United Bankshares (UBSI) Q4 2023 earnings summary

Executive summary

• FY2023 net income was $366.3 million and diluted EPS was $2.71; ROAA was 1.25%, ROAE 7.87% and return on average tangible equity 13.33%.

• Q4 2023 net income was $79.4 million and diluted EPS was $0.59, down from $96.2 million and $0.71 in Q3.

• Results reflected loan and deposit growth and slight sequential margin expansion, alongside deposit repricing costs and a $12.0 million FDIC special assessment in Q4.

Financial highlights

• FY2023 net interest income rose 3% to $919.9 million from $896.4 million; FTE net interest margin increased to 3.56% from 3.50%.

• Q4 net interest income increased 1% QoQ to $229.7 million but fell 8% YoY; FTE net interest margin was 3.55%, up 1 bp QoQ and down 32 bps YoY.

• FY noninterest income fell 12% to $135.3 million, while noninterest expense increased 1% to $560.2 million; Q4 expense was $152.3 million, up 11% YoY.

• FY provision for credit losses rose to $31.2 million from $18.8 million; Q4 provision was $6.9 million versus $16.4 million YoY.

• FY income before taxes was $463.8 million versus $475.8 million; income taxes were $97.5 million versus $96.2 million.

Outlook and guidance

• 2024 loan growth, excluding loans held for sale, and deposit growth are each expected in the mid-single digits versus Q4 2023; investment balances are expected to decline ~$500 million.

• 2024 non-FTE net interest income guidance is $910–$930 million, assuming three 25 bps rate cuts; net interest margin is expected to remain relatively stable versus Q4 2023.

• 2024 provision expense planning assumption is $36 million; outlook depends on economic conditions, credit trends and loan growth.

• 2024 noninterest income guidance is $120–$130 million, noninterest expense $555–$565 million, and estimated effective tax rate ~20.5%.

• Stock buybacks are expected to be market-dependent; mortgage banking revenue will be subject to industry trends.