United Bankshares, Inc. Announces Record Earnings for the Year 2020
United Bankshares, Inc. (NASDAQ: UBSI) (“United”), today reported earnings for the fourth quarter and the year of 2020. Earnings for the fourth quarter of 2020 were $92.4 million, or $0.71 per diluted share, as compared to earnings of $63.3 million, or $0.62 per diluted share for the fourth quarter of 2019. Earnings for the year of 2020 were a record $289.0 million as compared to earnings of $260.1 million for the year of 2019. Earnings per diluted share for the year of 2020 were $2.40 as compared to earnings per diluted share of $2.55 for the year of 2019.
Fourth quarter 2020 results produced annualized returns on average assets, average equity and average tangible equity of 1.41%, 8.51% and 14.72%, respectively compared to annualized returns on average assets, average equity and average tangible equity of 1.29%, 7.42% and 13.38%, respectively, for the fourth quarter of 2019. For the year of 2020, United’s returns on average assets, average equity and average tangible equity were 1.20%, 7.30% and 12.90%, respectively compared to returns on average assets, average equity and average tangible equity of 1.34%, 7.80% and 14.26%, respectively, for the year of 2019.
The record net income for the year of 2020, as compared to the year of 2019, was primarily due to higher income from mortgage banking activities, driven by an elevated volume of mortgage loan originations and sales in the secondary market, as well as the impact of the Carolina Financial Corporation (“Carolina Financial”) acquisition. Partially offsetting these increases in net income was higher provision for credit losses resulting from an adverse future macroeconomic forecast as a result of the coronavirus (“COVID-19”) pandemic under the Current Expected Credit Loss (“CECL”) accounting standard and merger-related expenses related to the Carolina Financial acquisition.
“During the many challenges of 2020, United delivered a strong performance for our shareholders, our team members, our customers and our communities,” stated Richard M. Adams, United’s Chairman of the Board and Chief Executive Officer. “For 2020, we earned a record $289 million, increased our dividend for the 47th consecutive year, successfully completed the largest acquisition in our company’s history with Carolina Financial, and maintained our focus on meeting the needs of our customers, our employees and our communities during the COVID-19 pandemic. We enter 2021 with strong credit quality and regulatory ratios that position us well for continued success.”
The results of operations for Carolina Financial are included in the consolidated results of operations from the date of acquisition, May 1, 2020. As a result of the acquisition, the fourth quarter and year of 2020 reflected higher average balances, income, and expense as compared to the fourth quarter and year of 2020. In addition, the fourth quarter and year of 2020 included merger-related expenses of $558 thousand and $54.2 million, respectively, as compared to $589 thousand for both the fourth quarter and year of 2019.
Net Interest Income and Net Interest Margin
Net interest income for the fourth quarter of 2020 was $192.0 million, which was an increase of $50.7 million or 36% from the fourth quarter of 2019, primarily due to an increase in average earning assets from the Carolina Financial acquisition and Paycheck Protection Program (“PPP”) loans. Tax-equivalent net interest income, a non-GAAP measure which adjusts for the tax-favored status of income from certain loans and investments, for the fourth quarter of 2020 increased $50.9 million or 36% from the fourth quarter of 2019 to $193.0 million. Average earning assets for the fourth quarter of 2020 increased $6.0 billion or 35% from the fourth quarter of 2019 due to a $4.4 billion increase in average net loans and loans held for sale, a $1.2 billion increase in average short-term investments and a $395.1 million increase in average investment securities. The net interest spread for the fourth quarter of 2020 increased 36 basis points from the fourth quarter of 2019 due to a 102 basis point decrease in the average cost of funds primarily due to the decline in market interest rates from the fourth quarter of 2019. The increase in the net interest spread was partially offset by a 66 basis point decrease in the average yield on earning assets from the fourth quarter of 2019 due to the decline in market interest rates and the lower yield on PPP loans. Loan accretion on acquired loans was $10.9 million and $8.6 million for the fourth quarter of 2020 and 2019, respectively, an increase of $2.3 million, primarily driven by the accretion on loans acquired from the Carolina Financial acquisition. The net interest margin of 3.33% for the fourth quarter of 2020 was an increase of 4 basis points from the net interest margin of 3.29% for the fourth quarter of 2019.
Net interest income for the year of 2020 was $689.8 million, which was an increase of $111.9 million or 19% from the year of 2019, primarily due to an increase in average earning assets from the Carolina Financial acquisition. Tax-equivalent net interest income for the year of 2020 was $693.7 million, an increase of $112.0 million or 19% from the year of 2019. Average earning assets for the year of 2020 increased $4.2 billion or 25% from the year of 2019 due to a $3.2 billion increase in average net loans and loans held for sale, a $767.9 million increase in average short-term investments and a $293.2 million increase in average investment securities. The net interest spread for the year of 2020 increased 8 basis points from the year of 2019 due to an 80 basis point decrease in the average cost of funds partially offset by a 72 basis point decrease in the average yield on earning assets. Loan accretion on acquired loans was $41.8 million and $38.8 million for the year of 2020 and 2019, respectively, an increase of $3.0 million. The net interest margin of 3.24% for the year of 2020 was a decrease of 15 basis points from the net interest margin of 3.39% for the year of 2019.
On a linked-quarter basis, net interest income for the fourth quarter of 2020 increased $6.3 million or 3% from the third quarter of 2020. United’s tax-equivalent net interest income for the fourth quarter of 2020 also increased $6.3 million or 3% from the third quarter of 2020. The net interest spread for the fourth quarter of 2020 increased 21 basis points from the third quarter of 2020 due to an 18 basis point decrease in the average cost of funds and a 3 basis point increase in the average yield on earning assets. PPP loan fee income increased $2.2 million to $7.0 million in the fourth quarter of 2020 from the third quarter of 2020, driven by loan forgiveness. Average earning assets decreased approximately $302.1 million or 1% from the third quarter of 2020, driven by a decrease in average net loans and loans held for sale of $165.3 million and average short-term investments of $199.8 million from the third quarter of 2020. Loan accretion on acquired loans decreased approximately $815 thousand from the third quarter of 2020. The net interest margin of 3.33% for the fourth quarter of 2020 was an increase of 15 basis points from the net interest margin of 3.18% for the third quarter of 2020.
Credit Quality
United’s asset quality continues to be sound relative to the current economic environment. At December 31, 2020, nonperforming loans were $132.2 million, or 0.75% of loans & leases, net of unearned income, as compared to nonperforming loans of $131.1 million, or 0.96% of loans & leases, net of unearned income, at December 31, 2019. As of December 31, 2020, the allowance for loan losses was $235.8 million or 1.34% of loans & leases, net of unearned income, as compared to $77.1 million or 0.56% of loans & leases, net of unearned income, at December 31, 2019. The increase in the allowance for loan losses was due to the adoption of CECL, the impact of COVID-19 and the loans acquired from Carolina Financial. Total nonperforming assets of $154.8 million, including OREO of $22.6 million at December 31, 2020, represented 0.59% of total assets as compared to nonperforming assets of $146.6 million or 0.75% of total assets at December 31, 2019.
For the quarters ended December 31, 2020 and 2019, the provision for credit losses was $16.8 million and $5.9 million, respectively. The increase in the provision in relation to the prior year quarter was driven by the impact from the reasonable and supportable forecasts of future macroeconomic conditions used in the estimation of expected credit losses adversely impacted by the COVID-19 pandemic under CECL. The provision for the year of 2020 was $106.6 million as compared to $21.3 million for the year of 2019. In addition to the impact of reasonable and supportable forecasts on reserves, the increase year over year was also driven by the provision for credit losses of $29.0 million recorded on purchased non-credit deteriorated (“non-PCD”) loans from the Carolina Financial acquisition. Net charge-offs were $6.9 million and $5.9 million for the fourth quarter of 2020 and 2019, respectively. Net charge-offs were $23.6 million and $21.0 million for the year of 2020 and 2019, respectively. Annualized net charge-offs as a percentage of average loans & leases, net of unearned income were 0.16% and 0.14% for the fourth quarter and year of 2020, respectively. On a linked-quarter basis, the provision for credit losses remained flat at $16.8 million.
Noninterest Income
Noninterest income for the fourth quarter of 2020 was $94.1 million, which was an increase of $56.8 million or 153% from the fourth quarter of 2019. The increase was driven by a $53.2 million increase in income from mortgage banking activities due to an elevated volume of mortgage loan originations and sales in the secondary market as well as the addition of mortgage banking operations from the Carolina Financial acquisition. Noninterest income for the fourth quarter of 2020 also included $2.3 million in mortgage loan servicing income.
Noninterest income for the year of 2020 was $354.7 million, which was an increase of $204.3 million or 136% from the year of 2019. The increase was due mainly to an increase of $189.1 million in income from mortgage banking activities. Net gains on investment securities were $3.2 million for the year of 2020 as compared to a net gain of $175 thousand for the year of 2019, an increase of approximately $3.0 million. Noninterest income for the year of 2020 also included $6.2 million in mortgage loan servicing income and a $2.2 million gain on the sale of a bank premises.
On a linked-quarter basis, noninterest income for the fourth quarter of 2020 decreased $41.4 million or 31% from the third quarter of 2020 primarily due to a decrease of $38.7 million in income from mortgage banking activities. Mortgage loan originations and sales volumes remained strong in the fourth quarter of 2020. The decrease in the fourth quarter of 2020 in relation to the third quarter of 2020 was primarily due to lower balances and volume of loans held for sale and loan commitments. The third quarter of 2020 also included a $2.2 million gain on the sale of a bank premises.
Noninterest Expense
Noninterest expense for the fourth quarter of 2020 was $156.1 million, an increase of $59.2 million or 61% from the fourth quarter of 2019. Employee compensation increased $32.6 million from the fourth quarter of 2019 due to the Carolina Financial acquisition as well as due to higher employee incentives and commissions expense mainly related to higher mortgage banking production. Additionally, noninterest expense increased from the fourth quarter of 2019 due to a $10.8 million increase in other expense, a $3.4 million increase in mortgage loan servicing expense and impairment, a $3.0 million increase in employee benefits, a $2.9 million increase in equipment expense and a $2.2 million increase in net occupancy expense. Within other expense, the largest drivers of the increase included an increase in the expense for the reserve for unfunded commitments of $3.3 million and an increase in the amortization of income tax credits of $1.9 million. The increases in employee benefits, equipment expense and occupancy expense were mainly from the Carolina Financial acquisition.
Noninterest expense for the year of 2020 was $578.2 million, an increase of $195.6 million or 51% from the year of 2019. Employee compensation increased $100.7 million from the year of 2019 due to the Carolina Financial acquisition as well as due to higher employee incentives and commissions expense mainly related to higher mortgage banking production. Additional employee benefit expense of $13.1 million and occupancy expense of $6.5 million were recognized in the year of 2020 mainly from the Carolina Financial acquisition. Data processing expense increased $13.2 million (including the Carolina Financial data processing contract termination penalty of $9.7 million recorded in the second quarter of 2020), mortgage loan servicing expense and impairment increased $9.0 million (including $1.4 million temporary impairment on mortgage servicing rights) and prepayment penalties on the early payoff of long-term FHLB advances increased $5.3 million. Other expense also increased $39.1 million due to an increase in merger-related expenses of $10.7 million associated with the Carolina Financial acquisition, an increase in the expense for the reserve for unfunded commitments of $11.0 million, and an increase in the amortization of income tax credits of $5.7 million which reduces the effective tax rate.
On a linked-quarter basis, noninterest expense for the fourth quarter of 2020 decreased $15.5 million or 9% from the third quarter of 2020 due primarily to the $10.4 million in prepayment penalties on the early payoff of three long-term FHLB advances recognized in the third quarter of 2020. Additionally, employee compensation decreased $7.5 million due a decline in salaries expense as a result of fewer employees and lower employee incentives and commissions expense recognized in the fourth quarter of 2020 related primarily to mortgage banking production.
Income Tax Expense
For the fourth quarter and year of 2020, income tax expense was $20.8 million and $70.7 million as compared to $12.5 million and $64.3 million, respectively, for the fourth quarter and year of 2019. The increase in the comparative quarter and year periods was due to overall higher earnings. On a linked-quarter basis, income tax expense decreased $8.1 million due to lower earnings and a lower effective tax rate primarily as a result of an increased benefit from income tax credits. United’s effective tax rate was 18.4% for the fourth quarter of 2020, 16.5% for the fourth quarter of 2019 and 21.8% for the third quarter of 2020. For the year of 2020 and 2019, United's effective tax rate was 19.7% and 19.8%, respectively.
Regulatory Capital
United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 15.6% at December 31, 2020 while its estimated Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 13.3%, 13.3% and 10.3%, respectively. The December 31, 2020 ratios reflect United’s election of a five-year transition provision, allowed by the Federal Reserve Board and other federal banking agencies in response to the COVID-19 pandemic, to delay for two years the full impact of CECL on regulatory capital, followed by a three-year transition period. The regulatory requirements for a well-capitalized financial institution are a risk-based capital ratio of 10.0%, a Common Equity Tier 1 capital ratio of 6.5%, a Tier 1 capital ratio of 8.0% and a leverage ratio of 5.0%.
About United Bankshares, Inc.
As of December 31, 2020, United had consolidated assets of approximately $26.2 billion. United is the parent company of United Bank, the largest community bank headquartered in the D.C. Metro region. United Bank has 230 offices in West Virginia, Virginia, Ohio, Pennsylvania, Maryland, North Carolina, South Carolina, Georgia, and the nation’s capital. United’s stock is traded on the NASDAQ Global Select Market under the quotation symbol “UBSI”.
Cautionary Statements
The Company is required under generally accepted accounting principles to evaluate subsequent events through the filing of its December 31, 2020 consolidated financial statements on Form 10-K. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of December 31, 2020 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 common equity is calculated as GAAP total shareholders’ equity minus total intangible assets. Tangible common equity can thus be considered the most conservative valuation of the company. Tangible common equity is also presented on a per common share basis and considering net income, a return on average tangible equity. Management provides these amounts to facilitate 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 common 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, such as statements about the potential impacts of the COVID-19 pandemic. 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 effect of the COVID-19 pandemic, including the negative impacts and disruptions on United’s colleagues, the communities United serves, and the domestic and global economy, which may have an adverse effect on United’s business; current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and any slowdown in global economic growth; fiscal and monetary policies of the Federal Reserve Board; 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; the successful integration of operations of Carolina Financial Corporation; 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, 2019, 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
FINANCIAL SUMMARY
(In Thousands Except for Per Share Data)
Three Months Ended
Year Ended
December
2020
December
2019
December
2020
December
2019
EARNINGS SUMMARY:
Interest income
$
208,914
$
183,869
$
798,382
$
762,562
Interest expense
16,925
42,586
108,609
184,640
Net interest income
191,989
141,283
689,773
577,922
Provision for credit losses
16,751
5,867
106,562
21,313
Noninterest income
94,082
37,242
354,746
150,484
Noninterest expense
156,117
96,900
578,217
382,654
Income before income taxes
113,203
75,758
359,740
324,439
Income taxes
20,833
12,473
70,717
64,340
Net income
$
92,370
$
63,285
$
289,023
$
260,099
PER COMMON SHARE:
Net income:
Basic
$
0.71
$
0.62
$
2.40
$
2.55
Diluted
0.71
0.62
2.40
2.55
Cash dividends
$
0.35
$
0.35
1.40
1.37
Book value
33.27
33.12
Closing market price
$
32.40
$
38.66
Common shares outstanding:
Actual at period end, net of treasury shares
129,188,507
101,553,671
Weighted average-basic
129,371,600
101,250,489
120,017,247
101,585,599
Weighted average-diluted
129,479,390
101,537,640
120,090,232
101,852,577
FINANCIAL RATIOS:
Return on average assets
1.41
%
1.29
%
1.20
%
1.34
%
Return on average shareholders’ equity
8.51
%
7.42
%
7.30
%
7.80
%
Return on average tangible equity (non-GAAP) (1)
14.72
%
13.38
%
12.90
%
14.26
%
Average equity to average assets
16.54
%
17.39
%
16.39
%
17.13
%
Net interest margin
3.33
%
3.29
%
3.24
%
3.39
%
December 31
2020
December 31
2019
December 31
2018
September 30
2020
PERIOD END BALANCES:
Assets
$
26,184,247
$
19,662,324
$
19,250,498
$
25,931,308
Earning assets
23,172,403
17,344,638
16,971,602
22,903,067
Loans & leases, net of unearned income
17,591,413
13,712,129
13,422,222
17,930,231
Loans held for sale
718,937
387,514
249,846
812,084
Investment securities
3,186,184
2,669,797
2,543,727
3,007,263
Total deposits
20,585,160
13,852,421
13,994,749
20,251,539
Shareholders’ equity
4,297,620
3,363,833
3,251,624
4,267,441
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
December
December
September
June
March
2020
2019
2020
2020
2020
Interest & Loan Fees Income (GAAP)
$
208,914
$
183,869
$
210,269
$
198,717
$
180,482
Tax equivalent adjustment
1,042
851
1,046
1,018
782
Interest & Fees Income (FTE) (non-GAAP)
209,956
184,720
211,315
199,735
181,264
Interest Expense
16,925
42,586
24,605
28,115
38,964
Net Interest Income (FTE) (non-GAAP)
193,031
142,134
186,710
171,620
142,300
Provision for Credit Losses
16,751
5,867
16,781
45,911
27,119
Noninterest Income:
Fees from trust services
3,585
3,597
3,574
3,261
3,483
Fees from brokerage services
3,125
2,468
3,066
2,651
2,916
Fees from deposit services
9,501
8,549
9,320
8,055
7,957
Bankcard fees and merchant discounts
1,129
1,154
1,226
718
993
Other charges, commissions, and fees
753
576
715
610
518
Income from bank-owned life insurance
1,479
2,906
2,059
1,291
2,388
Income from mortgage banking activities
70,793
17,547
109,457
68,213
17,631
Mortgage loan servicing income
2,334
0
2,345
1,534
0
Net gain on the sale of bank premises
0
0
2,229
0
0
Net gains on investment securities
589
109
860
1,510
196
Other noninterest income
794
336
617
547
724
Total Noninterest Income
94,082
37,242
135,468
88,390
36,806
Noninterest Expense:
Employee compensation
77,001
44,399
84,455
68,664
44,541
Employee benefits
12,103
9,121
13,202
12,779
10,786
Net occupancy
10,979
8,734
10,944
10,318
9,062
Data processing
7,280
5,727
6,708
15,926
5,506
Amortization of intangibles
1,691
1,754
1,691
1,646
1,577
OREO expense
3,069
1,450
1,166
607
906
Equipment expense
6,396
3,522
5,616
5,004
3,845
FDIC insurance expense
2,250
1,005
2,700
2,782
2,400
Mortgage loan servicing expense and impairment
3,482
119
3,301
2,510
138
Prepayment penalties on FHLB borrowings
0
0
10,385
0
0
Other expenses
31,866
21,069
31,425
29,138
22,372
Total Noninterest Expense
156,117
96,900
171,593
149,374
101,133
Income Before Income Taxes (FTE) (non-GAAP)
114,245
76,609
133,804
64,725
50,854
Tax equivalent adjustment
1,042
851
1,046
1,018
782
Income Before Income Taxes (GAAP)
113,203
75,758
132,758
63,707
50,072
Taxes
20,833
12,473
28,974
11,021
9,889
Net Income
$
92,370
$
63,285
$
103,784
$
52,686
$
40,183
MEMO: Effective Tax Rate
18.40
%
16.46
%
21.82
%
17.30
%
19.75
%
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
Year Ended
December
December
December
December
2020
2019
2018
2017
Interest & Loan Fees Income (GAAP)
$
798,382
$
762,562
$
717,715
$
623,806
Tax equivalent adjustment
3,888
3,735
4,328
8,429
Interest & Fees Income (FTE) (non-GAAP)
802,270
766,297
722,043
632,235
Interest Expense
108,609
184,640
129,070
74,809
Net Interest Income (FTE) (non-GAAP)
693,661
581,657
592,973
557,426
Provision for Credit Losses
106,562
21,313
22,013
28,406
Noninterest Income:
Fees from trust services
13,903
13,873
12,930
11,801
Fees from brokerage services
11,758
10,136
9,347
7,730
Fees from deposit services
34,833
33,768
33,973
33,622
Bankcard fees and merchant discounts
4,066
4,674
5,168
4,795
Other charges, commissions, and fees
2,596
2,241
2,228
2,057
Income from bank-owned life insurance
7,217
7,339
5,045
5,110
Income from mortgage banking activities
266,094
76,951
58,109
58,907
Mortgage loan servicing income
6,213
0
0
0
Net gain on the sale of bank premises
2,229
0
2,763
0
Net gains (losses) on investment securities
3,155
175
(2,618
)
5,584
Other noninterest income
2,682
1,327
1,767
2,039
Total Noninterest Income
354,746
150,484
128,712
131,645
Noninterest Expense:
Employee compensation
274,661
173,962
164,468
166,393
Employee benefits
48,870
35,745
36,172
34,997
Net occupancy
41,303
34,850
36,462
39,067
Data processing
35,420
22,232
23,800
21,019
Amortization of intangibles
6,605
7,016
8,039
7,772
OREO expense
5,748
5,336
3,444
6,003
Equipment expense
20,861
14,210
13,846
10,528
FDIC insurance expense
10,132
8,070
11,464
7,051
Mortgage loan servicing expense and impairment
9,431
423
271
263
Prepayment penalties on FHLB borrowings
10,385
5,105
0
0
Other expenses
114,801
75,705
70,213
74,316
Total Noninterest Expense
578,217
382,654
368,179
367,409
Income Before Income Taxes (FTE) (non-GAAP)
363,628
328,174
331,493
293,256
Tax equivalent adjustment
3,888
3,735
4,328
8,429
Income Before Income Taxes (GAAP)
359,740
324,439
327,165
284,827
Taxes
70,717
64,340
70,823
134,246
Net Income
$
289,023
$
260,099
$
256,342
$
150,581
MEMO: Effective Tax Rate
19.66
%
19.83
%
21.65
%
47.13
%
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
Consolidated Balance Sheets
December 2020
December 2019
December 31
December 31
December 31
Q-T-D Average
Q-T-D Average
2020
2019
2018
Cash & Cash Equivalents
$
2,048,915
$
777,007
$
2,209,068
$
837,493
$
1,020,396
Securities Available for Sale
2,849,102
2,463,101
2,953,359
2,437,296
2,337,039
Less: Allowance for credit losses
0
0
0
0
0
Net available for sale securities
2,849,102
2,463,101
2,953,359
2,437,296
2,337,039
Securities Held to Maturity
1,235
1,463
1,235
1,446
19,999
Less: Allowance for credit losses
(21
)
0
(23
)
0
0
Net held to maturity securities
1,214
1,463
1,212
1,446
19,999
Equity Securities
10,399
8,984
10,718
8,894
9,734
Other Investment Securities
218,741
210,855
220,895
222,161
176,955
Total Securities
3,079,456
2,684,403
3,186,184
2,669,797
2,543,727
Total Cash and Securities
5,128,371
3,461,410
5,395,252
3,507,290
3,564,123
Loans held for sale
720,896
368,966
718,937
387,514
249,846
Commercial Loans & Leases
13,296,380
9,347,641
13,165,497
9,399,170
9,447,420
Mortgage Loans
3,269,073
3,052,045
3,197,274
3,107,721
2,979,787
Consumer Loans
1,253,421
1,195,999
1,259,812
1,206,657
1,002,325
Gross Loans
17,818,874
13,595,685
17,622,583
13,713,548
13,429,532
Unearned income
(38,502
)
(2,823
)
(31,170
)
(1,419
)
(7,310
)
Loans & Leases, net of unearned income
17,780,372
13,592,862
17,591,413
13,712,129
13,422,222
Allowance for Loan & Leases Losses
(225,918
)
(77,073
)
(235,830
)
(77,057
)
(76,703
)
Net Loans
17,554,454
13,515,789
17,355,583
13,635,072
13,345,519
Mortgage Servicing Rights
20,766
0
20,955
0
0
Goodwill
1,794,997
1,478,014
1,796,848
1,478,014
1,478,014
Other Intangibles
27,580
30,837
26,923
29,931
36,947
Operating Lease Right-of-Use Asset
72,090
59,031
69,520
57,783
0
Other Real Estate Owned
26,316
18,472
22,595
15,515
16,865
Other Assets
771,233
532,561
777,634
551,205
559,184
Total Assets
$
26,116,703
$
19,465,080
$
26,184,247
$
19,662,324
$
19,250,498
MEMO: Interest-earning Assets
$
23,122,784
$
17,165,071
$
23,172,403
$
17,344,638
$
16,971,602
Interest-bearing Deposits
$
13,018,640
$
9,281,403
$
13,179,900
$
9,231,059
$
9,577,934
Noninterest-bearing Deposits
7,495,594
4,647,907
7,405,260
4,621,362
4,416,815
Total Deposits
20,514,234
13,929,310
20,585,160
13,852,421
13,994,749
Short-term Borrowings
144,177
132,621
142,300
374,654
351,327
Long-term Borrowings
901,655
1,836,423
864,369
1,838,029
1,499,103
Total Borrowings
1,045,832
1,969,044
1,006,669
2,212,683
1,850,430
Operating Lease Liability
75,805
62,662
73,213
61,342
0
Other Liabilities
161,580
118,702
221,585
172,045
153,695
Total Liabilities
21,797,451
16,079,718
21,886,627
16,298,491
15,998,874
Preferred Equity
0
0
0
0
0
Common Equity
4,319,252
3,385,362
4,297,620
3,363,833
3,251,624
Total Shareholders' Equity
4,319,252
3,385,362
4,297,620
3,363,833
3,251,624
Total Liabilities & Equity
$
26,116,703
$
19,465,080
$
26,184,247
$
19,662,324
$
19,250,498
MEMO: Interest-bearing Liabilities
$
14,064,472
$
11,250,447
$
14,186,569
$
11,443,742
$
11,428,364
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
Three Months Ended
December
December
September
June
March
Quarterly Share Data:
2020
2019
2020
2020
2020
Earnings Per Share:
Basic
$
0.71
$
0.62
$
0.80
$
0.44
$
0.40
Diluted
$
0.71
$
0.62
$
0.80
$
0.44
$
0.40
Common Dividend Declared Per Share
$
0.35
$
0.35
$
0.35
$
0.35
$
0.35
High Common Stock Price
$
32.86
$
40.70
$
30.07
$
33.12
$
39.07
Low Common Stock Price
$
21.19
$
36.09
$
20.57
$
21.52
$
19.67
Average Shares Outstanding (Net of Treasury Stock):
Basic
129,371,600
101,250,489
129,373,154
119,823,652
101,295,073
Diluted
129,479,390
101,537,640
129,454,966
119,887,823
101,399,181
Common Dividends
$
45,442
$
35,543
$
45,414
$
45,416
$
35,604
Dividend Payout Ratio
49.20
%
56.16
%
43.76
%
86.20
%
88.60
%
Year Ended
December
December
December
December
YTD Share Data:
2020
2019
2018
2017
Earnings Per Share:
Basic
$
2.40
$
2.55
$
2.46
$
1.54
Diluted
$
2.40
$
2.55
$
2.45
$
1.54
Common Dividend Declared Per Share
$
1.40
$
1.37
$
1.36
$
1.33
Average Shares Outstanding (Net of Treasury Stock):
Basic
120,017,247
101,585,599
104,015,976
97,502,633
Diluted
120,090,232
101,852,577
104,298,825
97,890,078
Common Dividends
$
171,876
$
139,508
$
141,610
$
131,755
Dividend Payout Ratio
59.47
%
53.64
%
55.24
%
87.50
%
December 31
December 31
September 30
June 30
March 31
EOP Share Data:
2020
2019
2020
2020
2020
Book Value Per Share
$
33.27
$
33.12
$
32.89
$
32.35
$
32.87
Tangible Book Value Per Share (non-GAAP) (1)
$
19.15
$
18.27
$
18.84
$
18.28
$
18.06
52-week High Common Stock Price
$
39.07
$
40.70
$
40.70
$
40.70
$
40.70
Date
01/02/20
11/05/19
11/05/19
11/05/19
11/05/19
52-week Low Common Stock Price
$
19.67
$
30.67
$
19.67
$
19.67
$
19.67
Date
03/23/20
01/02/19
03/23/20
03/23/20
03/23/20
EOP Shares Outstanding (Net of Treasury Stock):
129,188,507
101,553,671
129,762,348
129,755,395
101,723,600
Memorandum Items:
EOP Employees (full-time equivalent)
3,051
2,204
3,137
3,039
2,206
Note:
(1) Tangible Book Value Per Share:
Total Shareholders' Equity (GAAP)
$
4,297,620
$
3,363,833
$
4,267,441
$
4,197,855
$
3,343,702
Less: Total Intangibles
(1,823,771
)
(1,507,945
)
(1,823,129
)
(1,825,887
)
(1,506,368
)
Tangible Equity (non-GAAP)
$
2,473,849
$
1,855,888
$
2,444,312
$
2,371,968
$
1,837,334
÷ EOP Shares Outstanding (Net of Treasury Stock)
129,188,507
101,553,671
129,762,348
129,755,395
101,723,600
Tangible Book Value Per Share (non-GAAP)
$
19.15
$
18.27
$
18.84
$
18.28
$
18.06
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
Three Months Ended
December
December
September
June
March
Selected Yields and Net Interest Margin:
2020
2019
2020
2020
2020
Net Loans and Loans held for sale
4.18
%
4.65
%
4.17
%
4.21
%
4.60
%
Investment Securities
2.08
%
2.74
%
2.17
%
2.44
%
2.70
%
Money Market Investments/FFS
0.42
%
2.57
%
0.42
%
0.49
%
2.23
%
Average Earning Assets Yield
3.62
%
4.28
%
3.59
%
3.70
%
4.21
%
Interest-bearing Deposits
0.43
%
1.33
%
0.54
%
0.67
%
1.19
%
Short-term Borrowings
0.55
%
1.52
%
0.44
%
0.54
%
1.34
%
Long-term Borrowings
1.15
%
2.35
%
1.65
%
1.68
%
2.21
%
Average Liability Costs
0.48
%
1.50
%
0.66
%
0.82
%
1.37
%
Net Interest Spread
3.14
%
2.78
%
2.93
%
2.88
%
2.84
%
Net Interest Margin
3.33
%
3.29
%
3.18
%
3.18
%
3.30
%
Selected Financial Ratios:
Return on Average Assets
1.41
%
1.29
%
1.56
%
0.87
%
0.82
%
Return on Average Shareholders’ Equity
8.51
%
7.42
%
9.68
%
5.40
%
4.82
%
Return on Average Tangible Equity (non-GAAP) (1)
14.72
%
13.38
%
16.94
%
9.58
%
8.77
%
Efficiency Ratio
54.57
%
54.28
%
53.43
%
57.68
%
56.71
%
Note:
(1) Return on Average Tangible Equity:
(a) Net Income (GAAP)
$
92,370
$
63,285
$
103,784
$
52,686
$
40,183
(b) Number of days
92
92
92
91
91
Average Total Shareholders' Equity (GAAP)
$
4,319,252
$
3,385,362
$
4,263,111
$
3,921,289
$
3,350,652
Less: Average Total Intangibles
(1,822,577
)
(1,508,851
)
(1,826,057
)
(1,708,683
)
(1,507,272
)
(c) Average Tangible Equity (non-GAAP)
$
2,496,675
$
1,876,511
$
2,437,054
$
2,212,606
$
1,843,380
Return on Average Tangible Equity (non-GAAP)
[(a) / (b)] x 366 or 365 / (c)
14.72
%
13.38
%
16.94
%
9.58
%
8.77
%
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
Year Ended
December
December
December
December
2020
2019
2018
2017
Selected Yields and Net Interest Margin:
Net Loans and Loans held for sale
4.27
%
4.85
%
4.77
%
4.56
%
Investment Securities
2.33
%
2.86
%
2.73
%
2.63
%
Money Market Investments/FFS
0.65
%
2.91
%
2.29
%
1.23
%
Average Earning Assets Yield
3.75
%
4.47
%
4.36
%
4.07
%
Interest-bearing Deposits
0.67
%
1.41
%
0.97
%
0.54
%
Short-term Borrowings
0.70
%
1.67
%
1.00
%
0.51
%
Long-term Borrowings
1.76
%
2.56
%
2.34
%
1.80
%
Average Liability Costs
0.80
%
1.60
%
1.15
%
0.69
%
Net Interest Spread
2.95
%
2.87
%
3.21
%
3.38
%
Net Interest Margin
3.24
%
3.39
%
3.58
%
3.58
%
Selected Financial Ratios:
Return on Average Assets
1.20
%
1.34
%
1.36
%
0.85
%
Return on Average Shareholders’ Equity
7.30
%
7.80
%
7.84
%
5.09
%
Return on Average Tangible Equity (non-GAAP) (1)
12.90
%
14.26
%
14.65
%
9.18
%
Loans & Leases, net of unearned income / Deposit Ratio
85.46
%
98.99
%
95.91
%
94.08
%
Allowance for Loan & Lease Losses/ Loans & Leases, net of unearned income
1.34
%
0.56
%
0.57
%
0.59
%
Allowance for Credit Losses (2)/ Loans & Leases, net of unearned income
1.45
%
0.57
%
0.58
%
0.59
%
Nonaccrual Loans / Loans & Leases, net of unearned income
0.36
%
0.46
%
0.51
%
0.84
%
90-Day Past Due Loans/ Loans & Leases, net of unearned income
0.08
%
0.07
%
0.11
%
0.08
%
Non-performing Loans/ Loans & Leases, net of unearned income
0.75
%
0.96
%
1.06
%
1.30
%
Non-performing Assets/ Total Assets
0.59
%
0.75
%
0.83
%
1.01
%
Primary Capital Ratio
17.22
%
17.44
%
17.23
%
17.34
%
Shareholders' Equity Ratio
16.41
%
17.11
%
16.89
%
17.00
%
Price / Book Ratio
0.97
x
1.17
x
0.98
x
1.13
x
Price / Earnings Ratio
13.50
x
15.14
x
12.71
x
22.59
x
Efficiency Ratio
55.36
%
52.53
%
51.32
%
53.98
%
Notes:
(1) Return on Average Tangible Equity:
(a) Net Income (GAAP)
$
289,023
$
260,099
$
256,342
$
150,581
Average Total Shareholders' Equity (GAAP)
$
3,956,969
$
3,336,075
$
3,268,944
$
2,959,293
Less: Average Total Intangibles
(1,716,738
)
(1,511,501
)
(1,519,174
)
(1,319,109
)
(b) Average Tangible Equity (non-GAAP)
$
2,240,231
$
1,824,574
$
1,749,770
$
1,640,184
Return on Average Tangible Equity (non-GAAP) [(a) / (b)]
12.90
%
14.26
%
14.65
%
9.18
%
(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
December
December
September
June
March
2020
2019
2020
2020
2020
Mortgage Banking Segment Data:
Applications
$
2,284,532
$
896,000
$
3,460,687
$
2,189,008
$
2,054,000
Loans originated
1,979,284
777,312
2,071,717
1,692,297
904,949
Loans sold
$
2,065,400
$
800,400
$
1,898,539
$
1,636,063
$
793,392
Purchase money % of loans closed
49
%
66
%
48
%
42
%
49
%
Realized gain on sales and fees as a % of loans sold
4.10
%
2.84
%
4.26
%
2.49
%
2.82
%
Net interest income
$
2,918
$
547
$
2,740
$
2,246
$
949
Other income
73,082
19,946
110,900
71,013
21,190
Other expense
41,193
18,419
43,417
35,261
20,757
Income taxes
5,656
192
14,823
6,946
273
Net income
$
29,151
$
1,882
$
55,400
$
31,052
$
1,109
Year Ended
December
December
December
December
2020
2019
2018
2017
Mortgage Banking Segment Data:
Applications
$
9,988,227
$
4,330,000
$
3,912,000
$
3,337,000
Loans originated
6,648,247
2,941,722
2,619,454
2,333,895
Loans sold
$
6,393,394
$
2,804,451
$
2,608,242
$
2,350,813
Purchase money % of loans closed
47
%
72
%
83
%
82
%
Realized gain on sales and fees as a % of loans sold
3.63
%
2.86
%
2.72
%
2.80
%
Net interest income
$
8,853
$
916
$
1,315
$
(69
)
Other income
276,185
83,884
68,555
58,532
Other expense
140,628
72,288
72,632
62,072
Income taxes (benefit)
27,698
2,355
(505
)
(901
)
Net income (loss)
$
116,712
$
10,157
$
(2,257
)
$
(2,708
)
December 31
December 31
September 30
June 30
March 31
2020
2019
2020
2020
2020
Period End Mortgage Banking Segment Data:
Locked pipeline
$
989,640
$
143,465
$
1,398,898
$
889,275
$
739,322
Balance of loans serviced
$
3,587,953
$
0
$
3,551,157
$
3,552,292
$
0
Number of loans serviced
25,614
0
25,813
25,609
0
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
December 31
December 31
September 30
June 30
March 31
2020
2019
2020
2020
2020
Asset Quality Data:
EOP Non-Accrual Loans
$
62,718
$
63,209
$
71,312
$
67,669
$
64,036
EOP 90-Day Past Due Loans
13,832
9,494
12,583
11,150
7,051
EOP Restructured Loans (1)
55,657
58,369
68,381
77,436
61,470
Total EOP Non-performing Loans
$
132,207
$
131,072
$
152,276
$
156,255
$
132,557
EOP Other Real Estate Owned
22,595
15,515
25,696
29,947
15,849
Total EOP Non-performing Assets
$
154,802
$
146,587
$
177,972
$
186,202
$
148,406
Three Months Ended
December
December
September
June
March
2020
2019
2020
2020
2020
Allowance for Loan Losses:
Beginning Balance
$
225,812
$
77,098
$
215,121
$
154,923
$
77,057
Cumulative Effect Adjustment for CECL
0
0
0
0
57,442
225,812
77,098
215,121
154,923
134,499
Initial allowance for acquired PCD loans
0
0
0
18,635
0
Gross Charge-offs
(10,120
)
(9,704
)
(8,468
)
(5,634
)
(8,761
)
Recoveries
3,203
3,796
2,820
1,290
2,073
Net Charge-offs
(6,917
)
(5,908
)
(5,648
)
(4,344
)
(6,688
)
Provision for Loan & Lease Losses
16,935
5,867
16,339
45,907
27,112
Ending Balance
$
235,830
$
77,057
$
225,812
$
215,121
$
154,923
Reserve for lending-related commitments
19,250
1,733
15,960
11,946
7,742
Allowance for Credit Losses (2)
$
255,080
$
78,790
$
241,772
$
227,067
$
162,665
Year Ended
December
December
December
December
2020
2019
2018
2017
Allowance for Loan Losses:
Beginning Balance
$
77,057
$
76,703
$
76,627
$
72,771
Cumulative Effect Adjustment for CECL
57,442
0
0
0
134,499
76,703
76,627
72,771
Initial allowance for acquired PCD loans
18,635
0
0
0
Gross Charge-offs
(32,983
)
(29,110
)
(28,606
)
(32,863
)
Recoveries
9,386
8,151
6,669
8,313
Net Charge-offs
(23,597
)
(20,959
)
(21,937
)
(24,550
)
Provision for Loan & Lease Losses
106,293
21,313
22,013
28,406
Ending Balance
$
235,830
$
77,057
$
76,703
$
76,627
Reserve for lending-related commitments
19,250
1,733
1,389
679
Allowance for Credit Losses (2)
$
255,080
$
78,790
$
78,092
$
77,306
Notes:
(1)
Restructured loans with an aggregate balance of $41,185, $53,665, $59,916, $51,775 and $48,387 at December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019, respectively, were on nonaccrual status, but are not included in “EOP Non-Accrual Loans” above.
(2)
Includes allowances for loan losses and lending-related commitments.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210128005242/en/