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United Bankshares announces record earnings for 2021

CHARLESTON — United Bankshares has reported earnings for the fourth quarter and the year of 2021.

Earnings for the fourth quarter were $73.9 million, or 56 cents per diluted share, as compared to earnings of $92.4 million, or 71 cents per diluted share, for the fourth quarter of 2020. Earnings for 2021 were a record $367.7 million as compared to earnings of $289 million for 2020.

Earnings per diluted share for 2021 were a record $2.83 as compared to earnings per diluted share of $2.40 for the year of 2020.

Fourth quarter 2021 results produced annualized returns on average assets, average equity and average tangible equity, a non-GAAP measure, of 1.04%, 6.44% and 10.87%, respectively, compared to annualized returns on average assets, average equity, and average tangible equity of 1.41%, 8.51% and 14.72%, respectively, for the fourth quarter of 2020. For the year of 2021, United’s returns on average assets, average equity and average tangible equity were 1.35%, 8.30% and 14.18%, respectively, compared to returns on average assets, average equity, and average tangible equity of 1.20%, 7.30% and 12.90%, respectively, for the year of 2020.

“2021 was one of the most successful years in our Company’s history,” Richard M. Adams, United’s chairman of the board and Chief Executive Officer, said. “We achieved record pre-tax earnings of $463 million, increased earnings per diluted share 18%, and outperformed peer profitability. We increased our dividend for the 48th consecutive year and successfully completed the acquisition of Community Bankers Trust Corp., the 33rd acquisition of the current administration.”

On Dec. 3, United completed its acquisition of Community Bankers Trust Corp. The results of operations for Community Bankers Trust are included in the consolidated results of operations from the date of acquisition. As a result of the acquisition, the fourth quarter and year of 2021 were impacted by approximately one month of increased levels of average balances, income and expense as compared to the fourth quarter and year of 2020 and as compared to the third quarter of 2021.

As a result of the acquisition of Carolina Financial Corp. on May 1, 2020, the year of 2021 reflected higher average balances, income and expense as compared to the year of 2020.

The fourth quarter and year of 2021 included merger-related expenses associated with the Community Bankers Trust acquisition of $20.4 million and $21.4 million, respectively, compared to $558 thousand and $54.2 million of merger-related expenses associated with the Carolina Financial acquisition for the fourth quarter and year of 2020.

Net interest income for the fourth quarter of 2021 was $183.7 million, which was a decrease of $8.3 million, or 4%, from the fourth quarter of 2020. Tax-equivalent net interest income, a non-GAAP measure which adjusts for the tax-favored status of income from certain loans and investments, for the fourth quarter of 2021 also decreased $8.3 million, or 4%, from the fourth quarter of 2020 to $184.7 million.

Net interest income for the year of 2021 was $742.7 million, which was an increase of $53 million, or 8%, from the year of 2020.

On a linked-quarter basis, net interest income for the fourth quarter of 2021 increased $2.1 million, or 1%, from the third quarter of 2021.

United’s asset quality continues to be sound. At Dec. 31, nonperforming loans were $90.8 million, or 0.5% of loans & leases, net of unearned income, down from $132.2 million, or 0.75% of loans & leases, net of unearned income, at Dec. 31, 2020.

The provision for credit losses was a net benefit of $7.4 million and $24 million for the fourth quarter and year of 2021, respectively, while the provision for credit losses was an expense of $16.8 million and $106.6 million, respectively, for the fourth quarter and year of 2020.

As of Dec. 31, the allowance for loan losses was $216.0 million, or 1.20% of loans & leases, net of unearned income, as compared to $235.8 million, or 1.34% of loans & leases, net of unearned income, at Dec. 31, 2020.

Noninterest income for the fourth quarter of 2021 was $54 million, which was a decrease of $40 million, or 43%, from the fourth quarter of 2020 primarily driven by a $43.5 million decrease in income from mortgage banking activities due primarily to lower mortgage loan origination and sale volume and a lower margin on loans sold in the secondary market.

Noninterest income for the year of 2021 was $278.1 million, which was a decrease of $76.7 million, or 22%, from the year of 2020.

On a linked-quarter basis, noninterest income for the fourth quarter of 2021 decreased $14.6 million, or 21%, from the third quarter of 2021 primarily due to a decrease of $14.7 million in income from mortgage banking activities due primarily to lower mortgage loan origination and sale volume and a lower loan pipeline valuation.

Noninterest expense for the fourth quarter of 2021 was $151.8 million, a decrease of $4.3 million, or 3%, from the fourth quarter of 2020.

Noninterest expense for the year of 2021 was $581.9 million, an increase of $3.7 million, or less than 1%, from the year of 2020.

On a linked-quarter basis, noninterest expense for the fourth quarter of 2021 increased $9.5 million, or 7%, from the third quarter of 2021 primarily due to an increase of $4.1 million in employee compensation, $4.2 million in data processing and $3.3 million in other expense.

For the fourth quarter of 2021, income tax expense was $19.5 million as compared to $20.8 million for the fourth quarter of 2020 primarily due to lower earnings partially offset by a higher effective tax rate.

United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 15.4% at Dec. 31, while estimated Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 13.4%, 13.4% and 11%, respectively.

As of Dec. 31, United had consolidated assets of approximately $29.3 billion. United is the parent company of United Bank which comprises nearly 250 offices in Virginia, Maryland, Washington, D.C., North Carolina, South Carolina, Georgia, Pennsylvania, West Virginia, and Ohio. United’s stock is traded on the NASDAQ Global Select Market under the quotation symbol UBSI.

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