United Bankshares, Inc. · NASDAQ:UBSI
United Bankshares — Q2 2020 Earnings Presentation
23 slides from United Bankshares's earnings presentation, Jul 24, 2020
Slide 1: Second Quarter 2020 Earnings Review
United Bankshares, Inc. Second Quarter 2020 Earnings Review July 24, 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: 2Q20 Highlights
2Q20 HIGHLIGHTS Successfully closed the merger with Carolina Financial on May 1, 2020 adding 73 branches located throughout the attractive markets of North and South Carolina Continue to support our customers’ needs through new loan originations, loan deferrals, PPP loans, and other accommodations R
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 $52.7 million in 2Q20 compared to $40.2 million in 1Q20. Diluted EPS were $0.44 in 2Q20 compared to $0.40 in 1Q20. Net Interest Income increased $29.1 million compared to 1Q20 due mainly to an increase in average earning assets from the Carolina Fi
Slide 6: Performance Ratios
PERFORMANCE RATIOS Strong and consistent 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. *Non GAAP measure. Refer to appendix.
Slide 7: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN Reported Net Interest Margin decreased from 3.30% to 3.18% LQ. Linked-quarter Net Interest Margin decrease was primarily due to excess liquidity, the current low rate environment, and the addition of lower yielding PPP loans. Scheduled loan accretion is estimated at $1
Slide 8: Loan Summary
LOAN SUMMARY (excludes Loans Held for Sale) Linked-Quarter loan balances increased $4.2 billion driven by the loans acquired from CARO and PPP loan originations. Non Owner Occupied CRE to Total Risk Based Capital was 238% at 2Q20. The impact of the CARO merger on this ratio was negligible. CRE portf
Slide 9: Credit Quality
CREDIT QUALITY End of Period Balances (000s) 3/31/20 6/30/20 Non-Accrual Loans $64,036 $67,669 90-Day Past Due Loans $7,051 $11,150 Restructured Loans $61,470 $77,436 Total Non-performing Loans $132,557 $156,255 Other Real Estate Owned $15,849 $29,947 Total Non-performing Assets $148,406 $186,202 No
Slide 10: Commercial Loan Portfolio Details
COMMERCIAL LOAN PORTFOLIO DETAILS Diversified portfolio with strong underwriting practices and ongoing monitoring Portfolio Balance ($ MM) % Total Loans % Deferring Retail CRE 1,280 7.1% 50.8% Hotels 639 3.5% 70.9% Healthcare & Senior Living 327 1.8% 11.1% Entertainment & Recreation 313 1.7% 36.8% R
Slide 11: Consumer Loan Portfolio Details
CONSUMER LOAN PORTFOLIO DETAILS Solid consumer portfolio with product & geographic diversification Consumer deferrals total $285 million, or 6.0% of total consumer loans Portfolio Balance ($ MM) % Total Loans Weighted Average FICO % Deferring Residential Mortgage 3,010 16.7% 752 6.8% Indirect Auto 1
Slide 12: Paycheck Protection Program (PPP)
PAYCHECK PROTECTION PROGRAM (PPP) Over 8,400 notes outstanding for $1.27 billion “All hands on deck” approach in order to assist as many customers as possible Still accepting new applications Average Loan Balance: $149,800 Median Loan Balance: $40,900 Average projected fee: 3.3% 43% of PPP loans out
Slide 13: Deposit Summary
DEPOSIT SUMMARY Strong core deposit base with 36% of deposits in Non Interest Bearing accounts. LQ deposit increase of $5.9 billion primarily driven by CARO balances (~$3.9 billion at merger date). CARO adds to United’s enviable deposit franchise with an attractive mix of both high growth MSA’s and
Slide 14: Capital Ratios & Per Share Data
CAPITAL RATIOS & PER SHARE DATA End of Period Ratios / Values 3/31/20 6/30/20** Common Equity Tier 1 Ratio 12.3% 12.6% Tier 1 Capital Ratio 12.3% 12.6% Total Risk Based Capital Ratio 14.5% 14.8% Leverage Ratio 10.4% 10.7% Total Equity to Total Assets 16.4% 16.0% *Tangible Equity to Tangible Assets (
Slide 15: 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 15 retail offices located throughout Virginia, Maryland, North Carolina, and South Carolina. Crescent Mor
Slide 16: 2020 Outlook
2020 OUTLOOK Loans & Deposits: Expect majority of PPP loan forgiveness to occur in 4Q20 / 1Q21. Net Interest Margin / Net Interest Income: Expect to continue to experience modest core compression of the net interest margin due to the current low rate environment and excess liquidity. Mortgage Bankin
Slide 17: UBSI Investment Thesis
UBSI INVESTMENT THESIS Excellent franchise with long-term growth prospects Current income opportunity with a dividend yield of 5.0% (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 18: Appendix
Appendix ‘W BANKSHARES,INC. 18
Slide 19: 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 20: 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 21: CARO Merger – Additional Information
CARO Merger – Additional Information Category 1Q20 2Q20 YTD Provision --- $28.9 $28.9 Employee Comp --- $0.5 $0.5 Data Processing $0.5 $11.0 $11.5 Other Expense $1.1 $6.0 $7.1 Total $1.6 $46.4 $48.0 Merger-Related Expense Detail Other Information Fair Value Mark (preliminary) Loans $(51.6) Investmen
Slide 22: Reconciliation of non-GAAP Items
Reconciliation of non-GAAP Items July 2020 (dollars in thousands) 6/30/2019 9/30/2019 12/31/2019 3/31/2020 6/30/2020 (1) Return on Average Tangible Equity (A) Net Income (GAAP) $67,207 $65,965 $63,285 $40,183 $52,686 (B) Number of Days in the Quarter 91 92 92 91 91 Average Total Shareholders' Equity
Slide 23: Reconciliation of non-GAAP Items (cont.)
Reconciliation of non-GAAP Items (cont.) July 2020 (dollars in thousands) 3/31/2020 6/30/2020 (2) Tangible Equity to Tangible Assets Total Assets (GAAP) $ 20,370,653 $ 26,234,973 Less: Total Intangibles (GAAP) (1,506,368) (1,825,887) Tangible Assets (non-GAAP) $ 18,864,285 $ 24,409,086 Total Shareho