United Bankshares, Inc. · NASDAQ:UBSI
United Bankshares — Q3 2020 Earnings Presentation
24 slides from United Bankshares's earnings presentation, Oct 23, 2020
Slide 1: Third Quarter 2020 Earnings Review
United Bankshares, Inc. Third Quarter 2020 Earnings Review October 23, 2020 1
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: 3Q20 Highlights
3Q20 HIGHLIGHTS • Achieved record quarterly Net Income of $103.8 million and record quarterly Diluted Earnings Per Share of $0.80 • Reported record mortgage banking revenue, net income, and volume • Generated Return on Average Assets of 1.56%, Return on Average Equity of 9.68%, and Return on Average
Slide 4: Merger Update - Carolina Financial
MERGER UPDATE - CAROLINA FINANCIAL Merger Update New Franchise Footprint • Closed the merger with Carolina Financial (CARO) on May 1, 2020 • Continues UBSI’s strategic expansion in the Carolinas with a financially compelling acquisition of a high-performing bank • CARO had total assets of ~$5.0 bill
Slide 5: Earnings Summary
EARNINGS SUMMARY In thousands, except per share data Three Months Ended 3Q20 2Q20 3Q19 Interest & Fees Income $ 210,269 $ 198,717 $ 190,351 Interest Expense $ 24,605 $ 28,115 $ 48,433 Net Interest Income $ 185,664 $ 170,602 $ 141,918 Provision for Loan Losses $ 16,781 $ 45,911 $ 5,033 Noninterest In
Slide 6: Performance Ratios
PERFORMANCE RATIOS Strong profitability and expense control. 1Q20 was impacted by COVID-19 and CECL ACL build. 2Q20 was impacted by pre-tax merger- related expenses of $46.4 million and additional ACL build. 3Q20 included $5.7 million of pre-tax merger-related expenses and breakage fees of $10.4 mil
Slide 7: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN Average Yields 5.00% • Reported Net Interest Margin of 4.50% 3.18% was flat compared to 2Q20. 4.00% 3.50% • Linked-quarter Net Interest Income 3.00% increase was driven by the full 2.50% 2.00% quarter impact of assets acquired 1.50% from CARO and PPP loan activity. 1.0
Slide 8: Loan Summary
LOAN SUMMARY (excludes Loans Held for Sale) Loans, EOP 3Q20 % of Total LQ Change $20,000 Owner Occupied CRE $ 1,616 9.0% $ (9) $18,033 $17,968 $18,000 Non Owner Occupied CRE $ 5,030 28.0% $ 25 $16,000 Commercial $ 2,925 16.3% $ 76 $13,637 $13,714 $13,856 $14,000 Paycheck Protection Program $ 1,286 7
Slide 9: Credit Quality
CREDIT QUALITY End of Period Balances (000s) 6/30/20 9/30/20 Non-Accrual Loans $67,669 $71,312 90-Day Past Due Loans $11,150 $12,583 Restructured Loans $77,436 $68,381 Total Non-performing Loans $156,255 $152,276 Other Real Estate Owned $29,947 $25,696 Total Non-performing Assets $186,202 $177,972 N
Slide 10: Commercial Loan Portfolio Details
COMMERCIAL LOAN PORTFOLIO DETAILS Diversified portfolio with strong underwriting practices and ongoing monitoring % % % % Portfolio Balance Total Deferring Deferring Deferring ($ MM) Loans 10/15/20 9/04/20 6/30/20 Select Portfolios Retail CRE 1,312 7.3% 15.3% 18.3% 50.8% Hotels 668 3.7% 35.8% 51.6%
Slide 11: Consumer Loan Portfolio Details
CONSUMER LOAN PORTFOLIO DETAILS Balance % Total Weighted % Deferring % Deferring % Deferring Portfolio ($ MM) Loans Average 10/15/20 9/04/20 6/30/20 FICO Residential 2,791 15.5% 751 2.4% 2.8% 6.8% Mortgage Indirect Auto 1,161 6.5% 750 1.7% 2.0% 6.1% Home Equity 467 2.6% 741 0.6% 0.7% 1.7% Other Cons
Slide 12: Paycheck Protection Program (PPP)
PAYCHECK PROTECTION PROGRAM (PPP) PPP Loan Activity PPP Funding by Industry Balance % of PPP ▪ Over 8,900 notes outstanding for $1.29 billion Industry Notes ($MM) Portfolio ▪ “All hands on deck” approach in order to assist as Real Estate & Construction 1,481 219.1 17% many customers as possible Prof
Slide 13: Deposit Summary
DEPOSIT SUMMARY Deposits, EOP 3Q20 % of Total LQ Change Interest Bearing $ 12,947 63.9% $ 150 $25,000 Non Interest Bearing $ 7,305 36.1% $ 208 $19,894 $20,252 Total Deposits $ 20,252 100.0% $ 358 $20,000 $14,095 $14,014 ▪ Strong core deposit base with 36% of deposits in $15,000 $13,852 Non Interest
Slide 14: Attractive Deposit Market Share Position
ATTRACTIVE DEPOSIT MARKET SHARE POSITION West Virginia Washington D.C. MSA • #2 in the state (second only to • #1 community bank (#6 overall) with $9.5 Truist) with $5.3 billion in billion in deposits. deposits. • United has increased deposit market share • United ranks #1 or #2 in deposit in the D.
Slide 15: Capital Ratios & Per Share Data
CAPITAL RATIOS & PER SHARE DATA End of Period Ratios / Values 6/30/20 9/30/20** Common Equity Tier 1 Ratio 12.6% 13.0% Tier 1 Capital Ratio 12.6% 13.0% Total Risk Based Capital Ratio 14.8% 15.2% Leverage Ratio 10.7% 10.1% Total Equity to Total Assets 16.0% 16.5% *Tangible Equity to Tangible Assets (
Slide 16: Mortgage Banking
MORTGAGE BANKING Three Months Ended First Nine Months (000s) 6/30/20 9/30/20 2019 2020 Applications $2,189,008 $3,460,687 $3,434,000 $7,703,695 Loans Originated $1,692,297 $2,071,717 $2,164,410 $4,668,963 Loans Sold $1,636,063 $1,898,539 $2,004,051 $4,327,994 Purchase Money % 42% 48% 74% 46% Realize
Slide 17: 2020 Outlook
2020 OUTLOOK Select guidance is being provided for the fourth quarter of 2020. Our outlook may change if the expectations for these items vary from current expectations. • Loans & Deposits: Expect majority of PPP loan forgiveness to occur in 1Q21. • Net Interest Margin / Net Interest Income: Expect
Slide 18: UBSI Investment Thesis
UBSI INVESTMENT THESIS • Excellent franchise with long-term growth prospects • Current income opportunity with a dividend yield of 5.6% (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 ins
Slide 19: Appendix
Appendix HUNITED | BANKSHARES, INC.
Slide 20: Safe, Sound, and Secure Since 1839
“SAFE, SOUND, AND SECURE SINCE 1839” 1.58% NET CHARGEOFFS/AVERAGE LOANS 1.45% 0.93% 0.77% 0.64% 0.67% 0.29% 0.30% 0.31% 0.27% 0.27% 0.24% 0.22% 0.21% 0.35% 0.24% 0.29% 0.29% 0.24% 0.25% 0.28% 0.13% 0.16% 0.20% 0.16% 0.15% FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 UBSI Peer Sou
Slide 21: COVID-19 Response
COVID-19 RESPONSE • Supporting customer needs with our balance sheet • YTD loan production of over $3.7 billion (excluding mortgage company production) • Supporting customer needs through deferrals and modifications • ~2,500 commercial loans totaling $3.0 billion ($0.8 billion currently in deferral
Slide 22: CARO Merger - Additional Information
CARO Merger – Additional Information Merger-Related Expense Detail Category 1Q20 2Q20 3Q20 YTD Provision --- $28.9 --- $28.9 Employee Comp --- $0.5 $2.1 $2.6 Data Processing $0.5 $11.0 $1.2 $12.7 Other Expense $1.1 $6.0 $2.4 $9.5 Total $1.6 $46.4 $5.7 $53.7 Initial Day 1 Purchase Accounting Marks (n
Slide 23: Reconciliation of non-GAAP Items
Reconciliation of non-GAAP Items (dollars in thousands) 9/30/2019 12/31/2019 3/31/2020 6/30/2020 9/30/2020 (1) Return on Average Tangible Equity (A) Net Income (GAAP) $65,965 $63,285 $40,183 $52,686 $103,784 (B) Number of Days in the Quarter 92 92 91 91 92 Average Total Shareholders' Equity (GAAP) $
Slide 24: Reconciliation of non-GAAP Items (cont.)
Reconciliation of non-GAAP Items (cont.) (dollars in thousands) 6/30/2020 9/30/2020 (2) Tangible Equity to Tangible Assets Total Assets (GAAP) $ 26,234,973 $ 25,931,308 Less: Total Intangibles (GAAP) (1,825,887) (1,823,129) Tangible Assets (non-GAAP) $ 24,409,086 $ 24,108,179 Total Shareholders' Equ