United Bankshares, Inc. Announces Record Earnings for the Third Quarter of 2020

Rhea-AI Summary

United Bankshares, Inc. (NASDAQ: UBSI) reported record earnings of $103.8 million ($0.80 per diluted share) in Q3 2020, up from $66.0 million ($0.65) in Q3 2019. Year-to-date earnings totaled $196.7 million ($1.68 per diluted share) compared to $196.8 million ($1.93) in 2019. Significant factors for the increase include higher mortgage banking income and the acquisition of Carolina Financial. However, merger-related expenses and increased provisions for credit losses due to COVID-19 also impacted results. The company's strong credit quality and capital ratios support future growth.

Positive

• Record Q3 earnings of $103.8 million, a 57.6% increase year-over-year.
• Net interest income rose by $43.7 million (31%) in Q3 2020 due to average earning assets growth from Carolina Financial acquisition.
• Noninterest income increased by $93.2 million (221%) in Q3 2020, driven by robust mortgage banking activities.

Negative

• Merger-related expenses of $5.7 million in Q3 and $53.7 million for the first nine months of 2020.
• Provision for credit losses increased significantly to $16.8 million in Q3 from $5.0 million in Q3 2019, reflecting adverse macroeconomic forecasts.

WASHINGTON & CHARLESTON, W.Va.--(BUSINESS WIRE)--United Bankshares, Inc. (NASDAQ: UBSI) (“United”), today reported earnings for the third quarter and the first nine months of 2020. Earnings for the third quarter of 2020 were a record $103.8 million, or $0.80 per diluted share, as compared to earnings of $66.0 million, or $0.65 per diluted share for the third quarter of 2019. Earnings for the first nine months of 2020 were $196.7 million, or $1.68 per diluted share, as compared to earnings of $196.8 million, or $1.93 per diluted share, for the first nine months of 2019.

Third quarter 2020 results produced an annualized return on average assets of 1.56%, an annualized return on average equity of 9.68% and an annualized return on average tangible equity of 16.94%, compared to annualized returns on average assets, average equity and average tangible equity of 1.33%, 7.79% and 14.16%, respectively, for the third quarter of 2019. For the nine months of 2020, United’s annualized return on average assets was 1.12%, the annualized return on average equity was 6.85% and the annualized return on average tangible equity was 12.19% compared to annualized returns on average assets, average equity and average tangible equity of 1.35%, 7.93% and 14.56%, respectively, for the first nine months of 2019.

Higher net income in the third quarter of 2020 compared to the third quarter of 2019 was primarily due to higher income from mortgage banking activities, driven by an elevated volume of mortgage loan originations and sales in the secondary market, as well as the impact of the Carolina Financial Corporation (“Carolina Financial”) acquisition. Partially offsetting the increase in net income were merger-related expenses from the Carolina Financial acquisition, $10.4 million in prepayment penalties on the early payoff of three long-term FHLB advances and higher provision for credit losses resulting from an adverse future macroeconomic forecast as a result of the coronavirus (“COVID-19”) pandemic under the Current Expected Credit Loss (“CECL”) accounting standard.

“Despite the continued uncertainty in the economic environment, we achieved record earnings during the third quarter of 2020 and successfully completed the Carolina Financial system conversion,” stated Richard M. Adams, United’s Chairman of the Board and Chief Executive Officer. “United has continued to 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 8,900 loans totaling approximately $1.3 billion under the government Paycheck Protection Program. Our credit quality and regulatory ratios remain strong and position us well to continue delivering for our customers and for continued growth.”

The results of operations for Carolina Financial are included in the consolidated results of operations from the date of acquisition, May 1, 2020. As a result of the acquisition, the third quarter and first nine months of 2020 reflected higher average balances, income, and expense, including merger-related expense of $5.7 million and $53.7 million for the third quarter and first nine months of 2020, respectively, as compared to the same time periods in 2019.

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2020 was $185.7 million, which was an increase of $43.7 million or 31% from the third quarter of 2019, primarily due to an increase in average earning assets from the Carolina Financial acquisition. 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 third quarter of 2020 increased $43.9 million or 31% from the third quarter of 2019 to $186.7 million. Average earning assets for the third quarter of 2020 increased $6.1 billion or 35% from the third quarter of 2019 due to a $4.6 billion or 33% increase in average net loans and loans held for sale, a $1.1 billion or 137% increase in average short-term investments and a $366.6 million or 14% increase in average investment securities. The net interest spread for the third quarter of 2020 increased 19 basis points from the third quarter of 2019 due to a 98 basis point decrease in the average cost of funds primarily due to the impact of declines in interest rates from the third quarter of 2019 partially offset by a 79 basis point decrease in the average yield on earning assets from the third quarter of 2019 due to the decline in market interest rates and the lower yield on Paycheck Protection Program (“PPP”) loans. In addition, loan accretion on acquired loans was $11.7 million and $7.2 million for the third quarter of 2020 and 2019, respectively, an increase of $4.5 million, primarily driven by the accretion on loans acquired from the Carolina Financial acquisition. The net interest margin of 3.18% for the third quarter of 2020 was a decrease of 9 basis points from the net interest margin of 3.27% for the third quarter of 2019.

Net interest income for the first nine months of 2020 was $497.8 million, which was an increase of $61.1 million or 14% from the first nine months of 2019, primarily due to an increase in average earning assets from the Carolina Financial acquisition. Tax-equivalent net interest income for the first nine months of 2020 was $500.6 million, an increase of $61.1 million or 14% from the first nine months of 2019. Average earning assets for the first nine months of 2020 increased $3.6 billion or 21% from the first nine months of 2019 due to a $2.7 billion or 20% increase in average net loans and loans held for sale, a $632.0 million or 81% increase in average short-term investments and a $259.1 million or 10% increase in average investment securities. The net interest spread for the first nine months of 2020 decreased 2 basis points from the first nine months of 2019 due to a 73 basis point decrease in the average yield on earning assets partially offset by a 71 basis point decrease in the average cost of funds. Loan accretion on acquired loans was $30.8 million and $30.2 million for the first nine months of 2020 and 2019, respectively, an increase of $676 thousand. The net interest margin of 3.21% for the first nine months of 2020 was a decrease of 21 basis points from the net interest margin of 3.42% for the first nine months of 2019.

On a linked-quarter basis, net interest income for the third quarter of 2020 increased $15.1 million or 9% from the second quarter of 2020. United’s tax-equivalent net interest income for the third quarter of 2020 increased $15.1 million or 9% from the second quarter of 2020. Average earning assets increased $1.8 billion or 8% from the second quarter of 2020, due to the full quarter impact of assets acquired in the Carolina Financial acquisition and PPP loan activity. Average net loans and loans held for sale increased $1.3 billion or 7% and average short-term investments increased $419.0 million or 27%. The net interest spread for the third quarter of 2020 increased 5 basis points from the second quarter of 2020 due to a 16 basis point decrease in the average cost of funds partially offset by a 11 basis point decrease in the average yield on earning assets. Loan accretion on acquired loans increased $2.2 million from the second quarter of 2020 primarily driven by the accretion on loans acquired from Carolina Financial. The net interest margin remained flat at 3.18% for the third quarter of 2020 from the second quarter of 2020.

Credit Quality

United’s asset quality continues to be sound relative to the current economic environment. At September 30, 2020, nonperforming loans were $152.3 million, or 0.85% 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 September 30, 2020, the allowance for loan losses was $225.8 million or 1.26% 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 $178.0 million, including OREO of $25.7 million at September 30, 2020, represented 0.69% of total assets as compared to nonperforming assets of $146.6 million or 0.75% at December 31, 2019.

For the quarters ended September 30, 2020 and 2019, the provision for credit losses was $16.8 million and $5.0 million, respectively. The increase in the provision in relation to the prior year quarter was driven by the impact from the reasonable and supportable forecasts of future macroeconomic conditions used in the estimation of expected credit losses adversely impacted by the COVID-19 pandemic under CECL. The provision for the first nine months of 2020 was $89.8 million as compared to $15.4 million for the first nine months of 2019. In addition to the impact of reasonable and supportable forecasts on reserves, the increase was also driven by the provision for credit losses of $29.0 million recorded on purchased non-credit deteriorated (“non-PCD”) loans from the Carolina Financial acquisition. Net charge-offs were $5.6 million and $4.3 million for the third quarter of 2020 and 2019, respectively. Net charge-offs were $16.7 million and $15.1 million for the first nine months of 2020 and 2019, respectively. Annualized net charge-offs as a percentage of average loans & leases, net of unearned income were 0.12% and 0.13% for the third quarter and first nine months of 2020, respectively. On a linked-quarter basis, the provision for credit losses decreased $29.1 million due primarily to the provision expense recorded on the non-PCD loans acquired from Carolina Financial in the second quarter of 2020.

Noninterest Income

Noninterest income for the third quarter of 2020 was $135.5 million, which was an increase of $93.2 million or 221% from the third quarter of 2019. The change was driven by an $85.4 million increase in income from mortgage banking activities due to an elevated volume of mortgage loan originations and sales in the secondary market as well as the addition of mortgage banking operations from the Carolina Financial acquisition. Noninterest income for the third quarter of 2020 also included $2.3 million in mortgage loan servicing income and a $2.2 million gain on the sale of a bank premises.

Noninterest income for the first nine months of 2020 was $260.7 million, which was an increase of $147.4 million or 130% from the first nine months of 2019. The increase was due mainly to an increase of $135.9 million in income from mortgage banking activities. Net gains on investment securities were $2.6 million for the first nine months of 2020 as compared to a gain of $66 thousand for the first nine months of 2019, an increase of approximately $2.5 million. Noninterest income for the first nine months of 2020 also included $3.9 million in mortgage loan servicing income and a $2.2 million gain on the sale of a bank premises.

On a linked-quarter basis, noninterest income for the third quarter of 2020 increased $47.1 million or 53% from the second quarter of 2020 primarily due to an increase of $41.2 million in income from mortgage banking activities, a $2.2 million gain on the sale of a bank premises, and an increase in fees from deposit services of $1.3 million.

Noninterest Expense

Noninterest expense for the third quarter of 2020 was $171.6 million, an increase of $75.5 million or 78% from the third quarter of 2019 due to additional employee and branch office related expenses of $44.9 million mainly from the Carolina Financial acquisition, $10.4 million in prepayment penalties on the early payoff of three long-term FHLB advances, a $3.2 million increase in mortgage loan servicing expense and impairment and an increase of $12.6 million in other expenses. In particular, employee compensation increased $38.1 million (some of which was due to higher employee incentives and commissions related to the increased mortgage banking production), employee benefits increased $4.6 million and net occupancy expenses increased $2.2 million. Mortgage loan servicing expense and impairment included a $400 thousand temporary impairment on mortgage servicing rights. Within other expense, the largest drivers of the increase included merger-related expenses associated with the Carolina Financial acquisition of $3.6 million, the expense for the reserve for unfunded commitments increased $4.0 million and the amortization of income tax credits increased $1.4 million. Partially offsetting the increases to noninterest expense was a decrease of $671 thousand in other real estate owned (“OREO”) expense due to fewer declines in fair value of OREO properties.

Noninterest expense for the first nine months of 2020 was $422.1 million, an increase of $136.3 million or 48% from the first nine months of 2019. The largest drivers of the increase were additional employee and branch office related expenses of $82.5 million from the Carolina Financial acquisition as well as higher employee incentives and commissions expense mainly related to the higher mortgage banking production. Additionally, data processing expense increased $11.6 million (including the Carolina Financial data processing contract termination penalty of $9.7 million recorded in the second quarter of 2020), mortgage loan servicing expense and impairment increased $5.6 million (including $1.1 million temporary impairment on mortgage servicing rights) and prepayment penalties on the early payoff of long-term FHLB advances increased $5.3 million to $10.4 million for the first nine months of 2020 compared to $5.1 million for the first nine months of 2019. Other expense also increased $28.3 million due to merger-related expenses of $10.7 million associated with the Carolina Financial acquisition, an increase in the expense for the reserve for unfunded commitments of $7.6 million, and an increase in the amortization of income tax credits of $3.8 million which reduces the effective tax rate. Partially offsetting the increases to noninterest expense were decreases of $1.2 million in OREO expense due to fewer declines in fair value of OREO properties.

On a linked-quarter basis, noninterest expense for the third quarter of 2020 increased $22.2 million or 15% from the second quarter of 2020 due primarily to the added employee and branch office related expenses of $16.9 million from the Carolina Financial acquisition as well as higher employee incentives and commissions expense mainly related to the higher mortgage banking production. Noninterest expense for the third quarter also included the $10.4 million in prepayment penalties on the early payoff of three long-term FHLB advances. Partially offsetting the increases to noninterest expense were decreases of $9.2 million in data processing expense due to the $9.7 million contract termination penalty recorded in the second quarter of 2020.

Income Tax Expense

For the third quarter and first nine months of 2020, income tax expense was $29.0 million and $49.9 million as compared to $17.0 million and $51.9 million, respectively, for the third quarter and first nine months of 2019. The increase in the third quarter of 2020 from the third quarter of 2019 was due to overall higher earnings and a higher effective tax rate while the decrease for the first nine months of 2020 from the first nine months of 2020 was due mainly to slightly lower earnings. On a linked-quarter basis, income tax expense increased $17.9 million also due to higher earnings. United’s effective tax rate was 21.8% for the third quarter of 2020, 20.5% for the third quarter of 2019 and 17.3% for the second quarter of 2020. For the first nine months of 2020 and 2019, United's effective tax rate was 20.2% and 20.9%, respectively, reflecting higher amortization of income tax credits in 2020.

Regulatory Capital

United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 15.2% at September 30, 2020 while its estimated Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 13.0%, 13.0% and 10.1%, respectively. The September 30, 2020 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 September 30, 2020, United had consolidated assets of approximately $25.9 billion. United is the parent company of United Bank, the largest community bank headquartered in the D.C. Metro region. United Bank has 231 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 September 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 September 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 and monetary 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							Nine Months Ended
	September 2020			September 2019				September 2020			September 2019
EARNINGS SUMMARY:
Interest income	$	210,269		$	190,351			$	589,468		$	578,693
Interest expense		24,605			48,433				91,684			142,054
Net interest income		185,664			141,918				497,784			436,639
Provision for credit losses		16,781			5,033				89,811			15,446
Noninterest income		135,468			42,224				260,664			113,242
Noninterest expense		171,593			96,134				422,100			285,754
Income before income taxes		132,758			82,975				246,537			248,681
Income taxes		28,974			17,010				49,884			51,867
Net income	$	103,784		$	65,965			$	196,653		$	196,814
PER COMMON SHARE:
Net income:
Basic	$	0.80		$	0.65			$	1.68		$	1.93
Diluted		0.80			0.65				1.68			1.93
Cash dividends	$	0.35		$	0.34				1.05			1.02
Book value									32.89			33.03
Closing market price								$	21.47		$	37.87
Common shares outstanding:
Actual at period end, net of treasury shares									129,762,348			101,555,696
Weighted average-basic		129,373,154			101,432,243				116,876,402			101,698,530
Weighted average-diluted		129,454,966			101,711,740				116,944,594			101,967,135
FINANCIAL RATIOS:
Return on average assets		1.56	%		1.33	%			1.12	%		1.35	%
Return on average shareholders’ equity		9.68	%		7.79	%			6.85	%		7.93	%
Return on average tangible equity (non-GAAP) (1)		16.94	%		14.16	%			12.19	%		14.56	%
Average equity to average assets		16.14	%		17.08	%			16.34	%		17.04	%
Net interest margin		3.18	%		3.27	%			3.21	%		3.42	%
	September 30 2020			September 30 2019				December 31 2019			June 30 2020
PERIOD END BALANCES:
Assets	$	25,931,308		$	19,751,461			$	19,662,324		$	26,234,973
Earning assets		22,903,067			17,389,984				17,344,638			23,253,983
Loans & leases, net of unearned income		17,930,231			13,633,427				13,712,129			17,992,402
Loans held for sale		812,084			412,194				387,514			625,984
Investment securities		3,007,263			2,673,312				2,669,797			3,062,198
Total deposits		20,251,539			14,095,411				13,852,421			19,893,843
Shareholders’ equity		4,267,441			3,354,342				3,363,833			4,197,855
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																Nine Months Ended
	September				September				June				March				September				September
	2020				2019				2020				2020				2020				2019
Interest & Loan Fees Income (GAAP)	$	210,269			$	190,351			$	198,717			$	180,482			$	589,468			$	578,693
Tax equivalent adjustment		1,046				914				1,018				782				2,846				2,884
Interest & Fees Income (FTE) (non-GAAP)		211,315				191,265				199,735				181,264				592,314				581,577
Interest Expense		24,605				48,433				28,115				38,964				91,684				142,054
Net Interest Income (FTE) (non-GAAP)		186,710				142,832				171,620				142,300				500,630				439,523
Provision for Credit Losses		16,781				5,033				45,911				27,119				89,811				15,446
Noninterest Income:
Fees from trust services		3,574				3,574				3,261				3,483				10,318				10,276
Fees from brokerage services		3,066				2,378				2,651				2,916				8,633				7,668
Fees from deposit services		9,320				8,702				8,055				7,957				25,332				25,219
Bankcard fees and merchant discounts		1,226				1,262				718				993				2,937				3,520
Other charges, commissions, and fees		715				568				610				518				1,843				1,665
Income from bank-owned life insurance		2,059				1,280				1,291				2,388				5,738				4,433
Income from mortgage banking activities		109,457				24,019				68,213				17,631				195,301				59,404
Mortgage loan servicing income		2,345				0				1,534				0				3,879				0
Net gain on the sale of bank premises		2,229				0				0				0				2,229				0
Net gains on investment securities		860				116				1,510				196				2,566				66
Other noninterest income		617				325				547				724				1,888				991
Total Noninterest Income		135,468				42,224				88,390				36,806				260,664				113,242
Noninterest Expense:
Employee compensation		84,455				46,313				68,664				44,541				197,660				129,563
Employee benefits		13,202				8,615				12,779				10,786				36,767				26,624
Net occupancy		10,944				8,698				10,318				9,062				30,324				26,116
Data processing		6,708				5,776				15,926				5,506				28,140				16,505
Amortization of intangibles		1,691				1,754				1,646				1,577				4,914				5,262
OREO expense		1,166				1,837				607				906				2,679				3,886
Equipment expense		5,616				3,698				5,004				3,845				14,465				10,688
FDIC insurance expense		2,700				465				2,782				2,400				7,882				7,065
Mortgage loan servicing expense and impairment		3,301				107				2,510				138				5,949				304
Prepayment penalties on FHLB borrowings		10,385				0				0				0				10,385				5,105
Other expenses		31,425				18,871				29,138				22,372				82,935				54,636
Total Noninterest Expense		171,593				96,134				149,374				101,133				422,100				285,754
Income Before Income Taxes (FTE) (non-GAAP)		133,804				83,889				64,725				50,854				249,383				251,565
Tax equivalent adjustment		1,046				914				1,018				782				2,846				2,884
Income Before Income Taxes (GAAP)		132,758				82,975				63,707				50,072				246,537				248,681
Taxes		28,974				17,010				11,021				9,889				49,884				51,867
Net Income	$	103,784			$	65,965			$	52,686			$	40,183			$	196,653			$	196,814
MEMO: Effective Tax Rate		21.82	%			20.50	%			17.30	%			19.75	%			20.23	%			20.86	%

UNITED BANKSHARES, INC. AND SUBSIDIARIES Washington, D.C. and Charleston, WV Stock Symbol: UBSI (In Thousands Except for Per Share Data)
Consolidated Balance Sheets
	September 2020				September 2019				September 30				December 31				September 30
	Q-T-D Average				Q-T-D Average				2020				2019				2019
Cash & Cash Equivalents	$	2,227,314			$	1,012,682			$	1,656,533			$	837,493			$	976,154
Securities Available for Sale		2,751,913				2,428,288				2,777,802				2,437,296				2,452,097
Less: Allowance for credit losses		0				0				0				0				0
Net available for sale securities		2,751,913				2,428,288				2,777,802				2,437,296				2,452,097
Securities Held to Maturity		1,235				3,911				1,235				1,446				1,471
Less: Allowance for credit losses		(14	)			0				(21	)			0				0
Net held to maturity securities		1,221				3,911				1,214				1,446				1,471
Equity Securities		10,033				8,992				10,255				8,894				8,914
Other Investment Securities		253,302				208,632				217,992				222,161				210,830
Total Securities		3,016,469				2,649,823				3,007,263				2,669,797				2,673,312
Total Cash and Securities		5,243,783				3,662,505				4,663,796				3,507,290				3,649,466
Loans held for sale		668,874				358,525				812,084				387,514				412,194
Commercial Loans & Leases		13,224,385				9,453,569				13,377,091				9,399,170				9,452,464
Mortgage Loans		3,542,829				3,025,122				3,345,048				3,107,721				3,035,751
Consumer Loans		1,258,803				1,119,481				1,245,381				1,206,657				1,149,023
Gross Loans		18,026,017				13,598,172				17,967,520				13,713,548				13,637,238
Unearned income		(39,391	)			(4,410	)			(37,289	)			(1,419	)			(3,811	)
Loans & Leases, net of unearned income		17,986,626				13,593,762				17,930,231				13,712,129				13,633,427
Allowance for Loan & Leases Losses		(214,870	)			(76,408	)			(225,812	)			(77,057	)			(77,098	)
Net Loans		17,771,756				13,517,354				17,704,419				13,635,072				13,556,329
Mortgage Servicing Rights		20,462				0				20,413				0				0
Goodwill		1,795,682				1,478,014				1,794,886				1,478,014				1,478,014
Other Intangibles		30,375				32,639				28,243				29,931				31,685
Operating Lease Right-of-Use Asset		70,920				61,740				72,789				57,783				60,318
Other Real Estate Owned		28,592				16,475				25,696				15,515				18,367
Other Assets		785,179				539,356				808,982				551,205				545,088
Total Assets	$	26,415,623			$	19,666,608			$	25,931,308			$	19,662,324			$	19,751,461
MEMO: Interest-earning Assets	$	23,424,890			$	17,356,204			$	22,903,067			$	17,344,638			$	17,389,984
Interest-bearing Deposits	$	12,951,290			$	9,692,296			$	12,946,792			$	9,231,059			$	9,523,289
Noninterest-bearing Deposits		7,178,769				4,440,399				7,304,747				4,621,362				4,572,122
Total Deposits		20,130,059				14,132,695				20,251,539				13,852,421				14,095,411
Short-term Borrowings		156,502				120,155				148,357				374,654				329,966
Long-term Borrowings		1,616,647				1,870,944				924,674				1,838,029				1,708,297
Total Borrowings		1,773,149				1,991,099				1,073,031				2,212,683				2,038,263
Operating Lease Liability		74,640				65,430				76,604				61,342				63,987
Other Liabilities		174,664				117,947				262,693				172,045				199,458
Total Liabilities		22,152,512				16,307,171				21,663,867				16,298,491				16,397,119
Preferred Equity		0				0				0				0				0
Common Equity		4,263,111				3,359,437				4,267,441				3,363,833				3,354,342
Total Shareholders' Equity		4,263,111				3,359,437				4,267,441				3,363,833				3,354,342
Total Liabilities & Equity	$	26,415,623			$	19,666,608			$	25,931,308			$	19,662,324			$	19,751,461
MEMO: Interest-bearing Liabilities	$	14,724,439			$	11,683,395			$	14,019,823			$	11,443,742			$	11,561,552

UNITED BANKSHARES, INC. AND SUBSIDIARIES Washington, D.C. and Charleston, WV Stock Symbol: UBSI (In Thousands Except for Per Share Data)
	Three Months Ended																Nine Months Ended
	September				September				June				March				September				September
Quarterly/Year-to-Date Share Data:	2020				2019				2020				2020				2020				2019
Earnings Per Share:
Basic	$	0.80			$	0.65			$	0.44			$	0.40			$	1.68			$	1.93
Diluted	$	0.80			$	0.65			$	0.44			$	0.40			$	1.68			$	1.93
Common Dividend Declared Per Share:	$	0.35			$	0.34			$	0.35			$	0.35			$	1.05			$	1.02
High Common Stock Price	$	30.07			$	39.98			$	33.12			$	39.07			$	39.07			$	39.98
Low Common Stock Price	$	20.57			$	34.77			$	21.52			$	19.67			$	19.67			$	30.67
Average Shares Outstanding (Net of Treasury Stock):
Basic		129,373,154				101,432,243				119,823,652				101,295,073				116,876,402				101,698,530
Diluted		129,454,966				101,711,740				119,887,823				101,399,181				116,944,594				101,967,135
Memorandum Items:
Common Dividends	$	45,414			$	34,518			$	45,416			$	35,604			$	126,434			$	103,965
Dividend Payout Ratio		43.76	%			52.33	%			86.20	%			88.60	%			64.29	%			52.82	%

		September 30				September 30					June 30				March 31
EOP Share Data:		2020				2019					2020				2020
Book Value Per Share		$	32.89			$	33.03				$	32.35			$	32.87
Tangible Book Value Per Share (non-GAAP) (1)		$	18.84			$	18.16				$	18.28			$	18.06
52-week High Common Stock Price		$	40.70			$	39.98				$	40.70			$	40.70
Date		11/05/19				09/13/19					11/05/19				11/05/19
52-week Low Common Stock Price		$	19.67			$	30.67				$	19.67			$	19.67
Date		03/23/20				01/02/19					03/23/20				03/23/20
EOP Shares Outstanding (Net of Treasury Stock):			129,762,348				101,555,696					129,755,395				101,723,600
Memorandum Items:
EOP Employees (full-time equivalent)			3,137				2,231					3,039				2,206
Note:
(1) Tangible Book Value Per Share:
Total Shareholders' Equity (GAAP)		$	4,267,441			$	3,354,342				$	4,197,855			$	3,343,702
Less: Total Intangibles			(1,823,129	)			(1,509,699	)				(1,825,887	)			(1,506.368	)
Tangible Equity (non-GAAP)		$	2,444,312			$	1,844,643				$	2,371,968			$	1,837,334
÷ EOP Shares Outstanding (Net of Treasury Stock)			129,762,348				101,555,696					129,755,395				101,723,600
Tangible Book Value Per Share (non-GAAP)		$	18.84			$	18.16				$	18.28			$	18.06

UNITED BANKSHARES, INC. AND SUBSIDIARIES Washington, D.C. and Charleston, WV Stock Symbol: UBSI (In Thousands Except for Per Share Data)
	Three Months Ended																	Nine Months Ended
	September					September				June				March				September				September
Selected Yields and Net Interest Margin:	2020					2019				2020				2020				2020				2019
Net Loans and Loans held for sale		4.17	%				4.75	%			4.21	%			4.60	%			4.30	%			4.92	%
Investment Securities		2.17	%				2.90	%			2.44	%			2.70	%			2.42	%			2.91	%
Money Market Investments/FFS		0.42	%				2.98	%			0.49	%			2.23	%			0.75	%			2.99	%
Average Earning Assets Yield		3.59	%				4.38	%			3.70	%			4.21	%			3.80	%			4.53	%
Interest-bearing Deposits		0.54	%				1.49	%			0.67	%			1.19	%			0.76	%			1.44	%
Short-term Borrowings		0.44	%				1.78	%			0.54	%			1.34	%			0.75	%			1.72	%
Long-term Borrowings		1.65	%				2.44	%			1.68	%			2.21	%			1.86	%			2.63	%
Average Liability Costs		0.66	%				1.64	%			0.82	%			1.37	%			0.92	%			1.63	%
Net Interest Spread		2.93	%				2.74	%			2.88	%			2.84	%			2.88	%			2.90	%
Net Interest Margin		3.18	%				3.27	%			3.18	%			3.30	%			3.21	%			3.42	%
Selected Financial Ratios:
Return on Average Assets		1.56	%				1.33	%			0.87	%			0.82	%			1.12	%			1.35	%
Return on Average Shareholders’ Equity		9.68	%				7.79	%			5.40	%			4.82	%			6.85	%			7.93	%
Return on Average Tangible Equity (non-GAAP) (1)		16.94	%				14.16	%			9.58	%			8.77	%			12.19	%			14.56	%
Efficiency Ratio		53.43	%				52.21	%			57.68	%			56.71	%			55.65	%			51.97	%
Note:
(1) Return on Average Tangible Equity:
(a) Net Income (GAAP)	$	103,784				$	65,965			$	52,686			$	40,183			$	196,653			$	196,814
(b) Number of days		92					92				91				91				274				273
Average Total Shareholders' Equity (GAAP)	$	4,263,111				$	3,359,437			$	3,921,289			$	3,350,652			$	3,835,617			$	3,319,420
Less: Average Total Intangibles		(1,826,057	)				(1,510,653	)			(1,708,683	)			(1,507,272	)			(1,681,202	)			(1,512,394	)
(c) Average Tangible Equity (non-GAAP)	$	2,437,054				$	1,848,784			$	2,212,606			$	1,843,380			$	2,154,415			$	1,807,026
Return on Average Tangible Equity (non-GAAP) [(a) / (b)] x 366 or 365 / (c)		16.94	%				14.16	%			9.58	%			8.77	%			12.19	%			14.56	%

				September 30			September 30			December 31			June 30			March 31
				2020			2019			2019			2020			2020
Loan / Deposit Ratio				88.54	%		96.72	%		98.99	%		90.44	%		98.87	%
Allowance for Loan & Lease Losses/ Loans & Leases, net of unearned income				1.26	%		0.57	%		0.56	%		1.20	%		1.12	%
Allowance for Credit Losses (1)/ Loans & Leases, net of unearned income				1.35	%		0.58	%		0.57	%		1.26	%		1.17	%
Nonaccrual Loans / Loans & Leases, net of unearned income				0.40	%		0.51	%		0.46	%		0.38	%		0.46	%
90-Day Past Due Loans/ Loans & Leases, net of unearned income				0.07	%		0.07	%		0.07	%		0.06	%		0.05	%
Non-performing Loans/ Loans & Leases, net of unearned income				0.85	%		1.03	%		0.96	%		0.87	%		0.96	%
Non-performing Assets/ Total Assets				0.69	%		0.80	%		0.75	%		0.71	%		0.73	%
Primary Capital Ratio				17.23	%		17.31	%		17.44	%		16.72	%		17.08	%
Shareholders' Equity Ratio				16.46	%		16.98	%		17.11	%		16.00	%		16.41	%
Price / Book Ratio				0.65	x		1.15	x		1.17	x		0.85	x		0.70	x
Price / Earnings Ratio				6.70	x		14.60	x		15.14	x		15.74	x		14.56	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																Nine Months Ended
	September				September				June				March				September				September
Mortgage Banking Segment Data:	2020				2019				2020				2020				2020				2019
Applications	$	3,460,687			$	1,290,000			$	2,189,008			$	2,054,000			$	7,703,695			$	3,434,000
Loans originated		2,071,717				907,896				1,692,297				904,949				4,668,963				2,164,410
Loans sold	$	1,898,539			$	865,873			$	1,636,063			$	793,392			$	4,327,994			$	2,004,051
Purchase money % of loans closed		48	%			63	%			42	%			49	%			46	%			74	%
Realized gain on sales and fees as a % of loans sold		4.26	%			2.74	%			2.49	%			2.82	%			3.30	%			2.87	%
Net interest income	$	2,740			$	203			$	2,246			$	949			$	5,935			$	369
Other income		110,900				24,331				71,013				21,190				203,103				63,938
Other expense		43,417				20,256				35,261				20,757				99,435				53,869
Income taxes		14,823				877				6,946				273				22,042				2,163
Net income	$	55,400			$	3,401			$	31,052			$	1,109			$	87,561			$	8,275

	September			September			December			June			March
Period End Mortgage Banking Segment Data:	2020			2019			2019			2020			2020
Locked pipeline	$	1,398,898		$	262,313		$	143,465		$	889,275		$	739,322
Balance of loans serviced	$	3,551,157		$	0		$	0		$	3,552,292		$	0
Number of loans serviced		25,813			0			0			25,609			0

	September			September			December			June			March
Asset Quality Data:	2020			2019			2019			2020			2020
EOP Non-Accrual Loans	$	71,312		$	69,884		$	63,209		$	67,669		$	64,036
EOP 90-Day Past Due Loans		12,583			9,840			9,494			11,150			7,051
EOP Restructured Loans (1)		68,381			60,559			58,369			77,436			61,470
Total EOP Non-performing Loans	$	152,276		$	140,283		$	131,072		$	156,255		$	132,557
EOP Other Real Estate Owned		25,696			18,367			15,515			29,947			15,849
Total EOP Non-performing Assets	$	177,972		$	158,650		$	146,587		$	186,202		$	148,406

	Three Months Ended																Nine Months Ended
	September				September				June				March				September				September
Allowance for Loan Losses:	2020				2019				2020				2020				2020				2019
Beginning Balance	$	215,121			$	76,400			$	154,923			$	77,057			$	77,057			$	76,703
Cumulative Effect Adjustment for CECL		0				0				0				57,442				57,442				0
		215,121				76,400				154,923				134,499				134,499				76,703
Initial allowance for acquired PCD loans		0				0				18,635				0				18,635				0
Gross Charge-offs		(8,468	)			(5,404	)			(5,634	)			(8,761	)			(22,863	)			(19,406	)
Recoveries		2,820				1,069				1,290				2,073				6,183				4,355
Net Charge-offs		(5,648	)			(4,335	)			(4,344	)			(6,688	)			(16,680	)			(15,051	)
Provision for Loan & Lease Losses		16,339				5,033				45,907				27,112				89,358				15,446
Ending Balance		225,812				77,098			$	215,121			$	154,923				225,812				77,098
Reserve for lending-related commitments		15,960				1,776				11,946				7,742				15,960				1,776
Allowance for Credit Losses (2)	$	241,772			$	78,874			$	227,067			$	162,665			$	241,772			$	78,874
Notes:
(1) Restructured loans with an aggregate balance of $53,665, $50,757, $59,916, $51,775 and $48,387 at September 30, 2020, September 30, 2019 June 30, 2020, 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.