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):
January 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> <br>incorporation or organization) | (Commission File Number) | (I.R.S. Employer<br> <br>Identification No.) |
| 300 United Center | ||
| --- | ||
| 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 Symbol(s) | Name of each exchange 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 January 27, 2022 United Bankshares, Inc. (“United”) announced its financial results for the fourth quarter and year of 2021. 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 January 27, 2022, issued by United Bankshares, Inc. |
|---|---|
| 99.2 | Slide presentation of financial information for the fourth quarter of 2021 |
| 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: January 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 |
|---|---|
| January 27, 2022 | Chief Financial Officer |
| (800) 445-1347 ext. 8716 |
United Bankshares, Inc. Announces Record Earnings
for the Year 2021
WASHINGTON, D.C. and CHARLESTON, WV— United Bankshares, Inc. (NASDAQ: UBSI) (“United”), today reported earnings for the fourth quarter and the year of 2021. Earnings for the fourth quarter of 2021 were $73.9 million, or $0.56 per diluted share, as compared to earnings of $92.4 million, or $0.71 per diluted share, for the fourth quarter of 2020. Earnings for the year of 2021 were a record $367.7 million as compared to earnings of $289.0 million for the year of 2020. Earnings per diluted share for the year of 2021 were a record $2.83 as compared to earnings per diluted share of $2.40 for the year of 2020.
Fourth quarter 2021 results produced annualized returns on average assets, average equity and average tangible equity, a non-GAAP measure, of 1.04%, 6.44% and 10.87%, respectively, compared to annualized returns on average assets, average equity, and average tangible equity of 1.41%, 8.51% and 14.72%, respectively, for the fourth quarter of 2020. For the year of 2021, United’s returns on average assets, average equity and average tangible equity were 1.35%, 8.30% and 14.18%, respectively, compared to returns on average assets, average equity, and average tangible equity of 1.20%, 7.30% and 12.90%, respectively, for the year of 2020.
“2021 was one of the most successful years in our Company’s history,” stated Richard M. Adams, United’s Chairman of the Board and Chief Executive Officer. “We achieved record pre-tax earnings of $463 million, increased earnings per diluted share 18%, and outperformed peer profitability. We increased our dividend for the 48^th^ consecutive year and successfully completed the acquisition of Community Bankers Trust Corporation, the 33^rd^ acquisition of the current administration.”
On December 3, 2021, United completed its acquisition of Community Bankers Trust Corporation (“Community Bankers Trust”). The results of operations for Community Bankers Trust are included in the consolidated results of operations from the date of acquisition. As a result of the acquisition, the fourth quarter and year of 2021 were impacted by approximately one month of increased levels of average balances, income, and expense as compared to the fourth quarter and year of 2020 and as compared to the third quarter of 2021.
As a result of the acquisition of Carolina Financial Corporation (“Carolina Financial”) on May 1, 2020, the year of 2021 reflected higher average balances, income, and expense as compared to the year of 2020.
The fourth quarter and year of 2021 included merger-related expenses associated with the Community Bankers Trust acquisition of $20.4 million and $21.4 million, respectively, compared to $558 thousand and $54.2 million of merger-related expenses associated with the Carolina Financial acquisition for the fourth quarter and year of 2020.
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Net Interest Income and Net Interest Margin
Net interest income for the fourth quarter of 2021 was $183.7 million, which was a decrease of $8.3 million, or 4%, from the fourth quarter of 2020. 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 fourth quarter of 2021 also decreased $8.3 million, or 4%, from the fourth quarter of 2020 to $184.7 million. The decrease in net interest income and tax-equivalent net interest income was primarily due to lower accretion on acquired loans and lower fee income from Paycheck Protection Program (“PPP”) loans. A decrease in interest income due to lower acquired loan accretion income and PPP loan fee income as well as due to a change in the mix of interest earning assets was partially offset by lower interest expense on deposits and borrowings driven by rate repricing. The net interest spread for the fourth quarter of 2021 decreased 32 basis points from the fourth quarter of 2020 due to a 49 basis point decrease in the average yield on earning assets partially offset by a 17 basis point decrease in the average cost of funds. Loan accretion on acquired loans was $6.2 million and $10.9 million for the fourth quarter of 2021 and 2020, respectively, a decrease of $4.7 million. Net PPP loan fee income of $5.0 million was recognized in the fourth quarter of 2021 driven primarily by loan forgiveness, as compared to $7.0 million for the fourth quarter of 2020. Average earning assets for the fourth quarter of 2021 increased $1.8 billion, or 8%, from the fourth quarter of 2020 due to a $1.8 billion increase in average short-term investments and a $833.6 million increase in average investment securities, partially offset by a $862.0 million decrease in average net loans and loans held for sale mainly driven by a decline in PPP loan balances. The net interest margin of 2.94% for the fourth quarter of 2021 was a decrease of 39 basis points from the net interest margin of 3.33% for the fourth quarter of 2020.
Net interest income for the year of 2021 was $742.7 million, which was an increase of $53.0 million, or 8%, from the year of 2020. Tax-equivalent net interest income for the year of 2021 was $747.0 million, an increase of $53.3 million, or 8%, from the year of 2020. The increase in net interest income and tax-equivalent net interest income was primarily due to lower interest expense on deposits and borrowings as well as due to an increase in average earning assets from the Carolina Financial acquisition and PPP loan fee income, partially offset by lower acquired loan accretion income. The net interest spread for the year of 2021 decreased 2 basis points from the year of 2020 due to a 45 basis point decrease in the average yield on earning assets partially offset by a 43 basis point decrease in the average cost of funds. Average earning assets for the year of 2021 increased $2.8 billion, or 13%, from the year of 2020 due to a $1.7 billion increase in average short-term investments, a $628.0 million increase in average investment securities and a $523.9 million increase in average net loans and loans held for sale. Net PPP loan fee income of $33.2 million was recognized in the year of 2021 driven primarily by loan forgiveness, as compared to $16.3 million for the year of 2020. Loan accretion on acquired loans was $33.9 million and $41.8 million for the year of 2021 and 2020, respectively, a decrease of $7.9 million. The net interest margin of 3.09% for the year of 2021 was a decrease of 15 basis points from the net interest margin of 3.24% for the year of 2020.
On a linked-quarter basis, net interest income for the fourth quarter of 2021 increased $2.1 million, or 1%, from the third quarter of 2021. Tax-equivalent net interest income for the fourth quarter of 2021 also increased $2.1 million, or 1%, from the third quarter of 2021. The increase in net interest income and tax-equivalent net interest income was primarily due to an increase in average earning assets due to organic growth and the Community Bankers Trust acquisition as well as lower interest expense on deposits and borrowings partially offset by lower acquired loan accretion and PPP loan fee income. Average earning assets increased approximately $573.2 million, or 2%, from the third quarter of 2021 due to increases in average net loans and
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loans held for sale of $456.0 million and average securities of $333.4 million partially offset by a decrease in average short-term investments of $216.2 million. The net interest spread for the fourth quarter of 2021 of 2.82% decreased 1 basis point from the third quarter of 2021 due to a 5 basis point decrease in the average yield on earning assets partially offset by a 4 basis point decrease in the average cost of funds. Net PPP loan fee income for the fourth quarter of 2021 decreased $2.8 million from the third quarter of 2021 to $5.0 million. Loan accretion on acquired loans decreased $1.9 million from the third quarter of 2021 to $6.2 million for the fourth quarter of 2021. The net interest margin of 2.94% for the fourth quarter of 2021 was a decrease of 4 basis points from the net interest margin of 2.98% for the third quarter of 2021.
Credit Quality
United’s asset quality continues to be sound. At December 31, 2021, nonperforming loans were $90.8 million, or 0.50% of loans & leases, net of unearned income, down from $132.2 million, or 0.75% of loans & leases, net of unearned income, at December 31, 2020. Total nonperforming assets of $105.6 million, including other real estate owned (“OREO”) of $14.8 million at December 31, 2021, represented 0.36% of total assets as compared to nonperforming assets of $154.8 million, including OREO of $22.6 million, or 0.59% of total assets at December 31, 2020.
The provision for credit losses was a net benefit of $7.4 million and $24.0 million for the fourth quarter and year of 2021, respectively, while the provision for credit losses was an expense of $16.8 million and $106.6 million, respectively, for the fourth quarter and year of 2020. The quarter and year of 2021 included a provision for loan losses of $12.3 million recorded on purchased non-credit deteriorated (“non-PCD”) loans from Community Bankers Trust. The year of 2020 included a provision for loan losses of $29.0 million recorded on non-PCD loans from Carolina Financial. The decrease in the provision in relation to the prior year quarter and year of 2020 was also driven by the impact of better performance trends within the loan portfolio and improvements in the reasonable and supportable forecasts of future macroeconomic conditions on the estimate of expected credit losses under CECL. On a linked-quarter basis, the provision for credit losses for the fourth quarter of 2021 was a net benefit of $7.4 million compared to a net benefit of $7.8 million for the third quarter of 2021.
As of December 31, 2021, the allowance for loan losses was $216.0 million, or 1.20% of loans & leases, net of unearned income, as compared to $235.8 million, or 1.34% of loans & leases, net of unearned income, at December 31, 2020. Net charge-offs were $125 thousand for the fourth quarter of 2021 compared to net charge-offs of $6.9 million for the fourth quarter of 2020. Net charge-offs were $8.7 million for the year of 2021 compared to net charge-offs of $23.6 million for the year of 2020. Annualized net charge-offs as a percentage of average loans & leases, net of unearned income were 0.003% and 0.05% for the fourth quarter and year of 2021, respectively, compared to annualized net charge-offs of 0.16% and 0.14% for the fourth quarter and year of 2020. Net recoveries were $1.2 million for the third quarter of 2021.
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Noninterest Income
Noninterest income for the fourth quarter of 2021 was $54.0 million, which was a decrease of $40.0 million, or 43%, from the fourth quarter of 2020 primarily driven by a $43.5 million decrease in income from mortgage banking activities due primarily to lower mortgage loan origination and sale volume and a lower margin on loans sold in the secondary market. Partially offsetting the decreases in noninterest income were increases in fees from deposit services of $1.0 million, fees from trust services of $742 thousand and fees from brokerage services of $574 thousand.
Noninterest income for the year of 2021 was $278.1 million, which was a decrease of $76.7 million, or 22%, from the year of 2020. The decrease was driven primarily by a $94.4 million decrease in income from mortgage banking activities due primarily to a lower loan pipeline valuation and a lower margin on loans sold in the secondary market. The year of 2021 included fees from deposit services of $38.7 million, an increase of $3.9 million from the year of 2020, fees from trust services of $16.6 million, an increase of $2.6 million from the year of 2020 and fees from brokerage services of $15.6 million, an increase of $3.8 million from the year of 2020. Mortgage loan servicing income was $9.6 million for the year of 2021 compared to $6.2 million for the year of 2020, an increase of $3.4 million due to the Carolina Financial acquisition. The year of 2020 also included a gain on the sale of a bank premises of $2.2 million.
On a linked-quarter basis, noninterest income for the fourth quarter of 2021 decreased $14.6 million, or 21%, from the third quarter of 2021 primarily due to a decrease of $14.7 million in income from mortgage banking activities due primarily to lower mortgage loan origination and sale volume and a lower loan pipeline valuation.
Noninterest Expense
Noninterest expense for the fourth quarter of 2021 was $151.8 million, a decrease of $4.3 million, or 3%, from the fourth quarter of 2020. Employee compensation decreased $5.5 million due to lower employee commissions, incentives and overtime related to mortgage banking production partially offset by $2.5 million of merger-related expenses from the Community Bankers Trust acquisition as well as additional employees from the acquisition. OREO expense decreased $2.1 million due to a decrease in net losses on the sale of OREO properties and fewer declines in the fair value of OREO properties. Partially offsetting the decreases in noninterest expense were increases in data processing expense of $3.6 million primarily due to $3.5 million of merger-related expenses associated with the Community Bankers Trust acquisition. Other expense increased $1.9 million driven by an increase in the reserve for unfunded loan commitments of $2.8 million, including $844 thousand related to loan commitments acquired from Community Bankers Trust.
Noninterest expense for the year of 2021 was $581.9 million, an increase of $3.7 million, or less than 1%, from the year of 2020. Employee compensation increased $5.3 million from the year of 2020 primarily due to the Carolina Financial and Community Bankers Trust acquisitions partially offset by lower employee compensation expense related to mortgage banking production. Additionally, noninterest expense increased slightly from the year of 2020 due to increases of $5.1 million in equipment expense, $5.0 million in employee benefits and $2.8 million in mortgage loan servicing expense and impairment. The increases in equipment expense, employee benefits and mortgage loan servicing expense and impairment were mainly from the
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Carolina Financial acquisition. Offsetting the increases in noninterest expense was a decrease in data processing expense of $4.0 million, due to a penalty of $9.7 million to terminate Carolina Financial’s data processing contract incurred in the second quarter of 2020, partially offset by $3.5 million of merger-related termination and conversion expenses associated with the Community Bankers Trust acquisition in the fourth quarter of 2021. The year of 2020 also included $10.4 million in prepayment penalties on the early payoff of FHLB advances compared to $15 thousand for the year of 2021.
On a linked-quarter basis, noninterest expense for the fourth quarter of 2021 increased $9.5 million, or 7%, from the third quarter of 2021 primarily due to an increase of $4.1 million in employee compensation, $4.2 million in data processing and $3.3 million in other expense. The increases in employee compensation and data processing expense were primarily due to the Community Bankers Trust acquisition. Within other expense, the largest driver of the increase was an increase in the reserve for unfunded loan commitments of $1.8 million, including $844 thousand related to loan commitments acquired from Community Bankers Trust. Partially offsetting the increases in noninterest expense were decreases in employee benefits of $2.3 million and mortgage loan servicing expense and impairment of $1.0 million.
Income Tax Expense
For the fourth quarter of 2021, income tax expense was $19.5 million as compared to $20.8 million for the fourth quarter of 2020 primarily due to lower earnings partially offset by a higher effective tax rate. For the year of 2021, income tax expense was $95.1 million as compared to $70.7 million for the year of 2020 primarily due to higher earnings and a slightly higher effective tax rate. On a linked-quarter basis, income tax expense decreased $4.1 million primarily due to lower earnings. United’s effective tax rate was 20.9% for the fourth quarter of 2021, 18.4% for the fourth quarter of 2020 and 20.4% for the third quarter of 2021. For the year of 2021 and 2020, United’s effective tax rate was 20.6% and 19.7%, respectively.
Regulatory Capital
United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 15.4% at December 31, 2021, while estimated Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 13.4%, 13.4% and 11.0%, respectively. The December 31, 2021 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%.
About United Bankshares, Inc.
As of December 31, 2021, United had consolidated assets of approximately $29.3 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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Cautionary Statements
The Company is required under generally accepted accounting principles to evaluate subsequent events through the filing ofits December 31, 2021 consolidated financial statements on Form 10-K. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions andestimates made as of December 31, 2021 and will adjust amounts preliminarily reported, if necessary.
Use of non-GAAP Financial Measures
This press release contains certain financialmeasures that are not recognized under U.S. generally accepted accounting principles (“GAAP”). Generally, United has presented these “non-GAAP” financial measures because it believes thatthese measures provide meaningful additional information to assist in the evaluation of United’s results of operations or financial position. Presentation of these non-GAAP financial measures isconsistent with how United’s management evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in theevaluation of companies in the banking industry.
Specifically, this press release contains certain references tofinancial measures identified as tax-equivalent (FTE) net interest income, tangible equity, return on 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 anon-GAAP measure, 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-exempt sources. United uses this measure to monitor net interest income performance and to manage its balance sheet composition. The tax-equivalent adjustment combinesamounts of interest income on federally nontaxable loans and investment securities using the statutory federal income tax rate of 21%.
Tangible equity is calculated as GAAP total shareholders’ equity minus total intangible assets. Tangible equity canthus be considered the most conservative valuation of the company. Tangible equity is also presented on a per common share basis and considering net income, a return on average tangible equity. Management provides these amounts to facilitate theunderstanding of as well as to assess the quality and composition of United’s capital structure. By removing the effect of intangible assets that result from merger and acquisition activity, the “permanent” items of equity arepresented. 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 as reconciliation 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
In this report, we have made various statements regarding current expectations or forecasts of future events, which speakonly as of the date the statements are made. These statements are “forward-looking statements” within the meaning of the Private 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 the officers 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 onassumptions and estimates, which although believed to be reasonable, may turn out to be incorrect. Therefore, undue reliance should not be placed upon these estimates and statements. United cannot assure that any of these statements, estimates, orbeliefs will be realized and actual results may differ from those contemplated in these “forward-looking statements.” The following factors, among others, could cause the actual results of United’s operations to differ materially fromits expectations: 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;uncertainty in U.S .fiscal and monetary policies, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital and credit markets, reform of LIBOR; the nature, extent, timing, and results ofgovernmental actions, examinations, reviews, reforms, regulations, and interpretations, including those involving the OCC, Federal Reserve, FDIC, and CFPB; the effect of changes in the level of checking or savings account deposits on United’sfunding costs and net interest margin; future provisions for credit losses on loans and debt securities; changes in nonperforming assets; risks relating to the merger with Community Bankers Trust, including the successful integration of operationsof Community Bankers Trust, the expected growth opportunities and costs savings from the merger, and deposit attrition, operating costs, customer losses and business disruption following the merger; competition; and changes in legislation orregulatory requirements. For more information about factors 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 on Form 10-K for the year ended December 31, 2020, 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 of the 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 advisedto consult further disclosures United may make on related subjects in our filings with the SEC.
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Three Months Ended | Year Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| EARNINGS SUMMARY: | December<br>2021 | December<br>2020 | December<br>2021 | December<br>2020 | ||||||||
| Interest income | $ | 195,194 | $ | 208,914 | $ | 795,117 | $ | 798,382 | ||||
| Interest expense | 11,516 | 16,925 | 52,383 | 108,609 | ||||||||
| Net interest income | 183,678 | 191,989 | 742,734 | 689,773 | ||||||||
| Provision for credit losses | (7,405 | ) | 16,751 | (23,970 | ) | 106,562 | ||||||
| Noninterest income | 54,049 | 94,082 | 278,092 | 354,746 | ||||||||
| Noninterest expense | 151,789 | 156,117 | 581,943 | 578,217 | ||||||||
| Income before income taxes | 93,343 | 113,203 | 462,853 | 359,740 | ||||||||
| Income taxes | 19,491 | 20,833 | 95,115 | 70,717 | ||||||||
| Net income | $ | 73,852 | $ | 92,370 | $ | 367,738 | $ | 289,023 | ||||
| PER COMMON SHARE: | ||||||||||||
| Net income: | ||||||||||||
| Basic | $ | 0.56 | $ | 0.71 | $ | 2.84 | $ | 2.40 | ||||
| Diluted | 0.56 | 0.71 | 2.83 | 2.40 | ||||||||
| Cash dividends | $ | 0.36 | $ | 0.35 | 1.41 | 1.40 | ||||||
| Book value | 34.60 | 33.27 | ||||||||||
| Closing market price | $ | 36.28 | $ | 32.40 | ||||||||
| Common shares outstanding: | ||||||||||||
| Actual at period end, net of treasury shares | 136,392,758 | 129,188,507 | ||||||||||
| Weighted average-basic | 130,939,640 | 129,371,600 | 129,276,452 | 120,017,247 | ||||||||
| Weighted average-diluted | 131,295,816 | 129,479,390 | 129,512,853 | 120,090,232 | ||||||||
| FINANCIAL RATIOS: | ||||||||||||
| Return on average assets | 1.04 | % | 1.41 | % | 1.35 | % | 1.20 | % | ||||
| Return on average shareholders’ equity | 6.44 | % | 8.51 | % | 8.30 | % | 7.30 | % | ||||
| Return on average tangible equity (non-GAAP)^(1)^ | 10.87 | % | 14.72 | % | 14.18 | % | 12.90 | % | ||||
| Average equity to average assets | 16.22 | % | 16.54 | % | 16.26 | % | 16.39 | % | ||||
| Net interest margin | 2.94 | % | 3.33 | % | 3.09 | % | 3.24 | % | ||||
| PERIOD END BALANCES: | December 31<br>2021 | December 312020 | December 31<br>2019 | September 30<br>2021 | ||||||||
| Assets | $ | 29,328,902 | $ | 26,184,247 | $ | 19,662,324 | $ | 27,507,517 | ||||
| Earning assets | 26,083,089 | 23,172,403 | 17,344,638 | 24,415,973 | ||||||||
| Loans & leases, net of unearned income | 18,023,648 | 17,591,413 | 13,712,129 | 16,743,629 | ||||||||
| Loans held for sale | 504,416 | 718,937 | 387,514 | 493,299 | ||||||||
| Investment securities | 4,295,749 | 3,186,184 | 2,669,797 | 3,646,065 | ||||||||
| Total deposits | 23,350,263 | 20,585,160 | 13,852,421 | 21,822,609 | ||||||||
| Shareholders’ equity | 4,718,628 | 4,297,620 | 3,363,833 | 4,430,766 |
Note: (1) See information under the “Selected Financial Ratios” table for a reconciliation of non-GAAP measure.
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 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 2021 | December 2020 | September 2021 | June 2021 | March 2021 | |||||||||||
| Interest & Loan Fees Income (GAAP) | $ | 195,194 | $ | 208,914 | $ | 194,080 | $ | 200,186 | $ | 205,657 | |||||
| Tax equivalent adjustment | 1,037 | 1,042 | 1,059 | 1,075 | 1,047 | ||||||||||
| Interest & Fees Income (FTE) (non-GAAP) | 196,231 | 209,956 | 195,139 | 201,261 | 206,704 | ||||||||||
| Interest Expense | 11,516 | 16,925 | 12,501 | 13,669 | 14,697 | ||||||||||
| Net Interest Income (FTE) (non-GAAP) | 184,715 | 193,031 | 182,638 | 187,592 | 192,007 | ||||||||||
| Provision for Credit Losses | (7,405 | ) | 16,751 | (7,829 | ) | (8,879 | ) | 143 | |||||||
| Noninterest Income: | |||||||||||||||
| Fees from trust services | 4,327 | 3,585 | 4,269 | 4,193 | 3,763 | ||||||||||
| Fees from brokerage services | 3,699 | 3,125 | 3,883 | 3,654 | 4,323 | ||||||||||
| Fees from deposit services | 10,509 | 9,501 | 9,888 | 9,396 | 8,896 | ||||||||||
| Bankcard fees and merchant discounts | 1,580 | 1,129 | 1,473 | 1,368 | 1,064 | ||||||||||
| Other charges, commissions, and fees | 753 | 753 | 703 | 775 | 759 | ||||||||||
| Income from bank-owned life insurance | 1,223 | 1,479 | 2,556 | 1,658 | 1,403 | ||||||||||
| Income from mortgage banking activities | 27,342 | 70,793 | 42,012 | 36,943 | 65,395 | ||||||||||
| Mortgage loan servicing income | 2,435 | 2,334 | 2,429 | 2,386 | 2,355 | ||||||||||
| Net gain on the sale of bank premises | 0 | 0 | 0 | 0 | 0 | ||||||||||
| Net (losses) gains on investment securities | (39 | ) | 589 | 82 | 24 | 2,609 | |||||||||
| Other noninterest income | 2,220 | 794 | 1,329 | 2,449 | 2,006 | ||||||||||
| Total Noninterest Income | 54,049 | 94,082 | 68,624 | 62,846 | 92,573 | ||||||||||
| Noninterest Expense: | |||||||||||||||
| Employee compensation | 71,542 | 77,001 | 67,459 | 68,557 | 72,412 | ||||||||||
| Employee benefits | 10,819 | 12,103 | 13,132 | 14,470 | 15,450 | ||||||||||
| Net occupancy | 10,653 | 10,979 | 10,339 | 10,101 | 10,941 | ||||||||||
| Data processing | 10,852 | 7,280 | 6,612 | 6,956 | 7,026 | ||||||||||
| Amortization of intangibles | 1,509 | 1,691 | 1,466 | 1,467 | 1,466 | ||||||||||
| OREO expense | 1,004 | 3,069 | 387 | 372 | 3,625 | ||||||||||
| Equipment expense | 6,819 | 6,396 | 7,286 | 5,830 | 6,044 | ||||||||||
| FDIC insurance expense | 2,626 | 2,250 | 1,920 | 1,800 | 2,000 | ||||||||||
| Mortgage loan servicing expense and impairment | 2,217 | 3,482 | 3,253 | 3,599 | 3,177 | ||||||||||
| Prepayment penalties on FHLB borrowings | 15 | 0 | 0 | 0 | 0 | ||||||||||
| Other noninterest expense | 33,733 | 31,866 | 30,422 | 25,799 | 26,786 | ||||||||||
| Total Noninterest Expense | 151,789 | 156,117 | 142,276 | 138,951 | 148,927 | ||||||||||
| Income Before Income Taxes (FTE)(non-GAAP) | 94,380 | 114,245 | 116,815 | 120,366 | 135,510 | ||||||||||
| Tax equivalent adjustment | 1,037 | 1,042 | 1,059 | 1,075 | 1,047 | ||||||||||
| Income Before Income Taxes (GAAP) | 93,343 | 113,203 | 115,756 | 119,291 | 134,463 | ||||||||||
| Taxes | 19,491 | 20,833 | 23,604 | 24,455 | 27,565 | ||||||||||
| Net Income | $ | 73,852 | $ | 92,370 | $ | 92,152 | $ | 94,836 | $ | 106,898 | |||||
| MEMO: Effective Tax Rate | 20.88 | % | 18.40 | % | 20.39 | % | 20.50 | % | 20.50 | % |
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
Consolidated Statements of Income
| Year Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December2021 | December2020 | December2019 | December2018 | |||||||||
| Interest & Loan Fees Income (GAAP) | $ | 795,117 | $ | 798,382 | $ | 762,562 | $ | 717,715 | ||||
| Tax equivalent adjustment | 4,218 | 3,888 | 3,735 | 4,328 | ||||||||
| Interest & Fees Income (FTE) (non-GAAP) | 799,335 | 802,270 | 766,297 | 722,043 | ||||||||
| Interest Expense | 52,383 | 108,609 | 184,640 | 129,070 | ||||||||
| Net Interest Income (FTE) (non-GAAP) | 746,952 | 693,661 | 581,657 | 592,973 | ||||||||
| Provision for Credit Losses | (23,970 | ) | 106,562 | 21,313 | 22,013 | |||||||
| Noninterest Income: | ||||||||||||
| Fees from trust services | 16,552 | 13,903 | 13,873 | 12,930 | ||||||||
| Fees from brokerage services | 15,559 | 11,758 | 10,136 | 9,347 | ||||||||
| Fees from deposit services | 38,689 | 34,833 | 33,768 | 33,973 | ||||||||
| Bankcard fees and merchant discounts | 5,485 | 4,066 | 4,674 | 5,168 | ||||||||
| Other charges, commissions, and fees | 2,990 | 2,596 | 2,241 | 2,228 | ||||||||
| Income from bank-owned life insurance | 6,840 | 7,217 | 7,339 | 5,045 | ||||||||
| Income from mortgage banking activities | 171,692 | 266,094 | 76,951 | 58,109 | ||||||||
| Mortgage loan servicing income | 9,605 | 6,213 | 0 | 0 | ||||||||
| Net gain on the sale of bank premises | 0 | 2,229 | 0 | 2,763 | ||||||||
| Net gains (losses) on investment securities | 2,676 | 3,155 | 175 | (2,618 | ) | |||||||
| Other noninterest income | 8,004 | 2,682 | 1,327 | 1,767 | ||||||||
| Total Noninterest Income | 278,092 | 354,746 | 150,484 | 128,712 | ||||||||
| Noninterest Expense: | ||||||||||||
| Employee compensation | 279,970 | 274,661 | 173,962 | 164,468 | ||||||||
| Employee benefits | 53,871 | 48,870 | 35,745 | 36,172 | ||||||||
| Net occupancy | 42,034 | 41,303 | 34,850 | 36,462 | ||||||||
| Data processing | 31,446 | 35,420 | 22,232 | 23,800 | ||||||||
| Amortization of intangibles | 5,908 | 6,605 | 7,016 | 8,039 | ||||||||
| OREO expense | 5,388 | 5,748 | 5,336 | 3,444 | ||||||||
| Equipment expense | 25,979 | 20,861 | 14,210 | 13,846 | ||||||||
| FDIC insurance expense | 8,346 | 10,132 | 8,070 | 11,464 | ||||||||
| Mortgage loan servicing expense and impairment | 12,246 | 9,431 | 423 | 271 | ||||||||
| Prepayment penalties on FHLB borrowings | 15 | 10,385 | 5,105 | 0 | ||||||||
| Other noninterest expense | 116,740 | 114,801 | 75,705 | 70,213 | ||||||||
| Total Noninterest Expense | 581,943 | 578,217 | 382,654 | 368,179 | ||||||||
| Income Before Income Taxes (FTE)(non-GAAP) | 467,071 | 363,628 | 328,174 | 331,493 | ||||||||
| Tax equivalent adjustment | 4,218 | 3,888 | 3,735 | 4,328 | ||||||||
| Income Before Income Taxes (GAAP) | 462,853 | 359,740 | 324,439 | 327,165 | ||||||||
| Taxes | 95,115 | 70,717 | 64,340 | 70,823 | ||||||||
| Net Income | $ | 367,738 | $ | 289,023 | $ | 260,099 | $ | 256,342 | ||||
| MEMO: Effective Tax Rate | 20.55 | % | 19.66 | % | 19.83 | % | 21.65 | % |
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
Consolidated Balance Sheets
| December 2021<br>Q-T-D Average | December 2020Q-T-D Average | December 31<br>2021 | December 31<br>2020 | December 31<br>2019 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash & Cash Equivalents | $ | 3,913,480 | $ | 2,048,915 | $ | 3,758,170 | $ | 2,209,068 | $ | 837,493 | |||||
| Securities Available for Sale | 3,669,387 | 2,849,102 | 4,042,699 | 2,953,359 | 2,437,296 | ||||||||||
| Less: Allowance for credit losses | 0 | 0 | 0 | 0 | 0 | ||||||||||
| Net available for sale securities | 3,669,387 | 2,849,102 | 4,042,699 | 2,953,359 | 2,437,296 | ||||||||||
| Securities Held to Maturity | 1,020 | 1,235 | 1,020 | 1,235 | 1,446 | ||||||||||
| Less: Allowance for credit losses | (27 | ) | (21 | ) | (19 | ) | (23 | ) | 0 | ||||||
| Net held to maturity securities | 993 | 1,214 | 1,001 | 1,212 | 1,446 | ||||||||||
| Equity Securities | 12,161 | 10,399 | 12,404 | 10,718 | 8,894 | ||||||||||
| Other Investment Securities | 230,535 | 218,741 | 239,645 | 220,895 | 222,161 | ||||||||||
| Total Securities | 3,913,076 | 3,079,456 | 4,295,749 | 3,186,184 | 2,669,797 | ||||||||||
| Total Cash and Securities | 7,826,556 | 5,128,371 | 8,053,919 | 5,395,252 | 3,507,290 | ||||||||||
| Loans held for sale | 482,387 | 720,896 | 504,416 | 718,937 | 387,514 | ||||||||||
| Commercial Loans & Leases | 13,028,313 | 13,296,380 | 13,809,735 | 13,165,497 | 9,399,170 | ||||||||||
| Mortgage Loans | 2,908,187 | 3,269,073 | 3,008,410 | 3,197,274 | 3,107,721 | ||||||||||
| Consumer Loans | 1,240,676 | 1,253,421 | 1,233,162 | 1,259,812 | 1,206,657 | ||||||||||
| Gross Loans | 17,177,176 | 17,818,874 | 18,051,307 | 17,622,583 | 13,713,548 | ||||||||||
| Unearned income | (27,666 | ) | (38,502 | ) | (27,659 | ) | (31,170 | ) | (1,419 | ) | |||||
| Loans & Leases, net of unearned income | 17,149,510 | 17,780,372 | 18,023,648 | 17,591,413 | 13,712,129 | ||||||||||
| Allowance for Loan & Leases Losses | (218,550 | ) | (225,918 | ) | (216,016 | ) | (235,830 | ) | (77,057 | ) | |||||
| Net Loans | 16,930,960 | 17,554,454 | 17,807,632 | 17,355,583 | 13,635,072 | ||||||||||
| Mortgage Servicing Rights | 22,851 | 20,766 | 23,144 | 20,955 | 0 | ||||||||||
| Goodwill | 1,833,187 | 1,794,997 | 1,886,494 | 1,796,848 | 1,478,014 | ||||||||||
| Other Intangibles | 22,954 | 27,580 | 24,413 | 26,923 | 29,931 | ||||||||||
| Operating Lease<br>Right-of-Use Asset | 75,254 | 72,090 | 81,942 | 69,520 | 57,783 | ||||||||||
| Other Real Estate Owned | 15,451 | 26,316 | 14,823 | 22,595 | 15,515 | ||||||||||
| Other Assets | 857,680 | 771,233 | 932,119 | 777,634 | 551,205 | ||||||||||
| Total Assets | $ | 28,067,280 | $ | 26,116,703 | $ | 29,328,902 | $ | 26,184,247 | $ | 19,662,324 | |||||
| MEMO: Interest-earning Assets | $ | 24,935,489 | $ | 23,122,784 | $ | 26,083,089 | $ | 23,172,403 | $ | 17,344,638 | |||||
| Interest-bearing Deposits | $ | 13,653,822 | $ | 13,018,640 | $ | 14,369,716 | $ | 13,179,900 | $ | 9,231,059 | |||||
| Noninterest-bearing Deposits | 8,678,093 | 7,495,594 | 8,980,547 | 7,405,260 | 4,621,362 | ||||||||||
| Total Deposits | 22,331,915 | 20,514,234 | 23,350,263 | 20,585,160 | 13,852,421 | ||||||||||
| Short-term Borrowings | 127,731 | 144,177 | 128,844 | 142,300 | 374,654 | ||||||||||
| Long-term Borrowings | 816,518 | 901,655 | 817,394 | 864,369 | 1,838,029 | ||||||||||
| Total Borrowings | 944,249 | 1,045,832 | 946,238 | 1,006,669 | 2,212,683 | ||||||||||
| Operating Lease Liability | 80,118 | 75,805 | 86,703 | 73,213 | 61,342 | ||||||||||
| Other Liabilities | 159,364 | 161,580 | 227,070 | 221,585 | 172,045 | ||||||||||
| Total Liabilities | 23,515,646 | 21,797,451 | 24,610,274 | 21,886,627 | 16,298,491 | ||||||||||
| Preferred Equity | 0 | 0 | 0 | 0 | 0 | ||||||||||
| Common Equity | 4,551,634 | 4,319,252 | 4,718,628 | 4,297,620 | 3,363,833 | ||||||||||
| Total Shareholders’ Equity | 4,551,634 | 4,319,252 | 4,718,628 | 4,297,620 | 3,363,833 | ||||||||||
| Total Liabilities & Equity | $ | 28,067,280 | $ | 26,116,703 | $ | 29,328,902 | $ | 26,184,247 | $ | 19,662,324 | |||||
| MEMO: Interest-bearing Liabilities | $ | 14,598,071 | $ | 14,064,472 | $ | 15,315,954 | $ | 14,186,569 | $ | 11,443,742 |
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Three Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarterly Share Data: | December<br>2021 | December<br>2020 | September<br>2021 | June<br>2021 | March<br>2021 | ||||||||||
| Earnings Per Share: | |||||||||||||||
| Basic | $ | 0.56 | $ | 0.71 | $ | 0.71 | $ | 0.73 | $ | 0.83 | |||||
| Diluted | $ | 0.56 | $ | 0.71 | $ | 0.71 | $ | 0.73 | $ | 0.83 | |||||
| Common Dividend Declared Per Share | $ | 0.36 | $ | 0.35 | $ | 0.35 | $ | 0.35 | $ | 0.35 | |||||
| High Common Stock Price | $ | 39.41 | $ | 32.86 | $ | 37.12 | $ | 42.50 | $ | 41.61 | |||||
| Low Common Stock Price | $ | 33.34 | $ | 21.19 | $ | 31.74 | $ | 36.19 | $ | 31.57 | |||||
| Average Shares Outstanding (Net of Treasury Stock): | |||||||||||||||
| Basic | 130,939,640 | 129,371,600 | 128,762,815 | 128,750,851 | 128,635,740 | ||||||||||
| Diluted | 131,295,816 | 129,479,390 | 128,960,220 | 129,033,988 | 128,890,861 | ||||||||||
| Common Dividends | $ | 46,564 | $ | 45,442 | $ | 45,271 | $ | 45,268 | $ | 45,254 | |||||
| Dividend Payout Ratio | 63.05 | % | 49.20 | % | 49.13 | % | 47.73 | % | 42.33 | % | |||||
| Year Ended | |||||||||||||||
| Year-to-Date Share Data: | December<br>2021 | December<br>2020 | December<br>2019 | December<br>2018 | |||||||||||
| Earnings Per Share: | |||||||||||||||
| Basic | $ | 2.84 | $ | 2.40 | $ | 2.55 | $ | 2.46 | |||||||
| Diluted | $ | 2.83 | $ | 2.40 | $ | 2.55 | $ | 2.45 | |||||||
| Common Dividend Declared Per Share | $ | 1.41 | $ | 1.40 | $ | 1.37 | $ | 1.36 | |||||||
| Average Shares Outstanding (Net of Treasury Stock): | |||||||||||||||
| Basic | 129,276,452 | 120,017,247 | 101,585,599 | 104,015,976 | |||||||||||
| Diluted | 129,512,853 | 120,090,232 | 101,852,577 | 104,298,825 | |||||||||||
| Common Dividends | $ | 182,357 | $ | 171,876 | $ | 139,508 | $ | 141,610 | |||||||
| Dividend Payout Ratio | 49.59 | % | 59.47 | % | 53.64 | % | 55.24 | % | |||||||
| EOP Share Data: | December 31<br>2021 | December 31<br>2020 | September 30<br>2021 | June 30<br>2021 | March 31<br>2021 | ||||||||||
| Book Value Per Share | $ | 34.60 | $ | 33.27 | $ | 34.29 | $ | 34.01 | $ | 33.54 | |||||
| Tangible Book Value Per Share (non-GAAP) ^(1)^ | $ | 20.59 | $ | 19.15 | $ | 20.11 | $ | 19.81 | $ | 19.38 | |||||
| 52-week High Common Stock Price | $ | 42.50 | $ | 39.07 | $ | 42.50 | $ | 42.50 | $ | 41.61 | |||||
| Date | 05/18/21 | 01/02/20 | 05/18/21 | 05/18/21 | 03/18/21 | ||||||||||
| 52-week Low Common Stock Price | $ | 31.57 | $ | 19.67 | $ | 21.19 | $ | 20.57 | $ | 20.57 | |||||
| Date | 1/29/21 | 03/23/20 | 10/01/20 | 09/25/20 | 09/25/20 | ||||||||||
| EOP Shares Outstanding (Net of Treasury Stock): | 136,392,758 | 129,188,507 | 129,203,774 | 129,203,593 | 129,175,800 | ||||||||||
| Memorandum Items: | |||||||||||||||
| EOP Employees (full-time equivalent) | 3,143 | 3,051 | 2,986 | 3,012 | 3,033 | ||||||||||
| Note: | |||||||||||||||
| (1) Tangible Book Value Per Share: | |||||||||||||||
| Total Shareholders’ Equity (GAAP) | $ | 4,718,628 | $ | 4,297,620 | $ | 4,430,766 | $ | 4,393,713 | $ | 4,332,698 | |||||
| Less: Total Intangibles | (1,910,907 | ) | (1,823,771 | ) | (1,832,564 | ) | (1,834,030 | ) | (1,829,495 | ) | |||||
| Tangible Equity (non-GAAP) | $ | 2,807,721 | $ | 2,473,849 | $ | 2,598,202 | $ | 2,559,683 | $ | 2,503,203 | |||||
| ÷ EOP Shares Outstanding (Net of Treasury Stock) | 136,392,758 | 129,188,507 | 129,203,774 | 129,203,593 | 129,175,800 | ||||||||||
| Tangible Book Value Per Share (non-GAAP) | $ | 20.59 | $ | 19.15 | $ | 20.11 | $ | 19.81 | $ | 19.38 |
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Three Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December<br>2021 | December<br>2020 | September<br>2021 | June<br>2021 | March<br>2021 | |||||||||||
| Selected Yields and Net Interest Margin: | |||||||||||||||
| Net Loans and Loans held for sale | 4.04 | % | 4.18 | % | 4.15 | % | 4.18 | % | 4.26 | % | |||||
| Investment Securities | 1.72 | % | 2.08 | % | 1.71 | % | 1.87 | % | 1.93 | % | |||||
| Money Market Investments/FFS | 0.28 | % | 0.42 | % | 0.26 | % | 0.24 | % | 0.34 | % | |||||
| Average Earning Assets Yield | 3.13 | % | 3.62 | % | 3.18 | % | 3.37 | % | 3.56 | % | |||||
| Interest-bearing Deposits | 0.26 | % | 0.43 | % | 0.29 | % | 0.33 | % | 0.37 | % | |||||
| Short-term Borrowings | 0.52 | % | 0.55 | % | 0.54 | % | 0.54 | % | 0.51 | % | |||||
| Long-term Borrowings | 1.23 | % | 1.15 | % | 1.23 | % | 1.22 | % | 1.23 | % | |||||
| Average Liability Costs | 0.31 | % | 0.48 | % | 0.35 | % | 0.39 | % | 0.42 | % | |||||
| Net Interest Spread | 2.82 | % | 3.14 | % | 2.83 | % | 2.98 | % | 3.14 | % | |||||
| Net Interest Margin | 2.94 | % | 3.33 | % | 2.98 | % | 3.14 | % | 3.30 | % | |||||
| Selected Financial Ratios: | |||||||||||||||
| Return on Average Assets | 1.04 | % | 1.41 | % | 1.33 | % | 1.41 | % | 1.64 | % | |||||
| Return on Average Shareholders’ Equity | 6.44 | % | 8.51 | % | 8.23 | % | 8.69 | % | 9.97 | % | |||||
| Return on Average Tangible Equity (non-GAAP) ^(1)^ | 10.87 | % | 14.72 | % | 14.03 | % | 14.95 | % | 17.20 | % | |||||
| Efficiency Ratio | 63.85 | % | 54.57 | % | 56.86 | % | 55.72 | % | 52.53 | % | |||||
| Note: | |||||||||||||||
| (1) Return on Average Tangible Equity: | |||||||||||||||
| (a) Net Income (GAAP) | $ | 73,852 | $ | 92,370 | $ | 92,152 | $ | 94,836 | $ | 106,898 | |||||
| (b) Number of Days | 92 | 92 | 92 | 91 | 90 | ||||||||||
| Average Total Shareholders’ Equity (GAAP) | $ | 4,551,634 | $ | 4,319,252 | $ | 4,440,107 | $ | 4,378,898 | $ | 4,346,750 | |||||
| Less: Average Total Intangibles | (1,856,141 | ) | (1,822,577 | ) | (1,833,449 | ) | (1,834,920 | ) | (1,825,639 | ) | |||||
| (c) Average Tangible Equity (non-GAAP) | $ | 2,695,493 | $ | 2,496,675 | $ | 2,606,658 | $ | 2,543,978 | $ | 2,521,111 | |||||
| Return on Average Tangible Equity (non-GAAP) [(a) / (b)] x<br>365 or 366 / (c) | 10.87 | % | 14.72 | % | 14.03 | % | 14.95 | % | 17.20 | % |
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Year Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December<br>2021 | December<br>2020 | December<br>2019 | December<br>2018 | |||||||||
| Selected Yields and Net Interest Margin: | ||||||||||||
| Net Loans and Loans held for sale | 4.16 | % | 4.27 | % | 4.85 | % | 4.77 | % | ||||
| Investment Securities | 1.80 | % | 2.33 | % | 2.86 | % | 2.73 | % | ||||
| Money Market Investments/FFS | 0.28 | % | 0.65 | % | 2.91 | % | 2.29 | % | ||||
| Average Earning Assets Yield | 3.30 | % | 3.75 | % | 4.47 | % | 4.36 | % | ||||
| Interest-bearing Deposits | 0.31 | % | 0.67 | % | 1.41 | % | 0.97 | % | ||||
| Short-term Borrowings | 0.52 | % | 0.70 | % | 1.67 | % | 1.00 | % | ||||
| Long-term Borrowings | 1.23 | % | 1.76 | % | 2.56 | % | 2.34 | % | ||||
| Average Liability Costs | 0.37 | % | 0.80 | % | 1.60 | % | 1.15 | % | ||||
| Net Interest Spread | 2.93 | % | 2.95 | % | 2.87 | % | 3.21 | % | ||||
| Net Interest Margin | 3.09 | % | 3.24 | % | 3.39 | % | 3.58 | % | ||||
| Selected Financial Ratios: | ||||||||||||
| Return on Average Assets | 1.35 | % | 1.20 | % | 1.34 | % | 1.36 | % | ||||
| Return on Average Shareholders’ Equity | 8.30 | % | 7.30 | % | 7.80 | % | 7.84 | % | ||||
| Return on Average Tangible Equity (non-GAAP) ^(1)^ | 14.18 | % | 12.90 | % | 14.26 | % | 14.65 | % | ||||
| Efficiency Ratio | 57.01 | % | 55.36 | % | 52.53 | % | 51.32 | % | ||||
| Note: | ||||||||||||
| (1) Return on Average Tangible Equity: | ||||||||||||
| (a) Net Income (GAAP) | $ | 367,738 | $ | 289,023 | $ | 260,099 | $ | 256,342 | ||||
| Average Total Shareholders’ Equity (GAAP) | 4,430,688 | 3,956,969 | 3,336,075 | 3,268,944 | ||||||||
| Less: Average Total Intangibles | (1,837,609 | ) | (1,716,738 | ) | (1,511,501 | ) | (1,519,174 | ) | ||||
| (b) Average Tangible Equity (non-GAAP) | $ | 2,593,079 | $ | 2,240,231 | $ | 1,824,574 | $ | 1,749,770 | ||||
| Return on Average Tangible Equity (non-GAAP) [(a) /<br>(b)] | 14.18 | % | 12.90 | % | 14.26 | % | 14.65 | % | ||||
| Selected Financial Ratios: | December 31<br>2021 | December 31<br>2020 | December 31<br>2019 | December 31<br>2018 | ||||||||
| Loans & Leases, net of unearned income / Deposit Ratio | 77.19 | % | 85.46 | % | 98.99 | % | 95.91 | % | ||||
| Allowance for Loan & Lease Losses/ Loans & Leases, net of unearned<br>income | 1.20 | % | 1.34 | % | 0.56 | % | 0.57 | % | ||||
| Allowance for Credit Losses ^(2)^/ Loans & Leases, net of unearned income | 1.37 | % | 1.45 | % | 0.57 | % | 0.58 | % | ||||
| Nonaccrual Loans / Loans & Leases, net of unearned income | 0.20 | % | 0.36 | % | 0.46 | % | 0.51 | % | ||||
| 90-Day Past Due Loans/ Loans & Leases, net of<br>unearned income | 0.10 | % | 0.08 | % | 0.07 | % | 0.11 | % | ||||
| Non-performing Loans/ Loans & Leases, net of<br>unearned income | 0.50 | % | 0.75 | % | 0.96 | % | 1.06 | % | ||||
| Non-performing Assets/ Total Assets | 0.36 | % | 0.59 | % | 0.75 | % | 0.83 | % | ||||
| Primary Capital Ratio | 16.79 | % | 17.22 | % | 17.44 | % | 17.23 | % | ||||
| Shareholders’ Equity Ratio | 16.09 | % | 16.41 | % | 17.11 | % | 16.89 | % | ||||
| Price / Book Ratio | 1.05 | x | 0.97 | x | 1.17 | x | 0.98 | x | ||||
| Price / Earnings Ratio | 12.82 | x | 13.50 | x | 15.14 | x | 12.71 | x |
Note:
| (2) | Includes allowances for loan losses and lending-related commitments. |
|---|
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Three Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Mortgage Banking Segment Data: | December2021 | December2020 | September2021 | June<br>2021 | March<br>2021 | ||||||||||
| Applications | $ | 1,534,311 | $ | 2,284,532 | $ | 1,893,870 | $ | 2,029,846 | $ | 2,630,426 | |||||
| Loans originated | 1,287,629 | 1,979,284 | 1,385,871 | 1,658,128 | 1,910,619 | ||||||||||
| Loans sold | $ | 1,273,014 | $ | 2,065,400 | $ | 1,470,928 | $ | 1,877,772 | $ | 1,817,884 | |||||
| Purchase money % of loans closed | 69 | % | 49 | % | 69 | % | 69 | % | 43 | % | |||||
| Realized gain on sales and fees as a % of loans sold | 3.02 | % | 4.10 | % | 3.00 | % | 2.90 | % | 4.16 | % | |||||
| Net interest income | $ | 2,609 | $ | 2,918 | $ | 2,367 | $ | 2,871 | $ | 2,650 | |||||
| Other income | 30,921 | 73,082 | 45,023 | 39,765 | 67,507 | ||||||||||
| Other expense | 29,147 | 41,193 | 31,787 | 36,391 | 41,183 | ||||||||||
| Income taxes | 876 | 5,656 | 3,179 | 1,280 | 5,940 | ||||||||||
| Net income | $ | 3,507 | $ | 29,151 | $ | 12,424 | $ | 4,965 | $ | 23,034 | |||||
| Year Ended | |||||||||||||||
| Mortgage Banking Segment Data: | December<br>2021 | December<br>2020 | December<br>2019 | December<br>2018 | |||||||||||
| Applications | $ | 8,088,453 | $ | 9,988,227 | $ | 4,330,000 | $ | 3,912,000 | |||||||
| Loans originated | 6,242,246 | 6,648,247 | 2,941,722 | 2,619,454 | |||||||||||
| Loans sold | $ | 6,439,598 | $ | 6,393,394 | $ | 2,804,451 | $ | 2,608,242 | |||||||
| Purchase money % of loans closed | 61 | % | 47 | % | 72 | % | 83 | % | |||||||
| Realized gain on sales and fees as a % of loans sold | 3.31 | % | 3.63 | % | 2.86 | % | 2.72 | % | |||||||
| Net interest income | $ | 10,497 | $ | 8,853 | $ | 916 | $ | 1,315 | |||||||
| Other income | 183,216 | 276,185 | 83,884 | 68,555 | |||||||||||
| Other expense | 138,508 | 140,628 | 72,288 | 72,632 | |||||||||||
| Income taxes | 11,275 | 27,698 | 2,355 | (505 | ) | ||||||||||
| Net income (loss) | $ | 43,930 | $ | 116,712 | $ | 10,157 | $ | (2,257 | ) | ||||||
| Period End Mortgage Banking Segment Data: | December 31<br>2021 | December 312020 | September 302021 | June 30<br>2021 | March 312021 | ||||||||||
| Locked pipeline | $ | 448,889 | $ | 989,640 | $ | 648,706 | $ | 660,258 | $ | 979,842 | |||||
| Balance of loans serviced | $ | 3,698,998 | $ | 3,587,953 | $ | 3,723,206 | $ | 3,674,023 | $ | 3,585,890 | |||||
| Number of loans serviced | 25,198 | 25,614 | 25,583 | 25,526 | 25,443 |
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Asset Quality Data: | December 312021 | December 312020 | September 302021 | June 302021 | March 312021 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| EOP Non-Accrual Loans | $ | 36,028 | $ | 62,718 | $ | 37,689 | $ | 41,182 | $ | 48,985 | |||||
| EOP 90-Day Past Due Loans | 18,879 | 13,832 | 14,827 | 14,135 | 15,719 | ||||||||||
| EOP Restructured Loans<br>^(1)^ | 35,856 | 55,657 | 37,752 | 47,271 | 51,529 | ||||||||||
| Total EOP Non-performing Loans | $ | 90,763 | $ | 132,207 | $ | 90,268 | $ | 102,588 | $ | 116,233 | |||||
| EOP Other Real Estate Owned | 14,823 | 22,595 | 16,696 | 18,474 | 18,690 | ||||||||||
| Total EOP Non-performing Assets | $ | 105,586 | $ | 154,802 | $ | 106,964 | $ | 121,062 | $ | 134,923 | |||||
| Three Months Ended | |||||||||||||||
| Allowance for Loan Losses: | December2021 | December2020 | September2021 | June<br>2021 | March2021 | ||||||||||
| Beginning Balance | $ | 210,891 | $ | 225,812 | $ | 217,545 | $ | 231,582 | $ | 235,830 | |||||
| Cumulative Effect Adjustment for CECL | 0 | 0 | 0 | 0 | 0 | ||||||||||
| 210,891 | 225,812 | 217,545 | 231,582 | 235,830 | |||||||||||
| Initial allowance for acquired PCD loans | 12,629 | 0 | 0 | 0 | 0 | ||||||||||
| Gross Charge-offs | (4,205 | ) | (10,120 | ) | (2,004 | ) | (6,131 | ) | (6,957 | ) | |||||
| Recoveries | 4,080 | 3,203 | 3,173 | 910 | 2,415 | ||||||||||
| Net (Charge-offs) Recoveries | (125 | ) | (6,917 | ) | 1,169 | (5,221 | ) | (4,542 | ) | ||||||
| Provision for Loan & Lease Losses | (7,379 | ) | 16,935 | (7,823 | ) | (8,816 | ) | 294 | |||||||
| Ending Balance | 216,016 | 235,830 | 210,891 | 217,545 | 231,582 | ||||||||||
| Reserve for lending-related commitments | 31,442 | 19,250 | 25,191 | 20,897 | 20,024 | ||||||||||
| Allowance for Credit Losses ^(2)^ | $ | 247,458 | $ | 255,080 | $ | 236,082 | $ | 238,442 | $ | 251,606 | |||||
| Year Ended | |||||||||||||||
| Allowance for Loan Losses: | December2021 | December2020 | December2019 | December2018 | |||||||||||
| Beginning Balance | $ | 235,830 | $ | 77,057 | $ | 76,703 | $ | 76,627 | |||||||
| Cumulative Effect Adjustment for CECL | 0 | 57,442 | 0 | 0 | |||||||||||
| 235,830 | 134,499 | 76,703 | 76,627 | ||||||||||||
| Initial allowance for acquired PCD loans | 12,629 | 18,635 | 0 | 0 | |||||||||||
| Gross Charge-offs | (19,297 | ) | (32,983 | ) | (29,110 | ) | (28,606 | ) | |||||||
| Recoveries | 10,578 | 9,386 | 8,151 | 6,669 | |||||||||||
| Net (Charge-offs) | (8,719 | ) | (23,597 | ) | (20,959 | ) | (21,937 | ) | |||||||
| Provision for Loan & Lease Losses | (23,724 | ) | 106,293 | 21,313 | 22,013 | ||||||||||
| Ending Balance | 216,016 | 235,830 | 77,057 | 76,703 | |||||||||||
| Reserve for lending-related commitments | 31,442 | 19,250 | 1,733 | 1,389 | |||||||||||
| Allowance for Credit Losses ^(2)^ | $ | 247,458 | $ | 255,080 | $ | 78,790 | $ | 78,092 |
Notes:
| (1) | Restructured loans with an aggregate balance of $22,421, $41,185, $24,662, $32,471, and $38,023 at<br>December 31, 2021, December 31, 2020, September 30, 2021, June 30, 2021 and March 31, 2021, respectively, were on nonaccrual status, but are not included in “EOP Non-Accrual<br>Loans” above. Restructured loans with an aggregate balance of $102 thousand and $46 thousand at December 31, 2021 and June 30, 2021, respectively, were 90 days past due, but not included in “EOP Non-Accrual Loans” above. |
|---|---|
| (2) | Includes allowances for loan losses and lending-related commitments. |
| --- | --- |
EX-99.2
Fourth Quarter & Fiscal Year 2021 Earnings Review United Bankshares, Inc. January 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) the merger (the “Merger”) between Community Bankers Trust Corporation (“Community Bankers Trust”) and United that was completed on December 3, 2021; (ii) United’s plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts; (iii) the effect of the COVID-19 pandemic; and (iv) 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) reform of LIBOR; (5) the nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those involving the OCC, Federal Reserve, FDIC, and CFPB; (6) the effect of changes in the level of checking or savings account deposits on United’s funding costs and net interest margin; (7) future provisions for credit losses on loans and debt securities; (8) changes in nonperforming assets; (9) risks relating to the merger with Community Bankers Trust, including the successful integration of operations of Community Bankers Trust, the expected growth opportunities and costs savings from the Merger, and deposit attrition, operating costs, customer losses and business disruption following the Merger; (10) competition; and (11) 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 record Net Income of $367.7 million and record Diluted Earnings Per Share of $2.83 Generated Return on Average Assets of 1.35%, Return on Average Equity of 8.30%, and Return on Average Tangible Equity* of 14.18% Closed the merger with Community Bankers Trust Corporation (ESXB) on December 3, 2021, and successfully completed the integration and core systems conversions Increased dividends to shareholders for the 48th consecutive year (current dividend yield of 3.9% based upon recent prices) Asset quality remains sound and Non-Performing Assets decreased 31.8% YTD Strong expense control with an efficiency ratio of 57.01% (inclusive of merger-related expenses) Capital position remains robust and liquidity remains sound 2021 HIGHLIGHTS *Non-GAAP measure. Refer to appendix.
ESXB New Franchise Footprint UBSI Source:S&P Global Market Intelligence Note:Locations include mortgage origination and servicing branches Charleston Greenville Asheville Lynchburg Charlottesville ESXB MERGER UPDATE Update Closed the merger with Community Bankers Trust Corporation (ESXB) on December 3, 2021 Strategically connects UBSI’s Mid-Atlantic and Southeast footprint Adds to existing presence in Washington D.C. MSA Expands footprint into the contiguous markets of Baltimore and Annapolis in Maryland, and Richmond, Lynchburg, and the Northern Neck of Virginia ESXB had total assets of ~$1.8 billion, portfolio loans of ~$1.3 billion, and deposits ~$1.5 billion Issued ~7.1 million shares of UBSI common stock Successfully completed the integration and core systems conversions Expense savings are in-line with announced targets and fully realized beginning in 1Q22
Linked-Quarter (LQ) Net Income was $73.9 million in 4Q21 compared to $92.2 million in 3Q21, with diluted EPS of $0.56 in 4Q21 compared to $0.71 in 3Q21. Net Interest Income increased $2.1 million due to increased average earnings assets as a result of organic growth and the ESXB acquisition, as well as a decline of $1.0 million in interest expense. Offsetting the increase were declines in loan accretion on acquired loans and PPP loan fee income of $1.9 million and $2.8 million, respectively. Provision Expense was $(7.4) million in 4Q21 compared to $(7.8) million in 3Q21. Included within the 4Q21 total was provision expense of $12.3 million related to the purchased non-credit deteriorated loans acquired from ESXB. Noninterest Income decreased $14.6 million due primarily to a decrease of $14.7 million in income from mortgage banking activities. Noninterest Expense increased $9.5 million due primarily to an increase of $7.3 million in merger-related expenses. EARNINGS SUMMARY
PERFORMANCE RATIOS *Non-GAAP measure. Refer to appendix. FY 2017 was impacted by $26.8 million in pre-tax merger related expenses and $37.7 million in additional tax expense related to the Tax Act. FY 2020 was impacted by COVID-19, CECL ACL build, pre-tax merger-related expenses of $54.2 million, and breakage fees of $10.4 million on three FHLB advance payoffs, largely offset by strong mortgage banking income. FY 2021 was impacted by pre-tax merger-related expenses of $21.4 million, offset by CECL ACL releases. Strong profitability and expense control
Reported Net Interest Margin decreased from 2.98% to 2.94% LQ mainly due to declines in loan accretion on acquired loans and declines in PPP loan fee income of $1.9 million and $2.8 million, respectively. Linked-quarter Net Interest Income (FTE) was up $2.1 million due to increased average earnings assets as a result of organic growth and the ESXB acquisition, as well as a decline of $1.0 million in interest expense. Offsetting the increase were declines in loan accretion on acquired loans and PPP loan fee income. Year 1 of a +100 bps rate shock scenario shows projected NII up ~2.7% (compared to base case projection). Total remaining unamortized PPP fees (net of costs) were $10.4 million as of 12/31/21. Scheduled purchase accounting loan accretion is estimated at $14.5 million for FY 2022 and $12.3 million for FY 2023 (includes the impact from the ESXB merger). NET INTEREST INCOME AND MARGIN
Linked-Quarter loan balances increased $1.3 billion driven by the loans acquired in the ESXB merger. Excluding the impact of the merger and PPP loans, total loans increased $105 million (2.5% annualized) compared to 3Q21. In 3Q21, total loans increased $227 million (5.6% annualized) compared to 2Q21, excluding the impact of PPP loans. Loan balances within the North Carolina & South Carolina markets were up ~15.5% YTD (excluding PPP). Non Owner Occupied CRE to Total Risk Based Capital was ~236% at 4Q21. CRE portfolio remains diversified among underlying collateral types. Total purchase accounting-related fair value discount on loans is $66 million as of 12/31/21. Total COVID-19 loan deferrals have declined from a high of $3.3 billion (~18% of total loans) at 6/30/20 to ~$18 million (<1% of total loans) as of 12/31/21. LOAN SUMMARY (EXCLUDES LOANS HELD FOR SALE) $ in millions
End of Period Balances (000s) 9/30/21 12/31/21 Non-Accrual Loans $37,689 $36,028 90-Day Past Due Loans $14,827 $18,879 Restructured Loans $37,752 $35,856 Total Non-performing Loans $90,268 $90,763 Other Real Estate Owned $16,696 $14,823 Total Non-performing Assets $106,964 $105,586 Non-performing Loans / Loans 0.54% 0.50% Non-performing Assets / Total Assets 0.39% 0.36% Annualized Net Charge-offs / Average Loans (0.03)% 0.00% Allowance for Loan & Lease Losses (ALLL) $210,891 $216,016 ALLL / Loans, net of earned income 1.26% 1.20% Allowance for Credit Losses (ACL) $236,082 $247,458 ACL / Loans, net of earned income 1.41% 1.37% NPAs decreased $1.4 million (1.3%) compared to 3Q21 and decreased $49.2 million (31.8%) for the full year. ACL increased $11.4 million LQ driven by the increased loan balances associated with the ESXB acquisition. Day 1 ESXB ACL impact was $25.9 million. PPP loans are included within the ratios above ($412 million at 9/30/21 and $302 million at 12/31/21). United adopted CECL effective 01/01/20. CREDIT QUALITY
Diversified portfolio with strong underwriting practices and ongoing monitoring Portfolio Portfolio Balance ($ MM) % Total Loans Commercial Retail CRE 1,273 7.1% Hotels 846 4.7% Entertainment & Recreation 227 1.3% Healthcare & Senior Living 208 1.2% Restaurants 195 1.1% Energy (Direct & Indirect) 158 0.9% Consumer Residential Mortgage 2,419 13.4% Indirect Auto 1,159 6.4% Home Equity 457 2.5% Other Consumer 57 0.3% Total commercial deferrals have declined to $14 million (~0.1% of total commercial loans) as of 12/31/21. Retail CRE: Top 20 loans make up ~41% of the total balance. Average LTV for the top 20 is ~58%, and majority are anchored by nationally recognized essential businesses. Hotels: Top 20 loans make up ~39% of the total balance. Average LTV for the top 20 is ~56%. As of 12/31/21, the allowance for the hotel portfolio was $22.0 million. Consumer deferrals total $4 million, or ~0.1% of total consumer loans as of 12/31/21. Weighted average FICO score for the consumer portfolio is ~746 (based on most recently available system data). Data as of 12/31/21. LTVs calculated using current balances with most recently available collateral values. SELECT LOAN PORTFOLIO DETAILS
PPP Loan Activity Originated over 13,500 loans for $1.8 billion since program inception in 2020 Maintained an “all hands on deck” approach in order to assist as many customers as possible Outstandings decreased $109 million in 4Q21 Remaining outstandings at 12/31/21: Over 2,900 loans totaling $302 million Average loan balance: $102,509 Median loan balance: $26,371 PPP Fees Recognized, net of costs ($ millions)* 4Q20 1Q21 2Q21 3Q21 4Q21 $6.98 $11.31 $9.02 $7.85 $5.04 *Remaining unamortized fees of $10.4 million at 12/31/21. PPP Loans Outstanding ($ millions) 4Q20 1Q21 2Q21 3Q21 4Q21 $1,182 $1,203 $790 $412 $302 PAYCHECK PROTECTION PROGRAM (PPP)
Strong core deposit base with 39% of deposits in Non Interest Bearing accounts. LQ deposits increased $1.5 billion driven by the balances acquired in the ESXB merger. 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 6/30/21) MSA Total Deposits In Market ($000) Number of Branches Rank Washington, DC 10,389,699 63 7 Charleston, WV 1,458,733 8 2 Morgantown, WV 1,279,427 6 1 Myrtle Beach, SC 837,090 11 5 Richmond, VA 821,453 12 8 Parkersburg, WV 749,485 4 1 Hagerstown, MD 643,632 6 3 Charleston, SC 637,937 8 8 Wheeling, WV 520,225 6 2 Charlotte, NC 518,579 7 17 $ 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 $10.4 billion in deposits. United has increased deposit market share in the D.C. MSA from #15 in 2013 to #7 in 2021, with total deposits increasing from $2.1 billion to $10.4 billion. Virginia- #7 in the state with $9.3 billion (including VA deposits within the D.C. MSA). North Carolina #17 in the state with $2.0 billion. Select MSAs: #17 in Charlotte #28 in Raleigh #13 in Wilmington #11 in Greenville #1 in Washington #8 in Rocky Mount #10 in Fayetteville South Carolina #10 in the state with $1.9 billion. Select MSAs: #8 in Charleston #5 in Myrtle Beach #13 in Greenville #16 in Columbia ATTRACTIVE DEPOSIT MARKET SHARE POSITION Source: S&P Global Market Intelligence; Data as of 6/30/21
End of Period Ratios / Values 9/30/21 12/31/21** Common Equity Tier 1 Ratio 13.5% 13.4% Tier 1 Capital Ratio 13.5% 13.4% Total Risk Based Capital Ratio 15.7% 15.4% Leverage Ratio 10.4% 11.0% Total Equity to Total Assets 16.1% 16.1% *Tangible Equity to Tangible Assets (non-GAAP) 10.1% 10.2% Book Value Per Share $34.29 $34.60 *Tangible Book Value Per Share (non-GAAP) $20.11 $20.59 Capital ratios remain significantly above regulatory “Well Capitalized” levels and exceed all internal capital targets. United did not repurchase any common shares during 4Q21 or 3Q21. As of 12/31/21, there were 3,033,796 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) 9/30/21 12/31/21 Applications $1,893,870 $1,534,311 Loans Originated $1,385,871 $1,287,629 Loans Sold $1,470,928 $1,273,014 Purchase Money % 69% 69% Realized Gain on Sale Margin 3.00% 3.02% Locked Pipeline (EOP) $648,706 $448,889 Loans Held for Sale (EOP) $493,299 $504,416 Balance of Loans Serviced (EOP) $3,723,206 $3,698,998 Total Income $47,390 $33,530 Total Expense $31,787 $29,147 Income Before Tax $15,603 $4,383 Net Income After Tax $12,424 $3,507 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 13 retail 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 $(2.1) million in 3Q21 and $(6.8) million in 4Q21. MORTGAGE BANKING Full Year 2020 2021 $9,988,227 $8,088,453 $6,648,247 $6,242,246 $6,393,394 $6,439,598 47% 61% 3.63% 3.31% $989,640 $448,889 $718,937 $504,416 $3,587,953 $3,698,998 $285,038 $193,713 $140,628 $138,508 $144,410 $55,205 $116,712 $43,930
Select guidance is being provided for 2022. Our outlook may change if the expectations for these items vary from current expectations. Balance Sheet: Expect loan growth, excluding PPP loans and loans held for sale, to be in the mid single digits for 2022 (compared to end of period balance). Loan pipelines continue to be very strong. Expect to opportunistically increase investment portfolio balances. Net Interest Income / Net Interest Margin: Expect the net interest margin, excluding PPP fees and loan purchase accounting accretion, to increase throughout 2022 (compared to 4Q21). Net interest income expected to be in the range of $780 million to $800 million (assuming two 25 basis point rate hikes). Non Interest Income: Expect non interest income, excluding mortgage banking revenue and gain / loss on investments, to increase mid single digits in 2022 (compared to FY 2021). Mortgage banking revenue will be subject to industry trends, gain on sale margins, and mix of secondary market versus portfolio production. Mortgage banking revenue currently estimated at ~$125 million (+/-). Non Interest Expense: Expect non interest expense to be in the range of $570 million to $580 million. Expense savings from the ESXB merger are in-line with previously announced targets and fully realized beginning in 1Q22. Effective Tax Rate: Estimated at approximately 20.0% to 20.5%. Capital: Expect to be active in the stock buyback program during 2022. 2022 OUTLOOK
Excellent franchise with long-term growth prospects Current income opportunity with a dividend yield of 3.9% (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 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 14.7x (based upon median 2022 street consensus estimate of $2.54 per Bloomberg) INVESTMENT THESIS
APPENDIX
Merger-related expense detail ESXB MERGER- ADDITIONAL INFORMATION 1Q21 2Q21 3Q21 4Q21 YTD Provision --- --- --- $12.3 $12.3 Employee Comp. --- --- --- $2.6 $2.6 Data Processing --- --- --- $3.5 $3.5 Other Expense --- $0.2 $0.8 $2.0 $3.0 Total --- $0.2 $0.8 $20.4 $21.4 *In millions Day 1 purchase accounting marks (net mark) Other information 12/03/2021 Value Preliminary Goodwill $76.5 Core Deposit Intangible $3.4 Allowance for Credit Losses (including unfunded) $25.9 Fair value mark (preliminary) Loans $(8.4) Investments $6.8 Trust Preferred Debt / Sub Debt $(0.4) Buildings / Land $0.3 Interest Bearing Deposits $2.7 FHLB Advances $0.5
Source:S&P Global Market Intelligence Closed 3Q 2011 Closed 1Q 2014 Closed 2Q 2017 Closed 2Q 2020 Closed 4Q 2021 SUCCESSFUL ACQUISITIONS ADVANCING GROWTH AND ENHANCING FRANCHISE VALUE Closed 2Q 2016
(dollars in thousands) 2017 2018 2019 2020 2021 (1) Return on Average Tangible Equity (A) Net Income (GAAP) $150,581 $256,342 $260,099 $289,023 $367,738 Average Total Shareholders' Equity (GAAP) $2,959,293 $3,268,944 $3,336,075 $3,956,969 $4,430,688 Less: Average Total Intangibles (1,319,109) (1,519,175) (1,511,501) (1,716,738) (1,837,609) (C) Average Tangible Equity (non-GAAP) $1,640,184 $1,749,769 $1,824,574 $2,240,231 $2,593,079 Formula: Net Income/Average Tangible Equity Return on Average Tangible Equity (non-GAAP) 9.18% 9.58% 14.65% 14.26% 12.90% 14.18% RECONCILIATION OF NON-GAAP ITEMS
(dollars in thousands) 9/30/2021 12/31/2021 (2) Tangible Equity to Tangible Assets Total Assets (GAAP) $ 27,507,517 $ 29,328,902 Less: Total Intangibles (GAAP) (1,832,564) (1,910,907) Tangible Assets (non-GAAP) $ 25,674,953 $ 27,417,995 Total Shareholders' Equity (GAAP) $ 4,430,766 $ 4,718,628 Less: Total Intangibles (GAAP) (1,832,564) (1,910,907) Tangible Equity (non-GAAP) $ 2,598,202 $ 2,807,721 Tangible Equity to Tangible Assets (non-GAAP) 10.1% 10.2% (3) Tangible Book Value Per Share: Total Shareholders' Equity (GAAP) $ 4,430,766 $ 4,718,628 Less: Total Intangibles (GAAP) (1,832,564) (1,910,907) Tangible Equity (non-GAAP) $ 2,598,202 $ 2,807,721 ÷ EOP Shares Outstanding (Net of Treasury Stock) 129,203,774 136,392,758 Tangible Book Value Per Share (non-GAAP) $20.11 $20.59 RECONCILIATION OF NON-GAAP ITEMS (CONT.)