United Bankshares reports increase

PARKERSBURG – United Bankshares Inc. has reported an increase in earnings for the first quarter of 2013 as compared to the first quarter of 2012. Earnings for the first quarter of 2013 were $21.6 million or 43 cents per diluted share while earnings for the first quarter of 2012 were $21 million or 42 cents per diluted share.

United’s first quarter of 2013 results produced an annualized return on average assets of 1.05 percent and an annualized return on average equity of 8.72 percent.

United’s annualized returns on average assets and average equity were 1 percent and 8.63 percent, respectively, for the first quarter of 2012.

United’s asset quality continues to outperform its peers. United’s percentage of nonperforming loans to loans, net of unearned income of 1.35 percent at March 31 compares favorably to the most recently reported percentage of 2.55 percent at Dec. 31, 2012, for United’s Federal Reserve peer group. At March 31, nonperforming loans were $87.4 million, down from nonperforming loans of $92.8 million or 1.43 percent of loans, net of unearned income, at Dec. 31, 2012. As of March 31, the allowance for loan losses was $74.2 million or 1.15 percent of loans, net of unearned income, as compared to $73.9 million or 1.13 percent of loans, net of unearned income, at Dec. 31, 2012.

Total nonperforming assets of $136.3 million, including OREO of $48.9 million at March 31, represented 1.64 percent of total assets, which also compares favorably to the most recently reported percentage of 1.97 percent at Dec. 31, 2012, 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 13.8 percent at March 31 while its estimated Tier I capital and leverage ratios are 12.6 percent and 10.8 percent, respectively. The regulatory requirements for a well-capitalized financial institution are a risk-based capital ratio of 10 percent, a Tier I capital ratio of 6 percent and a leverage ratio of 5 percent.

Tax-equivalent net interest income for the first quarter of 2013 was $68.3 million, a decrease of $2.3 million or 3 percent from the first quarter of 2012 due mainly to a decrease in the average yield on earning assets. The first quarter of 2013 average yield on earning assets decreased 19 basis points from the first quarter of 2012.

In addition, average earning assets decreased $138.5 million or 2 percent from the first quarter of 2012 as average short-term investments and average investment securities declined $312.6 million and $77.0 million, respectively.

Average net loans did increase $251.1 million or 4 percent for the first quarter of 2013 from the first quarter of 2012 to somewhat mitigate the decreases in average short-term investments and investment securities. Partially offsetting the decreases to tax-equivalent net interest income for the first quarter of 2013 was a decline of 19 basis points in the average cost of funds as compared to the first quarter of 2012. The net interest margin for the first quarter of 2013 was 3.75 percent, which was a decrease of 3 basis points from a net interest margin of 3.78 percent for the first quarter of 2012.

On a linked-quarter basis, United’s tax-equivalent net interest income for the first quarter of 2013 decreased $3 million or 4 percent from the fourth quarter of 2012 due mainly to a decrease in the average yield on earning assets. The first quarter of 2013 average yield on earning assets declined 9 basis points while the average cost of funds only decreased 2 basis points from the fourth quarter of 2012. Average earning assets were flat, decreasing $48.7 million or less than 1 percent during the quarter. Average net loans and average investments were flat for the quarter as well.

Average net loans increased $2.3 million while average investments increased $372 thousand. Average short-term investments decreased $51.4 million or 19 percent for the quarter.

The net interest margin of 3.75 percent for the first quarter of 2013 was a decrease of 8 basis points from the net interest margin of 3.83 percent for the fourth quarter of 2012.

For the quarters ended March 31, 2013, and 2012, the provision for loan losses was $5.2 million and $4.1 million, respectively.

Net charge-offs were $4.9 million for the first quarter of 2013 as compared to $4 million for the first quarter of 2012. Annualized net charge-offs as a percentage of average loans were 0.31 percent for the first quarter of 2013 as compared to 0.64 percent for United’s Federal Reserve peer group for the year of 2012.

On a linked-quarter basis, the provision for loans losses decreased $760.000 while net charge-offs decreased $864,000 from the fourth quarter of 2012.

Noninterest income for the first quarter of 2013 was $18.3 million, which was an increase of $2 million from the first quarter of 2012.

Included in noninterest income for the first quarter of 2013 were noncash, before-tax, other-than-temporary impairment charges of $834,000 on certain investment securities as compared to noncash, before-tax other-than-temporary impairment charges of $1.4 million on certain investment securities for the first quarter of 2012. 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 2013 increased $1.3 million or 7 percent from the first quarter of 2012. This increase for the first quarter of 2013 was due primarily to increases of $1.1 million in income from bank-owned life insurance policies due a death benefit and $647,000 in mortgage banking income due to increased production and sales of mortgage loans in the secondary market. Partially offsetting these increases was a decrease of $688,000 in fees from deposit services.