PARKERSBURG - United Bankshares Inc. reported earnings for the third quarter and the first nine months of 2012. Earnings for the third quarter of 2012 were $19.3 million or 38 cents per diluted share while earnings for the first nine months of 2012 were $61.4 million or $1.22 per diluted share. Earnings for the third quarter of 2011 were $20 million or 40 cents per diluted share while earnings for the first nine months of 2011 were $55.4 million or $1.21 per diluted share.
The results for the third quarter and first nine months of 2011 included before-tax, other-than-temporary impairment charges of $7.9 million and $14.1 million, respectively, on certain investment securities. In addition, United completed its acquisition of Centra Financial Holdings, Inc. (Centra) during the third quarter of 2011. As a result, comparisons for the first nine months of 2012 to the same time period in 2011 are impacted by increased levels of average balances, income, and expense due to the acquisition. At consummation, Centra had assets of approximately $1.3 billion, loans of $1 billion, deposits of $1.1 billion and shareholders' equity of $131 million.
Third quarter of 2012 results produced a return on average assets of 0.92 percent and a return on average equity of 7.76 percent, respectively. For the first nine months of 2012, United's return on average assets was 0.97 percent while the return on average equity was 8.32 percent. United's annualized returns on average assets and average equity were 0.95 percent and 8.26 percent, respectively, for the third quarter of 2011 while the returns on average assets and average equity was 0.98 percent and 8.62 percent, respectively, for the first nine months of 2011.
United's asset quality continues to outperform its peers. United's percentage of nonperforming loans to loans, net of unearned income of 1.53 percent at Sept. 30 compares favorably to the most recently reported percentage of 2.93 percent at June 30 for United's Federal Reserve peer group. At Sept. 30 nonperforming loans were $98.4 million, up from nonperforming loans of $79.7 million or 1.28 percent of loans, net of unearned income, at Dec. 31, 2011. During the third quarter of 2012, loans totaling $20.5 million to two commercial customers were placed on nonaccrual status. The loss potential on these loans has been properly evaluated and allocated within the company's allowance for loan losses. As of Sept. 30 the allowance for loan losses was $73.7 million or 1.15 percent of loans, net of unearned income, which was comparable to $73.9 million or 1.18 percent of loans, net of unearned income, at Dec. 31, 2011. Total nonperforming assets of $148.5 million, including OREO of $50 million at Sept. 30 represented 1.77 percent of total assets which also compares favorably to the most recently reported percentage of 2.33 percent at June 30 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 Sept. 30 while its Tier I capital and leverage ratios are 12.6 percent and 10.7 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 third quarter of 2012 was $71.6 million, a decrease of $951,000 or 1 percent from the third quarter of 2011 due mainly to a decrease in the average yield on earning assets. The third quarter of 2012 average yield on earning assets decreased 13 basis points from the third quarter of 2011. In addition, average earning assets decreased $90.5 million or 1 percent from the third quarter of 2011 as average short-term investments and average investment securities declined $199.5 million and $87.9 million, respectively. Average net loans did increase $197 million or 3 percent for the third quarter of 2012 from the third quarter of 2011 partially offsetting the decreases in average short-term investments and investment securities. Partially offsetting the decreases to tax-equivalent net interest income for the third quarter of 2012 was a decline of 14 basis points in the average cost of funds as compared to the third quarter of 2011. The net interest margin for the third quarter of 2012 was 3.87 percent, which equaled the net interest margin for the third quarter of 2011.
