United Bank reports third quarter earnings
PARKERSBURG — United Bankshares has reported earnings for the third quarter and the first nine months of 2020.
Earnings for the third quarter of 2020 were a record $103.8 million, or 80 cents per diluted share, as compared to earnings of $66 million, or 65 cents per diluted share for the third quarter of 2019.
Earnings for the first nine months of 2020 were $196.7 million, or $1.68 per diluted share, as compared to earnings of $196.8 million, or $1.93 per diluted share, for the first nine months of 2019.
For the nine months of 2020, United’s annualized return on average assets was1.12 percent, the annualized return on average equity was 6.85 percent and the annualized return on average tangible equity was 12.19 percent compared to annualized returns on average assets, average equity and average tangible equity of 1.35 percent, 7.93 percent and 14.56 percent, respectively, for the first nine months of 2019.
Higher net income in the third quarter of 2020 compared to the third quarter of 2019 was primarily due to higher income from mortgage banking activities, driven by an elevated volume of mortgage loan originations and sales in the secondary market, as well as the impact of the Carolina Financial Corp. acquisition.
“Despite the continued uncertainty in the economic environment, we achieved record earnings during the third quarter of 2020 and successfully completed the Carolina Financial system conversion,” said Richard M. Adams, United’s chairman of the board and Chief Executive Officer.
“United has continued to focus on meeting our customers’ needs during the COVID-19 pandemic by suspending residential property foreclosures, offering fee waivers,providing payment deferrals, and processing over 8,900 loans totaling approximately $1.3 billion under the government Paycheck Protection Program,” he said. “Our Credit quality and regulatory ratios remain strong and position us well to continue delivering for our customers and for continued growth”.
The results of operations for Carolina Financial are included in the consolidated results of operations from the date of acquisition, May 1.
Net interest income for the first nine months of 2020 was $497.8 million, which was an increase of $61.1 million or 14 percent from the first nine months of2019, primarily due to an increase in average earning assets from the Carolina Financial acquisition.
The net interest spread for the third quarter of 2020 increased 5 basis points from the second quarter of 2020 due to a 16 basis point decrease in the average cost of funds partially offset by a 11 basis point decrease in the average yield on earning assets.
At Sept. 30, nonperforming loans were $152.3 million, or 0.85 percent of loans and leases, net of unearned income, as compared to nonperforming loans of $131.1 million, or 0.96 percent of loans and leases, net of unearned income, at Dec. 31, 2019. Nonperforming loans of $37.9 million were added from the Carolina Financial acquisition.
Noninterest income for the first nine months of 2020 was $260.7 million, which was an increase of $147.4 million or 130 percent from the first nine months of 2019.
Noninterest expense for the third quarter of 2020 was $171.6 million, an increase of $75.5 million or 78 percent from the third quarter of 2019 due to additional employee and branch office related expenses of $44.9 million mainly from the Carolina Financial acquisition, $10.4 million in prepayment penalties on the early payoff of three long-term FHLB advances, a $3.2 million increase in mortgage loan servicing expense and impairment and an increase of $12.6 million in other expenses.
United has consolidated assets of approximately $25.9 billion. United is the parent company of United Bank, the largest community bank headquartered in the D.C. Metro region. United Bank has 231 offices in West Virginia, Virginia, Ohio, Pennsylvania, Maryland, NorthCarolina, South Carolina, Georgia, and the nation’s capital.