United Bankshares announces third quarter earnings

PARKERSBURG — United Bankshares Inc. has reported earnings for the third quarter and the first nine months of 2017.

Earnings for the third quarter of 2017 were $56.7 million or 54 cents per diluted share, as compared to earnings of $41.5 million or 54 cents per diluted share for the third quarter of 2016.

Earnings for the first nine months of 2017 were $132.6 million or $1.39 per diluted share as compared to earnings of $108.0 million or $1.48 per diluted share for the first nine months of 2016.

Third quarter of 2017 results produced an annualized return on average assets of 1.19 percent and an annualized return on average equity of 6.89 percent, respectively.

For the first nine months of 2017, United’s return on average assets was 1.03 percent while the return on average equity was 6.22 percent.

United’s annualized returns on average assets and average equity were 1.17 percent and 8.10 percent, respectively, for the third quarter of 2016 while the returns on average assets and average equity were 1.10 percent and 7.73 percent, respectively, for the first nine months of 2016.

“We are pleased to announce record earnings of almost $57 million for the third quarter of 2017,” said Richard M. Adams, United’s Chairman of the Board and Chief Executive Officer. “In addition, our return on average assets of 1.19 percent for the quarter compares very favorably to United’s Federal Reserve peer group’s most recently reported return on average assets of 0.96 percent.”

During the third quarter of 2017, United’s Board of Directors declared a cash dividend of 33 cents per share. United has increased its dividend to shareholders for 43 consecutive years and is one of only two major banking companies in the USA to have achieved such a record.

On April 21, United completed its acquisition of Cardinal Financial Corp. (Cardinal) of Tysons Corner, Va. On June 3, 2016, United completed its acquisition of Bank of Georgetown of Washington, D.C.

Both the results of operations of Cardinal and Bank of Georgetown are included in the consolidated results of operations from their respective dates of acquisition.

Net interest income for the third quarter of 2017 was $150.3 million, which was an increase of $39.2 million or 35 percent from the third quarter of 2016.

Partially offsetting the increases to tax-equivalent net interest income for the third quarter of 2017 was an increase of 19 basis points in the average cost of funds as compared to the third quarter of 2016 due to the higher market interest rates.

Net interest income for the first nine months of 2017 was $394.1 million, which was an increase of $82.1 million or 26 percent from the first nine months of 2016.

On a linked-quarter basis, net interest income for the third quarter of 2017 increased $14.0 million or 10 percent from the second quarter of 2017.

For the quarters ended Sept. 30, 2017 and 2016, the provision for loan losses was $7.3 million and $7.0 million, respectively, while the provision for the first nine months of 2017 was $21.4 million as compared to $18.7 million for the first nine months of 2016.

Noninterest income for the third quarter of 2017 was $38.2 million, which was an increase of $19.2 million or 101 percent from the third quarter of 2016.

Noninterest income for the first nine months of 2017 was $98.9 million, which was an increase of $45.5 million or 85 percent from the first nine months of 2016.

On a linked-quarter basis, noninterest income for the third quarter of 2017 decreased $2.3 million or 6 percent from the second quarter of 2017 due mainly to a decline of $2.2 million in income from mortgage banking activities despite increased production and sales of mortgage loans in the secondary market.

Noninterest expense for the third quarter of 2017 was $96.7 million, an increase of $33.9 million or 54 percent from the third quarter of 2016 due mainly to the additional employees and branch offices from the Cardinal acquisition as most major categories of noninterest expense showed increases.

Noninterest expense for the first nine months of 2017 was $271.6 million, an increase of $85.9 million or 46 percent from the first nine months of 2016 due mainly to the additional employees and branch offices from the Cardinal acquisition.

Employee benefits increased $6.0 million, net occupancy expenses increased $9.1 million which includes an increase of $4.4 million for the termination of leases and a reduction in value of leasehold improvements for closed offices and data processing expense increased $4.0 million which included a contract termination penalty of $525,000 . In addition, other merger-related expenses increased $3.0 million.

On a linked-quarter basis, noninterest expense for the third quarter of 2017 decreased $15.5 million or 14 percent from the second quarter of 2017 generally due to a decline of $22.6 million in merger-related expenses.

Partially offsetting this decrease was an increase in OREO expense of $2.2 million due to declines in the fair value of OREO properties.

For the third quarter of 2017, income tax expense was $27.8 million as compared to $18.8 million for the third quarter of 2016.

United’s asset quality continues to be sound. At Sept. 30, nonperforming loans were $168.4 million, or 1.28 percent of loans, net of unearned income as compared to nonperforming loans of $113.3 million, or 1.10 percent of loans, net of unearned income, at Dec. 31, 2016.

United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 14.3 percent at Sept. 30, 2017 while its estimated Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 12 percent, 12 percent and 10.1 percent, respectively.

United has consolidated assets of $19.1 billion with 144 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.

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