United increases earnings for quarter

PARKERSBURG – United Bankshares Inc. reported earnings for the second quarter and the first half of 2013. Earnings for the second quarter of 2013 were $22.2 million or 44 cents per diluted share, an increase from earnings of $21 million or 42 cents per diluted share for the second quarter of 2012. Earnings for the first half of 2013 were $43.8 million or 87 cents per diluted share, up from earnings of $42.1 million or 84 cents per diluted share for the first half of 2012.

Second quarter of 2013 results produced a return on average assets of 1.07 percent and a return on average equity of 8.81 percent, respectively. For the first half of 2013, United’s return on average assets was 1.06 percent while the return on average equity was 8.76 percent. United’s annualized returns on average assets and average equity were 1.00 percent and 8.58 percent, respectively, for the second quarter of 2012 while the returns on average assets and average equity was 1.00 percent and 8.60 percent, respectively, for the first half of 2012.

The results for the second quarter and first half of 2013 included noncash, before-tax, other-than-temporary impairment charges of $137 thousand and $971 thousand, respectively, on certain investment securities. The results for the second quarter and first half of 2012 included noncash, before-tax, other-than-temporary impairment charges of $1.7 million and $3.1 million, respectively, on certain investment securities.

United’s asset quality continues to outperform its peers. United’s percentage of nonperforming loans to loans, net of unearned income of 1.43 percent at June 30 compares favorably to the most recently reported percentage of 2.39 percent at March 31 for United’s Federal Reserve peer group. At June 30, nonperforming loans were $94 million, up slightly from nonperforming loans of $92.8 million or 1.43 percent of loans, net of unearned income, at Dec. 31, 2012. As of June 30, , the allowance for loan losses was $74.6 million or 1.14 percent of loans, net of unearned income, which was comparable to $73.9 million or 1.13 percent of loans, net of unearned income, at Dec. 31, 2012. Total nonperforming assets of $138.4 million, including OREO of $44.4 million at June 30, represented 1.63 percent of total assets which also compares favorably to the most recently reported percentage of 1.87 percent at March 31 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 June 30 while its Tier I capital and leverage ratios are 12.6 percent and 10.9 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 second quarter of 2013 was $67.7 million, a decrease of $2.9 million or 4 percent from the second quarter of 2012 due mainly to a decrease in the average yield on earning assets. The second quarter of 2013 average yield on earning assets decreased 26 basis points from the second quarter of 2012. In addition, average earning assets decreased $104.3 million or 1 percent from the second quarter of 2012 as average short-term investments declined $383.6 million. Average investment securities and average net loans did increase $10.9 million and $268.4 million, respectively, for the second quarter of 2013 from the second quarter of 2012 to somewhat mitigate the decrease in average short-term investments.

Partially offsetting the decreases to tax-equivalent net interest income for the second quarter of 2013 was a decline of 17 basis points in the average cost of funds as compared to the second quarter of 2012.

The net interest margin for the second quarter of 2013 was 3.65 percent, which was a decrease of 11 basis points from a net interest margin of 3.76 percent for the second quarter of 2012.