8-K: United Bankshares Reports First Quarter 2025 Earnings, Impacted by Piedmont Bancorp Acquisition

United Bankshares, Inc. announced first quarter 2025 earnings of $84.3 million, or $0.59 per diluted share, with results influenced by the acquisition of Piedmont Bancorp, Inc.

Summary

• United Bankshares, Inc. reported earnings of $84.3 million, or $0.59 per diluted share, for the first quarter of 2025.
• The first quarter was marked by record net interest income and the completion of the Piedmont Bancorp acquisition.
• The acquisition impacted the quarter with increased average balances, income, and expenses, including $30.0 million in merger-related expenses.
• First quarter results showed annualized returns on average assets of 1.06%, average equity of 6.47%, and average tangible equity of 10.61%.
• Net interest income for the first quarter of 2025 was a record $260.1 million, a 12% increase from the fourth quarter of 2024.
• The net interest margin increased to 3.69% for the first quarter of 2025, up from 3.49% in the previous quarter.
• Non-performing loans were $69.8 million, or 0.29% of loans & leases, net of unearned income.
• The company repurchased approximately 567 thousand shares of its common stock at an average price of $34.93 during the first quarter of 2025.
• As of March 31, 2025, United had consolidated assets of approximately $33 billion.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While earnings are down compared to the previous quarter, the company highlights record net interest income, margin expansion, and the successful acquisition of Piedmont. The outlook provides guidance for 2025, suggesting stability and continued growth.

Positives

• Record net interest income of $260.1 million was achieved in the first quarter of 2025.
• The net interest margin increased by 20 basis points to 3.69% in the first quarter of 2025.
• Asset quality remains sound, with non-performing assets at a low 0.22% of total assets.
• The company is well-capitalized based on regulatory guidelines, with a risk-based capital ratio of 15.7%.
• United has a strong core deposit base, with 25% of deposits in non-interest-bearing accounts.
• United has a granular deposit base and geographic diversification.
• United has a history of successful acquisitions.

Negatives

• Earnings decreased to $84.3 million in Q1 2025 from $94.4 million in Q4 2024.
• Merger-related expenses of $30.0 million negatively impacted earnings per share by $0.17.
• The provision for credit losses increased to $29.1 million in Q1 2025 from $6.7 million in Q4 2024.
• Noninterest income decreased by $2.7 million compared to the first quarter of 2024, primarily due to a decrease in income from mortgage banking activities.
• The effective tax rate increased to 21.2% for the first quarter of 2025 from 19.8% for the first quarter of 2024.

Risks

• The company faces risks related to the integration of Piedmont, including the realization of expected growth opportunities and cost savings.
• Changes in trade, monetary, and fiscal policies, including interest rate policies of the Federal Reserve, could impact results.
• General competitive, economic, political, and market conditions may affect future results.
• Cyber incidents or security breaches of United's systems could pose a risk.
• Catastrophic events such as natural disasters or public health crises could disrupt operations.
• Geopolitical risks from terrorist activities and armed conflicts may result in economic and supply disruptions.

Future Outlook

United Bankshares expects loan and deposit growth to be in the low to mid-single digits for the remainder of 2025. Net interest income (non-FTE) is expected to be in the range of $1.050 billion to $1.065 billion for FY 2025, assuming three 25 bps rate cuts in 2025. Total provision expense for 2025 is planned at $53 million. Non-interest income is expected to be in the range of $120 million to $130 million for 2025. Non-interest expense is expected to be in the range of $610 million to $625 million for 2025. The effective tax rate is estimated at approximately 21.0%. Stock buybacks will be market-dependent.

Management Comments

• Richard M. Adams, Jr., United's Chief Executive Officer, stated, 'This quarter we officially welcomed Piedmont to the United family and we are very excited about entering the Atlanta market.'
• Richard M. Adams, Jr. also noted, 'Closing a deal always brings a lot of noise to the quarter, but that shouldn't overshadow the excellent results we posted when adjusting for the acquisition.'
• Management believes UBSI continues to perform at a high level and have success in these challenging and uncertain times.

Industry Context

The acquisition of Piedmont Bancorp expands United Bankshares' presence into the Atlanta market, a region with robust economic growth opportunities. The report also touches on broader industry trends such as interest rate policies, technological changes, and regulatory actions.

Comparison to Industry Standards

• United Bankshares' capital ratios remain significantly above regulatory 'Well Capitalized' levels.
• The company's efficiency ratio of 53.03% indicates strong expense control compared to some peers.
• United Bankshares has been consistently ranked as one of the most trustworthy banks in America by Newsweek, indicating a strong reputation.
• The company's 51 consecutive years of dividend increases demonstrates a long-term commitment to shareholder value, a feat that few banks can match.

Stakeholder Impact

• Shareholders will see continued dividends and potential for stock appreciation.
• Employees will experience integration with Piedmont staff and potential career opportunities.
• Customers will benefit from an expanded branch network and service offerings.
• The acquisition of Piedmont enhances United's position as a premier regional banking company in the Southeast and Mid-Atlantic.

Next Steps

• The company will continue to evaluate the impact of subsequent events on critical accounting assumptions and estimates as of March 31, 2025.
• United will continue to integrate Piedmont Bancorp into its operations.
• The company will continue to monitor economic conditions and adjust its strategies accordingly.
• United will continue to repurchase shares under the approved plan, market dependent.

Key Dates

Keywords

earnings, United Bankshares, Piedmont Bancorp, acquisition, net interest income, financial results, bank, UBSI