United Bankshares announces earnings

PARKERSBURG – United Bankshares on Tuesday announced earnings for the first quarter of 2014.

Earnings for the quarter were $30.1 million or 48 cents per diluted share, an increase from earnings for the first quarter of 2013 of $21.6 million or 43 cents per diluted share.

United’s first quarter of 2014 results produced an annualized return on average assets of 1.14 percent and an annualized return on average equity of 8.57 percent. These returns compare favorably to the most recently reported average return on assets of 0.94 percent and average return on equity of 8.31 percent for the year of 2013 reported by United’s Federal Reserve peer group (bank holding companies with assets more than $10 billion). United’s annualized returns on average assets and average equity were 1.05 percent and 8.72 percent, respectively, for the first quarter of 2013.

During the first quarter of 2014, United’s Board of Directors declared a cash dividend of 32 cents per share. The year of 2013 represented the 40th consecutive year of dividend increases for United shareholders. United is one of only two major banking companies in the U.S. to have achieved such a record.

On Jan. 31, United completed its acquisition of Virginia Commerce Bancorp Inc. of Arlington, Va. 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 affected 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 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 million.

Tax-equivalent net interest income for the first quarter of 2014 was $86.9 million, an increase of $18.6 million or 27 percent 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.

On a linked-quarter basis, United’s tax-equivalent net interest income for the first quarter of 2014 increased $16.3 million or 23 percent from the fourth quarter of 2013 due mainly to an increase in average earning assets as a result of the Virginia Commerce merger. Average earning assets increased $1.8 billion or 24 percent from the fourth quarter of 2013 as average investment securities and average net loans increased $365.4 million or 43 percent and $1.4 billion or 21 percent, respectively, for the quarter. In addition, the average yield on earning assets increased 3 basis points while the average cost of funds declined 3 basis points from the fourth quarter of 2013. The net interest margin of 3.70 percent for the first quarter of 2014 was an increase of 4 basis points from the net interest margin of 3.66 percent for the fourth quarter of 2013.

For the quarters ended March 31, 2014 and 2013, the provision for loan losses was $4.7 million and $5.2 million, respectively. Net charge-offs were $4.5 million for the first quarter of 2014 as compared to $4.9 million for the first quarter of 2013. Annualized net charge-offs as a percentage of average loans were 0.23 percent for the first quarter of 2014 as compared to 0.45 percent for United’s Federal Reserve peer group for the year of 2013. On a linked-quarter basis, the provision for loans losses increased $336,000 while net charge-offs decreased $177,000 from the fourth quarter of 2013.

Noninterest income for the first quarter of 2014 was $26.5 million, which was an increase of $8.2 million from the first quarter of 2013.

On a linked-quarter basis, noninterest income for the first quarter of 2014 increased $14.5 million from the fourth quarter of 2013.

Noninterest expense for the first quarter of 2014 was $61.2 million, an increase of $12.9 million or 27 percent from the first quarter of 2013 due mainly to the Virginia Commerce merger. Accordingly, most major categories of noninterest expense showed increases.

On a linked-quarter basis, noninterest expense for the first quarter of 2014 increased $13.2 million or 27 percent from the fourth quarter of 2013 generally due to additional operating and merger-related expenses from the Virginia Commerce acquisition.

For the first quarter of 2014, income tax expense was $15.9 million as compared to $10.2 million for the first quarter of 2013, an increase of $5.7 million or 56 percent primarily due to higher earnings. In addition, United increased its current tax expense during the first quarter of 2014 by $685,000 due to an adjustment in the deferred tax rate.

United’s asset quality continues to outperform its peers. United’s percentage of nonperforming loans to loans, net of unearned income of 1.10 percent at March 31 compares favorably to the most recently reported percentage of 1.64 percent at Dec. 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 13.3 percent at March 31 while its estimated Tier I capital and leverage ratios are 12.4 percent and 11.6 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.

United has consolidated assets of approximately $11.9 billion with 133 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.”