UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 26, 2021
United Bankshares, Inc.
(Exact name of registrant as specified in its charter)
| West Virginia | No. 002-86947 | 55-0641179 | ||
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer 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 | Name of each exchange | ||
| Common Stock, par value $2.50 per share | UBSI | NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On October 26, 2021 United Bankshares, Inc. (“United”) announced its financial results for the third quarter and first nine months 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 October 26, 2021, issued by United Bankshares, Inc. | |
| 99.2 | Slide presentation of financial information for the third 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: October 26, 2021 | By: | /s/ W. Mark Tatterson | ||||
| W. Mark Tatterson, Executive Vice | ||||||
| President and Chief Financial Officer | ||||||
EXHIBIT 99.1
News Release
For Immediate Release | Contact: W. Mark Tatterson | |
October 26, 2021 | Chief Financial Officer | |
| (800) 445-1347 ext. 8716 |
United Bankshares, Inc. Announces Earnings
for the Third Quarter and First Nine Months of 2021
WASHINGTON, D.C. and CHARLESTON, WV-- United Bankshares, Inc. (NASDAQ: UBSI) (“United”), today reported earnings for the third quarter and first nine months of 2021. Earnings for the third quarter of 2021 were $92.2 million, or $0.71 per diluted share, as compared to earnings of $103.8 million, or $0.80 per diluted share, for the third quarter of 2020. Earnings for the first nine months of 2021 were $293.9 million, or $2.27 per diluted share, as compared to earnings of $196.7 million, or $1.68 per diluted share, for the first nine months of 2020.
Third quarter 2021 results produced annualized returns on average assets, average equity and average tangible equity, a non-GAAP measure, of 1.33%, 8.23% and 14.03%, respectively, compared to annualized returns on average assets, average equity and average tangible equity of 1.56%, 9.68% and 16.94%, respectively, for the third quarter of 2020. For the first nine months of 2021, United’s annualized returns on average assets, average equity and average tangible equity were 1.46%, 8.95% and 15.36%, respectively, compared to annualized returns on average assets, average equity and average tangible equity of 1.12%, 6.85% and 12.19%, respectively, for the first nine months of 2020.
“Our earnings continued to be strong in the third quarter of 2021 as we earned net income of $92.2 million, diluted earnings per share of $0.71 and delivered an annualized return on average assets of 1.33%,” stated Richard M. Adams, United’s Chairman of the Board and Chief Executive Officer. “Additionally, credit quality metrics remain strong with nonperforming assets decreasing approximately 31% from December 31, 2020 to $107.0 million, representing 0.39% of total assets, at September 30, 2021.”
United previously announced that it entered into a definitive merger agreement with Community Bankers Trust Corporation (“Community Bankers Trust”). Under the merger agreement, United will acquire 100% of the outstanding shares of Community Bankers Trust in exchange for common shares of United. The combined organization will be approximately $29 billion in assets with nearly 250 locations in some of the most desirable banking markets in the nation. All requisite regulatory approvals for the merger have been received from the Board of Governors of the Federal Reserve System and from the Virginia State Corporation Commission. The merger is expected to close in the fourth quarter of 2021, subject to satisfaction of customary closing conditions including approval by the shareholders of Community Bankers Trust.
As a result of the acquisition of Carolina Financial Corporation (“Carolina Financial”) on May 1, 2020, the first nine months of 2021 reflected higher average balances, income, and expense as compared to the first nine months of 2020. In addition, the third quarter and first nine months of 2020 included merger-related expenses of $5.7 million and $53.7 million, respectively, associated with the acquisition of Carolina Financial compared to $845 thousand and $1.0 million of merger-related expenses incurred in the third quarter and first nine months of 2021, respectively, related to the announced Community Bankers Trust acquisition.
United Bankshares, Inc. Announces...
October 26, 2021
Page Two
Net Interest Income and Net Interest Margin
Net interest income for the third quarter of 2021 was $181.6 million, which was a decrease of $4.1 million, or 2%, from the third 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 third quarter of 2021 decreased $4.1 million, or 2%, from the third quarter of 2020 to $182.6 million. The decrease in net interest income and tax-equivalent net interest income was primarily due to a change in the mix of interest earning assets. A decrease in interest income due to the mix of interest earning assets as well as lower loan accretion on acquired loans was partially offset by lower interest expense on deposits and borrowings reflecting a decline in market interest rates and higher loan fee income from the Paycheck Protection Program (“PPP”). The net interest spread for the third quarter of 2021 decreased 10 basis points from the third quarter of 2020 due to a 41 basis point decrease in the average yield on earning assets partially offset by a 31 basis point decrease in the average cost of funds. Average earning assets for the third quarter of 2021 increased $937.4 million, or 4%, from the third quarter of 2020 due to a $1.9 billion increase in average short-term investments and a $563.2 million increase in average investment securities, partially offset by a $1.5 billion decrease in average net loans and loans held for sale mainly driven by a decline in PPP loan balances. Loan accretion on acquired loans was $8.2 million and $11.7 million for the third quarter of 2021 and 2020, respectively, a decrease of $3.5 million. Net PPP loan fee income of $7.8 million was recognized in the third quarter of 2021 driven primarily by loan forgiveness, as compared to $4.8 million for the third quarter of 2020. The net interest margin of 2.98% for the third quarter of 2021 was a decrease of 20 basis points from the net interest margin of 3.18% for the third quarter of 2020.
Net interest income for the first nine months of 2021 was $559.1 million, which was an increase of $61.3 million, or 12%, from the first nine months of 2020. Tax-equivalent net interest income for the first nine months of 2021 was $562.2 million, an increase of $61.6 million, or 12%, from the first nine months of 2020. The increase in net interest income and tax-equivalent net interest income was primarily due to an increase in average earning assets from the Carolina Financial acquisition and PPP loans as well as lower interest expense on deposits and borrowings. Average earning assets for the first nine months of 2021 increased $3.1 billion, or 15%, from the first nine months of 2020 due to a $1.6 billion increase in average short-term investments, a $989.3 million increase in average net loans and loans held for sale and a $558.5 million increase in average investment securities. The net interest spread for the first nine months of 2021 increased 11 basis points from the first nine months of 2020 due to a 54 basis point decrease in the average cost of funds partially offset by a 43 basis point decrease in the average yield on earning assets. Net PPP loan fee income of $28.2 million was recognized in the first nine months of 2021 driven primarily by loan forgiveness, as compared to $9.3 million for the first nine months of 2020. Loan accretion on acquired loans was $27.6 million and $30.8 million for the first nine months of 2021 and 2020, respectively, a decrease of $3.2 million. The net interest margin of 3.14% for the first nine months of 2021 was a decrease of 7 basis points from the net interest margin of 3.21% for the first nine months of 2020.
United Bankshares, Inc. Announces...
October 26, 2021
Page Three
On a linked-quarter basis, net interest income for the third quarter of 2021 decreased $4.9 million, or 3%, from the second quarter of 2021. Tax-equivalent net interest income for the third quarter of 2021 decreased $5.0 million, or 3%, from the second quarter of 2021. The net interest spread for the third quarter of 2021 of 2.83% decreased 15 basis points from the second quarter of 2021 due to a 19 basis point decrease in the average yield on earning assets partially offset by a 4 basis point decrease in the average cost of funds. Average earning assets increased approximately $394.6 million, or 2%, from the second quarter of 2021 due to increases in average short-term investments of $919.7 million and average investment securities of $111.6 million partially offset by a decrease in average net loans and loans held for sale of $636.6 million mainly driven by a decline in PPP loan balances. Net PPP loan fee income for the third quarter of 2021 decreased $1.2 million from the second quarter of 2021 to $7.8 million. Loan accretion on acquired loans decreased $1.5 million from the second quarter of 2021 to $8.2 million for the third quarter of 2021. The net interest margin of 2.98% for the third quarter of 2021 was a decrease of 16 basis points from the net interest margin of 3.14% for the second quarter of 2021.
Credit Quality
United’s asset quality continues to be sound. At September 30, 2021, nonperforming loans were $90.3 million, or 0.54% 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 $107.0 million, including other real estate owned (“OREO”) of $16.7 million at September 30, 2021, represented 0.39% 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 $7.8 million and $16.6 million for the third quarter and first nine months of 2021, respectively, while the provision for credit losses was an expense of $16.8 million and $89.8 million, respectively, for the third quarter and first nine months of 2020. The first nine months of 2020 included a provision for loan losses of $29.0 million recorded on purchased non-credit deteriorated (“non-PCD”) loans from Carolina Financial. The decrease in the provision in relation to the prior year quarter and first nine months 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 third quarter of 2021 was a net benefit of $7.8 million compared to a net benefit of $8.9 million for the second quarter of 2021.
As of September 30, 2021, the allowance for loan losses was $210.9 million, or 1.26% 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 recoveries were $1.2 million for the third quarter of 2021 compared to net charge-offs of $5.6 million for the third quarter of 2020. Net charge-offs were $8.6 million for the first nine months of 2021 compared to net charge-offs of $16.7 million for the first nine months of 2020. Annualized net (recoveries) charge-offs as a percentage of average loans & leases, net of unearned income were (0.03)% and 0.07% for the third quarter and first nine months of 2021, respectively, compared to annualized net charge-offs of 0.12% and 0.13% for the third quarter and first nine months of 2020. Net charge-offs were $5.2 million for the second quarter of 2021.
United Bankshares, Inc. Announces...
October 26, 2021
Page Four
Noninterest Income
Noninterest income for the third quarter of 2021 was $68.6 million, which was a decrease of $66.8 million, or 49%, from the third quarter of 2020 primarily driven by a $67.4 million decrease in income from mortgage banking activities due primarily to lower mortgage loan origination and sale volume and the mark-to-market impact of a declining locked pipeline. The third quarter of 2020 also included a $2.2 million gain on the sale of a bank premises. Partially offsetting the decreases in noninterest income were increases in fees from brokerage services of $817 thousand, fees from trust services of $695 thousand and fees from deposit services of $568 thousand.
Noninterest income for the first nine months of 2021 was $224.0 million, which was a decrease of $36.6 million, or 14%, from the first nine months of 2020. The decrease was driven primarily by a $51.0 million decrease in income from mortgage banking activities due primarily to the mark-to-market impact of a declining locked pipeline although originations and sales of mortgage loans in the secondary market increased. Mortgage loan servicing income for the first nine months of 2021 was $7.2 million compared to $3.9 million for the first nine months of 2020 as a result of the Carolina Financial acquisition. The first nine months of 2021 also included fees from deposit services of $28.2 million, an increase of $2.8 million from the first nine months of 2020, fees from trust services of $12.2 million, an increase of $1.9 million from the first nine months of 2020 and fees from brokerage services of $11.9 million, an increase of $3.2 million from the first nine months of 2020.
On a linked-quarter basis, noninterest income for the third quarter of 2021 increased $5.8 million, or 9%, from the second quarter of 2021 primarily due to an increase of $5.1 million in income from mortgage banking activities due primarily to a higher loan pipeline valuation. Income from bank-owned life insurance (BOLI) for the third quarter of 2021 was $2.6 million, an increase of $898 thousand from the linked quarter primarily due to the recognition of death benefits. Fees from deposit services for the third quarter of 2021 were $9.9 million, an increase of $492 thousand from the linked quarter.
Noninterest Expense
Noninterest expense for the third quarter of 2021 was $142.3 million, a decrease of $29.3 million, or 17%, from the third quarter of 2020, primarily due to a decrease of $17.0 million in employee compensation due to lower employee incentives and commissions related to mortgage banking production as well as a lower employee headcount. The third quarter of 2020 also included $10.4 million in prepayment penalties on the early payoff of three long-term FHLB advances.
Noninterest expense for the first nine months of 2021 was $430.2 million, an increase of $8.1 million, or 2%, from the first nine months of 2020. Employee compensation increased $10.8 million from the first nine months of 2020 primarily due to the Carolina Financial acquisition. Additionally, noninterest expense increased from the first nine months of 2020 due to increases of $6.3 million in employee benefits, $4.7 million in equipment expense, $4.1 million in mortgage loan servicing expense and impairment, $1.7 million in OREO expense and $1.1 million in net occupancy expense. The increase in OREO expense was due mainly to declines in the fair value of OREO properties. The increases in employee benefits, mortgage loan servicing expense and impairment, equipment expense and net occupancy expense were mainly from the Carolina Financial acquisition. Partially offsetting the increases in noninterest expense was a decrease in data processing expense of $7.5 million, primarily due to a penalty of $9.7 million to terminate Carolina Financial’s data processing contract in the second quarter of 2020. The first nine months of 2020 also included $10.4 million in prepayment penalties on the early payoff of FHLB advances.
United Bankshares, Inc. Announces...
October 26, 2021
Page Five
On a linked-quarter basis, noninterest expense for the third quarter of 2021 increased $3.3 million, or 2%, from the second quarter of 2021 primarily due to an increase of $4.6 million in other expense. Within other expense, the largest drivers of the variance were increases in the expense for the reserve for unfunded commitments of $3.4 million primarily due to an increase in outstanding loan commitments and merger-related expenses of $662 thousand associated with the announced Community Bankers Trust acquisition. Partially offsetting the increases in other expense were decreases in employee compensation of $1.1 million and employee benefits of $1.3 million, primarily due to lower commissions, and associated taxes, related to mortgage banking production.
Income Tax Expense
For the third quarter of 2021, income tax expense was $23.6 million as compared to $29.0 million for the third quarter of 2020 primarily due to lower earnings and a lower effective tax rate. For the first nine months of 2021, income tax expense was $75.6 million as compared to $49.9 million for the first nine months of 2020 primarily due to higher earnings. On a linked-quarter basis, income tax expense decreased $851 thousand primarily due to lower earnings and a slightly lower effective tax rate. United’s effective tax rate was 20.4% for the third quarter of 2021, 21.8% for the third quarter of 2020 and 20.5% for the second quarter of 2021. For the first nine months of 2021 and 2020, United’s effective tax rate was 20.5% and 20.2%, respectively.
Regulatory Capital
United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 15.7% at September 30, 2021, while estimated Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 13.5%, 13.5% and 10.4%, respectively. The September 30, 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 September 30, 2021, United had consolidated assets of approximately $27.5 billion. United is the parent company of United Bank which has 222 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”.
United Bankshares, Inc. Announces...
October 26, 2021
Page Six
Cautionary Statements
The Company is required under generally accepted accounting principles to evaluate subsequent events through the filing of its September 30, 2021 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 made as of September 30, 2021 and will adjust amounts preliminarily reported, if necessary.
Use of non-GAAP Financial Measures
This press release contains certain financial measures that are not recognized under U.S. generally accepted accounting principles (“GAAP”). Generally, United has presented these “non-GAAP” financial measures because it believes that these 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 is consistent 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 the evaluation of companies in the banking industry.
Specifically, this press release contains certain references to financial measures identified as tax-equivalent (FTE) net interest income, tangible equity, return on tangible equity and tangible book value per share. Management believes these non-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-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 combines amounts 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 can thus be considered the most conservative valuation of the company. Tangible equity is also presented on a per share basis and considering net income, a return 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 from merger 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 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 these non-GAAP financial measures might not be comparable to similarly titled measures at other companies. These non-GAAP financial measures should not be considered a substitute 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 speak only 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 on assumptions 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, or beliefs 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 from its 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 of governmental 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’s funding 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 operations of Community Bankers Trust; competition; and changes in legislation or regulatory 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 advised to 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 (In Thousands Except for Per Share Data)
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| Three Months Ended | Nine Months Ended | |||||||||||||||
EARNINGS SUMMARY: | September 2021 | September 2020 | September 2021 | September 2020 | ||||||||||||
Interest income | $ | 194,080 | $ | 210,269 | $ | 599,923 | $ | 589,468 | ||||||||
Interest expense | 12,501 | 24,605 | 40,867 | 91,684 | ||||||||||||
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Net interest income | 181,579 | 185,664 | 559,056 | 497,784 | ||||||||||||
Provision for credit losses | (7,829 | ) | 16,781 | (16,565 | ) | 89,811 | ||||||||||
Noninterest income | 68,624 | 135,468 | 224,043 | 260,664 | ||||||||||||
Noninterest expense | 142,276 | 171,593 | 430,154 | 422,100 | ||||||||||||
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Income before income taxes | 115,756 | 132,758 | 369,510 | 246,537 | ||||||||||||
Income taxes | 23,604 | 28,974 | 75,624 | 49,884 | ||||||||||||
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Net income | $ | 92,152 | $ | 103,784 | $ | 293,886 | $ | 196,653 | ||||||||
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PER COMMON SHARE: | ||||||||||||||||
Net income: | ||||||||||||||||
Basic | $ | 0.71 | $ | 0.80 | $ | 2.28 | $ | 1.68 | ||||||||
Diluted | 0.71 | 0.80 | 2.27 | 1.68 | ||||||||||||
Cash dividends | $ | 0.35 | $ | 0.35 | 1.05 | 1.05 | ||||||||||
Book value | 34.29 | 32.89 | ||||||||||||||
Closing market price | $ | 36.38 | $ | 21.47 | ||||||||||||
Common shares outstanding: | ||||||||||||||||
Actual at period end, net of treasury shares | 129,203,774 | 129,762,348 | ||||||||||||||
Weighted average-basic | 128,762,815 | 129,373,154 | 128,716,450 | 116,876,402 | ||||||||||||
Weighted average-diluted | 128,960,220 | 129,454,966 | 128,934,282 | 116,944,594 | ||||||||||||
FINANCIAL RATIOS: | ||||||||||||||||
Return on average assets | 1.33 | % | 1.56 | % | 1.46 | % | 1.12 | % | ||||||||
Return on average shareholders’ equity | 8.23 | % | 9.68 | % | 8.95 | % | 6.85 | % | ||||||||
Return on average tangible equity (non-GAAP)(1) | 14.03 | % | 16.94 | % | 15.36 | % | 12.19 | % | ||||||||
Average equity to average assets | 16.18 | % | 16.14 | % | 16.27 | % | 16.34 | % | ||||||||
Net interest margin | 2.98 | % | 3.18 | % | 3.14 | % | 3.21 | % | ||||||||
PERIOD END BALANCES: | September 30 2021 | September 30 2020 | December 31 2020 | June 30 2021 | ||||||||||||
Assets | $ | 27,507,517 | $ | 25,931,308 | $ | 26,184,247 | $ | 27,190,926 | ||||||||
Earning assets | 24,415,973 | 22,903,067 | 23,172,403 | 24,129,532 | ||||||||||||
Loans & leases, net of unearned income | 16,743,629 | 17,930,231 | 17,591,413 | 16,888,001 | ||||||||||||
Loans held for sale | 493,299 | 812,084 | 718,937 | 576,827 | ||||||||||||
Investment securities | 3,646,065 | 3,007,263 | 3,186,184 | 3,511,501 | ||||||||||||
Total deposits | 21,822,609 | 20,251,539 | 20,585,160 | 21,567,391 | ||||||||||||
Shareholders’ equity | 4,430,766 | 4,267,441 | 4,297,620 | 4,393,713 | ||||||||||||
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
(In Thousands Except for Per Share Data)
Consolidated Statements of Income
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 2021 | September 2020 | June 2021 | March 2021 | September 2021 | September 2020 | |||||||||||||||||||
Interest & Loan Fees Income (GAAP) | $ | 194,080 | $ | 210,269 | $ | 200,186 | $ | 205,657 | $ | 599,923 | $ | 589,468 | ||||||||||||
Tax equivalent adjustment | 1,059 | 1,046 | 1,075 | 1,047 | 3,181 | 2,846 | ||||||||||||||||||
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Interest & Fees Income (FTE) (non-GAAP) | 195,139 | 211,315 | 201,261 | 206,704 | 603,104 | 592,314 | ||||||||||||||||||
Interest Expense | 12,501 | 24,605 | 13,669 | 14,697 | 40,867 | 91,684 | ||||||||||||||||||
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Net Interest Income (FTE) (non-GAAP) | 182,638 | 186,710 | 187,592 | 192,007 | 562,237 | 500,630 | ||||||||||||||||||
Provision for Credit Losses | (7,829 | ) | 16,781 | (8,879 | ) | 143 | (16,565 | ) | 89,811 | |||||||||||||||
Noninterest Income: | ||||||||||||||||||||||||
Fees from trust services | 4,269 | 3,574 | 4,193 | 3,763 | 12,225 | 10,318 | ||||||||||||||||||
Fees from brokerage services | 3,883 | 3,066 | 3,654 | 4,323 | 11,860 | 8,633 | ||||||||||||||||||
Fees from deposit services | 9,888 | 9,320 | 9,396 | 8,896 | 28,180 | 25,332 | ||||||||||||||||||
Bankcard fees and merchant discounts | 1,473 | 1,226 | 1,368 | 1,064 | 3,905 | 2,937 | ||||||||||||||||||
Other charges, commissions, and fees | 703 | 715 | 775 | 759 | 2,237 | 1,843 | ||||||||||||||||||
Income from bank-owned life insurance | 2,556 | 2,059 | 1,658 | 1,403 | 5,617 | 5,738 | ||||||||||||||||||
Income from mortgage banking activities | 42,012 | 109,457 | 36,943 | 65,395 | 144,350 | 195,301 | ||||||||||||||||||
Mortgage loan servicing income | 2,429 | 2,345 | 2,386 | 2,355 | 7,170 | 3,879 | ||||||||||||||||||
Net gain on the sale of bank premises | 0 | 2,229 | 0 | 0 | 0 | 2,229 | ||||||||||||||||||
Net gains on investment securities | 82 | 860 | 24 | 2,609 | 2,715 | 2,566 | ||||||||||||||||||
Other noninterest income | 1,329 | 617 | 2,449 | 2,006 | 5,784 | 1,888 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Noninterest Income | 68,624 | 135,468 | 62,846 | 92,573 | 224,043 | 260,664 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Noninterest Expense: | ||||||||||||||||||||||||
Employee compensation | 67,459 | 84,455 | 68,557 | 72,412 | 208,428 | 197,660 | ||||||||||||||||||
Employee benefits | 13,132 | 13,202 | 14,470 | 15,450 | 43,052 | 36,767 | ||||||||||||||||||
Net occupancy | 10,339 | 10,944 | 10,101 | 10,941 | 31,381 | 30,324 | ||||||||||||||||||
Data processing | 6,612 | 6,708 | 6,956 | 7,026 | 20,594 | 28,140 | ||||||||||||||||||
Amortization of intangibles | 1,466 | 1,691 | 1,467 | 1,466 | 4,399 | 4,914 | ||||||||||||||||||
OREO expense | 387 | 1,166 | 372 | 3,625 | 4,384 | 2,679 | ||||||||||||||||||
Equipment expense | 7,286 | 5,616 | 5,830 | 6,044 | 19,160 | 14,465 | ||||||||||||||||||
FDIC insurance expense | 1,920 | 2,700 | 1,800 | 2,000 | 5,720 | 7,882 | ||||||||||||||||||
Mortgage loan servicing expense and impairment | 3,253 | 3,301 | 3,599 | 3,177 | 10,029 | 5,949 | ||||||||||||||||||
Prepayment penalties on FHLB borrowings | 0 | 10,385 | 0 | 0 | 0 | 10,385 | ||||||||||||||||||
Other noninterest expense | 30,422 | 31,425 | 25,799 | 26,786 | 83,007 | 82,935 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Noninterest Expense | 142,276 | 171,593 | 138,951 | 148,927 | 430,154 | 422,100 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income Before Income Taxes (FTE) (non-GAAP) | 116,815 | 133,804 | 120,366 | 135,510 | 372,691 | 249,383 | ||||||||||||||||||
Tax equivalent adjustment | 1,059 | 1,046 | 1,075 | 1,047 | 3,181 | 2,846 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income Before Income Taxes (GAAP) | 115,756 | 132,758 | 119,291 | 134,463 | 369,510 | 246,537 | ||||||||||||||||||
Taxes | 23,604 | 28,974 | 24,455 | 27,565 | 75,624 | 49,884 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Income | $ | 92,152 | $ | 103,784 | $ | 94,836 | $ | 106,898 | $ | 293,886 | $ | 196,653 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
MEMO: Effective Tax Rate | 20.39 | % | 21.82 | % | 20.50 | % | 20.50 | % | 20.47 | % | 20.23 | % | ||||||||||||
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
Consolidated Balance Sheets
| September 2021 Q-T-D Average | September 2020 Q-T-D Average | September 30 2021 | June 30 2021 | December 31 2020 | September 30 2020 | |||||||||||||||||||
Cash & Cash Equivalents | $ | 4,132,702 | $ | 2,227,314 | $ | 4,033,561 | $ | 3,677,396 | $ | 2,209,068 | $ | 1,656,533 | ||||||||||||
Securities Available for Sale | 3,344,196 | 2,751,913 | 3,409,984 | 3,277,074 | 2,953,359 | 2,777,802 | ||||||||||||||||||
Less: Allowance for credit losses | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net available for sale securities | 3,344,196 | 2,751,913 | 3,409,984 | 3,277,074 | 2,953,359 | 2,777,802 | ||||||||||||||||||
Securities Held to Maturity | 1,020 | 1,235 | 1,020 | 1,020 | 1,235 | 1,235 | ||||||||||||||||||
Less: Allowance for credit losses | (31 | ) | (14 | ) | (27 | ) | (31 | ) | (23 | ) | (21 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net held to maturity securities | 989 | 1,221 | 993 | 989 | 1,212 | 1,214 | ||||||||||||||||||
Equity Securities | 11,735 | 10,033 | 11,984 | 11,507 | 10,718 | 10,255 | ||||||||||||||||||
Other Investment Securities | 222,765 | 253,302 | 223,104 | 221,931 | 220,895 | 217,992 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Securities | 3,579,685 | 3,016,469 | 3,646,065 | 3,511,501 | 3,186,184 | 3,007,263 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Cash and Securities | 7,712,387 | 5,243,783 | 7,679,626 | 7,188,897 | 5,395,252 | 4,663,796 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Loans held for sale | 445,983 | 668,874 | 493,299 | 576,827 | 718,937 | 812,084 | ||||||||||||||||||
Commercial Loans & Leases | 12,621,706 | 13,224,385 | 12,657,238 | 12,723,654 | 13,165,497 | 13,377,091 | ||||||||||||||||||
Mortgage Loans | 2,916,877 | 3,542,829 | 2,884,542 | 2,946,352 | 3,197,274 | 3,345,048 | ||||||||||||||||||
Consumer Loans | 1,221,578 | 1,258,803 | 1,229,552 | 1,251,646 | 1,259,812 | 1,245,381 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Gross Loans | 16,760,161 | 18,026,017 | 16,771,332 | 16,921,652 | 17,622,583 | 17,967,520 | ||||||||||||||||||
Unearned income | (31,288 | ) | (39,391 | ) | (27,703 | ) | (33,651 | ) | (31,170 | ) | (37,289 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Loans & Leases, net of unearned income | 16,728,873 | 17,986,626 | 16,743,629 | 16,888,001 | 17,591,413 | 17,930,231 | ||||||||||||||||||
Allowance for Loan & Leases Losses | (217,472 | ) | (214,870 | ) | (210,891 | ) | (217,545 | ) | (235,830 | ) | (225,812 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Loans | 16,511,401 | 17,771,756 | 16,532,738 | 16,670,456 | 17,355,583 | 17,704,419 | ||||||||||||||||||
Mortgage Servicing Rights | 22,479 | 20,462 | 22,836 | 22,540 | 20,955 | 20,413 | ||||||||||||||||||
Goodwill | 1,810,040 | 1,795,682 | 1,810,040 | 1,810,040 | 1,796,848 | 1,794,886 | ||||||||||||||||||
Other Intangibles | 23,409 | 30,375 | 22,524 | 23,990 | 26,923 | 28,243 | ||||||||||||||||||
Operating Lease Right-of-Use Asset | 68,373 | 70,920 | 75,593 | 66,635 | 69,520 | 72,789 | ||||||||||||||||||
Other Real Estate Owned | 17,618 | 28,592 | 16,696 | 18,474 | 22,595 | 25,696 | ||||||||||||||||||
Other Assets | 826,020 | 785,179 | 854,165 | 813,067 | 777,634 | 808,982 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Assets | $ | 27,437,710 | $ | 26,415,623 | $ | 27,507,517 | $ | 27,190,926 | $ | 26,184,247 | $ | 25,931,308 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
MEMO: Interest-earning Assets | $ | 24,362,333 | $ | 23,424,890 | $ | 24,415,973 | $ | 24,129,532 | $ | 23,172,403 | $ | 22,903,067 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Interest-bearing Deposits | $ | 13,361,016 | $ | 12,951,290 | $ | 13,332,418 | $ | 13,283,937 | $ | 13,179,900 | $ | 12,946,792 | ||||||||||||
Noninterest-bearing Deposits | 8,471,744 | 7,178,769 | 8,490,191 | 8,283,454 | 7,405,260 | 7,304,747 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Deposits | 21,832,760 | 20,130,059 | 21,822,609 | 21,567,391 | 20,585,160 | 20,251,539 | ||||||||||||||||||
Short-term Borrowings | 123,526 | 156,502 | 123,018 | 127,745 | 142,300 | 148,357 | ||||||||||||||||||
Long-term Borrowings | 813,976 | 1,616,647 | 813,851 | 814,022 | 864,369 | 924,674 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Borrowings | 937,502 | 1,773,149 | 936,869 | 941,767 | 1,006,669 | 1,073,031 | ||||||||||||||||||
Operating Lease Liability | 72,389 | 74,640 | 80,518 | 70,546 | 73,213 | 76,604 | ||||||||||||||||||
Other Liabilities | 154,952 | 174,664 | 236,755 | 217,509 | 221,585 | 262,693 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Liabilities | 22,997,603 | 22,152,512 | 23,076,751 | 22,797,213 | 21,886,627 | 21,663,867 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Preferred Equity | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Common Equity | 4,440,107 | 4,263,111 | 4,430,766 | 4,393,713 | 4,297,620 | 4,267,441 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Shareholders’ Equity | 4,440,107 | 4,263,111 | 4,430,766 | 4,393,713 | 4,297,620 | 4,267,441 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Liabilities & Equity | $ | 27,437,710 | $ | 26,415,623 | $ | 27,507,517 | $ | 27,190,926 | $ | 26,184,247 | $ | 25,931,308 | ||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||
MEMO: Interest-bearing Liabilities | $ | 14,298,518 | $ | 14,724,439 | $ | 14,269,287 | $ | 14,225,704 | $ | 14,186,569 | $ | 14,019,823 | ||||||||||||
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| |||||||||||||
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
Quarterly/Year-to-Date Share Data: | September 2021 | September 2020 | June 2021 | March 2021 | September 2021 | September 2020 | ||||||||||||||||||
Earnings Per Share: | ||||||||||||||||||||||||
Basic | $ | 0.71 | $ | 0.80 | $ | 0.73 | $ | 0.83 | $ | 2.28 | $ | 1.68 | ||||||||||||
Diluted | $ | 0.71 | $ | 0.80 | $ | 0.73 | $ | 0.83 | $ | 2.27 | $ | 1.68 | ||||||||||||
Common Dividend Declared Per Share | $ | 0.35 | $ | 0.35 | $ | 0.35 | $ | 0.35 | $ | 1.05 | $ | 1.05 | ||||||||||||
High Common Stock Price | $ | 37.12 | $ | 30.07 | $ | 42.50 | $ | 41.61 | $ | 42.50 | $ | 39.07 | ||||||||||||
Low Common Stock Price | $ | 31.74 | $ | 20.57 | $ | 36.19 | $ | 31.57 | $ | 31.57 | $ | 19.67 | ||||||||||||
Average Shares Outstanding (Net of Treasury Stock): | ||||||||||||||||||||||||
Basic | 128,762,815 | 129,373,154 | 128,750,851 | 128,635,740 | 128,716,450 | 116,876,402 | ||||||||||||||||||
Diluted | 128,960,220 | 129,454,966 | 129,033,988 | 128,890,861 | 128,934,282 | 116,944,594 | ||||||||||||||||||
Common Dividends | $ | 45,271 | $ | 45,414 | $ | 45,268 | $ | 45,254 | $ | 135,793 | $ | 126,434 | ||||||||||||
Dividend Payout Ratio | 49.13 | % | 43.76 | % | 47.73 | % | 42.33 | % | 46.21 | % | 64.29 | % | ||||||||||||
EOP Share Data: | September 30 2021 | September 30 2020 | June 30 2021 | March 31 2021 | ||||||||||||
Book Value Per Share | $ | 34.29 | $ | 32.89 | $ | 34.01 | $ | 33.54 | ||||||||
Tangible Book Value Per Share (non-GAAP) (1) | $ | 20.11 | $ | 18.84 | $ | 19.81 | $ | 19.38 | ||||||||
52-week High Common Stock Price | $ | 42.50 | $ | 40.70 | $ | 42.50 | $ | 41.61 | ||||||||
Date | 05/18/21 | 11/05/19 | 05/18/21 | 03/18/21 | ||||||||||||
52-week Low Common Stock Price | $ | 21.19 | $ | 19.67 | $ | 20.57 | $ | 20.57 | ||||||||
Date | 10/01/20 | 03/23/20 | 09/25/20 | 09/25/20 | ||||||||||||
EOP Shares Outstanding (Net of Treasury Stock): | 129,203,774 | 129,762,348 | 129,203,593 | 129,175,800 | ||||||||||||
Memorandum Items: | ||||||||||||||||
EOP Employees (full-time equivalent) | 2,986 | 3,137 | 3,012 | 3,033 | ||||||||||||
Note: | ||||||||||||||||
(1) Tangible Book Value Per Share: | ||||||||||||||||
Total Shareholders’ Equity (GAAP) | $ | 4,430,766 | $ | 4,267,441 | $ | 4,393,713 | $ | 4,332,698 | ||||||||
Less: Total Intangibles | (1,832,564 | ) | (1,823,129 | ) | (1,834,030 | ) | (1,829,495 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Tangible Equity (non-GAAP) | $ | 2,598,202 | $ | 2,444,312 | $ | 2,559,683 | $ | 2,503,203 | ||||||||
÷ EOP Shares Outstanding (Net of Treasury Stock) | 129,203,774 | 129,762,348 | 129,203,593 | 129,175,800 | ||||||||||||
Tangible Book Value Per Share (non-GAAP) | $ | 20.11 | $ | 18.84 | $ | 19.81 | $ | 19.38 | ||||||||
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September | September | June | March | September | September | |||||||||||||||||||
| 2021 | 2020 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||||||
Selected Yields and Net Interest Margin: | ||||||||||||||||||||||||
Net Loans and Loans held for sale | 4.15 | % | 4.17 | % | 4.18 | % | 4.26 | % | 4.20 | % | 4.30 | % | ||||||||||||
Investment Securities | 1.71 | % | 2.17 | % | 1.87 | % | 1.93 | % | 1.83 | % | 2.42 | % | ||||||||||||
Money Market Investments/FFS | 0.26 | % | 0.42 | % | 0.24 | % | 0.34 | % | 0.28 | % | 0.75 | % | ||||||||||||
Average Earning Assets Yield | 3.18 | % | 3.59 | % | 3.37 | % | 3.56 | % | 3.37 | % | 3.80 | % | ||||||||||||
Interest-bearing Deposits | 0.29 | % | 0.54 | % | 0.33 | % | 0.37 | % | 0.33 | % | 0.76 | % | ||||||||||||
Short-term Borrowings | 0.54 | % | 0.44 | % | 0.54 | % | 0.51 | % | 0.53 | % | 0.75 | % | ||||||||||||
Long-term Borrowings | 1.23 | % | 1.65 | % | 1.22 | % | 1.23 | % | 1.23 | % | 1.86 | % | ||||||||||||
Average Liability Costs | 0.35 | % | 0.66 | % | 0.39 | % | 0.42 | % | 0.38 | % | 0.92 | % | ||||||||||||
Net Interest Spread | 2.83 | % | 2.93 | % | 2.98 | % | 3.14 | % | 2.99 | % | 2.88 | % | ||||||||||||
Net Interest Margin | 2.98 | % | 3.18 | % | 3.14 | % | 3.30 | % | 3.14 | % | 3.21 | % | ||||||||||||
Selected Financial Ratios: | ||||||||||||||||||||||||
Return on Average Assets | 1.33 | % | 1.56 | % | 1.41 | % | 1.64 | % | 1.46 | % | 1.12 | % | ||||||||||||
Return on Average Shareholders’ Equity | 8.23 | % | 9.68 | % | 8.69 | % | 9.97 | % | 8.95 | % | 6.85 | % | ||||||||||||
Return on Average Tangible Equity (non-GAAP) (1) | 14.03 | % | 16.94 | % | 14.95 | % | 17.20 | % | 15.36 | % | 12.19 | % | ||||||||||||
Efficiency Ratio | 56.86 | % | 53.43 | % | 55.72 | % | 52.53 | % | 54.93 | % | 55.65 | % | ||||||||||||
| Note: | ||||||||||||||||||||||||
(1) Return on Average Tangible Equity: | ||||||||||||||||||||||||
(a) Net Income (GAAP) | $ | 92,152 | $ | 103,784 | $ | 94,836 | $ | 106,898 | $ | 293,886 | $ | 196,653 | ||||||||||||
(b) Number of Days | 92 | 92 | 91 | 90 | 273 | 274 | ||||||||||||||||||
Average Total Shareholders’ Equity (GAAP) | $ | 4,440,107 | $ | 4,263,111 | $ | 4,378,898 | $ | 4,346,750 | $ | 4,389,087 | $ | 3,835,617 | ||||||||||||
Less: Average Total Intangibles | (1,833,449 | ) | (1,826,057 | ) | (1,834,920 | ) | (1,825,639 | ) | (1,831,364 | ) | (1,681,202 | ) | ||||||||||||
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|
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|
| |||||||||||||
(c) Average Tangible Equity (non-GAAP) | $ | 2,606,658 | $ | 2,437,054 | $ | 2,543,978 | $ | 2,521,111 | $ | 2,557,723 | $ | 2,154,415 | ||||||||||||
Return on Average Tangible Equity (non-GAAP) [(a) / (b)] x 365 or 366 / (c) | 14.03 | % | 16.94 | % | 14.95 | % | 17.20 | % | 15.36 | % | 12.19 | % | ||||||||||||
Selected Financial Ratios: | September 30 2021 | December 31 2020 | September 30 2020 | June 30 2021 | March 31 2021 | |||||||||||||||
Loans & Leases, net of unearned income / Deposit Ratio | 76.73 | % | 85.46 | % | 88.54 | % | 78.30 | % | 81.16 | % | ||||||||||
Allowance for Loan & Lease Losses/ Loans & Leases, net of unearned income | 1.26 | % | 1.34 | % | 1.26 | % | 1.29 | % | 1.33 | % | ||||||||||
Allowance for Credit Losses (2)/ Loans & Leases, net of unearned income | 1.41 | % | 1.45 | % | 1.35 | % | 1.41 | % | 1.45 | % | ||||||||||
Nonaccrual Loans / Loans & Leases, net of unearned income | 0.23 | % | 0.36 | % | 0.40 | % | 0.24 | % | 0.28 | % | ||||||||||
90-Day Past Due Loans/ Loans & Leases, net of unearned income | 0.09 | % | 0.08 | % | 0.07 | % | 0.08 | % | 0.09 | % | ||||||||||
Non-performing Loans/ Loans & Leases, net of unearned income | 0.54 | % | 0.75 | % | 0.85 | % | 0.61 | % | 0.67 | % | ||||||||||
Non-performing Assets/ Total Assets | 0.39 | % | 0.59 | % | 0.69 | % | 0.45 | % | 0.50 | % | ||||||||||
Primary Capital Ratio | 16.82 | % | 17.22 | % | 17.23 | % | 16.89 | % | 16.80 | % | ||||||||||
Shareholders’ Equity Ratio | 16.11 | % | 16.41 | % | 16.46 | % | 16.16 | % | 16.03 | % | ||||||||||
Price / Book Ratio | 1.06x | 0.97x | 0.65x | 1.07x | 1.15x | |||||||||||||||
Price / Earnings Ratio | 12.76x | 11.35x | 6.70x | 12.42x | 11.63x | |||||||||||||||
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 (In Thousands Except for Per Share Data)
| ||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September | September | June | March | September | September | |||||||||||||||||||
Mortgage Banking Segment Data: | 2021 | 2020 | 2021 | 2021 | 2021 | 2020 | ||||||||||||||||||
Applications | $ | 1,893,870 | $ | 3,460,687 | $ | 2,029,846 | $ | 2,630,426 | $ | 6,554,142 | $ | 7,703,695 | ||||||||||||
Loans originated | 1,385,871 | 2,071,717 | 1,658,128 | 1,910,619 | 4,954,618 | 4,668,963 | ||||||||||||||||||
Loans sold | $ | 1,470,928 | $ | 1,898,539 | $ | 1,877,772 | $ | 1,817,884 | $ | 5,166,584 | $ | 4,327,994 | ||||||||||||
Purchase money % of loans closed | 69 | % | 48 | % | 69 | % | 43 | % | 59 | % | 46 | % | ||||||||||||
Realized gain on sales and fees as a % of loans sold | 3.00 | % | 4.26 | % | 2.90 | % | 4.16 | % | 3.37 | % | 3.30 | % | ||||||||||||
Net interest income | $ | 2,367 | $ | 2,740 | $ | 2,871 | $ | 2,650 | $ | 7,888 | $ | 5,935 | ||||||||||||
Other income | 45,023 | 110,900 | 39,765 | 67,507 | 152,295 | 203,103 | ||||||||||||||||||
Other expense | 31,787 | 43,417 | 36,391 | 41,183 | 109,361 | 99,435 | ||||||||||||||||||
Income taxes | 3,179 | 14,823 | 1,280 | 5,940 | 10,399 | 22,042 | ||||||||||||||||||
Net income | $ | 12,424 | $ | 55,400 | $ | 4,965 | $ | 23,034 | $ | 40,423 | $ | 87,561 | ||||||||||||
| September 30 | December 31 | September 30 | June 30 | March 31 | ||||||||||||||||||||
Period End Mortgage Banking Segment Data: | 2021 | 2020 | 2020 | 2021 | 2021 | |||||||||||||||||||
Locked pipeline | $ | 648,706 | $ | 989,640 | $ | 1,398,898 | $ | 660,258 | $ | 979,842 | ||||||||||||||
Balance of loans serviced | $ | 3,723,206 | $ | 3,587,953 | $ | 3,551,157 | $ | 3,674,023 | $ | 3,585,890 | ||||||||||||||
Number of loans serviced | 25,583 | 25,614 | 25,813 | 25,526 | 25,443 | |||||||||||||||||||
| September 30 | December 31 | September 30 | June 30 | March 31 | ||||||||||||||||||||
Asset Quality Data: | 2021 | 2020 | 2020 | 2021 | 2021 | |||||||||||||||||||
EOP Non-Accrual Loans | $ | 37,689 | $ | 62,718 | $ | 71,312 | $ | 41,182 | $ | 48,985 | ||||||||||||||
EOP 90-Day Past Due Loans | 14,827 | 13,832 | 12,583 | 14,135 | 15,719 | |||||||||||||||||||
EOP Restructured Loans (1) | 37,752 | 55,657 | 68,381 | 47,271 | 51,529 | |||||||||||||||||||
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Total EOP Non-performing Loans | $ | 90,268 | $ | 132,207 | $ | 152,276 | $ | 102,588 | $ | 116,233 | ||||||||||||||
EOP Other Real Estate Owned | 16,696 | 22,595 | 25,696 | 18,474 | 18,690 | |||||||||||||||||||
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Total EOP Non-performing Assets | $ | 106,964 | $ | 154,802 | $ | 177,972 | $ | 121,062 | $ | 134,923 | ||||||||||||||
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| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September | September | June | March | September | September | |||||||||||||||||||
Allowance for Loan Losses: | 2021 | 2020 | 2021 | 2021 | 2021 | 2020 | ||||||||||||||||||
Beginning Balance | $ | 217,545 | $ | 215,121 | $ | 231,582 | $ | 235,830 | $ | 235,830 | $ | 77,057 | ||||||||||||
Cumulative Effect Adjustment for CECL | 0 | 0 | 0 | 0 | 0 | 57,442 | ||||||||||||||||||
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| 217,545 | 215,121 | 231,582 | 235,830 | 235,830 | 134,499 | |||||||||||||||||||
Initial allowance for acquired PCD loans | 0 | 0 | 0 | 0 | 0 | 18,635 | ||||||||||||||||||
Gross Charge-offs | (2,004 | ) | (8,468 | ) | (6,131 | ) | (6,957 | ) | (15,092 | ) | (22,863 | ) | ||||||||||||
Recoveries | 3,173 | 2,820 | 910 | 2,415 | 6,498 | 6,183 | ||||||||||||||||||
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Net Recoveries (Charge-offs) | 1,169 | (5,648 | ) | (5,221 | ) | (4,542 | ) | (8,594 | ) | (16,680 | ) | |||||||||||||
Provision for Loan & Lease Losses | (7,823 | ) | 16,339 | (8,816 | ) | 294 | (16,345 | ) | 89,358 | |||||||||||||||
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Ending Balance | 210,891 | 225,812 | 217,545 | 231,582 | 210,891 | 225,812 | ||||||||||||||||||
Reserve for lending-related commitments | 25,191 | 15,960 | 20,897 | 20,024 | 25,191 | 15,960 | ||||||||||||||||||
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Allowance for Credit Losses (2) | $ | 236,082 | $ | 241,772 | $ | 238,442 | $ | 251,606 | $ | 236,082 | $ | 241,772 | ||||||||||||
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Notes:
| (1) | Restructured loans with an aggregate balance of $24,662, $53,665, $32,471, $38,023 and $41,185 at September 30, 2021, September 30, 2020, June 30, 2021, March 31, 2021 and December 31, 2020, respectively, were on nonaccrual status, but are not included in “EOP Non-Accrual Loans” above. A restructured loan with a balance of $46 thousand at June 30, 2021 was 90 days past due, but not included in “EOP Non-Accrual Loans” above. |
| (2) | Includes allowances for loan losses and lending-related commitments. |
Third Quarter 2021 Earnings Review United Bankshares, Inc. October 26, 2021 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 benefits of a merger (the “Merger”) between Community Bankers Trust Corporation (“Community”) and United, including future financial and operating results, cost savings enhancements to revenue and accretion to reported earnings that may be realized from the Merger; (ii) United’s and Community’s plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts; and (iii) other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “targets,” “projects,” “will,” 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 the respective managements of United and Community and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of United and Community. 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 businesses of United and Community may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; (2) the expected growth opportunities or cost savings from the Merger may not be fully realized or may take longer to realize than expected; (3) deposit attrition, operating costs, customer losses and business disruption following the Merger, including adverse effects on relationships with employees, may be greater than expected; (4) the regulatory approvals required for the Merger may not be obtained on the proposed terms or on the anticipated schedule; (5) the shareholders of Community may fail to approve the Merger; (6) legislative or regulatory changes, including changes in accounting standards, may adversely affect the businesses in which United and Community are engaged; (7) the interest rate environment may further compress margins and adversely affect net interest income; (8) results may be adversely affected by continued diversification of assets and adverse changes to credit quality; (9) competitive pressures on product pricing and services; (10) success, impact, and timing of United’s business strategies, including market acceptance of any new products or services; (11) disruption from the Merger making it more difficult to maintain relationships with employees, customers or other parties with whom United and Community have business relationships; (12) diversion of management time on Merger-related issues; (13) risks relating to the potential dilutive effect of the shares of United common stock to be issued in the Merger; (14) the reaction to the proposed transaction from the companies’ customers, employees and counterparties; (15) the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement between United and Community; (16) the outcome of any legal proceedings that may be instituted against United or Community; (17) changes in general economic, political, or industry conditions; (18) uncertainty as to the extent of the duration, scope and impacts of the COVID-19 pandemic on United, Community and the Merger; (19) uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Federal Reserve Board; (20) volatility and disruptions in global capital and credit markets; (21) reform of LIBOR; and (22) the nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, those involving the OCC, Federal Reserve, FDIC, and CFPB. Additional factors, that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in Community’s and 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 (“SEC”) and available on the SEC's Internet site (http://www.sec.gov). United and Community caution that the foregoing list of factors is not exclusive. All subsequent written and oral forward-looking statements concerning the proposed transaction or other matters attributable to United or Community or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. United and Community do 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. Additional Information About the Merger and Where to Find It This presentation shall not constitute an offer to sell, the solicitation of an offer to sell, or the solicitation of an offer to buy any securities or the solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Shareholders of United and Community and other investors are urged to read the proxy statement/prospectus that is included in the registration statement on Form S-4 that United filed with the SEC in connection with the proposed Merger because it contains important information about United, Community, the Merger, the persons soliciting proxies in the Merger and their interests in the Merger and related matters. Investors will be able to obtain all documents filed with the SEC by United free of charge at the SEC's Internet site (http://www.sec.gov). In addition, documents filed with the SEC by United will be available free of charge from the Corporate Secretary of United Bankshares, Inc., 514 Market Street, Parkersburg, West Virginia 26101, telephone (304) 424-8800 and any documents filed with the SEC by Community will be available free of charge from the Corporate Secretary of Community, 9954 Mayland Drive, Suite 2100, Richmond, Virginia 23233, telephone, (804) 934-9999. The proxy statement/prospectus and the other documents may also be obtained for free by accessing United’s website at www.ubsi-inc.com under the tab “Investor Relations” and then under the heading “SEC Filings” or by accessing Community’s website at www.cbtrustcorp.com under the tab “SEC Filings” and then under the heading “Documents”. You are urged to read the proxy statement/prospectus carefully before making a decision concerning the Merger. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. Participants in the Transactions United, Community and their respective directors, executive officers and certain other members of management and employees may be deemed “participants” in the solicitation of proxies from United’s and Community’s shareholders in favor of the Merger. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the United and Community shareholders in connection with the proposed Merger are set forth in the proxy statement/prospectus filed with the SEC. You can find information about the executive officers and directors of United in its Annual Report on Form 10-K for the year ended December 31, 2020 and in its definitive proxy statement filed with the SEC on March 30, 2021. You can find information about Community’s executive officers and directors in its Annual Report on Form 10-K for the year ended December 31, 2020 and in its definitive proxy statement filed with the SEC on April 23, 2021. You can obtain free copies of these documents from United, or Community using the contact information above. IMPORTANT INFORMATION
Achieved quarterly Net Income of $92.2 million and quarterly Diluted Earnings Per Share of $0.71 Generated Return on Average Assets of 1.33%, Return on Average Equity of 8.23%, and Return on Average Tangible Equity* of 14.03% Achieved period-end annualized loan growth of 5.6% (excluding PPP loans) Reported strong mortgage banking revenue and net income Quarterly dividend of $0.35 per share equates to a yield of 3.8% (based upon recent prices) Asset quality remains sound and Non-Performing Assets decreased 11.6% linked-quarter (and down 30.9% YTD) Strong expense control with an efficiency ratio of 56.86% Capital position remains robust and liquidity remains sound Community Bankers Trust Corporation (ESXB) merger – requisite regulatory approvals have been received from the Federal Reserve and Virginia State Corporation Commission 3Q21 HIGHLIGHTS *Non-GAAP measure. Refer to appendix.
Linked-Quarter (LQ) Net Income was $92.2 million in 3Q21 compared to $94.8 million in 2Q21, with diluted EPS of $0.71 in 3Q21 compared to $0.73 in 2Q21. Net Interest Income decreased $4.9 million with loan accretion on acquired loans and PPP loan fee income decreasing $1.5 million and $1.2 million, respectively. Provision Expense was $(7.8) million in 3Q21 compared to $(8.9) million in 2Q21. Noninterest Income increased $5.8 million due primarily to an increase of $5.1 million in income from mortgage banking activities. Noninterest Expense increased $3.3 million due primarily to an increase of $4.6 million in other expense. The increase in other expense was mainly due to an increase in the reserve for unfunded commitments expense of $3.4 million, and an increase in merger-related expenses of $662 thousand. EARNINGS SUMMARY
Strong profitability and expense control PERFORMANCE RATIOS *Non-GAAP measure. Refer to appendix.
Reported Net Interest Margin decreased from 3.14% to 2.98% LQ mainly due to growth in interest bearing cash, a change in the mix of earnings assets, and declines in loan accretion on acquired loans and PPP fee income. Linked-quarter Net Interest Income (FTE) was down $5.0 million, with loan accretion on acquired loans and PPP loan fee income decreasing $1.5 million and $1.2 million, respectively. Total remaining unamortized PPP fees (net of costs) were $14.7 million as of 9/30/21. Scheduled purchase accounting loan accretion is estimated at $4 million for the remainder of FY 2021 and $14 million for FY 2022 (not including the impact from the ESXB merger). NET INTEREST INCOME AND MARGIN
Linked-Quarter loan balances decreased $151 million driven by paydowns on PPP loans of $378 million. Excluding the impact of PPP loans, total loans increased $227 million (5.6% annualized) driven by Non Owner Occupied CRE and Construction loans. Revolving Line of Credit balances within Commercial loans were down $182 million in 3Q21 and down $200 million in 2Q21 (reflecting decreased utilization rates). Loan balances within the North Carolina & South Carolina markets are up ~9% annualized YTD (excluding PPP). Non Owner Occupied CRE to Total Risk Based Capital was ~232% at 3Q21. CRE portfolio remains diversified among underlying collateral types. Total purchase accounting-related fair value discount on loans is $65 million as of 9/30/21. Total COVID-19 loan deferrals have declined from a high of $3.3 billion (~18% of total loans) at 6/30/20 to ~$52 million (<1% of total loans) as of 9/30/21. LOAN SUMMARY (EXCLUDES LOANS HELD FOR SALE) $ in millions
End of Period Balances (000s) 6/30/21 9/30/21 Non-Accrual Loans $41,182 $37,689 90-Day Past Due Loans $14,135 $14,827 Restructured Loans $47,271 $37,752 Total Non-performing Loans $102,588 $90,268 Other Real Estate Owned $18,474 $16,696 Total Non-performing Assets $121,062 $106,964 Non-performing Loans / Loans 0.61% 0.54% Non-performing Assets / Total Assets 0.45% 0.39% Annualized Net Charge-offs / Average Loans 0.12% (0.03)% Allowance for Loan & Lease Losses (ALLL) $217,545 $210,891 ALLL / Loans, net of earned income 1.29% 1.26% Allowance for Credit Losses (ACL) $238,442 $236,082 ACL / Loans, net of earned income 1.41% 1.41% NPAs decreased $14.1 million, or 11.6%, compared to 2Q21. ACL decreased $2.4 million LQ with the percentage of ACL/Loans remaining at 1.41%. PPP loans are included within total loans in the ratio calculations shown above. United adopted CECL effective 01/01/20. CREDIT QUALITY
Diversified portfolio with strong underwriting practices and ongoing monitoring Portfolio Portfolio Balance ($ MM) % Total Loans Commercial Retail CRE 1,348 8.0% Hotels 803 4.8% Entertainment & Recreation 246 1.5% Healthcare & Senior Living 215 1.3% Restaurants 183 1.1% Energy (Direct & Indirect) 131 0.8% Consumer Residential Mortgage 2,379 14.2% Indirect Auto 1,149 6.9% Home Equity 400 2.4% Other Consumer 52 0.3% Total commercial deferrals have declined to $48 million (~0.4% of total commercial loans) as of 9/30/21. Retail CRE: Top 20 loans make up ~40% of the total balance. Average LTV for the top 20 is ~56%, and majority are anchored by nationally recognized essential businesses. Hotels: Top 20 loans make up ~41% of the total balance. Average LTV for the top 20 is ~56%. Of the remaining commercial deferrals, ~77% are related to the hospitality industry. As of 9/30/21, the allowance for the hotel portfolio was $23.0 million. Consumer deferrals total $4 million, or ~0.1% of total consumer loans as of 9/30/21. Weighted average FICO score for the consumer portfolio is ~746 (based on most recently available system data). Data as of 9/30/21. 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 $378 million in 3Q21 Remaining outstandings at 9/30/21: Over 4,000 loans totaling $412 million Average loan balance: $102,300 Median loan balance: $26,892 PPP Fees Recognized, net of costs ($ millions)* 3Q20 4Q20 1Q21 2Q21 3Q21 $4.80 $6.98 $11.31 $9.02 $7.85 *Remaining unamortized fees of $14.7 million at 9/30/21. PPP Loans Outstanding ($ millions) 3Q20 4Q20 1Q21 2Q21 3Q21 $1,286 $1,182 $1,203 $790 $412 PAYCHECK PROTECTION PROGRAM (PPP)
Strong core deposit base with 39% of deposits in Non Interest Bearing accounts. LQ deposits increased $255 million. 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 10,303,569 61 7 Charleston, WV 1,458,733 8 2 Morgantown, WV 1,279,427 6 1 Myrtle Beach, SC 837,090 11 5 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 16 Beckley, WV 465,677 6 2 $ 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 $10.3 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 $10.3 billion. Virginia- #7 in the state with $8.1 billion (including VA deposits within the D.C. MSA). North Carolina #17 in the state with $2.0 billion. Select MSAs: #16 in Charlotte #29 in Raleigh #13 in Wilmington #11 in Greenville #1 in Washington #8 in Rocky Mount #11 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 6/30/21 9/30/21** Common Equity Tier 1 Ratio 13.7% 13.5% Tier 1 Capital Ratio 13.7% 13.5% Total Risk Based Capital Ratio 15.9% 15.7% Leverage Ratio 10.3% 10.4% Total Equity to Total Assets 16.2% 16.1% *Tangible Equity to Tangible Assets (non-GAAP) 10.1% 10.1% Book Value Per Share $34.01 $34.29 *Tangible Book Value Per Share (non-GAAP) $19.81 $20.11 Capital ratios remain significantly above regulatory “Well Capitalized” levels and exceed all internal capital targets. United did not repurchase any common shares during 3Q21 or 2Q21. As of 9/30/21, 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) 6/30/21 9/30/21 Applications $2,029,846 $1,893,870 Loans Originated $1,658,128 $1,385,871 Loans Sold $1,877,772 $1,470,928 Purchase Money % 69% 69% Realized Gain on Sale Margin 2.90% 3.00% Locked Pipeline (EOP) $660,258 $648,706 Loans Held for Sale (EOP) $576,827 $493,299 Balance of Loans Serviced (EOP) $3,674,023 $3,723,206 Total Income $42,635 $47,390 Total Expense $36,390 $31,787 Income Before Tax $6,245 $15,603 Net Income After Tax $4,965 $12,424 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 $(17.0) million in 2Q21. MORTGAGE BANKING
Select guidance is being provided for 2021. Our outlook may change if the expectations for these items vary from current expectations. Community Bankers Trust Corporation (ESXB) Merger: Expect to close the ESXB merger in 4Q21, subject to approval by the shareholders of ESXB. Requisite approvals for the merger have been received from the Federal Reserve and Virginia State Corporation Commission. Loans & Deposits: Expect loan growth, excluding PPP loans, loans held for sale, and merger-related loan balances (ESXB), to be in the low to mid single digits (annualized) in 4Q21. Pipelines continue to be strong, particularly in the North Carolina and South Carolina markets. Expect further decreases in the cost of interest bearing deposits. Net Interest Income / Non Interest Income / Non Interest Expense: Net interest income, non interest income, and non interest expense are expected to be impacted by a partial quarter of the ESXB merger. Expect mortgage banking revenue will generally be subject to industry trends and the mix of portfolio versus secondary market originations. Continue to focus on cost savings opportunities. Tax Rate: Estimated at approximately 20.5%. 2021 OUTLOOK
Excellent franchise with long-term growth prospects Current income opportunity with a dividend yield of 3.8% (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 47 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 13.4x (based upon median 2021 street consensus estimate of $2.78 per Bloomberg) INVESTMENT THESIS
Advancing Strategy Financially Attractive Transaction Transaction Details As of March 31, 2021 Assumes fully phased in cost save estimates Headquarters: Richmond, VA Founded: 1926 Ticker: ESXB (NASDAQ) Total Assets: $1.7 Billion (1) Enhances density and scale in highly attractive markets throughout Virginia and Maryland 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 Strategically connects UBSI’s Mid-Atlantic and Southeast footprint EPS Accretive in 2022 and thereafter (~$0.06 EPS accretion (2)) Immediately accretive to tangible book value per share (~0.3% TBVPS accretion) Mid-teens IRR Maintains “well-capitalized” regulatory capital ratios Consideration Mix: 100% stock Fixed Exchange Ratio: 0.3173 Anticipated Closing: 4Q 2021 (subject to approval by the shareholders of ESXB) Requisite regulatory approvals have been received ESXB Overview ESXB MERGER- ANNOUNCED JUNE 3, 2021
ESXB 26 Locations ~$29 Billion Tangible Equity Total Deposits Net Loans Total Assets Pro Forma Franchise Footprint ~$19 Billion ~$23 Billion ~$2.7 Billion UBSI 222 Locations Source:S&P Global Market Intelligence Note:Pro forma figures as of respective March 31, 2021 data; Locations include mortgage origination and servicing branches Charleston Greenville Asheville Lynchburg Charlottesville ESXB MERGER- PRO FORMA FRANCHISE
Source:S&P Global Market Intelligence Closed 3Q 2011 Closed 1Q 2014 Closed 2Q 2016 Closed 2Q 2017 Closed 2Q 2020 Announced 2Q 2021 SUCCESSFUL ACQUISITIONS ADVANCING GROWTH AND ENHANCING FRANCHISE VALUE
APPENDIX
(dollars in thousands) 9/30/2020 12/31/2020 3/31/2021 6/30/2021 9/30/2021 (1) Return on Average Tangible Equity (A) Net Income (GAAP) $103,784 $92,370 $106,898 $94,836 $92,152 (B) Number of Days in the Quarter 92 92 90 91 92 Average Total Shareholders' Equity (GAAP) $4,263,111 $4,319,252 $4,346,750 $4,378,898 $4,440,107 Less: Average Total Intangibles (1,826,057) (1,822,577) (1,825,639) (1,834,920) (1,833,449) (C) Average Tangible Equity (non-GAAP) $2,437,054 $2,496,675 $2,521,111 $2,543,978 $2,606,658 Formula: [(A) / (B)]*365 (or 366 for leap year) (C) Return on Average Tangible Equity (non-GAAP) 16.94% 9.58% 14.72% 17.20% 14.95% 14.03% RECONCILIATION OF NON-GAAP ITEMS
(dollars in thousands) 6/30/2021 9/30/2021 (2) Tangible Equity to Tangible Assets Total Assets (GAAP) $ 27,190,926 $ 27,507,517 Less: Total Intangibles (GAAP) (1,834,030) (1,832,564) Tangible Assets (non-GAAP) $ 25,356,896 $ 25,674,953 Total Shareholders' Equity (GAAP) $ 4,393,713 $ 4,430,766 Less: Total Intangibles (GAAP) (1,834,030) (1,832,564) Tangible Equity (non-GAAP) $ 2,559,683 $ 2,598,202 Tangible Equity to Tangible Assets (non-GAAP) 10.1% 10.1% (3) Tangible Book Value Per Share: Total Shareholders' Equity (GAAP) $ 4,393,713 $ 4,430,766 Less: Total Intangibles (GAAP) (1,834,030) (1,832,564) Tangible Equity (non-GAAP) $ 2,559,683 $ 2,598,202 ÷ EOP Shares Outstanding (Net of Treasury Stock) 129,203,593 129,203,774 Tangible Book Value Per Share (non-GAAP) $19.81 $20.11 RECONCILIATION OF NON-GAAP ITEMS (CONT.)
