EX-99.1 2 j1980401exv99w1.htm EX-99.1 EX-99.1
 

EXHIBIT 99.1
News Release
(UNITED BANKSHARES, INC. LOGO)
For Immediate Release   Contact: Steven E. Wilson
April 26, 2006   Chief Financial Officer
    (304) 424-8704
United Bankshares, Inc. Announces
Earnings for the First Quarter of 2006
     WASHINGTON, DC and CHARLESTON, WV— United Bankshares, Inc. (NASDAQ: UBSI), today reported diluted earnings per share of 58¢ for the first quarter of 2006, which represented a 2% increase from diluted earnings per share of 57¢ for first quarter of 2005. United generated net income of $24.6 million for the first quarter of 2006 as compared to $24.8 million earned in the first quarter of 2005.
     Like most financial institutions, United’s earnings remain under pressure because of a competitive banking market for loans and deposits and a sustained flat yield curve between short-term and long-term interest rates. In order to avoid greater interest rate risk, United’s management believes it is in the best interest of the Company and the shareholders to forego some short-term profits in order to improve long-term results. Accordingly, United recently repositioned its balance sheet by selling $86 million of low-yielding investment securities and using the sale proceeds to repay higher-cost debt. Management believes the repositioning should improve United’s net interest margin and thus earnings in future periods.
     To attract new deposits, United introduced its High Performance Checking program during the first quarter of 2006. United believes these lower rate and non-interest earning deposits, mixed with its time deposit products, will lower United overall cost of funds as well as generate increased fee income in future periods. In addition, United believes the relationships created through its High Performance Checking program will allow United the opportunity to provide additional bank products to its customers. In order to promote and launch the High Performance Checking program, United incurred marketing and related costs of approximately $950 thousand during the quarter.
     In the net interest margin, the flat yield curve has resulted in a lesser increase in yields on earning assets while the upward trend in the general market interest rates has resulted in a more significant increase to funding costs. United’s tax-equivalent net interest income for the first quarter of 2006 was $58.8 million, an increase of $3.0 million or 5% from the first quarter of 2005. This increase in tax-equivalent net interest income was due mainly to a $286.6 million or 5% increase in average earning assets as average loans for the first quarter of 2006 grew $238.5 million or 5% over last year’s first quarter. In addition, the average yield on earning assets for the first quarter of 2006 increased 88 basis points from the first quarter of 2005 as a result of higher interest rates. In the first quarter of 2006, the net interest margin was aided by additional interest income of approximately $917 thousand from United’s prior asset securitization compared to the first quarter of 2005. Partially offsetting these increases to net interest income for the first quarter of 2006 was a 102 basis point increase in the cost of funds from the first quarter of 2005 due to increased deposit and borrowing costs as a result of the higher interest rates. The net interest margin for the first quarter of 2006 was 3.86%, a one basis point increase from the first quarter 2005 net interest margin of 3.85%.

 

 

United Bankshares, Inc. Announces...
April 26, 2006
Page Two
     On a linked-quarter basis, United’s tax-equivalent net interest income for the first quarter of 2006 declined $2.5 million or 4% from the fourth quarter of 2005 due to a 31 basis points increase in the average cost of funds. Additionally, interest income from United’s prior asset securitization decreased $642 thousand from the fourth quarter of 2005. The average yield on earning assets increased 12 basis points which was not enough to offset the increase in the average cost of funds. The net interest margin for the first quarter of 2006 of 3.86% was a decrease of 17 basis points from the consolidated net interest margin of 4.03% for the fourth quarter of 2005.
     Noninterest income for the first quarter of 2006 increased $743 thousand or 6% from the first quarter of 2005. As previously mentioned, United repositioned its balance sheet during the first quarter of 2006. As part of the repositioning, United prepaid a $50 million variable interest rate Federal Home Loan Bank (“FHLB”) advance and terminated a fixed interest rate swap associated with the advance. United recognized a $3.1 million gain on the termination of the interest rate swap. Additionally, fees from deposit services in the first quarter of 2006 increased $500 thousand or 8% from the first quarter of 2005 while fees from trust and brokerage services increased $262 thousand or 10% over the same time period. During the first quarter of 2006, United incurred a net loss on security transactions of $2.8 million as compared to a net gain of $924 thousand in the first quarter of 2005. The net loss in the first quarter of 2006 was due primarily to an other than temporary impairment on approximately $86 million of low-yielding fixed rate investment securities which United sold as part of its balance sheet repositioning. On a linked-quarter basis, noninterest income increased $351 thousand or 3% from the fourth quarter of 2005 due mainly to the $3.1 million gain on the aforementioned termination of the interest rate swap which more than offset the $2.6 million increase in net losses on security transactions. Income from trust and brokerage services showed a growth of $249 thousand or 9% for the first quarter of 2006 over the fourth quarter of 2005.
     Noninterest expense increased $3.4 million or 12% for the first quarter of 2006 as compared to the first quarter of 2005 due mainly to an increase in salaries and benefits expense of $1.0 million or 7%. Salaries for the first quarter of 2006 increased $636 thousand from the first quarter of 2005 while health insurance and pension costs increased $280 thousand and $160 thousand, respectively, over the same time period. In addition, as previously mentioned, United incurred marketing and related costs of approximately $950 thousand during the quarter to promote and launch its new High Performance Checking program. On a linked-quarter basis, noninterest expense increased $862 thousand or 3% due primarily to the costs associated with the High Performance Checking program.
     United’s credit quality continues to be sound. At March 31, 2006, nonperforming loans were $12.9 million or 0.27% of loans, net of unearned income compared to $13.2 million or 0.28% of loans, net of unearned income at December 31, 2005. Net charge-offs were a low $156 thousand for the first quarter of 2006 as compared to $1.0 million for the first quarter of 2005. For the quarters ended March 31, 2006 and 2005, the provision for credit losses was $250 thousand and $1.1 million, respectively. As of March 31, 2006, the allowances for loan losses and lending-related commitments totaled $53.0 million or 1.13% of loans, net of unearned income, as compared to $52.9 million or 1.14% of loans, net of unearned income at December 31, 2005.

 

 

United Bankshares, Inc. Announces...
April 26, 2006
Page Three
     During the first quarter, United’s Board of Directors declared a cash dividend of 27¢ per share. The 2006 annualized first quarter dividend of 27¢ per share equals $1.08, which would represent the 33rd consecutive year of dividend increases for United shareholders.
     United Bankshares, with $6.7 billion in assets, presently has 90 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) Stock 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.

 

 

UNITED BANKSHARES, INC. AND SUBSIDIARIES
FINANCIAL SUMMARY
(In Thousands Except for Per Share Data)
                         
    Three Months Ended
    March 31   March 31   December 31
    2006   2005   2005
EARNINGS SUMMARY:
                        
Interest income, taxable equivalent
   $ 99,311     $ 82,041     $ 97,866  
Interest expense
     40,560       26,286       36,612  
Net interest income, taxable equivalent
     58,751       55,755       61,254  
Taxable equivalent adjustment
     3,730       2,765       3,533  
Net interest income
     55,021       52,990       57,721  
Provision for credit losses
     250       1,111       2,058  
Noninterest income
     13,662       12,919       13,311  
Noninterest expenses
     32,188       28,741       31,326  
Income taxes
     11,635       11,297       11,962  
Net income
   $ 24,610     $ 24,760     $ 25,686  
 
                        
PER COMMON SHARE:
                        
Net income:
                        
Basic
   $ 0.59     $ 0.58     $ 0.61  
Diluted
     0.58       0.57       0.60  
Cash dividends
     0.27       0.26       0.27  
Book value
     15.26       14.65       15.12  
Closing market price
   $ 38.27     $ 33.14     $ 35.24  
Common shares outstanding:
                        
Actual at period end, net of treasury shares
     41,848,564       42,790,954       42,008,179  
Weighted average- basic
     41,923,726       42,900,416       42,117,900  
Weighted average- diluted
     42,379,242       43,418,579       42,638,687  
 
                        
FINANCIAL RATIOS:
                        
Return on average assets
     1.49 %     1.58 %     1.54 %
Return on average shareholders’ equity
     15.51 %     15.71 %     15.76 %
Average equity to average assets
     9.63 %     10.05 %     9.79 %
Net interest margin
     3.86 %     3.85 %     4.03 %
                         
    March 31   March 31   December 31
    2006   2005   2005
PERIOD END BALANCES:
                        
Assets
   $ 6,706,832     $ 6,311,308     $ 6,728,492  
Earning assets
     6,133,062       5,823,572       6,129,969  
Loans, net of unearned income
     4,693,329       4,391,093       4,649,829  
Loans held for sale
     1,773       4,488       3,324  
Investment securities
     1,453,394       1,389,152       1,501,966  
Total deposits
     4,703,268       4,350,439       4,617,452  
Shareholders’ equity
     638,607       626,683       635,205  

 

 

EXHIBIT 99.2
UNITED BANKSHARES, INC. AND SUBSIDIARIES
Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
Consolidated Statements of Income
                         
    Three Months Ended  
    March     March     December  
    2006     2005     2005  
Interest & Loan Fees Income
   $ 95,581     $ 79,276     $ 94,333  
Tax Equivalent Adjustment
     3,730       2,765       3,533  
 
                  
Interest & Fees Income (FTE)
     99,311       82,041       97,866  
Interest Expense
     40,560       26,286       36,612  
 
                  
Net Interest Income (FTE)
     58,751       55,755       61,254  
 
                        
Provision for Credit Losses
     250       1,111       2,058  
 
                        
Non-Interest Income:
                        
Investment securities transactions
     (2,838 )     924       (194 )
Fees from trust & brokerage services
     3,020       2,758       2,771  
Fees from deposit services
     6,991       6,491       7,040  
Other charges, commissions, and fees
     1,670       1,331       1,598  
Income from mortgage banking operations
     229       126       365  
Gain on termination of interest rate swap associated with prepayment of FHLB advance
     3,060       —       —  
Other non-interest revenue
     1,530       1,289       1,731  
 
                  
Total Non-Interest Income
     13,662       12,919       13,311  
 
                  
 
                        
Non-Interest Expense:
                        
Salaries and employee benefits
     15,098       14,066       15,005  
Net occupancy
     3,313       3,095       2,942  
Other expenses
     12,940       10,698       12,123  
Prepayment penalties on FHLB advances
     —       —       406  
Amortization of intangibles
     510       611       535  
OREO expense
     179       120       169  
FDIC expense
     148       151       146  
 
                  
Total Non-Interest Expense
     32,188       28,741       31,326  
 
                  
 
                        
Income Before Income Taxes (FTE)
     39,975       38,822       41,181  
 
                        
Tax Equivalent Adjustment
     3,730       2,765       3,533  
 
                  
 
                        
Income Before Income Taxes
     36,245       36,057       37,648  
 
                        
Taxes
     11,635       11,297       11,962  
 
                  
 
                        
Net Income
   $ 24,610     $ 24,760     $ 25,686  
 
                  
 
                        
MEMO: Effective Tax Rate
     32.10 %     31.33 %     31.77 %

 

 

UNITED BANKSHARES, INC. AND SUBSIDIARIES
Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
Consolidated Balance Sheets
                                 
    March 31     March 31              
    2006     2005     March 31     December 31  
    Q-T-D Average     Q-T-D Average     2006     2005  
Cash & Cash Equivalents
   $ 155,963     $ 167,617     $ 194,882     $ 207,962  
 
Securities Available for Sale
     1,263,306       1,219,415       1,237,596       1,274,621  
Held to Maturity Securities
     223,003       233,100       215,798       227,345  
 
                        
Total Securities
     1,486,309       1,452,515       1,453,394       1,501,966  
 
                        
Total Cash and Securities
     1,642,272       1,620,132       1,648,276       1,709,928  
 
                        
 
                                
Loans held for sale
     2,350       1,913       1,773       3,324  
 
                                
Commercial Loans
     2,578,117       2,421,531       2,612,356       2,599,781  
Mortgage Loans
     1,683,337       1,580,145       1,713,317       1,668,782  
Consumer Loans
     379,868       401,202       374,396       387,959  
 
                        
 
                                
Gross Loans
     4,641,322       4,402,878       4,700,069       4,656,522  
 
                                
Unearned income
     (6,715 )     (6,382 )     (6,740 )     (6,693 )
 
                        
 
                                
Loans, net of unearned income
     4,634,607       4,396,496       4,693,329       4,649,829  
 
                                
Allowance for Loan Losses
     (44,229 )     (43,377 )     (44,135 )     (44,138 )
 
                                
Goodwill
     167,487       166,925       167,461       167,487  
Other Intangibles
     4,282       6,532       4,017       4,527  
 
                        
Total Intangibles
     171,769       173,457       171,478       172,014  
 
                                
Real Estate Owned
     3,092       3,273       3,145       2,941  
Other Assets
     270,553       211,399       232,966       234,594  
 
                        
Total Assets
   $ 6,680,414     $ 6,363,293     $ 6,706,832     $ 6,728,492  
 
                        
 
                                
MEMO: Earning Assets
   $ 6,120,599     $ 5,833,995     $ 6,133,062     $ 6,129,969  
 
                        
 
                                
Interest-bearing Deposits
   $ 3,695,782     $ 3,436,365     $ 3,796,194     $ 3,657,778  
Noninterest-bearing Deposits
     900,751       877,253       907,074       959,674  
 
                        
Total Deposits
     4,596,533       4,313,618       4,703,268       4,617,452  
 
                                
Short-term Borrowings
     834,310       739,645       787,831       856,425  
Long-term Borrowings
     544,930       615,438       495,611       547,731  
 
                        
Total Borrowings
     1,379,240       1,355,083       1,283,442       1,404,156  
 
                                
Other Liabilities
     61,227       55,293       81,515       71,679  
 
                        
Total Liabilities
     6,037,000       5,723,994       6,068,225       6,093,287  
 
                        
 
                                
Common Equity
     643,414       639,299       638,607       635,205  
 
                        
Total Shareholders’ Equity
     643,414       639,299       638,607       635,205  
 
                        
 
                                
Total Liabilities & Equity
   $ 6,680,414     $ 6,363,293     $ 6,706,832     $ 6,728,492  
 
                        

 

 

UNITED BANKSHARES, INC. AND SUBSIDIARIES
Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
                         
    Three Months Ended
    March   March   December
    2006   2005   2005
Quarterly Share Data:
                        
 
                        
Earnings Per Share:
                        
Basic
   $ 0.59     $ 0.58     $ 0.61  
Diluted
   $ 0.58     $ 0.57     $ 0.60  
 
                        
Common Dividend Declared Per Share
   $ 0.27     $ 0.26     $ 0.27  
 
                        
High Common Stock Price
   $ 38.50     $ 38.62     $ 38.55  
Low Common Stock Price
   $ 34.46     $ 32.00     $ 32.34  
 
                        
Average Shares Outstanding (Net of Treasury Stock):
                        
Basic
     41,923,726       42,900,416       42,117,900  
Diluted
     42,379,242       43,418,579       42,638,687  
 
                        
Memorandum Items:
                        
 
                        
Tax Applicable to Security Transactions
   $ (993 )   $ 323     $ (67 )
 
                        
Common Dividends
   $ 11,331     $ 11,138     $ 11,356  
                         
    March   March   December
    2006   2005   2005
EOP Share Data:
                        
 
                        
Book Value Per Share
   $ 15.26     $ 14.65     $ 15.12  
Tangible Book Value Per Share
   $ 11.16     $ 10.60     $ 11.03  
 
                        
52-week High Common Stock Price
   $ 38.55     $ 39.35     $ 38.62  
Date
     12/02/05       12/02/04       01/03/05  
52-week Low Common Stock Price
   $ 29.82     $ 29.15     $ 29.82  
Date
     04/29/05       05/10/04       04/29/05  
 
                        
EOP Shares Outstanding (Net of Treasury Stock):
     41,848,564       42,790,954       42,008,179  
 
                        
Memorandum Items:
                        
 
                        
EOP Employees (full-time equivalent)
     1,352       1,319       1,374  

 

 

UNITED BANKSHARES, INC. AND SUBSIDIARIES
Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
                         
    Three Months Ended
    March   March   December
    2006   2005   2005
Selected Yields and Net Interest Margin:
                        
Loans
     6.96 %     6.03 %     6.76 %
Investment Securities
     5.37 %     4.68 %     5.45 %
Money Market Investments/FFS
     2.84 %     1.94 %     3.80 %
Average Earning Assets Yield
     6.55 %     5.67 %     6.43 %
Interest-bearing Deposits
     2.68 %     1.73 %     2.41 %
Short-term Borrowings
     3.65 %     1.87 %     3.03 %
Long-term Borrowings
     6.41 %     5.39 %     6.21 %
Average Liability Costs
     3.24 %     2.22 %     2.93 %
Net Interest Spread
     3.31 %     3.45 %     3.50 %
Net Interest Margin
     3.86 %     3.85 %     4.03 %
 
                        
Selected Financial Ratios:
                        
 
                        
Return on Average Common Equity
     15.51 %     15.71 %     15.76 %
Return on Average Assets
     1.49 %     1.58 %     1.54 %
Loan / Deposit Ratio
     99.79 %     100.93 %     100.70 %
Allowance for Loan Losses/ Loans, net of unearned income
     0.94 %     0.99 %     0.95 %
Allowance for Credit Losses (1)/ Loans, net of unearned income
     1.13 %     1.17 %     1.14 %
Nonaccrual Loans / Loans, net of unearned income
     0.16 %     0.14 %     0.15 %
90-Day Past Due Loans/ Loans, net of unearned income
     0.12 %     0.08 %     0.13 %
Non-performing Loans/ Loans, net of unearned income
     0.27 %     0.22 %     0.28 %
Non-performing Assets/ Total Assets
     0.24 %     0.20 %     0.24 %
Primary Capital Ratio
     10.23 %     10.66 %     10.15 %
Shareholders’ Equity Ratio
     9.52 %     9.93 %     9.44 %
Price / Book Ratio
     2.51 x     2.26 x     2.33 x
Price / Earnings Ratio
     16.48 x     14.53 x     14.62 x
Efficiency Ratio
     41.86 %     41.34 %     40.96 %

 

 

UNITED BANKSHARES, INC. AND SUBSIDIARIES
Charleston, WV
Stock Symbol: UBSI
(In Thousands Except for Per Share Data)
                         
    March     March     December  
    2006     2005     2005  
Asset Quality Data:
                        
 
                        
EOP Non-Accrual Loans
   $ 7,308     $ 5,955     $ 7,146  
EOP 90-Day Past Due Loans
     5,569       3,565       6,039  
 
                  
Total EOP Non-performing Loans
   $ 12,877     $ 9,520     $ 13,185  
 
                        
EOP Other Real Estate & Assets Owned
     3,145       2,974       2,941  
 
                  
Total EOP Non-performing Assets
   $ 16,022     $ 12,494     $ 16,126  
 
                  
                         
    Three Months Ended  
    March     March     December  
    2006     2005     2005  
Allowance for Credit Losses:(1)
                        
 
                        
Beginning Balance
   $ 52,871     $ 51,353     $ 51,995  
Provision Expense
     250       1,111       2,058  
 
                  
 
     53,121       52,464       54,053  
 
                        
Gross Charge-offs
     (671 )     (1,538 )     (1,493 )
Recoveries
     515       498       311  
 
                  
Net Charge-offs
     (156 )     (1,040 )     (1,182 )
 
                  
Ending Balance
   $ 52,965     $ 51,424     $ 52,871  
 
                  
 
Note: (1) Includes allowances for loan losses and lending-related commitments.