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 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: 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 Tangi
Slide 4: Merger Update - Carolina Financial
MERGER UPDATE - CAROLINA FINANCIAL 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 billion, portfolio loans of ~$3.3 billion, and d
Slide 5: Earnings Summary
EARNINGS SUMMARY Linked-Quarter (LQ) Net Income was $103.8 million in 3Q20 compared to $52.7 million in 2Q20, with diluted EPS of $0.80 in 3Q20 compared to $0.44 in 2Q20. Net Interest Income increased $15.1 million compared to 2Q20 due mainly to an increase in average earning assets from the Carolin
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 mill
Slide 7: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN Reported Net Interest Margin of 3.18% was flat compared to 2Q20. Linked-quarter Net Interest Income increase was driven by the full quarter impact of assets acquired from CARO and PPP loan activity. Continue to actively manage funding costs in the current low rate envi
Slide 8: Loan Summary
LOAN SUMMARY (excludes Loans Held for Sale) Linked-Quarter loan balances decreased $65 million driven by declines in Residential Real Estate loans. Non Owner Occupied CRE to Total Risk Based Capital was 239% at 3Q20. CRE portfolio remains diversified among underlying collateral types. Total purchase
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 $177,972 N
Slide 10: Commercial Loan Portfolio Details
COMMERCIAL LOAN PORTFOLIO DETAILS Diversified portfolio with strong underwriting practices and ongoing monitoring Portfolio Balance ($ MM) % Total Loans % Deferring 10/15/20 % Deferring 9/04/20 % Deferring 6/30/20 Retail CRE 1,312 7.3% 15.3% 18.3% 50.8% Hotels 668 3.7% 35.8% 51.6% 70.9% Healthcare &
Slide 11: Consumer Loan Portfolio Details
CONSUMER LOAN PORTFOLIO DETAILS Solid consumer portfolio with product & geographic diversification Consumer deferrals total $91 million, or 2.0% of total consumer loans as of 10/15/20 (down from $285 million, or 6.0% of total consumer loans at 6/30/20) Portfolio Balance ($ MM) % Total Loans Weighted
Slide 12: Paycheck Protection Program (PPP)
PAYCHECK PROTECTION PROGRAM (PPP) Over 8,900 notes outstanding for $1.29 billion “All hands on deck” approach in order to assist as many customers as possible Average Loan Balance: $143,200 Median Loan Balance: $37,700 Average projected fee: 3.3% (remaining fees of $29.5 million, net of costs) Appro
Slide 13: Deposit Summary
DEPOSIT SUMMARY Strong core deposit base with 36% of deposits in Non Interest Bearing accounts. LQ deposits increased $358 million while brokered deposits declined $171 million. Enviable deposit franchise with an attractive mix of both high growth MSA’s and stable, rural markets with a dominant mark
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 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 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: 2020 Outlook
2020 OUTLOOK Loans & Deposits: Expect majority of PPP loan forgiveness to occur in 1Q21. Net Interest Margin / Net Interest Income: Expect the core net interest margin to be up slightly in 4Q20 compared to 3Q20 (excluding the impact of loan accretion and any accelerated PPP fee income). Prepaid $775
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 insider owner
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 UBSI has increased dividends to shareholders for 46 consecutive years Capital level
Slide 21: COVID-19 Response
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 Continuing to pay 100% of regular salaries for all employees All standalone locations remain open Paid bonuses to certain empl
Slide 22: CARO Merger – Additional Information
CARO Merger – Additional Information 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 Merger-Related Expense Detail Other Information Fair Value Mark (prelimi
Slide 23: Reconciliation of non-GAAP Items
Reconciliation of non-GAAP Items October 2020 (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' Eq
Slide 24: Reconciliation of non-GAAP Items (cont.)
Reconciliation of non-GAAP Items (cont.) October 2020 (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 Shar