United Bankshares, Inc.

Net income was $6.5 million for the third quarter of 2021, versus $5.4 million in Q2 2021 and $4.5 million in Q3 2020. Net interest income increased $298,000, or 2.1%, quarter over quarter, and the tax-equivalent net interest margin was 3.52% versus 3.58% in Q2 2021. The company recorded a $1.25 million credit to provision for loan losses in Q3 2021, compared with no provision in Q2 2021. For the first nine months of 2021, the company reported a $2.65 million reserve recovery versus a $4.2 million provision in the first nine months of 2020; net interest margin was 3.58% versus 3.48%, and interest spread improved to 3.44% from 3.21%. Loans excluding purchase credit impaired loans grew $39.1 million, or 3.3%, in the quarter and $53.3 million, or 4.5%, year over year. Nonperforming assets were $4 million, down $4.6 million from a year earlier, and the ratio of nonperforming assets to loans and other real estate was 0.33% versus 0.73% a year ago. Deposits grew $10 million in the quarter and $129.5 million, or 9.5%, year over year; noninterest-bearing deposits rose $64 million, or 22.7%. Total securities were $402.9 million, up $53.3 million in the quarter, while cash and equivalents declined $74.6 million as excess liquidity was invested into higher-yielding assets. Management did not provide formal forward guidance, but said it expects the merger with United Bank to close before the end of Q4 2021, subject to approvals and closing conditions.

Rex Smith said this would likely be the company’s final earnings call before merging into United Bank, and he expressed clear enthusiasm for the transaction. He framed the quarter as the culmination of long-term work to improve the balance sheet and operating metrics, saying the company now has its best balance sheet in history and is producing superior returns. His tone was reflective and optimistic, emphasizing the value of the franchise, the management team, and the bank’s guiding principles.

Bruce Thomas described the quarter as, in his view, the best the company had issued over the years. He highlighted the $6.5 million net income, the $1.25 million provision credit, the 2.1% increase in net interest income, and the 3.52% tax-equivalent margin, noting the margin remained stable even after excluding PPP-related items. He also pointed to strong credit metrics, with nonperforming assets at $4 million and a 0.33% ratio, plus deposit growth of $129.5 million year over year and total securities of $402.9 million as excess liquidity was redeployed into higher-yielding assets.

There were no analyst questions on the call, so there was no Q&A discussion of concerns or follow-up issues. Management’s only forward-looking update was that the merger with United Bank is expected to close before the end of the fourth quarter of 2021, subject to approvals and other closing conditions. They also reiterated that balance-sheet quality and financial metrics continue to improve as the company transitions.