United Bankshares Inc. announces earnings for second quarter, first half of 2024

CHARLESTON – United Bankshares Inc. (NASDAQ: UBSI) this week reported earnings for the second quarter of 2024 of $96.5 million, or $0.71 per diluted share.

The second quarter produced annualized returns on average assets, average equity and average tangible equity of 1.32%, 7.99% and 13.12%, respectively.

“UBSI continues to consistently deliver exceptional results,” said Richard M. Adams Jr., United’s chief executive officer. “In the second quarter, we saw increases in profitability, capital, loans and deposits, as well as decreases in expenses and non-performing assets. We anticipate continued success in the second half of the year and are excited about our recent acquisition announcement of Piedmont Bancorp Inc. in Atlanta.”

United previously announced during the second quarter of 2024 that it entered into a definitive merger agreement with Piedmont Bancorp Inc. combined organization will have more than $32

billion in assets and a network of over 240 locations across eight states and Washington, DC The merger is expected to close late in the fourth quarter of 2024 or early in the first quarter of 2025.

Earnings for the first quarter of 2024 were $86.8 million, or $0.64 per diluted share, and annualized returns on average assets, average equity and average tangible equity were 1.19%, 7.25% and 11.98%, respectively.

Earnings for the second quarter of 2023 were $92.5 million, or $0.68 per diluted share, and annualized returns on average assets, average equity and average tangible equity were 1.26%, 7.96% and 13.47%, respectively.

Net interest income for the second quarter of 2024 increased $3.2 million, or 1%, from the first quarter. Tax-equivalent net interest income for the second quarter of 2024 also increased $3.2 million, or 1%, from the first quarter. The increase in net interest income and tax-equivalent net interest income was driven by a higher yield on average net loans and loans held for sale, organic loan growth and a decrease in average long-term borrowings partially offset by higher interest expense driven by the impact of deposit rate repricing.

Average net loans and loans held for sale increased $127.6 million, or 2% on an annualized basis, from the first quarter. Average long-term borrowings decreased $209.8 million, or 14%, from the first quarter of 2024.

The provision for credit losses was $5.8 million for the second quarter of 2024 as compared to $5.7 million for the first quarter.

Noninterest income for the second quarter of 2024 decreased $2 million, or 6%, from the first quarter. The decrease was primarily due to a decrease in income from mortgage banking activities of $1.4 million driven by lower mortgage loan sale volume and a lower margin.

Noninterest expense for the second quarter of 2024 decreased $6 million, or 4%, from the first quarter. The decrease in noninterest expense was primarily driven by decreases in employee benefits of $2.5 million, Federal Deposit Insurance Corporation insurance expense of $1.4 million and smaller decreases in other categories of noninterest expense. Other noninterest expense was $32.8 million for the second quarter of 2024 compared to $33.5 million for the first quarter. The decrease was driven by lower amounts of certain general operating expenses partially offset by $1.3 million in merger-related expenses related to the Piedmont acquisition.

Earnings for the second quarter of 2024 were $96.5 million, or $0.71 per diluted share, as compared to earnings of $92.5 million, or $0.68 per diluted share, for the second quarter of 2023.

Net interest income for the second quarter of 2024 of $225.7 million slightly decreased by $1.7 million, or less than 1%, from the second quarter of 2023. Tax-equivalent net interest income for the second quarter of 2024 of $226.6 million slightly decreased by $2 million, or less than 1%, from the second quarter of 2023. The slight decreases were primarily due to higher interest expense driven by deposit rate repricing, an increase in average interest-bearing deposits and a decrease in acquired loan accretion income. The decrease was largely offset by the impact of rising market interest rates on earning assets, organic loan growth and a decrease in average long-term borrowings.

Acquired loan accretion income for the second quarter of 2024 decreased $671,000 from the second quarter of 2023. Average net loans and loans held for sale increased $912 million from the second quarter of 2023. Average long-term borrowings decreased $1 billion from the second quarter of 2023. The net interest margin for the second quarter of 2024 and 2023 was 3.50% and 3.51%, respectively.

The provision for credit losses was $5.8 million for the second quarter of 2024 as compared to $11.4 million for the second quarter of 2023.

Noninterest income for the second quarter of 2024 was $30.2 million, which was a decrease of $5 million, or 14%, from the second quarter of 2023. Mortgage loan servicing income decreased $9.1 million driven by an $8.1 million gain on the sale of mortgage servicing rights in the second quarter of 2023. Income from mortgage banking activities decreased $4 million from the second quarter of 2023 mainly due to lower mortgage loan origination and sale volume and a lower quarter-end valuation of mortgage derivatives. Net losses on investment securities were $218,000 for the second quarter of 2024, which included a $6.9 million gain on the VISA share exchange partially offset by a $6.8 million loss on the sale of AFS investment securities. Net losses on investment securities for the second quarter of 2023 were $7.3 million driven by a $7.2 million loss on the sale of AFS investment securities. Fees from brokerage services increased $1 million from the second quarter of 2023 primarily due to higher volume.

Earnings for the first six months of 2024 were $183.3 million, or $1.35 per diluted share, as compared to earnings of $190.8 million, or $1.41 per diluted share, for the first six months of 2023.

Net interest income for the first half of 2024 decreased $13.6 million, or 3%, from the first half of 2023.

Tax-equivalent net interest income for the first half of 2024 decreased $14.1 million, or 3%, from the first half of 2023. The decrease in net interest income and tax-equivalent net interest income was primarily due to higher interest expense driven by deposit rate repricing, an increase in average interest-bearing deposits and a decrease in acquired loan accretion income. These decreases were partially offset by the impact of rising market interest rates on earning assets, organic loan growth and a decrease in average long-term borrowings.

Average interest-bearing deposits increased $1.3 billion from the first half of 2023. Acquired loan accretion income for the first half of 2024 of $4.9 million was a decrease of $1.3 million from the first half of 2023.

Average net loans and loans held for sale increased $856.2 million from the first half of 2023. Average long-term borrowings decreased $967.1 million from the first half of 2023. The net interest margin for the first half of 2024 and 2023 was 3.47% and 3.57 %, respectively.

The provision for credit losses was $11.5 million for the first six months of 2024 as compared to $18.3 million for the first six months of 2023.

Noninterest income for the first six months of 2024 was $62.4 million, which was a decrease of $5.5 million, or 8%, from the first six months of 2023. Mortgage loan servicing income decreased $10.5 million from the first half of 2023 driven by the aforementioned sale of MSRs. Income from mortgage banking activities decreased $5.1 million from the first half of 2023 mainly due to lower mortgage loan origination and sale volume and a lower quarter-end valuation of mortgage derivatives and mortgage loans held for sale. Net losses on investment securities were $317,000 for the first half of 2024 which included a $6.9 million gain on the VISA share exchange partially offset by a $6.8 million loss on the sale of AFS investment securities. Net losses on investment securities for the first six months of 2023 were $7.7 million driven by a $7.2 million loss on the sale of AFS investment securities. Fees from brokerage services increased $2.1 million from the first half of 2023 primarily due to higher volume.

Noninterest expense for the first six months of 2024 was $275.5 million, an increase of $2.8 million, or 1%, from the first six months of 2023 driven by increases in employee compensation of $3.9 million, other noninterest expense of $2.9 million and FDIC insurance expense of $2.4 million partially offset by decreases in the expense for the reserve for unfunded loan commitments of $4.5 million and mortgage loan servicing expense of $1.6 million. The increase in employee compensation was driven by higher employee incentives, base salaries and employee severance associated with the previously announced mortgage delivery channel consolidation. The increase in other noninterest expense was primarily driven by a $2 million increase in tax credit amortization, $1.3 million in merger-related expenses incurred in the second quarter of 2024 and higher amounts of certain general operating expenses.

United’s asset quality continues to be sound. As of June 30, non-performing loans were $65.3 million, or 0.3% of loans and leases, net of unearned income. Total non-performing assets were $67.5 million, including other real estate owned of $2.2 million, or 0.23% of total assets at June 30, 2024. As of Dec. 31, 2023, non-performing loans were $45.5 million, or 0.21% of loans and leases, net of unearned income. Total non-performing assets were $48.1 million, including OREO of $2.6 million, or 0.16% of total assets at Dec. 31, 2023.

United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 15.8% as of June 30, which 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.

United did not repurchase any shares of its common stock during 2024 or 2023.

As of June 30, United had consolidated assets of approximately $30 billion and is the 38th largest banking company in the US based on market capitalization. United is the parent company of United Bank, which comprises more than 225 offices located throughout West Virginia, Ohio, Virginia, Maryland, North Carolina, South Carolina, Pennsylvania, Georgia and Washington, DC

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