8-K
UNITED BANKSHARES INC/WV (UBSI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 27, 2022
United Bankshares, Inc.
(Exact name of registrant as specified in its charter)
| West Virginia | No. 002-86947 | 55-0641179 |
|---|---|---|
| (State or other jurisdiction of<br>incorporation or organization) | (Commission<br>File Number) | (I.R.S. Employer<br>Identification No.) |
| 300 United Center<br> <br>500 Virginia Street, East | ||
| --- | ||
| Charleston, West Virginia 25301 | ||
| (Address of Principal Executive Offices) |
(304) 424-8800
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange<br>on which registered |
|---|---|---|
| Common Stock, par value $2.50 per share | UBSI | NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition |
|---|
On October 27, 2022 United Bankshares, Inc. (“United”) announced its financial results for the third quarter and first nine months of 2022. A copy of the press release is attached as Exhibit 99.1 to this report. The press release is being furnished under Item 2.02 of this Form 8-K.
| Item 9.01. | Financial Statements and Exhibits |
|---|---|
| (c) | The following exhibits are being furnished herewith: |
| --- | --- |
| 99.1 | Press Release, dated October 27, 2022, issued by United Bankshares, Inc. |
| --- | --- |
| 99.2 | Slide presentation of financial information for the third quarter of 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| UNITED BANKSHARES, INC. | ||
|---|---|---|
| Date: October 27, 2022 | By: | /s/ W. Mark Tatterson |
| W. Mark Tatterson, Executive Vice | ||
| President and Chief Financial Officer |
EX-99.1
Exhibit 99.1
News Release
| For Immediate Release | Contact: W. Mark Tatterson |
|---|---|
| October 27, 2022 | Chief Financial Officer |
| (800) 445-1347 ext. 8716 |
United Bankshares, Inc. Announces Earnings
for the Third Quarter and First Nine Months of 2022
WASHINGTON, D.C. and CHARLESTON, WV-- United Bankshares, Inc. (NASDAQ: UBSI) (“United”), today reported earnings for the third quarter of 2022 of $102.6 million, or $0.76 per diluted share, as compared to earnings of $95.6 million, or $0.71 per diluted share, for the second quarter of 2022. The quarter was highlighted by continued broad-based loan growth, net interest margin expansion and strong credit quality metrics.
Annualized loan growth, excluding Paycheck Protection Program (“PPP”) loans, for the third quarter and first nine months of 2022 was 16% and 15%, respectively. Third quarter 2022 net interest margin of 3.78% increased 40 basis points from the second quarter of 2022. Non-performing loans as a percentage of loans and leases, net of unearned income was a low 0.35% at September 30, 2022.
Third quarter 2022 results produced annualized returns on average assets, average equity and average tangible equity, a non-GAAP measure, of 1.41%, 8.96% and 15.46%, respectively, compared to annualized returns on average assets, average equity and average tangible equity of 1.32%, 8.33% and 14.23%, respectively, for the second quarter of 2022.
“The third quarter of 2022 was another great quarter for UBSI,” stated Richard M. Adams, Jr., United’s Chief Executive Officer. “The company delivered strong results related to loan growth, margin expansion, expense control and asset quality. The vitality of our markets, the strength of our deposit franchise and our conservative and disciplined approach to running our business have served us well in this environment and will provide us opportunities going forward.”
Third quarter of2022 compared to the second quarter of 2022
Net interest income for the third quarter of 2022 increased $25.7 million, or 12%, from the second quarter of 2022. Tax-equivalent net interest income, a non-GAAP measure which adjusts for the tax-favored status of income from certain loans and investments, for the third quarter of 2022 also increased $25.7 million, or 12%, from the second quarter of 2022. The increase in net interest income and tax-equivalent net interest income was primarily due to higher interest income on earning assets driven by rising market interest rates and a change in the asset mix to higher earning assets. This increase in net interest income and tax-equivalent net interest income was partially offset by higher interest expense primarily driven by deposit rate repricing as well as due to lower PPP loan fee income and lower acquired loan accretion. The interest rate spread of 3.52% for
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the third quarter of 2022 increased 28 basis points from the second quarter of 2022 due to a 56 basis point increase in the average yield on earning assets partially offset by a 28 basis point increase in the average cost of funds. A decrease in average earning assets of $188.1 million, or 1%, from the second quarter of 2022 was driven by a decrease of $818.5 million in short-term investments partially offset by increases in higher yielding average net loans and loans held for sale of $627.6 million. Net PPP loan fee income decreased $1.9 million to $1.6 million for the third quarter of 2022. Acquired loan accretion income decreased $1.3 million to $4.1 million for the third quarter of 2022. The net interest margin of 3.78% for the third quarter of 2022 was an increase of 40 basis points from the net interest margin of 3.38% for the second quarter of 2022.
The provision for credit losses was $7.7 million for the third quarter of 2022 as compared to a net benefit of $1.8 million for the second quarter of 2022. The increase in the provision for credit losses was primarily due to loan growth.
Noninterest income for the third quarter of 2022 decreased $10.9 million, or 25%, from the second quarter of 2022. The decrease in noninterest income was primarily due to decreases of $6.0 million in income from mortgage banking activities, $2.6 million in income from bank-owned life insurance (“BOLI”), $1.4 million in net (losses) gains on investment securities and $761 thousand in fees from deposit services. The decrease in income from mortgage banking activities was mainly due to lower mortgage loan origination and sale volume driven by the rising rate environment and a lower margin on loans sold in the secondary market. The decrease in BOLI income was primarily due to lower death benefits from the second quarter of 2022 and the impact of lower market values of underlying investments in the third quarter of 2022. The decrease in fees from deposit services reflects changes to United’s overdraft policy implemented during the third quarter of 2022.
Noninterest expense for the third quarter of 2022 decreased $4.0 million, or 3%, from the second quarter of 2022. The decrease in noninterest expense was primarily due to decreases of $8.8 million in the expense for the reserve for unfunded loan commitments and $3.0 million in employee compensation partially offset by an increase of $6.1 million in other noninterest expense. The decrease in the reserve for unfunded loan commitments reflects a decrease in the outstanding balance of loan commitments at quarter-end driven by loan fundings. The decrease in employee compensation was primarily due to lower employee commissions related to mortgage banking production. Other noninterest expense for the third quarter of 2022 included an accrual of $5.0 million related to a litigation matter with a former commercial customer.
For the third quarter of 2022, income tax expense was $25.9 million as compared to $23.5 million for the second quarter of 2022. The increase of $2.4 million was due to higher earnings and a higher effective tax rate. United’s effective tax rate was 20.2% and 19.8% for the third and second quarter of 2022, respectively.
Third quarter of 2022 compared to the third quarter of 2021
Earnings for the third quarter of 2022 were $102.6 million, or $0.76 per diluted share, as compared to earnings of $92.2 million, or $0.71 per diluted share, for the third quarter of 2021.
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Net interest income for the third quarter of 2022 increased $59.0 million, or 33%, from the third quarter of 2021. Tax-equivalent net interest income for the third quarter of 2022 increased $59.1 million, or 32%, from the third quarter of 2021. United completed its acquisition of Community Bankers Trust Corporation (“Community Bankers Trust”) on December 3, 2021. The increase in net interest income and tax-equivalent net interest income was primarily due to the impact of higher average earning assets, driven by the Community Bankers Trust acquisition and organic loan growth, the impact of rising market interest rates on earning assets and a change in the asset mix to higher earning assets. These increases were partially offset by higher interest expense primarily driven by deposit rate repricing, lower PPP loan fee income and lower acquired loan accretion income. Average earning assets for the third quarter of 2022 increased $1.1 billion, or 4%, from the third quarter of 2021 due to a $2.5 billion increase in average net loans and loans held for sale and a $1.5 billion increase in average investment securities partially offset by a $2.9 billion decrease in average short-term investments. The interest rate spread for the third quarter of 2022 increased 69 basis points from the third quarter of 2021 to 3.52% due to a 96 basis point increase in the average yield on earning assets partially offset by a 27 basis point increase in the average cost of funds. Net PPP loan fee income was $1.6 million and $7.8 million for the third quarter of 2022 and 2021, respectively, a decrease of $6.2 million. Acquired loan accretion income was $4.1 million and $8.2 million for the third quarter of 2022 and 2021, respectively, a decrease of $4.1 million. The net interest margin of 3.78% for the third quarter of 2022 was an increase of 80 basis points from the net interest margin of 2.98% for the third quarter of 2021.
The provision for credit losses was $7.7 million for the third quarter of 2022 as compared to a net benefit of $7.8 million for the third quarter of 2021. The increase in the provision for credit losses in the third quarter of 2022 was primarily due to loan growth.
Noninterest income for the third quarter of 2022 was $32.7 million, which was a decrease of $35.9 million, or 52%, from the third quarter of 2021. The decrease in noninterest income was driven by a $35.6 million decrease in income from mortgage banking activities mainly due to lower mortgage loan origination and sale volume driven by the rising rate environment and a lower margin on loans sold in the secondary market.
Noninterest expense for the third quarter of 2022 was $137.2 million, a decrease of $5.1 million, or 4%, from the third quarter of 2021 primarily due to decreases of $7.8 million in employee compensation and $7.2 million in the expense for the reserve for unfunded loan commitments partially offset by an increase of $8.8 million in other noninterest expense. The decrease in employee compensation was primarily due to lower employee commissions related to mortgage banking production partially offset by additional employees from the Community Bankers Trust acquisition. The increase in other noninterest expense resulted from the previously mentioned litigation accrual in the third quarter of 2022 and higher amounts of certain general operating expenses.
For the third quarter of 2022, income tax expense was $25.9 million as compared to $23.6 million for the third quarter of 2021. The increase of $2.3 million was primarily due to higher earnings partially offset by a slightly lower effective tax rate. United’s effective tax rate was 20.2% for the third quarter of 2022 and 20.4% for the third quarter of 2021.
First nine months of 2022 compared to the first nine months of 2021
Earnings for the first nine months of 2022 were $279.9 million, or $2.06 per diluted share, as compared to earnings of $293.9 million, or $2.27 per diluted share, for the first nine months of 2021.
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Net interest income for the first nine months of 2022 increased $88.0 million, or 16%, from the first nine months of 2021. Tax-equivalent net interest income for the first nine months of 2022 increased $88.1 million, or 16%, from the first nine months of 2021. The increase in net interest income and tax-equivalent net interest income was primarily due to the impact of rising market interest rates on earning assets, an increase in average earning assets from the Community Bankers Trust acquisition and organic loan growth and a change in the asset mix to higher earning assets. These increases were partially offset by lower PPP loan fee income, lower acquired loan accretion income and the impact of rising market interest rates on interest-bearing liabilities. Average earning assets for the first nine months of 2022 increased $1.8 billion, or 7%, from the first nine months of 2021 due to a $1.5 billion increase in average investment securities and a $1.3 billion increase in average net loans and loans held for sale partially offset by a $1.1 billion decrease in average short-term investments. The interest rate spread for the first nine months of 2022 increased 22 basis points from the first nine months of 2021 due to a 26 basis point increase in the average yield on earning assets partially offset by a 4 basis point increase in the average cost of funds. Net PPP loan fee income was $9.3 million and $28.2 million for the first nine months of 2022 and 2021, respectively, a decrease of $18.9 million. Acquired loan accretion income was $13.6 million and $27.6 million for the first nine months of 2022 and 2021, respectively, a decrease of $14.0 million. The net interest margin of 3.38% for the first nine months of 2022 was an increase of 24 basis points from the net interest margin of 3.14% for the first nine months of 2021.
The provision for credit losses was $2.5 million for the first nine months of 2022 as compared to a net benefit of $16.6 million for the first nine months of 2021.
Noninterest income for the first nine months of 2022 was $122.4 million, which was a decrease of $101.7 million, or 45%, from the first nine months of 2021. The decrease was driven by a $106.3 million decrease in income from mortgage banking activities mainly due to lower mortgage loan origination and sale volume driven by the rising rate environment and a lower margin on loans sold in the secondary market. Fees from deposit services for the first nine months of 2022 were $31.0 million, an increase of $2.9 million from the first nine months of 2021. BOLI income for the first nine months of 2022 was $7.8 million, an increase of $2.2 million from the first nine months of 2021 due to increased death benefits.
Noninterest expense for the first nine months of 2022 was $417.5 million, a decrease of $12.6 million, or 3%, from the first nine months of 2021 driven by decreases in employee compensation of $23.6 million and employee benefits of $7.4 million partially offset by an increase in other noninterest expense of $13.3 million. The decrease in employee compensation was due to lower employee commissions, incentives and overtime related to mortgage banking production partially offset by additional employees from the Community Bankers Trust acquisition. Employee benefits decreased primarily due to changes in deferred compensation plans resulting from market fluctuations. The increase in other noninterest expense resulted from the previously mentioned litigation accrual in the third quarter of 2022 and higher amounts of certain general operating expenses.
For the first nine months of 2022, income tax expense was $69.6 million as compared to $75.6 million for the first nine months of 2021 due to lower earnings and a lower effective tax rate. United’s effective tax rate was 19.9% for the first nine months of 2022 and 20.5% for the first nine months of 2021.
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United Bankshares, Inc. Announces…
October 27, 2022
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Credit Quality
United’s asset quality continues to be sound. At September 30, 2022, non-performing loans were $69.7 million, or 0.35% of loans & leases, net of unearned income, down from $90.8 million, or 0.50% of loans & leases, net of unearned income, at December 31, 2021. Total non-performing assets of $80.4 million, including OREO of $10.8 million at September 30, 2022, represented 0.28% of total assets as compared to non-performing assets of $105.6 million, including OREO of $14.8 million, or 0.36% of total assets at December 31, 2021.
As of September 30, 2022, the allowance for loan & lease losses was $219.6 million, or 1.11% of loans & leases, net of unearned income, as compared to $216.0 million, or 1.20% of loans & leases, net of unearned income, at December 31, 2021. Net charge-offs were $1.8 million for the third quarter of 2022 compared to net recoveries of $1.2 million for the third quarter of 2021. Net recoveries were $1.1 million for the first nine months of 2022 compared to net charge-offs of $8.6 million for the first nine months of 2021. Annualized net charge-offs (recoveries) as a percentage of average loans & leases, net of unearned income were 0.04% and (0.03)% for the third quarter of 2022 and 2021, respectively. Annualized net (recoveries) charge-offs as a percentage of average loans & leases, net of unearned income were (0.01)% and 0.07% for the for the first nine months of 2022 and 2021, respectively.
Capital
United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 14.4% at September 30, 2022, while estimated Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 12.4%, 12.4% and 10.7%, respectively. The September 30, 2022 ratios reflect United’s election of a five-year transition provision, allowed by the Federal Reserve Board and other federal banking agencies in response to the COVID-19 pandemic, to delay for two years the full impact of CECL on regulatory capital, followed by a three-year transition period. The regulatory requirements for a well-capitalized financial institution are a risk-based capital ratio of 10.0%, a Common Equity Tier 1 capital ratio of 6.5%, a Tier 1 capital ratio of 8.0% and a leverage ratio of 5.0%.
During the first nine months of 2022 and 2021, United repurchased, under a previously announced stock repurchase plan, shares of its common stock. United did not repurchase any shares of its common stock during the third quarter of 2022 or 2021. During the first nine months of 2022, United repurchased approximately 2.3 million shares of its common stock at an average price per share of $34.69. During the first nine months of 2021, United repurchased approximately 306 thousand shares of its common stock at an average price per share of $32.52.
About United Bankshares, Inc.
As of September 30, 2022, United had consolidated assets of approximately $29.0 billion. United is the parent company of United Bank which comprises nearly 250 offices in Virginia, Maryland, Washington, D.C., North Carolina, South Carolina, Georgia, Pennsylvania, West Virginia, and Ohio. United’s stock is traded on the NASDAQ Global Select Market under the quotation symbol “UBSI”.
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United Bankshares, Inc. Announces…
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Cautionary Statements
The Company is required under generally accepted accounting principles to evaluate subsequent events through the filing of itsSeptember 30, 2022 consolidated financial statements on Form 10-Q. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimatesmade as of September 30, 2022 and will adjust amounts preliminarily reported, if necessary.
Use ofnon-GAAP Financial Measures
This press release contains certain financial measures thatare not recognized under U.S. generally accepted accounting principles (“GAAP”). Generally, United has presented these “non-GAAP” financial measures because it believes that these measuresprovide meaningful additional information to assist in the evaluation of United’s results of operations or financial position. Presentation of these non-GAAP financial measures is consistent with howUnited’s management evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation ofcompanies in the banking industry.
Specifically, this press release contains certain references to financial measures identifiedas tax-equivalent (FTE) net interest income, average tangible equity, return on average tangible equity and tangible book value per share. Management believes thesenon-GAAP financial measures to be helpful in understanding United’s results of operations or financial position.
Net interest income is presented in this press release on a tax-equivalent basis. The tax-equivalent basis adjusts for the tax-favored status of income from certain loans and investments. Although this is a non-GAAPmeasure, United’s management believes this measure is more widely used within the financial services industry and provides better comparability of net interest income arising from taxable and tax-exemptsources. United uses this measure to monitor net interest income performance and to manage its balance sheet composition. The tax-equivalent adjustment combines amounts of interest income on federallynontaxable loans and investment securities using the statutory federal income tax rate of 21%.
Tangible equity is calculated asGAAP total shareholders’ equity minus total intangible assets. Tangible equity can thus be considered the most conservative valuation of the company. Tangible equity is also presented on a per common share basis and considering net income, areturn on average tangible equity. Management provides these amounts to facilitate the understanding of as well as to assess the quality and composition of United’s capital structure. By removing the effect of intangible assets that result frommerger and acquisition activity, the “permanent” items of equity are presented. These measures, along with others, are used by management to analyze capital adequacy and performance.
Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well asreconciliation to that comparable GAAP financial measure can be found in the attached financial information tables to this press release. Investors should recognize that United’s presentation of thesenon-GAAP financial measures might not be comparable to similarly titled measures at other companies. These non-GAAP financial measures should not be considered asubstitute for GAAP basis measures and United strongly encourages a review of its condensed consolidated financial statements in their entirety.
Forward-Looking Statements
Inthis report, we have made various statements regarding current expectations or forecasts of future events, which speak only as of the date the statements are made. These statements are “forward-looking statements” within the meaning of thePrivate Securities Litigation Reform Act of 1995. Forward-looking statements are also made from time-to-time in press releases and in oral statements made by theofficers of the Company. Forward-looking statements can be identified by the use of the words “expect,” “may,” “could,” “intend,” “project,” “estimate,” “believe,”“anticipate,” and other words of similar meaning. Such forward-looking statements are based on assumptions and estimates, which although believed to be reasonable, may turn out to be incorrect. Therefore, undue reliance should not beplaced upon these estimates and statements. United cannot assure that any of these statements, estimates, or beliefs will be realized and actual results may differ from those contemplated in these “forward-looking statements.” Thefollowing factors, among others, could cause the actual results of United’s operations to differ materially from its expectations: the uncertainty as to the extent of the duration, scope and impacts of theCOVID-19 pandemic on United, its colleagues, the communities United serves, and the domestic and global economy; uncertainty in U.S. fiscal and monetary policies, including the interest rate policies of theFederal Reserve Board; volatility and disruptions in global capital and credit markets, interest rate, securities market and monetary supply fluctuations; increasing rates of inflation and slower growth rates; reform of LIBOR; the nature, extent,timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those involving the Federal Reserve, FDIC, and CFPB; the effect of changes in the level of checking or savings account depositson United’s funding costs and net interest margin; future provisions for credit losses on loans and debt securities; changes in nonperforming assets; competition; and changes in legislation or regulatory requirements. For more information aboutfactors that could cause actual results to differ materially from United’s expectations, refer to its reports filed with the Securities and Exchange Commission, including the discussion under “Risk Factors” in the Annual Report onForm 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission and available on its website at www.sec.gov. Further, any forward-looking statement speaks only as ofthe date on which it is made, and United undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise. You are advised to consult further disclosures United may makeon related subjects in our filings with the SEC.
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UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Three Months Ended | Nine Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September<br>2022 | September<br>2021 | June<br>2022 | September<br>2022 | September<br>2021 | |||||||||||
| EARNINGS SUMMARY: | |||||||||||||||
| Interest income | $ | 263,683 | $ | 194,080 | $ | 227,771 | $ | 694,249 | $ | 599,923 | |||||
| Interest expense | 23,061 | 12,501 | 12,868 | 47,222 | 40,867 | ||||||||||
| Net interest income | 240,622 | 181,579 | 214,903 | 647,027 | 559,056 | ||||||||||
| Provision for credit losses | 7,671 | (7,829 | ) | (1,807 | ) | 2,454 | (16,565 | ) | |||||||
| Noninterest income | 32,749 | 68,631 | 43,608 | 122,382 | 224,075 | ||||||||||
| Noninterest expense | 137,196 | 142,283 | 141,174 | 417,545 | 430,186 | ||||||||||
| Income before income taxes | 128,504 | 115,756 | 119,144 | 349,410 | 369,510 | ||||||||||
| Income taxes | 25,919 | 23,604 | 23,531 | 69,548 | 75,624 | ||||||||||
| Net income | $ | 102,585 | $ | 92,152 | $ | 95,613 | $ | 279,862 | $ | 293,886 | |||||
| PER COMMON SHARE: | |||||||||||||||
| Net income: | |||||||||||||||
| Basic | $ | 0.76 | $ | 0.71 | $ | 0.71 | $ | 2.07 | $ | 2.28 | |||||
| Diluted | 0.76 | 0.71 | 0.71 | 2.06 | 2.27 | ||||||||||
| Cash dividends | $ | 0.36 | $ | 0.35 | 0.36 | 1.08 | 1.05 | ||||||||
| Book value | 33.34 | 32.98 | 34.29 | ||||||||||||
| Closing market price | $ | 35.07 | $ | 35.75 | $ | 36.38 | |||||||||
| Common shares outstanding: | |||||||||||||||
| Actual at period end, net of treasury shares | 134,580,646 | 134,631,647 | 129,203,774 | ||||||||||||
| Weighted average-basic | 134,182,248 | 128,762,815 | 134,623,061 | 134,947,674 | 128,716,450 | ||||||||||
| Weighted average-diluted | 134,553,565 | 128,960,220 | 134,863,650 | 135,251,299 | 128,934,282 | ||||||||||
| FINANCIAL RATIOS: | |||||||||||||||
| Return on average assets | 1.41 | % | 1.33 | % | 1.32 | % | 1.29 | % | 1.46 | % | |||||
| Return on average shareholders’ equity | 8.96 | % | 8.23 | % | 8.33 | % | 8.07 | % | 8.95 | % | |||||
| Return on average tangible equity (non-GAAP)^(1)^ | 15.46 | % | 14.03 | % | 14.23 | % | 13.73 | % | 15.36 | % | |||||
| Average equity to average assets | 15.75 | % | 16.18 | % | 15.88 | % | 15.95 | % | 16.27 | % | |||||
| Net interest margin | 3.78 | % | 2.98 | % | 3.38 | % | 3.38 | % | 3.14 | % | |||||
| September 30<br>2022 | December 31<br>2021 | September 30<br>2021 | June 30<br>2022 | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| PERIOD END BALANCES: | |||||||||||||||
| Assets | $ | 29,048,475 | $ | 29,328,902 | $ | 27,507,517 | $ | 28,777,896 | |||||||
| Earning assets | 25,648,264 | 26,083,089 | 24,415,973 | 25,356,669 | |||||||||||
| Loans & leases, net of unearned income | 19,700,080 | 18,023,648 | 16,743,629 | 18,970,395 | |||||||||||
| Loans held for sale | 210,075 | 504,416 | 493,299 | 220,689 | |||||||||||
| Investment securities | 4,923,694 | 4,295,749 | 3,646,065 | 5,073,618 | |||||||||||
| Total deposits | 22,863,377 | 23,350,263 | 21,822,609 | 23,026,649 | |||||||||||
| Shareholders’ equity | 4,440,086 | 4,718,628 | 4,430,766 | 4,487,050 | |||||||||||
| Note: | (1) See information under the “Selected Financial Ratios” table for a reconciliation of non-GAAP measure. | ||||||||||||||
| --- | --- |
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UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Consolidated Statements of Income | Three Months Ended | Nine Months Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September2022 | September2021 | June2022 | March2022 | September2022 | September2021 | |||||||||||||
| Interest & Loan Fees Income (GAAP) | $ | 263,683 | $ | 194,080 | $ | 227,771 | $ | 202,795 | $ | 694,249 | $ | 599,923 | ||||||
| Tax equivalent adjustment | 1,105 | 1,059 | 1,104 | 1,109 | 3,318 | 3,181 | ||||||||||||
| Interest & Fees Income (FTE) (non-GAAP) | 264,788 | 195,139 | 228,875 | 203,904 | 697,567 | 603,104 | ||||||||||||
| Interest Expense | 23,061 | 12,501 | 12,868 | 11,293 | 47,222 | 40,867 | ||||||||||||
| Net Interest Income (FTE) (non-GAAP) | 241,727 | 182,638 | 216,007 | 192,611 | 650,345 | 562,237 | ||||||||||||
| Provision for Credit Losses | 7,671 | (7,829 | ) | (1,807 | ) | (3,410 | ) | 2,454 | (16,565 | ) | ||||||||
| Noninterest Income: | ||||||||||||||||||
| Fees from trust services | 4,384 | 4,269 | 4,294 | 4,127 | 12,805 | 12,225 | ||||||||||||
| Fees from brokerage services | 4,016 | 3,883 | 4,115 | 4,552 | 12,683 | 11,860 | ||||||||||||
| Fees from deposit services | 10,069 | 9,888 | 10,830 | 10,148 | 31,047 | 28,180 | ||||||||||||
| Bankcard fees and merchant discounts | 1,857 | 1,473 | 1,671 | 1,379 | 4,907 | 3,905 | ||||||||||||
| Other charges, commissions, and fees | 918 | 703 | 785 | 759 | 2,462 | 2,237 | ||||||||||||
| Income from bank-owned life insurance | 1,472 | 2,556 | 4,120 | 2,194 | 7,786 | 5,617 | ||||||||||||
| Income from mortgage banking activities | 6,422 | 42,012 | 12,445 | 19,203 | 38,070 | 144,350 | ||||||||||||
| Mortgage loan servicing income | 2,302 | 2,429 | 2,328 | 2,387 | 7,017 | 7,170 | ||||||||||||
| Net (losses) gains on investment securities | (206 | ) | 82 | 1,182 | (251 | ) | 725 | 2,715 | ||||||||||
| Other noninterest income | 1,515 | 1,336 | 1,838 | 1,527 | 4,880 | 5,816 | ||||||||||||
| Total Noninterest Income | 32,749 | 68,631 | 43,608 | 46,025 | 122,382 | 224,075 | ||||||||||||
| Noninterest Expense: | ||||||||||||||||||
| Employee compensation | 59,618 | 67,459 | 62,632 | 62,621 | 184,871 | 208,428 | ||||||||||||
| Employee benefits | 10,750 | 13,132 | 12,047 | 12,851 | 35,648 | 43,052 | ||||||||||||
| Net occupancy | 11,281 | 10,339 | 11,206 | 11,187 | 33,674 | 31,381 | ||||||||||||
| Data processing | 7,614 | 6,612 | 7,549 | 7,371 | 22,534 | 20,594 | ||||||||||||
| Amortization of intangibles | 1,379 | 1,466 | 1,379 | 1,379 | 4,137 | 4,399 | ||||||||||||
| OREO expense | 1,708 | 428 | 46 | 182 | 1,936 | 4,483 | ||||||||||||
| Net losses (gains) on the sale of OREO properties | 125 | (34 | ) | (454 | ) | (33 | ) | (362 | ) | (67 | ) | |||||||
| Equipment expense | 7,807 | 7,286 | 7,310 | 7,335 | 22,452 | 19,160 | ||||||||||||
| FDIC insurance expense | 3,063 | 1,920 | 3,004 | 2,673 | 8,740 | 5,720 | ||||||||||||
| Mortgage loan servicing expense and impairment | 1,847 | 3,253 | 1,783 | 1,643 | 5,273 | 10,029 | ||||||||||||
| Expense for the reserve for unfunded loan commitments | (2,881 | ) | 4,294 | 5,899 | 5,237 | 8,255 | 5,941 | |||||||||||
| Other noninterest expense | 34,885 | 26,128 | 28,773 | 26,729 | 90,387 | 77,066 | ||||||||||||
| Total Noninterest Expense | 137,196 | 142,283 | 141,174 | 139,175 | 417,545 | 430,186 | ||||||||||||
| Income Before Income Taxes (FTE)(non-GAAP) | 129,609 | 116,815 | 120,248 | 102,871 | 352,728 | 372,691 | ||||||||||||
| Tax equivalent adjustment | 1,105 | 1,059 | 1,104 | 1,109 | 3,318 | 3,181 | ||||||||||||
| Income Before Income Taxes (GAAP) | 128,504 | 115,756 | 119,144 | 101,762 | 349,410 | 369,510 | ||||||||||||
| Taxes | 25,919 | 23,604 | 23,531 | 20,098 | 69,548 | 75,624 | ||||||||||||
| Net Income | $ | 102,585 | $ | 92,152 | $ | 95,613 | $ | 81,664 | $ | 279,862 | $ | 293,886 | ||||||
| MEMO: Effective Tax Rate | 20.17 | % | 20.39 | % | 19.75 | % | 19.75 | % | 19.90 | % | 20.47 | % |
8
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Consolidated Balance Sheets | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 2022 | September 2021 | September 30 | December 31 | September 30 | June 30 | |||||||||||||
| Q-T-D Average | Q-T-D Average | 2022 | 2021 | 2021 | 2022 | |||||||||||||
| Cash & Cash Equivalents | $ | 1,260,311 | $ | 4,132,702 | $ | 1,356,347 | $ | 3,758,170 | $ | 4,033,561 | $ | 1,658,486 | ||||||
| Securities Available for Sale | 4,826,072 | 3,344,196 | 4,648,087 | 4,042,699 | 3,409,984 | 4,812,704 | ||||||||||||
| Less: Allowance for credit losses | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
| Net available for sale securities | 4,826,072 | 3,344,196 | 4,648,087 | 4,042,699 | 3,409,984 | 4,812,704 | ||||||||||||
| Securities Held to Maturity | 1,020 | 1,020 | 1,020 | 1,020 | 1,020 | 1,020 | ||||||||||||
| Less: Allowance for credit losses | (18 | ) | (31 | ) | (19 | ) | (19 | ) | (27 | ) | (18 | ) | ||||||
| Net held to maturity securities | 1,002 | 989 | 1,001 | 1,001 | 993 | 1,002 | ||||||||||||
| Equity Securities | 9,449 | 11,735 | 7,314 | 12,404 | 11,984 | 13,513 | ||||||||||||
| Other Investment Securities | 251,405 | 222,765 | 267,292 | 239,645 | 223,104 | 246,399 | ||||||||||||
| Total Securities | 5,087,928 | 3,579,685 | 4,923,694 | 4,295,749 | 3,646,065 | 5,073,618 | ||||||||||||
| Total Cash and Securities | 6,348,239 | 7,712,387 | 6,280,041 | 8,053,919 | 7,679,626 | 6,732,104 | ||||||||||||
| Loans held for sale | 203,420 | 445,983 | 210,075 | 504,416 | 493,299 | 220,689 | ||||||||||||
| Commercial Loans & Leases | 14,410,508 | 12,621,706 | 14,531,221 | 13,809,735 | 12,657,238 | 14,136,614 | ||||||||||||
| Mortgage Loans | 3,613,613 | 2,916,877 | 3,756,692 | 3,008,410 | 2,884,542 | 3,481,064 | ||||||||||||
| Consumer Loans | 1,442,240 | 1,221,578 | 1,434,572 | 1,233,162 | 1,229,552 | 1,376,447 | ||||||||||||
| Gross Loans | 19,466,361 | 16,760,161 | 19,722,485 | 18,051,307 | 16,771,332 | 18,994,125 | ||||||||||||
| Unearned income | (24,295 | ) | (31,288 | ) | (22,405 | ) | (27,659 | ) | (27,703 | ) | (23,730 | ) | ||||||
| Loans & Leases, net of unearned income | 19,442,066 | 16,728,873 | 19,700,080 | 18,023,648 | 16,743,629 | 18,970,395 | ||||||||||||
| Allowance for Loan & Lease Losses | (213,824 | ) | (217,472 | ) | (219,611 | ) | (216,016 | ) | (210,891 | ) | (213,729 | ) | ||||||
| Net Loans | 19,228,242 | 16,511,401 | 19,480,469 | 17,807,632 | 16,532,738 | 18,756,666 | ||||||||||||
| Mortgage Servicing Rights | 22,369 | 22,479 | 21,908 | 23,144 | 22,836 | 22,593 | ||||||||||||
| Goodwill | 1,888,889 | 1,810,040 | 1,888,889 | 1,886,494 | 1,810,040 | 1,888,889 | ||||||||||||
| Other Intangibles | 21,165 | 23,409 | 20,276 | 24,413 | 22,524 | 21,655 | ||||||||||||
| Operating Lease<br>Right-of-Use Asset | 74,734 | 68,373 | 74,043 | 81,942 | 75,593 | 75,143 | ||||||||||||
| Other Real Estate Owned | 13,508 | 17,618 | 10,779 | 14,823 | 16,696 | 13,847 | ||||||||||||
| Bank Owned Life Insurance | 477,654 | 432,593 | 478,518 | 478,067 | 446,110 | 473,470 | ||||||||||||
| Other Assets | 556,215 | 393,427 | 583,477 | 454,052 | 408,055 | 572,840 | ||||||||||||
| Total Assets | $ | 28,834,435 | $ | 27,437,710 | $ | 29,048,475 | $ | 29,328,902 | $ | 27,507,517 | $ | 28,777,896 | ||||||
| MEMO: Interest-earning Assets | $ | 25,438,281 | $ | 24,362,333 | $ | 25,648,264 | $ | 26,083,089 | $ | 24,415,973 | $ | 25,356,669 | ||||||
| Interest-bearing Deposits | $ | 13,756,151 | $ | 13,361,016 | $ | 13,533,152 | $ | 14,369,716 | $ | 13,332,418 | $ | 13,995,710 | ||||||
| Noninterest-bearing Deposits | 9,216,058 | 8,471,744 | 9,330,225 | 8,980,547 | 8,490,191 | 9,030,939 | ||||||||||||
| Total Deposits | 22,972,209 | 21,832,760 | 22,863,377 | 23,350,263 | 21,822,609 | 23,026,649 | ||||||||||||
| Short-term Borrowings | 137,985 | 123,526 | 142,476 | 128,844 | 123,018 | 128,242 | ||||||||||||
| Long-term Borrowings | 894,940 | 813,976 | 1,297,308 | 817,394 | 813,851 | 796,961 | ||||||||||||
| Total Borrowings | 1,032,925 | 937,502 | 1,439,784 | 946,238 | 936,869 | 925,203 | ||||||||||||
| Operating Lease Liability | 79,409 | 72,389 | 78,748 | 86,703 | 80,518 | 79,787 | ||||||||||||
| Other Liabilities | 207,792 | 154,952 | 226,480 | 227,070 | 236,755 | 259,207 | ||||||||||||
| Total Liabilities | 24,292,335 | 22,997,603 | 24,608,389 | 24,610,274 | 23,076,751 | 24,290,846 | ||||||||||||
| Preferred Equity | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
| Common Equity | 4,542,100 | 4,440,107 | 4,440,086 | 4,718,628 | 4,430,766 | 4,487,050 | ||||||||||||
| Total Shareholders’ Equity | 4,542,100 | 4,440,107 | 4,440,086 | 4,718,628 | 4,430,766 | 4,487,050 | ||||||||||||
| Total Liabilities & Equity | $ | 28,834,435 | $ | 27,437,710 | $ | 29,048,475 | $ | 29,328,902 | $ | 27,507,517 | $ | 28,777,896 | ||||||
| MEMO: Interest-bearing Liabilities | $ | 14,789,076 | $ | 14,298,518 | $ | 14,972,936 | $ | 15,315,954 | $ | 14,269,287 | $ | 14,920,913 |
9
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Three Months Ended | Nine Months Ended | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September | September | June | March | September | September | |||||||||||||
| 2022 | 2021 | 2022 | 2022 | 2022 | 2021 | |||||||||||||
| Quarterly/Year-to-Date ShareData: | **** | |||||||||||||||||
| Earnings Per Share: | ||||||||||||||||||
| Basic | $ | 0.76 | $ | 0.71 | $ | 0.71 | $ | 0.60 | $ | 2.07 | $ | 2.28 | ||||||
| Diluted | $ | 0.76 | $ | 0.71 | $ | 0.71 | $ | 0.60 | $ | 2.06 | $ | 2.27 | ||||||
| Common Dividend Declared Per Share | $ | 0.36 | $ | 0.35 | $ | 0.36 | $ | 0.36 | $ | 1.08 | $ | 1.05 | ||||||
| High Common Stock Price | $ | 40.85 | $ | 37.12 | $ | 37.81 | $ | 39.80 | $ | 40.85 | $ | 42.50 | ||||||
| Low Common Stock Price | $ | 33.67 | $ | 31.74 | $ | 33.11 | $ | 33.58 | $ | 33.11 | $ | 31.57 | ||||||
| Average Shares Outstanding (Net of Treasury Stock): | ||||||||||||||||||
| Basic | 134,182,248 | 128,762,815 | 134,623,061 | 136,058,328 | 134,947,674 | 128,716,450 | ||||||||||||
| Diluted | 134,553,565 | 128,960,220 | 134,863,650 | 136,435,229 | 135,251,299 | 128,934,282 | ||||||||||||
| Common Dividends | $ | 48,564 | $ | 45,271 | $ | 48,544 | $ | 49,266 | $ | 146,374 | $ | 135,793 | ||||||
| Dividend Payout Ratio | 47.34 | % | 49.13 | % | 50.77 | % | 60.33 | % | 52.30 | % | 46.21 | % | ||||||
| September 30 | September 30 | June 30 | March 31 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| 2022 | 2021 | 2022 | 2022 | |||||||||||||||
| EOP Share Data: | ||||||||||||||||||
| Book Value Per Share | $ | 32.98 | $ | 34.29 | $ | 33.34 | $ | 33.77 | ||||||||||
| Tangible Book Value Per Share (non-GAAP) ^(1)^ | $ | 18.80 | $ | 20.11 | $ | 19.14 | $ | 19.72 | ||||||||||
| 52-week High Common Stock Price | $ | 40.85 | $ | 42.50 | $ | 39.80 | $ | 42.50 | ||||||||||
| Date | 8/16/22 | 05/18/21 | 01/13/22 | 05/18/21 | ||||||||||||||
| 52-week Low Common Stock Price | $ | 33.11 | $ | 21.19 | $ | 31.74 | $ | 31.74 | ||||||||||
| Date | 5/2/22 | 10/01/20 | 09/20/21 | 9/20/21 | ||||||||||||||
| EOP Shares Outstanding (Net of Treasury Stock): | 134,631,647 | 129,203,774 | 134,580,646 | 136,068,439 | ||||||||||||||
| Memorandum Items: | ||||||||||||||||||
| EOP Employees (full-time equivalent) | 2,915 | 2,986 | 2,988 | 3,090 | ||||||||||||||
| Note: | ||||||||||||||||||
| (1) Tangible Book Value Per Share: | ||||||||||||||||||
| Total Shareholders’ Equity (GAAP) | $ | 4,440,086 | $ | 4,430,766 | $ | 4,487,050 | $ | 4,595,140 | ||||||||||
| Less: Total Intangibles | (1,909,165 | ) | (1,832,564 | ) | (1,910,544 | ) | (1,912,278 | ) | ||||||||||
| Tangible Equity (non-GAAP) | $ | 2,530,921 | $ | 2,598,202 | $ | 2,576,506 | $ | 2,682,862 | ||||||||||
| ÷ EOP Shares Outstanding (Net of Treasury Stock) | 134,631,647 | 129,203,774 | 134,580,646 | 136,068,439 | ||||||||||||||
| Tangible Book Value Per Share (non-GAAP) | $ | 18.80 | $ | 20.11 | $ | 19.14 | $ | 19.72 |
10
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Three Months Ended<br>September 2022 | Three Months Ended<br>September 2021 | Three Months Ended<br>June 2022 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Average | Average | Average | Average | Average | Average | |||||||||||||||||||
| Balance | Interest^(1)^ | Rate^(1)^ | Balance | Interest^(1)^ | Rate^(1)^ | Balance | Interest^(1)^ | Rate^(1)^ | ||||||||||||||||
| Selected Average Balances and Yields: | **** | |||||||||||||||||||||||
| ASSETS: | ||||||||||||||||||||||||
| Earning Assets: | ||||||||||||||||||||||||
| Federal funds sold and securities purchased under agreements to resell and other short-term<br>investments | $ | 918,691 | $ | 6,834 | 2.95 | % | $ | 3,825,264 | $ | 2,548 | 0.26 | % | $ | 1,737,146 | $ | 4,841 | 1.12 | % | ||||||
| Investment securities: | ||||||||||||||||||||||||
| Taxable | 4,687,528 | 29,149 | 2.49 | % | 3,215,719 | 12,999 | 1.62 | % | 4,665,307 | 24,558 | 2.11 | % | ||||||||||||
| Tax-exempt | 400,400 | 2,783 | 2.78 | % | 363,966 | 2,327 | 2.56 | % | 419,865 | 2,794 | 2.66 | % | ||||||||||||
| Total securities | 5,087,928 | 31,932 | 2.51 | % | 3,579,685 | 15,326 | 1.71 | % | 5,085,172 | 27,352 | 2.15 | % | ||||||||||||
| Loans and loans held for sale, net of unearned income ^(2)^ | 19,645,486 | 226,022 | 4.57 | % | 17,174,856 | 177,265 | 4.10 | % | 19,018,717 | 196,682 | 4.15 | % | ||||||||||||
| Allowance for loan losses | (213,824 | ) | (217,472 | ) | (214,624 | ) | ||||||||||||||||||
| Net loans and loans held for sale | 19,431,662 | 4.62 | % | 16,957,384 | 4.15 | % | 18,804,093 | 4.19 | % | |||||||||||||||
| Total earning assets | 25,438,281 | $ | 264,788 | 4.14 | % | 24,362,333 | $ | 195,139 | 3.18 | % | 25,626,411 | $ | 228,875 | 3.58 | % | |||||||||
| Other assets | 3,396,154 | 3,075,377 | 3,383,037 | |||||||||||||||||||||
| TOTAL ASSETS | $ | 28,834,435 | $ | 27,437,710 | $ | 29,009,448 | ||||||||||||||||||
| LIABILITIES: | ||||||||||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||||||||
| Interest-bearing deposits | $ | 13,756,151 | $ | 17,660 | 0.51 | % | $ | 13,361,016 | $ | 9,803 | 0.29 | % | $ | 14,136,707 | $ | 9,751 | 0.28 | % | ||||||
| Short-term borrowings | 137,985 | 493 | 1.42 | % | 123,526 | 167 | 0.54 | % | 136,025 | 237 | 0.70 | % | ||||||||||||
| Long-term borrowings | 894,940 | 4,908 | 2.18 | % | 813,976 | 2,531 | 1.23 | % | 811,924 | 2,880 | 1.42 | % | ||||||||||||
| Total interest-bearing liabilities | 14,789,076 | 23,061 | 0.62 | % | 14,298,518 | 12,501 | 0.35 | % | 15,084,656 | 12,868 | 0.34 | % | ||||||||||||
| Noninterest-bearing deposits | 9,216,058 | 8,471,744 | 9,038,947 | |||||||||||||||||||||
| Accrued expenses and other liabilities | 287,201 | 227,341 | 279,659 | |||||||||||||||||||||
| TOTAL LIABILITIES | 24,292,335 | 22,997,603 | 24,403,262 | |||||||||||||||||||||
| SHAREHOLDERS’ EQUITY | 4,542,100 | 4,440,107 | 4,606,186 | |||||||||||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 28,834,435 | $ | 27,437,710 | $ | 29,009,448 | ||||||||||||||||||
| NET INTEREST INCOME | $ | 241,727 | $ | 182,638 | $ | 216,007 | ||||||||||||||||||
| INTEREST RATE SPREAD | 3.52 | % | 2.83 | % | 3.24 | % | ||||||||||||||||||
| NET INTEREST MARGIN | 3.78 | % | 2.98 | % | 3.38 | % | ||||||||||||||||||
| (1) | The interest income and the yields on federally nontaxable loans and investment securities are presented on a tax-equivalent basis using the statutory federal income tax rate of 21%. | |||||||||||||||||||||||
| --- | --- | |||||||||||||||||||||||
| (2) | Nonaccruing loans are included in the daily average loan amounts outstanding. | |||||||||||||||||||||||
| --- | --- |
11
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Nine Months Ended<br>September 2022 | Nine Months Ended<br>September 2021 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Average | Average | Average | Average | |||||||||||||
| Balance | Interest^(1)^ | Rate^(1)^ | Balance | Interest^(1)^ | Rate^(1)^ | |||||||||||
| Selected Average Balances and Yields: | ||||||||||||||||
| ASSETS: | ||||||||||||||||
| Earning Assets: | ||||||||||||||||
| Federal funds sold and securities purchased under agreements to resell and other short-term<br>investments | $ | 1,887,158 | $ | 14,004 | 0.99 | % | $ | 3,012,429 | $ | 6,198 | 0.28 | % | ||||
| Investment securities: | ||||||||||||||||
| Taxable | 4,540,767 | 71,212 | 2.09 | % | 3,085,050 | 40,371 | 1.74 | % | ||||||||
| Tax-exempt | 421,440 | 8,266 | 2.62 | % | 337,590 | 6,639 | 2.62 | % | ||||||||
| Total securities | 4,962,207 | 79,478 | 2.14 | % | 3,422,640 | 47,010 | 1.83 | % | ||||||||
| Loans and loans held for sale, net of unearned income ^(2)^ | 19,068,898 | 604,085 | 4.23 | % | 17,742,054 | 549,896 | 4.14 | % | ||||||||
| Allowance for loan losses | (214,813 | ) | (228,163 | ) | ||||||||||||
| Net loans and loans held for sale | 18,854,085 | 4.28 | % | 17,513,891 | 4.20 | % | ||||||||||
| Total earning assets | 25,703,450 | $ | 697,567 | 3.63 | % | 23,948,960 | $ | 603,104 | 3.37 | % | ||||||
| Other assets | 3,358,118 | 3,032,927 | ||||||||||||||
| TOTAL ASSETS | $ | 29,061,568 | $ | 26,981,887 | ||||||||||||
| LIABILITIES: | ||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||
| Interest-bearing deposits | $ | 14,089,933 | $ | 35,972 | 0.34 | % | $ | 13,255,751 | $ | 32,800 | 0.33 | % | ||||
| Short-term borrowings | 136,014 | 911 | 0.90 | % | 134,092 | 527 | 0.53 | % | ||||||||
| Long-term borrowings | 841,693 | 10,339 | 1.64 | % | 820,426 | 7,540 | 1.23 | % | ||||||||
| Total interest-bearing liabilities | 15,067,640 | 47,222 | 0.42 | % | 14,210,269 | 40,867 | 0.38 | % | ||||||||
| Noninterest-bearing deposits | 9,082,869 | 8,147,540 | ||||||||||||||
| Accrued expenses and other liabilities | 275,201 | 234,991 | ||||||||||||||
| TOTAL LIABILITIES | 24,425,710 | 22,592,800 | ||||||||||||||
| SHAREHOLDERS’ EQUITY | 4,635,858 | 4,389,087 | ||||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 29,061,568 | $ | 26,981,887 | ||||||||||||
| NET INTEREST INCOME | $ | 650,345 | $ | 562,237 | ||||||||||||
| INTEREST RATE SPREAD | 3.21 | % | 2.99 | % | ||||||||||||
| NET INTEREST MARGIN | 3.38 | % | 3.14 | % | ||||||||||||
| (1) | The interest income and the yields on federally nontaxable loans and investment securities are presented on a tax-equivalent basis using the statutory federal income tax rate of 21%. | |||||||||||||||
| --- | --- | |||||||||||||||
| (2) | Nonaccruing loans are included in the daily average loan amounts outstanding. | |||||||||||||||
| --- | --- |
12
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Three Months Ended | Nine Months Ended | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September | September | June | March | September | September | |||||||||||||
| 2022 | 2021 | 2022 | 2022 | 2022 | 2021 | |||||||||||||
| Selected Financial Ratios: | ||||||||||||||||||
| Return on Average Assets | 1.41 | % | 1.33 | % | 1.32 | % | 1.13 | % | 1.29 | % | 1.46 | % | ||||||
| Return on Average Shareholders’ Equity | 8.96 | % | 8.23 | % | 8.33 | % | 6.96 | % | 8.07 | % | 8.95 | % | ||||||
| Return on Average Tangible Equity (non-GAAP)^(1)^ | 15.46 | % | 14.03 | % | 14.23 | % | 11.63 | % | 13.73 | % | 15.36 | % | ||||||
| Efficiency Ratio | 50.19 | % | 56.87 | % | 54.61 | % | 58.59 | % | 54.27 | % | 54.93 | % | ||||||
| Note: | ||||||||||||||||||
| (1) Return on Average Tangible Equity: | ||||||||||||||||||
| (a) Net Income (GAAP) | $ | 102,585 | $ | 92,152 | $ | 95,613 | $ | 81,664 | $ | 279,862 | $ | 293,886 | ||||||
| (b) Number of Days | 92 | 92 | 91 | 90 | 273 | 273 | ||||||||||||
| Average Total Shareholders’ Equity (GAAP) | $ | 4,542,100 | $ | 4,440,107 | $ | 4,606,186 | $ | 4,759,780 | $ | 4,635,858 | $ | 4,389,087 | ||||||
| Less: Average Total Intangibles | (1,910,054 | ) | (1,833,449 | ) | (1,911,705 | ) | (1,911,125 | ) | (1,910,957 | ) | (1,831,364 | ) | ||||||
| (c) Average Tangible Equity (non-GAAP) | $ | 2,632,046 | $ | 2,606,658 | $ | 2,694,481 | $ | 2,848,655 | $ | 2,724,901 | $ | 2,557,723 | ||||||
| Return on Average Tangible Equity (non-GAAP)\ [(a) / (b)]<br>x 365 / (c) | 15.46 | % | 14.03 | % | 14.23 | % | 11.63 | % | 13.73 | % | 15.36 | % | ||||||
| September 30<br>2022 | December 31<br>2021 | September 30<br>2021 | June 30<br>2022 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| Selected Financial Ratios: | ||||||||||||||||||
| Loans & Leases, net of unearned income / Deposit Ratio | 86.16 | % | 77.19 | % | 76.73 | % | 82.38 | % | ||||||||||
| Allowance for Loan & Lease Losses/ Loans & Leases, net of unearned<br>income | 1.11 | % | 1.20 | % | 1.26 | % | 1.13 | % | ||||||||||
| Allowance for Credit Losses ^(2)^/<br>Loans & Leases, net of unearned income | 1.32 | % | 1.37 | % | 1.41 | % | 1.35 | % | ||||||||||
| Nonaccrual Loans / Loans & Leases, net of unearned income | 0.14 | % | 0.20 | % | 0.23 | % | 0.15 | % | ||||||||||
| 90-Day Past Due Loans/ Loans & Leases, net of<br>unearned income | 0.09 | % | 0.10 | % | 0.09 | % | 0.09 | % | ||||||||||
| Non-performing Loans/ Loans & Leases, net of<br>unearned income | 0.35 | % | 0.50 | % | 0.54 | % | 0.37 | % | ||||||||||
| Non-performing Assets/ Total Assets | 0.28 | % | 0.36 | % | 0.39 | % | 0.29 | % | ||||||||||
| Primary Capital Ratio | 16.03 | % | 16.79 | % | 16.82 | % | 16.34 | % | ||||||||||
| Shareholders’ Equity Ratio | 15.29 | % | 16.09 | % | 16.11 | % | 15.59 | % | ||||||||||
| Price / Book Ratio | 1.08 | x | 1.05 | x | 1.06 | x | 1.05 | x | ||||||||||
| Price / Earnings Ratio | 11.75 | x | 12.82 | x | 12.76 | x | 12.37 | x | ||||||||||
| Note: | ||||||||||||||||||
| --- | ||||||||||||||||||
| (2) | Includes allowances for loan losses and lending-related commitments. | |||||||||||||||||
| --- | --- |
13
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Three Months Ended | Nine Months Ended | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September | September | June | March | September | September | |||||||||||||
| 2022 | 2021 | 2022 | 2022 | 2022 | 2021 | |||||||||||||
| Mortgage Banking Segment Data: | ||||||||||||||||||
| Applications | $ | 785,529 | $ | 1,893,870 | $ | 1,159,102 | $ | 1,696,504 | $ | 3,641,135 | $ | 6,554,142 | ||||||
| Loans originated | 552,487 | 1,385,871 | 955,152 | 1,006,363 | 2,514,002 | 4,954,618 | ||||||||||||
| Loans sold | $ | 564,267 | $ | 1,470,928 | $ | 1,072,623 | $ | 1,170,124 | $ | 2,807,014 | $ | 5,166,584 | ||||||
| Purchase money % of loans closed | 86 | % | 69 | % | 86 | % | 73 | % | 81 | % | 59 | % | ||||||
| Realized gain on sales and fees as a % of loans sold | 2.13 | % | 3.00 | % | 2.40 | % | 2.98 | % | 2.49 | % | 3.37 | % | ||||||
| Net interest income | $ | 2,758 | $ | 2,367 | $ | 2,870 | $ | 2,317 | $ | 7,945 | $ | 7,888 | ||||||
| Other income | 13,749 | 45,023 | 21,468 | 23,397 | 58,614 | 152,295 | ||||||||||||
| Other expense | 20,662 | 31,787 | 25,776 | 25,448 | 71,886 | 109,361 | ||||||||||||
| Income taxes | (820 | ) | 3,179 | (285 | ) | 57 | (1,048 | ) | 10,399 | |||||||||
| Net (loss) income | $ | (3,335 | ) | $ | 12,424 | $ | (1,153 | ) | $ | 209 | $ | (4,279 | ) | $ | 40,423 | |||
| September 30 | December 31 | September 30 | June 30 | March 31 | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| 2022 | 2021 | 2021 | 2022 | 2022 | ||||||||||||||
| Period End Mortgage Banking Segment Data: | ||||||||||||||||||
| Locked pipeline | $ | 131,846 | $ | 448,889 | $ | 648,706 | $ | 206,246 | $ | 412,809 | ||||||||
| Balance of loans serviced | $ | 3,459,781 | $ | 3,698,998 | $ | 3,723,206 | $ | 3,534,607 | $ | 3,623,207 | ||||||||
| Number of loans serviced | 23,859 | 25,198 | 25,583 | 24,226 | 24,677 | |||||||||||||
| September 30 | December 31 | September 30 | June 30 | March 31 | ||||||||||||||
| 2022 | 2021 | 2021 | 2022 | 2022 | ||||||||||||||
| Asset Quality Data: | ||||||||||||||||||
| EOP Non-Accrual Loans | $ | 28,244 | $ | 36,028 | $ | 37,689 | $ | 28,386 | $ | 34,093 | ||||||||
| EOP 90-Day Past Due Loans | 18,254 | 18,879 | 14,827 | 16,443 | 15,179 | |||||||||||||
| EOP Restructured Loans (1) | 23,155 | 35,856 | 37,752 | 25,504 | 30,582 | |||||||||||||
| Total EOP Non-performing Loans | $ | 69,653 | $ | 90,763 | $ | 90,268 | $ | 70,333 | $ | 79,854 | ||||||||
| EOP Other Real Estate Owned | 10,779 | 14,823 | 16,696 | 13,847 | 13,641 | |||||||||||||
| Total EOP Non-performing Assets | $ | 80,432 | $ | 105,586 | $ | 106,964 | $ | 84,180 | $ | 93,495 | ||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| September | September | June | March | September | September | |||||||||||||
| 2022 | 2021 | 2022 | 2022 | 2022 | 2021 | |||||||||||||
| Allowance for Loan & Lease Losses: | ||||||||||||||||||
| Beginning Balance | $ | 213,729 | $ | 217,545 | $ | 214,594 | $ | 216,016 | $ | 216,016 | $ | 235,830 | ||||||
| Gross Charge-offs | (3,087 | ) | (2,004 | ) | (2,119 | ) | (1,476 | ) | (6,682 | ) | (15,092 | ) | ||||||
| Recoveries | 1,299 | 3,173 | 3,060 | 3,456 | 7,815 | 6,498 | ||||||||||||
| Net (Charge-offs) Recoveries | (1,788 | ) | 1,169 | 941 | 1,980 | 1,133 | (8,594 | ) | ||||||||||
| Provision for Loan & Lease Losses | 7,670 | (7,823 | ) | (1,806 | ) | (3,402 | ) | 2,462 | (16,345 | ) | ||||||||
| Ending Balance | $ | 219,611 | $ | 210,891 | $ | 213,729 | $ | 214,594 | $ | 219,611 | $ | 210,891 | ||||||
| Reserve for lending-related commitments | 39,698 | 25,191 | 42,579 | 36,679 | 39,698 | 25,191 | ||||||||||||
| Allowance for Credit Losses (2) | $ | 259,309 | $ | 236,082 | $ | 256,308 | $ | 251,273 | $ | 259,309 | $ | 236,082 |
Notes:
| (1) | Restructured loans with an aggregate balance of $10,336, $24,662, $22,421, $11,298 and $13,568 at<br>September 30, 2022, September 30, 2021, December 31, 2021, June 30, 2022 and March 31, 2022 respectively, were on nonaccrual status, but are not included in “EOP Non-Accrual<br>Loans” above. Restructured loans with an aggregate balance of $2,941, $102 and $3,162 at September 30, 2022, December 31, 2021 and June 30, 2022, respectively, were were 90 days past due, but not included in “EOP Non-Accrual Loans” above. |
|---|---|
| (2) | Includes allowances for loan losses and lending-related commitments. |
| --- | --- |
14
EX-99.2
Third Quarter 2022 Earnings Review United Bankshares, Inc. October 27, 2022 Exhibit 99.2
Forward Looking Statements This presentation and statements made by United Bankshares, Inc. (“United”) and its management contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are intended to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about (i) United’s plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts; (ii) the effect of the COVID-19 pandemic; and (iii) other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “targets,” “projects,” or words of similar meaning generally intended to identify forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations managements of United and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of United. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed in these forward-looking statements because of possible uncertainties. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) the uncertainty as to the extent of the duration, scope and impacts of the COVID-19 pandemic, on United, its colleagues, the communities United serves, and the domestic and global economy; (2) uncertainty in U.S. fiscal and monetary policies, including the interest rate policies of the Federal Reserve Board; (3) volatility and disruptions in global capital and credit markets; (4) interest rate, securities market and monetary supply fluctuations; (5) increasing rates of inflation and slower growth rates; (6) reform of LIBOR; (7) the nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those involving the Federal Reserve, FDIC, and CFPB; (8) the effect of changes in the level of checking or savings account deposits on United’s funding costs and net interest margin; (9) future provisions for credit losses on loans and debt securities; (10) changes in nonperforming assets; (11) competition; and (12) changes in legislation or regulatory requirements. Additional factors, that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed United’s reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission and available on the SEC's Internet site (http://www.sec.gov). United cautions that the foregoing list of factors is not exclusive. All subsequent written and oral forward-looking statements concerning United or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. United does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made. IMPORTANT INFORMATION
Achieved Net Income of $102.6 million and Diluted Earnings Per Share of $0.76 Generated Return on Average Assets of 1.41%, Return on Average Equity of 8.96%, and Return on Average Tangible Equity* of 15.46% Achieved period end annualized loan growth of 16.4% (excluding PPP loans) Net Interest Margin (FTE) increased from 3.38% to 3.78% (linked-quarter) Quarterly dividend of $0.36 per share equates to a yield of 3.7% (based upon recent prices) Asset quality remains sound and Non-Performing Assets decreased 4.5% linked-quarter Strong expense control with an efficiency ratio of 50.19% Capital position remains robust and liquidity remains sound 3Q22 HIGHLIGHTS *Non-GAAP measure. Refer to appendix.
Linked-Quarter (LQ) Net Income was $102.6 million in 3Q22 compared to $95.6 million in 2Q22, with diluted EPS of $0.76 in 3Q22 compared to $0.71 in 2Q22. Net Interest Income increased $25.7 million primarily due to higher interest income on earning assets driven by rising market interest rates and a change in the asset mix to higher earning assets. The increase in net interest income was partially offset by higher interest expense, driven by deposit rate repricing, and declines in PPP loan fee income and loan accretion on acquired loans. Provision Expense was $7.7 million in 3Q22 compared to $(1.8) million in 2Q22. The increase was primarily due to loan growth. Noninterest Income decreased $10.9 million primarily due to a decrease of $6.0 million in income from mortgage banking activities. Additionally, BOLI income declined $2.6 million primarily due lower death benefits from 2Q22 and the impact of lower market values of underlying investments in 3Q22. Noninterest Expense decreased $4.0 million primarily due to declines in the expense for reserve for unfunded loan commitments of $8.8 million and employee compensation of $3.0 million. Partially offsetting these declines was an increase in other noninterest expense which included an accrual of $5.0 million related to a litigation matter with a former commercial customer. EARNINGS SUMMARY
PERFORMANCE RATIOS *Non-GAAP measure. Refer to appendix. Strong profitability and expense control
Reported Net Interest Margin increased from 3.38% to 3.78% LQ. Linked-quarter Net Interest Income (FTE) was up $25.7 million primarily due to higher interest income on earning assets driven by rising market interest rates and a change in the asset mix to higher earning assets. The increase in net interest income was partially offset by higher interest expense, driven by deposit rate repricing, and declines in PPP loan fee income and loan accretion on acquired loans. Approximately ~57% of the loan portfolio is fixed rate and ~43% is adjustable rate, while ~31% of the total portfolio is projected to reprice within the next 3 months. Additionally, ~25% of the securities portfolio is floating rate. Total remaining unamortized PPP fees (net of costs) were $1.1 million as of 9/30/22. Scheduled purchase accounting loan accretion is estimated at $2.7 million for the remainder of FY 2022 and $10.8 million for FY 2023. NET INTEREST INCOME AND MARGIN
Linked-Quarter loan balances increased $728 million primarily driven by Residential Real Estate loans and Construction & Land Development loans. Excluding the $45 million decline in PPP loans, total loans increased $773 million (16.4% annualized) compared to 2Q22. As of 9/30/22, loan balances within the North Carolina & South Carolina markets were up ~34.6% annualized YTD (excluding PPP). Non Owner Occupied CRE to Total Risk Based Capital was ~250% at 3Q22. CRE portfolio remains diversified among underlying collateral types. Total purchase accounting-related fair value discount on loans was $52 million as of 9/30/22. LOAN SUMMARY (EXCLUDES LOANS HELD FOR SALE) $ in millions
End of Period Balances (000s) 6/30/22 9/30/22 Non-Accrual Loans $28,386 $28,244 90-Day Past Due Loans $16,443 $18,254 Restructured Loans $25,504 $23,155 Total Non-performing Loans $70,333 $69,653 Other Real Estate Owned $13,847 $10,779 Total Non-performing Assets $84,180 $80,432 Non-performing Loans / Loans 0.37% 0.35% Non-performing Assets / Total Assets 0.29% 0.28% Annualized Net Charge-offs / Average Loans (0.02)% 0.04% Allowance for Loan & Lease Losses (ALLL) $213,729 $219,611 ALLL / Loans, net of earned income 1.13% 1.11% Allowance for Credit Losses (ACL)* $256,308 $259,309 ACL / Loans, net of earned income 1.35% 1.32% NPAs decreased $3.7 million, or 4.5%, compared to 2Q22. ACL increased $3.0 million LQ primarily due to loan growth. PPP loans are included within the ratios above ($89 million at 6/30/22 and $43 million at 9/30/22). CREDIT QUALITY *ACL is comprised of ALLL and the reserve for lending-related commitments
Strong core deposit base with 41% of deposits in Non Interest Bearing accounts. LQ deposits decreased $163 million driven by Interest Bearing Checking and Time Deposit accounts. Interest bearing deposit beta of ~16% and total deposit beta of ~10% in 3Q22, and cumulative betas of ~13% and ~8%, respectively, since 1Q22. Enviable deposit franchise with an attractive mix of both high growth MSA’s and stable, rural markets with a dominant market share position. Top 10 Deposit Markets by MSA (as of 6/30/22) MSA Total Deposits In Market ($000) Number of Branches Rank Washington, DC 10,167,928 60 7 Charleston, WV 1,442,649 7 2 Morgantown, WV 1,215,804 6 2 Myrtle Beach, SC 881,399 11 5 Richmond, VA 818,349 12 9 Parkersburg, WV 738,802 4 1 Hagerstown, MD 657,411 6 3 Charlotte, NC 534,710 7 16 Wheeling, WV 520,156 6 2 Charleston, SC 519,950 8 11 $ in millions Source: S&P Global Market Intelligence DEPOSIT SUMMARY
West Virginia #2 in the state (second only to Truist) with $6.1 billion in deposits. United ranks #1 or #2 in deposit market share within its top 5 largest markets in the state. United continues to build franchise value with an attractive mix of both high growth MSA’s and stable, rural markets with a dominant market share position. Further growth opportunities exist to expand our presence in some of the most desirable banking markets in the nation. These dynamics uniquely position our franchise and contribute to making United one of the most valuable banking companies in the Southeast and Mid-Atlantic. Washington D.C. MSA #1 regional bank (#7 overall) with $10.2 billion in deposits. United has increased deposit market share in the D.C. MSA from #15 in 2013 to #7 in 2022, with total deposits increasing from $2.1 billion to $10.2 billion. Virginia- #7 in the state with $9.2 billion (including VA deposits within the D.C. MSA). North Carolina #18 in the state with $2.2 billion. Select MSAs: #16 in Charlotte #26 in Raleigh #14 in Wilmington #11 in Greenville #1 in Washington #8 in Rocky Mount #10 in Fayetteville South Carolina #11 in the state with $1.9 billion. Select MSAs: #11 in Charleston #5 in Myrtle Beach #12 in Greenville #16 in Columbia ATTRACTIVE DEPOSIT MARKET SHARE POSITION Source: S&P Global Market Intelligence; Data as of 6/30/22
End of Period Ratios / Values 6/30/22 9/30/22** Common Equity Tier 1 Ratio 12.7% 12.4% Tier 1 Capital Ratio 12.7% 12.4% Total Risk Based Capital Ratio 14.8% 14.4% Leverage Ratio 10.5% 10.7% Total Equity to Total Assets 15.6% 15.3% *Tangible Equity to Tangible Assets (non-GAAP) 9.6% 9.3% Book Value Per Share $33.34 $32.98 *Tangible Book Value Per Share (non-GAAP) $19.14 $18.80 Capital ratios remain significantly above regulatory “Well Capitalized” levels and exceed all internal capital targets. United did not repurchase any common shares during 3Q22 as compared to 1,548,761 common shares repurchased during 2Q22 for $53.4 million. As of 9/30/22, there were 4,371,239 shares available to be repurchased under the approved plan. *Non-GAAP measure. Refer to appendix. **Regulatory ratios are estimates as of the earnings release date. CAPITAL RATIOS AND PER SHARE DATA
Three Months Ended (000s) 6/30/22 9/30/22 Applications $1,159,102 $785,529 Loans Originated $955,152 $552,487 Loans Sold $1,072,623 $564,267 Purchase Money % 86% 86% Realized Gain on Sale Margin 2.40% 2.13% Locked Pipeline (EOP) $206,246 $131,846 Loans Held for Sale (EOP) $220,689 $210,075 Balance of Loans Serviced (EOP) $3,534,607 $3,459,781 Total Income $24,338 $16,507 Total Expense $25,776 $20,662 Income Before Tax $(1,438) $(4,155) Net Income After Tax $(1,153) $(3,335) Mortgage Banking Segment represents George Mason Mortgage and Crescent Mortgage Company. George Mason Mortgage, founded in 1980, is headquartered in the Washington D.C. MSA with 10 offices located throughout Virginia, Maryland, North Carolina, and South Carolina. Crescent Mortgage Company, founded in 1993, is headquartered in Atlanta, Georgia, and is primarily a correspondent/wholesale mortgage company approved to originate loans in 48 states partnering with community banks, credit unions and mortgage brokers. The quarterly net fair value impact on mortgage banking derivatives and loans held for sale was $(6.9) million in 2Q22 and $(2.3) million in 3Q22. MORTGAGE BANKING
Select guidance is being provided for 4Q22. Our outlook may change if the expectations for these items vary from current expectations. Balance Sheet: Expect loan growth, excluding loans held for sale, to be in the mid to high single digits for 4Q22 (annualized) compared to EOP 3Q22. Loan pipelines continue to be very strong. Net Interest Income / Net Interest Margin: Expect net interest income to be in the range of $243 million to $248 million for 4Q22 (utilizing implied forward rate assumptions as of 9/30/22, including an additional ~125 bps of fed funds rate increases). Provision Expense: Asset quality remains sound. Provision expense will be dependent on the future economic outlook, future credit trends within United’s portfolio, and loan growth. Non Interest Income: Expect non interest income to be in the range of $27 million to $30 million for 4Q22. Non Interest Expense: Expect non interest expense, excluding expense for the reserve for unfunded loan commitments, to be in the range of $135 million to $137 million for 4Q22. Unfunded commitments expense will largely be dependent on unfunded loan commitment levels at quarter-end. Effective Tax Rate: Estimated at approximately ~20.2% for 4Q22. Capital: Stock buyback will be market dependent. United’s capital position remains robust. 2022 OUTLOOK
Excellent franchise with long-term growth prospects Current income opportunity with a dividend yield of 3.7% (based upon recent prices) High-performance bank with a low-risk profile Experienced management team with a proven track record of execution High level of insider / employee ownership 48 consecutive years of dividend increases evidences United’s strong profitability, solid asset quality, and sound capital management over a very long period of time Attractive valuation with a current Price-to-Earnings Ratio of 14.5x (based upon median 2022 street consensus estimate of $2.66 per Bloomberg) INVESTMENT THESIS
APPENDIX
(dollars in thousands) 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 (1) Return on Average Tangible Equity (A) Net Income (GAAP) $92,152 $73,852 $81,664 $95,613 $102,585 (B) Number of Days in the Quarter 92 92 90 91 92 Average Total Shareholders' Equity (GAAP) $4,440,107 $4,551,634 $4,759,780 $4,606,186 $4,542,100 Less: Average Total Intangibles (1,833,449) (1,856,141) (1,911,125) (1,911,705) (1,910,054) (C) Average Tangible Equity (non-GAAP) $2,606,658 $2,695,493 $2,848,655 $2,694,481 $2,632,046 Formula: [(A) / (B)]*365 (or 366 for leap year) (C) Return on Average Tangible Equity (non-GAAP) 14.03% 9.58% 10.87% 11.63% 14.23% 15.46% RECONCILIATION OF NON-GAAP ITEMS
(dollars in thousands) 6/30/2022 9/30/2022 (2) Tangible Equity to Tangible Assets Total Assets (GAAP) $ 28,777,896 $ 29,048,475 Less: Total Intangibles (GAAP) (1,910,544) (1,909,165) Tangible Assets (non-GAAP) $ 26,867,352 $ 27,139,310 Total Shareholders' Equity (GAAP) $ 4,487,050 $ 4,440,086 Less: Total Intangibles (GAAP) (1,910,544) (1,909,165) Tangible Equity (non-GAAP) $ 2,576,506 $ 2,530,921 Tangible Equity to Tangible Assets (non-GAAP) 9.6% 9.3% (3) Tangible Book Value Per Share: Total Shareholders' Equity (GAAP) $ 4,487,050 $ 4,440,086 Less: Total Intangibles (GAAP) (1,910,544) (1,909,165) Tangible Equity (non-GAAP) $ 2,576,506 $ 2,530,921 ÷ EOP Shares Outstanding (Net of Treasury Stock) 134,580,646 134,631,647 Tangible Book Value Per Share (non-GAAP) $19.14 $18.80 RECONCILIATION OF NON-GAAP ITEMS (CONT.)