PARKERSBURG - United Bankshares Inc. has reported an increase in earnings for the fourth quarter 2012 and for 2012 as compared to the fourth quarter 2011 and for 2011.
Earnings for the fourth quarter of 2012 were $21.2 million or 42 cents per diluted share, up 5 percent from earnings of $20.3 million or 40 cents per diluted share for the fourth quarter of 2011. Earnings for the year of 2012 were $82.6 million or $1.64 per diluted share, an increase of 9 percent from earnings of $75.6 million or $1.61 per diluted share for the year of 2011.
"The year 2012 was another successful year for United," said Richard M. Adams, United's chairman of the board and chief executive officer. "Earnings rose from 2011 while the dividend to shareholders was increased for the 39th consecutive year. Only one other major banking company in the USA has achieved such a dividend record."
Fourth quarter 2012 results produced a return on average assets of 1.01 percent and a return on average equity of 8.44 percent. For 2012, United's return on average assets was .98 percent while the return on average equity was 8.35 percent.
United's annualized returns on average assets and average equity were .94 percent and 8.17 percent, respectively, for the fourth quarter of 2011 while the returns on average assets and average equity was .97 percent and 8.5 percent, respectively, for the year of 2011.
The results for the fourth quarter and year of 2012 included noncash, before-tax, other-than-temporary impairment charges of $2 million and $7.4 million, respectively, on certain investment securities. In comparison, the results for the fourth quarter and year of 2011 included noncash, before-tax, other-than-temporary impairment charges of $6.3 million and $20.4 million, respectively, on certain investment securities. Also included in the results for the year of 2012 was an accrual of $3.3 million with respect to a settlement of claims asserted in class actions against United Bank Inc. of West Virginia.
In addition, United completed its acquisition of Centra Financial Holdings Inc. during the third quarter of 2011. As a result, comparisons for the year of 2012 to the year of 2011 are impacted by increased levels of average balances, income, and expense due to the acquisition. At consummation, Centra had assets of about $1.3 billion, loans of $1 billion, deposits of $1.1 billion and shareholders' equity of $131 million.
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 Dec. 31 compares favorably to the most recently reported percentage of 2.86 percent at Sept. 30 for United's Federal Reserve peer group. At Dec. 31, nonperforming loans were $92.8 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 Dec. 31, the allowance for loan losses was $73.9 million or 1.13 percent of loans, net of unearned income, which was comparable to $73.9 million or 1.19 percent of loans, net of unearned income, at Dec. 31, 2011. Nonperforming assets of $142.3 million, including OREO of $49.5 million at Dec. 31 represented 1.69 percent of total assets which also compares favorably to the most recently reported percentage of 2.21 percent at Septe. 30 for United's Federal Reserve peer group.
United continues to be well-capitalized based on all regulatory guidelines. United's estimated risk-based capital ratio is 13.7 percent at Dec. 31, while its Tier I capital and leverage ratios are 12.4 percent and 10.6 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.
Tax-equivalent net interest income for the fourth quarter of 2012 was $71.3 million, a decrease of $2.4 million or 3 percent from the fourth quarter of 2011 due mainly to a decrease in the average yield on earning assets.
The fourth quarter of 2012 average yield on earning assets decreased 22 basis points from the fourth quarter of 2011. In addition, average earning assets decreased $142.9 million or 2 percent from the fourth quarter of 2011 as average short-term investments and average investment securities declined $270.3 million and $83.8 million, respectively. Average net loans did increase $211.2 million or 3 percent for the fourth quarter of 2012 from the fourth 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 fourth quarter of 2012 was a decline of 20 basis points in the average cost of funds as compared to the fourth quarter of 2011. The net interest margin for the fourth quarter of 2012 was 3.83 percent, which was a decrease of 5 basis points from a net interest margin of 3.88 percent for the fourth quarter of 2011.