United Bankshares (UBSI) Reports Q4 EPS of $0.56

January 27, 2022 7:51 AM EST
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United Bankshares, Inc. (NASDAQ: UBSI) (“United”), today reported earnings for the fourth quarter and the year of 2021. Earnings for the fourth quarter of 2021 were $73.9 million, or $0.56 per diluted share, as compared to earnings of $92.4 million, or $0.71 per diluted share, for the fourth quarter of 2020. Earnings for the year of 2021 were a record $367.7 million as compared to earnings of $289.0 million for the year of 2020. Earnings per diluted share for the year of 2021 were a record $2.83 as compared to earnings per diluted share of $2.40 for the year of 2020.

Fourth quarter 2021 results produced annualized returns on average assets, average equity and average tangible equity, a non-GAAP measure, of 1.04%, 6.44% and 10.87%, respectively, compared to annualized returns on average assets, average equity, and average tangible equity of 1.41%, 8.51% and 14.72%, respectively, for the fourth quarter of 2020. For the year of 2021, United’s returns on average assets, average equity and average tangible equity were 1.35%, 8.30% and 14.18%, respectively, compared to returns on average assets, average equity, and average tangible equity of 1.20%, 7.30% and 12.90%, respectively, for the year of 2020.

“2021 was one of the most successful years in our Company’s history,” stated Richard M. Adams, United’s Chairman of the Board and Chief Executive Officer. “We achieved record pre-tax earnings of $463 million, increased earnings per diluted share 18%, and outperformed peer profitability. We increased our dividend for the 48th consecutive year and successfully completed the acquisition of Community Bankers Trust Corporation, the 33rd acquisition of the current administration.”

On December 3, 2021, United completed its acquisition of Community Bankers Trust Corporation (“Community Bankers Trust”). The results of operations for Community Bankers Trust are included in the consolidated results of operations from the date of acquisition. As a result of the acquisition, the fourth quarter and year of 2021 were impacted by approximately one month of increased levels of average balances, income, and expense as compared to the fourth quarter and year of 2020 and as compared to the third quarter of 2021.

As a result of the acquisition of Carolina Financial Corporation (“Carolina Financial”) on May 1, 2020, the year of 2021 reflected higher average balances, income, and expense as compared to the year of 2020.

The fourth quarter and year of 2021 included merger-related expenses associated with the Community Bankers Trust acquisition of $20.4 million and $21.4 million, respectively, compared to $558 thousand and $54.2 million of merger-related expenses associated with the Carolina Financial acquisition for the fourth quarter and year of 2020.

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter of 2021 was $183.7 million, which was a decrease of $8.3 million, or 4%, from the fourth quarter of 2020. Tax-equivalent net interest income, a non-GAAP measure which adjusts for the tax-favored status of income from certain loans and investments, for the fourth quarter of 2021 also decreased $8.3 million, or 4%, from the fourth quarter of 2020 to $184.7 million. The decrease in net interest income and tax-equivalent net interest income was primarily due to lower accretion on acquired loans and lower fee income from Paycheck Protection Program (“PPP”) loans. A decrease in interest income due to lower acquired loan accretion income and PPP loan fee income as well as due to a change in the mix of interest earning assets was partially offset by lower interest expense on deposits and borrowings driven by rate repricing. The net interest spread for the fourth quarter of 2021 decreased 32 basis points from the fourth quarter of 2020 due to a 49 basis point decrease in the average yield on earning assets partially offset by a 17 basis point decrease in the average cost of funds. Loan accretion on acquired loans was $6.2 million and $10.9 million for the fourth quarter of 2021 and 2020, respectively, a decrease of $4.7 million. Net PPP loan fee income of $5.0 million was recognized in the fourth quarter of 2021 driven primarily by loan forgiveness, as compared to $7.0 million for the fourth quarter of 2020. Average earning assets for the fourth quarter of 2021 increased $1.8 billion, or 8%, from the fourth quarter of 2020 due to a $1.8 billion increase in average short-term investments and a $833.6 million increase in average investment securities, partially offset by a $862.0 million decrease in average net loans and loans held for sale mainly driven by a decline in PPP loan balances. The net interest margin of 2.94% for the fourth quarter of 2021 was a decrease of 39 basis points from the net interest margin of 3.33% for the fourth quarter of 2020.

Net interest income for the year of 2021 was $742.7 million, which was an increase of $53.0 million, or 8%, from the year of 2020. Tax-equivalent net interest income for the year of 2021 was $747.0 million, an increase of $53.3 million, or 8%, from the year of 2020. The increase in net interest income and tax-equivalent net interest income was primarily due to lower interest expense on deposits and borrowings as well as due to an increase in average earning assets from the Carolina Financial acquisition and PPP loan fee income, partially offset by lower acquired loan accretion income. The net interest spread for the year of 2021 decreased 2 basis points from the year of 2020 due to a 45 basis point decrease in the average yield on earning assets partially offset by a 43 basis point decrease in the average cost of funds. Average earning assets for the year of 2021 increased $2.8 billion, or 13%, from the year of 2020 due to a $1.7 billion increase in average short-term investments, a $628.0 million increase in average investment securities and a $523.9 million increase in average net loans and loans held for sale. Net PPP loan fee income of $33.2 million was recognized in the year of 2021 driven primarily by loan forgiveness, as compared to $16.3 million for the year of 2020. Loan accretion on acquired loans was $33.9 million and $41.8 million for the year of 2021 and 2020, respectively, a decrease of $7.9 million. The net interest margin of 3.09% for the year of 2021 was a decrease of 15 basis points from the net interest margin of 3.24% for the year of 2020.

On a linked-quarter basis, net interest income for the fourth quarter of 2021 increased $2.1 million, or 1%, from the third quarter of 2021. Tax-equivalent net interest income for the fourth quarter of 2021 also increased $2.1 million, or 1%, from the third quarter of 2021. The increase in net interest income and tax-equivalent net interest income was primarily due to an increase in average earning assets due to organic growth and the Community Bankers Trust acquisition as well as lower interest expense on deposits and borrowings partially offset by lower acquired loan accretion and PPP loan fee income. Average earning assets increased approximately $573.2 million, or 2%, from the third quarter of 2021 due to increases in average net loans and loans held for sale of $456.0 million and average securities of $333.4 million partially offset by a decrease in average short-term investments of $216.2 million. The net interest spread for the fourth quarter of 2021 of 2.82% decreased 1 basis point from the third quarter of 2021 due to a 5 basis point decrease in the average yield on earning assets partially offset by a 4 basis point decrease in the average cost of funds. Net PPP loan fee income for the fourth quarter of 2021 decreased $2.8 million from the third quarter of 2021 to $5.0 million. Loan accretion on acquired loans decreased $1.9 million from the third quarter of 2021 to $6.2 million for the fourth quarter of 2021. The net interest margin of 2.94% for the fourth quarter of 2021 was a decrease of 4 basis points from the net interest margin of 2.98% for the third quarter of 2021.

Credit Quality

United’s asset quality continues to be sound. At December 31, 2021, nonperforming loans were $90.8 million, or 0.50% of loans & leases, net of unearned income, down from $132.2 million, or 0.75% of loans & leases, net of unearned income, at December 31, 2020. Total nonperforming assets of $105.6 million, including other real estate owned (“OREO”) of $14.8 million at December 31, 2021, represented 0.36% of total assets as compared to nonperforming assets of $154.8 million, including OREO of $22.6 million, or 0.59% of total assets at December 31, 2020.

The provision for credit losses was a net benefit of $7.4 million and $24.0 million for the fourth quarter and year of 2021, respectively, while the provision for credit losses was an expense of $16.8 million and $106.6 million, respectively, for the fourth quarter and year of 2020. The quarter and year of 2021 included a provision for loan losses of $12.3 million recorded on purchased non-credit deteriorated (“non-PCD”) loans from Community Bankers Trust. The year of 2020 included a provision for loan losses of $29.0 million recorded on non-PCD loans from Carolina Financial. The decrease in the provision in relation to the prior year quarter and year of 2020 was also driven by the impact of better performance trends within the loan portfolio and improvements in the reasonable and supportable forecasts of future macroeconomic conditions on the estimate of expected credit losses under CECL. On a linked-quarter basis, the provision for credit losses for the fourth quarter of 2021 was a net benefit of $7.4 million compared to a net benefit of $7.8 million for the third quarter of 2021.

As of December 31, 2021, the allowance for loan losses was $216.0 million, or 1.20% of loans & leases, net of unearned income, as compared to $235.8 million, or 1.34% of loans & leases, net of unearned income, at December 31, 2020. Net charge-offs were $125 thousand for the fourth quarter of 2021 compared to net charge-offs of $6.9 million for the fourth quarter of 2020. Net charge-offs were $8.7 million for the year of 2021 compared to net charge-offs of $23.6 million for the year of 2020. Annualized net charge-offs as a percentage of average loans & leases, net of unearned income were 0.003% and 0.05% for the fourth quarter and year of 2021, respectively, compared to annualized net charge-offs of 0.16% and 0.14% for the fourth quarter and year of 2020. Net recoveries were $1.2 million for the third quarter of 2021.

Noninterest Income

Noninterest income for the fourth quarter of 2021 was $54.0 million, which was a decrease of $40.0 million, or 43%, from the fourth quarter of 2020 primarily driven by a $43.5 million decrease in income from mortgage banking activities due primarily to lower mortgage loan origination and sale volume and a lower margin on loans sold in the secondary market. Partially offsetting the decreases in noninterest income were increases in fees from deposit services of $1.0 million, fees from trust services of $742 thousand and fees from brokerage services of $574 thousand.

Noninterest income for the year of 2021 was $278.1 million, which was a decrease of $76.7 million, or 22%, from the year of 2020. The decrease was driven primarily by a $94.4 million decrease in income from mortgage banking activities due primarily to a lower loan pipeline valuation and a lower margin on loans sold in the secondary market. The year of 2021 included fees from deposit services of $38.7 million, an increase of $3.9 million from the year of 2020, fees from trust services of $16.6 million, an increase of $2.6 million from the year of 2020 and fees from brokerage services of $15.6 million, an increase of $3.8 million from the year of 2020. Mortgage loan servicing income was $9.6 million for the year of 2021 compared to $6.2 million for the year of 2020, an increase of $3.4 million due to the Carolina Financial acquisition. The year of 2020 also included a gain on the sale of a bank premises of $2.2 million.

On a linked-quarter basis, noninterest income for the fourth quarter of 2021 decreased $14.6 million, or 21%, from the third quarter of 2021 primarily due to a decrease of $14.7 million in income from mortgage banking activities due primarily to lower mortgage loan origination and sale volume and a lower loan pipeline valuation.

Noninterest Expense

Noninterest expense for the fourth quarter of 2021 was $151.8 million, a decrease of $4.3 million, or 3%, from the fourth quarter of 2020. Employee compensation decreased $5.5 million due to lower employee commissions, incentives and overtime related to mortgage banking production partially offset by $2.5 million of merger-related expenses from the Community Bankers Trust acquisition as well as additional employees from the acquisition. OREO expense decreased $2.1 million due to a decrease in net losses on the sale of OREO properties and fewer declines in the fair value of OREO properties. Partially offsetting the decreases in noninterest expense were increases in data processing expense of $3.6 million primarily due to $3.5 million of merger-related expenses associated with the Community Bankers Trust acquisition. Other expense increased $1.9 million driven by an increase in the reserve for unfunded loan commitments of $2.8 million, including $844 thousand related to loan commitments acquired from Community Bankers Trust.

Noninterest expense for the year of 2021 was $581.9 million, an increase of $3.7 million, or less than 1%, from the year of 2020. Employee compensation increased $5.3 million from the year of 2020 primarily due to the Carolina Financial and Community Bankers Trust acquisitions partially offset by lower employee compensation expense related to mortgage banking production. Additionally, noninterest expense increased slightly from the year of 2020 due to increases of $5.1 million in equipment expense, $5.0 million in employee benefits and $2.8 million in mortgage loan servicing expense and impairment. The increases in equipment expense, employee benefits and mortgage loan servicing expense and impairment were mainly from the Carolina Financial acquisition. Offsetting the increases in noninterest expense was a decrease in data processing expense of $4.0 million, due to a penalty of $9.7 million to terminate Carolina Financial’s data processing contract incurred in the second quarter of 2020, partially offset by $3.5 million of merger-related termination and conversion expenses associated with the Community Bankers Trust acquisition in the fourth quarter of 2021. The year of 2020 also included $10.4 million in prepayment penalties on the early payoff of FHLB advances compared to $15 thousand for the year of 2021.

On a linked-quarter basis, noninterest expense for the fourth quarter of 2021 increased $9.5 million, or 7%, from the third quarter of 2021 primarily due to an increase of $4.1 million in employee compensation, $4.2 million in data processing and $3.3 million in other expense. The increases in employee compensation and data processing expense were primarily due to the Community Bankers Trust acquisition. Within other expense, the largest driver of the increase was an increase in the reserve for unfunded loan commitments of $1.8 million, including $844 thousand related to loan commitments acquired from Community Bankers Trust. Partially offsetting the increases in noninterest expense were decreases in employee benefits of $2.3 million and mortgage loan servicing expense and impairment of $1.0 million.

Income Tax Expense

For the fourth quarter of 2021, income tax expense was $19.5 million as compared to $20.8 million for the fourth quarter of 2020 primarily due to lower earnings partially offset by a higher effective tax rate. For the year of 2021, income tax expense was $95.1 million as compared to $70.7 million for the year of 2020 primarily due to higher earnings and a slightly higher effective tax rate. On a linked-quarter basis, income tax expense decreased $4.1 million primarily due to lower earnings. United’s effective tax rate was 20.9% for the fourth quarter of 2021, 18.4% for the fourth quarter of 2020 and 20.4% for the third quarter of 2021. For the year of 2021 and 2020, United’s effective tax rate was 20.6% and 19.7%, respectively.

Regulatory Capital

United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 15.4% at December 31, 2021, while estimated Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 13.4%, 13.4% and 11.0%, respectively. The December 31, 2021 ratios reflect United’s election of a five-year transition provision, allowed by the Federal Reserve Board and other federal banking agencies in response to the COVID-19 pandemic, to delay for two years the full impact of CECL on regulatory capital, followed by a three-year transition period. The regulatory requirements for a well-capitalized financial institution are a risk-based capital ratio of 10.0%, a Common Equity Tier 1 capital ratio of 6.5%, a Tier 1 capital ratio of 8.0% and a leverage ratio of 5.0%.

About United Bankshares, Inc.

As of December 31, 2021, United had consolidated assets of approximately $29.3 billion. United is the parent company of United Bank which comprises nearly 250 offices in Virginia, Maryland, Washington, D.C., North Carolina, South Carolina, Georgia, Pennsylvania, West Virginia, and Ohio. United’s stock is traded on the NASDAQ Global Select Market under the quotation symbol "UBSI".

Cautionary Statements

The Company is required under generally accepted accounting principles to evaluate subsequent events through the filing of its December 31, 2021 consolidated financial statements on Form 10-K. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of December 31, 2021 and will adjust amounts preliminarily reported, if necessary.

Use of non-GAAP Financial Measures

This press release contains certain financial measures that are not recognized under U.S. generally accepted accounting principles ("GAAP"). Generally, United has presented these “non-GAAP” financial measures because it believes that these measures provide meaningful additional information to assist in the evaluation of United’s results of operations or financial position. Presentation of these non-GAAP financial measures is consistent with how United’s management evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the banking industry.

Specifically, this press release contains certain references to financial measures identified as tax-equivalent (FTE) net interest income, tangible equity, return on tangible equity and tangible book value per share. Management believes these non-GAAP financial measures to be helpful in understanding United’s results of operations or financial position.

Net interest income is presented in this press release on a tax-equivalent basis. The tax-equivalent basis adjusts for the tax-favored status of income from certain loans and investments. Although this is a non-GAAP measure, United’s management believes this measure is more widely used within the financial services industry and provides better comparability of net interest income arising from taxable and tax-exempt sources. United uses this measure to monitor net interest income performance and to manage its balance sheet composition. The tax-equivalent adjustment combines amounts of interest income on federally nontaxable loans and investment securities using the statutory federal income tax rate of 21%.

Tangible equity is calculated as GAAP total shareholders’ equity minus total intangible assets. Tangible equity can thus be considered the most conservative valuation of the company. Tangible equity is also presented on a per common share basis and considering net income, a return on average tangible equity. Management provides these amounts to facilitate the understanding of as well as to assess the quality and composition of United’s capital structure. By removing the effect of intangible assets that result from merger and acquisition activity, the “permanent” items of equity are presented. These measures, along with others, are used by management to analyze capital adequacy and performance.

Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as reconciliation to that comparable GAAP financial measure can be found in the attached financial information tables to this press release. Investors should recognize that United’s presentation of these non-GAAP financial measures might not be comparable to similarly titled measures at other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and United strongly encourages a review of its condensed consolidated financial statements in their entirety.

Forward-Looking Statements

In this report, we have made various statements regarding current expectations or forecasts of future events, which speak only as of the date the statements are made. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are also made from time-to-time in press releases and in oral statements made by the officers of the Company. Forward-looking statements can be identified by the use of the words “expect,” “may,” “could,” “intend,” “project,” “estimate,” “believe,” “anticipate,” and other words of similar meaning. Such forward-looking statements are based on assumptions and estimates, which although believed to be reasonable, may turn out to be incorrect. Therefore, undue reliance should not be placed upon these estimates and statements. United cannot assure that any of these statements, estimates, or beliefs will be realized and actual results may differ from those contemplated in these “forward-looking statements.” The following factors, among others, could cause the actual results of United’s operations to differ materially from its expectations: the uncertainty as to the extent of the duration, scope and impacts of the COVID-19 pandemic, on United, its colleagues, the communities United serves, and the domestic and global economy; uncertainty in U.S .fiscal and monetary policies, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital and credit markets, reform of LIBOR; the nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those involving the OCC, Federal Reserve, FDIC, and CFPB; the effect of changes in the level of checking or savings account deposits on United’s funding costs and net interest margin; future provisions for credit losses on loans and debt securities; changes in nonperforming assets; risks relating to the merger with Community Bankers Trust, including the successful integration of operations of Community Bankers Trust, the expected growth opportunities and costs savings from the merger, and deposit attrition, operating costs, customer losses and business disruption following the merger; competition; and changes in legislation or regulatory requirements. For more information about factors that could cause actual results to differ materially from United’s expectations, refer to its reports filed with the Securities and Exchange Commission, including the discussion under “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission and available on its website at www.sec.gov. Further, any forward-looking statement speaks only as of the date on which it is made, and United undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise. You are advised to consult further disclosures United may make on related subjects in our filings with the SEC.

UNITED BANKSHARES, INC. AND SUBSIDIARIES

Washington, D.C. and Charleston, WV

Stock Symbol: UBSI

(In Thousands Except for Per Share Data)

Three Months Ended

Year Ended

EARNINGS SUMMARY:

December
2021

December
2020

December
2021

December
2020

Interest income

$

195,194

$

208,914

$

795,117

$

798,382

Interest expense

11,516

16,925

52,383

108,609

Net interest income

183,678

191,989

742,734

689,773

Provision for credit losses

(7,405

)

16,751

(23,970

)

106,562

Noninterest income

54,049

94,082

278,092

354,746

Noninterest expense

151,789

156,117

581,943

578,217

Income before income taxes

93,343

113,203

462,853

359,740

Income taxes

19,491

20,833

95,115

70,717

Net income

$

73,852

$

92,370

$

367,738

$

289,023

PER COMMON SHARE:

Net income:

Basic

$

0.56

$

0.71

$

2.84

$

2.40

Diluted

0.56

0.71

2.83

2.40

Cash dividends

$

0.36

$

0.35

1.41

1.40

Book value

34.60

33.27

Closing market price

$

36.28

$

32.40

Common shares outstanding:

Actual at period end, net of treasury shares

136,392,758

129,188,507

Weighted average-basic

130,939,640

129,371,600

129,276,452

120,017,247

Weighted average-diluted

131,295,816

129,479,390

129,512,853

120,090,232

FINANCIAL RATIOS:

Return on average assets

1.04

%

1.41

%

1.35

%

1.20

%

Return on average shareholders’ equity

6.44

%

8.51

%

8.30

%

7.30

%

Return on average tangible equity (non-GAAP)(1)

10.87

%

14.72

%

14.18

%

12.90

%

Average equity to average assets

16.22

%

16.54

%

16.26

%

16.39

%

Net interest margin

2.94

%

3.33

%

3.09

%

3.24

%

PERIOD END BALANCES:

December 31
2021

December 31
2020

December 31
2019

September 30
2021

Assets

$

29,328,902

$

26,184,247

$

19,662,324

$

27,507,517

Earning assets

26,083,089

23,172,403

17,344,638

24,415,973

Loans & leases, net of unearned income

18,023,648

17,591,413

13,712,129

16,743,629

Loans held for sale

504,416

718,937

387,514

493,299

Investment securities

4,295,749

3,186,184

2,669,797

3,646,065

Total deposits

23,350,263

20,585,160

13,852,421

21,822,609

Shareholders’ equity

4,718,628

4,297,620

3,363,833

4,430,766

Note: (1) See information under the “Selected Financial Ratios” table for a reconciliation of non-GAAP measure.

UNITED BANKSHARES, INC. AND SUBSIDIARIES

Washington, D.C. and Charleston, WV

Stock Symbol: UBSI

(In Thousands Except for Per Share Data)

Consolidated Statements of Income

Three Months Ended

December

December

September

June

March

2021

2020

2021

2021

2021

Interest & Loan Fees Income (GAAP)

$

195,194

$

208,914

$

194,080

$

200,186

$

205,657

Tax equivalent adjustment

1,037

1,042

1,059

1,075

1,047

Interest & Fees Income (FTE) (non-GAAP)

196,231

209,956

195,139

201,261

206,704

Interest Expense

11,516

16,925

12,501

13,669

14,697

Net Interest Income (FTE) (non-GAAP)

184,715

193,031

182,638

187,592

192,007

Provision for Credit Losses

(7,405

)

16,751

(7,829

)

(8,879

)

143

Noninterest Income:

Fees from trust services

4,327

3,585

4,269

4,193

3,763

Fees from brokerage services

3,699

3,125

3,883

3,654

4,323

Fees from deposit services

10,509

9,501

9,888

9,396

8,896

Bankcard fees and merchant discounts

1,580

1,129

1,473

1,368

1,064

Other charges, commissions, and fees

753

753

703

775

759

Income from bank-owned life insurance

1,223

1,479

2,556

1,658

1,403

Income from mortgage banking activities

27,342

70,793

42,012

36,943

65,395

Mortgage loan servicing income

2,435

2,334

2,429

2,386

2,355

Net gain on the sale of bank premises

0

0

0

0

0

Net (losses) gains on investment securities

(39

)

589

82

24

2,609

Other noninterest income

2,220

794

1,329

2,449

2,006

Total Noninterest Income

54,049

94,082

68,624

62,846

92,573

Noninterest Expense:

Employee compensation

71,542

77,001

67,459

68,557

72,412

Employee benefits

10,819

12,103

13,132

14,470

15,450

Net occupancy

10,653

10,979

10,339

10,101

10,941

Data processing

10,852

7,280

6,612

6,956

7,026

Amortization of intangibles

1,509

1,691

1,466

1,467

1,466

OREO expense

1,004

3,069

387

372

3,625

Equipment expense

6,819

6,396

7,286

5,830

6,044

FDIC insurance expense

2,626

2,250

1,920

1,800

2,000

Mortgage loan servicing expense and impairment

2,217

3,482

3,253

3,599

3,177

Prepayment penalties on FHLB borrowings

15

0

0

0

0

Other noninterest expense

33,733

31,866

30,422

25,799

26,786

Total Noninterest Expense

151,789

156,117

142,276

138,951

148,927

Income Before Income Taxes (FTE) (non-GAAP)

94,380

114,245

116,815

120,366

135,510

Tax equivalent adjustment

1,037

1,042

1,059

1,075

1,047

Income Before Income Taxes (GAAP)

93,343

113,203

115,756

119,291

134,463

Taxes

19,491

20,833

23,604

24,455

27,565

Net Income

$

73,852

$

92,370

$

92,152

$

94,836

$

106,898

MEMO: Effective Tax Rate

20.88

%

18.40

%

20.39

%

20.50

%

20.50

%

UNITED BANKSHARES, INC. AND SUBSIDIARIES

Washington, D.C. and Charleston, WV

Stock Symbol: UBSI

(In Thousands Except for Per Share Data)

Consolidated Statements of Income

Year Ended

December

December

December

December

2021

2020

2019

2018

Interest & Loan Fees Income (GAAP)

$

795,117

$

798,382

$

762,562

$

717,715

Tax equivalent adjustment

4,218

3,888

3,735

4,328

Interest & Fees Income (FTE) (non-GAAP)

799,335

802,270

766,297

722,043

Interest Expense

52,383

108,609

184,640

129,070

Net Interest Income (FTE) (non-GAAP)

746,952

693,661

581,657

592,973

Provision for Credit Losses

(23,970

)

106,562

21,313

22,013

Noninterest Income:

Fees from trust services

16,552

13,903

13,873

12,930

Fees from brokerage services

15,559

11,758

10,136

9,347

Fees from deposit services

38,689

34,833

33,768

33,973

Bankcard fees and merchant discounts

5,485

4,066

4,674

5,168

Other charges, commissions, and fees

2,990

2,596

2,241

2,228

Income from bank-owned life insurance

6,840

7,217

7,339

5,045

Income from mortgage banking activities

171,692

266,094

76,951

58,109

Mortgage loan servicing income

9,605

6,213

0

0

Net gain on the sale of bank premises

0

2,229

0

2,763

Net gains (losses) on investment securities

2,676

3,155

175

(2,618

)

Other noninterest income

8,004

2,682

1,327

1,767

Total Noninterest Income

278,092

354,746

150,484

128,712

Noninterest Expense:

Employee compensation

279,970

274,661

173,962

164,468

Employee benefits

53,871

48,870

35,745

36,172

Net occupancy

42,034

41,303

34,850

36,462

Data processing

31,446

35,420

22,232

23,800

Amortization of intangibles

5,908

6,605

7,016

8,039

OREO expense

5,388

5,748

5,336

3,444

Equipment expense

25,979

20,861

14,210

13,846

FDIC insurance expense

8,346

10,132

8,070

11,464

Mortgage loan servicing expense and impairment

12,246

9,431

423

271

Prepayment penalties on FHLB borrowings

15

10,385

5,105

0

Other noninterest expense

116,740

114,801

75,705

70,213

Total Noninterest Expense

581,943

578,217

382,654

368,179

Income Before Income Taxes (FTE) (non-GAAP)

467,071

363,628

328,174

331,493

Tax equivalent adjustment

4,218

3,888

3,735

4,328

Income Before Income Taxes (GAAP)

462,853

359,740

324,439

327,165

Taxes

95,115

70,717

64,340

70,823

Net Income

$

367,738

$

289,023

$

260,099

$

256,342

MEMO: Effective Tax Rate

20.55

%

19.66

%

19.83

%

21.65

%

UNITED BANKSHARES, INC. AND SUBSIDIARIES

Washington, D.C. and Charleston, WV

Stock Symbol: UBSI

(In Thousands Except for Per Share Data)

Consolidated Balance Sheets

December 2021

December 2020

December 31

December 31

December 31

Q-T-D Average

Q-T-D Average

2021

2020

2019

Cash & Cash Equivalents

$

3,913,480

$

2,048,915

$

3,758,170

$

2,209,068

$

837,493

Securities Available for Sale

3,669,387

2,849,102

4,042,699

2,953,359

2,437,296

Less: Allowance for credit losses

0

0

0

0

0

Net available for sale securities

3,669,387

2,849,102

4,042,699

2,953,359

2,437,296

Securities Held to Maturity

1,020

1,235

1,020

1,235

1,446

Less: Allowance for credit losses

(27

)

(21

)

(19

)

(23

)

0

Net held to maturity securities

993

1,214

1,001

1,212

1,446

Equity Securities

12,161

10,399

12,404

10,718

8,894

Other Investment Securities

230,535

218,741

239,645

220,895

222,161

Total Securities

3,913,076

3,079,456

4,295,749

3,186,184

2,669,797

Total Cash and Securities

7,826,556

5,128,371

8,053,919

5,395,252

3,507,290

Loans held for sale

482,387

720,896

504,416

718,937

387,514

Commercial Loans & Leases

13,028,313

13,296,380

13,809,735

13,165,497

9,399,170

Mortgage Loans

2,908,187

3,269,073

3,008,410

3,197,274

3,107,721

Consumer Loans

1,240,676

1,253,421

1,233,162

1,259,812

1,206,657

Gross Loans

17,177,176

17,818,874

18,051,307

17,622,583

13,713,548

Unearned income

(27,666

)

(38,502

)

(27,659

)

(31,170

)

(1,419

)

Loans & Leases, net of unearned income

17,149,510

17,780,372

18,023,648

17,591,413

13,712,129

Allowance for Loan & Leases Losses

(218,550

)

(225,918

)

(216,016

)

(235,830

)

(77,057

)

Net Loans

16,930,960

17,554,454

17,807,632

17,355,583

13,635,072

Mortgage Servicing Rights

22,851

20,766

23,144

20,955

0

Goodwill

1,833,187

1,794,997

1,886,494

1,796,848

1,478,014

Other Intangibles

22,954

27,580

24,413

26,923

29,931

Operating Lease Right-of-Use Asset

75,254

72,090

81,942

69,520

57,783

Other Real Estate Owned

15,451

26,316

14,823

22,595

15,515

Other Assets

857,680

771,233

932,119

777,634

551,205

Total Assets

$

28,067,280

$

26,116,703

$

29,328,902

$

26,184,247

$

19,662,324

MEMO: Interest-earning Assets

$

24,935,489

$

23,122,784

$

26,083,089

$

23,172,403

$

17,344,638

Interest-bearing Deposits

$

13,653,822

$

13,018,640

$

14,369,716

$

13,179,900

$

9,231,059

Noninterest-bearing Deposits

8,678,093

7,495,594

8,980,547

7,405,260

4,621,362

Total Deposits

22,331,915

20,514,234

23,350,263

20,585,160

13,852,421

Short-term Borrowings

127,731

144,177

128,844

142,300

374,654

Long-term Borrowings

816,518

901,655

817,394

864,369

1,838,029

Total Borrowings

944,249

1,045,832

946,238

1,006,669

2,212,683

Operating Lease Liability

80,118

75,805

86,703

73,213

61,342

Other Liabilities

159,364

161,580

227,070

221,585

172,045

Total Liabilities

23,515,646

21,797,451

24,610,274

21,886,627

16,298,491

Preferred Equity

0

0

0

0

0

Common Equity

4,551,634

4,319,252

4,718,628

4,297,620

3,363,833

Total Shareholders' Equity

4,551,634

4,319,252

4,718,628

4,297,620

3,363,833

Total Liabilities & Equity

$

28,067,280

$

26,116,703

$

29,328,902

$

26,184,247

$

19,662,324

MEMO: Interest-bearing Liabilities

$

14,598,071

$

14,064,472

$

15,315,954

$

14,186,569

$

11,443,742

UNITED BANKSHARES, INC. AND SUBSIDIARIES

Washington, D.C. and Charleston, WV

Stock Symbol: UBSI

(In Thousands Except for Per Share Data)

Three Months Ended

December

December

September

June

March

Quarterly Share Data:

2021

2020

2021

2021

2021

Earnings Per Share:

Basic

$

0.56

$

0.71

$

0.71

$

0.73

$

0.83

Diluted

$

0.56

$

0.71

$

0.71

$

0.73

$

0.83

Common Dividend Declared Per Share

$

0.36

$

0.35

$

0.35

$

0.35

$

0.35

High Common Stock Price

$

39.41

$

32.86

$

37.12

$

42.50

$

41.61

Low Common Stock Price

$

33.34

$

21.19

$

31.74

$

36.19

$

31.57

Average Shares Outstanding (Net of Treasury Stock):

Basic

130,939,640

129,371,600

128,762,815

128,750,851

128,635,740

Diluted

131,295,816

129,479,390

128,960,220

129,033,988

128,890,861

Common Dividends

$

46,564

$

45,442

$

45,271

$

45,268

$

45,254

Dividend Payout Ratio

63.05

%

49.20

%

49.13

%

47.73

%

42.33

%

Year Ended

December

December

December

December

Year-to-Date Share Data:

2021

2020

2019

2018

Earnings Per Share:

Basic

$

2.84

$

2.40

$

2.55

$

2.46

Diluted

$

2.83

$

2.40

$

2.55

$

2.45

Common Dividend Declared Per Share

$

1.41

$

1.40

$

1.37

$

1.36

Average Shares Outstanding (Net of Treasury Stock):

Basic

129,276,452

120,017,247

101,585,599

104,015,976

Diluted

129,512,853

120,090,232

101,852,577

104,298,825

Common Dividends

$

182,357

$

171,876

$

139,508

$

141,610

Dividend Payout Ratio

49.59

%

59.47

%

53.64

%

55.24

%

December 31

December 31

September 30

June 30

March 31

EOP Share Data:

2021

2020

2021

2021

2021

Book Value Per Share

$

34.60

$

33.27

$

34.29

$

34.01

$

33.54

Tangible Book Value Per Share (non-GAAP) (1)

$

20.59

$

19.15

$

20.11

$

19.81

$

19.38

52-week High Common Stock Price

$

42.50

$

39.07

$

42.50

$

42.50

$

41.61

Date

05/18/21

01/02/20

05/18/21

05/18/21

03/18/21

52-week Low Common Stock Price

$

31.57

$

19.67

$

21.19

$

20.57

$

20.57

Date

1/29/21

03/23/20

10/01/20

09/25/20

09/25/20

EOP Shares Outstanding (Net of Treasury Stock):

136,392,758

129,188,507

129,203,774

129,203,593

129,175,800

Memorandum Items:

EOP Employees (full-time equivalent)

3,143

3,051

2,986

3,012

3,033

Note:

(1) Tangible Book Value Per Share:

Total Shareholders' Equity (GAAP)

$

4,718,628

$

4,297,620

$

4,430,766

$

4,393,713

$

4,332,698

Less: Total Intangibles

(1,910,907

)

(1,823,771

)

(1,832,564

)

(1,834,030

)

(1,829,495

)

Tangible Equity (non-GAAP)

$

2,807,721

$

2,473,849

$

2,598,202

$

2,559,683

$

2,503,203

÷ EOP Shares Outstanding (Net of Treasury Stock)

136,392,758

129,188,507

129,203,774

129,203,593

129,175,800

Tangible Book Value Per Share (non-GAAP)

$

20.59

$

19.15

$

20.11

$

19.81

$

19.38

UNITED BANKSHARES, INC. AND SUBSIDIARIES

Washington, D.C. and Charleston, WV

Stock Symbol: UBSI

(In Thousands Except for Per Share Data)

Three Months Ended

December

December

September

June

March

2021

2020

2021

2021

2021

Selected Yields and Net Interest Margin:

Net Loans and Loans held for sale

4.04

%

4.18

%

4.15

%

4.18

%

4.26

%

Investment Securities

1.72

%

2.08

%

1.71

%

1.87

%

1.93

%

Money Market Investments/FFS

0.28

%

0.42

%

0.26

%

0.24

%

0.34

%

Average Earning Assets Yield

3.13

%

3.62

%

3.18

%

3.37

%

3.56

%

Interest-bearing Deposits

0.26

%

0.43

%

0.29

%

0.33

%

0.37

%

Short-term Borrowings

0.52

%

0.55

%

0.54

%

0.54

%

0.51

%

Long-term Borrowings

1.23

%

1.15

%

1.23

%

1.22

%

1.23

%

Average Liability Costs

0.31

%

0.48

%

0.35

%

0.39

%

0.42

%

Net Interest Spread

2.82

%

3.14

%

2.83

%

2.98

%

3.14

%

Net Interest Margin

2.94

%

3.33

%

2.98

%

3.14

%

3.30

%

Selected Financial Ratios:

Return on Average Assets

1.04

%

1.41

%

1.33

%

1.41

%

1.64

%

Return on Average Shareholders’ Equity

6.44

%

8.51

%

8.23

%

8.69

%

9.97

%

Return on Average Tangible Equity (non-GAAP) (1)

10.87

%

14.72

%

14.03

%

14.95

%

17.20

%

Efficiency Ratio

63.85

%

54.57

%

56.86

%

55.72

%

52.53

%

Note:

(1) Return on Average Tangible Equity:

(a) Net Income (GAAP)

$

73,852

$

92,370

$

92,152

$

94,836

$

106,898

(b) Number of Days

92

92

92

91

90

Average Total Shareholders' Equity (GAAP)

$

4,551,634

$

4,319,252

$

4,440,107

$

4,378,898

$

4,346,750

Less: Average Total Intangibles

(1,856,141

)

(1,822,577

)

(1,833,449

)

(1,834,920

)

(1,825,639

)

(c) Average Tangible Equity (non-GAAP)

$

2,695,493

$

2,496,675

$

2,606,658

$

2,543,978

$

2,521,111

Return on Average Tangible Equity (non-GAAP) [(a) / (b)]

x 365 or 366 / (c)

10.87

%

14.72

%

14.03

%

14.95

%

17.20

%

UNITED BANKSHARES, INC. AND SUBSIDIARIES

Washington, D.C. and Charleston, WV

Stock Symbol: UBSI

(In Thousands Except for Per Share Data)

Year Ended

December

December

December

December

2021

2020

2019

2018

Selected Yields and Net Interest Margin:

Net Loans and Loans held for sale

4.16

%

4.27

%

4.85

%

4.77

%

Investment Securities

1.80

%

2.33

%

2.86

%

2.73

%

Money Market Investments/FFS

0.28

%

0.65

%

2.91

%

2.29

%

Average Earning Assets Yield

3.30

%

3.75

%

4.47

%

4.36

%

Interest-bearing Deposits

0.31

%

0.67

%

1.41

%

0.97

%

Short-term Borrowings

0.52

%

0.70

%

1.67

%

1.00

%

Long-term Borrowings

1.23

%

1.76

%

2.56

%

2.34

%

Average Liability Costs

0.37

%

0.80

%

1.60

%

1.15

%

Net Interest Spread

2.93

%

2.95

%

2.87

%

3.21

%

Net Interest Margin

3.09

%

3.24

%

3.39

%

3.58

%

Selected Financial Ratios:

Return on Average Assets

1.35

%

1.20

%

1.34

%

1.36

%

Return on Average Shareholders’ Equity

8.30

%

7.30

%

7.80

%

7.84

%

Return on Average Tangible Equity (non-GAAP) (1)

14.18

%

12.90

%

14.26

%

14.65

%

Efficiency Ratio

57.01

%

55.36

%

52.53

%

51.32

%

Note:

(1) Return on Average Tangible Equity:

(a) Net Income (GAAP)

$

367,738

$

289,023

$

260,099

$

256,342

Average Total Shareholders' Equity (GAAP)

4,430,688

3,956,969

3,336,075

3,268,944

Less: Average Total Intangibles

(1,837,609

)

(1,716,738

)

(1,511,501

)

(1,519,174

)

(b) Average Tangible Equity (non-GAAP)

$

2,593,079

$

2,240,231

$

1,824,574

$

1,749,770

Return on Average Tangible Equity (non-GAAP) [(a) / (b)]

14.18

%

12.90

%

14.26

%

14.65

%

December 31

December 31

December 31

December 31

Selected Financial Ratios:

2021

2020

2019

2018

Loans & Leases, net of unearned income / Deposit Ratio

77.19

%

85.46

%

98.99

%

95.91

%

Allowance for Loan & Lease Losses/ Loans & Leases, net of unearned income

1.20

%

1.34

%

0.56

%

0.57

%

Allowance for Credit Losses (2)/ Loans & Leases, net of unearned income

1.37

%

1.45

%

0.57

%

0.58

%

Nonaccrual Loans / Loans & Leases, net of unearned income

0.20

%

0.36

%

0.46

%

0.51

%

90-Day Past Due Loans/ Loans & Leases, net of unearned income

0.10

%

0.08

%

0.07

%

0.11

%

Non-performing Loans/ Loans & Leases, net of unearned income

0.50

%

0.75

%

0.96

%

1.06

%

Non-performing Assets/ Total Assets

0.36

%

0.59

%

0.75

%

0.83

%

Primary Capital Ratio

16.79

%

17.22

%

17.44

%

17.23

%

Shareholders' Equity Ratio

16.09

%

16.41

%

17.11

%

16.89

%

Price / Book Ratio

1.05

x

0.97

x

1.17

x

0.98

x

Price / Earnings Ratio

12.82

x

13.50

x

15.14

x

12.71

x

Note:

(2) Includes allowances for loan losses and lending-related commitments.

UNITED BANKSHARES, INC. AND SUBSIDIARIES

Washington, D.C. and Charleston, WV

Stock Symbol: UBSI

(In Thousands Except for Per Share Data)

Three Months Ended

December

December

September

June

March

Mortgage Banking Segment Data:

2021

2020

2021

2021

2021

Applications

$

1,534,311

$

2,284,532

$

1,893,870

$

2,029,846

$

2,630,426

Loans originated

1,287,629

1,979,284

1,385,871

1,658,128

1,910,619

Loans sold

$

1,273,014

$

2,065,400

$

1,470,928

$

1,877,772

$

1,817,884

Purchase money % of loans closed

69

%

49

%

69

%

69

%

43

%

Realized gain on sales and fees as a % of loans sold

3.02

%

4.10

%

3.00

%

2.90

%

4.16

%

Net interest income

$

2,609

$

2,918

$

2,367

$

2,871

$

2,650

Other income

30,921

73,082

45,023

39,765

67,507

Other expense

29,147

41,193

31,787

36,391

41,183

Income taxes

876

5,656

3,179

1,280

5,940

Net income

$

3,507

$

29,151

$

12,424

$

4,965

$

23,034

Year Ended

December

December

December

December

Mortgage Banking Segment Data:

2021

2020

2019

2018

Applications

$

8,088,453

$

9,988,227

$

4,330,000

$

3,912,000

Loans originated

6,242,246

6,648,247

2,941,722

2,619,454

Loans sold

$

6,439,598

$

6,393,394

$

2,804,451

$

2,608,242

Purchase money % of loans closed

61

%

47

%

72

%

83

%

Realized gain on sales and fees as a % of loans sold

3.31

%

3.63

%

2.86

%

2.72

%

Net interest income

$

10,497

$

8,853

$

916

$

1,315

Other income

183,216

276,185

83,884

68,555

Other expense

138,508

140,628

72,288

72,632

Income taxes

11,275

27,698

2,355

(505

)

Net income (loss)

$

43,930

$

116,712

$

10,157

$

(2,257

)

December 31

December 31

September 30

June 30

March 31

Period End Mortgage Banking Segment Data:

2021

2020

2021

2021

2021

Locked pipeline

$

448,889

$

989,640

$

648,706

$

660,258

$

979,842

Balance of loans serviced

$

3,698,998

$

3,587,953

$

3,723,206

$

3,674,023

$

3,585,890

Number of loans serviced

25,198

25,614

25,583

25,526

25,443

UNITED BANKSHARES, INC. AND SUBSIDIARIES

Washington, D.C. and Charleston, WV

Stock Symbol: UBSI

(In Thousands Except for Per Share Data)

December 31

December 31

September 30

June 30

March 31

Asset Quality Data:

2021

2020

2021

2021

2021

EOP Non-Accrual Loans

$

36,028

$

62,718

$

37,689

$

41,182

$

48,985

EOP 90-Day Past Due Loans

18,879

13,832

14,827

14,135

15,719

EOP Restructured Loans (1)

35,856

55,657

37,752

47,271

51,529

Total EOP Non-performing Loans

$

90,763

$

132,207

$

90,268

$

102,588

$

116,233

EOP Other Real Estate Owned

14,823

22,595

16,696

18,474

18,690

Total EOP Non-performing Assets

$

105,586

$

154,802

$

106,964

$

121,062

$

134,923

Three Months Ended

December

December

September

June

March

Allowance for Loan Losses:

2021

2020

2021

2021

2021

Beginning Balance

$

210,891

$

225,812

$

217,545

$

231,582

$

235,830

Cumulative Effect Adjustment for CECL

0

0

0

0

0

210,891

225,812

217,545

231,582

235,830

Initial allowance for acquired PCD loans

12,629

0

0

0

0

Gross Charge-offs

(4,205

)

(10,120

)

(2,004

)

(6,131

)

(6,957

)

Recoveries

4,080

3,203

3,173

910

2,415

Net (Charge-offs) Recoveries

(125

)

(6,917

)

1,169

(5,221

)

(4,542

)

Provision for Loan & Lease Losses

(7,379

)

16,935

(7,823

)

(8,816

)

294

Ending Balance

216,016

235,830

210,891

217,545

231,582

Reserve for lending-related commitments

31,442

19,250

25,191

20,897

20,024

Allowance for Credit Losses (2)

$

247,458

$

255,080

$

236,082

$

238,442

$

251,606

Year Ended

December

December

December

December

Allowance for Loan Losses:

2021

2020

2019

2018

Beginning Balance

$

235,830

$

77,057

$

76,703

$

76,627

Cumulative Effect Adjustment for CECL

0

57,442

0

0

235,830

134,499

76,703

76,627

Initial allowance for acquired PCD loans

12,629

18,635

0

0

Gross Charge-offs

(19,297

)

(32,983

)

(29,110

)

(28,606

)

Recoveries

10,578

9,386

8,151

6,669

Net (Charge-offs)

(8,719

)

(23,597

)

(20,959

)

(21,937

)

Provision for Loan & Lease Losses

(23,724

)

106,293

21,313

22,013

Ending Balance

216,016

235,830

77,057

76,703

Reserve for lending-related commitments

31,442

19,250

1,733

1,389

Allowance for Credit Losses (2)

$

247,458

$

255,080

$

78,790

$

78,092

Notes:

(1) Restructured loans with an aggregate balance of $22,421, $41,185, $24,662, $32,471, and $38,023 at December 31, 2021, December 31, 2020, September 30, 2021,

June 30, 2021 and March 31, 2021, respectively, were on nonaccrual status, but are not included in “EOP Non-Accrual Loans” above. Restructured loans with an

aggregate balance of $102 thousand and $46 thousand at December 31, 2021 and June 30, 2021, respectively, were 90 days past due, but not included in

“EOP Non-Accrual Loans” above.

(2) Includes allowances for loan losses and lending-related commitments.

W. Mark Tatterson

Chief Financial Officer

(800) 445-1347 ext. 8716

Source: United Bankshares, Inc.



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