 $15,744 $4,625 $— $61,599 $11,370,815 
The following table presents nonaccrual loans by loan class for the periods indicated (in thousands). 
Nonaccrual loans
 December 31, 2021December 31, 2020
With no allowanceWith an allowanceTotalWith no allowanceWith an allowanceTotal
Owner occupied commercial real estate$2,141 $573 $2,714 $6,614 $1,968 $8,582 
Income producing commercial real estate6,873 715 7,588 10,008 5,141 15,149 
Commercial & industrial3,715 1,714 5,429 2,004 14,630 16,634 
Commercial construction— 343 343 1,339 406 1,745 
Equipment financing— 1,741 1,741 156 3,249 3,405 
Total commercial12,729 5,086 17,815 20,121 25,394 45,515 
Residential mortgage3,126 10,187 13,313 1,855 11,003 12,858 
HELOC219 993 1,212 1,329 1,158 2,487 
Residential construction280 140 420 274 240 514 
Consumer6 46 52 181 44 225 
Total$16,360 $16,452 $32,812 $23,760 $37,839 $61,599 

Risk Ratings
United categorizes commercial loans, with the exception of equipment financing receivables, into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current industry and economic trends, among other factors. United analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continual basis. United uses the following definitions for its risk ratings:

Pass. Loans in this category are considered to have a low probability of default and do not meet the criteria of the risk categories below.

Special Mention. Loans in this category are presently protected from apparent loss, however weaknesses exist that could cause future impairment, including the deterioration of financial ratios, past due status and questionable management capabilities. These loans require more than the ordinary amount of supervision. Collateral values generally afford adequate coverage, but may not be immediately marketable.
 
Substandard. These loans are inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged. Specific and well-defined weaknesses exist that may include poor liquidity and deterioration of financial ratios. The loan may be past due and related deposit accounts experiencing overdrafts. There is the distinct possibility that United will sustain some loss if deficiencies are not corrected. If possible, immediate corrective action is taken.

Doubtful. Specific weaknesses characterized as Substandard that are severe enough to make collection in full highly questionable and improbable. There is no reliable secondary source of full repayment.
 
Loss. Loans categorized as Loss have the same characteristics as Doubtful; however probability of loss is certain. Loans classified as Loss are charged off.
 
Equipment Financing Receivables and Consumer Purpose Loans. United applies a pass / fail grading system to all equipment financing receivables and consumer purpose loans. Under this system, loans that are on nonaccrual status, become past due 90 days or are in bankruptcy are classified as “fail” and all other loans are classified as “pass”. For reporting purposes, loans classified as “fail” are reported as “substandard” and all other loans are reported as “pass”.
 
The following tables present the risk category of term loans by vintage year, which is the year of origination or most recent renewal, as of the date indicated (in thousands).
Term LoansRevolversRevolvers converted to term loansTotal
As of December 31, 202120212020201920182017Prior
Pass
Owner occupied commercial real estate$643,151 $674,124 $278,702 $153,233 $139,584 $267,460 $68,354 $17,150 $2,241,758 
Income producing commercial real estate668,322 678,487 333,911 221,218 165,563 219,459 41,157 11,830 2,339,947 
Commercial & industrial638,567 270,150 178,944 136,281 50,567 72,904 514,750 4,361 1,866,524 
Commercial construction378,695 303,154 149,740 40,625 22,983 13,206 12,628 1,673 922,704 
Equipment financing563,618 271,913 167,904 63,254 13,145 903 — — 1,080,737 
Total commercial2,892,353 2,197,828 1,109,201 614,611 391,842 573,932 636,889 35,014 8,451,670 
Residential mortgage781,007 370,092 108,091 64,346 71,552 221,131 9 3,915 1,620,143 
HELOC— — — — — — 676,545 14,994 691,539 
Residential construction325,111 16,301 2,802 2,278 3,144 9,352 — 33 359,021 
Consumer57,530 29,218 10,757 5,137 1,439 1,355 32,312 111 137,859 
4,056,001 2,613,439 1,230,851 686,372 467,977 805,770 1,345,755 54,067 11,260,232 
Special Mention
Owner occupied commercial real estate7,772 2,979 16,639 4,374 6,007 2,641 248 286 40,946 
Income producing commercial real estate64,139 27,875 21,875 22,292 18,415 21,880 — — 176,476 
Commercial & industrial1,037 1,831 2,740 597 273 303 2,242 — 9,023 
Commercial construction14,283 16,237 13,149 22,479 11,766 52 — — 77,966 
Equipment financing— — — — — — — — — 
Total commercial87,231 48,922 54,403 49,742 36,461 24,876 2,490 286 304,411 
Residential mortgage— — — — — — — — — 
HELOC— — — — — — — — — 
Residential construction— — — — — — — — — 
Consumer— — — — — — — — — 
87,231 48,922 54,403 49,742 36,461 24,876 2,490 286 304,411 
Substandard
Owner occupied commercial real estate11,987 1,049 4,216 3,712 5,829 11,088 — 1,100 38,981 
Income producing commercial real estate15,485 12,618 3,779 29,212 6,726 16,531 — 84 84,435 
Commercial & industrial2,741 1,615 5,284 12,685 1,232 5,863 4,326 869 34,615 
Commercial construction3,464 157 272 11 9,750 255 — 251 14,160 
Equipment financing428 590 676 503 84 3 — — 2,284 
Total commercial34,105 16,029 14,227 46,123 23,621 33,740 4,326 2,304 174,475 
Residential mortgage3,339 1,585 2,813 3,229 1,205 4,744 — 827 17,742 
HELOC— — — — — — 329 2,166 2,495 
Residential construction407 — 30 51 — 306 — — 794 
Consumer37 16 22 26 22 50 3 21 197 
37,888 17,630 17,092 49,429 24,848 38,840 4,658 5,318 195,703 
Total$4,181,120 $2,679,991 $1,302,346 $785,543 $529,286 $869,486 $1,352,903 $59,671 $11,760,346 
Term LoansRevolversRevolvers converted to term loansTotal
As of December 31, 202020202019201820172016Prior
Pass
Owner occupied commercial real estate$707,501 $368,615 $231,316 $197,778 $201,362 $229,667 $56,273 $9,072 $2,001,584 
Income producing commercial real estate815,799 376,911 361,539 277,769 206,068 198,080 28,542 12,128 2,276,836 
Commercial & industrial1,092,767 287,857 263,439 115,790 92,968 58,359 515,593 3,777 2,430,550 
Commercial construction314,154 217,643 226,308 53,708 30,812 21,985 20,278 3,947 888,835 
Equipment financing413,653 270,664 125,869 39,982 9,404 445 — — 860,017 
Total commercial3,343,874 1,521,690 1,208,471 685,027 540,614 508,536 620,686 28,924 8,457,822 
Residential mortgage468,945 195,213 125,492 120,944 122,013 230,771 18 5,393 1,268,789 
HELOC— — — — — — 675,878 17,581 693,459 
Residential construction225,727 30,646 4,026 4,544 3,172 12,546 — 64 280,725 
Consumer54,997 25,528 14,206 4,531 3,595 1,677 41,445 76 146,055 
4,093,543 1,773,077 1,352,195 815,046 669,394 753,530 1,338,027 52,038 10,846,850 
Special Mention
Owner occupied commercial real estate8,759 4,088 4,221 10,025 11,138 4,728 100 — 43,059 
Income producing commercial real estate35,471 42,831 39,954 13,238 24,164 11,337 — 1,681 168,676 
Commercial & industrial1,451 16,315 2,176 630 459 17 6,464 — 27,512 
Commercial construction21,366 272 816 23,292 11,775 477 — — 57,998 
Equipment financing— — — — — — — — — 
Total commercial67,047 63,506 47,167 47,185 47,536 16,559 6,564 1,681 297,245 
Residential mortgage— — — — — — — — — 
HELOC— — — — — — — — — 
Residential construction— — — — — — — — — 
Consumer— — — — — — — — — 
67,047 63,506 47,167 47,185 47,536 16,559 6,564 1,681 297,245 
Substandard
Owner occupied commercial real estate6,586 10,473 7,596 3,717 6,753 8,473 1,528 674 45,800 
Income producing commercial real estate45,125 8,940 2,179 5,034 31,211 2,652 — 97 95,238 
Commercial & industrial1,545 5,536 6,193 1,684 1,292 1,485 22,170 593 40,498 
Commercial construction2,466 735 13,741 340 1,931 250 — 1,009 20,472 
Equipment financing631 1,392 1,371 306 96 17 — — 3,813 
Total commercial56,353 27,076 31,080 11,081 41,283 12,877 23,698 2,373 205,821 
Residential mortgage2,049 2,106 3,174 1,369 679 5,860 — 894 16,131 
HELOC— — — — — — 265 3,393 3,658 
Residential construction106 37 54 4 124 380 — — 705 
Consumer— 97 49 60 78 98 — 23 405 
58,508 29,316 34,357 12,514 42,164 19,215 23,963 6,683 226,720 
Total$4,219,098 $1,865,899 $1,433,719 $874,745 $759,094 $789,304 $1,368,554 $60,402 $11,370,815 
 
Troubled Debt Restructurings and Other Modifications
As of December 31, 2021 and 2020, United had TDRs totaling $52.4 million and $61.6 million, respectively. As of December 31, 2021 and 2020, United had remaining short-term deferrals related to the COVID-19 crisis of approximately $2.55 million and $70.7 million, respectively, which generally represented payment deferrals for up to 90 days. To the extent that these deferrals qualified under either the CARES Act or interagency guidance, they were not considered new TDRs.

Loans modified under the terms of a TDR during the years ended December 31 are presented in the table below. In addition, the following table presents loans modified under the terms of a TDR that defaulted (became 90 days or more delinquent) during the years ended December 31 that were initially restructured within one year prior to default (dollars in thousands):
 New TDRs
  Number of
Contracts		Post-Modification Outstanding Recorded Investment
by Type of Modification		TDRs Modified Within the Year That Have Subsequently Defaulted
Year Ended December 31, 2021Rate
Reduction		StructureOtherTotalNumber of ContractsRecorded
Investment
Owner occupied commercial real estate2 $— $731 $— $731 1 $99 
Income producing commercial real estate3 — — 1,697 1,697 — — 
Commercial & industrial8 — 597 103 700 2 76 
Commercial construction1 — 309 — 309 — — 
Equipment financing62 — 4,689 — 4,689 15 375 
Total commercial76 — 6,326 1,800 8,126 18 550 
Residential mortgage16 — 1,528 57 1,585 4 593 
HELOC— — — — — 2 92 
Residential construction— — — — — — — 
Consumer— — — — — — — 
Total92 $— $7,854 $1,857 $9,711 24 $1,235 
Year Ended December 31, 2020
Owner occupied commercial real estate8 $— $833 $1,536 $2,369 — $— 
Income producing commercial real estate7 — 4,856 6,699 11,555 1 5,998 
Commercial & industrial4 — 586 15 601 3 819 
Commercial construction7 — 832 70 902 — — 
Equipment financing172 — 5,821 5,821 22 944 
Total commercial198 — 12,928 8,320 21,248 26 7,761 
Residential mortgage40 — 4,359 3 4,362 2 145 
HELOC4 — 164 — 164 1 60 
Residential construction3 — 123 — 123 — — 
Consumer7 — 11 24 35 1 3 
Total252 $— $17,585 $8,347 $25,932 30 $7,969 
Year Ended December 31, 2019
Owner occupied commercial real estate4 $— $1,739 $— $1,739 — $— 
Income producing commercial real estate3 — 9,013 — 9,013 — — 
Commercial & industrial2 — 75 7 82 — — 
Commercial construction— — — — — — — 
Equipment financing9 — 1,071 — 1,071 — — 
Total commercial18 — 11,898 7 11,905 — — 
Residential mortgage15 — 2,057 — 2,057 1 135 
HELOC1 — 50 — 50 — — 
Residential construction1 — — 21 21 1 13 
Consumer5 — — 45 45 — — 
Indirect auto15 — — 262 262 — — 
Total55 $— $14,005 $335 $14,340 2 $148 
 
Allowance for Credit Losses
The following table presents the balance and activity in the ACL by portfolio segment for the periods indicated (in thousands): 
CECL
Year Ended December 31, 2021Beginning
Balance
Initial ACL- PCD loans(1)
Charge-OffsRecoveriesProvisionEnding
Balance
Owner occupied commercial real estate$20,673 $280 $(1,640)$1,324 $(6,355)$14,282 
Income producing commercial real estate41,737 982 (267)496 (18,792)24,156 
Commercial & industrial22,019 312 (4,776)7,275 (8,238)16,592 
Commercial construction10,952 1,969 (334)1,081 (3,712)9,956 
Equipment financing16,820 — (5,724)2,619 2,575 16,290 
Residential mortgage15,341 — (344)564 (3,171)12,390 
HELOC8,417 1 (112)517 (2,255)6,568 
Residential construction764 — (10)157 936 1,847 
Consumer287 — (2,066)1,202 1,028 451 
ACL - loans137,010 3,544 (15,273)15,235 (37,984)102,532 
ACL - unfunded commitments10,558 — — — 434 10,992 
Total ACL$147,568 $3,544 $(15,273)$15,235 $(37,550)$113,524 
(1) Represents the initial ACL related to PCD loans acquired in the Aquesta transaction.
Year Ended December 31, 2020Dec. 31, 2019Adoption of CECLJan. 1, 2020
Initial ACL- PCD loans(1)
Charge-OffsRecoveriesProvisionEnding
Balance
Owner occupied commercial
  real estate		$11,404 $(1,616)$9,788 $1,779 $(70)$2,565 $6,611 $20,673 
Income producing commercial
  real estate		12,306 (30)12,276 1,208 (8,430)3,546 33,137 41,737 
Commercial & industrial5,266 4,012 9,278 7,680 (10,707)1,371 14,397 22,019 
Commercial construction9,668 (2,583)7,085 74 (726)1,045 3,474 10,952 
Equipment financing7,384 5,871 13,255 — (8,764)2,004 10,325 16,820 
Residential mortgage8,081 1,569 9,650 195 (398)455 5,439 15,341 
HELOC4,575 1,919 6,494 209 (221)677 1,258 8,417 
Residential construction2,504 (1,771)733 — (93)156 (32)764 
Consumer901 (491)410 7 (2,985)2,259 596 287 
ACL - loans62,089 6,880 68,969 11,152 (32,394)14,078 75,205 137,010 
ACL - unfunded commitments3,458 1,871 5,329 — — — 5,229 10,558 
Total ACL$65,547 $8,751 $74,298 $11,152 $(32,394)$14,078 $80,434 $147,568 
(1) Represents the initial ACL related to PCD loans acquired in the Three Shores transaction.
Incurred Loss
Year Ended December 31, 2019Beginning
Balance		Charge-OffsRecoveriesProvisionEnding
Balance
Owner occupied commercial real estate$12,207 $(5)$375 $(1,173)$11,404 
Income producing commercial real estate11,073 (1,227)283 2,177 12,306 
Commercial & industrial4,802 (5,849)852 5,461 5,266 
Commercial construction10,337 (290)1,165 (1,544)9,668 
Equipment financing5,452 (5,675)781 6,826 7,384 
Residential mortgage8,295 (616)481 (79)8,081 
HELOC4,752 (996)610 209 4,575 
Residential construction2,433 (306)157 220 2,504 
Consumer853 (2,390)911 1,527 901 
Indirect auto999 (663)186 (522)— 
ACL - loans61,203 (18,017)5,801 13,102 62,089 
ACL - unfunded commitments3,410 — — 48 3,458 
Total ACL$64,613 $(18,017)$5,801 $13,150 $65,547 

At both December 31, 2021 and 2020, United used a one-year reasonable and supportable forecast period. Expected credit losses were estimated using a regression model for each segment based on historical data from peer banks combined with a third party vendor’s economic forecast to predict the change in credit losses. These estimates were then combined with a starting value that was based on United’s recent default experience, with the results subject to a floor. At December 31, 2021, the third party
vendor’s forecast, which was representative of a baseline scenario, improved significantly from December 31, 2020, including the unemployment rate which has a significant impact on our models and led to the negative provision for loan losses in 2021. At December 31, 2021, United applied qualitative factors to the model output for income producing commercial real estate and equipment finance portfolios. With regard to income producing commercial real estate, the qualitative factors reflected continued credit concerns related to the senior care portfolio, elevated criticized loans relative to the pre-pandemic period and inflationary concerns related to the impact of rising rates on commercial real estate values. Qualitative factors for the equipment finance portfolio reflected management’s approximation of long-term loss rates.

For periods beyond the reasonable and supportable forecast period of one year, United reverted to historical credit loss information on a straight line basis over two years. For all collateral types excluding residential mortgage, United reverted to through-the-cycle average default rates using peer data from 2000 to 2017. For loans secured by residential mortgages, the peer data was adjusted for changes in lending practices designed to prevent the magnitude of losses observed during the mortgage crisis.

PPP loans were considered low risk assets due to the related 100% guarantee by the SBA and were therefore excluded from the calculation.