Document Contents

Section 1: 10-Q (10-Q)

FORM

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File

Number: 002-86947

United Bankshares, Inc.

(Exact name of registrant as specified in its charter)


West Virginia		55-0641179
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

300 United Center 500 Virginia Street, East
Charleston, West Virginia		25301
(Address of principal executive offices)		Zip Code

Registrant’s telephone number, including area code: (304)

424-8716

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $2.50 per share	UBSI	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Act). Yes ☐

☒

As of

October

31, 2020

, the registrant had

129,762,348

shares of common stock, $2.50 par value per share, outstanding.

CONSOLIDATED BALANCE SHEETS

UNITED BANKSHARES, INC. AND SUBSIDIARIES

(Dollars in thousands, except par value)


	September 30			December 31
	2020			2019
	(Unaudited)			(Note 1)
Assets
Cash and due from banks	$	277,232		$	185,238
Interest-bearing deposits with other banks		1,378,478			651,435
Federal funds sold		823			820

Total cash and cash equivalents		1,656,533			837,493
Securities available for sale at estimated fair value (amortized cost-$2,697,548 at September 30, 2020 and $2,426,924 at December 31, 2019, allowance for credit losses of $ 0 at September 30, 2020)		2,777,802			2,437,296
Securities held to maturity, net of allowance for credit losses of $ 21 at September 30, 2020 (estimated fair value-$1,213 at September 30, 2020 and $1,447 at December 31, 2019)		1,214			1,446
Equity securities at estimated fair value		10,255			8,894
Other investment securities		217,992			222,161
Loans held for sale (at fair value-$784,457 at September 30, 2020 and $384,375 at December 31, 2019)		812,084			387,514
Loans and leases		17,967,520			13,713,548
Less: Unearned income		(37,289	)		(1,419	)

Loans and leases, net of unearned income		17,930,231			13,712,129
Less: Allowance for loan and lease losses		(225,812	)		(77,057	)

Net loans and leases		17,704,419			13,635,072
Bank premises and equipment		180,456			96,644
Operating lease right-of-use assets		72,789			57,783
Goodwill		1,794,886			1,478,014
Mortgage servicing rights, net of valuation allowance		20,413			0
Accrued interest receivable, net of allowance for credit losses of $435 at September 30, 2020		65,141			58,085
Other assets		617,324			441,922

TOTAL ASSETS	$	25,931,308		$	19,662,324

Liabilities
Deposits:
Noninterest-bearing	$	7,304,747		$	4,621,362
Interest-bearing		12,946,792			9,231,059

Total deposits		20,251,539			13,852,421
Borrowings:
Securities sold under agreements to repurchase		148,357			124,654
Federal Home Loan Bank (“FHLB”) borrowings		645,249			1,851,865
Other long-term borrowings		279,425			236,164
Reserve for lending-related commitments		15,960			1,733
Operating lease liabilities		76,604			61,342
Accrued expenses and other liabilities		246,733			170,312

TOTAL LIABILITIES		21,663,867			16,298,491

Shareholders’ Equity
Preferred stock, $1.00 par value; Authorized-50,000,000 shares, none issued		0			0
Common stock, $2.50 par value; Authorized-200,000,000 shares; issued-133,723,210 and 105,494,290 at September 30, 2020 and December 31, 2019, respectively, including 3,960,862 and 3,940,619 shares in treasury at September 30, 2020 and December 31, 2019, respectively		334,308			263,736
Surplus		2,891,746			2,140,175
Retained earnings		1,158,467			1,132,579
Accumulated other comprehensive gain (loss)		21,350			(34,869	)
Treasury stock, at cost		(138,430	)		(137,788	)

TOTAL SHAREHOLDERS’ EQUITY		4,267,441			3,363,833

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	25,931,308		$	19,662,324

See notes to consolidated unaudited financial statements.

Table of Contents

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

UNITED BANKSHARES, INC. AND SUBSIDIARIES

(Dollars in thousands, except per share data)


	Three Months Ended				Nine Months Ended
	September 30				September 30
	2020		2019		2020		2019
Interest income
Interest and fees on loans and leases	$	192,266	$	165,149	$	530,431	$	505,150
Interest on federal funds sold and other short-term investments		2,060		6,236		7,893		17,478
Interest and dividends on securities:
Taxable		14,448		18,168		47,658		53,279
Tax-exempt		1,495		798		3,486		2,786

Total interest income		210,269		190,351		589,468		578,693

Interest expense
Interest on deposits		17,726		36,368		64,452		104,461
Interest on short-term borrowings		172		539		826		1,838
Interest on long-term borrowings		6,707		11,526		26,406		35,755

Total interest expense		24,605		48,433		91,684		142,054

Net interest income		185,664		141,918		497,784		436,639
Provision for credit losses		16,781		5,033		89,811		15,446

Net interest income after provision for credit losses		168,883		136,885		407,973		421,193

Other income
Fees from trust services		3,574		3,574		10,318		10,276
Fees from brokerage services		3,066		2,378		8,633		7,668
Fees from deposit services		9,320		8,702		25,332		25,219
Bankcard fees and merchant discounts		1,226		1,262		2,937		3,520
Other service charges, commissions, and fees		715		568		1,843		1,665
Income from bank-owned life insurance		2,059		1,280		5,738		4,433
Income from mortgage banking activities		109,457		24,019		195,301		59,404
Mortgage loan servicing income		2,345		0		3,879		0
Net gain on the sale of bank premises		2,229		0		2,229		0
Net investment securities gains		860		116		2,566		66
Other income		617		325		1,888		991

Total other income		135,468		42,224		260,664		113,242

Other expense
Employee compensation		84,455		46,313		197,660		129,563
Employee benefits		13,202		8,615		36,767		26,624
Net occupancy expense		10,944		8,698		30,324		26,116
Other real estate owned (“OREO”) expense		1,166		1,837		2,679		3,886
Equipment expense		5,616		3,698		14,465		10,688
Data processing expense		6,708		5,776		28,140		16,505
Mortgage loan servicing expense and impairment		3,301		107		5,949		304
Bankcard processing expense		450		474		1,319		1,402
FDIC insurance expense		2,700		465		7,882		7,065
FHLB prepayment penalties		10,385		0		10,385		5,105
Other expense		32,666		20,151		86,530		58,496

Total other expense		171,593		96,134		422,100		285,754

Income before income taxes		132,758		82,975		246,537		248,681
Income taxes		28,974		17,010		49,884		51,867

Net income	$	103,784	$	65,965	$	196,653	$	196,814

Earnings per common share:
Basic	$	0.80	$	0.65	$	1.68	$	1.93

Diluted	$	0.80	$	0.65	$	1.68	$	1.93

Average outstanding shares:
Basic		129,373,154		101,432,243		116,876,402		101,698,530
Diluted		129,454,966		101,711,740		116,944,594		101,967,135

See notes to consolidated unaudited financial statements

Table of Contents

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

UNITED BANKSHARES, INC. AND SUBSIDIARIES

(Dollars in thousands)


	Three Months Ended				Nine Months Ended
	September 30				September 30
	2020		2019		2020			2019
Net income	$	103,784	$	65,965	$	196,653		$	196,814
Change in net unrealized gain on available-for-sale (“AFS”) securities, net of tax		8,180		3,637		53,600			38,420
Change in net unrealized gain (loss) on cash flow hedge, net of tax		678		0		(594	)		0
Change in pension plan assets, net of tax		988		949		3,213			2,768

Comprehensive income, net of tax	$	113,630	$	70,551	$	252,872		$	238,002

See notes to consolidated unaudited financial statements

Table of Contents


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

Consolidated Balance Sheets (Unaudited) September 30, 2020 and December 31, 2019			4

Consolidated Statements of Income (Unaudited) for the Three and Nine Months Ended September 30, 2020 and 2019			5

Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Nine Months Ended September 30, 2020 and 2019			6

Consolidated Statement of Changes in Shareholders’ Equity (Unaudited) for the Three and Nine Months Ended September 30, 2020 and 2019			7

Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2020 and 2019			9

Notes to Consolidated Financial Statements			10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		63

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		90

Item 4.	Controls and Procedures		93

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings		94

Item 1A.	Risk Factors		94

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		97

Item 3.	Defaults Upon Senior Securities		97

Item 4.	Mine Safety Disclosures		97

Item 5.	Other Information		97

Item 6.	Exhibits		98

Signatures			99

Large accelerated filer

Accelerated filer

Non-accelerated
filer

Smaller reporting company

Emerging growth company