UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 2.02. | Results of Operations and Financial Condition |
On October 25, 2023 United Bankshares, Inc. (“United”) announced its financial results for the third quarter and first nine months of 2023. A copy of the press release is attached as Exhibit 99.1 to this report. The press release is being furnished under Item 2.02 of this Form 8-K.
Item 9.01. | Financial Statements and Exhibits |
(c) | The following exhibits are being furnished herewith: |
99.1 | Press Release, dated October 25, 2023, issued by United Bankshares, Inc. | |
99.2 | Slide presentation of financial information for the third quarter of 2023 | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
UNITED BANKSHARES, INC. | ||||||
Date: October 25, 2023 | By: | /s/ W. Mark Tatterson | ||||
W. Mark Tatterson, Executive Vice | ||||||
President and Chief Financial Officer |
Exhibit 99.1
News Release
For Immediate Release | Contact: W. Mark Tatterson | |
October 25, 2023 | Chief Financial Officer | |
(800) 445-1347 ext. 8716 |
United Bankshares, Inc. Announces Earnings
for the Third Quarter and First Nine Months of 2023
WASHINGTON, D.C. and CHARLESTON, WV-- United Bankshares, Inc. (NASDAQ: UBSI) (United), today reported earnings for the third quarter of 2023 of $96.2 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. Earnings for the third quarter of 2022 were $102.6 million, or $0.76 per diluted share.
Third quarter results saw accelerated growth and profitability, while maintaining our strong capital, liquidity, and asset quality positions, stated Richard M. Adams, Jr., Uniteds Chief Executive Officer. Im pleased with the resilient performance we continue to deliver in this environment.
Third quarter of 2023 results produced annualized returns on average assets, average equity and average tangible equity, a non-GAAP measure, of 1.31%, 8.14% and 13.71%, respectively, compared to annualized returns on average assets, average equity and average tangible equity of 1.26%, 7.96% and 13.47%, respectively, for the second quarter of 2023. Annualized returns on average assets, average equity and average tangible equity were 1.41%, 8.96% and 15.46%, respectively, for the third quarter of 2022.
1
United Bankshares, Inc. Announces
October 25, 2023
Page Two
Third quarter of 2023 compared to the second quarter of 2023
Net interest income for the third quarter of 2023 increased $992 thousand, or less than 1%, from the second quarter of 2023. 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 2023 increased $717 thousand, or less than 1%, from the second quarter of 2023. Net interest income and tax-equivalent net interest income for the third quarter of 2023 benefited from the impact of rising market interest rates on earning assets, a change in the asset mix to higher earning assets and lower average balances of long-term borrowings. Partially offsetting the increase in net interest income and tax-equivalent net interest income was higher interest expense primarily driven by the impact of deposit rate repricing and higher average balances of interest-bearing deposits. The yield on average earning assets increased 19 basis points from the second quarter of 2023 to 5.52%. Average net loans and loans held for sale increased $245.6 million from the second quarter of 2023 and the yield on average net loans and loans held for sale increased 14 basis points to 5.92% for the third quarter of 2023. Average investment securities decreased $456.8 million from the second quarter of 2023 and average short-term investments decreased $141.8 million from the second quarter of 2023. Average long-term borrowings decreased $716.7 million from the second quarter of 2023. The yield on average interest-bearing deposits increased 33 basis points to 2.70% and average interest-bearing deposits increased $473.5 million from the second quarter of 2023. The net interest margin of 3.54% for the third quarter of 2023 was an increase of 3 basis points from the net interest margin of 3.51% for the second quarter of 2023.
The provision for credit losses was $5.9 million for the third quarter of 2023 as compared to $11.4 million for the second quarter of 2023. The lower amount of provision expense for the third quarter of 2023 as compared to the second quarter of 2023 was mainly due to a decrease in qualitative adjustments and the impact of reasonable and supportable forecasts of future macroeconomic conditions, partially offset by additional provision expense due to loan growth.
Noninterest income for the third quarter of 2023 decreased $1.5 million, or 4%, from the second quarter of 2023. The decrease in noninterest income was primarily due to a decrease in mortgage loan servicing income of $9.0 million partially offset by lower net losses on investment securities of $7.2 million. During the second quarter of 2023, United sold mortgage servicing rights (MSRs) with an aggregate unpaid principal balance of approximately $2.0 billion at a gain of $8.1 million. The remaining decrease in mortgage loan servicing income from the second quarter of 2023 was due to lower MSR balances in the third quarter of 2023 as a result of the sale. Additionally, during the second quarter of 2023, United sold approximately $187.0 million of available for sale (AFS) investment securities at a loss of $7.2 million.
Noninterest expense for the third quarter of 2023 decreased $58 thousand, or less than 1%, from the second quarter of 2023. The decrease in noninterest expense from the second quarter of 2023 was primarily due to a decrease in the expense for the reserve for unfunded loan commitments of $981 thousand mainly driven by a decrease in the outstanding balance of loan commitments at quarter-end. This decrease in noninterest expense was partially offset by an increase in other noninterest expense of $966 thousand mainly driven by higher amounts of certain general operating expenses.
For the third quarter of 2023, income tax expense was $24.8 million as compared to $23.5 million for the second quarter of 2023. The increase of $1.3 million was due to higher earnings and a higher effective tax rate.
2
United Bankshares, Inc. Announces
October 25, 2023
Page Three
Uniteds effective tax rate was 20.5% and 20.2% for the third quarter of 2023 and second quarter of 2023, respectively.
Third quarter of 2023 compared to the third quarter of 2022
Earnings for the third quarter of 2023 were $96.2 million, or $0.71 per diluted share, as compared to earnings of $102.6 million, or $0.76 per diluted share, for the third quarter of 2022.
Net interest income for the third quarter of 2023 decreased $12.2 million, or 5%, from the third quarter of 2022. Tax-equivalent net interest income for the third quarter of 2023 decreased $12.4 million, or 5%, from the third quarter of 2022. The decrease in net interest income and tax-equivalent net interest income was primarily due to higher interest expense driven by deposit rate repricing, higher average balances and cost of long-term borrowings, lower acquired loan accretion income and lower income from Paycheck Protection Program (PPP) loan fees. These decreases were partially offset by the impact of rising market interest rates on earning assets, organic loan growth and a change in the asset mix to higher earning assets. The average cost of funds increased 231 basis points from the third quarter of 2022 to 2.87% primarily due to increases in the yield on average interest-bearing deposits of 224 basis points and in the yield on average long-term borrowings of 227 basis points. Average long-term borrowings increased $695.8 million from the third quarter of 2022. Acquired loan accretion income decreased $1.7 million from the third quarter of 2022 to $2.3 million. Net PPP loan fee income decreased $1.5 million from the third quarter of 2022. The yield on average earning assets increased 138 basis points from the third quarter of 2022 to 5.52%. Average earning assets for the third quarter of 2023 increased $329.7 million, or 1%, from the third quarter of 2022 due to a $1.3 billion increase in average net loans and loans held for sale partially offset by an $882.7 million decrease in average investment securities. The net interest margin of 3.54% for the third quarter of 2023 was a decrease of 24 basis points from the net interest margin of 3.78% for the third quarter of 2022.
The provision for credit losses was $5.9 million for the third quarter of 2023 as compared to $7.7 million for the third quarter of 2022. The lower amount of provision expense for the third quarter of 2023 as compared to the third quarter of 2022 was mainly due to the impact of reasonable and supportable forecasts of future macroeconomic conditions.
Noninterest income for the third quarter of 2023 was $33.7 million, an increase of $912 thousand, or 3%, from the third quarter of 2022 primarily due to increases of $1.1 million in income from mortgage banking activities and $1.1 million in income from bank-owned life insurance (BOLI) partially offset by a decrease in mortgage loan servicing income of $1.5 million. The increase in income from mortgage banking activities was mainly due to a higher quarter-end valuation of our mortgage derivatives and mortgage loans held for sale. The increase in BOLI income was primarily due to the impact of lower market values of underlying investments in the third quarter of 2022 and due to higher amounts of death benefits recognized in the third quarter of 2023. The decrease in mortgage loan servicing income was mainly driven by lower MSR balances primarily as a result of the sale.
Noninterest expense for the third quarter of 2023 was $135.2 million, a decrease of $2.0 million, or 1%, from the third quarter of 2022 primarily due to decreases of $1.9 million in other noninterest expense, $1.5 million in other real estate owned (OREO) expense and $796 thousand in mortgage loan servicing expense partially offset by increases in employee benefits of $2.2 million, FDIC insurance expense of $1.5 million and higher amounts of certain general operating expenses. Other noninterest expense for the third quarter of 2022 included
3
United Bankshares, Inc. Announces
October 25, 2023
Page Four
an accrual of $5.0 million related to a litigation matter with a former commercial customer. The decrease in OREO expense was primarily due to fewer write-downs on OREO properties. The decrease in mortgage loan servicing expense was mainly driven by lower MSR balances. The increase in employee benefits was primarily due to higher postretirement benefit costs and higher health insurance costs. The increase in FDIC insurance expense was primarily due to a higher assessment rate.
For the third quarter of 2023, income tax expense was $24.8 million as compared to $25.9 million for the third quarter of 2022. The decrease of $1.1 million was due to lower earnings partially offset by a higher effective tax rate. Uniteds effective tax rate was 20.5% and 20.2% for the third quarter of 2023 and third quarter of 2022, respectively.
First nine months of 2023 compared to the first nine months of 2022
Earnings for the first nine months of 2023 were $286.9 million, or $2.12 per diluted share, as compared to earnings of $279.9 million, or $2.06 per diluted share, for the first nine months of 2022.
Net interest income for the first nine months of 2023 increased $43.2 million, or 7%, from the first nine months of 2022. 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 first nine months of 2023 increased $43.0 million, or 7%, from the first nine months of 2022. The increase in net interest income and tax-equivalent net interest income was primarily due to the impact of rising market interest rates on earning assets, organic loan growth and a change in the asset mix to higher earning assets. These increases were partially offset by higher interest expense primarily driven by deposit rate repricing, higher average balances and cost of long-term borrowings, lower income from PPP loan fees and lower acquired loan accretion income. The yield on average earning assets increased 169 basis points from the first nine months of 2022 to 5.32%. Average earning assets for the first nine months of 2023 increased $317.3 million, or 1%, from the first nine months of 2022 due to a $1.7 billion increase in average net loans and loans held for sale partially offset by a $959.9 million decrease in average short-term investments and a $411.1 million decrease in average investment securities. The average cost of funds increased 218 basis points from the first nine months of 2022 to 2.56% primarily due to increases in the yield on average interest-bearing deposits of 200 basis points and in the yield on average long-term borrowings of 272 basis points. Average long-term borrowings increased $1.3 billion from the first nine months of 2022. Net PPP loan fee income decreased $8.8 million from the first nine months of 2022. Acquired loan accretion income was $8.5 million and $13.6 million for the first nine months of 2023 and 2022, respectively, a decrease of $5.1 million. The net interest margin of 3.56% for the first nine months of 2023 was an increase of 18 basis points from the net interest margin of 3.38% for the first nine months of 2022.
The provision for credit losses was $24.3 million for the first nine months 2023 as compared to $2.5 million for the first nine months of 2022. The higher amount of provision expense for the first nine months of 2023 as compared to the first nine months of 2022 was mainly due to an increase in qualitative adjustments and the impact of reasonable and supportable forecasts of future macroeconomic conditions.
Noninterest income for the first nine months of 2023 was $101.6 million, which was a decrease of $20.8 million, or 17%, from the first nine months of 2022. Income from mortgage banking activities decreased $16.2 million from the first nine months of 2022 mainly due to lower mortgage loan origination and sale volume and a lower margin on loans sold. Additionally, net losses on investment securities were $7.9 million for the first nine months of 2023 as compared to net gains on investment securities of $725 thousand for the first nine months of 2022 mainly driven by the loss on sale of AFS investment securities in the second quarter of 2023. The decrease in noninterest income was partially offset by a $5.9 million increase in mortgage loan servicing income mainly driven by the gain on sale of MSRs in the second quarter of 2023.
4
United Bankshares, Inc. Announces
October 25, 2023
Page Five
Noninterest expense for the first nine months of 2023 was $407.9 million, a decrease of $9.6 million, or 2%, from the first nine months of 2022 driven by decreases in employee compensation of $11.9 million and in the expense for the reserve for unfunded loan commitments of $10.7 million partially offset by increases in other noninterest expense of $5.9 million and FDIC insurance expense of $5.0 million. The decrease in employee compensation was primarily due to lower employee commissions and incentives related to mortgage banking production. The increase in other noninterest expense was primarily driven by higher amounts of certain general operating expenses. The increase in FDIC insurance expense was primarily due to a higher assessment rate.
For the first nine months of 2023, income tax expense was $72.7 million as compared to $69.5 million for the first nine months of 2022 primarily due to higher earnings and a higher effective tax rate. Uniteds effective tax rate was 20.2% for the first nine months of 2023 and 19.9% for the first nine months of 2022.
Credit Quality
Uniteds asset quality continues to be sound. At September 30, 2023, non-performing loans were $42.7 million, or 0.20% of loans & leases, net of unearned income. Total non-performing assets were $45.9 million, including OREO of $3.2 million, or 0.16% of total assets at September 30, 2023. At December 31, 2022, non-performing loans were $58.6 million, or 0.29% of loans & leases, net of unearned income. Total non-performing assets were $60.7 million, including OREO of $2.1 million, or 0.21% of total assets at December 31, 2022.
On January 1, 2023, United adopted ASU 2022-02, Troubled Debt Restructurings and Vintage Disclosures which eliminated the accounting guidance on troubled debt restructurings and enhanced creditors disclosure requirements related to loan refinancings and restructurings for borrowers experiencing financial difficulty. After the adoption of ASU 2022-02, United no longer considers accruing restructured loans that are fewer than 90 days past due as non-performing loans or non-performing assets. December 31, 2022 non-performing loans and non-performing assets noted above included $9.1 million of troubled debt restructurings that were on accruing status and fewer than 90 days past due but classified as non-performing loans and non-performing assets. Restructured loans that are on non-accrual or 90-day past due are included in the respective non-performing loan and non-performing asset categories for periods subsequent to adoption.
As of September 30, 2023, the allowance for loan & lease losses was $254.9 million, or 1.21% of loans & leases, net of unearned income, as compared to $234.7 million, or 1.14% of loans & leases, net of unearned income, at December 31, 2022. Net charge-offs were $1.8 million for both the third quarter of 2023 and 2022. Net charge-offs were $4.1 million for the first nine months of 2023 compared to net recoveries of $1.1 million for the first nine months of 2022. Annualized net charge-offs as a percentage of average loans & leases, net of unearned income were 0.03% and 0.04% for the third quarter of 2023 and 2022, respectively. Annualized net charge-offs (recoveries) as a percentage of average loans & leases, net of unearned income were 0.03% and (0.01)% for the first nine months of 2023 and 2022, respectively. Net charge-offs were $1.2 million for the second quarter of 2023.
5
United Bankshares, Inc. Announces
October 25, 2023
Page Six
Capital
United continues to be well-capitalized based upon regulatory guidelines. Uniteds estimated risk-based capital ratio is 15.2% at September 30, 2023, while estimated Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 13.0%, 13.0% and 11.3%, respectively. The September 30, 2023 ratios reflect Uniteds 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%.
During the first nine months of 2022, United repurchased, under a previously announced stock repurchase plan, approximately 2.3 million shares of its common stock at an average price per share of $34.69. United did not repurchase any shares of its common stock during the first nine months of 2023.
About United Bankshares, Inc.
As of September 30, 2023, United had consolidated assets of approximately $29.2 billion. United is the parent company of United Bank which comprises nearly 250 offices in Virginia, Maryland, Washington, D.C., North Carolina, South Carolina, Georgia, Pennsylvania, West Virginia, and Ohio. Uniteds 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, 2023 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, 2023 and will adjust amounts preliminarily reported, if necessary.
6
United Bankshares, Inc. Announces
October 25, 2023
Page Seven
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 Uniteds results of operations or financial position. Presentation of these non-GAAP financial measures is consistent with how Uniteds 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, average tangible equity, return on average tangible equity and tangible book value per share. Management believes these non-GAAP financial measures to be helpful in understanding Uniteds 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, Uniteds management believes this measure is more widely used within the financial services industry and provides better comparability of net interest income arising from taxable and tax-exempt sources. United uses this measure to monitor net interest income performance and to manage its balance sheet composition. The tax-equivalent adjustment combines amounts of interest income on federally nontaxable loans and investment securities using the statutory federal income tax rate of 21%.
Tangible equity is calculated as GAAP total shareholders equity minus total intangible assets. Tangible equity can thus be considered the most conservative valuation of the company. Tangible equity is also presented on a per common share basis and considering net income, a return on average tangible equity. Management provides these amounts to facilitate the understanding of as well as to assess the quality and composition of Uniteds capital structure. By removing the effect of intangible assets that result from merger and acquisition activity, the permanent items of equity are presented. These measures, along with others, are used by management to analyze capital adequacy and performance.
Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as reconciliation to that comparable GAAP financial measure can be found in the attached financial information tables to this press release. Investors should recognize that Uniteds presentation of these non-GAAP financial measures might not be comparable to similarly titled measures at other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and United strongly encourages a review of its condensed consolidated financial statements in their entirety.
Forward-Looking Statements
In this report, we have made various statements regarding current expectations or forecasts of future events, which speak only as of the date the statements are made. These statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are also made from time-to-time in press releases and in oral statements made by the officers of the Company. Forward-looking statements can be identified by the use of the words expect, may, could, intend, project, estimate, believe, anticipate, and other words of similar meaning. Such forward-looking statements are based on assumptions and estimates, which although believed to be reasonable, may turn out to be incorrect. Therefore, undue reliance should not be placed upon these estimates and statements. United cannot assure that any of these statements, estimates, or beliefs will be realized and actual results may differ from those contemplated in these forward-looking statements. The following factors, among others, could cause the actual results of Uniteds operations to differ materially from its expectations: the uncertainty as to the extent of the duration, scope and impacts of the COVID-19 pandemic on United, its colleagues, the communities United serves, and the domestic and global economy; uncertainty in U.S. fiscal and monetary policies, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital and credit markets, interest rate, securities market and monetary supply fluctuations; increasing rates of inflation and slower growth rates; reform of LIBOR; the nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those involving the Federal Reserve, FDIC, and CFPB; the effect of changes in the level of checking or savings account deposits on Uniteds funding costs and net interest margin; future provisions for credit losses on loans and debt securities; changes in nonperforming assets; competition; changes in legislation or regulatory requirements; and the impact of natural disasters, extreme weather events, military conflict (including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas, the possible expansion of such conflicts and potential geopolitical consequences), terrorism or other geopolitical events. For more information about factors that could cause actual results to differ materially from Uniteds 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, 2022, 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.
7
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 2023 |
September 2022 |
June 2023 |
September 2023 |
September 2022 |
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EARNINGS SUMMARY: |
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Interest income |
$ | 356,910 | $ | 263,683 | $ | 345,932 | $ | 1,032,145 | $ | 694,249 | ||||||||||
Interest expense |
128,457 | 23,061 | 118,471 | 341,911 | 47,222 | |||||||||||||||
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Net interest income |
228,453 | 240,622 | 227,461 | 690,234 | 647,027 | |||||||||||||||
Provision for credit losses |
5,948 | 7,671 | 11,440 | 24,278 | 2,454 | |||||||||||||||
Noninterest income |
33,661 | 32,749 | 35,178 | 101,583 | 122,382 | |||||||||||||||
Noninterest expense |
135,230 | 137,196 | 135,288 | 407,937 | 417,545 | |||||||||||||||
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Income before income taxes |
120,936 | 128,504 | 115,911 | 359,602 | 349,410 | |||||||||||||||
Income taxes |
24,779 | 25,919 | 23,452 | 72,679 | 69,548 | |||||||||||||||
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Net income |
$ | 96,157 | $ | 102,585 | $ | 92,459 | $ | 286,923 | $ | 279,862 | ||||||||||
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PER COMMON SHARE: |
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Net income: |
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Basic |
$ | 0.71 | $ | 0.76 | $ | 0.68 | $ | 2.13 | $ | 2.07 | ||||||||||
Diluted |
0.71 | 0.76 | 0.68 | 2.12 | 2.06 | |||||||||||||||
Cash dividends |
$ | 0.36 | $ | 0.36 | 0.36 | 1.08 | 1.08 | |||||||||||||
Book value |
34.37 | 34.45 | 32.98 | |||||||||||||||||
Closing market price |
$ | 29.67 | $ | 27.59 | $ | 35.75 | ||||||||||||||
Common shares outstanding: |
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Actual at period end, net of treasury shares |
134,934,858 | 134,933,015 | 134,631,647 | |||||||||||||||||
Weighted average-basic |
134,685,041 | 134,182,248 | 134,683,010 | 134,493,059 | 134,947,674 | |||||||||||||||
Weighted average-diluted |
134,887,776 | 134,553,565 | 134,849,818 | 134,733,055 | 135,251,299 | |||||||||||||||
FINANCIAL RATIOS: |
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Return on average assets |
1.31 | % | 1.41 | % | 1.26 | % | 1.31 | % | 1.29 | % | ||||||||||
Return on average shareholders equity |
8.14 | % | 8.96 | % | 7.96 | % | 8.27 | % | 8.07 | % | ||||||||||
Return on average tangible equity (non-GAAP)(1) |
13.71 | % | 15.46 | % | 13.47 | % | 14.03 | % | 13.73 | % | ||||||||||
Average equity to average assets |
16.12 | % | 15.75 | % | 15.83 | % | 15.81 | % | 15.95 | % | ||||||||||
Net interest margin |
3.54 | % | 3.78 | % | 3.51 | % | 3.56 | % | 3.38 | % |
September 30 2023 |
December 31 2022 |
September 30 2022 |
June 30 2023 |
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PERIOD END BALANCES: |
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Assets |
$ | 29,224,794 | $ | 29,489,380 | $ | 29,048,475 | $ | 29,694,651 | ||||||||
Earning assets |
25,883,462 | 26,135,400 | 25,648,264 | 26,335,600 | ||||||||||||
Loans & leases, net of unearned income |
21,097,883 | 20,558,166 | 19,700,080 | 20,764,291 | ||||||||||||
Loans held for sale |
59,614 | 56,879 | 210,075 | 91,296 | ||||||||||||
Investment securities |
4,066,299 | 4,872,604 | 4,923,694 | 4,342,714 | ||||||||||||
Total deposits |
22,676,854 | 22,303,166 | 22,863,377 | 22,369,753 | ||||||||||||
Shareholders equity |
4,648,878 | 4,516,193 | 4,440,086 | 4,637,043 |
Note:
(1) | See information under the Selected Financial Ratios table for a reconciliation of non-GAAP measure. |
8
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 | |||||||||||||||||||
2023 | 2022 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||||||
Interest & Loan Fees Income (GAAP) |
$ | 356,910 | $ | 263,683 | $ | 345,932 | $ | 329,303 | $ | 1,032,145 | $ | 694,249 | ||||||||||||
Tax equivalent adjustment |
869 | 1,105 | 1,144 | 1,135 | 3,148 | 3,318 | ||||||||||||||||||
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|
|
|
|
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|
|
|
|
|||||||||||||
Interest & Fees Income (FTE) (non-GAAP) |
357,779 | 264,788 | 347,076 | 330,438 | 1,035,293 | 697,567 | ||||||||||||||||||
Interest Expense |
128,457 | 23,061 | 118,471 | 94,983 | 341,911 | 47,222 | ||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net Interest Income (FTE) (non-GAAP) |
229,322 | 241,727 | 228,605 | 235,455 | 693,382 | 650,345 | ||||||||||||||||||
Provision for Credit Losses |
5,948 | 7,671 | 11,440 | 6,890 | 24,278 | 2,454 | ||||||||||||||||||
Noninterest Income: |
||||||||||||||||||||||||
Fees from trust services |
4,514 | 4,384 | 4,516 | 4,780 | 13,810 | 12,805 | ||||||||||||||||||
Fees from brokerage services |
4,433 | 4,016 | 3,918 | 4,200 | 12,551 | 12,683 | ||||||||||||||||||
Fees from deposit services |
9,282 | 10,069 | 9,325 | 9,362 | 27,969 | 31,047 | ||||||||||||||||||
Bankcard fees and merchant discounts |
1,676 | 1,857 | 1,707 | 1,707 | 5,090 | 4,907 | ||||||||||||||||||
Other charges, commissions, and fees |
850 | 918 | 949 | 1,138 | 2,937 | 2,462 | ||||||||||||||||||
Income from bank-owned life insurance |
2,562 | 1,472 | 2,022 | 1,891 | 6,475 | 7,786 | ||||||||||||||||||
Income from mortgage banking activities |
7,556 | 6,422 | 7,907 | 6,384 | 21,847 | 38,070 | ||||||||||||||||||
Mortgage loan servicing income |
846 | 2,302 | 9,841 | 2,276 | 12,963 | 7,017 | ||||||||||||||||||
Net (losses) gains on investment securities |
(181 | ) | (206 | ) | (7,336 | ) | (405 | ) | (7,922 | ) | 725 | |||||||||||||
Other noninterest income |
2,123 | 1,515 | 2,329 | 1,411 | 5,863 | 4,880 | ||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Noninterest Income |
33,661 | 32,749 | 35,178 | 32,744 | 101,583 | 122,382 | ||||||||||||||||||
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|
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|
|||||||||||||
Noninterest Expense: |
||||||||||||||||||||||||
Employee compensation |
59,064 | 59,618 | 58,502 | 55,414 | 172,980 | 184,871 | ||||||||||||||||||
Employee benefits |
12,926 | 10,750 | 12,236 | 13,435 | 38,597 | 35,648 | ||||||||||||||||||
Net occupancy |
11,494 | 11,281 | 11,409 | 11,833 | 34,736 | 33,674 | ||||||||||||||||||
Data processing |
7,405 | 7,614 | 7,256 | 7,473 | 22,134 | 22,534 | ||||||||||||||||||
Amortization of intangibles |
1,279 | 1,379 | 1,279 | 1,279 | 3,837 | 4,137 | ||||||||||||||||||
OREO expense |
185 | 1,708 | 315 | 667 | 1,167 | 1,936 | ||||||||||||||||||
Net losses (gains) on the sale of OREO properties |
93 | 125 | 16 | (43 | ) | 66 | (362 | ) | ||||||||||||||||
Equipment expense |
7,170 | 7,807 | 8,026 | 6,996 | 22,192 | 22,452 | ||||||||||||||||||
FDIC insurance expense |
4,598 | 3,063 | 4,570 | 4,587 | 13,755 | 8,740 | ||||||||||||||||||
Mortgage loan servicing expense and impairment |
1,051 | 1,847 | 1,699 | 1,884 | 4,634 | 5,273 | ||||||||||||||||||
Expense for the reserve for unfunded loan commitments |
(3,002 | ) | (2,881 | ) | (2,021 | ) | 2,600 | (2,423 | ) | 8,255 | ||||||||||||||
Other noninterest expense |
32,967 | 34,885 | 32,001 | 31,294 | 96,262 | 90,387 | ||||||||||||||||||
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|
|
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|
|||||||||||||
Total Noninterest Expense |
135,230 | 137,196 | 135,288 | 137,419 | 407,937 | 417,545 | ||||||||||||||||||
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|||||||||||||
Income Before Income Taxes (FTE) (non-GAAP) |
121,805 | 129,609 | 117,055 | 123,890 | 362,750 | 352,728 | ||||||||||||||||||
Tax equivalent adjustment |
869 | 1,105 | 1,144 | 1,135 | 3,148 | 3,318 | ||||||||||||||||||
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|||||||||||||
Income Before Income Taxes (GAAP) |
120,936 | 128,504 | 115,911 | 122,755 | 359,602 | 349,410 | ||||||||||||||||||
Taxes |
24,779 | 25,919 | 23,452 | 24,448 | 72,679 | 69,548 | ||||||||||||||||||
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|||||||||||||
Net Income |
$ | 96,157 | $ | 102,585 | $ | 92,459 | $ | 98,307 | $ | 286,923 | $ | 279,862 | ||||||||||||
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MEMO: Effective Tax Rate |
20.49 | % | 20.17 | % | 20.23 | % | 19.92 | % | 20.21 | % | 19.90 | % |
9
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 2023 | September 2022 | September 30 | December 31 | September 30 | June 30 | |||||||||||||||||||
Q-T-D Average | Q-T-D Average | 2023 | 2022 | 2022 | 2023 | |||||||||||||||||||
Cash & Cash Equivalents |
$ | 1,133,432 | $ | 1,260,311 | $ | 1,184,054 | $ | 1,176,652 | $ | 1,356,347 | $ | 1,692,357 | ||||||||||||
Securities Available for Sale |
3,885,870 | 4,826,072 | 3,749,357 | 4,541,925 | 4,648,087 | 4,005,324 | ||||||||||||||||||
Less: Allowance for credit losses |
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
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|
|
|
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|
|
|
|||||||||||||
Net available for sale securities |
3,885,870 | 4,826,072 | 3,749,357 | 4,541,925 | 4,648,087 | 4,005,324 | ||||||||||||||||||
Securities Held to Maturity |
1,020 | 1,020 | 1,020 | 1,020 | 1,020 | 1,020 | ||||||||||||||||||
Less: Allowance for credit losses |
(19 | ) | (18 | ) | (18 | ) | (18 | ) | (19 | ) | (19 | ) | ||||||||||||
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|||||||||||||
Net held to maturity securities |
1,001 | 1,002 | 1,002 | 1,002 | 1,001 | 1,001 | ||||||||||||||||||
Equity Securities |
8,556 | 9,449 | 8,548 | 7,629 | 7,314 | 8,443 | ||||||||||||||||||
Other Investment Securities |
309,824 | 251,405 | 307,392 | 322,048 | 267,292 | 327,946 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Securities |
4,205,251 | 5,087,928 | 4,066,299 | 4,872,604 | 4,923,694 | 4,342,714 | ||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Cash and Securities |
5,338,683 | 6,348,239 | 5,250,353 | 6,049,256 | 6,280,041 | 6,035,071 | ||||||||||||||||||
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|
|
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|
|||||||||||||
Loans held for sale |
65,009 | 203,420 | 59,614 | 56,879 | 210,075 | 91,296 | ||||||||||||||||||
Commercial Loans & Leases |
15,193,346 | 14,410,508 | 15,416,232 | 14,986,117 | 14,531,221 | 15,083,157 | ||||||||||||||||||
Mortgage Loans |
4,482,774 | 3,613,613 | 4,519,845 | 4,158,226 | 3,756,692 | 4,437,158 | ||||||||||||||||||
Consumer Loans |
1,237,183 | 1,442,240 | 1,178,898 | 1,435,820 | 1,434,572 | 1,261,611 | ||||||||||||||||||
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|
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|
|||||||||||||
Gross Loans |
20,913,303 | 19,466,361 | 21,114,975 | 20,580,163 | 19,722,485 | 20,781,926 | ||||||||||||||||||
Unearned income |
(16,999 | ) | (24,295 | ) | (17,092 | ) | (21,997 | ) | (22,405 | ) | (17,635 | ) | ||||||||||||
|
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|
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|
|||||||||||||
Loans & Leases, net of unearned income |
20,896,304 | 19,442,066 | 21,097,883 | 20,558,166 | 19,700,080 | 20,764,291 | ||||||||||||||||||
Allowance for Loan & Lease Losses |
(250,810 | ) | (213,824 | ) | (254,886 | ) | (234,746 | ) | (219,611 | ) | (250,721 | ) | ||||||||||||
|
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|
|
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|
|
|
|
|
|
|
|||||||||||||
Net Loans |
20,645,494 | 19,228,242 | 20,842,997 | 20,323,420 | 19,480,469 | 20,513,570 | ||||||||||||||||||
Mortgage Servicing Rights |
4,588 | 22,369 | 4,616 | 21,022 | 21,908 | 4,627 | ||||||||||||||||||
Goodwill |
1,888,889 | 1,888,889 | 1,888,889 | 1,888,889 | 1,888,889 | 1,888,889 | ||||||||||||||||||
Other Intangibles |
15,880 | 21,165 | 15,060 | 18,897 | 20,276 | 16,339 | ||||||||||||||||||
Operating Lease Right-of-Use Asset |
80,751 | 74,734 | 80,259 | 71,144 | 74,043 | 80,641 | ||||||||||||||||||
Other Real Estate Owned |
3,189 | 13,508 | 3,181 | 2,052 | 10,779 | 3,756 | ||||||||||||||||||
Bank-Owned Life Insurance |
484,751 | 477,654 | 485,386 | 480,184 | 478,518 | 483,906 | ||||||||||||||||||
Other Assets |
548,687 | 556,215 | 594,439 | 577,637 | 583,477 | 576,556 | ||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Assets |
$ | 29,075,921 | $ | 28,834,435 | $ | 29,224,794 | $ | 29,489,380 | $ | 29,048,475 | $ | 29,694,651 | ||||||||||||
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|
|||||||||||||
MEMO: Interest-earning Assets |
$ | 25,767,978 | $ | 25,438,281 | $ | 25,883,462 | $ | 26,135,400 | $ | 25,648,264 | $ | 26,335,600 | ||||||||||||
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|
|
|||||||||||||
Interest-bearing Deposits |
$ | 15,993,991 | $ | 15,308,177 | $ | 16,423,511 | $ | 15,103,488 | $ | 15,244,554 | $ | 15,918,927 | ||||||||||||
Noninterest-bearing Deposits |
6,337,052 | 7,664,032 | 6,253,343 | 7,199,678 | 7,618,823 | 6,450,826 | ||||||||||||||||||
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|
|
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|
|
|
|
|
|
|
|||||||||||||
Total Deposits |
22,331,043 | 22,972,209 | 22,676,854 | 22,303,166 | 22,863,377 | 22,369,753 | ||||||||||||||||||
Short-term Borrowings |
188,945 | 137,985 | 188,274 | 160,698 | 142,476 | 176,739 | ||||||||||||||||||
Long-term Borrowings |
1,590,763 | 894,940 | 1,388,770 | 2,197,656 | 1,297,308 | 2,188,438 | ||||||||||||||||||
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|
|
|
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|
|
|
|||||||||||||
Total Borrowings |
1,779,708 | 1,032,925 | 1,577,044 | 2,358,354 | 1,439,784 | 2,365,177 | ||||||||||||||||||
Operating Lease Liability |
85,112 | 79,409 | 84,569 | 75,749 | 78,748 | 85,038 | ||||||||||||||||||
Other Liabilities |
192,934 | 207,792 | 237,449 | 235,918 | 226,480 | 237,640 | ||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Liabilities |
24,388,797 | 24,292,335 | 24,575,916 | 24,973,187 | 24,608,389 | 25,057,608 | ||||||||||||||||||
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|
|||||||||||||
Preferred Equity |
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Common Equity |
4,687,124 | 4,542,100 | 4,648,878 | 4,516,193 | 4,440,086 | 4,637,043 | ||||||||||||||||||
|
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|
|
|
|
|
|
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|
|
|
|||||||||||||
Total Shareholders Equity |
4,687,124 | 4,542,100 | 4,648,878 | 4,516,193 | 4,440,086 | 4,637,043 | ||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Liabilities & Equity |
$ | 29,075,921 | $ | 28,834,435 | $ | 29,224,794 | $ | 29,489,380 | $ | 29,048,475 | $ | 29,694,651 | ||||||||||||
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|||||||||||||
MEMO: Interest-bearing Liabilities |
$ | 17,773,699 | $ | 16,341,102 | $ | 18,000,555 | $ | 17,461,842 | $ | 16,684,338 | $ | 18,284,104 | ||||||||||||
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10
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 | |||||||||||||||||||
2023 | 2022 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||||||
Quarterly/Year-to-Date Share Data: |
||||||||||||||||||||||||
Earnings Per Share: |
||||||||||||||||||||||||
Basic |
$ | 0.71 | $ | 0.76 | $ | 0.68 | $ | 0.73 | $ | 2.13 | $ | 2.07 | ||||||||||||
Diluted |
$ | 0.71 | $ | 0.76 | $ | 0.68 | $ | 0.73 | $ | 2.12 | $ | 2.06 | ||||||||||||
Common Dividend Declared Per Share |
$ | 0.36 | $ | 0.36 | $ | 0.36 | $ | 0.36 | $ | 1.08 | $ | 1.08 | ||||||||||||
High Common Stock Price |
$ | 34.30 | $ | 40.85 | $ | 35.61 | $ | 42.45 | $ | 42.45 | $ | 40.85 | ||||||||||||
Low Common Stock Price |
$ | 26.49 | $ | 33.67 | $ | 27.68 | $ | 33.35 | $ | 26.49 | $ | 33.11 | ||||||||||||
Average Shares Outstanding (Net of Treasury Stock): |
||||||||||||||||||||||||
Basic |
134,685,041 | 134,182,248 | 134,683,010 | 134,411,166 | 134,493,059 | 134,947,674 | ||||||||||||||||||
Diluted |
134,887,776 | 134,553,565 | 134,849,818 | 134,840,328 | 134,733,055 | 135,251,299 | ||||||||||||||||||
Common Dividends |
$ | 48,706 | $ | 48,564 | $ | 48,628 | $ | 48,720 | $ | 146,054 | $ | 146,374 | ||||||||||||
Dividend Payout Ratio |
50.65 | % | 47.34 | % | 52.59 | % | 49.56 | % | 50.90 | % | 52.30 | % |
September 30 | December 31 | September 30 | June 30 | |||||||||||||
2023 | 2022 | 2022 | 2023 | |||||||||||||
EOP Share Data: |
||||||||||||||||
Book Value Per Share |
$ | 34.45 | $ | 33.52 | $ | 32.98 | $ | 34.37 | ||||||||
Tangible Book Value Per Share (non-GAAP) (1) |
$ | 20.34 | $ | 19.36 | $ | 18.80 | $ | 20.25 | ||||||||
52-week High Common Stock Price |
$ | 44.15 | $ | 44.15 | $ | 40.85 | $ | 44.15 | ||||||||
Date |
11/11/22 | 11/11/22 | 8/16/22 | 11/11/22 | ||||||||||||
52-week Low Common Stock Price |
$ | 26.49 | $ | 33.11 | $ | 33.11 | $ | 27.68 | ||||||||
Date |
9/22/23 | 5/2/22 | 5/2/22 | 5/12/23 | ||||||||||||
EOP Shares Outstanding (Net of Treasury Stock): |
134,933,015 | 134,745,122 | 134,631,647 | 134,934,858 | ||||||||||||
Memorandum Items: |
||||||||||||||||
EOP Employees (full-time equivalent) |
2,803 | 2,856 | 2,915 | 2,799 | ||||||||||||
Note: |
||||||||||||||||
(1) Tangible Book Value Per Share: |
||||||||||||||||
Total Shareholders Equity (GAAP) |
$ | 4,648,878 | $ | 4,516,193 | $ | 4,440,086 | $ | 4,637,043 | ||||||||
Less: Total Intangibles |
(1,903,949 | ) | (1,907,786 | ) | (1,909,165 | ) | (1,905,228 | ) | ||||||||
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|
|
|
|
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|
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Tangible Equity (non-GAAP) |
$ | 2,744,929 | $ | 2,608,407 | $ | 2,530,921 | $ | 2,731,815 | ||||||||
÷ EOP Shares Outstanding (Net of Treasury Stock) |
134,933,015 | 134,745,122 | 134,631,647 | 134,934,858 | ||||||||||||
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|
|
|
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|
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|
|||||||||
Tangible Book Value Per Share (non-GAAP) |
$ | 20.34 | $ | 19.36 | $ | 18.80 | $ | 20.25 |
11
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
Three Months Ended September 2023 |
Three Months Ended September 2022 |
Three Months Ended June 2023 |
||||||||||||||||||||||||||||||||||
Average | Average | Average | Average | Average | Average | |||||||||||||||||||||||||||||||
Balance | Interest(1) | Rate(1) | Balance | Interest(1) | Rate(1) | Balance | Interest(1) | Rate(1) | ||||||||||||||||||||||||||||
Selected Average Balances and Yields: |
|
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ASSETS: |
||||||||||||||||||||||||||||||||||||
Earning Assets: |
||||||||||||||||||||||||||||||||||||
Federal funds sold and securities purchased under agreements to resell and other short-term investments |
$ | 852,224 | $ | 11,810 | 5.50 | % | $ | 918,691 | $ | 6,834 | 2.95 | % | $ | 994,072 | $ | 12,706 | 5.13 | % | ||||||||||||||||||
Investment securities: |
||||||||||||||||||||||||||||||||||||
Taxable |
3,994,073 | 35,730 | 3.58 | % | 4,687,528 | 29,149 | 2.49 | % | 4,274,123 | 36,721 | 3.44 | % | ||||||||||||||||||||||||
Tax-exempt |
211,178 | 1,482 | 2.81 | % | 400,400 | 2,783 | 2.78 | % | 387,918 | 2,718 | 2.80 | % | ||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total securities |
4,205,251 | 37,212 | 3.54 | % | 5,087,928 | 31,932 | 2.51 | % | 4,662,041 | 39,439 | 3.38 | % | ||||||||||||||||||||||||
Loans and loans held for sale, net of unearned income (2) |
20,961,313 | 308,757 | 5.85 | % | 19,645,486 | 226,022 | 4.57 | % | 20,705,509 | 294,931 | 5.71 | % | ||||||||||||||||||||||||
Allowance for loan losses |
(250,810 | ) | (213,824 | ) | (240,611 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Net loans and loans held for sale |
20,710,503 | 5.92 | % | 19,431,662 | 4.62 | % | 20,464,898 | 5.78 | % | |||||||||||||||||||||||||||
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|
|
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|
|
|
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|
|
|||||||||||||||||||
Total earning assets |
25,767,978 | $ | 357,779 | 5.52 | % | 25,438,281 | $ | 264,788 | 4.14 | % | 26,121,011 | $ | 347,076 | 5.33 | % | |||||||||||||||||||||
|
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|
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|
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|
|
|
|||||||||||||||||||||||||
Other assets |
3,307,943 | 3,396,154 | 3,317,801 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
TOTAL ASSETS |
$ | 29,075,921 | $ | 28,834,435 | $ | 29,438,812 | ||||||||||||||||||||||||||||||
|
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|
|
|
|||||||||||||||||||||||||||||||
LIABILITIES: |
||||||||||||||||||||||||||||||||||||
Interest-Bearing Liabilities: |
||||||||||||||||||||||||||||||||||||
Interest-bearing deposits |
$ | 15,993,991 | $ | 108,793 | 2.70 | % | $ | 15,308,177 | $ | 17,660 | 0.46 | % | $ | 15,520,461 | $ | 91,577 | 2.37 | % | ||||||||||||||||||
Short-term borrowings |
188,945 | 1,805 | 3.79 | % | 137,985 | 493 | 1.42 | % | 177,315 | 1,489 | 3.37 | % | ||||||||||||||||||||||||
Long-term borrowings |
1,590,763 | 17,859 | 4.45 | % | 894,940 | 4,908 | 2.18 | % | 2,307,485 | 25,405 | 4.42 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total interest-bearing liabilities |
17,773,699 | 128,457 | 2.87 | % | 16,341,102 | 23,061 | 0.56 | % | 18,005,261 | 118,471 | 2.64 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Noninterest-bearing deposits |
6,337,052 | 7,664,032 | 6,500,259 | |||||||||||||||||||||||||||||||||
Accrued expenses and other liabilities |
278,046 | 287,201 | 274,198 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
TOTAL LIABILITIES |
24,388,797 | 24,292,335 | 24,779,718 | |||||||||||||||||||||||||||||||||
SHAREHOLDERS EQUITY |
4,687,124 | 4,542,100 | 4,659,094 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |
$ | 29,075,921 | $ | 28,834,435 | $ | 29,438,812 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
NET INTEREST INCOME |
$ | 229,322 | $ | 241,727 | $ | 228,605 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
INTEREST RATE SPREAD |
2.65 | % | 3.58 | % | 2.69 | % | ||||||||||||||||||||||||||||||
NET INTEREST MARGIN |
3.54 | % | 3.78 | % | 3.51 | % |
(1) | The interest income and the yields on federally nontaxable loans and investment securities are presented on a tax-equivalent basis using the statutory federal income tax rate of 21%. |
(2) | Nonaccruing loans are included in the daily average loan amounts outstanding. |
12
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
Nine Months Ended September 2023 |
Nine Months Ended September 2022 |
|||||||||||||||||||||||
Average | Average | Average | Average | |||||||||||||||||||||
Balance | Interest(1) | Rate(1) | Balance | Interest(1) | Rate(1) | |||||||||||||||||||
Selected Average Balances and Yields: |
||||||||||||||||||||||||
ASSETS: |
||||||||||||||||||||||||
Earning Assets: |
||||||||||||||||||||||||
Federal funds sold and securities purchased under agreements to resell and other short-term investments |
$ | 927,255 | $ | 35,499 | 5.12 | % | $ | 1,887,158 | $ | 14,004 | 0.99 | % | ||||||||||||
Investment securities: |
||||||||||||||||||||||||
Taxable |
4,222,849 | 108,710 | 3.43 | % | 4,540,767 | 71,212 | 2.09 | % | ||||||||||||||||
Tax-exempt |
328,276 | 6,940 | 2.82 | % | 421,440 | 8,266 | 2.62 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total securities |
4,551,125 | 115,650 | 3.39 | % | 4,962,207 | 79,478 | 2.14 | % | ||||||||||||||||
Loans and loans held for sale, net of unearned income (2) |
20,784,493 | 884,144 | 5.69 | % | 19,068,898 | 604,085 | 4.23 | % | ||||||||||||||||
Allowance for loan losses |
(242,135 | ) | (214,813 | ) | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net loans and loans held for sale |
20,542,358 | 5.75 | % | 18,854,085 | 4.28 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total earning assets |
26,020,738 | $ | 1,035,293 | 5.32 | % | 25,703,450 | $ | 697,567 | 3.63 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Other assets |
3,319,143 | 3,358,118 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
TOTAL ASSETS |
$ | 29,339,881 | $ | 29,061,568 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
LIABILITIES: |
||||||||||||||||||||||||
Interest-Bearing Liabilities: |
||||||||||||||||||||||||
Interest-bearing deposits |
$ | 15,569,985 | $ | 268,962 | 2.31 | % | $ | 15,599,135 | $ | 35,972 | 0.31 | % | ||||||||||||
Short-term borrowings |
177,707 | 4,451 | 3.35 | % | 136,014 | 911 | 0.90 | % | ||||||||||||||||
Long-term borrowings |
2,102,386 | 68,498 | 4.36 | % | 841,693 | 10,339 | 1.64 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total interest-bearing liabilities |
17,850,078 | 341,911 | 2.56 | % | 16,576,842 | 47,222 | 0.38 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Noninterest-bearing deposits |
6,576,063 | 7,573,667 | ||||||||||||||||||||||
Accrued expenses and other liabilities |
274,418 | 275,201 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
TOTAL LIABILITIES |
24,700,559 | 24,425,710 | ||||||||||||||||||||||
SHAREHOLDERS EQUITY |
4,639,322 | 4,635,858 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |
$ | 29,339,881 | $ | 29,061,568 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
NET INTEREST INCOME |
$ | 693,382 | $ | 650,345 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
INTEREST RATE SPREAD |
2.76 | % | 3.25 | % | ||||||||||||||||||||
NET INTEREST MARGIN |
3.56 | % | 3.38 | % |
(1) | The interest income and the yields on federally nontaxable loans and investment securities are presented on a tax-equivalent basis using the statutory federal income tax rate of 21%. |
(2) | Nonaccruing loans are included in the daily average loan amounts outstanding. |
13
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 | |||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||
Selected Financial Ratios: |
||||||||||||||||||||||||||||||||||||||||||||||||
Return on Average Assets |
1.31 | % | 1.41 | % | 1.26 | % | 1.35 | % | 1.31 | % | 1.29 | % | ||||||||||||||||||||||||||||||||||||
Return on Average Shareholders Equity |
8.14 | % | 8.96 | % | 7.96 | % | 8.72 | % | 8.27 | % | 8.07 | % | ||||||||||||||||||||||||||||||||||||
Return on Average Tangible Equity (non-GAAP) (1) |
13.71 | % | 15.46 | % | 13.47 | % | 14.97 | % | 14.03 | % | 13.73 | % | ||||||||||||||||||||||||||||||||||||
Efficiency Ratio |
51.59 | % | 50.19 | % | 51.51 | % | 51.46 | % | 51.52 | % | 54.27 | % | ||||||||||||||||||||||||||||||||||||
Price / Earnings Ratio |
9.70 | x | 11.75 | x | 10.84 | x | 12.10 | x | 9.74 | x | 13.02 | x | ||||||||||||||||||||||||||||||||||||
Note: |
||||||||||||||||||||||||||||||||||||||||||||||||
(1) Return on Average Tangible Equity: |
||||||||||||||||||||||||||||||||||||||||||||||||
(a) Net Income (GAAP) |
$ | 96,157 | $ | 102,585 | $ | 92,459 | $ | 98,307 | $ | 286,923 | $ | 279,862 | ||||||||||||||||||||||||||||||||||||
(b) Number of Days |
92 | 92 | 91 | 90 | 273 | 273 | ||||||||||||||||||||||||||||||||||||||||||
Average Total Shareholders Equity (GAAP) |
$ | 4,687,124 | $ | 4,542,100 | $ | 4,659,094 | $ | 4,570,288 | $ | 4,639,322 | $ | 4,635,858 | ||||||||||||||||||||||||||||||||||||
Less: Average Total Intangibles |
(1,904,769 | ) | (1,910,054 | ) | (1,906,053 | ) | (1,907,331 | ) | (1,906,042 | ) | (1,910,957 | ) | ||||||||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
(c) Average Tangible Equity (non-GAAP) |
$ | 2,782,355 | $ | 2,632,046 | $ | 2,753,041 | $ | 2,662,957 | $ | 2,733,280 | $ | 2,724,901 | ||||||||||||||||||||||||||||||||||||
Return on Average Tangible Equity (non-GAAP)\ [(a) / (b)] x 365 / (c) |
13.71 | % | 15.46 | % | 13.47 | % | 14.97 | % | 14.03 | % | 13.73 | % |
September 30 2023 |
December 31 2022 |
September 30 2022 |
June 30 2023 |
|||||||||||||||||||||||||||||
Selected Financial Ratios: |
||||||||||||||||||||||||||||||||
Loans & Leases, net of unearned income / Deposit Ratio |
93.04 | % | 92.18 | % | 86.16 | % | 92.82 | % | ||||||||||||||||||||||||
Allowance for Loan & Lease Losses/ Loans & Leases, net of unearned income |
1.21 | % | 1.14 | % | 1.11 | % | 1.21 | % | ||||||||||||||||||||||||
Allowance for Credit Losses (2)/ Loans & Leases, net of unearned income |
1.42 | % | 1.37 | % | 1.32 | % | 1.43 | % | ||||||||||||||||||||||||
Nonaccrual Loans / Loans & Leases, net of unearned income |
0.12 | % | 0.12 | % | 0.14 | % | 0.13 | % | ||||||||||||||||||||||||
90-Day Past Due Loans/ Loans & Leases, net of unearned income |
0.09 | % | 0.08 | % | 0.09 | % | 0.07 | % | ||||||||||||||||||||||||
Non-performing Loans/ Loans & Leases, net of unearned income |
0.20 | % | 0.29 | % | 0.35 | % | 0.20 | % | ||||||||||||||||||||||||
Non-performing Assets/ Total Assets |
0.16 | % | 0.21 | % | 0.28 | % | 0.15 | % | ||||||||||||||||||||||||
Primary Capital Ratio |
16.76 | % | 16.11 | % | 16.03 | % | 16.45 | % | ||||||||||||||||||||||||
Shareholders Equity Ratio |
15.91 | % | 15.31 | % | 15.29 | % | 15.62 | % | ||||||||||||||||||||||||
Price / Book Ratio |
0.80 | x | 1.21 | x | 1.08 | x | 0.86 | x |
Note:
(2) | Includes allowances for loan losses and lending-related commitments. |
14
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 | |||||||||||||||||||
2023 | 2022 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||||||
Mortgage Banking Segment Data: |
||||||||||||||||||||||||
Applications |
$ | 458,818 | $ | 785,529 | $ | 588,734 | $ | 505,840 | $ | 1,553,392 | $ | 3,641,135 | ||||||||||||
Loans originated |
342,131 | 552,487 | 416,255 | 312,077 | 1,070,463 | 2,514,002 | ||||||||||||||||||
Loans sold |
$ | 367,679 | $ | 564,267 | $ | 399,632 | $ | 301,476 | $ | 1,068,787 | $ | 2,807,014 | ||||||||||||
Purchase money % of loans closed |
94 | % | 86 | % | 94 | % | 92 | % | 94 | % | 81 | % | ||||||||||||
Realized gain on sales and fees as a % of loans sold |
2.29 | % | 2.13 | % | 2.27 | % | 2.17 | % | 2.25 | % | 2.49 | % | ||||||||||||
Net interest income |
$ | 2,558 | $ | 2,758 | $ | 2,155 | $ | 2,122 | $ | 6,835 | $ | 7,945 | ||||||||||||
Other income |
10,871 | 13,749 | 19,946 | 10,861 | 41,678 | 58,614 | ||||||||||||||||||
Other expense |
14,119 | 20,662 | 15,706 | 15,085 | 44,910 | 71,886 | ||||||||||||||||||
Income taxes |
(141 | ) | (820 | ) | 1,270 | (424 | ) | 705 | (1,048 | ) | ||||||||||||||
Net (loss) income |
$ | (549 | ) | $ | (3,335 | ) | $ | 5,125 | $ | (1,678 | ) | $ | 2,898 | $ | (4,279 | ) |
September 30 | December 31 | September 30 | June 30 | March 31 | ||||||||||||||||
2023 | 2022 | 2022 | 2023 | 2023 | ||||||||||||||||
Period End Mortgage Banking Segment Data: |
||||||||||||||||||||
Locked pipeline |
$ | 99,988 | $ | 68,654 | $ | 131,846 | $ | 93,417 | $ | 92,639 | ||||||||||
Balance of loans serviced |
$ | 1,216,805 | $ | 3,381,485 | $ | 3,459,781 | $ | 1,242,441 | $ | 3,280,741 | ||||||||||
Number of loans serviced |
12,596 | 23,510 | 23,859 | 12,843 | 22,436 |
15
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Washington, D.C. and Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
September 30 | December 31 | September 30 | June 30 | March 31 | ||||||||||||||||
2023 | 2022 | 2022 | 2023 | 2023 | ||||||||||||||||
Asset Quality Data: |
||||||||||||||||||||
EOP Non-Accrual Loans |
$ | 24,456 | $ | 23,685 | $ | 28,244 | $ | 26,545 | $ | 29,296 | ||||||||||
EOP 90-Day Past Due Loans |
18,283 | 15,565 | 18,254 | 15,007 | 13,105 | |||||||||||||||
EOP Restructured Loans (1) |
n/a | 19,388 | 23,155 | n/a | n/a | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total EOP Non-performing Loans |
$ | 42,739 | $ | 58,638 | $ | 69,653 | $ | 41,552 | $ | 42,401 | ||||||||||
EOP Other Real Estate Owned |
3,181 | 2,052 | 10,779 | 3,756 | 4,086 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total EOP Non-performing Assets |
$ | 45,920 | $ | 60,690 | $ | 80,432 | $ | 45,308 | $ | 46,487 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30 | September 30 | June 30 | March 31 | September 30 | September 30 | |||||||||||||||||||
2023 | 2022 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||||||
Allowance for Loan & Lease Losses: |
||||||||||||||||||||||||
Beginning Balance |
$ | 250,721 | $ | 213,729 | $ | 240,491 | $ | 234,746 | $ | 234,746 | $ | 216,016 | ||||||||||||
Gross Charge-offs |
(2,836 | ) | (3,087 | ) | (2,274 | ) | (2,936 | ) | (8,046 | ) | (6,682 | ) | ||||||||||||
Recoveries |
1,052 | 1,299 | 1,065 | 1,791 | 3,908 | 7,815 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net (Charge-offs) Recoveries |
(1,784 | ) | (1,788 | ) | (1,209 | ) | (1,145 | ) | (4,138 | ) | 1,133 | |||||||||||||
Provision for Loan & Lease Losses |
5,949 | 7,670 | 11,439 | 6,890 | 24,278 | 2,462 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ending Balance |
$ | 254,886 | $ | 219,611 | $ | 250,721 | $ | 240,491 | $ | 254,886 | $ | 219,611 | ||||||||||||
Reserve for lending-related commitments |
43,766 | 39,698 | 46,768 | 48,789 | 43,766 | 39,698 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Allowance for Credit Losses (2) |
$ | 298,652 | $ | 259,309 | $ | 297,489 | $ | 289,280 | $ | 298,652 | $ | 259,309 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
(1) | On January 1, 2023, United adopted ASU 2022-02, Troubled Debt Restructurings and Vintage Disclosures which eliminated the accounting guidance on troubled debt restructurings and enhanced creditors disclosure requirements related to loan refinancings and restructurings for borrowers experiencing financial difficulty. After the adoption of ASU 2022-02, United no longer considers accruing restructured loans that are fewer than 90 days past due as non-performing loans or non-performing assets. December 31, 2022 and September 30, 2022 non-performing loans and non-performing assets included $9,127 and $9,878, respectively, of troubled debt restructurings that were on accruing status and fewer than 90 days past due but classified as non-performing loans and non-performing assets. Restructured loans that are on non-accrual or 90-days past due are included in the above respective non-performing loan and non-performing asset categories at September 30, 2023. |
Restructured loans with an aggregate balance of $7,186 and $10,336 at December 31, 2022 and September 30, 2022, respectively, were on nonaccrual status, but are not included in EOP Non-Accrual Loans above. Restructured loans with an aggregate balance of $3,075 and $2,941 at December 31, 2022 and September 30, 2022, respectively, were 90 days past due, but not included in EOP 90-Day Past Due Loans above.
(2) | Includes allowances for loan losses and lending-related commitments. |
16
Third Quarter 2023 Earnings Review United Bankshares, Inc. October 25, 2023 Exhibit 99.2
Forward Looking Statements This presentation and statements made by United Bankshares, Inc. (“United”) and its management contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are intended to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about (i) United’s plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts; (ii) the effect of the COVID-19 pandemic; and (iii) other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “targets,” “projects,” or words of similar meaning generally intended to identify forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations managements of United and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of United. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed in these forward-looking statements because of possible uncertainties. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) the uncertainty as to the extent of the duration, scope and impacts of the COVID-19 pandemic on United, its colleagues, the communities United serves, and the domestic and global economy; (2) uncertainty in U.S. fiscal and monetary policies, including the interest rate policies of the Federal Reserve Board; (3) volatility and disruptions in global capital and credit markets; (4) interest rate, securities market and monetary supply fluctuations; (5) increasing rates of inflation and slower growth rates; (6) reform of LIBOR; (7) the nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those involving the Federal Reserve, FDIC, and CFPB; (8) the effect of changes in the level of checking or savings account deposits on United’s funding costs and net interest margin; (9) future provisions for credit losses on loans and debt securities; (10) changes in nonperforming assets; (11) competition; (12) changes in legislation or regulatory requirements and (13) the impact of natural disasters, extreme weather events, military conflict (including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas, the possible expansion of such conflicts and potential geopolitical consequences), terrorism or other geopolitical events. Additional factors, that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed United’s reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission and available on the SEC's Internet site (http://www.sec.gov). United cautions that the foregoing list of factors is not exclusive. All subsequent written and oral forward-looking statements concerning United or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. United does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made. IMPORTANT INFORMATION
Achieved Net Income of $96.2 million and Diluted Earnings Per Share of $0.71 Generated Return on Average Assets of 1.31%, Return on Average Equity of 8.14%, and Return on Average Tangible Equity* of 13.71% Ranked #1 most trustworthy bank in Newsweek’s list of “Most Trustworthy Companies in America 2023” Quarterly dividend of $0.36 per share equates to a yield of ~5.5% (based upon recent prices) Asset quality remains sound and Non-Performing Assets remained low at 0.16% of Total Assets Strong expense control with an efficiency ratio of 51.59% Capital position remains robust and liquidity remains sound 3Q23 HIGHLIGHTS *Non-GAAP measure. Refer to appendix.
Linked-Quarter (LQ) Net Income was $96.2 million in 3Q23 compared to $92.5 million in 2Q23, with diluted EPS of $0.71 in 3Q23 compared to $0.68 in 2Q23. Net Interest Income increased $1.0 million due to a combination of the impact of rising market interest rates on earning assets, a change in the asset mix to higher earning assets and lower average balances of long-term borrowings, partially offset by higher interest expense driven by deposit rate repricing and higher average balances of interest-bearing deposits. Provision Expense was $5.9 million in 3Q23 compared to $11.4 million in 2Q23. The provision expense for 3Q23 was primarily driven by loan growth. Noninterest Income decreased $1.5 million primarily due to a decrease in mortgage loan servicing income of $9.0 million partially offset by lower net losses on investment securities of $7.2 million. 2Q23 included an $8.1 million gain on sale of mortgage servicing rights (“MSRs”) with an aggregate unpaid principal balance of approximately $2.0 billion. 2Q23 also included the sale of approximately $187.0 million of available for sale (“AFS”) investment securities at a loss of $7.2 million. Noninterest Expense was essentially flat compared to 2Q23. The expense for the reserve for unfunded loan commitments decreased $1.0 million and other noninterest expense increased $1.0 million. EARNINGS SUMMARY
PERFORMANCE RATIOS *Non-GAAP measure. Refer to appendix. Strong profitability and expense control
Reported Net Interest Margin increased from 3.51% to 3.54% LQ. Linked-quarter Net Interest Income (FTE) increased $1.0 million due to a combination of the impact of rising market interest rates on earning assets, a change in the asset mix to higher earning assets and lower average balances of long-term borrowings, partially offset by higher interest expense driven by deposit rate repricing and higher average balances of interest-bearing deposits. Approximately ~58% of the loan portfolio is fixed rate and ~42% is adjustable rate, while ~27% of the total portfolio is projected to reprice within the next 3 months. ~26% of the securities portfolio is floating rate. Securities balances of approximately ~$100 million with an average yield of ~3.6% are projected to roll off over the remainder of 2023, with ~$900 million at ~3.5% in 2024. HTM securities are immaterial at $1.0 million, or 0.0% of total securities. The duration of the AFS portfolio is 4.3 years. Scheduled purchase accounting loan accretion is estimated at $2.4 million for the remainder of FY 2023 and $8.5 million for FY 2024. NET INTEREST INCOME AND MARGIN
Linked-Quarter loan balances increased $333 million primarily driven by Constructions & Land Development and Residential Real Estate loans. Loan growth continues to be led by the North Carolina & South Carolina markets, with loan balances up 19.1% annualized in 3Q23, and up 13.8% annualized YTD. Non Owner Occupied CRE to Total Risk Based Capital was ~259% at 3Q23. CRE portfolio remains diversified among underlying collateral types. Office loans within Non Owner Occupied CRE total $1.0 billion (~5% of total loans). Top 25 Office loans make up ~45% of total Office balances. Weighted average LTV at origination for the Top 25 was ~62%. United has been disciplined in its approach to underwriting Office loans. The stringent underwriting process focuses on the underlying tenants, lease terms, sponsor support, location, property class, amenities, etc. Weighted average FICO of all consumer-related loan sectors is ~755. Total purchase accounting-related fair value discount on loans was $39 million as of 9/30/23. LOAN SUMMARY (EXCLUDES LOANS HELD FOR SALE) $ in millions
End of Period Balances (000s) 6/30/23 9/30/23 Non-Accrual Loans $26,545 $24,456 90-Day Past Due Loans $15,007 $18,283 Total Non-performing Loans $41,552 $42,739 Other Real Estate Owned $3,756 $3,181 Total Non-performing Assets $45,308 $45,920 Non-performing Loans / Loans 0.20% 0.20% Non-performing Assets / Total Assets 0.15% 0.16% Annualized Net Charge-offs / Average Loans 0.02% 0.03% Allowance for Loan & Lease Losses (ALLL) $250,721 $254,886 ALLL / Loans, net of unearned income 1.21% 1.21% Allowance for Credit Losses (ACL)* $297,489 $298,652 ACL / Loans, net of unearned income 1.43% 1.42% NPAs were relatively unchanged compared to the prior quarter at $45.9 million, or 0.16% of Total Assets. NPAs have declined $14.8 million (24.3%) YTD. 30-89 Day Past Due loans were 0.39% of total loans as of 9/30/23 compared to 0.34% at 6/30/23. ACL increased $1.2 million LQ primarily due to loan growth. CREDIT QUALITY *ACL is comprised of ALLL and the reserve for lending-related commitments
Strong core deposit base with 28% of deposits in Non Interest Bearing accounts. LQ deposits increased $307 million driven by Money Market accounts, Time Deposits and Interest Bearing Transaction accounts, partially offset by declines in other categories. Brokered deposits total $338 million (only 1.5% of total deposits), which represents a decline of $73 million compared to 2Q23. Cumulative interest bearing deposit beta of ~48% and total deposit beta of ~35% since 1Q22. Enviable deposit franchise with an attractive mix of both high growth MSAs and stable, rural markets with a dominant market share position. Top 10 Deposit Markets by MSA (as of 6/30/23) MSA Total Deposits In Market ($000) Number of Branches Rank Washington, DC 9,907,513 61 6 Charleston, WV 1,573,967 7 2 Morgantown, WV 1,038,394 6 2 Myrtle Beach, SC 828,928 11 7 Parkersburg, WV 778,888 4 1 Richmond, VA 733,180 12 8 Hagerstown, MD 621,574 6 3 Charlotte, NC 594,782 7 17 Wheeling, WV 516,579 6 2 Beckley, WV 482,704 6 2 $ in millions Source: S&P Global Market Intelligence DEPOSIT SUMMARY
Deposit Account Details ($ in millions) End of Period Ratios / Values 9/30/23 % of Total Deposits Estimated Uninsured Deposits (less affiliate and collateralized deposits) $6,530 29% Estimated Insured/Collateralized Deposits $16,146 71% Total Deposits $22,677 100% No borrowings from the FRB Discount Window or BTFP to date in 2023. Ample additional liquidity sources over and above those shown in the table above for contingency purposes. LIQUIDITY POSITION & ADDITIONAL DEPOSIT DETAIL *Does not include other sources of liquidity such as the FRB’s Bank Term Funding Program (BTFP), Fed Funds Lines, additional Reciprocal Deposit capacity, etc. Available Liquidity ($ in millions) 9/30/23 Cash & Cash Equivalents $1,184 Unpledged AFS Securities $1,422 Available FHLB Borrowing Capacity $3,171 Available FRB Discount Window Borrowing Capacity $2,719 Subtotal $8,496 Additional FHLB Capacity (with delivery of collateral) $4,133 Additional Brokered Deposit Capacity (based on internal policy) $4,197 Total Liquidity* $16,826 Liquidity remains strong with a granular deposit base and geographic diversification. Average deposit account size is ~$35 thousand with >600 thousand total deposit accounts. Estimated uninsured/uncollateralized deposits declined from 30% at 6/30/23 and 37% at 12/31/22.
West Virginia #2 in the state (second only to Truist) with $6.0 billion in deposits. United ranks #1 or #2 in deposit market share within its top 5 largest markets in the state. United continues to build franchise value with an attractive mix of both high growth MSAs and stable, rural markets with a dominant market share position. Further growth opportunities exist to expand our presence in some of the most desirable banking markets in the nation. These dynamics uniquely position our franchise and contribute to making United one of the most valuable banking companies in the Southeast and Mid-Atlantic. Washington D.C. MSA #1 regional bank (#6 overall) with $9.9 billion in deposits. United has increased deposit market share in the D.C. MSA from #15 in 2013 to #6 in 2023, with total deposits increasing from $2.1 billion to $9.9 billion. Virginia- #7 in the state with $8.6 billion (including VA deposits within the D.C. MSA). North Carolina #17 in the state with $2.2 billion. Select MSAs: #17 in Charlotte #27 in Raleigh #11 in Wilmington #10 in Greenville #1 in Washington #8 in Rocky Mount #9 in Fayetteville South Carolina #11 in the state with $1.7 billion. Select MSAs: #11 in Charleston #7 in Myrtle Beach #15 in Greenville #15 in Columbia ATTRACTIVE DEPOSIT MARKET SHARE POSITION Source: S&P Global Market Intelligence; Data as of 6/30/23
End of Period Ratios / Values 6/30/23 9/30/23** Common Equity Tier 1 Ratio 12.8% 13.0% Tier 1 Capital Ratio 12.8% 13.0% Total Risk Based Capital Ratio 15.1% 15.2% Leverage Ratio 11.0% 11.3% Total Equity to Total Assets 15.6% 15.9% *Tangible Equity to Tangible Assets (non-GAAP) 9.8% 10.0% Book Value Per Share $34.37 $34.45 *Tangible Book Value Per Share (non-GAAP) $20.25 $20.34 Capital ratios remain significantly above regulatory “Well Capitalized” levels and exceed all internal capital targets. United did not repurchase any common shares during 2Q23 or 3Q23. As of 9/30/23, there were 4,371,239 shares available to be repurchased under the approved plan. *Non-GAAP measure. Refer to appendix. **Regulatory ratios are estimates as of the earnings release date. CAPITAL RATIOS AND PER SHARE DATA
Three Months Ended (000s) 6/30/23 9/30/23 Applications $588,734 $458,818 Loans Originated $416,255 $342,131 Loans Sold $399,632 $367,679 Purchase Money % 94% 94% Realized Gain on Sale Margin 2.27% 2.29% Locked Pipeline (EOP) $93,417 $99,988 Loans Held for Sale (EOP) $91,296 $59,614 Balance of Loans Serviced (EOP) $1,242,441 $1,216,805 Total Income $22,101 $13,429 Total Expense $15,706 $14,119 Income Before Tax $6,395 $(690) Net Income After Tax $5,125 $(549) Mortgage Banking Segment represents George Mason Mortgage and Crescent Mortgage Company. George Mason Mortgage, founded in 1980, is headquartered in the Washington D.C. MSA with 10 offices located throughout Virginia, Maryland, and South Carolina. Crescent Mortgage Company, founded in 1993, is headquartered in Atlanta, Georgia, and is primarily a correspondent/wholesale mortgage company approved to originate loans in 48 states partnering with community banks, credit unions and mortgage brokers. 2Q23 included the sale of MSRs with an aggregate unpaid principal balance of approximately $2.0 billion at a gain of $8.1 million. The quarterly net fair value impact on mortgage banking derivatives and loans held for sale was $0.3 million in 2Q23 and $(0.1) million in 3Q23. MORTGAGE BANKING
Select guidance is being provided for 2023. Our outlook may change if the expectations for these items vary from current expectations. Balance Sheet: Expect loan growth, excluding loans held for sale, to be in the low single digits for the 4th quarter of 2023 (annualized). Expect investment portfolio balances to decrease ~$100 million in 4Q23. Expect deposit growth in the low single digits in 4Q23 (annualized). Net Interest Income / Net Interest Margin: Net interest income (non-FTE) expected to be in the range of $915 million to $920 million for 2023 (assumes no additional fed funds rate changes). Expect the net interest margin to remain relatively stable in 4Q23 compared to 3Q23. Expect full-cycle total deposit beta of ~38% to 40%. Provision Expense: Asset quality remains sound. Provision expense will be dependent on the future economic outlook, future credit trends within United’s portfolio, and loan growth. Expect near term net charge-offs to remain low. Current planning assumption for provision expense is $31 million for FY 2023. Non Interest Income: Expect non interest income to be in the range of $129 million to $133 million for 2023. Mortgage banking revenue will be subject to industry trends. Non Interest Expense: Expect non interest expense to be in the range of $545 million to $550 million (excluding one-time FDIC special assessments). Effective Tax Rate: Estimated at approximately ~20.2%. Capital: Stock buyback will be market dependent. United’s capital position remains robust. 2023 OUTLOOK
Premier Mid-Atlantic and Southeast franchise with an attractive mix of high growth MSAs and smaller stable markets with a dominant market share position Consistently high-performing company with a culture of disciplined risk management and expense control 49 consecutive years of dividend increases evidences United’s strong profitability, solid asset quality, and sound capital management over a very long period of time Experienced management team with a proven track record of execution Committed to our mission of excellence in service to our employees, our customers, our shareholders and our communities Attractive valuation with a current Price-to-Earnings Ratio of 9.7x (based upon median 2023 street consensus estimate of $2.70 per Bloomberg) INVESTMENT THESIS
APPENDIX
(dollars in thousands) 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 (1) Return on Average Tangible Equity (A) Net Income (GAAP) $102,585 $99,765 $98,307 $92,459 $96,157 (B) Number of Days in the Quarter 92 92 90 91 92 Average Total Shareholders' Equity (GAAP) $4,542,100 $4,498,378 $4,570,288 $4,659,094 $4,687,124 Less: Average Total Intangibles (1,910,054) (1,908,656) (1,907,331) (1,906,053) (1,904,769) (C) Average Tangible Equity (non-GAAP) $2,632,046 $2,589,722 $2,662,957 $2,753,041 $2,782,355 Formula: [(A) / (B)]*365 (or 366 for leap year) (C) Return on Average Tangible Equity (non-GAAP) 15.46% 15.28% 14.97% 13.47% 13.71% RECONCILIATION OF NON-GAAP ITEMS
(dollars in thousands) 6/30/2023 9/30/2023 (2) Tangible Equity to Tangible Assets Total Assets (GAAP) $ 29,694,651 $ 29,224,794 Less: Total Intangibles (GAAP) (1,905,228) (1,903,949) Tangible Assets (non-GAAP) $ 27,789,423 $ 27,320,845 Total Shareholders' Equity (GAAP) $ 4,637,043 $ 4,648,878 Less: Total Intangibles (GAAP) (1,905,228) (1,903,949) Tangible Equity (non-GAAP) $ 2,731,815 $ 2,744,929 Tangible Equity to Tangible Assets (non-GAAP) 9.8% 10.0% (3) Tangible Book Value Per Share: Total Shareholders' Equity (GAAP) $ 4,637,043 $ 4,648,878 Less: Total Intangibles (GAAP) (1,905,228) (1,903,949) Tangible Equity (non-GAAP) $ 2,731,815 $ 2,744,929 ÷ EOP Shares Outstanding (Net of Treasury Stock) 134,934,858 134,933,015 Tangible Book Value Per Share (non-GAAP) $20.25 $20.34 RECONCILIATION OF NON-GAAP ITEMS (CONT.)
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