United Bankshares, Inc. · NASDAQ:UBSI
United Bankshares — Q2 2021 Earnings Presentation
22 slides from United Bankshares's earnings presentation, Jul 23, 2021
Slide 1: Second Quarter 2021 Earnings Review
United Bankshares, Inc. Second Quarter 2021 Earnings Review July 23, 2021 1
Slide 2: Important Information: Forward Looking Statements
IMPORTANT INFORMATION 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. T
Slide 3: 2Q21 Highlights
2Q21 HIGHLIGHTS • Achieved quarterly Net Income of $94.8 million and quarterly Diluted Earnings Per Share of $0.73 • Generated Return on Average Assets of 1.41%, Return on Average Equity of 8.69%, and Return on Average Tangible Equity* of 14.95% • Announced the signing of a definitive merger agreeme
Slide 4: Earnings Summary
EARNINGS SUMMARY In thousands, except per share data Three Months Ended 2Q21 1Q21 2Q20 Interest & Fees Income $ 200,186 $ 205,657 $ 198,717 Interest Expense $ 13,669 $ 14,697 $ 28,115 Net Interest Income $ 186,517 $ 190,960 $ 170,602 Provision for Credit Losses $ (8,879) $ 143 $ 45,911 Noninterest I
Slide 5: Performance Ratios
PERFORMANCE RATIOS Strong profitability and expense control. 2Q20 was impacted by pre-tax merger-related expenses of $46.4 million and CECL ACL build. Return on Average Assets Efficiency Ratio 1.80% 70.00% 1.60% 60.00% 1.40% 50.00% 1.20% 1.00% 40.00% 0.80% 30.00% 0.60% 20.00% 0.40% 10.00% 0.20% 0.00
Slide 6: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN Average Yields Net Interest Income & Net Interest Margin 4.50% $200 4.00% $180 3.50% 4.00% $160 3.00% 3.50% $140 $120 2.50% 3.00% $100 2.00% 2.50% $80 1.50% $60 2.00% 1.00% $40 $20 0.50% 1.50% $0 0.00% 1.00% 2Q20 3Q20 4Q20 1Q21 2Q21 Loan PA Accretion 9.5 11.7 10.9 9.8
Slide 7: Loan Summary (Excludes Loans Held for Sale)
LOAN SUMMARY (EXCLUDES LOANS HELD FOR SALE) 2Q21 % of Total LQ Change Loans, EOP Owner Occupied CRE $ 1,590 9.4% $ (29) $20,000 Non Owner Occupied CRE $ 4,981 29.4% $ 69 $18,033 $17,968 $17,623 $17,400 $16,922 $18,000 Commercial $ 2,868 17.0% $ (33) $16,000 Paycheck Protection Program $ 790 4.7% $ (
Slide 8: Credit Quality
CREDIT QUALITY End of Period Balances (000s) 3/31/21 6/30/21 Non-Accrual Loans $48,985 $41,182 90-Day Past Due Loans $15,719 $14,135 Restructured Loans $51,529 $47,271 Total Non-performing Loans $116,233 $102,588 Other Real Estate Owned $18,690 $18,474 Total Non-performing Assets $134,923 $121,062 N
Slide 9: Select Loan Portfolio Details
SELECT LOAN PORTFOLIO DETAILS Diversified portfolio with strong underwriting practices and ongoing monitoring Portfolio % Total Portfolio Balance Loans ($ MM) • Total commercial deferrals have declined to $58 million (~0.4% of total commercial loans) as of 6/30/21. Commercial Retail CRE 1,288 7.6% •
Slide 10: Paycheck Protection Program (PPP)
PAYCHECK PROTECTION PROGRAM (PPP) PPP Loan Activity • Originated over 13,500 loans for $1.8 billion since PPP Fees Recognized, net of costs ($ millions)* program inception in 2020 2Q20 3Q20 4Q20 1Q21 2Q21 • Maintained an “all hands on deck” approach in $4.48 $4.80 $6.98 $11.31 $9.02 order to assist
Slide 11: Deposit Summary
DEPOSIT SUMMARY 2Q21 % of Total LQ Change Deposits, EOP Interest Bearing $ 13,284 61.6% $ (19) $25,000 $21,567 Non Interest Bearing $ 8,283 38.4% $ 190 $21,396 $19,894 $20,252 $20,585 Total Deposits $ 21,567 100.0% $ 171 $20,000 $15,000 • Strong core deposit base with 38% of deposits in Non Interest
Slide 12: Attractive Deposit Market Share Position
ATTRACTIVE DEPOSIT MARKET SHARE POSITION West Virginia Washington D.C. MSA • #2 in the state (second only to • #1 regional bank (#6 overall) with $9.5 Truist) with $5.3 billion in billion in deposits. deposits. • United has increased deposit market • United ranks #1 or #2 in deposit share in the D.C
Slide 13: Capital Ratios and Per Share Data
CAPITAL RATIOS AND PER SHARE DATA End of Period Ratios / Values 3/31/21 6/30/21** Common Equity Tier 1 Ratio 13.4% 13.7% Tier 1 Capital Ratio 13.4% 13.7% Total Risk Based Capital Ratio 15.7% 15.9% Leverage Ratio 10.4% 10.3% Total Equity to Total Assets 16.0% 16.2% *Tangible Equity to Tangible Assets
Slide 14: Mortgage Banking
MORTGAGE BANKING Three Months Ended (000s) 3/31/21 6/30/21 Applications $2,630,426 $2,029,846 Loans Originated $1,910,619 $1,658,128 Loans Sold $1,817,884 $1,877,772 Purchase Money % 43% 69% Realized Gain on Sale Margin 4.16% 2.90% Locked Pipeline (EOP) $979,842 $660,258 Loans Held for Sale (EOP) $8
Slide 15: 2021 Outlook
2021 OUTLOOK Select guidance is being provided for 2021. Our outlook may change if the expectations for these items vary from current expectations. • Loans & Deposits: Expect loan growth, excluding PPP loans and loans held for sale, to be in the low to mid single digits (annualized) in the second ha
Slide 16: Investment Thesis
INVESTMENT THESIS • Excellent franchise with long-term growth prospects • Current income opportunity with a dividend yield of 4.1% (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
Slide 17: ESXB Merger - Announced June 3, 2021
ESXB MERGER- ANNOUNCED JUNE 3, 2021 • Headquarters: Richmond, VA • Founded: 1926 ESXB Overview • Ticker: ESXB (NASDAQ) • Total Assets: $1.7 Billion (1) • Enhances density and scale in highly attractive markets throughout Virginia and Maryland • Adds to existing presence in Washington D.C. MSA Advanc
Slide 18: ESXB Merger - Pro Forma Franchise
ESXB MERGER- PRO FORMA FRANCHISE Pro Forma Franchise Footprint Total ~$29 Billion Assets Charleston Charlottesville Net ~$19 Billion Loans Lynchburg Total Asheville ~$23 Billion Deposits Greenville UBSI Tangible 223 Locations ~$2.7 Billion Equity ESXB 26 Locations Source: S&P Global Market Intellige
Slide 19: Successful Acquisitions Advancing Growth and Enhancing Franchise Value
SUCCESSFUL ACQUISITIONS ADVANCING GROWTH AND ENHANCING FRANCHISE VALUE Announced Closed 2Q 2021 1Q 2014 Closed Closed 2Q 2017 3Q 2011 Closed 2Q 2020 $35.0 Closed $30.0 2Q 2016 $28.7 $27.0 $26.2 $25.0 $19.7 Total Assets ($B) $19.3 $19.1 $20.0 $14.5 $15.0 $12.6 $12.3 $8.7 $10.0 $8.5 $8.4 $7.2 $5.0 $0.
Slide 20: Appendix
APPENDIX 20
Slide 21: Reconciliation of Non-GAAP Items
RECONCILIATION OF NON-GAAP ITEMS (dollars in thousands) 6/30/2020 9/30/2020 12/31/2020 3/31/2021 6/30/2021 (1) Return on Average Tangible Equity (A) Net Income (GAAP) $52,686 $103,784 $92,370 $106,898 $94,836 (B) Number of Days in the Quarter 91 92 92 90 91 Average Total Shareholders' Equity (GAAP)
Slide 22: Reconciliation of Non-GAAP Items (Cont.)
RECONCILIATION OF NON-GAAP ITEMS (CONT.) (dollars in thousands) 3/31/2021 6/30/2021 (2) Tangible Equity to Tangible Assets Total Assets (GAAP) $ 27,030,755 $ 27,190,926 Less: Total Intangibles (GAAP) (1,829,495) (1,834,030) Tangible Assets (non-GAAP) $ 25,201,260 $ 25,356,896 Total Shareholders' Equ