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United Bankshares marks record earnings

$61.7M earned for first quarter

PARKERSBURG — United Bankshares has announced record earnings for the first quarter of 2018. Earnings for the first quarter of 2018 were a record $61.7 million as compared to earnings of $38.8 million for the first quarter of 2017. Diluted earnings per share were 59 cents for the first quarter of 2018 as compared to diluted earnings per share of 48 cents for the first quarter of 2017.

United’s first quarter 2018 results produced an annualized return on average assets of 1.35 percent and an annualized return on average equity of 7.65 percent. United’s annualized returns on average assets and average equity were 1.09 percent and 6.98 percent, respectively, for the first quarter of 2017.

“United’s earnings continue to be strong as we achieved record net income of $61.7 million for the first quarter of 2018,” said Richard M. Adams, United’s chairman and chief executive officer. “For the first quarter of 2018, we increased before tax earnings to $79.6 million from $59.0 million for last year’s first quarter and our return on average assets of 1.35 percent for the quarter was up significantly from 1.09 percent for the first quarter of 2017.”

On April 21, 2017, United completed its acquisition of Cardinal Financial Corp. of Tysons, Va. As a result of the Cardinal acquisition, the first quarter of 2018 was impacted by increased levels of average balances, income, and expense as compared to the first quarter of 2017. In addition, the first quarter of 2017 included merger-related expenses of $1.2 million related to the Cardinal acquisition.

Net interest income for the first quarter of 2018 was $144 million, which was an increase of $36.4 million or 34 percent from the first quarter of 2017.

Partially offsetting the increases to tax-equivalent net interest income for the first quarter of 2018 was an increase of 26 basis points in the average cost of funds as compared to the first quarter of 2017 due to the higher market interest rates. The net interest margin of 3.61 percent for the first quarter of 2018 was an increase of 18 basis points from the net interest margin of 3.43 percent for the first quarter of 2017.

On a linked-quarter basis, net interest income for the first quarter of 2018 decreased $10.8 million or 7 percent from the fourth quarter of 2017.

Its efficiency ratio for the first quarter of 2018 was 51.62 percent, compared to 49.19 percent for the first quarter of 2017 and 51.05 percent for the quarter ending Dec. 31, 2017. For the quarters ended March 31, 2018, and 2017, the provision for loan losses was $5.2 million and $5.9 million, respectively.

Noninterest income for the first quarter of 2018 was $31.2 million, which was an increase of $11.0 million or 55 percent from the first quarter of 2017.

On a linked-quarter basis, noninterest income for the first quarter of 2018 decreased $1.6 million or 5 percent from the fourth quarter of 2017 due mainly to a net loss of $485 thousand on investment securities transactions as compared to a net gain of $430 thousand for the fourth quarter of 2017.

Noninterest expense for the first quarter of 2018 was $90.5 million, an increase of $27.6 million or 44 percent from the first quarter of 2017 due mainly to the additional employees and branch offices from the Cardinal acquisition as most major categories of noninterest expense showed increases.

On a linked-quarter basis, noninterest expense decreased $5.3 million or 6 percent from the fourth quarter of 2017 due mainly to decreases of $1.5 million each in merger-related expenses and business franchise taxes within other expense.

For the first quarter of 2018, income tax expense was $17.9 million, a decrease of $2.3 million from the first quarter of 2017 mainly due to a decline in the effective tax rate as a result of the Tax Cuts and Jobs Act of 2017.

United’s asset quality continues to be sound. At March 31, nonperforming loans were $157.6 million, or 1.21 percent of loans, net of unearned income, down from nonperforming loans of $168.7 million, or 1.30 percent of loans, net of unearned income, at Dec. 31, 2017. As of March 31, the allowance for loan losses was $76.7 million or 0.59 percent of loans, net of unearned income, as compared to $76.6 million or 0.59 percent of loans, net of unearned income, at Dec. 31, 2017. Total nonperforming assets of $180.4 million, including OREO of $22.8 million at March 31, 2018, represented 0.97 percent of total assets as compared to nonperforming assets of $193.1 million or 1.01 percent at Dec. 31, 2017.

United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 14.6 percent at March 31, while its estimated Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 12.4 percent, 12.4 percent and 10.5 percent, respectively. The regulatory requirements for a well-capitalized financial institution are a risk-based capital ratio of 10.0 percent, a Common Equity Tier 1 capital ratio of 6.5 percent, a Tier 1 capital ratio of 8.0 percent and a leverage ratio of 5.0 percent.

United has consolidated assets of $18.6 billion with 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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