Stock-Based Compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

United has an equity compensation plan that allows for grants of various share-based compensation. The general terms of the plan include a vesting period (usually four years) with an exercise period not to exceed ten years. Certain options and restricted stock unit awards provide for accelerated vesting if there is a change in control (as defined in the plan document). As of March 31, 2024, the plan covered 2.13 million shares that could be issued pursuant to additional awards granted under the plan.

The table below presents restricted stock unit and option activity for the three months ended March 31, 2024.


	Restricted Stock Unit Awards			Options
	Shares	Weighted- Average Grant- Date Fair Value		Aggregate Intrinsic Value ($000)		Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value ($000)
Outstanding at December 31, 2023	929,367	$	28.85			406,737	$	21.19
Granted	171,905	28.42				—	—
Released / Exercised	(42,467)	30.67		$	1,175	(55,654)	20.32			$	375

Cancelled	(55,672)	27.55				(2,353)	26.05
Outstanding at March 31, 2024	1,003,133	28.80		26,402		348,730	21.29		5.0	1,755

Vested / Exercisable at March 31, 2024	—	—				348,730	21.29		5.0	1,755

No compensation expense relating to options was included in earnings for the three months ended March 31, 2024 and 2023.

Compensation expense for restricted stock units and performance stock units without market conditions is based on the market value of United’s common stock on the date of grant. Compensation expense for performance stock units with market conditions is based on the grant date per share fair value, which was estimated using the Monte Carlo Simulation valuation model. United recognizes the impact of forfeitures as they occur. The value of restricted stock unit and performance stock unit awards is amortized into expense over the service period.

For the three months ended March 31, 2024 and 2023, expense of $2.22 million and $2.36 million, respectively, was recognized related to restricted stock unit and performance stock unit awards granted to United employees, which was included in salaries and employee benefits expense. In addition, for the three months ended March 31, 2024 and 2023, $183,000 and $122,000, respectively, was recognized in other expense for restricted stock unit awards granted to members of United’s Board of Directors.

A deferred income tax benefit related to stock-based compensation expense of $614,000 and $634,000 was included in the determination of income tax expense for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, there was $22.3 million of unrecognized expense related to non-vested restricted stock unit and performance stock unit awards granted under the plan. That cost is expected to be recognized over a weighted-average period of 2.6 years.