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United Bankshares, Inc. Announces Record Earnings for Third Quarter and First Nine Months of 2000
United Bankshares, Inc. (NASDAQ: UBSI), today reported record third quarter earnings for 2000, which follows record first and second quarter earnings. Earnings per share for the third quarter increased 7% from 41˘ in 1999 to 44˘ in 2000 to reach a record $18.6 million net profit compared to $17.7 million in 1999. Record earnings for the first three quarters of 2000 of $1.29 a share or $54.7 million grew 8% over the first three quarters of 1999 earnings of $1.20 per share or $52.7 million. Cash earnings per share were 45˘ and $1.33 for the third quarter and first nine months of 2000, respectively.
United's key performance ratios remain strong. Third quarter 2000 annualized returns on average assets and average equity were 1.50% and 18.01%, respectively. For the first nine months ended September 30, 2000, United achieved an annualized return on average assets of 1.48% and an annualized return on average equity of 18.08%. On a cash basis, the annualized return on average tangible assets was 1.55% and 1.53% for the third quarter and first nine months of 2000, respectively, while the annualized return on average tangible equity was 20.59% and 20.75%, respectively for the same time periods in 2000. These key financial performance ratios are indicative of United's earnings strength. United continues to be one of the best performing regional banking companies in the nation.
The third quarter dividend was 21˘ per share. It is expected that 2000 will represent twenty-seven consecutive years of dividend increases for United shareholders.
Tax-equivalent interest income increased $4.4 million or 5% in the third quarter of 2000 and $22.0 million or 8% for the first nine months of 2000 when compared to the same periods of 1999. Tax-equivalent net interest income remained relatively flat for the third quarter of 2000 and first nine months of 2000 when compared to the same periods of 1999 as increased deposit and funding costs resulting from six Federal Funds rate increases since mid 1999 have offset the growth in interest income. United's tax-equivalent net interest margin was 4.04% and 4.13% for the third quarter and first nine months of 2000, respectively, compared to 3.99% and 4.16% for the same time periods in 1999. The increase in the margin percentage for the quarter-to-quarter comparison reflected a changing earning asset mix from investment securities to higher yielding loans.
United's asset quality remained stable for the quarter and has improved significantly since year end. Nonperforming loans were $16.7 million at September 30, 2000 as compared to $17.1 million at June 30, 2000 and $20.7 million at December 31, 1999. Nonperforming loans represented 0.34% of total assets at the end of the first nine months of 2000, as compared to 0.41% for United at year end 1999. Loans past due 90 days or more and nonaccrual loans decreased $1.7 million and $2.3 million, respectively during the first nine months of 2000. Total nonperforming assets of $18.2 million, including OREO of $1.5 million, represented 0.37% of total assets at September 30, 2000 as compared to 0.49% at December 31, 1999.
For the quarters ended September 30, 2000 and 1999, the provision for loan losses was $4.4 million and $2.3 million, respectively, while the provision for the first nine months was $10.8 million for 2000 as compared to $4.8 million for 1999. Total net charge-offs were $4.3 million in the third quarter of 2000 and $3.0 million during the same time period in 1999. Net charge-offs were $11.0 million for the first nine months of 2000 as compared to net charge-offs of $4.3 million for the first nine months of 1999. The increases in provision and net charge-offs were primarily attributed to the addition to the loan portfolio as of October 1, 1999 of approximately $230 million of junior-lien mortgage loans previously classified as securities held for sale. Such increased provision and charge-offs were offset by increased interest income recognized on the reclassed loans. At September 30, 2000, the balance of these junior-lien mortgage loans approximated $185 million. As of September 30, 2000, the allowance for loan losses was $39.4 million or 1.25% of net loans.
Noninterest income increased 4% for the third quarter of 2000 when compared to the third quarter of 1999 while remaining relatively flat in the year-to-year comparison. These results were achieved despite the depressed mortgage lending business caused by rising interest rates and a slowing economy. Mortgage loan origination activity fell 19% or $187.0 million for the first nine months of 2000 as compared to the same period in 1999. Fewer originations resulted in a decline of loan sales in the secondary market of 32% or $371.2 million during the first nine months of 2000 in comparison to the same time period in 1999. Excluding income from mortgage banking operations and gains on the sale of investment securities, noninterest income increased 11% and 16% for the third quarter and first nine months of 2000, respectively over last years' results primarily due to a combination of increased revenues from the trust department and the deposit services area. Trust fees increased 26% and 30% in the third quarter and first nine months of 2000, respectively, compared to the prior year's third quarter and year-to-date results. Deposit charges increased 6% for the quarter compared to the prior year's third quarter and rose 13% in the year-to-year comparison.
Noninterest expense decreased $3.9 million or 13% and $6.6 million or 8% for the quarter and nine months ended September 30, 2000, as compared to the same periods in 1999. Total salaries and benefits decreased by 18% or $2.8 million and 12% or $5.5 million for the third quarter and first nine months of 2000, respectively when compared to the same periods of 1999. The decline was due mainly to lower sales activity in the mortgage banking segment as compensation and incentives for its personnel are significantly tied to activity levels. The efficiency ratio was a low 41.37% and 43.41% for the third quarter and first nine months of 2000, respectively. This ratio compares very favorably to regional and national peer group banking companies.
Total assets have declined $118.7 million or 2% since year end as United continues to restructure its balance sheet. Total loans, including loans held for sale, have remained relatively flat growing only $74.1 million or 2%. Total deposits have also remained relatively stable, increasing $52.2 million or 2% since year end. United's total borrowed funds have decreased $181.0 million or 13% for the year. United repaid these borrowings to restructure the balance sheet to better manage interest rate risk. Shareholders' equity was $421.6 million resulting in a book value per share of $10.08. United is categorized as well capitalized based on the risk-based capital ratio, considerably exceeding the regulatory minimum requirement. All these measures provide evidence that United's financial position is strong.
United Bankshares, with $5 billion in assets, has 77 full-service offices in West Virginia, Virginia, Maryland, Ohio, and Washington, D.C. United Bankshares stock is traded on the NASDAQ (National Association of Securities Dealers Quotation System) National Market System under the quotation symbol "UBSI".
This press release contains certain forward-looking statements, including certain plans, expectations, goals and projections, which are subject to numerous assumptions, risks and uncertainties. Actual results could differ materially from those contained in or implied by such statements for a variety of factors including: changes in economic conditions; movements in interest rates; competitive pressures on product pricing and services; success and timing of business strategies; the nature and extent of governmental actions and reforms; and rapidly changing technology and evolving banking industry standards.
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UNITED BANKSHARES, INC. AND SUBSIDIARIES |
|||||||
|
|
Three Months Ended |
Nine Months Ended |
|||||
|
EARNING SUMMARY: |
September 30 |
September 30 |
September 30 |
September 30 |
|||
|
Interest income, taxable equivalent |
$98,158 |
$93,751 |
$290,879 |
$268,911 |
|||
|
Interest Expense |
51,165 |
45,822 |
146,339 |
127,770 |
|||
|
Net interest income, taxable equivalent |
46,993 |
47,929 |
144,540 |
141,141 |
|||
|
Taxable equivalent adjustment |
2,860 |
2,940 |
8,250 |
5,574 |
|||
|
Net Interest income |
44,133 |
44,989 |
136,290 |
135,567 |
|||
|
Provision for loan losses |
4,439 |
2,255 |
10,837 |
4,780 |
|||
|
Income (loss) from mortgage banking operations |
5,014 |
5,706 |
12,556 |
16,219 |
|||
|
Gain (loss) on security transactions |
324 |
(70) |
1,147 |
1 |
|||
|
Other noninterest income |
7,986 |
7,207 |
22,886 |
19,715 |
|||
|
Noninterest expenses |
25,463 |
29,377 |
80,712 |
87,268 |
|||
|
Income taxes |
8,994 |
8,500 |
26,658 |
26,797 |
|||
|
Net income |
18,561 |
17,700 |
54,672 |
52,657 |
|||
|
Cash dividends paid |
8,812 |
9,028 |
26,503 |
26,403 |
|||
|
|
|
|
|
|
|||
|
PER COMMON SHARE: |
|
|
|
|
|||
|
Net income: |
|||||||
|
Basic |
0.44 |
0.41 |
1.30 |
1.22 |
|||
|
Diluted |
0.44 |
0.41 |
1.29 |
1.20 |
|||
|
Diluted - cash basis |
0.45 |
0.42 |
1.33 |
1.24 |
|||
|
Cash dividends paid |
0.21 |
0.21 |
0.63 |
0.61 |
|||
|
Book value |
10.08 |
9.43 |
|||||
|
Closing market price |
19.625 |
24.313 |
|||||
|
Common shares outstanding: |
|||||||
|
Actual, net of treasury shares |
41,825,392 |
42,831,660 |
|||||
|
Average basic |
41,842,460 |
43,124,385 |
42,020,696 |
43,239,869 |
|||
|
Average diluted |
42,147,989 |
43,708,483 |
42,337,568 |
43,817,913 |
|||
|
FINANCIAL RATIOS: |
|||||||
|
Return on average assets |
1.50% |
1.40% |
1.48% |
1.46% |
|||
|
Return on average shareholders’ equity |
18.01% |
17.49% |
18.08% |
16.68% |
|||
|
Average equity to average assets |
8.31% |
8.01% |
8.16% |
8.78% |
|||
|
Net interest margin |
4.04% |
3.99% |
4.13% |
4.16% |
|||
|
|
September 30 |
September 30 |
December 31 |
June 30 |
|||
|
PERIOD END BALANCES: |
|||||||
|
Assets |
4,950,442 |
5,081,915 |
5,069,160 |
4,991,051 |
|||
|
Earning assets |
4,717,326 |
4,812,774 |
4,789,191 |
4,740,443 |
|||
|
Loans, net of unearned income |
3,203,538 |
2,963,033 |
3,170,096 |
3,221,646 |
|||
|
Loans held for sale |
158,468 |
117,610 |
117,825 |
153,701 |
|||
|
Investment securities |
1,352,630 |
1,719,026 |
1,472,553 |
1,353,317 |
|||
|
Total deposits |
3,313,137 |
3,376,927 |
3,260,985 |
3,270,925 |
|||
|
Shareholders’ equity |
421,622 |
403,956 |
395,930 |
402,135 |
|||
|
Charleston, WV Stock Symbol: UBSI (In Thousands Except for Per Share Data) Consolidated Statements of Income | ||||||
|
Three Months Ended |
Nine Months Ended |
|||||
|
September |
September |
June |
March |
September |
September |
|
|
INTEREST & LOAN FEES INCOME |
$95,298 |
$90,811 |
$94,063 |
$93,268 |
$282,629 |
$263,337 |
|
Tax Equivalent Adjustment |
2,860 |
2,940 |
2,514 |
2,875 |
8,250 |
5,574 |
|
Interest & Fees Income (FTE) |
98,158 |
93,751 |
96,577 |
96,143 |
290,879 |
268,911 |
|
Interest Expense |
51,165 |
45,822 |
48,632 |
46,542 |
146,339 |
127,770 |
|
Net Interest Income (FTE) |
46,993 |
47,929 |
47,945 |
49,601 |
144,540 |
141,141 |
|
LOAN LOSS PROVISION |
4,439 |
2,255 |
3,851 |
2,547 |
10,837 |
4,780 |
|
NON-INTEREST INCOME: |
||||||
|
Inv. Securities Transactions |
324 |
(70) |
505 |
318 |
1,147 |
1 |
|
Trust Revenue |
1,749 |
1,392 |
1,753 |
1,692 |
5,194 |
3,984 |
|
Service Charges on Deposits |
5,661 |
5,365 |
5,634 |
5,093 |
16,388 |
14,522 |
|
Non-recurring |
||||||
|
Income/(loss) from Mortgage Banking Operations |
5,014 |
5,706 |
4,159 |
3,383 |
12,556 |
16,219 |
|
Gain/(loss) on Sale of Assets |
0 |
0 |
0 |
|||
|
Other Non-Interest Revenue |
576 |
450 |
413 |
315 |
1,304 |
1,209 |
|
Total Non-Interest Income |
13,324 |
12,843 |
12,464 |
10,801 |
36,589 |
35,935 |
|
NON-INTEREST EXPENSE: |
||||||
|
Staff Expense |
12,127 |
14,878 |
13,610 |
13,739 |
39,476 |
44,932 |
|
Occupancy & Equipment |
2,861 |
3,104 |
2,870 |
3,161 |
8,892 |
9,257 |
|
Other Expenses |
9,622 |
10,264 |
9,450 |
10,151 |
29,223 |
29,723 |
|
Non-recurring |
||||||
|
Amortization of Intangibles |
819 |
810 |
819 |
820 |
2,458 |
2,460 |
|
OREO Expense |
(172) |
150 |
191 |
97 |
116 |
345 |
|
FDIC Expense |
206 |
171 |
166 |
175 |
547 |
551 |
|
Total Non-Interest Expense |
25,463 |
29,377 |
27,106 |
28,143 |
80,712 |
87,268 |
|
PRE-TAX EARNINGS (FTE) |
30,415 |
29,140 |
29,452 |
29,712 |
89,580 |
85,028 |
|
Tax Equivalent Adjustment |
2,860 |
2,940 |
2,514 |
2,875 |
8,250 |
5,574 |
|
REPORTED PRE-TAX EARNINGS |
27,555 |
26,200 |
26,938 |
26,837 |
81,330 |
79,454 |
|
Taxes |
8,994 |
8,500 |
8,815 |
8,849 |
26,658 |
26,797 |
|
NET INCOME BEFORE EXTRA ITEMS |
18,561 |
17,700 |
18,123 |
17,988 |
54,672 |
52,657 |
|
Extraordinary Items (Net of Tax) |
||||||
|
NET INCOME |
$18,561 |
$17,700 |
$18,123 |
$17,988 |
$54,672 |
$52,657 |
|
MEMO: EFFECTIVE TAX RATE |
32.64% |
32.44% |
32.72% |
32.97% |
32.78% |
33.73% |
| Consolidated Balance Sheets | ||||||
|
September 30 2000 |
September 30 1999 |
September 30 |
December 31 |
September 30 |
||
|
Cash & Cash Equivalents |
$119,225 |
$115,453 |
$106,887 |
$159,808 |
$135,637 |
|
|
Trading Account Securities |
||||||
|
Securities Available for Sale |
958,583 |
1,443,419 |
967,554 |
1,207,363 |
1,445,351 |
|
|
Held to Maturity Securities |
388,343 |
273,309 |
385,076 |
265,190 |
273,675 |
|
|
Other Securities |
||||||
|
Total Securities |
1,346,926 |
1,716,728 |
1,352,630 |
1,472,553 |
1,719,026 |
|
|
Total Cash and Securities |
1,466,151 |
1,832,181 |
1,459,517 |
1,632,361 |
1,854,663 |
|
|
Loans held for sale |
156,408 |
115,503 |
158,468 |
117,825 |
117,610 |
|
|
Commercial Loans |
1,483,121 |
1,395,434 |
1,502,658 |
1,446,633 |
1,420,895 |
|
|
Mortgage Loans |
1,356,533 |
1,176,426 |
1,374,402 |
1,370,904 |
1,197,891 |
|
|
Consumer Loans |
322,233 |
338,078 |
326,478 |
352,559 |
344,247 |
|
|
Loans & Leases, net of unearned income |
3,318,295 |
3,025,441 |
3,362,006 |
3,287,921 |
3,080,643 |
|
|
Reserve for loan & Lease Losses |
(39,358) |
(40,433) |
(39,432) |
(39,599) |
(39,704) |
|
|
Goodwill |
36,163 |
36,841 |
35,754 |
37,467 |
38,214 |
|
|
Mortgage Servicing Rights |
4 |
13 |
0 |
13 |
13 |
|
|
Purchase Credit Card Intangibles |
||||||
|
Other Intangibles |
4,405 |
4,588 |
4,299 |
4,850 |
5,034 |
|
|
Total Intangibles |
40,572 |
41,442 |
40,053 |
42,331 |
43,261 |
|
|
Real Estate Owned |
1,691 |
3,580 |
1,516 |
3,764 |
3,271 |
|
|
Other Assets |
145,520 |
147,883 |
126,782 |
142,383 |
139,781 |
|
|
TOTAL ASSETS |
$4,932,871 |
$5,010,094 |
$4,950,442 |
$5,069,160 |
$5,081,915 |
|
|
MEMO: EARNING ASSETS |
$4,656,217 |
$4,711,097 |
$4,717,326 |
$4,789,191 |
$4,812,774 |
|
|
Interest-bearing Deposits |
$2,755,411 |
$2,878,331 |
$2,799,057 |
$2,780,218 |
$2,875,127 |
|
|
Noninterest-bearing Deposits |
472,398 |
465,750 |
514,080 |
480,767 |
501,800 |
|
|
Foreign Deposits |
||||||
|
Total Deposits |
3,227,809 |
3,344,081 |
3,313,137 |
3,260,985 |
3,376,927 |
|
|
Short-term Borrowings |
408,705 |
438,637 |
422,315 |
398,247 |
441,629 |
|
|
Intermediate & Long-term Borrowings |
828,107 |
759,047 |
748,310 |
953,347 |
801,851 |
|
|
Total Borrowings |
1,236,812 |
1,197,684 |
1,170,625 |
1,351,594 |
1,243,480 |
|
|
Other Liabilities |
58,295 |
66,791 |
45,058 |
60,651 |
57,552 |
|
|
Minority Interest |
||||||
|
TOTAL LIABILITIES |
4,522,916 |
4,608,556 |
4,528,820 |
4,673,230 |
4,677,959 |
|
|
Common Equity |
409,955 |
401,538 |
421,622 |
395,930 |
403,956 |
|
|
TOTAL SHAREHOLDERS' EQUITY |
409,955 |
401,538 |
421,622 |
395,930 |
403,956 |
|
|
TOTAL LIABILITIES & EQUITY |
$4,932,871 |
$5,010,094 |
$4,950,442 |
$5,069,160 |
$5,081,915 |
|
Three Months Ended |
Year to Date |
|||||
| Share Data: | September |
September |
June |
March |
September |
September |
|
EARNINGS PER SHARE: |
||||||
|
NET INCOME BEFORE EXTRAORDINARY ITEMS: |
||||||
|
Basic |
$0.44 |
$0.41 |
$0.43 |
$0.43 |
$1.30 |
$1.22 |
|
Diluted |
$0.44 |
$0.41 |
$0.43 |
$0.42 |
$1.29 |
$1.20 |
|
Diluted - Cash Basis |
$0.45 |
$0.42 |
$0.44 |
$0.44 |
$1.33 |
$1.24 |
|
NET INCOME AFTER EXTRAORDINARY ITEMS: |
||||||
|
Basic |
$0.44 |
$0.41 |
$0.43 |
$0.43 |
$1.30 |
$1.22 |
|
Diluted |
$0.44 |
$0.41 |
$0.43 |
$0.42 |
$1.29 |
$1.20 |
|
Diluted - Cash Basis |
$0.45 |
$0.42 |
$0.44 |
$0.44 |
$1.33 |
$1.24 |
|
COMMON DIVIDEND DECLARED PER SHARE |
$0.21 |
$0.21 |
$0.21 |
$0.21 |
$0.63 |
$0.61 |
|
High Common Stock Price |
$20.88 |
$27.25 |
$22.38 |
$24.44 |
||
|
Low Common Stock Price |
$18.38 |
$25.06 |
$16.38 |
$17.00 |
||
|
Book Value Per Share |
$10.08 |
$9.43 |
$9.60 |
$9.37 |
||
|
Tangible Book Value Per Share |
$9.12 |
$8.42 |
$8.62 |
$8.38 |
||
|
52-week High Common Stock Price |
$26.25 |
$29.88 |
$27.25 |
$27.38 |
||
|
Date |
11/04/99 |
12/02/98 |
07/09/99 |
04/22/99 |
||
|
52-week Low Common Stock Price |
$16.38 |
$20.75 |
$16.38 |
$17.00 |
||
|
Date |
06/27/00 |
10/08/98 |
06/27/00 |
03/08/00 |
||
|
EOP Shares Outstanding (Net of Treasury Stock): |
41,910,723 |
42,018,879 |
41,825,392 |
42,831,660 |
||
|
Average Shares Outstanding: (Net of Treasury Stock): |
||||||
|
Basic |
41,842,460 |
43,124,385 |
41,931,050 |
42,272,860 |
42,020,696 |
43,239,869 |
|
Diluted |
42,147,989 |
43,708,483 |
42,264,141 |
42,657,425 |
42,337,568 |
43,817,913 |
|
Three Months Ended |
Year to Date |
|||||
| Memorandum Items: |
September |
September |
June |
March |
September |
September |
|
Tax Applicable to Security Transactions |
$113 |
($25) |
$177 |
$111 |
$401 |
$0 |
|
Common Dividends |
$8,812 |
$9,028 |
$8,812 |
$8,879 |
$26,503 |
$26,403 |
|
EOP Employees (full-time equivalent) |
1,306 |
1,395 |
||||
| Selected Yields and Net Interest Margin: | ||||||
|
Loans |
8.94% |
8.36% |
8.85% |
8.75% |
8.85% |
8.35% |
|
Investment Securities |
6.85% |
7.00% |
6.84% |
6.84% |
6.84% |
6.83% |
|
Money Market Investments/FFS |
7.37% |
6.37% |
4.50% |
6.46% |
6.73% |
6.16% |
|
Average Earning Assets Yield |
8.41% |
7.93% |
8.32% |
8.22% |
8.32% |
7.92% |
|
Interest-bearing Deposits |
4.65% |
4.17% |
4.41% |
4.22% |
4.43% |
4.27% |
|
Short-term Borrowings |
5.63% |
4.80% |
5.34% |
4.85% |
5.31% |
4.54% |
|
Long-term Borrowings |
6.31% |
5.35% |
6.11% |
5.70% |
6.03% |
5.23% |
|
Average Liability Costs |
5.10% |
4.46% |
4.87% |
4.62% |
4.86% |
4.44% |
|
Net Interest Spread |
3.31% |
3.47% |
3.45% |
3.60% |
3.46% |
3.48% |
|
Net Interest Margin |
4.04% |
3.99% |
4.13% |
4.23% |
4.13% |
4.16% |
| Selected Financial Ratios: | ||||||
|
Return on Average Common Equity |
18.01% |
17.49% |
18.19% |
18.05% |
18.08% |
16.68% |
|
Return on Average Assets |
1.50% |
1.40% |
1.47% |
1.45% |
1.48% |
1.46% |
|
Loan / Deposit Ratio |
101.48% |
91.23% |
||||
|
Loan Loss Reserve / Net Loans |
1.19% |
1.31% |
||||
|
Nonaccrual / Net Loans |
0.30% |
0.36% |
||||
|
OREO / Net Loans |
0.05% |
0.11% |
||||
|
Non-performing / Net Loans |
0.55% |
0.80% |
||||
|
Delinquency Ratio |
0.50% |
0.69% |
||||
|
Primary Capital Ratio |
9.24% |
8.66% |
||||
|
Shareholders' Equity Ratio |
8.52% |
7.95% |
||||
|
Price / Book Ratio |
2.33% |
3.15% |
||||
|
Price / Earnings Ratio |
11.38% |
10.94% |
||||
|
Efficiency Ratio |
41.36% |
46.71% |
43.56% |
45.31% |
43.41% |
47.70% |
| Credit Quality Data: |
September |
September |
December |
June |
March |
|
EOP Non-Accrual Loans |
$10,062 |
$11,059 |
$12,327 |
$11,156 |
$13,110 |
|
EOP 90-Day Past Due Loans |
6,666 |
9,872 |
8,415 |
5,955 |
7,951 |
|
Total EOP Non-performing Loans |
$16,728 |
$20,931 |
$20,742 |
$17,111 |
$21,061 |
|
EOP Other Real Estate & Assets Owned |
1,516 |
3,271 |
3,764 |
2,754 |
3,764 |
|
Total EOP Non-performing Assets |
$18,244 |
$24,202 |
$24,506 |
$19,865 |
$24,825 |
|
|
|
||||
|
September |
September |
September |
September |
||
| Charge-off Analysis: | |||||
|
Gross Charge-offs |
($4,544) |
($3,032) |
($11,792) |
($4,943) |
|
|
Recoveries |
212 |
10 |
787 |
678 |
|
|
Net Charge-offs |
($4,332) |
($3,022) |
($11,005) |
($4,265) |
|
