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):
April 25, 2024
United Bankshares, Inc.
(Exact name of registrant as specified in its charter)
| West Virginia | No. 002-86947 | 55-0641179 |
|---|---|---|
| (State or other jurisdiction<br>of incorporation or organization) | (Commission<br> <br>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<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 April 25, 2024 United Bankshares, Inc. (“United”) announced its financial results for the first quarter of 2024. 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 April 25, 2024, issued by United Bankshares, Inc. |
| --- | --- |
| 99.2 | Slide presentation of financial information for the first quarter of 2024 |
| 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: April 25, 2024 | 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 |
|---|---|
| April 25, 2024 | Chief Financial Officer |
| (800) 445-1347 ext. 8716 |
United Bankshares, Inc. Announces Earnings
for the First Quarter of 2024
WASHINGTON, D.C. and CHARLESTON, WV-- United Bankshares, Inc. (NASDAQ: UBSI) (“United”), today reported earnings for the first quarter of 2024 of $86.8 million, or $0.64 per diluted share. First quarter of 2024 results produced annualized returns on average assets, average equity and average tangible equity, a non-GAAP measure, of 1.19%, 7.25% and 11.98%, respectively. The first quarter of 2024 included $1.8 million of noninterest expense for the Federal Deposit Insurance Corporation’s (“FDIC”) special assessment levied on banking organizations stemming from the FDIC’s revised loss estimates to the Deposit Insurance Fund.
“UBSI delivered solid performance in the first quarter of 2024,” stated Richard M. Adams, Jr., United’s Chief Executive Officer. “While the headwinds in the current economic environment persist and continue to create challenges, UBSI’s operating metrics remain strong and we are well-positioned for success going forward.”
Earnings for the fourth quarter of 2023 were $79.4 million, or $0.59 per diluted share, and annualized returns on average assets, average equity and average tangible equity for the fourth quarter of 2023 were 1.08%, 6.70% and 11.27%, respectively. The fourth quarter of 2023 included $12.0 million of noninterest expense for the FDIC special assessment.
Earnings for the first quarter of 2023 were $98.3 million, or $0.73 per diluted share, and annualized returns on average assets, average equity and average tangible equity were 1.35%, 8.72% and 14.97%, respectively.
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United Bankshares, Inc. Announces…
April 25, 2024
Page Two
First quarter of 2024 compared to the fourth quarter of 2023
Net interest income for the first quarter of 2024 decreased $7.2 million, or 3%, from the fourth quarter of 2023. 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 first quarter of 2024 also decreased $7.2 million, or 3%, from the fourth quarter of 2023. The decrease in net interest income and tax-equivalent net interest income was primarily due to higher interest expense driven by the impact of deposit rate repricing, a decrease in acquired loan accretion income and a decrease in loan fees. The yield on average interest-bearing deposits increased 15 basis points to 3.10% for the first quarter of 2024. Loan fees for the first quarter of 2024 decreased $677 thousand from the fourth quarter of 2023. Acquired loan accretion income for the first quarter of 2024 decreased $521 thousand from the fourth quarter of 2023. The net interest margin of 3.44% for the first quarter of 2024 was a decrease of 11 basis points from the net interest margin of 3.55% for the fourth quarter of 2023.
The provision for credit losses was $5.7 million for the first quarter of 2024 as compared to $6.9 million for the fourth quarter of 2023.
Noninterest income for the first quarter of 2024 decreased $1.5 million, or 4%, from the fourth quarter of 2023 driven by a decrease of $3.0 million in other noninterest income. The fourth quarter of 2023 included a $2.7 million gain from the payoff of a fixed rate commercial loan that had an associated interest rate swap derivative. Partially offsetting the decrease in noninterest income was a $907 thousand increase in fees from brokerage services primarily due to higher volume.
Noninterest expense for the first quarter of 2024 decreased $11.5 million, or 8%, from the fourth quarter of 2023. This decrease in noninterest expense was driven by decreases in FDIC insurance expense of $10.2 million, other noninterest expense of $4.9 million and in the expense for the reserve for unfunded loan commitments of $2.7 million partially offset by an increase in employee benefits of $4.9 million and an increase in employee compensation of $1.5 million. The fourth quarter of 2023 included $12.0 million of expense for the FDIC special assessment. The first quarter of 2024 included an incremental $1.8 million of expense related to the FDIC special assessment stemming from the FDIC’s revised loss estimates. The decrease in other noninterest expense was driven by a decrease of $1.2 million of tax credit investment amortization and a decrease of $1.2 million of expense related to community development lending programs. Additionally, other noninterest expense for the fourth quarter of 2023 included $1.3 million related to trade name intangible impairments. The decrease in the expense for the reserve for unfunded loan commitments was primarily driven by a decrease in the outstanding balance of loan commitments. The increase in employee benefits was primarily driven by higher postretirement benefit costs and higher Federal Insurance Contributions Act (“FICA”) costs. Employee compensation for the first quarter of 2024 included approximately $240 thousand of severance expense associated with the previously announced mortgage delivery channel consolidation.
Income tax expense was $21.4 million for the first quarter of 2024 as compared to $24.8 million for the fourth quarter of 2023. The decrease of $3.4 million was due to a lower effective tax rate partially offset by higher earnings. United’s effective tax rate was 19.8% and 23.8% for the first quarter of 2024 and fourth quarter of 2023, respectively. The lower effective tax rate was primarily driven by the impact of provision to return adjustments in the fourth quarter of 2023.
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United Bankshares, Inc. Announces…
April 25, 2024
Page Three
First quarter of 2024 compared to the first quarter of 2023
Earnings for the first quarter of 2024 were $86.8 million, or $0.64 per diluted share, as compared to earnings of $98.3 million, or $0.73 per diluted share, for the first quarter of 2023.
Net interest income for the first quarter of 2024 decreased $11.8 million, or 5%, from the first quarter of 2023. Tax-equivalent net interest income for the first quarter of 2024 decreased $12.1 million, or 5%, from the first quarter of 2023. The decrease in net interest income and tax-equivalent net interest income was primarily due to higher interest expense driven by deposit rate repricing, an increase in average interest-bearing deposits, a decrease in acquired loan accretion income and a decrease in loan fees. The decrease was partially offset by the impact of rising market interest rates on earning assets, organic loan growth and a decrease in average long-term borrowings. The average cost of funds increased 104 basis points from the first quarter of 2023 to 3.21% driven by an increase in the yield on average interest-bearing deposits of 127 basis points. Average deposits increased $522.0 million from the first quarter of 2023 driven by a $1.5 billion, or 10%, increase in average interest-bearing deposits. Acquired loan accretion income for the first quarter of 2024 decreased $613 thousand from the first quarter of 2023. Loan fees for the first quarter of 2024 decreased $351 thousand from the first quarter of 2023. The yield on average earning assets increased 60 basis points from the first quarter of 2023 to 5.70% driven by an increase in the yield on average net loans and loans held for sale of 53 basis points. Average net loans and loans held for sale increased $800.5 million, or 4%, from the first quarter of 2023. The net interest margin of 3.44% for the first quarter of 2024 was a decrease of 19 basis points from the net interest margin of 3.63% for the first quarter of 2023.
The provision for credit losses was $5.7 million for the first quarter of 2024 as compared to $6.9 million for the first quarter of 2023.
Noninterest income for the first quarter of 2024 was $32.2 million, a decrease of $532 thousand, or 2%, from the first quarter of 2023 driven by a decrease in mortgage loan servicing income of $1.5 million. The decrease in mortgage loan servicing income was due to lower mortgage servicing rights (“MSRs”) balances after the sale of MSRs during the second quarter of 2023. Partially offsetting the decrease in noninterest income was a $1.1 million increase in fees from brokerage services primarily due to higher volume.
Noninterest expense for the first quarter of 2024 was $140.7 million, an increase of $3.3 million, or 2% from the first quarter of 2023, primarily due to increases of $3.9 million in employee compensation, $2.2 million in other noninterest expense and $1.9 million in FDIC insurance expense partially offset by a decrease of $4.4 million in the expense for the reserve for unfunded loan commitments. The increase in employee compensation was driven by higher employee incentives, commissions, base salaries and employee severance. The increase in other noninterest expense was primarily driven by a $950 thousand increase in tax credit amortization and higher amounts of certain general operating expenses. The increase in FDIC insurance expense was driven by $1.8 million of expense recognized in the first quarter of 2024 for the FDIC special assessment. The decrease in the expense for the reserve for unfunded loan commitments was primarily driven by a decrease in the outstanding balance of loan commitments.
For the first quarter of 2024, income tax expense was $21.4 million as compared to $24.4 million for the first quarter of 2023. The decrease of $3.0 million was due to lower earnings and a slightly lower effective tax rate. United’s effective tax rate was 19.8% and 19.9% for the first quarter of 2024 and 2023, respectively.
3
United Bankshares, Inc. Announces…
April 25, 2024
Page Four
Credit Quality
United’s asset quality continues to be sound. At March 31, 2024, non-performing loans were $74.4 million, or 0.35% of loans & leases, net of unearned income. Total non-performing assets were $77.1 million, including OREO of $2.7 million, or 0.26% of total assets at March 31, 2024. At December 31, 2023, non-performing loans were $45.5 million, or 0.21% of loans & leases, net of unearned income. Total non-performing assets were $48.1 million, including OREO of $2.6 million, or 0.16% of total assets at December 31, 2023. The increase in non-performing loans and non-performing assets was driven by one commercial & industrial loan relationship.
As of March 31, 2024, the allowance for loan & lease losses was $262.9 million, or 1.22% of loans & leases, net of unearned income, as compared to $259.2 million, or 1.21% of loans & leases, net of unearned income, at December 31, 2023. Net charge-offs were $2.1 million for the first quarter of 2024, $1.1 million for the first quarter of 2023 and $2.5 million for the fourth quarter of 2023. Annualized net charge-offs as a percentage of average loans & leases, net of unearned income were 0.04% for the first quarter of 2024, 0.02% for the first quarter of 2023 and 0.05% for the fourth quarter of 2023.
Capital
United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 15.6% at March 31, 2024, while estimated Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 13.2%, 13.2% and 11.4%, respectively. The March 31, 2024 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%. United did not repurchase any shares of its common stock during 2023 or 2024.
About United Bankshares, Inc.
As of March 31, 2024, United had consolidated assets of approximately $30.0 billion. United is the parent company of United Bank, which comprises more than 225 offices located throughout Washington, D.C., Virginia, West Virginia, Maryland, North Carolina, South Carolina, Ohio, Pennsylvania, and Georgia. United’s stock is traded on the NASDAQ Global Select Market under the quotation symbol “UBSI”.
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United Bankshares, Inc. Announces…
April 25, 2024
Page Five
Cautionary Statements
The Company is required under generally accepted accounting principles to evaluate subsequent events through the filing of itsMarch 31, 2024 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 estimates madeas of March 31, 2024 and will adjust amounts preliminarily reported, if necessary.
Use of non-GAAPFinancial Measures
This press release contains certain financial measures that are not recognized under U.S. generally accepted accountingprinciples (“GAAP”). Generally, United has presented these “non-GAAP” financial measures because it believes that these measures provide meaningful additional information to assist in theevaluation of United’s results of operations or financial position. Presentation of these non-GAAP financial measures is consistent with how United’s management evaluates its performance internallyand these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the banking industry.
Specifically, this press release contains certain references to financial measures identified astax-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: uncertainty in U.S. fiscal and monetary policies, including the interest rate policies of the Federal ReserveBoard; 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; the nature, extent, timing, and results of governmentalactions, 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 deposits on United’s funding costs andnet interest margin; future provisions for credit losses on loans and debt securities; changes in nonperforming assets; competition; changes in legislation or regulatory requirements; and the impact of natural disasters, extreme weather events,military conflict (including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas, the possible expansion of such conflicts and potential geopolitical consequences), terrorism or other geopolitical events. For more informationabout 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 Reporton Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission and available on its website at www.sec.gov. Further, any forward-looking statement speaks only asof 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 advised to consult further disclosures United maymake on related subjects in our filings with the SEC.
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| UNITED BANKSHARES, INC. AND SUBSIDIARIES<br><br><br>Washington, D.C. and Charleston, WV<br><br><br>Stock Symbol: UBSI<br> <br>(InThousands Except for Per Share Data) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | |||||||||
| March<br>2024 | March<br>2023 | December<br>2023 | |||||||
| EARNINGS SUMMARY: | |||||||||
| Interest income | $ | 369,180 | $ | 329,303 | $ | 369,175 | |||
| Interest expense | 146,691 | 94,983 | 139,485 | ||||||
| Net interest income | 222,489 | 234,320 | 229,690 | ||||||
| Provision for credit losses | 5,740 | 6,890 | 6,875 | ||||||
| Noninterest income | 32,212 | 32,744 | 33,675 | ||||||
| Noninterest expense | 140,742 | 137,419 | 152,287 | ||||||
| Income before income taxes | 108,219 | 122,755 | 104,203 | ||||||
| Income taxes | 21,405 | 24,448 | 24,813 | ||||||
| Net income | $ | 86,814 | $ | 98,307 | $ | 79,390 | |||
| PER COMMON SHARE: | |||||||||
| Net income: | |||||||||
| Basic | $ | 0.64 | $ | 0.73 | $ | 0.59 | |||
| Diluted | 0.64 | 0.73 | 0.59 | ||||||
| Cash dividends | 0.37 | 0.36 | 0.37 | ||||||
| Book value | 35.56 | 34.14 | 35.36 | ||||||
| Closing market price | $ | 35.79 | $ | 35.20 | $ | 37.55 | |||
| Common shares outstanding: | |||||||||
| Actual at period end, net of treasury shares | 135,192,675 | 134,936,551 | 134,949,063 | ||||||
| Weighted average-basic | 134,808,634 | 134,411,166 | 134,691,360 | ||||||
| Weighted average-diluted | 135,121,380 | 134,840,328 | 134,984,970 | ||||||
| FINANCIAL RATIOS: | |||||||||
| Return on average assets | 1.19 | % | 1.35 | % | 1.08 | % | |||
| Return on average shareholders’ equity | 7.25 | % | 8.72 | % | 6.70 | % | |||
| Return on average tangible equity (non-GAAP)^(1)^ | 11.98 | % | 14.97 | % | 11.27 | % | |||
| Average equity to average assets | 16.36 | % | 15.49 | % | 16.11 | % | |||
| Net interest margin | 3.44 | % | 3.63 | % | 3.55 | % | |||
| March 31<br>2024 | December 31<br>2023 | March 31<br>2023 | |||||||
| PERIOD END BALANCES: | |||||||||
| Assets | $ | 30,028,798 | $ | 29,926,482 | $ | 30,182,241 | |||
| Earning assets | 26,659,694 | 26,623,652 | 26,826,111 | ||||||
| Loans & leases, net of unearned income | 21,520,076 | 21,359,084 | 20,612,159 | ||||||
| Loans held for sale | 44,426 | 56,261 | 68,176 | ||||||
| Investment securities | 3,954,519 | 4,125,754 | 4,777,587 | ||||||
| Total deposits | 22,919,746 | 22,819,319 | 22,284,586 | ||||||
| Shareholders’ equity | 4,807,441 | 4,771,240 | 4,606,537 |
Note: (1) See information under the “Selected Financial Ratios” table for a reconciliation of non-GAAP measure.
6
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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| March | March | December | |||||||
| 2024 | 2023 | 2023 | |||||||
| Interest & Loan Fees Income (GAAP) | $ | 369,180 | $ | 329,303 | $ | 369,175 | |||
| Tax equivalent adjustment | 872 | 1,135 | 866 | ||||||
| Interest & Fees Income (FTE) (non-GAAP) | 370,052 | 330,438 | 370,041 | ||||||
| Interest Expense | 146,691 | 94,983 | 139,485 | ||||||
| Net Interest Income (FTE) (non-GAAP) | 223,361 | 235,455 | 230,556 | ||||||
| Provision for Credit Losses | 5,740 | 6,890 | 6,875 | ||||||
| Noninterest Income: | |||||||||
| Fees from trust services | 4,646 | 4,780 | 4,508 | ||||||
| Fees from brokerage services | 5,267 | 4,200 | 4,360 | ||||||
| Fees from deposit services | 8,971 | 9,362 | 9,107 | ||||||
| Bankcard fees and merchant discounts | 1,873 | 1,707 | 1,923 | ||||||
| Other charges, commissions, and fees | 858 | 1,138 | 924 | ||||||
| Income from bank-owned life insurance | 2,418 | 1,891 | 1,855 | ||||||
| Income from mortgage banking activities | 5,298 | 6,384 | 4,746 | ||||||
| Mortgage loan servicing income | 789 | 2,276 | 783 | ||||||
| Net (losses) gains on investment securities | (99 | ) | (405 | ) | 276 | ||||
| Other noninterest income | 2,191 | 1,411 | 5,193 | ||||||
| Total Noninterest Income | 32,212 | 32,744 | 33,675 | ||||||
| Noninterest Expense: | |||||||||
| Employee compensation | 59,293 | 55,414 | 57,829 | ||||||
| Employee benefits | 14,671 | 13,435 | 9,771 | ||||||
| Net occupancy | 12,343 | 11,833 | 11,690 | ||||||
| Data processing | 7,463 | 7,473 | 7,261 | ||||||
| Amortization of intangibles | 910 | 1,279 | 1,279 | ||||||
| OREO expense | 159 | 667 | 188 | ||||||
| Net (gains) on the sale of OREO properties | (83 | ) | (43 | ) | (126 | ) | |||
| Equipment expense | 6,853 | 6,996 | 7,539 | ||||||
| FDIC insurance expense | 6,455 | 4,587 | 16,621 | ||||||
| Mortgage loan servicing expense and impairment | 1,015 | 1,884 | 962 | ||||||
| Expense for the reserve for unfunded loan commitments | (1,790 | ) | 2,600 | 940 | |||||
| Other noninterest expense | 33,453 | 31,294 | 38,333 | ||||||
| Total Noninterest Expense | 140,742 | 137,419 | 152,287 | ||||||
| Income Before Income Taxes (FTE)(non-GAAP) | 109,091 | 123,890 | 105,069 | ||||||
| Tax equivalent adjustment | 872 | 1,135 | 866 | ||||||
| Income Before Income Taxes (GAAP) | 108,219 | 122,755 | 104,203 | ||||||
| Taxes | 21,405 | 24,448 | 24,813 | ||||||
| Net Income | $ | 86,814 | $ | 98,307 | $ | 79,390 | |||
| MEMO: Effective Tax Rate | 19.78 | % | 19.92 | % | 23.81 | % |
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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 Balance Sheets | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 2024Q-T-D Average | March 2023Q-T-D Average | March 312024 | December 312023 | |||||||||
| Cash & Cash Equivalents | $ | 1,131,565 | $ | 1,238,563 | $ | 1,732,646 | $ | 1,598,943 | ||||
| Securities Available for Sale | 3,717,961 | 4,450,510 | 3,613,975 | 3,786,377 | ||||||||
| Less: Allowance for credit losses | 0 | 0 | 0 | 0 | ||||||||
| Net available for sale securities | 3,717,961 | 4,450,510 | 3,613,975 | 3,786,377 | ||||||||
| Securities Held to Maturity | 1,020 | 1,020 | 1,020 | 1,020 | ||||||||
| Less: Allowance for credit losses | (17 | ) | (18 | ) | (19 | ) | (17 | ) | ||||
| Net held to maturity securities | 1,003 | 1,002 | 1,001 | 1,003 | ||||||||
| Equity Securities | 8,946 | 7,767 | 8,762 | 8,945 | ||||||||
| Other Investment Securities | 316,490 | 333,256 | 330,781 | 329,429 | ||||||||
| Total Securities | 4,044,400 | 4,792,535 | 3,954,519 | 4,125,754 | ||||||||
| Total Cash and Securities | 5,175,965 | 6,031,098 | 5,687,165 | 5,724,697 | ||||||||
| Loans held for sale | 43,759 | 41,015 | 44,426 | 56,261 | ||||||||
| Commercial Loans & Leases | 15,630,846 | 15,048,023 | 15,725,038 | 15,535,204 | ||||||||
| Mortgage Loans | 4,757,005 | 4,215,807 | 4,769,495 | 4,728,374 | ||||||||
| Consumer Loans | 1,090,632 | 1,400,008 | 1,038,035 | 1,109,607 | ||||||||
| Gross Loans | 21,478,483 | 20,663,838 | 21,532,568 | 21,373,185 | ||||||||
| Unearned income | (13,631 | ) | (21,243 | ) | (12,492 | ) | (14,101 | ) | ||||
| Loans & Leases, net of unearned income | 21,464,852 | 20,642,595 | 21,520,076 | 21,359,084 | ||||||||
| Allowance for Loan & Lease Losses | (259,341 | ) | (234,809 | ) | (262,905 | ) | (259,237 | ) | ||||
| Net Loans | 21,205,511 | 20,407,786 | 21,257,171 | 21,099,847 | ||||||||
| Mortgage Servicing Rights | 4,427 | 20,739 | 4,241 | 4,554 | ||||||||
| Goodwill | 1,888,889 | 1,888,889 | 1,888,889 | 1,888,889 | ||||||||
| Other Intangibles | 12,185 | 18,442 | 11,595 | 12,505 | ||||||||
| Operating Lease<br>Right-of-Use Asset | 86,375 | 74,163 | 86,074 | 86,986 | ||||||||
| Other Real Estate Owned | 2,668 | 2,211 | 2,670 | 2,615 | ||||||||
| Bank-Owned Life Insurance | 488,401 | 480,690 | 490,596 | 486,895 | ||||||||
| Other Assets | 524,203 | 547,256 | 555,971 | 563,233 | ||||||||
| Total Assets | $ | 29,432,383 | $ | 29,512,289 | $ | 30,028,798 | $ | 29,926,482 | ||||
| MEMO: Interest-earning Assets | $ | 26,087,458 | $ | 26,177,730 | $ | 26,659,694 | $ | 26,623,652 | ||||
| Interest-bearing Deposits | $ | 16,663,765 | $ | 15,186,632 | $ | 16,902,397 | $ | 16,670,239 | ||||
| Noninterest-bearing Deposits | 5,941,866 | 6,897,030 | 6,017,349 | 6,149,080 | ||||||||
| Total Deposits | 22,605,631 | 22,083,662 | 22,919,746 | 22,819,319 | ||||||||
| Short-term Borrowings | 203,570 | 166,614 | 207,727 | 196,095 | ||||||||
| Long-term Borrowings | 1,500,237 | 2,417,999 | 1,739,434 | 1,789,103 | ||||||||
| Total Borrowings | 1,703,807 | 2,584,613 | 1,947,161 | 1,985,198 | ||||||||
| Operating Lease Liability | 92,480 | 78,729 | 92,266 | 92,885 | ||||||||
| Other Liabilities | 213,989 | 194,997 | 262,184 | 257,840 | ||||||||
| Total Liabilities | 24,615,907 | 24,942,001 | 25,221,357 | 25,155,242 | ||||||||
| Preferred Equity | 0 | 0 | 0 | 0 | ||||||||
| Common Equity | 4,816,476 | 4,570,288 | 4,807,441 | 4,771,240 | ||||||||
| Total Shareholders’ Equity | 4,816,476 | 4,570,288 | 4,807,441 | 4,771,240 | ||||||||
| Total Liabilities & Equity | $ | 29,432,383 | $ | 29,512,289 | $ | 30,028,798 | $ | 29,926,482 | ||||
| MEMO: Interest-bearing Liabilities | $ | 18,367,572 | $ | 17,771,245 | $ | 18,849,558 | $ | 18,655,437 |
8
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: | March<br>2024 | March<br>2023 | December<br>2023 | ||||||
| Earnings Per Share: | |||||||||
| Basic | $ | 0.64 | $ | 0.73 | $ | 0.59 | |||
| Diluted | $ | 0.64 | $ | 0.73 | $ | 0.59 | |||
| Common Dividend Declared Per Share | $ | 0.37 | $ | 0.36 | $ | 0.37 | |||
| High Common Stock Price | $ | 38.18 | $ | 42.45 | $ | 38.74 | |||
| Low Common Stock Price | $ | 32.92 | $ | 33.35 | $ | 25.35 | |||
| Average Shares Outstanding (Net of Treasury Stock): | |||||||||
| Basic | 134,808,634 | 134,411,166 | 134,691,360 | ||||||
| Diluted | 135,121,380 | 134,840,328 | 134,984,970 | ||||||
| Common Dividends | $ | 50,213 | $ | 48,720 | $ | 50,066 | |||
| Dividend Payout Ratio | 57.84 | % | 49.56 | % | 63.06 | % | |||
| EOP Share Data: | March 31<br>2024 | December 312023 | March 31<br>2023 | ||||||
| Book Value Per Share | $ | 35.56 | $ | 35.36 | $ | 34.14 | |||
| Tangible Book Value Per Share (non-GAAP) ^(1)^ | $ | 21.50 | $ | 21.27 | $ | 20.01 | |||
| 52-week High Common Stock Price | $ | 38.74 | $ | 42.45 | $ | 44.15 | |||
| Date | 12/14/23 | 2/3/2023 | 11/11/22 | ||||||
| 52-week Low Common Stock Price | $ | 25.35 | $ | 25.35 | $ | 33.11 | |||
| Date | 10/24/23 | 10/24/23 | 5/2/22 | ||||||
| EOP Shares Outstanding (Net of Treasury Stock): | 135,192,675 | 134,949,063 | 134,936,551 | ||||||
| Memorandum Items: | |||||||||
| Employees (full-time equivalent) | 2,716 | 2,736 | 2,836 | ||||||
| Note: | |||||||||
| (1) Tangible Book Value Per Share: | |||||||||
| Total Shareholders’ Equity (GAAP) | $ | 4,807,441 | $ | 4,771,240 | $ | 4,606,537 | |||
| Less: Total Intangibles | (1,900,484 | ) | (1,901,394 | ) | (1,906,507 | ) | |||
| Tangible Equity (non-GAAP) | $ | 2,906,957 | $ | 2,869,846 | $ | 2,700,030 | |||
| ÷ EOP Shares Outstanding (Net of Treasury Stock) | 135,192,675 | 134,949,063 | 134,936,551 | ||||||
| Tangible Book Value Per Share (non-GAAP) | $ | 21.50 | $ | 21.27 | $ | 20.01 |
9
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Three Months Ended<br>March 2024 | Three Months Ended<br>March 2023 | Three Months Ended<br>December 2023 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Average Balances and Yields: | AverageBalance | Interest^(1)^ | AverageRate^(1)^ | AverageBalance | Interest^(1)^ | AverageRate^(1)^ | AverageBalance | Interest^(1)^ | AverageRate^(1)^ | |||||||||||||||
| ASSETS: | ||||||||||||||||||||||||
| Earning Assets: | ||||||||||||||||||||||||
| Federal funds sold and securities purchased under agreements to resell and other short-term<br>investments | $ | 882,656 | $ | 12,303 | 5.61 | % | $ | 936,394 | $ | 10,983 | 4.76 | % | $ | 819,431 | $ | 11,570 | 5.60 | % | ||||||
| Investment securities: | ||||||||||||||||||||||||
| Taxable | 3,743,157 | 34,722 | 3.71 | % | 4,404,864 | 36,259 | 3.29 | % | 3,836,498 | 35,710 | 3.72 | % | ||||||||||||
| Tax-exempt | 212,375 | 1,474 | 2.78 | % | 387,671 | 2,740 | 2.83 | % | 195,471 | 1,471 | 3.01 | % | ||||||||||||
| Total securities | 3,955,532 | 36,196 | 3.66 | % | 4,792,535 | 38,999 | 3.26 | % | 4,031,969 | 37,181 | 3.69 | % | ||||||||||||
| Loans and loans held for sale, net of unearned income ^(2)^ | 21,508,611 | 321,553 | 6.01 | % | 20,683,610 | 280,456 | 5.49 | % | 21,279,444 | 321,290 | 6.00 | % | ||||||||||||
| Allowance for loan losses | (259,341 | ) | (234,809 | ) | (255,032 | ) | ||||||||||||||||||
| Net loans and loans held for sale | 21,249,270 | 6.08 | % | 20,448,801 | 5.55 | % | 21,024,412 | 6.07 | % | |||||||||||||||
| Total earning assets | 26,087,458 | $ | 370,052 | 5.70 | % | 26,177,730 | $ | 330,438 | 5.10 | % | 25,875,812 | $ | 370,041 | 5.68 | % | |||||||||
| Other assets | 3,344,925 | 3,334,559 | 3,288,334 | |||||||||||||||||||||
| TOTAL ASSETS | $ | 29,432,383 | $ | 29,512,289 | $ | 29,164,146 | ||||||||||||||||||
| LIABILITIES: | ||||||||||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||||||||
| Interest-bearing deposits | $ | 16,663,765 | $ | 128,377 | 3.10 | % | $ | 15,186,632 | $ | 68,592 | 1.83 | % | $ | 16,414,152 | $ | 122,132 | 2.95 | % | ||||||
| Short-term borrowings | 203,570 | 2,082 | 4.11 | % | 166,614 | 1,157 | 2.82 | % | 198,453 | 1,998 | 3.99 | % | ||||||||||||
| Long-term borrowings | 1,500,237 | 16,232 | 4.35 | % | 2,417,999 | 25,234 | 4.23 | % | 1,394,361 | 15,355 | 4.37 | % | ||||||||||||
| Total interest-bearing liabilities | 18,367,572 | 146,691 | 3.21 | % | 17,771,245 | 94,983 | 2.17 | % | 18,006,966 | 139,485 | 3.07 | % | ||||||||||||
| Noninterest-bearing deposits | 5,941,866 | 6,897,030 | 6,175,309 | |||||||||||||||||||||
| Accrued expenses and other liabilities | 306,469 | 273,726 | 284,191 | |||||||||||||||||||||
| TOTAL LIABILITIES | 24,615,907 | 24,942,001 | 24,466,466 | |||||||||||||||||||||
| SHAREHOLDERS’ EQUITY | 4,816,476 | 4,570,288 | 4,697,680 | |||||||||||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 29,432,383 | $ | 29,512,289 | $ | 29,164,146 | ||||||||||||||||||
| NET INTEREST INCOME | $ | 223,361 | $ | 235,455 | $ | 230,556 | ||||||||||||||||||
| INTEREST RATE SPREAD | 2.49 | % | 2.93 | % | 2.61 | % | ||||||||||||||||||
| NET INTEREST MARGIN | 3.44 | % | 3.63 | % | 3.55 | % | ||||||||||||||||||
| (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. | |||||||||||||||||||||||
| --- | --- |
10
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(InThousands Except for Per Share Data)
| Three Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Ratios: | March<br>2024 | March<br>2023 | December2023 | ||||||||
| Return on Average Assets | 1.19 | % | 1.35 | % | 1.08 | % | |||||
| Return on Average Shareholders’ Equity | 7.25 | % | 8.72 | % | 6.70 | % | |||||
| Return on Average Tangible Equity (non-GAAP) ^(1)^ | 11.98 | % | 14.97 | % | 11.27 | % | |||||
| Efficiency Ratio | 55.26 | % | 51.46 | % | 57.82 | % | |||||
| Price / Earnings Ratio | 13.96 | x | 12.10 | x | 16.00 | x | |||||
| Note: | |||||||||||
| (1) Return on Average Tangible Equity: | |||||||||||
| (a) Net Income (GAAP) | $ | 86,814 | $ | 98,307 | $ | 79,390 | |||||
| (b) Number of Days | 91 | 90 | 92 | ||||||||
| Average Total Shareholders’ Equity (GAAP) | $ | 4,816,476 | $ | 4,570,288 | $ | 4,697,680 | |||||
| Less: Average Total Intangibles | (1,901,074 | ) | (1,907,331 | ) | (1,903,458 | ) | |||||
| (c) Average Tangible Equity (non-GAAP) | $ | 2,915,402 | $ | 2,662,957 | $ | 2,794,222 | |||||
| Return on Average Tangible Equity (non-GAAP)\[(a) / (b)] x<br>366 or 365 / (c) | 11.98 | % | 14.97 | % | 11.27 | % | |||||
| Selected Financial Ratios: | March 31<br>2024 | December 31<br>2023 | March 31<br>2023 | ||||||||
| Loans & Leases, net of unearned income / Deposit Ratio | 93.89 | % | 93.60 | % | 92.50 | % | |||||
| Allowance for Loan & Lease Losses/ Loans & Leases, net of unearned<br>income | 1.22 | % | 1.21 | % | 1.17 | % | |||||
| Allowance for Credit Losses ^(2)^/<br>Loans & Leases, net of unearned income | 1.42 | % | 1.42 | % | 1.40 | % | |||||
| Nonaccrual Loans / Loans & Leases, net of unearned income | 0.29 | % | 0.14 | % | 0.14 | % | |||||
| 90-Day Past Due Loans/ Loans & Leases, net of<br>unearned income | 0.05 | % | 0.07 | % | 0.06 | % | |||||
| Non-performing Loans/ Loans & Leases, net of<br>unearned income | 0.35 | % | 0.21 | % | 0.21 | % | |||||
| Non-performing Assets/ Total Assets | 0.26 | % | 0.16 | % | 0.15 | % | |||||
| Primary Capital Ratio | 16.86 | % | 16.79 | % | 16.07 | % | |||||
| Shareholders’ Equity Ratio | 16.01 | % | 15.94 | % | 15.26 | % | |||||
| Price / Book Ratio | 1.01 | x | 1.06 | x | 1.03 | x | |||||
| Note: | |||||||||||
| (2) Includes allowances for loan losses and lending-related commitments. |
11
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 Data:^(1)^ | March<br>2024 | March<br>2023 | December2023 | ||||||
| Loans originated | $ | 176,906 | $ | 177,808 | $ | 225,319 | |||
| Loans sold | 188,711 | 166,511 | 228,672 | ||||||
| Mortgage Loan Servicing Data: | March 312024 | December 312023 | March 312023 | ||||||
| Balance of loans serviced | $ | 1,173,246 | $ | 1,202,448 | $ | 3,280,741 | |||
| Number of loans serviced | 12,163 | 12,419 | 22,436 | ||||||
| Asset Quality Data: | March 312024 | December 312023 | March 312023 | ||||||
| EOP Non-Accrual Loans | $ | 63,053 | $ | 30,919 | $ | 29,296 | |||
| EOP 90-Day Past Due Loans | 11,329 | 14,579 | 13,105 | ||||||
| Total EOP Non-performing Loans | $ | 74,382 | $ | 45,498 | $ | 42,401 | |||
| EOP Other Real Estate Owned | 2,670 | 2,615 | 4,086 | ||||||
| Total EOP Non-performing Assets | $ | 77,052 | $ | 48,113 | $ | 46,487 | |||
| Three Months Ended | |||||||||
| Allowance for Loan & Lease Losses: | March<br>2024 | March<br>2023 | December2023 | ||||||
| Beginning Balance | $ | 259,237 | $ | 234,746 | $ | 254,886 | |||
| Gross Charge-offs | (3,576 | ) | (2,936 | ) | (3,258 | ) | |||
| Recoveries | 1,506 | 1,791 | 733 | ||||||
| Net (Charge-offs) | (2,070 | ) | (1,145 | ) | (2,525 | ) | |||
| Provision for Loan & Lease Losses | 5,738 | 6,890 | 6,876 | ||||||
| Ending Balance | $ | 262,905 | $ | 240,491 | $ | 259,237 | |||
| Reserve for lending-related commitments | 42,915 | 48,789 | 44,706 | ||||||
| Allowance for Credit Losses ^(2)^ | $ | 305,820 | $ | 289,280 | $ | 303,943 |
Notes:
| (1) | During the first quarter of 2024, United completed its previously announced consolidation of its mortgage<br>delivery channels. Based on an evaluation performed in accordance with ASC 280, Segment Reporting, as of March 31, 2024, United operates one reportable business segment. Mortgage banking data above is presented on a consolidated basis<br>for all current and prior periods. |
|---|---|
| (2) | Includes allowances for loan losses and lending-related commitments. |
| --- | --- |
12
EX-99.2
First Quarter 2024 Earnings Review United Bankshares, Inc. April 25, 2024 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 presentation 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 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) uncertainty in U.S. fiscal and monetary policies, including the interest rate policies of the Federal Reserve Board; (2) volatility and disruptions in global capital and credit markets; (3) interest rate, securities market and monetary supply fluctuations; (4) increasing rates of inflation and slower growth rates; (5) the nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those involving the 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) competition; (10) changes in legislation or regulatory requirements and (11) the impact of natural disasters, extreme weather events, military conflict (including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas, the possible expansion of such conflicts and potential geopolitical consequences), terrorism or other geopolitical events. 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 $86.8 million and Diluted Earnings Per Share of $0.64 Generated Return on Average Assets of 1.19%, Return on Average Equity of 7.25%, and Return on Average Tangible Equity* of 11.98% Consistently ranked as one of the most trustworthy banks in America by Newsweek (#1 in 2023, #2 in 2022, #4 in 2024) Quarterly dividend of $0.37 per share equates to a yield of ~4.3% (based upon recent prices). 2023 was the 50th consecutive year of dividend increases to shareholders Net Interest Margin (FTE) remains solid at 3.44% Asset quality remains sound and Non-Performing Assets remained low at 0.26% of Total Assets Strong expense control with an efficiency ratio of 55.26% Capital position remains robust and liquidity remains sound 1Q24 HIGHLIGHTS *Non-GAAP measure. Refer to appendix.
Linked-Quarter (LQ) Net Income was $86.8 million in 1Q24 compared to $79.4 million in 4Q23, with diluted EPS of $0.64 in 1Q24 compared to $0.59 in 4Q23. Net Interest Income decreased $7.2 million primarily due to higher interest expense driven by the impact of deposit rate repricing, a decrease in acquired loan accretion income and a decrease in loan fees. Provision Expense was $5.7 million in 1Q24 compared to $6.9 million in 4Q23. Noninterest Income decreased $1.5 million compared to 4Q23 driven by a decrease of $3.0 million in other noninterest income. 4Q23 included a $2.7 million gain from the payoff of a fixed rate commercial loan that had an associated interest rate swap derivative. Partially offsetting the decrease in noninterest income was a $907 thousand increase in fees from brokerage services. Noninterest Expense decreased $11.5 million compared to 4Q23 driven by a decrease in FDIC insurance expense of $10.2 million. 1Q24 included $1.8 million of expense related to the FDIC special assessment as compared to $12.0 million in 4Q23. The Noninterest Expense decline in 1Q24 was also driven by decreases in other noninterest expense of $4.9 million and in the expense for the reserve for unfunded loan commitments of $2.7 million partially offset by an increase in employee benefits of $4.9 million and an increase in employee compensation of $1.5 million. The effective tax rate decreased from 23.8% to 19.8% in 1Q24 driven by the impact of provision to return adjustments in 4Q23. EARNINGS SUMMARY
PERFORMANCE RATIOS *Non-GAAP measure. Refer to appendix. Strong profitability and expense control 4Q23 was impacted by a $12.0 million expense related to the FDIC’s special assessment levied on banking organizations to recover losses to the Deposit Insurance Fund.
Reported Net Interest Margin decreased from 3.55% to 3.44% LQ. Linked-quarter Net Interest Income (FTE) decreased $7.2 million primarily due to higher interest expense driven by the impact of deposit rate repricing, a decrease in acquired loan accretion income and a decrease in loan fees. Approximately ~57% of the loan portfolio is fixed rate and ~43% is adjustable rate, while ~28% of the total portfolio is projected to reprice within the next 3 months. ~26% of the securities portfolio is floating rate. Securities balances of approximately ~$800 million with an average yield of ~4.8% are projected to roll off over the remainder of 2024. During 1Q24, approximately ~$250 million of short-term Treasury securities with an average yield of ~5.4% were purchased to replace ~$300 million of maturing Treasury securities with an average yield of ~1.8%. HTM securities are immaterial at $1.0 million, or 0.0% of total securities. The duration of the AFS portfolio is 4.0 years. Scheduled purchase accounting loan accretion is estimated at $6.2 million for the remainder of FY 2024 and $5.8 million for FY 2025. NET INTEREST INCOME AND MARGIN
Linked-Quarter loan balances increased $159 million primarily driven by Non Owner Occupied CRE and Residential Real Estate loans. Loan growth continues to be led by the North Carolina & South Carolina markets, with loan balances up 13.3% annualized in 1Q24. This is in line with the full year 2023 growth of 13.3%. Non Owner Occupied CRE to Total Risk Based Capital was ~262% at 1Q24. CRE portfolio remains diversified among underlying collateral types. Non Owner Occupied Office loans total $1.0 billion (~5% of total loans). The Top 40 Office loans make up ~68% of total Non Owner Occupied Office balances. The weighted average LTV based on current loan balances and appraised values at origination for the Top 40 was ~55% at 3/31/24. The weighted average LTV at origination for the Top 40 was ~63%. United has been disciplined in its approach to underwriting Office loans. The stringent underwriting process focuses on the underlying tenants, lease terms, sponsor support, location, property class, amenities, etc. Weighted average FICO of all consumer-related loan sectors is ~756. Total purchase accounting-related fair value discount on loans was $33 million as of 3/31/24. LOAN SUMMARY (EXCLUDES LOANS HELD FOR SALE) $ in millions
End of Period Balances (000s) 12/31/23 3/31/24 Non-Accrual Loans $30,919 $63,053 90-Day Past Due Loans $14,579 $11,329 Total Non-performing Loans $45,498 $74,382 Other Real Estate Owned $2,615 $2,670 Total Non-performing Assets $48,113 $77,052 Non-performing Loans / Loans 0.21% 0.35% Non-performing Assets / Total Assets 0.16% 0.26% Annualized Net Charge-offs / Average Loans 0.05% 0.04% Allowance for Loan & Lease Losses (ALLL) $259,237 $262,905 ALLL / Loans, net of unearned income 1.21% 1.22% Allowance for Credit Losses (ACL)* $303,943 $305,820 ACL / Loans, net of unearned income 1.42% 1.42% NPAs were $77.1 million at 3/31/24 compared to $48.1 million at 12/31/23 with the ratio of NPAs to Total Assets increasing from 0.16% to 0.26%. The increase was driven by one commercial & industrial loan relationship. 30-89 Day Past Due loans declined from 0.39% of total loans at 12/31/23 to 0.32% of total loans at 3/31/24. ALLL increased $3.7 million LQ to 1.22% of Total Loans. CREDIT QUALITY *ACL is comprised of ALLL and the reserve for lending-related commitments
Strong core deposit base with 26% of deposits in Non Interest Bearing accounts. LQ deposits increased $100 million driven by Money Market Accounts and Time Deposits, partially offset by declines in other categories. Brokered deposits total $267.8 million (only 1.2% of total deposits), which represents a decline of $4.4 million compared to 4Q23. Cumulative interest bearing deposit beta of ~55% and total deposit beta of ~41% since 1Q22. Enviable deposit franchise with an attractive mix of both high growth MSAs and stable, rural markets with a dominant market share position. Top 10 Deposit Markets by MSA (as of 6/30/23) MSA Total Deposits In Market ($000) Number of Branches Rank Washington, DC 9,907,513 61 6 Charleston, WV 1,573,967 7 2 Morgantown, WV 1,038,394 6 2 Myrtle Beach, SC 828,928 11 7 Parkersburg, WV 778,888 4 1 Richmond, VA 733,180 12 8 Hagerstown, MD 621,574 6 3 Charlotte, NC 594,782 7 17 Wheeling, WV 516,579 6 2 Beckley, WV 482,704 6 2 $ in millions Source: S&P Global Market Intelligence DEPOSIT SUMMARY
Deposit Account Details ($ in millions) End of Period Ratios / Values 3/31/24 % of Total Deposits Estimated Uninsured Deposits (less affiliate and collateralized deposits) $6,727 29% Estimated Insured/Collateralized Deposits $16,193 71% Total Deposits $22,920 100% No borrowings from the FRB Discount Window or BTFP during 2023 or 2024 YTD. Ample additional liquidity sources over and above those shown in the table above for contingency purposes. LIQUIDITY POSITION & ADDITIONAL DEPOSIT DETAIL *Does not include other sources of liquidity such as Fed Funds Lines, additional Reciprocal Deposit capacity, etc. Available Liquidity ($ in millions) 3/31/24 Cash & Cash Equivalents $1,733 Unpledged AFS Securities $1,334 Available FHLB Borrowing Capacity $2,861 Available FRB Discount Window Borrowing Capacity $2,527 Subtotal $8,454 Additional FHLB Capacity (with delivery of collateral) $4,141 Additional Brokered Deposit Capacity (based on internal policy) $4,316 Total Liquidity* $16,911 Liquidity remains strong with a granular deposit base and geographic diversification. Average deposit account size is ~$35 thousand with >650 thousand total deposit accounts. Estimated uninsured/uncollateralized deposits were 28% at 12/31/23 and 37% at 12/31/22.
West Virginia #2 in the state (second only to Truist) with $6.0 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 MSAs 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 (#6 overall) with $9.9 billion in deposits. United has increased deposit market share in the D.C. MSA from #15 in 2013 to #6 in 2023, with total deposits increasing from $2.1 billion to $9.9 billion. Virginia- #7 in the state with $8.6 billion (including VA deposits within the D.C. MSA). North Carolina #17 in the state with $2.2 billion. Select MSAs: #17 in Charlotte #27 in Raleigh #11 in Wilmington #10 in Greenville #1 in Washington #8 in Rocky Mount #9 in Fayetteville South Carolina #11 in the state with $1.7 billion. Select MSAs: #11 in Charleston #7 in Myrtle Beach #15 in Greenville #15 in Columbia ATTRACTIVE DEPOSIT MARKET SHARE POSITION Source: S&P Global Market Intelligence; Data as of 6/30/23
End of Period Ratios / Values 12/31/23 3/31/24** Common Equity Tier 1 Ratio 13.1% 13.2% Tier 1 Capital Ratio 13.1% 13.2% Total Risk Based Capital Ratio 15.4% 15.6% Leverage Ratio 11.4% 11.4% Total Equity to Total Assets 15.9% 16.0% *Tangible Equity to Tangible Assets (non-GAAP) 10.2% 10.3% Book Value Per Share $35.36 $35.56 *Tangible Book Value Per Share (non-GAAP) $21.27 $21.50 Capital ratios remain significantly above regulatory “Well Capitalized” levels and exceed all internal capital targets. United did not repurchase any common shares during 4Q23 or 1Q24. As of 3/31/24, 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
Select guidance is being provided for 2024. 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 low to mid single digits for the remainder of 2024 (annualized). Loan pipelines continue to be relatively strong. Expect investment portfolio balances to decrease ~$500 million for the remainder of 2024. Expect deposit growth in the low to mid single digits for the remainder of 2024 (annualized). Net Interest Income / Net Interest Margin: Net interest income (non-FTE) expected to be in the range of $900 million to $915 million for 2024 (assumes two 25 bps rate cuts in 2024). Expect the net interest margin to remain relatively stable in 2024 compared to 1Q24. 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. Expect credit environment to continue to normalize. Expect our credit performance to outperform the industry. Current planning assumption for provision expense is $28 million for FY 2024. Non Interest Income: Expect non interest income to be in the range of $120 million to $128 million for 2024. Mortgage banking revenue will be subject to industry trends. Non Interest Expense: Expect non interest expense to be in the range of $555 million to $565 million for 2024. Effective Tax Rate: Estimated at approximately ~19.8%. Capital: Stock buyback will be market dependent. United’s capital position remains robust. 2024 OUTLOOK
Premier Mid-Atlantic and Southeast franchise with an attractive mix of high growth MSAs and smaller stable markets with a dominant market share position Consistently high-performing company with a culture of disciplined risk management and expense control 50 consecutive years of dividend increases evidences United’s strong profitability, solid asset quality, and sound capital management over a very long period of time Experienced management team with a proven track record of execution Committed to our mission of excellence in service to our employees, our customers, our shareholders and our communities Attractive valuation with a current Price-to-Earnings Ratio of 13.0x (based upon median 2024 street consensus estimate of $2.65 per Bloomberg) INVESTMENT THESIS
APPENDIX
(dollars in thousands) 1Q23 2Q23 3Q23 4Q23 1Q24 (1) Return on Average Tangible Equity (A) Net Income (GAAP) $98,307 $92,459 $96,157 $79,390 $86,814 (B) Number of Days in the Quarter 90 91 92 92 91 Average Total Shareholders' Equity (GAAP) $4,570,288 $4,659,094 $4,687,124 $4,697,680 $4,816,476 Less: Average Total Intangibles (1,907,331) (1,906,053) (1,904,769) (1,903,458) (1,901,074) (C) Average Tangible Equity (non-GAAP) $2,662,957 $2,753,041 $2,782,355 $2,794,222 $2,915,402 Formula: [(A) / (B)]*365 (or 366 for leap year) (C) Return on Average Tangible Equity (non-GAAP) 14.97% 13.47% 13.71% 11.27% 11.98% RECONCILIATION OF NON-GAAP ITEMS
(dollars in thousands) 12/31/2023 3/31/2024 (2) Tangible Equity to Tangible Assets Total Assets (GAAP) $ 29,926,482 $ 30,028,798 Less: Total Intangibles (GAAP) (1,901,394) (1,900,484) Tangible Assets (non-GAAP) $ 28,025,088 $ 28,128,314 Total Shareholders' Equity (GAAP) $ 4,771,240 $ 4,807,441 Less: Total Intangibles (GAAP) (1,901,394) (1,900,484) Tangible Equity (non-GAAP) $ 2,869,846 $ 2,906,957 Tangible Equity to Tangible Assets (non-GAAP) 10.2% 10.3% (3) Tangible Book Value Per Share: Total Shareholders' Equity (GAAP) $ 4,771,240 $ 4,807,441 Less: Total Intangibles (GAAP) (1,901,394) (1,900,484) Tangible Equity (non-GAAP) $ 2,869,846 $ 2,906,957 ÷ EOP Shares Outstanding (Net of Treasury Stock) 134,949,063 135,192,675 Tangible Book Value Per Share (non-GAAP) $21.27 $21.50 RECONCILIATION OF NON-GAAP ITEMS (CONT.)