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United Bankshares, Inc. Announces Record Earnings for the Third Quarter of 2020

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United Bankshares, Inc. (NASDAQ: UBSI) ("United"), today reported earnings for the third quarter and the first nine months of 2020. Earnings for the third quarter of 2020 were a record $103.8 million, or $0.80 per diluted share, as compared to earnings of $66.0 million, or $0.65 per diluted share for the third quarter of 2019. Earnings for the first nine months of 2020 were $196.7 million, or $1.68 per diluted share, as compared to earnings of $196.8 million, or $1.93 per diluted share, for the first nine months of 2019.

Third quarter 2020 results produced an annualized return on average assets of 1.56%, an annualized return on average equity of 9.68% and an annualized return on average tangible equity of 16.94%, compared to annualized returns on average assets, average equity and average tangible equity of 1.33%, 7.79% and 14.16%, respectively, for the third quarter of 2019. For the nine months of 2020, United’s annualized return on average assets was 1.12%, the annualized return on average equity was 6.85% and the annualized return on average tangible equity was 12.19% compared to annualized returns on average assets, average equity and average tangible equity of 1.35%, 7.93% and 14.56%, respectively, for the first nine months of 2019.

Higher net income in the third quarter of 2020 compared to the third quarter 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 the increase in net income were merger-related expenses from the Carolina Financial acquisition, $10.4 million in prepayment penalties on the early payoff of three long-term FHLB advances and 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.

"Despite the continued uncertainty in the economic environment, we achieved record earnings during the third quarter of 2020 and successfully completed the Carolina Financial system conversion," stated Richard M. Adams, United’s Chairman of the Board and Chief Executive Officer. "United has continued to focus on meeting our customers’ needs during the COVID-19 pandemic by suspending residential property foreclosures, offering fee waivers, providing payment deferrals, and processing over 8,900 loans totaling approximately $1.3 billion under the government Paycheck Protection Program. Our credit quality and regulatory ratios remain strong and position us well to continue delivering for our customers and for continued growth."

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 third quarter and first nine months of 2020 reflected higher average balances, income, and expense, including merger-related expense of $5.7 million and $53.7 million for the third quarter and first nine months of 2020, respectively, as compared to the same time periods in 2019.

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2020 was $185.7 million, which was an increase of $43.7 million or 31% from the third quarter of 2019, primarily due to an increase in average earning assets from the Carolina Financial acquisition. 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 2020 increased $43.9 million or 31% from the third quarter of 2019 to $186.7 million. Average earning assets for the third quarter of 2020 increased $6.1 billion or 35% from the third quarter of 2019 due to a $4.6 billion or 33% increase in average net loans and loans held for sale, a $1.1 billion or 137% increase in average short-term investments and a $366.6 million or 14% increase in average investment securities. The net interest spread for the third quarter of 2020 increased 19 basis points from the third quarter of 2019 due to a 98 basis point decrease in the average cost of funds primarily due to the impact of declines in interest rates from the third quarter of 2019 partially offset by a 79 basis point decrease in the average yield on earning assets from the third quarter of 2019 due to the decline in market interest rates and the lower yield on Paycheck Protection Program ("PPP") loans. In addition, loan accretion on acquired loans was $11.7 million and $7.2 million for the third quarter of 2020 and 2019, respectively, an increase of $4.5 million, primarily driven by the accretion on loans acquired from the Carolina Financial acquisition. The net interest margin of 3.18% for the third quarter of 2020 was a decrease of 9 basis points from the net interest margin of 3.27% for the third quarter of 2019.

Net interest income for the first nine months of 2020 was $497.8 million, which was an increase of $61.1 million or 14% from the first nine months of 2019, primarily due to an increase in average earning assets from the Carolina Financial acquisition. Tax-equivalent net interest income for the first nine months of 2020 was $500.6 million, an increase of $61.1 million or 14% from the first nine months of 2019. Average earning assets for the first nine months of 2020 increased $3.6 billion or 21% from the first nine months of 2019 due to a $2.7 billion or 20% increase in average net loans and loans held for sale, a $632.0 million or 81% increase in average short-term investments and a $259.1 million or 10% increase in average investment securities. The net interest spread for the first nine months of 2020 decreased 2 basis points from the first nine months of 2019 due to a 73 basis point decrease in the average yield on earning assets partially offset by a 71 basis point decrease in the average cost of funds. Loan accretion on acquired loans was $30.8 million and $30.2 million for the first nine months of 2020 and 2019, respectively, an increase of $676 thousand. The net interest margin of 3.21% for the first nine months of 2020 was a decrease of 21 basis points from the net interest margin of 3.42% for the first nine months of 2019.

On a linked-quarter basis, net interest income for the third quarter of 2020 increased $15.1 million or 9% from the second quarter of 2020. United’s tax-equivalent net interest income for the third quarter of 2020 increased $15.1 million or 9% from the second quarter of 2020. Average earning assets increased $1.8 billion or 8% from the second quarter of 2020, due to the full quarter impact of assets acquired in the Carolina Financial acquisition and PPP loan activity. Average net loans and loans held for sale increased $1.3 billion or 7% and average short-term investments increased $419.0 million or 27%. The net interest spread for the third quarter of 2020 increased 5 basis points from the second quarter of 2020 due to a 16 basis point decrease in the average cost of funds partially offset by a 11 basis point decrease in the average yield on earning assets. Loan accretion on acquired loans increased $2.2 million from the second quarter of 2020 primarily driven by the accretion on loans acquired from Carolina Financial. The net interest margin remained flat at 3.18% for the third quarter of 2020 from the second quarter of 2020.

Credit Quality

United’s asset quality continues to be sound relative to the current economic environment. At September 30, 2020, nonperforming loans were $152.3 million, or 0.85% 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. Nonperforming loans of $37.9 million were added from the Carolina Financial acquisition. As of September 30, 2020, the allowance for loan losses was $225.8 million or 1.26% 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 $178.0 million, including OREO of $25.7 million at September 30, 2020, represented 0.69% of total assets as compared to nonperforming assets of $146.6 million or 0.75% at December 31, 2019.

For the quarters ended September 30, 2020 and 2019, the provision for credit losses was $16.8 million and $5.0 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 first nine months of 2020 was $89.8 million as compared to $15.4 million for the first nine months of 2019. In addition to the impact of reasonable and supportable forecasts on reserves, the increase 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 $5.6 million and $4.3 million for the third quarter of 2020 and 2019, respectively. Net charge-offs were $16.7 million and $15.1 million for the first nine months of 2020 and 2019, respectively. Annualized net charge-offs as a percentage of average loans & leases, net of unearned income were 0.12% and 0.13% for the third quarter and first nine months of 2020, respectively. On a linked-quarter basis, the provision for credit losses decreased $29.1 million due primarily to the provision expense recorded on the non-PCD loans acquired from Carolina Financial in the second quarter of 2020.

Noninterest Income

Noninterest income for the third quarter of 2020 was $135.5 million, which was an increase of $93.2 million or 221% from the third quarter of 2019. The change was driven by an $85.4 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 third quarter of 2020 also included $2.3 million in mortgage loan servicing income and a $2.2 million gain on the sale of a bank premises.

Noninterest income for the first nine months of 2020 was $260.7 million, which was an increase of $147.4 million or 130% from the first nine months of 2019. The increase was due mainly to an increase of $135.9 million in income from mortgage banking activities. Net gains on investment securities were $2.6 million for the first nine months of 2020 as compared to a gain of $66 thousand for the first nine months of 2019, an increase of approximately $2.5 million. Noninterest income for the first nine months of 2020 also included $3.9 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 third quarter of 2020 increased $47.1 million or 53% from the second quarter of 2020 primarily due to an increase of $41.2 million in income from mortgage banking activities, a $2.2 million gain on the sale of a bank premises, and an increase in fees from deposit services of $1.3 million.

Noninterest Expense

Noninterest expense for the third quarter of 2020 was $171.6 million, an increase of $75.5 million or 78% from the third quarter of 2019 due to additional employee and branch office related expenses of $44.9 million mainly from the Carolina Financial acquisition, $10.4 million in prepayment penalties on the early payoff of three long-term FHLB advances, a $3.2 million increase in mortgage loan servicing expense and impairment and an increase of $12.6 million in other expenses. In particular, employee compensation increased $38.1 million (some of which was due to higher employee incentives and commissions related to the increased mortgage banking production), employee benefits increased $4.6 million and net occupancy expenses increased $2.2 million. Mortgage loan servicing expense and impairment included a $400 thousand temporary impairment on mortgage servicing rights. Within other expense, the largest drivers of the increase included merger-related expenses associated with the Carolina Financial acquisition of $3.6 million, the expense for the reserve for unfunded commitments increased $4.0 million and the amortization of income tax credits increased $1.4 million. Partially offsetting the increases to noninterest expense was a decrease of $671 thousand in other real estate owned ("OREO") expense due to fewer declines in fair value of OREO properties.

Noninterest expense for the first nine months of 2020 was $422.1 million, an increase of $136.3 million or 48% from the first nine months of 2019. The largest drivers of the increase were additional employee and branch office related expenses of $82.5 million from the Carolina Financial acquisition as well as higher employee incentives and commissions expense mainly related to the higher mortgage banking production. Additionally, data processing expense increased $11.6 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 $5.6 million (including $1.1 million temporary impairment on mortgage servicing rights) and prepayment penalties on the early payoff of long-term FHLB advances increased $5.3 million to $10.4 million for the first nine months of 2020 compared to $5.1 million for the first nine months of 2019. Other expense also increased $28.3 million due to 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 $7.6 million, and an increase in the amortization of income tax credits of $3.8 million which reduces the effective tax rate. Partially offsetting the increases to noninterest expense were decreases of $1.2 million in OREO expense due to fewer declines in fair value of OREO properties.

On a linked-quarter basis, noninterest expense for the third quarter of 2020 increased $22.2 million or 15% from the second quarter of 2020 due primarily to the added employee and branch office related expenses of $16.9 million from the Carolina Financial acquisition as well as higher employee incentives and commissions expense mainly related to the higher mortgage banking production. Noninterest expense for the third quarter also included the $10.4 million in prepayment penalties on the early payoff of three long-term FHLB advances. Partially offsetting the increases to noninterest expense were decreases of $9.2 million in data processing expense due to the $9.7 million contract termination penalty recorded in the second quarter of 2020.

Income Tax Expense

For the third quarter and first nine months of 2020, income tax expense was $29.0 million and $49.9 million as compared to $17.0 million and $51.9 million, respectively, for the third quarter and first nine months of 2019. The increase in the third quarter of 2020 from the third quarter of 2019 was due to overall higher earnings and a higher effective tax rate while the decrease for the first nine months of 2020 from the first nine months of 2020 was due mainly to slightly lower earnings. On a linked-quarter basis, income tax expense increased $17.9 million also due to higher earnings. United’s effective tax rate was 21.8% for the third quarter of 2020, 20.5% for the third quarter of 2019 and 17.3% for the second quarter of 2020. For the first nine months of 2020 and 2019, United's effective tax rate was 20.2% and 20.9%, respectively, reflecting higher amortization of income tax credits in 2020.

Regulatory Capital

United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 15.2% at September 30, 2020 while its estimated Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 13.0%, 13.0% and 10.1%, respectively. The September 30, 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 September 30, 2020, United had consolidated assets of approximately $25.9 billion. United is the parent company of United Bank, the largest community bank headquartered in the D.C. Metro region. United Bank has 231 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 September 30, 2020 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, 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

Nine Months Ended

September

2020

September

2019

September

2020

September

2019

EARNINGS SUMMARY:

Interest income

$

210,269

$

190,351

$

589,468

$

578,693

Interest expense

24,605

48,433

91,684

142,054

Net interest income

185,664

141,918

497,784

436,639

Provision for credit losses

16,781

5,033

89,811

15,446

Noninterest income

135,468

42,224

260,664

113,242

Noninterest expense

171,593

96,134

422,100

285,754

Income before income taxes

132,758

82,975

246,537

248,681

Income taxes

28,974

17,010

49,884

51,867

Net income

$

103,784

$

65,965

$

196,653

$

196,814

PER COMMON SHARE:

Net income:

Basic

$

0.80

$

0.65

$

1.68

$

1.93

Diluted

0.80

0.65

1.68

1.93

Cash dividends

$

0.35

$

0.34

1.05

1.02

Book value

32.89

33.03

Closing market price

$

21.47

$

37.87

Common shares outstanding:

Actual at period end, net of treasury shares

129,762,348

101,555,696

Weighted average-basic

129,373,154

101,432,243

116,876,402

101,698,530

Weighted average-diluted

129,454,966

101,711,740

116,944,594

101,967,135

FINANCIAL RATIOS:

Return on average assets

1.56

%

1.33

%

1.12

%

1.35

%

Return on average shareholders’ equity

9.68

%

7.79

%

6.85

%

7.93

%

Return on average tangible equity (non-GAAP) (1)

16.94

%

14.16

%

12.19

%

14.56

%

Average equity to average assets

16.14

%

17.08

%

16.34

%

17.04

%

Net interest margin

3.18

%

3.27

%

3.21

%

3.42

%

September 30

2020

September 30

2019

December 31

2019

June 30

2020

PERIOD END BALANCES:

Assets

$

25,931,308

$

19,751,461

$

19,662,324

$

26,234,973

Earning assets

22,903,067

17,389,984

17,344,638

23,253,983

Loans & leases, net of unearned income

17,930,231

13,633,427

13,712,129

17,992,402

Loans held for sale

812,084

412,194

387,514

625,984

Investment securities

3,007,263

2,673,312

2,669,797

3,062,198

Total deposits

20,251,539

14,095,411

13,852,421

19,893,843

Shareholders’ equity

4,267,441

3,354,342

3,363,833

4,197,855

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

September

June

March

September

September

2020

2019

2020

2020

2020

2019

Interest & Loan Fees Income (GAAP)

$

210,269

$

190,351

$

198,717

$

180,482

$

589,468

$

578,693

Tax equivalent adjustment

1,046

914

1,018

782

2,846

2,884

Interest & Fees Income (FTE) (non-GAAP)

211,315

191,265

199,735

181,264

592,314

581,577

Interest Expense

24,605

48,433

28,115

38,964

91,684

142,054

Net Interest Income (FTE) (non-GAAP)

186,710

142,832

171,620

142,300

500,630

439,523

Provision for Credit Losses

16,781

5,033

45,911

27,119

89,811

15,446

Noninterest Income:

Fees from trust services

3,574

3,574

3,261

3,483

10,318

10,276

Fees from brokerage services

3,066

2,378

2,651

2,916

8,633

7,668

Fees from deposit services

9,320

8,702

8,055

7,957

25,332

25,219

Bankcard fees and merchant discounts

1,226

1,262

718

993

2,937

3,520

Other charges, commissions, and fees

715

568

610

518

1,843

1,665

Income from bank-owned life insurance

2,059

1,280

1,291

2,388

5,738

4,433

Income from mortgage banking activities

109,457

24,019

68,213

17,631

195,301

59,404

Mortgage loan servicing income

2,345

0

1,534

0

3,879

0

Net gain on the sale of bank premises

2,229

0

0

0

2,229

0

Net gains on investment securities

860

116

1,510

196

2,566

66

Other noninterest income

617

325

547

724

1,888

991

Total Noninterest Income

135,468

42,224

88,390

36,806

260,664

113,242

Noninterest Expense:

Employee compensation

84,455

46,313

68,664

44,541

197,660

129,563

Employee benefits

13,202

8,615

12,779

10,786

36,767

26,624

Net occupancy

10,944

8,698

10,318

9,062

30,324

26,116

Data processing

6,708

5,776

15,926

5,506

28,140

16,505

Amortization of intangibles

1,691

1,754

1,646

1,577

4,914

5,262

OREO expense

1,166

1,837

607

906

2,679

3,886

Equipment expense

5,616

3,698

5,004

3,845

14,465

10,688

FDIC insurance expense

2,700

465

2,782

2,400

7,882

7,065

Mortgage loan servicing expense and impairment

3,301

107

2,510

138

5,949

304

Prepayment penalties on FHLB borrowings

10,385

0

0

0

10,385

5,105

Other expenses

31,425

18,871

29,138

22,372

82,935

54,636

Total Noninterest Expense

171,593

96,134

149,374

101,133

422,100

285,754

Income Before Income Taxes (FTE) (non-GAAP)

133,804

83,889

64,725

50,854

249,383

251,565

Tax equivalent adjustment

1,046

914

1,018

782

2,846

2,884

Income Before Income Taxes (GAAP)

132,758

82,975

63,707

50,072

246,537

248,681

Taxes

28,974

17,010

11,021

9,889

49,884

51,867

Net Income

$

103,784

$

65,965

$

52,686

$

40,183

$

196,653

$

196,814

MEMO: Effective Tax Rate

21.82

%

20.50

%

17.30

%

19.75

%

20.23

%

20.86

%

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 2020

September 2019

September 30

December 31

September 30

Q-T-D Average

Q-T-D Average

2020

2019

2019

Cash & Cash Equivalents

$

2,227,314

$

1,012,682

$

1,656,533

$

837,493

$

976,154

Securities Available for Sale

2,751,913

2,428,288

2,777,802

2,437,296

2,452,097

Less: Allowance for credit losses

0

0

0

0

0

Net available for sale securities

2,751,913

2,428,288

2,777,802

2,437,296

2,452,097

Securities Held to Maturity

1,235

3,911

1,235

1,446

1,471

Less: Allowance for credit losses

(14

)

0

(21

)

0

0

Net held to maturity securities

1,221

3,911

1,214

1,446

1,471

Equity Securities

10,033

8,992

10,255

8,894

8,914

Other Investment Securities

253,302

208,632

217,992

222,161

210,830

Total Securities

3,016,469

2,649,823

3,007,263

2,669,797

2,673,312

Total Cash and Securities

5,243,783

3,662,505

4,663,796

3,507,290

3,649,466

Loans held for sale

668,874

358,525

812,084

387,514

412,194

Commercial Loans & Leases

13,224,385

9,453,569

13,377,091

9,399,170

9,452,464

Mortgage Loans

3,542,829

3,025,122

3,345,048

3,107,721

3,035,751

Consumer Loans

1,258,803

1,119,481

1,245,381

1,206,657

1,149,023

Gross Loans

18,026,017

13,598,172

17,967,520

13,713,548

13,637,238

Unearned income

(39,391

)

(4,410

)

(37,289

)

(1,419

)

(3,811

)

Loans & Leases, net of unearned income

17,986,626

13,593,762

17,930,231

13,712,129

13,633,427

Allowance for Loan & Leases Losses

(214,870

)

(76,408

)

(225,812

)

(77,057

)

(77,098

)

Net Loans

17,771,756

13,517,354

17,704,419

13,635,072

13,556,329

Mortgage Servicing Rights

20,462

0

20,413

0

0

Goodwill

1,795,682

1,478,014

1,794,886

1,478,014

1,478,014

Other Intangibles

30,375

32,639

28,243

29,931

31,685

Operating Lease Right-of-Use Asset

70,920

61,740

72,789

57,783

60,318

Other Real Estate Owned

28,592

16,475

25,696

15,515

18,367

Other Assets

785,179

539,356

808,982

551,205

545,088

Total Assets

$

26,415,623

$

19,666,608

$

25,931,308

$

19,662,324

$

19,751,461

MEMO: Interest-earning Assets

$

23,424,890

$

17,356,204

$

22,903,067

$

17,344,638

$

17,389,984

Interest-bearing Deposits

$

12,951,290

$

9,692,296

$

12,946,792

$

9,231,059

$

9,523,289

Noninterest-bearing Deposits

7,178,769

4,440,399

7,304,747

4,621,362

4,572,122

Total Deposits

20,130,059

14,132,695

20,251,539

13,852,421

14,095,411

Short-term Borrowings

156,502

120,155

148,357

374,654

329,966

Long-term Borrowings

1,616,647

1,870,944

924,674

1,838,029

1,708,297

Total Borrowings

1,773,149

1,991,099

1,073,031

2,212,683

2,038,263

Operating Lease Liability

74,640

65,430

76,604

61,342

63,987

Other Liabilities

174,664

117,947

262,693

172,045

199,458

Total Liabilities

22,152,512

16,307,171

21,663,867

16,298,491

16,397,119

Preferred Equity

0

0

0

0

0

Common Equity

4,263,111

3,359,437

4,267,441

3,363,833

3,354,342

Total Shareholders' Equity

4,263,111

3,359,437

4,267,441

3,363,833

3,354,342

Total Liabilities & Equity

$

26,415,623

$

19,666,608

$

25,931,308

$

19,662,324

$

19,751,461

MEMO: Interest-bearing Liabilities

$

14,724,439

$

11,683,395

$

14,019,823

$

11,443,742

$

11,561,552

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

Quarterly/Year-to-Date Share Data:

2020

2019

2020

2020

2020

2019

Earnings Per Share:

Basic

$

0.80

$

0.65

$

0.44

$

0.40

$

1.68

$

1.93

Diluted

$

0.80

$

0.65

$

0.44

$

0.40

$

1.68

$

1.93

Common Dividend Declared Per Share:

$

0.35

$

0.34

$

0.35

$

0.35

$

1.05

$

1.02

High Common Stock Price

$

30.07

$

39.98

$

33.12

$

39.07

$

39.07

$

39.98

Low Common Stock Price

$

20.57

$

34.77

$

21.52

$

19.67

$

19.67

$

30.67

Average Shares Outstanding (Net of Treasury Stock):

Basic

129,373,154

101,432,243

119,823,652

101,295,073

116,876,402

101,698,530

Diluted

129,454,966

101,711,740

119,887,823

101,399,181

116,944,594

101,967,135

Memorandum Items:

Common Dividends

$

45,414

$

34,518

$

45,416

$

35,604

$

126,434

$

103,965

Dividend Payout Ratio

43.76

%

52.33

%

86.20

%

88.60

%

64.29

%

52.82

%

September 30

September 30

June 30

March 31

EOP Share Data:

2020

2019

2020

2020

Book Value Per Share

$

32.89

$

33.03

$

32.35

$

32.87

Tangible Book Value Per Share (non-GAAP) (1)

$

18.84

$

18.16

$

18.28

$

18.06

52-week High Common Stock Price

$

40.70

$

39.98

$

40.70

$

40.70

Date

11/05/19

09/13/19

11/05/19

11/05/19

52-week Low Common Stock Price

$

19.67

$

30.67

$

19.67

$

19.67

Date

03/23/20

01/02/19

03/23/20

03/23/20

EOP Shares Outstanding (Net of Treasury Stock):

129,762,348

101,555,696

129,755,395

101,723,600

Memorandum Items:

EOP Employees (full-time equivalent)

3,137

2,231

3,039

2,206

Note:

(1) Tangible Book Value Per Share:

Total Shareholders' Equity (GAAP)

$

4,267,441

$

3,354,342

$

4,197,855

$

3,343,702

Less: Total Intangibles

(1,823,129

)

(1,509,699

)

(1,825,887

)

(1,506.368

)

Tangible Equity (non-GAAP)

$

2,444,312

$

1,844,643

$

2,371,968

$

1,837,334

÷ EOP Shares Outstanding (Net of Treasury Stock)

129,762,348

101,555,696

129,755,395

101,723,600

Tangible Book Value Per Share (non-GAAP)

$

18.84

$

18.16

$

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

Nine Months Ended

September

September

June

March

September

September

Selected Yields and Net Interest Margin:

2020

2019

2020

2020

2020

2019

Net Loans and Loans held for sale

4.17

%

4.75

%

4.21

%

4.60

%

4.30

%

4.92

%

Investment Securities

2.17

%

2.90

%

2.44

%

2.70

%

2.42

%

2.91

%

Money Market Investments/FFS

0.42

%

2.98

%

0.49

%

2.23

%

0.75

%

2.99

%

Average Earning Assets Yield

3.59

%

4.38

%

3.70

%

4.21

%

3.80

%

4.53

%

Interest-bearing Deposits

0.54

%

1.49

%

0.67

%

1.19

%

0.76

%

1.44

%

Short-term Borrowings

0.44

%

1.78

%

0.54

%

1.34

%

0.75

%

1.72

%

Long-term Borrowings

1.65

%

2.44

%

1.68

%

2.21

%

1.86

%

2.63

%

Average Liability Costs

0.66

%

1.64

%

0.82

%

1.37

%

0.92

%

1.63

%

Net Interest Spread

2.93

%

2.74

%

2.88

%

2.84

%

2.88

%

2.90

%

Net Interest Margin

3.18

%

3.27

%

3.18

%

3.30

%

3.21

%

3.42

%

Selected Financial Ratios:

Return on Average Assets

1.56

%

1.33

%

0.87

%

0.82

%

1.12

%

1.35

%

Return on Average Shareholders’ Equity

9.68

%

7.79

%

5.40

%

4.82

%

6.85

%

7.93

%

Return on Average Tangible Equity (non-GAAP) (1)

16.94

%

14.16

%

9.58

%

8.77

%

12.19

%

14.56

%

Efficiency Ratio

53.43

%

52.21

%

57.68

%

56.71

%

55.65

%

51.97

%

Note:

(1) Return on Average Tangible Equity:

(a) Net Income (GAAP)

$

103,784

$

65,965

$

52,686

$

40,183

$

196,653

$

196,814

(b) Number of days

92

92

91

91

274

273

Average Total Shareholders' Equity (GAAP)

$

4,263,111

$

3,359,437

$

3,921,289

$

3,350,652

$

3,835,617

$

3,319,420

Less: Average Total Intangibles

(1,826,057

)

(1,510,653

)

(1,708,683

)

(1,507,272

)

(1,681,202

)

(1,512,394

)

(c) Average Tangible Equity (non-GAAP)

$

2,437,054

$

1,848,784

$

2,212,606

$

1,843,380

$

2,154,415

$

1,807,026

Return on Average Tangible Equity (non-GAAP)

[(a) / (b)] x 366 or 365 / (c)

16.94

%

14.16

%

9.58

%

8.77

%

12.19

%

14.56

%

September 30

September 30

December 31

June 30

March 31

2020

2019

2019

2020

2020

Loan / Deposit Ratio

88.54

%

96.72

%

98.99

%

90.44

%

98.87

%

Allowance for Loan & Lease Losses/ Loans & Leases, net of unearned income

1.26

%

0.57

%

0.56

%

1.20

%

1.12

%

Allowance for Credit Losses (1)/ Loans & Leases, net of unearned income

1.35

%

0.58

%

0.57

%

1.26

%

1.17

%

Nonaccrual Loans / Loans & Leases, net of unearned income

0.40

%

0.51

%

0.46

%

0.38

%

0.46

%

90-Day Past Due Loans/ Loans & Leases, net of unearned income

0.07

%

0.07

%

0.07

%

0.06

%

0.05

%

Non-performing Loans/ Loans & Leases, net of unearned income

0.85

%

1.03

%

0.96

%

0.87

%

0.96

%

Non-performing Assets/ Total Assets

0.69

%

0.80

%

0.75

%

0.71

%

0.73

%

Primary Capital Ratio

17.23

%

17.31

%

17.44

%

16.72

%

17.08

%

Shareholders' Equity Ratio

16.46

%

16.98

%

17.11

%

16.00

%

16.41

%

Price / Book Ratio

0.65

x

1.15

x

1.17

x

0.85

x

0.70

x

Price / Earnings Ratio

6.70

x

14.60

x

15.14

x

15.74

x

14.56

x

Note:

(1) 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 and Number of Loans Serviced)

Three Months Ended

Nine Months Ended

September

September

June

March

September

September

Mortgage Banking Segment Data:

2020

2019

2020

2020

2020

2019

Applications

$

3,460,687

$

1,290,000

$

2,189,008

$

2,054,000

$

7,703,695

$

3,434,000

Loans originated

2,071,717

907,896

1,692,297

904,949

4,668,963

2,164,410

Loans sold

$

1,898,539

$

865,873

$

1,636,063

$

793,392

$

4,327,994

$

2,004,051

Purchase money % of loans closed

48

%

63

%

42

%

49

%

46

%

74

%

Realized gain on sales and fees as a % of loans sold

4.26

%

2.74

%

2.49

%

2.82

%

3.30

%

2.87

%

Net interest income

$

2,740

$

203

$

2,246

$

949

$

5,935

$

369

Other income

110,900

24,331

71,013

21,190

203,103

63,938

Other expense

43,417

20,256

35,261

20,757

99,435

53,869

Income taxes

14,823

877

6,946

273

22,042

2,163

Net income

$

55,400

$

3,401

$

31,052

$

1,109

$

87,561

$

8,275

September

September

December

June

March

Period End Mortgage Banking Segment Data:

2020

2019

2019

2020

2020

Locked pipeline

$

1,398,898

$

262,313

$

143,465

$

889,275

$

739,322

Balance of loans serviced

$

3,551,157

$

0

$

0

$

3,552,292

$

0

Number of loans serviced

25,813

0

0

25,609

0

September

September

December

June

March

Asset Quality Data:

2020

2019

2019

2020

2020

EOP Non-Accrual Loans

$

71,312

$

69,884

$

63,209

$

67,669

$

64,036

EOP 90-Day Past Due Loans

12,583

9,840

9,494

11,150

7,051

EOP Restructured Loans (1)

68,381

60,559

58,369

77,436

61,470

Total EOP Non-performing Loans

$

152,276

$

140,283

$

131,072

$

156,255

$

132,557

EOP Other Real Estate Owned

25,696

18,367

15,515

29,947

15,849

Total EOP Non-performing Assets

$

177,972

$

158,650

$

146,587

$

186,202

$

148,406

Three Months Ended

Nine Months Ended

September

September

June

March

September

September

Allowance for Loan Losses:

2020

2019

2020

2020

2020

2019

Beginning Balance

$

215,121

$

76,400

$

154,923

$

77,057

$

77,057

$

76,703

Cumulative Effect Adjustment for CECL

0

0

0

57,442

57,442

0

215,121

76,400

154,923

134,499

134,499

76,703

Initial allowance for acquired PCD loans

0

0

18,635

0

18,635

0

Gross Charge-offs

(8,468

)

(5,404

)

(5,634

)

(8,761

)

(22,863

)

(19,406

)

Recoveries

2,820

1,069

1,290

2,073

6,183

4,355

Net Charge-offs

(5,648

)

(4,335

)

(4,344

)

(6,688

)

(16,680

)

(15,051

)

Provision for Loan & Lease Losses

16,339

5,033

45,907

27,112

89,358

15,446

Ending Balance

225,812

77,098

$

215,121

$

154,923

225,812

77,098

Reserve for lending-related commitments

15,960

1,776

11,946

7,742

15,960

1,776

Allowance for Credit Losses (2)

$

241,772

$

78,874

$

227,067

$

162,665

$

241,772

$

78,874

Notes:

(1) Restructured loans with an aggregate balance of $53,665, $50,757, $59,916, $51,775 and $48,387 at September 30, 2020, September 30, 2019 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/20201023005064/en/

Contacts

W. Mark Tatterson
Chief Financial Officer
(800) 445-1347 ext. 8716