Business Wire | Jul 24, 2020 07:50AM EDT

United Bankshares, Inc. Announces Earnings for the Second Quarter and First Half of 2020

Jul. 24, 2020

WASHINGTON & CHARLESTON, W. Va.--(BUSINESS WIRE)--Jul. 24, 2020--United Bankshares, Inc. (NASDAQ: UBSI) ("United"), today reported earnings for the second quarter and the first half of 2020. Earnings for the second quarter of 2020 were $52.7 million as compared to earnings of $67.2 million for the second quarter of 2019. Earnings for the first half of 2020 were $92.9 million as compared to earnings of $130.8 million for the first half of 2019. The lower amount of net income in 2020 was driven primarily by significant merger-related expenses from the Carolina Financial Corporation ("Carolina Financial") acquisition and a higher provision for loan losses resulting from an adverse future macroeconomic forecast as a result of the coronavirus ("COVID-19") pandemic under the new Current Expected Credit Loss ("CECL") accounting standard. The higher amount of provision expense resulting from COVID-19 is an industry-wide issue affecting bank earnings nationwide. Diluted earnings per share were $0.44 and $0.84 for the second quarter and first half of 2020, respectively, as compared to diluted earnings per share of $0.66 and $1.28 for the second quarter and first half of 2019, respectively.

Second quarter of 2020 results produced an annualized return on average assets of 0.87%, an annualized return on average equity of 5.40% and an annualized return on average tangible equity of 9.58%, respectively. For the first half of 2020, United's annualized return on average assets was 0.85% while the annualized return on average equity was 5.16% and the annualized return on average tangible equity was 9.28%. United's annualized returns on average assets, average equity and average tangible equity were 1.38%, 8.12% and 14.90%, respectively, for the second quarter of 2019 while the annualized returns on average assets, average equity and average tangible equity were 1.36%, 8.00% and 14.78%, respectively, for the first half of 2019.

"During the second quarter of 2020, we successfully completed the acquisition of Carolina Financial Corporation, headquartered in Charleston, South Carolina, which broadens our footprint in the Southeast," stated Richard M. Adams, United's Chairman of the Board and Chief Executive Officer. "Core earnings for the second quarter of 2020 continued to be good despite the current economic environment and significant merger expenses related to the acquisition of Carolina Financial. In addition, United has continued its focus on meeting our customers' needs during the COVID-19 pandemic by suspending residential property foreclosures, offering fee waivers, providing payment deferrals, and processing over 8,000 loans totaling approximately $1.3 billion under the government Paycheck Protection Program."

On May 1, 2020, United completed its acquisition of Carolina Financial. The results of operations for Carolina Financial are included in the consolidated results of operations from the date of acquisition. As a result of the acquisition, the second quarter and first half of 2020 were impacted by two months of increased levels of average balances, income, and expense as compared to the second quarter and first half of 2019. In addition, the second quarter and first half of 2020 included $46.4 million and $48.0 million, respectively, of merger-related expenses from the acquisition.

Net interest income for the second quarter of 2020 was $170.6 million, which was an increase of $20.0 million or 13% from the second quarter of 2019. Tax-equivalent net interest income, which adjusts for the tax-favored status of income from certain loans and investments, for the second quarter of 2020 was $171.6 million, an increase of $20.0 million or 13% from the second quarter of 2019 due mainly to an increase in average earning assets from the Carolina Financial acquisition. Average earning assets for the second quarter of 2020 increased $4.5 billion or 26% from the second quarter of 2019 due mainly to a $3.4 billion or 24% increase in average net loans. Average short-term investments increased $778.1 million or 101% while average investment securities increased $315.6 million or 12%. In addition, the average cost of funds for the second quarter of 2020 decreased 84 basis points due primarily to a decline in interest rates from the second quarter of 2019. Partially offsetting the increases to tax-equivalent net interest income for the second quarter of 2020 was a decrease of 97 basis points in the average yield on earning assets as compared to the second quarter of 2019 due to the decline in market interest rates and the low yield on Paycheck Protection Program ("PPP") loans. In addition, loan accretion on acquired loans was $9.5 million and $14.5 million for the second quarter of 2020 and 2019, respectively, a decline of $5.0 million. The net interest margin of 3.18% for the second quarter of 2020 was a decrease of 35 basis points from the net interest margin of 3.53% for the second quarter of 2019.

Net interest income for the first six months of 2020 was $312.1 million, which was an increase of $17.4 million or 6% from the first six months of 2019. Tax-equivalent net interest income for the first six months of 2020 was $313.9 million, an increase of $17.2 million or 6% from the first six months of 2019. This increase in tax-equivalent net interest income was primarily attributable to an increase in average earning assets from the Carolina Financial acquisition. Average earning assets increased $2.4 billion or 14% from the first six months of 2019 as average net loans increased $1.8 billion or 13%. Average short-term investments and average investment securities increased $376.8 million or 50% and $204.8 million or 8%, respectively. In addition, the average cost of funds for the first half of 2020 decreased 55 basis points due primarily to a decline in interest rates from the first half of 2019. Partially offsetting the increases to tax-equivalent net interest income for the first half of 2020 was a decrease of 67 basis points in the average yield on earning assets as compared to the first half of 2019 due to the decline in market interest rates and the low yield on the PPP loans. In addition, loan accretion on acquired loans was $19.1 million and $23.0 million for the first half of 2020 and 2019, respectively, a decline of $3.9 million. The net interest margin of 3.24% for the first half of 2020 was a decrease of 26 basis points from the net interest margin of 3.50% for the first half of 2019.

On a linked-quarter basis, net interest income for the second quarter of 2020 increased $29.1 million or 21% from the first quarter of 2020. United's tax-equivalent net interest income for the second quarter of 2020 increased $29.3 million or 21% from the first quarter of 2020 due mainly to an increase in average earning assets from the Carolina Financial acquisition. Average earning assets increased $4.4 billion or 25% for the linked-quarter. Average net loans increased $3.2 billion or 23% while average investment securities increased $287.6 million or 11%. Average short-term investments increased $834.3 million or 117%. In addition, the average cost of funds for the second quarter of 2020 decreased 55 basis points due primarily to a decline in market interest rates from the first quarter of 2020. Loan accretion on acquired loans was flat at $9.5 million for the second quarter and first quarter of 2020. Partially offsetting the increases to tax-equivalent net interest income on a linked-quarter was a decrease of 51 basis points in the average yield on earning assets due mainly to the low yield on the PPP loans. The net interest margin of 3.18% for the second quarter of 2020 was a decrease of 12 basis points from the net interest margin of 3.30% for the first quarter of 2020.

For the quarters ended June 30, 2020 and 2019, the provision for credit losses was $45.9 million and $5.4 million, respectively, while the provision for the first six months of 2020 was $73.0 million as compared to $10.4 million for the first six months of 2019. These increases in 2020 were due mainly to a provision for loan losses of $29.0 million recorded on purchased non-credit deteriorated ("non-PCD") loans from Carolina Financial and the impact from the reasonable and supportable forecasts for future macroeconomic scenarios used in the estimation of expected credit losses adversely impacted by the COVID-19 pandemic under the new CECL accounting standard adopted by United on January 1, 2020. Net charge-offs were $4.3 million and $5.9 million for the second quarter of 2020 and 2019, respectively. Net charge-offs were $11.0 million and $10.7 million for the first half of 2020 and 2019, respectively. Annualized net charge-offs as a percentage of average loans was 0.10% and 0.15% for the second quarter and first half of 2020, respectively. On a linked-quarter basis, the provision for loans losses increased $18.8 million due primarily to the provision expense recorded on the non-PCD loans acquired from Carolina Financial. Net charge-offs for the second quarter of 2020 decreased $2.3 million from the first quarter of 2020.

Noninterest income for the second quarter of 2020 was $88.4 million, which was an increase of $48.6 million or 122% from the second quarter of 2019. The increase was due mainly to an increase of $46.5 million in income from mortgage banking activities due to increased production and sales of mortgage loans in the secondary market as well as the addition of mortgage banking operations from the Carolina Financial acquisition. In addition, $1.5 million in mortgage servicing income was added as a result of the Carolina Financial acquisition.

Noninterest income for the first half of 2020 was $125.2 million, which was an increase of $54.2 million or 76% from the first half of 2019. The increase was due mainly to an increase of $50.5 million in income from mortgage banking activities due mainly to increased production and sales of mortgage loans in the secondary market and the addition of mortgage banking operations from the Carolina Financial acquisition. Net investment securities' gains were $1.7 million for the first half of 2020 as compared to a net loss of $50 thousand for the first half of 2019, an increase of $1.8 million. In addition, $1.5 million in mortgage servicing income was added as a result of the Carolina Financial acquisition.

On a linked-quarter basis, noninterest income for the second quarter of 2020 increased $51.6 million or 140% from the first quarter of 2020 due mainly to an increase of $50.6 million in income from mortgage banking activities. The increase was due mainly to increased production and sales of mortgage loans in the secondary market as well as net gains on mortgage loan derivatives and the addition of mortgage banking operations from the Carolina Financial acquisition. Net investment securities' gains were $1.5 million for the second quarter of 2020 as compared to a net gain of $196 thousand for the first quarter of 2020, an increase of $1.3 million. In addition, $1.5 million of mortgage servicing income was added in the second quarter of 2020 as a result of the Carolina Financial acquisition. Partially offsetting these increases was a decrease of $1.1 million in income from bank-owned life insurance policies ("BOLI") due to the recognition of death benefits of $1.2 million in the first quarter of 2020.

Noninterest expense for the second quarter of 2020 was $149.4 million, an increase of $49.2 million or 49% from the second quarter of 2019 due mainly to the additional employees and branch offices from the Carolina Financial acquisition as most major categories of noninterest expense showed increases. In particular, employee compensation increased $24.4 million (some of which was due to higher employee incentives and commissions mainly related to the increased mortgage banking production), employee benefits increased $4.2 million, net occupancy expenses increased $1.7 million, data processing expense increased $10.4 million which included a contract termination penalty of $9.7 million, mortgage loan servicing and impairment expense increased $2.4 million (includes $710 thousand for impairment on mortgage servicing rights) and other expense increased $10.6 million. Within other expense, merger-related expenses associated with the Carolina Financial acquisition were $5.5 million and the expense for the reserve for unfunded commitments increased $2.7 million, which includes $1.8 million for the expense related to the reserve for the acquired unfunded commitments from Carolina Financial. Partially offsetting the increases to noninterest expense were decreases of $518 thousand in Federal Deposit Insurance Corporation ("FDIC") insurance expense due to lower premiums. Also, included in noninterest expense for the second quarter of 2019 were penalties of $5.1 million to prepay long-term Federal Home Loan Bank ("FHLB") advances.

Noninterest expense for the first half of 2020 was $250.5 million, an increase of $60.9 million or 32% from the first half of 2019 due mainly to the additional employees and branch offices from the Carolina Financial acquisition. Employee compensation increased $30.0 million. Otherwise, employee compensation increased due to higher employee incentives and commissions expense mainly related to the mortgage banking production. Employee benefits increased $5.6 million, net occupancy expenses increased $2.0 million, data processing expense increased $10.7 million which included the contract termination penalty of $9.7 million, mortgage loan servicing and impairment expense increased $2.5 million (includes $710 thousand for impairment on mortgage servicing rights) and other expense increased $15.7 million. Within other expense, merger-related expenses associated with the Carolina Financial acquisition were $7.1 million, the expense for the reserve for unfunded commitments increased $3.6 million (includes $1.8 million for the expense related to the reserve for the acquired unfunded loan commitments from Carolina Financial), and the amortization of income tax credits increased $2.4 million which reduces the effective tax rate. Partially offsetting the increases to noninterest expense were decreases of $1.4 million in FDIC insurance expense due to lower premiums and $536 thousand in other real estate owned ("OREO") expense due to fewer declines in fair value of OREO properties. Also, included in noninterest expense for the first half of 2019 were penalties of $5.1 million to prepay long-term FHLB advances.

On a linked-quarter basis, noninterest expense for the second quarter of 2020 increased $48.2 million or 48% from the first quarter of 2019 due primarily to the added employees and branch offices from the Carolina Financial acquisition. In particular, employee compensation expense increased $24.1 million (some of which was due to higher employee incentives and commissions mainly related to the increased mortgage banking production), employee benefits increased $2.0 million, net occupancy expense increased $1.3 million, data processing expense increased $10.4 million which included the contract termination penalty of $9.7 million, mortgage loan servicing and impairment expense increased $2.4 million (includes $710 thousand for impairment on mortgage servicing rights) and other expenses increased $6.8 million. Within other expense, merger-related expenses increased $4.0 million and the expense for the reserve for unfunded commitments increased $2.1 million, which includes $1.8 million for the expense related to the reserve for the acquired unfunded loan commitments from Carolina Financial.

For the second quarter and first half of 2020, income tax expense was $11.0 million and $20.9 million as compared to $17.5 million and $34.9 million, respectively, for the second quarter and first half of 2019. These decreases were due to lower earnings and a lower effective tax rate, due mainly to income tax credits. On a linked-quarter basis, income tax expense increased $1.1 million due to higher earnings partially offset by a lower effective tax rate, due mainly to income tax credits from the first quarter of 2020. United's effective tax rate was 17.3% for the second quarter of 2020, 20.7% for the second quarter of 2019 and 19.8% for the first quarter of 2020. For the first half of 2020 and 2019, United's effective tax rate was 18.4% and 21.0%, respectively.

United's asset quality continues to be sound relative to the current economic environment. At June 30, 2020, nonperforming loans were $156.3 million, or 0.87% of loans & leases, net of unearned income, as compared to nonperforming loans of $131.1 million, or 0.96% of loans & leases, net of unearned income, at December 31, 2019. Nonperforming loans of $37.9 million were added from the Carolina Financial acquisition. As of June 30, 2020, the allowance for loan losses was $215.1 million or 1.20% of loans & leases, net of unearned income, as compared to $77.1 million or 0.56% of loans & leases, net of unearned income, at December 31, 2019. The increase in the allowance for loan losses was due to the adoption of CECL, the impact of COVID-19 and the loans acquired from Carolina Financial. Total nonperforming assets of $186.2 million, including OREO of $29.9 million at June 30, 2020, represented 0.71% of total assets as compared to nonperforming assets of $146.6 million or 0.75% at December 31, 2019.

United continues to be well-capitalized based upon regulatory guidelines. United's estimated risk-based capital ratio is 14.8% at June 30, 2020 while its estimated Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 12.6%, 12.6% and 10.7%, respectively. The June 30, 2020 ratios reflects 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%.

As mentioned previously, United completed its acquisition of Carolina Financial during the second quarter of 2020. The acquisition of Carolina Financial expands United's footprint in the Southeast region. At consummation, Carolina Financial had assets of approximately $5.0 billion, portfolio loans of $3.3 billion, and deposits of $3.9 billion. The aggregate purchase price was approximately $817.9 million. The number of shares issued in the transaction was 28.0 million. The preliminary purchase price has been allocated to the identifiable tangible and intangible assets resulting in preliminary additions to goodwill, trade name intangibles and core deposit intangibles of $316.8 million, $1.4 million and $3.0 million, respectively. United recorded fair value discounts of $51.6 million on the loans acquired, $562 thousand on investment securities, $272 thousand on OREO, $4.8 million on trust preferred issuances and $135 thousand on subordinated notes respectively, and premiums of $8.8 million on buildings acquired, $5.0 million on land acquired, $12.8 million on interest-bearing deposits, and $468 thousand on long-term FHLB advances, respectively. United also recorded an allowance for credit losses, including a reserve for unfunded commitments, of $50.6 million on the loans and commitments acquired split between $19.8 million for PCD loans and $30.8 million for non-PCD loans. The estimated fair values of the acquired assets and assumed liabilities, including identifiable intangible assets are preliminary as of June 30, 2020 and are subject to refinement as additional information relative to closing date fair values becomes available.

As of June 30, 2020, United had consolidated assets of approximately $26.2 billion. United is the parent company of United Bank, the largest community bank headquartered in the D.C. Metro region. United Bank has 226 offices in West Virginia, Virginia, Ohio, Pennsylvania, Maryland, North Carolina, South Carolina, Georgia, and the nation's capital. 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 June 30, 2020 consolidated financial statements on Form 10-Q. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of June 30, 2020 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 common equity is calculated as GAAP total shareholders' equity minus total intangible assets. Tangible common equity can thus be considered the most conservative valuation of the company. Tangible common 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 common 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, such as statements about the potential impacts of the COVID-19 pandemic. 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 effect of the COVID-19 pandemic, including the negative impacts and disruptions on United's colleagues, the communities United serves, and the domestic and global economy, which may have an adverse effect on United's business; current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and any slowdown in global economic growth; fiscal andmonetary policies of the Federal Reserve Board; 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; the successful integration of operations of Carolina Financial Corporation; 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, 2019, 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

FINANCIAL SUMMARY

(In Thousands Except for Per Share Data)



Three Months Ended Six Months Ended

June 30 June 30 June 30 June 30 2020 2019 2020 2019

EARNINGS SUMMARY:

Interest income $ 198,717 $ 199,245 $ 379,199 $ 388,342

Interest expense 28,115 48,692 67,079 93,621

Net interest 170,602 150,553 312,120 294,721income

Provision for 45,911 5,417 73,030 10,413credit losses

Noninterest 88,390 39,795 125,196 71,018income

Noninterest 149,374 100,195 250,507 189,620expenses

Income before 63,707 84,736 113,779 165,706income taxes

Income taxes 11,021 17,529 20,910 34,857

Net income $ 52,686 $ 67,207 $ 92,869 $ 130,849



PER COMMON SHARE:

Net income:

Basic $ 0.44 $ 0.66 $ 0.84 $ 1.28

Diluted 0.44 0.66 0.84 1.28

Cash dividends $ 0.35 $ 0.34 0.70 0.68

Book value 32.35 32.70

Closing market $ 27.66 $ 37.09price

Common shares outstanding:

Actual at periodend, net of 129,755,395 101,963,030treasury shares

Weighted average- 119,823,652 101,773,643 110,559,363 101,833,880basic

Weighted average- 119,887,823 102,047,845 110,624,976 102,099,809diluted



FINANCIAL RATIOS:

Return on average 0.87% 1.38% 0.85% 1.36%assets

Return on averageshareholders' 5.40% 8.12% 5.16% 8.00%equity

Return on averagetangible equity 9.58% 14.90% 9.28% 14.78%(non-GAAP) ^(1)

Average equity to 16.07% 17.02% 16.47% 17.02%average assets

Net interest 3.18% 3.53% 3.24% 3.50%margin



June 30 June 30 December 31 March 31 2019 2019 2020 2020

PERIOD END BALANCES:

Assets $ 26,234,973 $ 19,882,539 $ 19,662,324 $ 20,370,653

Earning assets 23,253,983 17,548,123 17,344,638 17,966,159

Loans & leases,net of unearned 17,992,402 13,635,266 13,712,129 13,855,558income

Loans held for 625,984 370,593 387,514 503,514sale

Investment 3,062,198 2,563,262 2,669,797 2,673,415securities

Total deposits 19,893,843 14,404,085 13,852,421 14,014,168

Shareholders' 4,197,855 3,333,858 3,363,833 3,343,702equity

Note: (1) See information under the "Selected Financial Ratios" table for areconciliation 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 Six Months Ended

June June March June June

2020 2019 2020 2020 2019

Interest & Loan Fees $ 198,717 $ 199,245 $ 180,482 $ 379,199 $ 388,342Income (GAAP)

Tax equivalent 1,018 977 782 1,800 1,970adjustment

Interest & FeesIncome (FTE) 199,735 200,222 181,264 380,999 390,312(non-GAAP)

Interest Expense 28,115 48,692 38,964 67,079 93,621

Net Interest Income 171,620 151,530 142,300 313,920 296,691(FTE) (non-GAAP)



Provision for Credit 45,911 5,417 27,119 73,030 10,413Losses



Non-Interest Income:

Fees from trust 3,261 3,438 3,483 6,744 6,702services

Fees from brokerage 2,651 2,766 2,916 5,567 5,290services

Fees from deposit 8,055 8,464 7,957 16,012 16,517services

Bankcard fees and 718 1,102 993 1,711 2,258merchant discounts

Other charges, 610 576 518 1,128 1,097commissions, and fees

Income frombank-owned life 1,291 1,326 2,388 3,679 3,153insurance

Income from mortgage 68,213 21,704 17,631 85,844 35,385banking activities

Mortgage loan 1,534 0 0 1,534 0servicing income

Net gains (losses) on 1,510 109 196 1,706 (50)investment securities

Other non-interest 547 310 724 1,271 666revenue

Total Non-Interest 88,390 39,795 36,806 125,196 71,018Income



Non-Interest Expense:

Employee compensation 68,664 44,301 44,541 113,205 83,250

Employee benefits 12,779 8,578 10,786 23,565 18,009

Net occupancy 10,318 8,667 9,062 19,380 17,418

Data processing 15,926 5,567 5,506 21,432 10,729

Amortization of 1,646 1,754 1,577 3,223 3,508intangibles

OREO expense 607 633 906 1,513 2,049

Equipment expense 5,004 3,675 3,845 8,849 6,990

FDIC insurance 2,782 3,300 2,400 5,182 6,600expense

Mortgage loanservicing expense and 2,510 106 138 2,648 197impairment

Prepayment penalties 0 5,105 0 0 5,105on FHLB borrowings

Other expenses 29,138 18,509 22,372 51,510 35,765

Total Non-Interest 149,374 100,195 101,133 250,507 189,620Expense



Income Before IncomeTaxes (FTE) 64,725 85,713 50,854 115,579 167,676(non-GAAP)



Tax equivalent 1,018 977 782 1,800 1,970adjustment



Income Before Income 63,707 84,736 50,072 113,779 165,706Taxes (GAAP)



Taxes 11,021 17,529 9,889 20,910 34,857



Net Income $ 52,686 $ 67,207 $ 40,183 $ 92,869 $ 130,849



MEMO: Effective Tax 17.30% 20.69% 19.75% 18.38% 21.04%Rate

UNITED BANKSHARES, INC. AND SUBSIDIARIES

Washington, D.C. and Charleston, WV Stock Symbol: UBSI

(In Thousands Except for Per Share Data)



Consolidated Balance Sheets

June 30 June 30

2020 2019 June 30 December 31 June 30

Q-T-D Q-T-D 2020 2019 2019 Average Average



Cash & Cash $ 1,803,632 $ 955,838 $ 2,062,813 $ 837,493 $ 1,253,573 Equivalents



Securities 2,671,202 2,396,501 2,799,941 2,437,296 2,345,791 Available for Sale

Less: Allowance for 0 0 0 0 0 credit losses

Net available for 2,671,202 2,396,501 2,799,941 2,437,296 2,345,791 sale securities

Securities Held to 1,235 7,315 1,235 1,446 6,461 Maturity

Less: Allowance for (10) 0 (14) 0 0 credit losses

Net held to 1,225 7,315 1,221 1,446 6,461 maturity securities

Equity Securities 8,940 13,082 9,875 8,894 9,098

Other Investment 249,555 198,432 251,161 222,161 201,912 Securities

Total Securities 2,930,922 2,615,330 3,062,198 2,669,797 2,563,262

Total Cash and 4,734,554 3,571,168 5,125,011 3,507,290 3,816,835 Securities



Loans held for sale 566,381 285,366 625,984 387,514 370,593



Commercial Loans & 11,795,853 9,504,143 13,043,554 9,399,170 9,525,321 Leases

Mortgage Loans 3,730,995 3,038,958 3,745,085 3,107,721 3,050,786

Consumer Loans 1,259,424 1,065,490 1,243,915 1,206,657 1,063,839



Gross Loans 16,786,272 13,608,591 18,032,554 13,713,548 13,639,946

Unearned income (7,645) (5,241) (40,152) (1,419) (4,680)



Loans & Leases, net 16,778,627 13,603,350 17,992,402 13,712,129 13,635,266 of unearned income



Allowance for Loan (170,947) (76,682) (215,121) (77,057) (76,400) & Leases Losses

Net Loans 16,607,680 13,526,668 17,777,281 13,635,072 13,558,866



Mortgage Servicing 21,171 0 20,200 0 0 Rights

Goodwill 1,679,530 1,478,014 1,794,779 1,478,014 1,478,014

Other Intangibles 29,153 34,386 31,108 29,931 33,439

Operating Lease 65,115 63,503 70,655 57,783 63,113 Right-of-Use Asset

Other Real Estate 17,797 16,264 29,947 15,515 14,469 Owned

Other Assets 681,219 540,485 760,008 551,205 547,210

Total Assets $ 24,402,600 $ 19,515,854 $ 26,234,973 $ 19,662,324 $ 19,882,539



MEMO:Interest-earning $ 21,653,742 $ 17,197,989 $ 23,253,983 $ 17,344,638 $ 17,548,123 Assets



Interest-bearing $ 11,600,243 $ 9,753,724 $ 12,797,269 $ 9,231,059 $ 10,073,420 Deposits

Noninterest-bearing 6,412,124 4,240,050 7,096,574 4,621,362 4,330,665 Deposits

Total Deposits 18,012,367 13,993,774 19,893,843 13,852,421 14,404,085



Short-term 144,866 136,230 176,168 374,654 122,159 Borrowings

Long-term 2,070,557 1,879,154 1,633,891 1,838,029 1,783,567 Borrowings

Total Borrowings 2,215,423 2,015,384 1,810,059 2,212,683 1,905,726



Operating Lease 68,917 67,240 74,435 61,342 66,821 Liability

Other Liabilities 184,604 118,469 258,781 172,045 172,049

Total Liabilities 20,481,311 16,194,867 22,037,118 16,298,491 16,548,681



Preferred Equity 0 0 0 0 0

Common Equity 3,921,289 3,320,987 4,197,855 3,363,833 3,333,858

Total Shareholders' 3,921,289 3,320,987 4,197,855 3,363,833 3,333,858 Equity



Total Liabilities & $ 24,402,600 $ 19,515,854 $ 26,234,973 $ 19,662,324 $ 19,882,539 Equity



MEMO:Interest-bearing $ 13,815,666 $ 11,769,108 $ 14,607,328 $ 11,443,742 $ 11,979,146 Liabilities

UNITED BANKSHARES, INC. AND SUBSIDIARIES

Washington, D.C. and Charleston, WV

Stock Symbol: UBSI

(In Thousands Except for Per Share Data)



Three Months Ended Six Months Ended

June June March June June

Quarterly/Year-to-Date 2020 2019 2020 2020 2019Share Data:



Earnings Per Share:

Basic $ 0.44 $ 0.66 $ 0.40 $ 0.84 $ 1.28

Diluted $ 0.44 $ 0.66 $ 0.40 $ 0.84 $ 1.28



CommonDividend $ 0.35 $ 0.34 $ 0.35 $ 0.70 $ 0.68Declared PerShare:



High Common $ 33.12 $ 39.88 $ 39.07 $ 39.07 $ 39.88Stock Price

Low Common $ 21.52 $ 35.42 $ 19.67 $ 19.67 $ 30.67Stock Price



AverageSharesOutstanding (Net ofTreasuryStock):

Basic 119,823,652 101,773,643 101,295,073 110,559,363 101,833,880

Diluted 119,887,823 102,047,845 101,399,181 110,624,976 102,099,809



Memorandum Items:



Common $ 45,416 $ 34,688 $ 35,604 $ 81,020 $ 69,447Dividends



Dividend 86.20% 51.61% 88.60% 87.24% 53.07%Payout Ratio

June 30 June 30 March 31

EOP Share Data: 2020 2019 2020



Book Value Per Share $ 32.35 $ 32.70 $ 32.87

Tangible Book Value Per Share $ 18.28 $ 17.87 $ 18.06(non-GAAP) ^(1)



52-week High Common Stock Price $ 40.70 $ 39.95 $ 40.70

Date 11/05/19 08/21/18 11/05/19

52-week Low Common Stock Price $ 19.67 $ 29.13 $ 19.67

Date 03/23/20 12/27/18 03/23/20



EOP Shares Outstanding (Net of 129,755,395 101,963,030 101,723,600Treasury Stock):



Memorandum Items:



EOP Employees (full-time 3,039 2,212 2,206equivalent)



Note:

(1) Tangible Book Value Per Share:

Total Shareholders' Equity (GAAP) $ 4,197,855 $ 3,333,858 $ 3,343,702

Less: Total Intangibles (1,825,887) (1,511,453) (1,506,368)

Tangible Equity (non-GAAP) $ 2,371,968 $ 1,822,405 $ 1,837,334

/ EOP Shares Outstanding (Net of 129,755,395 101,963,030 101,723,600Treasury Stock)

Tangible Book Value Per Share $ 18.28 $ 17.87 $ 18.06(non-GAAP)



UNITED BANKSHARES, INC. AND SUBSIDIARIES

Washington, D.C. and Charleston, WV Stock Symbol: UBSI

(In Thousands Except for Per Share Data)



Three Months Ended Six Months Ended

June June March June June

Selected Yields and Net Interest 2020 2019 2020 2020 2019Margin:



Net Loans 4.21% 5.10% 4.60% 4.38% 5.01%

Investment Securities 2.44% 2.90% 2.70% 2.56% 2.91%

Money Market Investments/FFS 0.49% 2.81% 2.23% 1.04% 3.00%

Average Earning Assets Yield 3.70% 4.67% 4.21% 3.93% 4.60%

Interest-bearing Deposits 0.67% 1.46% 1.19% 0.90% 1.41%

Short-term Borrowings 0.54% 1.79% 1.34% 0.93% 1.69%

Long-term Borrowings 1.68% 2.70% 2.21% 1.95% 2.73%

Average Liability Costs 0.82% 1.66% 1.37% 1.07% 1.62%

Net Interest Spread 2.88% 3.01% 2.84% 2.86% 2.98%

Net Interest Margin 3.18% 3.53% 3.30% 3.24% 3.50%



Selected Financial Ratios:



Return on Average Assets 0.87% 1.38% 0.82% 0.85% 1.36%

Return on Average Common Equity 5.40% 8.12% 4.82% 5.16% 8.00%

Return on Average Tangible 9.58% 14.90% 8.77% 9.28% 14.78%Equity (non-GAAP) ^(1)

Efficiency Ratio 57.68% 52.64% 56.71% 57.28% 51.85%

Note:

(1) Return onAverage Tangible Equity:

(a) Net $52,686 $67,207 $ 40,183 $92,869 $130,849Income (GAAP)



(b) Number of 91 91 91 182 181days



Average TotalShareholders' $3,921,289 $3,220,987 $3,350,652 $3,620,425 $3,299,061 Equity (GAAP)

Less: AverageTotal (1,708,683) (1,512,400) (1,507,272) (1,607,977) (1,513,279) Intangibles

(c) AverageTangible $2,212,606 $1,808,587 $1,843,380 $2,012,448 $1,785,782Equity (non-GAAP)



Return onTangibleEquity (non-GAAP) 9.58% 14.90% 8.77% 9.28% 14.78%[(a) / (b)] x365 / (c)

June June March December 30 30 31 31

2020 2019 2020 2019

Loan / Deposit Ratio 90.44% 94.66% 98.87% 98.99%

Allowance for Loan & Lease Losses/ 1.20% 0.56% 1.12% 0.56%Loans, net of unearned income

Allowance for Credit Losses ^(1)/ 1.26% 0.57% 1.17% 0.57%Loans, net of unearned income

Nonaccrual Loans / Loans, net of 0.38% 0.52% 0.46% 0.46%unearned income

90-Day Past Due Loans/ Loans, net of 0.06% 0.09% 0.05% 0.07%unearned income

Non-performing Loans/ Loans, net of 0.87% 1.05% 0.96% 0.96%unearned income

Non-performing Assets/ Total Assets 0.71% 0.79% 0.73% 0.75%

Primary Capital Ratio 16.72% 17.09% 17.08% 17.44%

Shareholders' Equity Ratio 16.00% 16.77% 16.41% 17.11%

Price / Book Ratio 0.85 x 1.13 x 0.70 x 1.17 x

Price / Earnings Ratio 15.74 x 14.08 x 14.56 x 15.14 x

Note:(1) 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 and Number of Loans Serviced)

Three Months Ended Six Months Ended

June June March June June

MortgageBanking 2020 2019 2020 2020 2019SegmentData:

Applications $ 2,189,008 $ 1,278,000 $ 2,054,000 $ 4,243,008 $ 2,144,000

Loans 1,692,297 801,926 904,949 2,597,246 1,256,514originated

Loans sold $ 1,636,063 $ 680,986 $ 793,392 $ 2,429,455 $ 1,138,178

Purchasemoney % of 42% 81% 49% 44% 83%loans closed

Realizedgain onsales and 2.49% 2.76% 2.82% 2.60% 2.76%fees as a %of loanssold

Net interest $ 2,246 $ 111 $ 949 $ 3,195 $ 166income

Other income 71,013 23,501 21,190 92,203 39,607

Other 35,261 18,771 20,757 56,018 33,613expense

Income taxes 6,946 1,004 273 7,219 1,286

Net income $ 31,052 $ 3,837 $ 1,109 $ 32,161 $ 4,874

June June December March

Period End Mortgage Banking 2020 2019 2019 2020Segment Data:

Locked pipeline $ 889,275 $ 305,843 $ 143,465 $ 739,322

Balance of loans serviced $ 3,552,292 $ 0 $ 0 $ 0

Number of loans serviced 25,609 0 0 0

June June December March

Asset Quality Data: 2020 2019 2019 2020



EOP Non-Accrual Loans $ 67,669 $ 71,123 $ 63,209 $ 64,036

EOP 90-Day Past Due Loans 11,150 12,729 9,494 7,051

EOP Restructured Loans ^(1) 77,436 58,750 58,369 61,470

Total EOP Non-performing Loans $ 156,255 $ 142,602 $ 131,072 $ 132,557



EOP Other Real Estate Owned 29,947 14,469 15,515 15,849

Total EOP Non-performing Assets $ 186,202 $ 157,071 $ 146,587 $ 148,406

Three Months Ended Six Months Ended

June June March June June

Allowance for Loan 2020 2019 2020 2020 2019Losses:

Beginning Balance $ 154,923 $ 76,886 $ 77,057 $ 77,057 $ 76,703

Cumulative Effect 0 0 57,442 57,442 0Adjustment for CECL

154,923 76,886 134,499 134,499 76,703

Initial allowance for 18,635 0 0 18,635 0acquired PCD loans

Gross Charge-offs (5,634) (7,588) (8,761) (14,395) (14,002)

Recoveries 1,290 1,685 2,073 3,363 3,286

Net Charge-offs (4,344) (5,903) (6,688) (11,032) (10,716)

Provision for Loan & 45,907 5,417 27,112 73,019 10,413Lease Losses

Ending Balance $ 215,121 $ 76,400 $ 154,923 $ 215,121 $ 76,400

Reserve forlending-related 11,946 1,752 7,742 11,946 1,752commitments

Allowance for Credit $ 227,067 $ 78,152 $ 162,665 $ 227,067 $ 78,152Losses ^(2)

Notes Restructured loans with an aggregate balance of $59,916, $48,586, $51,775(1) and $48,387 at June 30, 2020, June 30, 2019, March 31, 2020 and December 31, 2019, respectively, were on nonaccrual status, but are not included in "EOP Non-Accrual Loans" above.

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20200724005051/en/

CONTACT: W. Mark Tatterson Chief Financial Officer (800) 445-1347 ext. 8716