United Bankshares, Inc. (NASDAQ: UBSI) (“United”), today reported earnings for the fourth quarter of 2024 of $94.4 million, or $0.69 per diluted share. Fourth quarter of 2024 results produced annualized returns on average assets, average equity, and average tangible equity, a non-GAAP measure, of 1.25%, 7.48%, and 12.03%, respectively. Earnings for the year of 2024 were $373.0 million, or $2.75 per diluted share, and returns on average assets, average equity, and average tangible equity were 1.26%, 7.61%, and 12.43%, respectively.

“UBSI capped off a successful 2024 with another high quality quarter,” stated Richard M. Adams, Jr., United’s Chief Executive Officer. “Strong earnings, credit, and capital continue to be the story, and we also received regulatory approval of our acquisition in Atlanta. As we turn our sights towards 2025, we are excited about the opportunities we see in front of us.”

Earnings for the third quarter of 2024 were $95.3 million, or $0.70 per diluted share, and annualized returns on average assets, average equity, and average tangible equity were 1.28%, 7.72%, and 12.59%, respectively. Earnings for the fourth quarter of 2023 were $79.4 million, or $0.59 per diluted share, and annualized returns on average assets, average equity, and average tangible equity were 1.08%, 6.70%, and 11.27%, respectively. Earnings for the year of 2023 were $366.3 million, or $2.71 per diluted share, and returns on average assets, average equity, and average tangible equity were 1.25%, 7.87%, and 13.33%, respectively. The fourth quarter of 2023 included approximately $12.0 million of noninterest expense for the Federal Deposit Insurance Corporation’s (“FDIC”) special assessment levied on banking organizations to recover losses to the Deposit Insurance Fund.

On January 10, 2025, United consummated its acquisition of Atlanta-based Piedmont Bancorp, Inc. (“Piedmont”). As of January 10, 2025, Piedmont had total assets of approximately $2.4 billion, total loans of approximately $2.1 billion, total liabilities of approximately $2.2 billion, total deposits of approximately $2.1 billion, and total shareholders’ equity of approximately $202 million. Merger-related expenses for the fourth quarter and year of 2024 were $1.3 million and $2.9 million, respectively.

Fourth quarter of 2024 compared to the third quarter of 2024

Earnings for the fourth quarter of 2024 were $94.4 million, or $0.69 per diluted share, as compared to earnings of $95.3 million, or $0.70 per diluted share, for the third quarter of 2024.

Net interest income for the fourth quarter of 2024 was $232.6 million, an increase of $2.4 million, or 1%, from the third quarter of 2024. Tax-equivalent net interest income, a non-GAAP measure which adjusts for the tax-favored status of income from certain loans and investments, of $233.4 million for the fourth quarter of 2024 increased $2.3 million, or 1%, from the third quarter of 2024. The increase in net interest income and tax-equivalent net interest income was mainly due to a lower average rate paid on deposits and an increase in average earning assets that was largely funded by deposit growth. This increase in net interest income and tax-equivalent net interest income was partially offset by a lower yield on average net loans and loans held for sale. The yield on average interest-bearing deposits decreased 26 basis points from the third quarter of 2024. Average earning assets increased $556.2 million, or 2%, from the third quarter of 2024 due to a $419.7 million increase in average short-term investments, a $121.5 million increase in average net loans and loans held for sale, and a $14.9 million increase in average investment securities. The yield on average net loans and loans held for sale decreased 18 basis points from the third quarter of 2024. The net interest margin was 3.49% for the fourth quarter of 2024 as compared to 3.52% for the third quarter of 2024.

The provision for credit losses was $6.7 million for the fourth quarter of 2024 as compared to $6.9 million for the third quarter of 2024.

Noninterest income for the fourth quarter of 2024 was $29.3 million, a decrease of $2.6 million, or 8%, from the third quarter of 2024 driven by decreases in mortgage loan servicing income of $7.4 million and income from mortgage banking activities of $2.2 million partially offset by lower net losses on investment securities of $6.0 million and increases in several other categories of noninterest income, none of which were significant. During the third quarter of 2024, United sold its remaining mortgage servicing rights (“MSRs”) at a gain of $7.1 million. The decrease in income from mortgage banking activities was mainly due to lower mortgage loan sale volume and a lower quarter-end valuation of mortgage derivatives and mortgage loans held for sale. Net losses on investment securities were $688 thousand for the fourth quarter of 2024 compared to $6.7 million for the third quarter of 2024. During the fourth quarter of 2024, $2.4 million of losses on sales of $170.9 million of available for sale (“AFS”) investment securities were partially offset by net unrealized fair value gains on equity securities of $1.7 million. During the third quarter of 2024, United sold $196.7 million of AFS investment securities at a loss of $6.9 million.

Noninterest expense for the fourth quarter of 2024 of $134.2 million was flat from the third quarter of 2024, decreasing $1.2 million, or less than 1%. The slight decrease in noninterest expense was driven by decreases in several categories of noninterest expense, none of which were significant. Within other noninterest expense, an increase in merger-related expenses was mostly offset by lower amounts of certain general operating expenses. Merger-related expenses for the fourth quarter of 2024 were $1.3 million as compared to $332 thousand for the third quarter of 2024.

For the fourth quarter of 2024, income tax expense was $26.7 million as compared to $24.6 million for the third quarter of 2024. The increase was driven by a higher effective tax rate and slightly higher pre-tax earnings. United’s effective tax rate was 22.0% and 20.6% for the fourth quarter of 2024 and third quarter of 2024, respectively. The higher effective tax rate was primarily due to the impact of provision to return adjustments in the fourth quarter of 2024.

Fourth quarter of 2024 compared to the fourth quarter of 2023

Earnings for the fourth quarter of 2024 were $94.4 million, or $0.69 per diluted share, as compared to earnings of $79.4 million, or $0.59 per diluted share, for the fourth quarter of 2023.

Net interest income for the fourth quarter of 2024 was $232.6 million, an increase of $2.9 million, or 1%, from the fourth quarter of 2023. Tax-equivalent net interest income for the fourth quarter of 2024 increased $2.8 million, or 1%, from the fourth quarter of 2023. The increase in net interest income and tax-equivalent net interest income was primarily due to an increase in average short-term investments, a decrease in average long-term borrowings, and loan growth. This increase in net interest income and tax-equivalent net interest income was partially offset by a lower yield on average short-term investments, an increase in average interest-bearing deposits, and a decrease in average investment securities. Average earning assets for the fourth quarter of 2024 increased $812.0 million, or 3%, from the fourth quarter of 2023 due to a $987.8 million increase in average short-term investments and a $418.0 million increase in average net loans and loans held for sale partially offset by a $593.7 million decrease in average investment securities. Average long-term borrowings decreased $854.1 million, or 61%, from the fourth quarter of 2023. The yield on average short-term investments decreased 78 basis points from the fourth quarter of 2023. Average interest-bearing deposits increased $1.5 billion, or 9%, from the fourth quarter of 2023. The net interest margin for the fourth quarter of 2024 and 2023 was 3.49% and 3.55%, respectively.

The provision for credit losses was $6.7 million for the fourth quarter of 2024 as compared to $6.9 million for the fourth quarter of 2023.

Noninterest income for the fourth quarter of 2024 was $29.3 million, which was a decrease of $4.4 million, or 13%, from the fourth quarter of 2023. This decrease in noninterest income was driven by decreases in other noninterest income of $3.3 million and income from mortgage banking activities of $2.4 million partially offset by an increase in income from bank-owned life insurance (“BOLI”) of $1.4 million. Other noninterest income for the fourth quarter of 2023 included a $2.7 million gain from the payoff of a fixed rate commercial loan that had an associated interest rate swap derivative. The decrease in income from mortgage banking activities was mainly due to lower mortgage loan origination and sale volume. The increase in BOLI income was primarily due to the impact of higher market values of underlying investments and higher amounts of death benefits recognized in the fourth quarter of 2024.

Noninterest expense for the fourth quarter of 2024 decreased $18.1 million, or 12%, from the fourth quarter of 2023. The decrease in noninterest expense was driven by decreases in FDIC insurance expense of $12.7 million, the expense for the reserve for unfunded loan commitments of $4.0 million, and other noninterest expense of $4.0 million partially offset by increases in employee benefits of $3.9 million. FDIC insurance expense for the fourth quarter of 2023 included $12.0 million for the FDIC special assessment. The decrease in the expense for the reserve for unfunded loan commitments was mainly due to a decrease in loan commitments. The decrease in other noninterest expense was primarily driven by a decrease in certain general operating expenses and an impairment recognized during the fourth quarter of 2023 of trade name intangibles partially offset by merger-related expenses recognized during the fourth quarter of 2024. The increase in employee benefits was driven by higher health insurance costs and higher postretirement benefit costs.

For the fourth quarter of 2024, income tax expense was $26.7 million as compared to $24.8 million for the fourth quarter of 2023. The increase was driven by higher pre-tax earnings partially offset by a lower effective tax rate. United’s effective tax rate was 22.0% and 23.8% for the fourth quarter of 2024 and fourth quarter of 2023, respectively. The effective tax rates for the fourth quarter of 2024 and 2023 reflect the impact of provision to return adjustments during each period.

Year of 2024 compared to the year of 2023

Earnings for the year of 2024 were $373.0 million, or $2.75 per diluted share, as compared to earnings of $366.3 million, or $2.71 per diluted share, for the year of 2023.

Net interest income for the year of 2024 decreased $8.9 million, or 1%, from the year of 2023. Tax-equivalent net interest income for the year of 2024 decreased $9.5 million, or 1%, from the year of 2023. The decrease in net interest income and tax-equivalent net interest income was primarily due to a higher average rate paid on deposits, an increase in average interest-bearing deposits, a decrease in average investment securities, and a decrease in acquired loan accretion income. These decreases were partially offset by a higher yield on average net loans and loans held for sale, loan growth, a decrease in average long-term borrowings, and an increase in average short-term investments. The yield on average interest-bearing deposits increased 66 basis points from the year of 2023. Average interest-bearing deposits increased $1.4 billion from the year of 2023. Average investment securities decreased $790.7 million from the year of 2023. Acquired loan accretion income for the year of 2024 of $9.3 million was a decrease of $2.3 million from the year of 2023. The yield on average earning assets increased 33 basis points from the year of 2023 to 5.74% driven by an increase in the yield on average net loans and loans held for sale of 28 basis points. Average net loans and loans held for sale increased $683.7 million from the year of 2023. Average long-term borrowings decreased $906.1 million from the year of 2023. Average short-term investments increased $353.8 million from the year of 2023. The net interest margin for the year of 2024 and 2023 was 3.49% and 3.56%, respectively.

The provision for credit losses was $25.2 million for the year of 2024 as compared to $31.2 million for the year of 2023.

Noninterest income for the year of 2024 was $123.7 million, which was a decrease of $11.6 million, or 9%, from the year of 2023. Income from mortgage banking activities decreased $10.5 million from the year of 2023 mainly due to lower mortgage loan origination and sale volume. Mortgage loan servicing income for the year of 2024 of $9.0 million included a $7.1 million gain on the sale of MSRs while mortgage loan servicing income for the year of 2023 of $13.7 million included $8.3 million in gains on sales of MSRs with the remainder of the decrease due to lower serviced loan balances. Other noninterest income decreased $3.3 million from the year of 2023 primarily due to the aforementioned $2.7 million gain from the payoff of a fixed rate commercial loan that had an associated interest rate swap derivative in the fourth quarter of 2023. Fees from brokerage services increased $3.4 million from the year of 2023 primarily due to higher volume. BOLI income increased $2.9 million from the year of 2023 mainly due to higher market values of underlying investments and higher amounts of death benefits recognized during the year of 2024. Net losses on investment securities of $7.7 million for the year of 2024 included $16.0 million in losses on sales of AFS investment securities partially offset by a $6.9 million gain on the VISA share exchange and $1.7 million net unrealized fair value gains on equity securities. Net losses on investment securities of $7.6 million for the year of 2023 were driven by a $7.2 million loss on sale of AFS investment securities during the second quarter of 2023.

Noninterest expense for the year of 2024 was $545.0 million, a decrease of $15.2 million, or 3%, from the year of 2023 driven by decreases in FDIC insurance expense of $10.6 million, the expense for the reserve for unfunded loan commitments of $8.3 million, mortgage loan servicing expense of $3.2 million, and amortization of intangibles of $1.5 million. These decreases in noninterest expense were partially offset by increases in employee benefits of $5.3 million and employee compensation of $3.8 million. The decrease in FDIC insurance expense was driven by $12.0 million in expense recognized for the FDIC special assessment in 2023 as compared to $1.5 million in 2024. The decrease in the expense for the reserve for unfunded loan commitments was driven by decreases in loan commitments. The decrease in mortgage loan servicing expense was driven by the aforementioned sales of MSRs in 2023 and 2024. The decrease in the amortization of intangibles was due to lower core deposit intangible balances. The increase in employee benefits was primarily due to higher postretirement benefit costs. The increase in employee compensation was driven by higher employee incentives and base salaries, as well as employee severance associated with the previously announced mortgage delivery channel consolidation partially offset by lower employee commissions and incentives related to mortgage banking production.

For the year of 2024, income tax expense was $91.6 million as compared to $97.5 million for the year of 2023. The decrease was primarily due to the impact of discrete tax benefits recognized in the second quarter of 2024 and the impact of higher provision to return adjustments recognized in the fourth quarter of 2023 as compared to the fourth quarter of 2024. United’s effective tax rate was 19.7% for the year of 2024 and 21.0% for the year of 2023.

Credit Quality

United’s asset quality continues to be sound. At December 31, 2024, non-performing loans (“NPLs”) were $73.4 million, or 0.34% of loans & leases, net of unearned income. Total non-performing assets (“NPAs”) were $73.7 million, including other real estate owned (“OREO”) of $327 thousand, or 0.25% of total assets at December 31, 2024. At September 30, 2024, NPLs were $65.2 million, or 0.30% of loans & leases, net of unearned income. Total NPAs were $65.4 million, including OREO of $169 thousand, or 0.22% of total assets at September 30, 2024. At December 31, 2023, NPLs were $45.5 million, or 0.21% of loans & leases, net of unearned income. Total NPAs were $48.1 million, including OREO of $2.6 million, or 0.16% of total assets at December 31, 2023.

As of December 31, 2024, the allowance for loan & lease losses was $271.8 million, or 1.25% of loans & leases, net of unearned income. At September 30, 2024, the allowance for loan & lease losses was $270.8 million, or 1.25% of loans & leases, net of unearned income. At December 31, 2023, the allowance for loan & lease losses was $259.2 million, or 1.21% of loans & leases, net of unearned income.

Net charge-offs were $5.6 million, or 0.10% on an annualized basis as a percentage of average loans & leases, net of unearned income for the fourth quarter of 2024. Net charge-offs were $3.6 million, or 0.07% on an annualized basis as a percentage of average loans & leases, net of unearned income for the third quarter of 2024. Net charge-offs were $2.5 million, or 0.05% on an annualized basis as a percentage of average loans & leases, net of unearned income for the fourth quarter of 2023. Net charge-offs were $12.5 million for the year of 2024 compared to $6.7 million for the year of 2023. Net charge-offs as a percentage of average loans & leases, net of unearned income were 0.06% and 0.03% for the years of 2024 and 2023, respectively.

Capital

United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 16.5% at December 31, 2024, while estimated Common Equity Tier 1 capital, Tier 1 capital, and leverage ratios are 14.2%, 14.2%, and 11.7%, respectively. The December 31, 2024 ratios reflect United’s election of a five-year transition provision, allowed by the Federal Reserve Board and other federal banking agencies in response to the COVID-19 pandemic, to delay for two years the full impact of CECL on regulatory capital, followed by a three-year transition period. The regulatory requirements for a well-capitalized financial institution are a risk-based capital ratio of 10.0%, a Common Equity Tier 1 capital ratio of 6.5%, a Tier 1 capital ratio of 8.0%, and a leverage ratio of 5.0%. United did not repurchase any shares of its common stock during 2024 or 2023.

About United Bankshares, Inc.

As of December 31, 2024, United had consolidated assets of approximately $30 billion and is the 41^st largest banking company in the U.S. based on market capitalization. United is the parent company of United Bank, which comprises more than 225 offices located throughout Washington, D.C., Virginia, West Virginia, Maryland, North Carolina, South Carolina, Ohio, Pennsylvania, and Georgia. United’s stock is traded on the NASDAQ Global Select Market under the quotation symbol "UBSI".

Cautionary Statements

The Company is required under generally accepted accounting principles to evaluate subsequent events through the filing of its December 31, 2024 consolidated financial statements on Form 10-K. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of December 31, 2024 and will adjust amounts preliminarily reported, if necessary.

Use of non-GAAP Financial Measures

This press release contains certain financial measures that are not recognized under U.S. generally accepted accounting principles ("GAAP"). Generally, United has presented these “non-GAAP” financial measures because it believes that these measures provide meaningful additional information to assist in the evaluation of United’s results of operations or financial position. Presentation of these non-GAAP financial measures is consistent with how United’s management evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in the banking industry.

Specifically, this press release contains certain references to financial measures identified as tax-equivalent (FTE) net interest income, 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 United’s results of operations or financial position.

Net interest income is presented in this press release on a tax-equivalent basis. The tax-equivalent basis adjusts for the tax-favored status of income from certain loans and investments. Although this is a non-GAAP measure, United’s management believes this measure is more widely used within the financial services industry and provides better comparability of net interest income arising from taxable and tax-exempt sources. United uses this measure to monitor net interest income performance and to manage its balance sheet composition. The tax-equivalent adjustment combines amounts of interest income on federally nontaxable loans and investment securities using the statutory federal income tax rate of 21%.

Tangible 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 United’s 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 United’s presentation of these non-GAAP financial measures might not be comparable to similarly titled measures at other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and United strongly encourages a review of its condensed consolidated financial statements in their entirety.

Forward-Looking Statements

In this report, we have made various statements regarding current expectations or forecasts of future events, which speak only as of the date the statements are made. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are also made from time-to-time in press releases and in oral statements made by the officers of the Company. Forward-looking statements can be identified by the use of the words “expect,” “may,” “could,” “intend,” “project,” “estimate,” “believe,” “anticipate,” and other words of similar meaning. Such forward-looking statements are based on assumptions and estimates, which although believed to be reasonable, may turn out to be incorrect. Therefore, undue reliance should not be placed upon these estimates and statements. United cannot assure that any of these statements, estimates, or beliefs will be realized and actual results may differ from those contemplated in these “forward-looking statements.” The following factors, among others, could cause the actual results of United’s operations to differ materially from its expectations: 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; 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 United’s funding costs and net interest margin; future provisions for credit losses on loans and debt securities; changes in nonperforming assets; risks relating to the merger with Piedmont, including the successful integration of operations of Piedmont; 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 United’s expectations, refer to its reports filed with the Securities and Exchange Commission, including the discussion under “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2023, 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.