All right. Good afternoon, everyone. I'm Steve Moss, one of the bank analysts here at Raymond James. With me today, I have the pleasure of hosting United Bankshares, UBSI. With me here to kick off the presentation is Rick Adams, their CEO. With that, Rick, I'll hand it over to you.
Thank you. I appreciate that. Again, Rick Adams, CEO, UBSI. I have with me today Mark Tatterson. He's our CFO. I have our Chief Operating Officer, Ross Draber, Wes Tracewell, SVP of Treasury. Appreciate everyone being here today. Appreciate Raymond James for inviting us. This is one of our favorite conferences of the year. I'm gonna make a few comments to kick things off, and then I'm gonna turn it over to Mark, who's gonna do a little presentation. For those of you who aren't familiar with UBSI, we're a $34 billion banking company in the Mid-Atlantic and Southeast. We have over 240 locations, eight states, plus D.C. We go from Baltimore in the north down to Charleston, South Carolina in the south, and then from the coast over to Atlanta, Georgia in the west.
We are a high-performing banking company with a low-risk profile. We have a long history of success dating back to 1839, when we opened our doors on St. Patrick's Day. We're two weeks away from our 187th birthday. We have an experienced management team. We have one of the best footprints in the industry, and we have the size and the culture that allow us to compete and win upstream and downstream. We've increased our dividend to shareholders for 52 consecutive years. I don't think there's anything that captures the essence of our company quite like the dividend streak. I think it speaks to our consistency, to our discipline, to our ability to manage risk, and to our ability to execute at a high level.
It shows that we've been able to protect against the asymmetric downside, but at the same time, shows that we've been able to grow and innovate. Demonstrates our steadfast commitment to our mission. It evidences the fact that we are a shareholder-driven organization. Let me touch just on 2025. 2025 was one of the best years in our company's long history. We had record earnings in 2025.
We outperformed peer meetings in pretty much every profitability and risk management metric. Last year, we reinstituted the buyback for the first time since 2022. Between the buyback and the dividend, we returned $338 million of capital to our shareholders in 2025. We are committed to being good stewards of our capital and focused on its efficient allocation.
2025, I'd mentioned that we closed our 34th acquisition, Piedmont Bancorp in Atlanta, Georgia. It couldn't be going any better, I couldn't be any more excited about what I think we're gonna be able to accomplish in that market. When it comes to M&A, we are very disciplined on the front end, we have a proven track record of execution on the back end. Our experience and expertise with M&A, I think, is a true competitive advantage. With my job, I get to do a lot of media interviews, one of the questions that I always like to get is, I usually do it at the end, is there anything about the United story that you think people are missing?
When I think about the financial outperformance that we had last year, I would have expected some more stock outperformance to go along with it. I think there was a disconnect. I do think that there are some things that people are missing about our story, and I'd like to share three of them with you this afternoon. The first thing is I think people are missing the organic growth story just a little bit. I mean, historically, people have viewed us as a growth via acquisition company, and I think historically speaking, that's pretty fair. Initially, you know, we grew up in West Virginia.
We needed M&A to build the franchise in the slower growth markets in and around West Virginia, we needed M&A to eventually expand into higher growth markets like D.C. and the Southeast.
Today, through a combination of management focus, also a new footprint in some of the best banking markets in the country, we've become a much more balanced organization between organic and inorganic growth. We've grown loans now for 17 straight quarters. We've grown deposits 10 out of the 11 last quarters, the growth strategy of most companies is either, you know, build or buy, we are fortunate to have the dual growth strategies of build and buy.
I think it's also important to note that when we've driven this growth, we've been able to do it without sacrificing our underwriting or pricing disciplines. Our growth strategy always begins with quality. I can tell you that a $1 of growth at United is better than a $1 of growth in most other places. Now, I'm not saying, and I'm certainly not signaling that we are out of the M&A business. It's been a big part of our story, but M&A is perhaps lower on the list of capital deployment priorities than it once was. Unlike many others out there today, we do not feel any pressure to rush out and do a deal to hit this window of M&A opportunity that exists. We love our long runway for organic growth.
Because we're an experienced acquirer and because we have strong risk management practices, capital levels, and liquidity, we feel that the window for M&A is always open to us. If you think back when we did announce our last deal in Atlanta, it was at a time when nobody was doing M&A.
Sometimes that's the best time to be doing it. For now, we are more focused on organic growth. Second thing I think people might be missing about our story is what I would refer to as the true D.C. story. You know, when I stood here at this presentation a year ago, our stock was in a little bit of a free fall. You know, it's funny because earnings were great. Asset quality was great. Our land acquisition was closed, converted. It was going great.
Everything was going great, except for the stock. When I asked around to see where the selling pressure was coming from, the explanation I received was the four-letter word DOGE. Investors were running at that time from any banks with exposure to D.C. We are, the go-to bank in the DMV.
DOGE, along with pandemic-driven concerns with CRE and office as well as government shutdowns, had people predicting, the end of D.C. as we know it. Last year I said in my remarks, that it was important to look beyond the D.C. headlines, important to gain and maintain some perspective about what the true D.C. story is. I also said that the concerns about D.C., at least in my opinion, were a bit overblown, and it turns out that they were.
I mean, the deep recession, that everybody said was imminent when I stood here last year, well, it didn't happen. The dire predictions about job losses in D.C., actual numbers, weren't even close to what was predicted.
The hand-wringing about agencies leaving D.C., relocating to other parts of the country, well, that has not materialized either. Now have we learned that the D.C. economy is not quite as bulletproof, as maybe we once thought? I think that's fair. Can you point to some negative trends in the area? That, that's certainly true. D.C. is a resilient, global city, capital of the United States of America. There's a lot of positive things that go along with that that are not gonna go away. Embassies, global, institutions, and the like.
Has one of the wealthiest and most educated workforces anywhere. Growing industries like cyber, AI, IT, defense. A mayor who is taking a balanced approach towards economic development. 20-plus colleges and universities, great restaurants, museums, performing arts venues. I can tell you that we do believe in D.C., and I think D.C. is gonna be just fine. Even if D.C. does take a turn for the worst, UBSI will be just fine.
Our deep market knowledge, our disciplined underwriting, our strong relationships with the best sponsors have kept our portfolio strong. Just as it was wrong, I think, to overreact about the D.C. economy, it was equally as wrong, I think, to paint all the banks that do business there with the same broad brush because they are not equal.
The third thing that I think people are missing about our story is I think they're missing the Southeast story a bit. When I travel around, there's still some people that think of us as a West Virginia bank, and we are the dominant banking franchise in and around West Virginia. We have a long legacy there. We're the oldest company there.
We have number one market share there. Then a lot of people think of us as a D.C. company. Over the last 35 years, we've built what I think is the best bank in the DMV. We bank the best customers. We're involved in the biggest deals, and we truly have become the community bank of the nation's capital.
I don't think that people are fully aware of the franchise that we've built in the Southeast. Our Southeastern franchise has now become the biggest part of our company. We have more locations, over 100 in the Southeast than we do in either our legacy franchise or in the D.C. area. We've got more loans there. The production, the growth is coming from there. We have some of our largest relationships there.
We've been recognized as the best bank in South Carolina for three years in a row. I think we have one of the best regional bank footprints in the industry. We've got access to great core deposit markets, access to some of the best growth markets in the country, and our footprint gives us a great deal of geographic and industry diversification.
To close, I'd just say that we're continuing to perform at a high level. I'm confident that we can continue to do that, and the future looks bright for UBSI. I'm gonna turn it over to Mark, who's gonna go through a slide presentation for you today, and then we'll be glad to answer any questions.
Good afternoon, thank you, Rick. Thank you again to Raymond James and Steve Moss for hosting us today. We really appreciate the coverage. Our forward-looking statements disclosure can be seen on this slide. You can just read that at your convenience if you're bored at night sometime.
Wanted to start today with a general corporate overview of UBSI. UBSI is a regional financial holding company with over 240 locations, and you can see on the map on the right-hand side, we do have locations now in Georgia, South Carolina, North Carolina, Virginia, Maryland, Washington D.C., West Virginia, Ohio, and Pennsylvania. We are now the 38th largest bank in the U.S. by market cap. We have had 52 consecutive years of dividend increases to shareholders.
We've completed 34 acquisitions since 1982, and we've consistently been ranked as one of the most trustworthy banks in America by Newsweek. United is a member of a number of indices, including the S&P MidCap 400, the Russell 2000, the Dow Jones U.S. Select Dividend Index, the S&P High Yield Dividend Aristocrats Index, and the NASDAQ US Dividend Achievers 50 Index. These last three funds have very stringent dividend requirements that you must meet in order to be eligible to be in the fund. As you can see in the box on the bottom left, United has about $34 billion in assets, $25 billion in loans, and about $27 billion in deposits.
I'm not gonna hit on all the bullet points, but I did wanna note that in 2025 we achieved record net income of $465 million, we recorded diluted earnings per share of $3.27, which was also a record. Our returns were strong. We generated return on average assets of 1.141%, return on average equity of 8.63%, and return on tangible equity of 13.95%. If you look at the fourth bullet point on this slide, you can see that we did return $338 million in capital to shareholders through $212 million of common dividends and $126 million of share repurchases.
We also closed our merger with Piedmont in 2025. Piedmont was headquartered in the Greater Atlanta area and brought us 16 offices and $2.4 billion in assets. On the acquisition topic, United does have a demonstrated history of successful acquisitions. You can see the last three mergers have really helped us build out our Southeastern footprint. Carolina Financial got us a really nice branch network in North and South Carolina.
Community Bankers Trust C orporation got us into the Richmond market. Piedmont most recently provided an entry into the Georgia market. These mergers really provided some geographic diversification and expansion into new markets that have very strong growth demographics. United has been a very strong performer for a long period of time. This slide shows our performance ratios over the last five years.
As you can see, United has posted strong and consistent results. I previously mentioned our record earnings in 2025, and a large part of our financial success in 2025 was driven by our Net Interest Margin expansion. Our last five quarters of margin data are shown in the table on the upper right. You can see that our margin increased from 3.49% at the end of 2024 up to 3.83% at the end of 2025.
Another factor driving our success in 2025 was our ability to generate organic loan and deposit growth. This slide shows our current loan mix and recent balance trends, and during 2025, loans increased approximately $3 billion. Excluding the Piedmont merger-related balances, loans increased approximately $1 billion during the last fiscal year on an organic basis.
Much of the growth in 2025 was driven by our newer Southeastern markets. For example, we grew loans approximately 20% in North Carolina in 2025. We also grew loans in Georgia approximately 19% in 2025. Very strong growth rates coming out of our Southeastern markets. This slide summarizes our loan portfolio by major asset class and geography.
As Rick discussed in the opening, what we define as our Southeastern markets now represent the largest part of our loan portfolio at 43%. This is followed by the Metro D.C. Baltimore market at 35% and our legacy West Virginia, Ohio, Pennsylvania, and Shenandoah Valley markets at 19%. The graphic on the right shows a map with the shaded areas representing where we have loans outstanding.
I think this really helps drive the point home with what Rick was highlighting in the beginning, that we've really grown to be a very solid Mid-Atlantic and Southeastern franchise. I wanna talk about credit quality for a minute. Our credit quality remains solid with NPAs to total assets at 33 basis points at year-end.
Net charge-offs were better than peer last year. We were 15 basis points in net charge-offs in the fourth quarter and only 19 basis points for the full year of 2025. We currently have a strong allowance of $298 million, representing about 1.2% of total loans. The next two slides show our asset quality going back to 2007, which does capture the financial crisis and provides more of a longer-term view of credit.
As you can see here, our non-current loans, which includes non-accrual and 90-plus days past due, significantly outperformed our Federal Reserve peer group through the crisis. Additionally, our loss content was also significantly less than peers during this timeframe. As you can see, our underwriting held up very well during the last major recession and continues to be very strong. This slide shows our current deposit mix.
If you look at the upper left-hand corner, you will see that we increased deposits in 2025 by about $3.1 billion. If you exclude the Piedmont-acquired balances on an organic basis, deposit growth was approximately $1 billion for the year. We do maintain about 24% of our deposit base in non-interest-bearing deposits.
With respect to Deposit Betas, our cumulative interest-bearing Deposit Beta is about 47% through this down cycle, while our total Deposit Beta is running at about 33%. Our capital position remains very strong, and we do substantially exceed the well-capitalized guidelines and the Capital Conservation Buffers. Our CET1 is over 13%, and our Tangible Equity to Tangible Assets is at 10.9%. Both are well ahead of our peers. We have 4.3 million shares remaining under our board-approved share repurchase program, and that's as of February 28th. I would note, and Rick talked about this in the beginning as well, we were active with our buyback in 2025. During the year of 2025, we repurchased 3.6 million shares.
We've also continued to be active in the buyback in 2026. Year to date, we've repurchased 495,000 shares. My last two slides today show our outlook for 2026 and our investment thesis. We are forecasting a mid-single digit loan and deposit growth rate for 2026. We are projecting Net Interest Income to be between $1.145 billion and $1.175 billion. For provision, we're using a planning assumption of approximately $48 million. We do expect Net Non-Interest Income to be between $125 million and $135 million. We always do a great job on the expense side. We're always working on trying to cut expenses where we can and be very mindful of expense growth.
On the expenses, we do think expenses will be in the range of $615 million-$630 million for the year. We are projecting an effective tax rate of approximately 21%. Finally, as we've said a couple times now, we do believe we do have a very significant excess capital position. Therefore, we do expect to be active in the buyback in 2026, although it will be market dependent. The last slide I wanted to touch on today is our investment thesis for UBSI. We do believe we have one of the premier Mid-Atlantic and Southeast franchises with an attractive mix of high-growth MSAs and smaller, stable markets with a strong deposit base.
We have consistently been a high-performing company with a culture of disciplined risk management and expense control, our 52 years of consecutive dividend increases evidences United's strong profitability, solid asset quality, and solid capital management over a very long period of time. We do have an experienced management team with a proven track record of execution, we are committed to our mission of excellence and service to our employees, our customers, our communities, and our shareholders.
Finally, we do have an attractive valuation. Our current Price-to-Earnings Ratio is at 11.8 times, that's based upon the median street estimates of $3.50 that's coming from Bloomberg for 2026. That concludes, my portion of the presentation, and Rick and I would be happy to answer any questions that anyone has, and we do appreciate, your time and attention today. Thank you.
Well, thanks, Mark, and, thanks, Rick. Maybe just starting off, one question to start it here is, you know, you touched on it, Rick, about being focused on organic growth. Maybe just give us some update as to what you're seeing in the market for the loan pipeline, loan pricing. Obviously, Georgia's been going very well, which I think a lot of people are aware of, but maybe just a little update, quarter to date, kind of what you guys are seeing and how things are going.
Yeah. I'll bring it on back over here. you know, our pipelines continue to be very strong. They're down a little bit from where they were, you know, kind of second and third quarter last year. Historically speaking, our pipelines still are very strong. you know, the Southeast, as Mark said, last year drove that growth. I think that we expect that to continue to be true in 2026. I think from a competitive perspective on the loan side, competition has definitely heated up. I don't think that that's peculiar to the Southeast.
I think that's probably true across all of our different markets. I mean, even in West Virginia, we've seen some very aggressive structure and pricing on the loan side. I think that even with that increased competition, I think we're still gonna be able to come in at the guidance that we've put out there.
Okay. Maybe just in terms of pricing, I know you guys have some give on deposits. You guys definitely emphasized with me over time about holding a relatively stable margin. Just kinda curious how you guys are thinking with, you know, the pricing's a little tighter, how you guys may be doing some offsets on the deposit side.
Yeah. Thanks, Steve. We, we do think we'll have a relatively stable margin in the upcoming year. I think there's some puts and takes. Rick talked about it being more competitive on the loan side. The deposit side, while it's competitive, it hasn't been extreme at this point. We do have some of the back book of the loan portfolio that's gonna continue to reprice in 2026. We've also looked at some opportunities on the investment side. We're sitting on a fair amount of cash right now, and we've been putting a little bit of that to work, and we expect to continue to put some of that to work throughout the year. I think that could help the margin out as well.
I think the growth will help drive it, both on the loan and deposit side, and I do think a little bit on the investment portfolio could help as well. Overall, we think it'll be relatively stable. You may give a few basis points back here or there in a quarter, might see a basis point or two of expansion, overall, we're projecting to be relatively stable for the year.
Appreciate that. Then, you know, another question just in terms of thinking about you guys are running at a 91% Loan-to-Deposit Ratio. Just kinda curious where you guys are maybe willing to take that, if you want to stay in this range or you want to go a bit higher.
I think we have always historically run, pretty high maybe compared to some of our peers. We've run higher, in the past. I think that we're comfortable, where we are, maybe a little bit higher than other folks are and a little bit room to grow. We don't see that as something that's gonna hamper our growth.
Then on capital here, you guys have been buying back very actively in the fourth quarter. You bought back into January. You know, numbers show maybe a little bit less in February here, but, you know, you guys do have a 13.4% CET1 ratio. Kinda curious where you guys are looking to run it, going forward here. Definitely a much more regulatory friendly environment. A lot of guys talking 10.5%, 11% CET1. Just kinda any color on that.
Yeah, we haven't, you know, said or announced any targets. That's a very, you know, dynamic decision that depends on a lot of things. We've kind of stayed away from putting a target out there. It is something that we talk about all the time, and we have, you know, since we got back into the buyback at the beginning of 2025, you know, depending on, you know, what the stock has done, we've changed, you know, where, you know, what our program is, and I think we're evaluating that again right now in this environment.
It's very market specific for us, but I can tell you that we, you know, historically have held a lot of capital. It's just part of our conservative nature. I think that we realize that we've, you know, got, even for United Bankshares, a lot of capital right now, and we are very much committed to putting that to work.
Appreciate that. You know, definitely Rick, you touched on in terms of D.C. being an issue last year with DOGE and everything else. You know, what are you guys seeing in terms of D.C. office, just kind of the activity, and where pricing maybe is these days?
I mean, you know, first of all, you know, D.C. office is different. You know, to talk about D.C. office like it's the same everywhere, it's very different. One of the things that we have been trying to communicate through the pandemic is, you know, the ground zero, I think, for the office situation is Downtown D.C. We don't have any exposure there. It is still weak, but I think there are some green shoots coming up. I mean, D.C. leads in office conversions. We just did a really nice one just finishing up. I think Ross just toured the building right beside us. One of the best sponsors in the entire country came in and redid it.
I think that the mayor has a growth agenda that she's put out that is addressing some of the red tape that exists in D.C. There are some legislation on the books that makes it difficult for some of the developers. She's attacking that. I'm not trying to sugarcoat it by any means. I do think the concerns are overblown, but there are certainly concerns. I think D.C. is heading back in the right direction.
If there are any questions from the audience, please let me know. Running low on time here. I guess, you know, one more for me here, just in terms of, you know, talking on efficiencies here, just, you know, I know you guys like to keep costs under control, but just on the other side of, you know, what investments do you see that you need, tech or otherwise, that, you guys are contemplating these days?
Yeah. I think one of our strengths is that historically we have been one of the more efficient banks out there. It's a big part of our story, and certainly we are always committed to that. At the same time, we know that we have to invest. I'd say a few things. One, we did just renegotiate our core provider contract, and we were able to obtain significant savings. Rather than pass that through in the expenses in 2026, I think we're gonna take that and invest that in new technologies.
We're taking a hard look now, at what we need to do from a technology perspective, a talent perspective, a systems perspective, you know, we're at $34 billion now, to get to $50, to get to $75, to get to $100. When I talk to our peers that have gone through that process, everybody has the same advice is to get out in front of it because you have a lot of big changes and to be able to take those in bite size chunks, to be able to make those investments in bite size chunks. I think that it's kind of across the board. Certainly, technology is a big part, talent is a big part, and then systems.
We are putting together, a multiyear plan in terms of what investments that we need to make in those categories.
One question from the-.
Just a couple of questions. Just to follow up on that, can you clarify more about why you're able to get the core savings by renegotiating that? The second question is, you guys have a fairly large residential loan book. Can you just talk about the maturity profile of that, the repricing profile of that?
A question on the residential repricing profile and also how you're able to get the core savings.
You wanna take the.
Yeah
the repricing?
I could start on the resi portfolio. Yeah, it is about 25% of our book, I think is the number. You know, generally what we're trying to do is we're originating ARMs, so five, seven-year ARMs. Typically not trying to put on 30-year fixed rate mortgages.
If we're gonna put on any of that type of exposure, we usually do that through the investment portfolio through like a PAC well-structured type of bond. Generally what we're gonna have are gonna be more of the ARM products. I'd have to go back and look at the specifics, like on how much rolls every year.
Generally it's got a pretty good roll profile just given that it is the ARM products that we're typically buying. It's within our footprint, but we're originating most of that within our footprint. We also have some relationships with some mortgage companies that will occasionally pick up some of their five and seven within our geographies.
On the core, I don't know that we have any ones. Yeah, one thing that we did do different this time, we've never done it. We did use a consultant to help us negotiate that contract. I wasn't personally involved in it, so I don't know that I can speak to the particulars. I know that's something that we've never done. And we're very pleased with that process. Good question. I think we're out of time. I appreciate it, and there's a breakout if anybody has any further questions. Thank you.