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United Bankshares reports earnings for Q3 and first nine months of 2024

Finance News (Photo Illustration/MetroCreative)

CHARLESTON — United Bankshares Inc. reported earnings for the third quarter of 2024 of $95.3 million, or $0.70 per diluted share.

Third quarter of 2024 results produced annualized returns on average assets, average equity, and average tangible equity, a non-GAAP measure, of 1.28%, 7.72%, and 12.59%, respectively.

“We are excited to announce this quarter’s earnings,” said Richard M. Adams Jr., United’s chief executive officer. “It was another successful quarter for UBSI, and we continue to perform at a high level. Profitability metrics stayed strong, growth trends continued upward, and expenses were well-controlled. In addition, asset quality, liquidity and capital levels remain a source of strength.”

United announced during the second quarter that it entered into a definitive merger agreement with Piedmont Bancorp Inc. The combined organization will have approximately $32 billion in assets and a network of over 240 locations across eight states and Washington, D.C. The merger is expected to close late in the fourth quarter of 2024 or early in the first quarter of 2025.

Earnings for the second quarter of 2024 were $96.5 million, or $0.71 per diluted share, and annualized returns on average assets, average equity, and average tangible equity were 1.32%, 7.99%, and 13.12%, respectively.

Earnings for the third quarter of 2023 were $96.2 million, or $0.71 per diluted share, and annualized returns on average assets, average equity, and average tangible equity were 1.31%, 8.14%, and 13.71%, respectively.

Net interest income for the third quarter of 2024 was $230.3 million, an increase of $4.5 million, or 2%, from the second quarter. Tax-equivalent net interest income, a non-GAAP measure which adjusts for the tax-favored status of income from certain loans and investments, of $231.1 million for the third quarter of 2024 also increased $4.5 million, or 2%, from the second quarter.

The increase in both categories was driven by an increase in average short-term investments, a higher yield on average net loans and loans held for sale and a decrease in average long-term borrowings partially offset by an increase in average interest-bearing deposits as well as a higher average rate paid on deposits. Average short-term investments increased $457 million, or 49%, from the second quarter, primarily driven by cash received from deposit growth.

Average long-term borrowings decreased $541.8 million, or 42%, from the second quarter. Average interest-bearing deposits increased $659.2 million, or 4%, from the second quarter.

The provision for credit losses was $6.9 million for the third quarter of 2024 as compared to $5.8 million for the second quarter.

Noninterest income for the third quarter of 2024 was $31.9 million, an increase of $1.7 million, or 6%, from the second quarter. The increase in noninterest income was driven by an increase in income from mortgage banking activities of $643,000 as well as increases in several additional categories of noninterest income, none of which were significant. The increase in income from mortgage banking activities was primarily due to higher mortgage loan sale volume and a higher quarter-end valuation of mortgage loans held for sale.

An increase in mortgage loan servicing income was mostly offset by higher net losses on investment securities. Mortgage loan servicing income was $7.4 million for the third quarter, an increase of $6.6 million from the second quarter. During the third quarter of 2024, United sold its remaining mortgage servicing rights with an aggregate unpaid principal balance of $1.1 billion at a gain of $7.1 million. Net losses on investment securities were $6.7 million for the third quarter, compared to $218 thousand for the second quarter. During the third quarter of 2024, United sold $196.7 million of available for sale investment securities at a loss of $6.9 million.

Noninterest expense for the third quarter of 2024 of $135.3 million was flat from the second quarter, increasing $565,000, or less than 1%. A $1.5 million increase in other noninterest expense from the second quarter, driven by higher amounts of certain general operating expenses, was mostly offset by smaller decreases in several other categories.

Earnings for the third quarter of 2024 were $95.3 million, or $0.70 per diluted share, as compared to earnings of $96.2 million, or $0.71 per diluted share, for the third quarter of 2023.

Net interest income for the third quarter of 2024 of $230.3 million was flat from the third quarter of 2023, increasing $1.8 million, or less than 1%. Tax-equivalent net interest income for the third quarter of 2024 was also flat from the third quarter of 2023, increasing $1.8 million, or less than 1%. The slight increase in net interest income and tax-equivalent net interest income was primarily due to a higher yield on average net loans and loans held for sale, a decrease in average long-term borrowings, organic loan growth and an increase in average short-term investments. This was partially offset by the impact of deposit rate repricing and an increase in average interest-bearing deposits.

Average earning assets for the third quarter of 2024 increased $363.7 million, or 1%, from the third quarter of 2023 due to a $610.4 million increase in average net loans and loans held for sale and a $535.2 million increase in average short-term investments partially offset by a $781.9 million decrease in average investment securities.

Noninterest income for the third quarter of 2024 was $31.9 million, which was a decrease of $1.7 million, or 5%, from the third quarter of 2023. Income from mortgage banking activities decreased $3 million from the third quarter of 2023 mainly due to lower mortgage loan origination and sale volume. This decrease in income from mortgage banking activities was partially offset by increases in several categories of noninterest income, none of which were significant.

An increase in mortgage loan servicing income was mostly offset by higher net losses on investment securities. Mortgage loan servicing income was $7.4 million for the third quarter of 2024, an increase of $6.5 million from the third quarter of 2023 driven by the aforementioned $7.1 million gain on the sale of MSRs in the third quarter of 2024. Net losses on investment securities were $6.7 million for the third quarter of 2024 as compared to $181,000 for the third quarter of 2023 driven by the aforementioned $6.9 million loss on sale of AFS investment securities in the third quarter of 2024.

Noninterest expense for the third quarter of 2024 was flat from the third quarter of 2023, increasing $109,000 or less than 1%. A $1.3 million increase in other noninterest expense from the third quarter of 2023, driven by higher amounts of certain general operating expenses, was mostly offset by smaller decreases in several other categories of noninterest expense.

As of Sept. 30, United had consolidated assets of approximately $30 billion and is the 41st 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 West Virginia, Ohio, Virginia, Maryland, North Carolina, South Carolina, Pennsylvania, Georgia and Washington, D.C. United’s stock is traded on the NASDAQ Global Select Market under the quotation symbol “UBSI.”

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