Moody's Affirms United Bank's Ratings with Stable Outlook

Moody's Investors Service has recently affirmed United Bank's ratings, citing its solid solvency position, successful integration of Piedmont Bancorp, Inc., and strong asset quality track record. The affirmation reflects United's good levels of capital and profitability, which mitigate its asset risk. However, the bank's concentrated loan portfolio and lower liquid banking assets relative to peers are concerns. The stable outlook indicates that United's ratings are expected to remain stable over the next 12-18 months, with potential for an upgrade if the bank demonstrates strong asset quality performance and reduces its CRE concentration.

Key Takeaways:

• Moody's has affirmed United Bank's ratings, including long-term and short-term local and foreign currency counterparty risk ratings of A3 and Prime-2, respectively.
• The bank's solid solvency position is reflected in good levels of capital and profitability, which mitigate its asset risk.
• The successful integration of Piedmont Bancorp, Inc. in 1Q25 is a key factor in the ratings affirmation.
• United's asset quality track record is strong, with low net charge-offs compared to peers and the industry.
• The bank's core deposit funding is sufficient to offset funding pressures, with 71% of insured and collateralized deposits.
• Factors that could lead to a rating upgrade include significant increases in capital, strong asset quality performance, and reduction in CRE concentration.
• Factors that could lead to a rating downgrade include weakening profitability, asset quality deterioration, or significant erosion of the deposit base.

Statistics:

• United Bank's tangible common equity (TCE)/risk-weighted assets (RWA) is 14.0% as of 31 December 2024.
• The bank's average net income/tangible assets is 1.31% between 2020 and 2024.
• Liquid banking assets to tangible banking assets stood at 19% as of 31 December 2024.
• Core deposit funding is 71% insured and collateralized deposits.

Sources:

• Moody's Ratings, "United Bank", 2023.
• Moody's Investors Service, "Moody's Publishes Update to Banks Methodology", November 2024.
• United Bankshares, Inc., "2024 Annual Report".
• Piedmont Bancorp, Inc., "2024 Annual Report".