United Bankshares(UBSI) - 2025 Q2 - Quarterly Results

Earnings Announcement and Performance Summary This section details United Bankshares' record earnings for Q2 2025, driven by the Piedmont acquisition, strong asset quality, and effective expense management, with comparative financial analysis across periods Second Quarter 2025 Highlights United Bankshares, Inc. (UBSI) announced record earnings for the second quarter of 2025, reaching $120.7 million, or $0.85 per diluted share, driven by the Piedmont Bancorp acquisition, strong asset quality, and effective expense management Q2 2025 Key Earnings Metrics | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Income | $120.7 million | $84.3 million | $96.5 million | | Diluted EPS | $0.85 | $0.59 | $0.71 | | Return on Average Assets (Annualized) | 1.49% | 1.06% | 1.32% | | Return on Average Tangible Equity (Annualized, non-GAAP) | 14.67% | 10.61% | 13.12% | - CEO Richard M. Adams, Jr. stated that Q2 2025 was the strongest earnings quarter in the company's history, attributing the success to the entry into the Atlanta market, excellent asset quality, and strong expense control[3] - The acquisition of Piedmont Bancorp, Inc. on January 10, 2025, significantly impacted the financial results for 2025, leading to increased average balances, income, and expenses[3] Financial Performance Analysis This section provides a detailed comparative analysis of United Bankshares' financial performance, breaking down results for Q2 2025 against Q1 2025 and Q2 2024, and H1 2025 against H1 2024, covering net interest income, provision for credit losses, noninterest income, and noninterest expense Q2 2025 vs. Q1 2025 Earnings surged from $84.3 million in Q1 to a record $120.7 million in Q2, driven by a 6% increase in net interest income, a 12 basis point expansion in net interest margin, reduced provision for credit losses, and lower merger-related expenses - Net interest income rose by $14.5 million (6%) QoQ, driven by organic loan growth, the Piedmont acquisition, and a $5.8 million increase in acquired loan accretion income[6] - The net interest margin increased by 12 basis points to 3.81%, and the interest rate spread widened by 12 basis points to 2.95%[6] - Provision for credit losses decreased sharply to $5.9 million from $29.1 million in Q1, as the prior quarter included an $18.7 million provision related to the Piedmont acquisition[7] - Noninterest expense fell by $5.6 million, primarily due to a decrease in merger-related expenses from $11.3 million in Q1 to $1.3 million in Q2[8] Q2 2025 vs. Q2 2024 Year-over-year, earnings grew from $96.5 million to $120.7 million, with net interest income increasing by a substantial $48.8 million (22%) due to a $2.9 billion increase in average earning assets from the Piedmont acquisition and a 31 basis point expansion in net interest margin, while noninterest expense rose by 10% - Net interest income grew by $48.8 million (22%) YoY, and the net interest margin expanded by 31 basis points to 3.81%[12] - The provision for credit losses remained stable at $5.9 million compared to $5.8 million in Q2 2024[13] - Noninterest income increased by $1.2 million (4%), with higher income from bank-owned life insurance partially offset by a $1.3 million decrease in income from mortgage banking activities[14] - Noninterest expense increased by $13.2 million (10%), driven by higher employee compensation and other expenses mainly from the Piedmont acquisition[16] First Half 2025 vs. First Half 2024 For the first six months of 2025, earnings increased to $205.0 million from $183.3 million in the prior year, primarily due to an $86.4 million (19%) increase in net interest income, partially offset by a higher provision for credit losses and a $26.1 million increase in noninterest expense, largely tied to the Piedmont acquisition First Half Performance Comparison | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Income | $205.0 million | $183.3 million | | Diluted EPS | $1.44 | $1.35 | | Net Interest Income | $534.6 million | $448.2 million | | Provision for Credit Losses | $35.0 million | $11.5 million | | Noninterest Expense | $301.6 million | $275.5 million | - The provision for credit losses for H1 2025 was $35.0 million, which included an $18.7 million provision recorded on non-PCD loans acquired from Piedmont[20] - Noninterest expense in H1 2025 included $12.6 million in merger-related expenses, compared to $1.3 million in H1 2024[23] Financial Condition This section assesses United Bankshares' financial health, focusing on stable credit quality with low non-performing assets and strong capital ratios significantly exceeding regulatory requirements Credit Quality United's asset quality remained sound and stable as of June 30, 2025, with non-performing loans at 0.28% of total loans, non-performing assets at 0.23% of total assets, an allowance for loan and lease losses of $308.0 million (1.28% of loans), and modest net charge-offs at an annualized rate of 0.14% Asset Quality Indicators | Metric | June 30, 2025 | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | :--- | | Non-Performing Loans (NPLs) as % of loans | 0.28% | 0.29% | 0.34% | | Non-Performing Assets (NPAs) as % of assets | 0.23% | 0.22% | 0.25% | | Allowance for Loan & Lease Losses as % of loans | 1.28% | 1.30% | 1.25% | - Net charge-offs for Q2 2025 were $8.4 million, or 0.14% of average loans on an annualized basis, consistent with the previous quarter[28] Capital The company continues to be well-capitalized, with regulatory capital ratios significantly exceeding required minimums; as of June 30, 2025, the estimated Common Equity Tier 1 capital ratio was 13.4%, and approximately 1.5 million shares of common stock were repurchased during the first half of 2025 Estimated Capital Ratios (June 30, 2025) | Ratio | UBSI Estimated | Well-Capitalized Requirement | | :--- | :--- | :--- | | Common Equity Tier 1 | 13.4% | 6.5% | | Tier 1 Capital | 13.4% | 8.0% | | Total Risk-Based Capital | 15.8% | 10.0% | | Leverage | 11.3% | 5.0% | - In H1 2025, United repurchased approximately 1.5 million shares of common stock at an average price of $33.81 per share; no shares were repurchased in 2024[30] Financial Statements and Data This section provides comprehensive financial statements and key data, including earnings summaries, balance sheets, average balances, shareholder data, and detailed financial ratios for comparative analysis across periods Earnings Summary and Key Ratios This section presents a consolidated summary of United Bankshares' earnings, per-share data, key financial ratios, and period-end balance sheet figures for the three and six months ended June 30, 2025, with comparisons to prior periods Financial Highlights (Q2 2025) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Income | $120,721 | $84,306 | $96,507 | | Diluted EPS | $0.85 | $0.59 | $0.71 | | Net Interest Margin | 3.81% | 3.69% | 3.50% | | Total Assets (Period End) | $32,783,363 | $32,788,494 | $29,957,418 | | Total Shareholders' Equity (Period End) | $5,364,541 | $5,314,449 | $4,856,633 | Consolidated Statements of Income This section provides a detailed breakdown of the company's revenues and expenses for the three and six months ended June 30, 2025, compared to the same periods in 2024, including both GAAP and non-GAAP (FTE) figures for net interest income Consolidated Statements of Income (Three Months Ended June 30, 2025) | (In Thousands) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Interest Income | $274,537 | $225,715 | | Provision for credit losses | $5,889 | $5,779 | | Total Noninterest Income | $31,460 | $30,223 | | Total Noninterest Expense | $148,020 | $134,774 | | Income before income taxes | $152,088 | $115,385 | | Net Income | $120,721 | $96,507 | Consolidated Balance Sheets This section presents the company's financial position as of June 30, 2025, with comparative data for March 31, 2025, December 31, 2024, and June 30, 2024, detailing assets, liabilities, and shareholders' equity Consolidated Balance Sheet Highlights (As of June 30, 2025) | (In Thousands) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Assets | $32,783,363 | $29,957,418 | | Net Loans | $23,742,260 | $21,331,304 | | Total Deposits | $26,335,874 | $23,066,440 | | Total Shareholders' Equity | $5,364,541 | $4,856,633 | Consolidated Average Balance Sheets This table shows the average balances for assets, liabilities, and equity for the quarters ended June 30, 2025, March 31, 2025, and June 30, 2024, which are used to calculate key performance ratios like net interest margin and return on assets Consolidated Average Balances (Q2 2025 vs Q2 2024) | (In Thousands) | Q2 2025 Average | Q2 2024 Average | | :--- | :--- | :--- | | Total Assets | $32,584,368 | $29,370,164 | | Interest-earning Assets | $28,949,287 | $26,012,725 | | Total Deposits | $26,202,718 | $22,717,095 | | Interest-bearing Liabilities | $20,321,323 | $18,236,763 | | Total Shareholders' Equity | $5,351,140 | $4,857,893 | Shareholder Data This section provides key data for common shareholders, including earnings per share, dividends, stock price performance, and book value per share calculations for various periods Per Share Data | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Diluted EPS | $0.85 | $0.59 | $0.71 | | Common Dividend Declared | $0.37 | $0.37 | $0.37 | | Book Value Per Share (EOP) | $37.80 | $37.19 | $35.92 | | Tangible Book Value Per Share (EOP, non-GAAP) | $23.32 | $22.76 | $21.87 | Selected Average Balances and Yields This section provides a detailed analysis of net interest income on a tax-equivalent basis, breaking down average balances, interest income/expense, and average yields/rates for each category of earning assets and interest-bearing liabilities for both quarterly and year-to-date periods Net Interest Margin and Spread Analysis (Q2 2025) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Yield on Earning Assets | 5.84% | 5.73% | 5.79% | | Cost of Interest-Bearing Liabilities | 2.89% | 2.90% | 3.27% | | Interest Rate Spread | 2.95% | 2.83% | 2.52% | | Net Interest Margin | 3.81% | 3.69% | 3.50% | Selected Financial Ratios This section presents key performance, valuation, and balance sheet ratios, including profitability ratios like Return on Average Assets, efficiency ratios, and asset quality ratios like Non-performing Assets to Total Assets Key Financial Ratios | Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Return on Average Assets | 1.49% | 1.06% | 1.32% | | Return on Average Shareholders' Equity | 9.05% | 6.47% | 7.99% | | Return on Average Tangible Equity (non-GAAP) | 14.67% | 10.61% | 13.12% | | Efficiency Ratio | 48.37% | 53.03% | 52.66% | | Non-performing Assets / Total Assets (EOP) | 0.23% | 0.22% | 0.23% | Supplemental Data (Mortgage and Asset Quality) This section provides supplemental data on mortgage banking activities, detailed asset quality metrics, and a reconciliation of the allowance for loan and lease losses for the quarter and year-to-date periods Allowance for Loan & Lease Losses Roll-Forward (Q2 2025) | (In Thousands) | Amount | | :--- | :--- | | Beginning Balance (Mar 31, 2025) | $310,424 | | Net Charge-offs | ($8,351) | | Provision for Loan & Lease Losses | $5,889 | | Ending Balance (Jun 30, 2025) | $307,962 | - As previously disclosed, United sold its remaining mortgage servicing rights during the third quarter of 2024, hence there is no mortgage loan servicing data for 2025[63] Other Information This section provides background on United Bankshares, clarifies the use of non-GAAP financial measures, and outlines forward-looking statements with associated risks and uncertainties About United Bankshares, Inc. United Bankshares, Inc. is a financial services company with approximately $33 billion in consolidated assets as of June 30, 2025, operating over 240 offices through its subsidiary, United Bank, across nine states and Washington, D.C., and is the 39th largest banking company in the U.S. by market capitalization - As of June 30, 2025, United Bankshares has consolidated assets of approximately $33 billion[31] - The company is the parent of United Bank, which has over 240 offices in Washington, D.C., Virginia, West Virginia, Maryland, North Carolina, South Carolina, Ohio, Pennsylvania, and Georgia[31] Use of non-GAAP Financial Measures This press release includes non-GAAP financial measures such as tax-equivalent (FTE) net interest income, average tangible equity, and return on average tangible equity, which management believes provide meaningful additional information for evaluating performance and are consistent with industry practice, with reconciliations to comparable GAAP measures provided in the attached financial tables - The company uses non-GAAP measures because it believes they provide meaningful additional information to assist in evaluating results of operations or financial position[34] - Specific non-GAAP measures used include tax-equivalent (FTE) net interest income, average tangible equity, return on average tangible equity, and tangible book value per share[35] Forward-Looking Statements The report contains forward-looking statements regarding future events and expectations, which are subject to various risks and uncertainties, including economic conditions, interest rate policies, and risks related to the integration of acquisitions like Piedmont, meaning actual results may differ materially from those projected - The report includes forward-looking statements that are subject to risks and uncertainties, and actual results may differ[39] - Key risk factors include changes in monetary and fiscal policies, economic conditions, risks related to the Piedmont acquisition integration, and regulatory changes[39]