United Bankshares, Inc. Announces Increased Earnings

United Bankshares, Inc. (NASDAQ: UBSI), today reported an increase in earnings for the first quarter of 2012 as compared to the first quarter of 2011. Earnings for the first quarter of 2012 were $21.0 million or $0.42 per diluted share while earnings for the first quarter of 2011 were $17.9 million or $0.41 per diluted share.

United’s first quarter of 2012 results produced an annualized return on average assets of 1.00% and an annualized return on average equity of 8.63%. These returns compare very favorably to United’s most recently reported peer group banking companies’ (bank holding companies with total assets between $3 and $10 billion) average return on assets of 0.81% and average return on equity of 7.26% for the year of 2011. United’s annualized returns on average assets and average equity were 1.02% and 9.04%, respectively, for the first quarter of 2011.

United’s asset quality also continues to outperform its peers. United’s percentage of nonperforming loans to loans, net of unearned income of 1.23% at March 31, 2012 compares favorably to the most recently reported percentage of 3.37% at December 31, 2011 for United’s Federal Reserve peer group. At March 31, 2012, nonperforming loans were $76.2 million as compared to nonperforming loans of $79.7 million or 1.28% of loans, net of unearned income, at December 31, 2011. As of March 31, 2012, the allowance for loan losses was $74.0 million or 1.19% of loans, net of unearned income, as compared to $73.9 million or 1.18% of loans, net of unearned income, at December 31, 2011. United’s coverage ratio of its allowance for loan losses to nonperforming loans also compares favorably to its peers. The coverage ratio for United was 97.1% and 92.7% at March 31, 2012 and December 31, 2011, respectively. The coverage ratio for United’s Federal Reserve peer group was 93.3% at December 31, 2011. Total nonperforming assets of $126.1 million, including OREO of $49.9 million at March 31, 2012, represented 1.48% of total assets which also compares favorably to the most recently reported percentage of 2.87% at December 31, 2011 for United’s Federal Reserve peer group.

United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 14.1% at March 31, 2012 while its estimated Tier I capital and leverage ratios are 12.8% and 10.4%, respectively. The regulatory requirements for a well-capitalized financial institution are a risk-based capital ratio of 10%, a Tier I capital ratio of 6% and a leverage ratio of 5%.

“United’s earnings continue to be strong with solid asset quality favorable to peers,” stated Richard M. Adams, United’s Chairman of the Board and Chief Executive Officer. “United also continues to be well-capitalized based upon regulatory guidelines.”

Tax-equivalent net interest income for the first quarter of 2012 was $70.6 million, an increase of $9.8 million or 16% from the first quarter of 2011. This increase in tax-equivalent net interest income was primarily attributable to an increase in average earning assets from the Centra acquisition. Average earning assets increased $1.2 billion or 20% from the first quarter of 2011. Average net loans increased $994.8 million or 19% for the first quarter of 2012. In addition, the average cost of funds declined 31 basis points from the first quarter of 2011. Partially offsetting the increases to tax-equivalent net interest income for the first quarter of 2012 was a decline of 39 basis points in the average yield on earning assets for the first quarter of 2012 as compared to the same quarter in 2011. The net interest margin for the first quarter of 2012 was 3.78%, which was a decrease of 14 basis points from a net interest margin of 3.92% for the first quarter of 2011.

On a linked-quarter basis, United’s tax-equivalent net interest income for the first quarter of 2012 decreased $3.1 million or 4% from the fourth quarter of 2011 due mainly to a decrease in the average yield on earning assets. The first quarter of 2012 average yield on earning assets declined 12 basis points while the average cost of funds decreased 3 basis points from the fourth quarter of 2011. Average earning assets were flat, decreasing $53.1 million or less than 1% during the quarter. Average net loans and average investments were flat for the quarter as well. Average net loans decreased $37.6 million while average investments declined $6.4 million. Both of these decreases were less than 1%. Average short-term investments decreased $9.1 million or 2% for the quarter. The net interest margin of 3.78% for the first quarter of 2012 was a decrease of 10 basis points from the net interest margin of 3.88% for the fourth quarter of 2011.

For the quarters ended March 31, 2012 and 2011, the provision for loan losses was $4.1 million and $4.4 million, respectively. Net charge-offs were $4.0 million for the first quarter of 2012 as compared to $4.5 million for the first quarter of 2011. Annualized net charge-offs as a percentage of average loans were 0.26% for the first quarter of 2012 as compared to 0.93% for United’s Federal Reserve peer group for the year of 2011. On a linked-quarter basis, the provision for loans losses decreased $135 thousand while net charge-offs increased $92 thousand from the fourth quarter of 2011.

Noninterest income for the first quarter of 2012 was $16.3 million, which was an increase of $1.7 million from the first quarter of 2011. Included in noninterest income for the first quarter of 2012 were noncash, before-tax, other-than-temporary impairment charges of $1.4 million on certain investment securities as compared to noncash, before-tax other-than-temporary impairment charges of $2.1 million on certain investment securities for the first quarter of 2011. Excluding the results of the noncash, other-than-temporary impairment charges as well as net gains and losses from sales and calls of investment securities, noninterest income for the first quarter of 2012 would have increased $1.6 million or 10% from the first quarter of 2011. This increase for the first quarter of 2012 was due primarily to increases of $674 thousand in income from trust and brokerage services due to increases in volume and the value of assets under management and $623 thousand in fees from deposit services due to the Centra merger.

On a linked-quarter basis, noninterest income for the first quarter of 2012 increased $4.5 million from the fourth quarter of 2011. Included in the results for the first quarter of 2012 and fourth quarter of 2011 were noncash, before-tax, other-than-temporary impairment charges of $1.4 million and $6.3 million, respectively. Excluding the results of the noncash, other-than-temporary impairment charges as well as net gains and losses from sales and calls of investment securities, noninterest income would have decreased $425 thousand or 2% on a linked-quarter basis due primarily to decrease of $819 thousand in fees from deposit services. Partially offsetting this decrease was an increase of $668 thousand in income from trust and brokerage services.

Noninterest expense for the first quarter of 2012 was $50.3 million, an increase of $6.8 million or 16% from the first quarter of 2011 due primarily to increases of $3.0 million in employee compensation due to additional employees from the Centra merger and $814 thousand in employee benefits due mainly to an increase in pension expense. The remainder of the increase in noninterest expense from the first quarter of 2011 was due mainly to the additional offices, equipment and data processing from the Centra merger.

On a linked-quarter basis, noninterest expense for the first quarter of 2012 was flat from the fourth quarter of 2011, increasing $233 thousand or less than 1%. Increases of $704 thousand and $449 thousand in employee benefits and OREO expenses, respectively, were virtually offset by decreases of $699 thousand and $549 thousand in equipment and merger expenses, respectively.

During the first quarter of 2012, United’s Board of Directors declared a cash dividend of $0.31 per share. The annualized 2012 dividend of $1.24 equates to a yield of approximately 4.5% based on recent UBSI market prices. The year of 2011 represented the 38th consecutive year of dividend increases for United shareholders.

United has consolidated assets of approximately $8.5 billion with 123 full service offices in West Virginia, Virginia, Maryland, Ohio, Pennsylvania and Washington, D.C. United Bankshares stock is traded on the NASDAQ Global Select Market under the quotation symbol " UBSI".

Cautionary Statements

The Company is required under generally accepted accounting principles to evaluate subsequent events through the filing of its March 31, 2012 consolidated financial statements on Form 10-Q. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of March 31, 2012 and will adjust amounts preliminarily reported, if necessary.

Forward-Looking Statements

This press release contains certain forward-looking statements, including certain plans, expectations, goals and projections, which are subject to numerous assumptions, risks and uncertainties. Actual results could differ materially from those contained in or implied by such statements for a variety of factors including: changes in economic conditions; movements in interest rates; competitive pressures on product pricing and services; success and timing of business strategies; the nature and extent of governmental actions and reforms; and rapidly changing technology and evolving banking industry standards.

UNITED BANKSHARES, INC. AND SUBSIDIARIES

FINANCIAL SUMMARY

(In Thousands Except for Per Share Data)
Three Months Ended
March 31

2012
  March 31

2011
  December 31

2011
EARNINGS SUMMARY:
Interest income, taxable equivalent $ 83,457 $ 75,310 $ 87,261
Interest expense 12,822 14,494 13,537
Net interest income, taxable equivalent 70,635 60,816 73,724
Taxable equivalent adjustment 1,669 1,453 1,732
Net interest income 68,966 59,363 71,992
Provision for loan losses 4,133 4,436 4,268
Noninterest income 16,326 14,651 11,874
Noninterest expense 50,262 43,469 50,029
Income taxes 9,887 8,224 9,312
Net income $ 21,010 $ 17,885 $ 20,257
 
PER COMMON SHARE:
Net income:
Basic $ 0.42 $ 0.41 $ 0.40
Diluted 0.42 0.41 0.40
Cash dividends 0.31 0.30 0.31
Book value 19.42 18.32 19.29
Closing market price $ 28.86 $ 26.52 $ 28.27
Common shares outstanding:
Actual at period end, net of treasury shares 50,274,104 43,645,650 50,212,948
Weighted average- basic 50,235,374 43,629,364 50,207,410
Weighted average- diluted 50,300,538 43,700,436 50,235,812
 
FINANCIAL RATIOS:
Return on average assets 1.00 % 1.02 % 0.94 %
Return on average shareholders’ equity 8.63 % 9.04 % 8.17 %
Average equity to average assets 11.60 % 11.33 % 11.56 %
Net interest margin 3.78 % 3.92 % 3.88 %
 
March 31

2012
March 31

2011
December 31

2011
PERIOD END BALANCES:
Assets $ 8,529,469 $ 7,191,336 $ 8,451,470
Earning assets 7,579,030 6,344,359 7,498,333
Loans, net of unearned income 6,200,120 5,222,959 6,236,710
Loans held for sale 7,401 890 3,902
Investment securities 790,936 806,482 824,219
Total deposits 6,881,610 5,711,923 6,819,010
Shareholders’ equity 976,303 799,463 968,844
UNITED BANKSHARES, INC. AND SUBSIDIARIES

Charleston, WV

Stock Symbol: UBSI

(In Thousands Except for Per Share Data)
     
Consolidated Statements of Income
Three Months Ended
March March December
2012 2011 2011
 
Interest & Loan Fees Income $ 81,788 $ 73,857 $ 85,529
Tax equivalent adjustment   1,669     1,453     1,732  
Interest & Fees Income (FTE) 83,457 75,310 87,261
Interest Expense   12,822     14,494     13,537  
Net Interest Income (FTE) 70,635 60,816 73,724
 
Provision for Loan Losses 4,133 4,436 4,268
 
Non-Interest Income:
Fees from trust & brokerage services 3,984 3,310 3,316
Fees from deposit services 10,312 9,631 11,131
Bankcard fees and merchant discounts 646 555 642
Other charges, commissions, and fees 577 454 559
Income from bank owned life insurance 1,289 1,175 1,339
Mortgage banking income 318 234 382
Other non-interest revenue 658 851 841
Net other-than-temporary impairment losses (1,377 ) (2,110 ) (6,286 )
Net (losses) gains on sales/calls of investment securities   (82 )   551     (50 )
Total Non-Interest Income 16,326 14,651 11,874
 
Non-Interest Expense:
Employee compensation 17,907 14,870 17,756
Employee benefits 5,192 4,378 4,488
Net occupancy 5,042 4,387 5,018
Other expenses 17,476 15,347 18,560
Amortization of intangibles 762 383 832
OREO expense 2,328 1,767 1,879
FDIC expense   1,555     2,337     1,496  
Total Non-Interest Expense   50,262     43,469     50,029  
 
Income Before Income Taxes (FTE)   32,566     27,562     31,301  
 
Tax equivalent adjustment   1,669     1,453     1,732  
 
Income Before Income Taxes 30,897 26,109 29,569
 
Income taxes   9,887     8,224     9,312  
 
Net Income $ 21,010   $ 17,885   $ 20,257  
 
MEMO: Effective Tax Rate 32.00 % 31.50 % 31.49 %
UNITED BANKSHARES, INC. AND SUBSIDIARIES

Charleston, WV

Stock Symbol: UBSI

(In Thousands Except for Per Share Data)
     
Consolidated Balance Sheets
March 31 March 31
2012 2011 March 31 December 31
Q-T-D Average Q-T-D Average 2012 2011
 
Cash & Cash Equivalents $ 664,743 $ 443,625 $ 789,831 $ 636,003
 
Securities Available for Sale 688,880 650,757 665,286 696,518
Securities Held to Maturity 58,999 64,741 58,686 59,289
Other Investment Securities   67,813     73,669     66,964     68,412  
Total Securities   815,692     789,167     790,936     824,219  
Total Cash and Securities   1,480,435     1,232,792     1,580,767     1,460,222  
 
Loans Held for Sale 4,905 2,715 7,401 3,902
 
Commercial Loans 4,375,024 3,518,647 4,383,712 4,378,345
Mortgage Loans 1,545,793 1,442,937 1,528,542 1,562,838
Consumer Loans   301,076     263,980     300,492     299,030  
 
Gross Loans 6,221,893 5,225,564 6,212,746 6,240,213
 
Unearned Income   (6,574 )   (3,082 )   (12,626 )   (3,503 )
 
Loans, Net of Unearned Income 6,215,319 5,222,482 6,200,120 6,236,710
 
Allowance for Loan Losses (73,142 ) (72,941 ) (74,012 ) (73,874 )
 
Goodwill 371,638 311,763 371,656 371,693
Other Intangibles   12,726     2,756     12,197     12,950  
Total Intangibles 384,364 314,519 383,853 384,643
 
Real Estate Owned 51,373 44,922 49,864 51,760
Other Assets   379,556     334,850     381,476     388,107  
Total Assets $ 8,442,810   $ 7,079,339   $ 8,529,469   $ 8,451,470  
 
MEMO: Earning Assets $ 7,498,574   $ 6,257,807   $ 7,579,030   $ 7,498,333  
 
Interest-bearing Deposits $ 5,163,834 $ 4,322,396 $ 5,192,522 $ 5,199,848
Noninterest-bearing Deposits   1,637,543     1,320,246     1,689,088     1,619,162  
Total Deposits 6,801,377 5,642,642 6,881,610 6,819,010
 
Short-term Borrowings 270,647 243,653 263,333 254,766
Long-term Borrowings   345,323     337,467     345,298     345,366  
Total Borrowings 615,970 581,120 608,631 600,132
 
Other Liabilities   45,781     53,390     62,925     63,484  
Total Liabilities   7,463,128     6,277,152     7,553,166     7,482,626  
 
Preferred Equity --- --- --- ---
Common Equity   979,682     802,187     976,303     968,844  
Total Shareholders' Equity   979,682     802,187     976,303     968,844  
 
Total Liabilities & Equity $ 8,442,810   $ 7,079,339   $ 8,529,469   $ 8,451,470  
 
MEMO: Interest-bearing Liabilities $ 5,779,804   $ 4,903,516   $ 5,801,153   $ 5,799,980  
UNITED BANKSHARES, INC. AND SUBSIDIARIES

Charleston, WV

Stock Symbol: UBSI

(In Thousands Except for Per Share Data)
   
Three Months Ended
March March December
Quarterly Share Data: 2012 2011 2011
 
Earnings Per Share:
Basic $ 0.42 $ 0.41 $ 0.40
Diluted $ 0.42 $ 0.41 $ 0.40
 
Common Dividend Declared Per Share $ 0.31 $ 0.30 $ 0.31
 
High Common Stock Price $ 30.91 $ 30.84 $ 29.29
Low Common Stock Price $ 27.36 $ 25.66 $ 19.06
 
Average Shares Outstanding (Net of Treasury Stock):
Basic 50,235,374 43,629,364 50,207,410
Diluted 50,300,538 43,700,436 50,235,812
 
Memorandum Items:
 
Tax Applicable to Security Sales/Calls $ (29 ) $ 193 $ (18 )
 
Common Dividends $ 15,570 $ 13,095 $ 15,571
 
Dividend Payout Ratio 74.11 % 73.22 % 76.87 %
 
March March December
EOP Share Data: 2012 2011 2011
 
Book Value Per Share $ 19.42 $ 18.32 $ 19.29
Tangible Book Value Per Share $ 11.78 $ 11.12 $ 11.63
 
52-week High Common Stock Price $ 30.91 $ 31.99 $ 30.84
Date 03/19/12 04/23/10 01/19/11
52-week Low Common Stock Price $ 18.78 $ 22.09 $ 18.78
Date 09/22/11 08/24/10 09/22/11
 
EOP Shares Outstanding (Net of Treasury Stock): 50,274,104 43,645,650 50,212,948
 
Memorandum Items:
 
EOP Employees (full-time equivalent) 1,637 1,426 1,619

UNITED BANKSHARES, INC. AND SUBSIDIARIES

Charleston, WV

Stock Symbol: UBSI

(In Thousands Except for Per Share Data)
     
Three Months Ended
March March December
2012 2011 2011
Selected Yields and Net Interest Margin:
Net Loans 5.02 % 5.24 % 5.18 %
Investment Securities 3.08 % 4.19 % 3.08 %
Money Market Investments/FFS 0.26 % 0.37 % 0.23 %
Average Earning Assets Yield 4.47 % 4.86 % 4.59 %
Interest-bearing Deposits 0.67 % 0.99 % 0.69 %
Short-term Borrowings 0.09 % 0.04 % 0.08 %
Long-term Borrowings 4.83 % 4.75 % 4.85 %
Average Liability Costs 0.89 % 1.20 % 0.92 %
Net Interest Spread 3.58 % 3.66 % 3.67 %
Net Interest Margin 3.78 % 3.92 % 3.88 %
 
Selected Financial Ratios:
 
Return on Average Common Equity 8.63 % 9.04 % 8.17 %
Return on Average Assets 1.00 % 1.02 % 0.94 %
Loan / Deposit Ratio 90.10 % 91.44 % 91.46 %
Allowance for Loan Losses/ Loans, net of unearned income 1.19 % 1.40 % 1.18 %
Allowance for Credit Losses (1)/ Loans, net of unearned income 1.22 % 1.44 % 1.21 %
Nonaccrual Loans / Loans, net of unearned income 1.00 % 1.20 % 0.96 %
90-Day Past Due Loans/ Loans, net of unearned income 0.16 % 0.13 % 0.26 %
Non-performing Loans/ Loans, net of unearned income 1.23 % 1.40 % 1.28 %
Non-performing Assets/ Total Assets 1.48 % 1.63 % 1.56 %
Primary Capital Ratio 12.23 % 12.04 % 12.25 %
Shareholders' Equity Ratio 11.45 % 11.12 % 11.46 %
Price / Book Ratio 1.49

x

 
1.45

x

 
1.47

x

 
Price / Earnings Ratio 17.27

x

 
16.20

x

 
17.51

x

 
Efficiency Ratio 53.35 % 53.64 % 51.47 %
 
Note: (1) Includes allowances for loan losses and lending-related commitments.
UNITED BANKSHARES, INC. AND SUBSIDIARIES

Charleston, WV

Stock Symbol: UBSI

(In Thousands Except for Per Share Data)
     
March March December
Asset Quality Data: 2012 2011 2011
 
EOP Non-Accrual Loans $ 62,037 $ 62,703 $ 59,892
EOP 90-Day Past Due Loans 9,816 6,539 16,179
EOP Restructured Loans (2)   4,335     3,716     3,592  
Total EOP Non-performing Loans $ 76,188 $ 72,958 $ 79,663
 
EOP Other Real Estate & Assets Owned   49,864     44,362     51,760  
Total EOP Non-performing Assets $ 126,052   $ 117,320   $ 131,423  
 
Three Months Ended
March March December
Allowance for Credit Losses: (1) 2012 2011 2011
Beginning Balance $ 75,727 $ 75,039 $ 75,494
Provision for Credit Losses (3)   4,015     4,590     4,136  
79,742 79,629 79,630
Gross Charge-offs (4,734 ) (4,741 ) (4,398 )
Recoveries   739     247     495  
Net Charge-offs   (3,995 )   (4,494 )   (3,903 )
Ending Balance $ 75,747   $ 75,135   $ 75,727  
 
Note: (1) Includes allowances for loan losses and lending-related commitments.

(2) Restructured loans with an aggregate balance of $2,283, $1,067 and $1,528 at March 31, 2012, March 31,2011 and December 31, 2011, respectively, were on nonaccrual status, but are not included in the “EOP Non-Accrual Loans.”

(3) Includes the Provision for Loan Losses and a provision for lending-related commitments included in Other Expenses.

Copyright Business Wire 2010

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