United Bankshares, Inc. · NASDAQ:UBSI
United Bankshares — Q4 2020 Earnings Presentation
24 slides from United Bankshares's earnings presentation, Jan 28, 2021
Slide 1: Fourth Quarter & Fiscal Year 2020 Earnings Review
United Bankshares, Inc. Fourth Quarter & Fiscal Year 2020 Earnings Review January 28, 2021 Exhibit 99.2
Slide 2: Forward-Looking Statements
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 s
Slide 3: 2020 Highlights
2020 HIGHLIGHTS Achieved record Net Income of $289.0 million for FY 2020. Diluted Earnings Per Share were $2.40 for the year Reported record mortgage banking revenue, net income, and volume Generated Return on Average Assets of 1.20%, Return on Average Equity of 7.30%, and Return on Average Tangible
Slide 4: Merger Update - Carolina Financial
MERGER UPDATE - CAROLINA FINANCIAL Closed the merger with Carolina Financial (CARO) on May 1, 2020 Continues United’s strategic expansion in the Carolinas with a financially compelling acquisition of a high-performing bank CARO had total assets of ~$5.0 billion, portfolio loans of ~$3.3 billion, and
Slide 5: Earnings Summary
EARNINGS SUMMARY Linked-Quarter (LQ) Net Income was $92.4 million in 4Q20 compared to $103.8 million in 3Q20, with diluted EPS of $0.71 in 4Q20 compared to $0.80 in 3Q20. Net Interest Income increased $6.3 million compared to 3Q20 due mainly to a decrease in interest expense of $7.7 million and an i
Slide 6: Performance Ratios
PERFORMANCE RATIOS Strong profitability and expense control. FY 2017 was impacted by $26.8 million in pre-tax merger related expenses and $37.7 million in additional tax expense related to the Tax Act. FY 2020 was impacted by COVID-19, CECL ACL build, pre-tax merger-related expenses of $54.2 million
Slide 7: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN Reported Net Interest Margin increased from 3.18% to 3.33% LQ. Linked-quarter Net Interest Income increase was driven by lower funding costs and an increase in PPP loan fee income of $2.2 million. Total remaining PPP fee income (net of costs) is $22.6 million as of 12/
Slide 8: Loan Summary
LOAN SUMMARY (excludes Loans Held for Sale) Linked-Quarter loan balances decreased $345 million driven primarily by declines in Residential Real Estate loans and Paycheck Protection Program loans. Non Owner Occupied CRE to Total Risk Based Capital was 231% at 4Q20. CRE portfolio remains diversified
Slide 9: Credit Quality
CREDIT QUALITY End of Period Balances (000s) 9/30/20 12/31/20 Non-Accrual Loans $71,312 $62,718 90-Day Past Due Loans $12,583 $13,832 Restructured Loans $68,381 $55,657 Total Non-performing Loans $152,276 $132,207 Other Real Estate Owned $25,696 $22,595 Total Non-performing Assets $177,972 $154,802
Slide 10: Commercial Loan Portfolio Details
COMMERCIAL LOAN PORTFOLIO DETAILS Diversified portfolio with strong underwriting practices and ongoing monitoring Portfolio Portfolio Balance ($ MM) % Total Loans % Deferring 12/31/20 % Deferring 10/15/20 % Deferring 6/30/20 Retail CRE 1,295 7.3% 2.3% 15.3% 50.8% Hotels 716 4.1% 18.0% 35.8% 70.9% He
Slide 11: Consumer Loan Portfolio Details
CONSUMER LOAN PORTFOLIO DETAILS Solid consumer portfolio with product & geographic diversification Consumer deferrals total $74 million, or 1.7% of total consumer loans as of 12/31/20 (down from $285 million, or 6.0% of total consumer loans at 6/30/20) Portfolio Portfolio Balance ($ MM) % Total Loan
Slide 12: Paycheck Protection Program (PPP)
PAYCHECK PROTECTION PROGRAM (PPP) Originated over 8,900 loans for $1.3 billion Maintained an “all hands on deck” approach in order to assist as many customers as possible Outstandings declined $104 million in 4Q20, driven by forgiveness from the SBA Remaining outstandings at 12/31/20: Over 8,700 loa
Slide 13: Deposit Summary
DEPOSIT SUMMARY Strong core deposit base with 36% of deposits in Non Interest Bearing accounts. LQ deposits increased $333 million. Enviable deposit franchise with an attractive mix of both high growth MSA’s and stable, rural markets with a dominant market share position. $ in millions Market share
Slide 14: Attractive Deposit Market Share Position
ATTRACTIVE DEPOSIT MARKET SHARE POSITION West Virginia #2 in the state (second only to Truist) with $5.3 billion in deposits. United ranks #1 or #2 in deposit market share within its top 5 largest markets in the state. North Carolina #17 in the state with $1.9 billion. Select MSAs: #14 in Charlotte
Slide 15: Capital Ratios & Per Share Data
CAPITAL RATIOS & PER SHARE DATA End of Period Ratios / Values 9/30/20 12/31/20** Common Equity Tier 1 Ratio 13.0% 13.3% Tier 1 Capital Ratio 13.0% 13.3% Total Risk Based Capital Ratio 15.2% 15.6% Leverage Ratio 10.1% 10.3% Total Equity to Total Assets 16.5% 16.4% *Tangible Equity to Tangible Assets
Slide 16: Mortgage Banking
MORTGAGE BANKING 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 Mor
Slide 17: 2021 Outlook
2021 OUTLOOK Loans & Deposits: Expect the majority of PPP loan forgiveness to occur in the first half of 2021. Expect loan growth, excluding PPP forgiveness and new PPP originations, to be in the low to mid single digits. Expect further decreases in the cost of interest bearing deposits in 2021. Mor
Slide 18: Investment Thesis
INVESTMENT THESIS Excellent franchise with long-term growth prospects Current income opportunity with a dividend yield of 4.2% (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
Slide 19: Appendix
Appendix ‘@ BANKSHARES,INC. 19
Slide 20: Safe, Sound, and Secure Since 1839
“SAFE, SOUND, AND SECURE SINCE 1839” Source: Federal Reserve BHCPR. NET CHARGEOFFS/AVERAGE LOANS Outperformed peers during the Great Recession Conservative credit culture and experienced management team remain intact United has increased dividends to shareholders for 47 consecutive years Capital lev
Slide 21: 2020 COVID-19 Response
2020 COVID-19 RESPONSE Branches Operating on a drive-up and walk-up basis, or by appointment Employees Majority working remotely - 85% of non-retail staff has remote capabilities Continued to pay 100% of regular salaries for all employees All standalone locations remain open Paid bonuses to certain
Slide 22: CARO Merger – Additional Information
CARO Merger – Additional Information Category 1Q20 2Q20 3Q20 4Q20 YTD Provision --- $29.0 --- --- $29.0 Employee Comp. --- $0.4 $2.1 --- $2.5 Data Processing --- $9.7 --- --- $9.7 Other Expense $1.6 $7.3 $3.6 $0.5 $13.0 Total $1.6 $46.4 $5.7 $0.5 $54.2 Merger-Related Expense Detail Other Information
Slide 23: Reconciliation of non-GAAP Items
Reconciliation of non-GAAP Items January 2021 (dollars in thousands) 2016 2017 2018 2019 2020 (1) Return on Average Tangible Equity Net Income (GAAP) $147,083 $150,581 $256,342 $260,099 $289,023 Average Total Shareholders' Equity (GAAP) $1,918,887 $2,959,293 $3,268,944 $3,336,075 $3,956,969 Less: Av
Slide 24: Reconciliation of non-GAAP Items (cont.)
Reconciliation of non-GAAP Items (cont.) January 2021 (dollars in thousands) 9/30/2020 12/31/2020 (2) Tangible Equity to Tangible Assets Total Assets (GAAP) $ 25,931,308 $ 26,184,247 Less: Total Intangibles (GAAP) (1,823,129) (1,823,771) Tangible Assets (non-GAAP) $ 24,108,179 $ 24,360,476 Total Sha