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United Bankshares, Inc. (NASDAQ: UBSI), today announced earnings for the first quarter of 2014. Earnings for the first quarter of 2014 were $30.1 million or $0.48 per diluted share, an increase from earnings for the first quarter of 2013 of $21.6 million or $0.43 per diluted share.
United’s first quarter of 2014 results produced an annualized return on average assets of 1.14% and an annualized return on average equity of 8.57%. These returns compare favorably to the most recently reported average return on assets of 0.94% and average return on equity of 8.31% for the year of 2013 reported by United’s Federal Reserve peer group (bank holding companies with total assets over $10 billion). United’s annualized returns on average assets and average equity were 1.05% and 8.72%, respectively, for the first quarter of 2013.
On January 31, 2014, United completed its acquisition of Virginia Commerce Bancorp, Inc. (Virginia Commerce) of Arlington, Virginia. The results of operations of Virginia Commerce are included in the consolidated results of operations from the date of acquisition. As a result, comparisons for the first quarter of 2014 to the first quarter and fourth quarter of 2013 are impacted by increased levels of average balances, income, and expense due to the acquisition. At consummation, Virginia Commerce had assets of approximately $2.8 billion, loans of $2.1 billion, and deposits of $2.0 billion. In addition, as previously reported, United sold a former branch building during the first quarter of 2014 which resulted in a before-tax gain of $9.0 million.
Tax-equivalent net interest income for the first quarter of 2014 was $86.9 million, an increase of $18.6 million or 27% from the first quarter of 2013. This increase in tax-equivalent net interest income was primarily attributable to an increase in average earning assets from the Virginia Commerce acquisition. Average earning assets increased $2.1 billion or 29% from the first quarter of 2013. Average net loans increased $1.6 billion or 25% for the first quarter of 2014 while average investment securities increased $473.8 million or 64%. In addition, the average cost of funds declined 14 basis points from the first quarter of 2013. Partially offsetting the increases to tax-equivalent net interest income for the first quarter of 2014 was a decline of 15 basis points in the average yield on earning assets as compared to the first quarter of 2013. The net interest margin for the first quarter of 2014 was 3.70%, which was a decrease of 5 basis points from a net interest margin of 3.75% for the first quarter of 2013.