425 1 h91501e425.txt CENTURY BANCSHARES, INC. FOR UNITED BANKSHARES Filed by Century Bancshares, Inc. Pursuant to Rule 425 under the Securities Act of 1933, as amended, and deemed filed pursuant to 14a-12 of the Securities Exchange Act of 1934, as amended Subject Company: United Bankshares, Inc. Commission File No: 000-25976 NEWS RELEASE RELEASE: IMMEDIATE FOR: CENTURY BANCSHARES, INC. CONTACTS: MEDIA: JOSEPH S. BRACEWELL, CHAIRMAN/CEO 202-496-4040 INVESTOR RELATIONS: DALE G. PHELPS, SVP/CFO 301-468-8667 CENTURY BANCSHARES, INC. ANNOUNCES THIRD QUARTER RESULTS Washington, D.C., October 22, 2001, CENTURY BANCSHARES, INC. (NASDAQ SmallCap Market: CTRY) announced today that net income, exclusive of after-tax merger- related expense (or "core earnings"), for the third quarter was $102,000 or $0.02 per diluted common share, a 76% decrease compared with net income of $433,000, or $0.10 per diluted common share in the third quarter of 2000. Core earnings for the first nine months of 2001 were $1.344 million, or $0.30 per diluted common share, a 1% increase over 2000 when core earnings were $1.326 million, or $0.30 per diluted common share. As a result of the events of September 11, several industries and the economy in general have been negatively impacted. One of the sectors specifically impacted has been the travel and hotel industry, which has seen increased cancellations and low occupancy rates. As a result of our concentration in this industry and the importance of this industry to the Washington, DC economy, the allowance for credit losses was increased to 1.21%. The 164% increase in provision for credit losses resulting from this boosting of credit loss allowance combined with a 5% increase in noninterest expense and slow growth in net interest income and noninterest income acted to negatively impact our third quarter earnings performance. While average earning assets for the third quarter of 2001 increased 14% compared with the same quarter last year, net interest income increased only 4% as the net interest margin declined from 4.29% to Century Bancshares, Inc. 3.88% resulting from declining market rates and more intense competition for loans and deposits. On a positive note, the net interest margin has held steady at 3.88% for the past two quarters despite an additional 75 basis point easing by the Federal Reserve during the third quarter of 2001. Including after-tax merger-related expense of $438,000, Century reported a net loss for the third quarter 2001 of $336,000, or $0.07 per diluted common share compared with net income of $433,000, or $0.30 per diluted common share for the same period last year. Including after-tax merger-related expense of $2.217 million and after-tax net gains realized from investment portfolio repositioning of $951,000, net income for the first nine months of 2001 was $78,000, or $0.02 per diluted common share compared with $1.326 million, or $0.30 per diluted common share for the same period last year. "Clearly, Century's financial performance this year has been dominated by merger-related expense - first as the acquiror in the GrandBanc merger closed during the first quarter, and more recently as the acquiree in our pending merger with United," said Joseph S. Bracewell, Chairman, President and CEO. "Notwithstanding the negative short-term impact on our earnings performance, we continue to believe that both of these merger transactions will provide substantial value for our stockholders in the long run." Total assets at September 30, 2001 were $413.4 million, an increase of $14.1 million, or 4%, compared with $399.3 million one year earlier. Total loans, net of unearned income, at September 30, 2001 were $291.0 million and total deposits were $330.3 million, reflecting increases of 21% and 4%, respectively, compared with September 30, 2000. CenturyBancshares, Inc. is the parent company of Century National Bank, a community bank providing a full range of loans and financial services to professionals, small businesses, and non-profit organizations in the Washington, DC metropolitan area. Century operates eleven banking offices - five in Northern Virginia, four in Montgomery County, and two in the District - and owns an insurance agency. On June 14, 2001, Century signed a definitive agreement to merge with United Bankshares, Inc. The merger with United, which is subject to regulatory and shareholder approvals, is expected to close in the fourth quarter of this year. -2- Century Bancshares, Inc. This press release contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although the Company believes that the expectations reflected in such forward looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in its Form 10-K dated March 29, 2001, filed with the Securities and Exchange Commission and are incorporated by reference herein (Cautionary Disclosures). Subsequent written and oral forward looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Disclosures. ADDITIONAL INFORMATION SHAREHOLDERS OF CENTURY AND OTHER INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS INCLUDED IN THE REGISTRATION STATEMENT ON FORM S-4 FILED BY UNITED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION (SEC) IN CONNECTION WITH THE PROPOSED MERGER OF CENTURY AND UNITED. THE PROXY STATEMENT/PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT CENTURY, UNITED, THE MERGER, AND ABOUT PERSONS SOLICITING PROXIES IN THE MERGER, INCLUDING OFFICERS AND DIRECTORS OF CENTURY, AND THEIR INTEREST IN THE MERGER. INVESTORS MAY OBTAIN A FREE COPY OF THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS ON THE SEC'S WEB SITE (http://www.sec.gov). A PROXY STATEMENT/PROSPECTUS WITH RESPECT TO THE PROPOSED MERGER AND OTHER RELEVANT DOCUMENTS WILL ALSO BE MADE AVAILABLE FOR FREE TO CENTURY STOCKHOLDERS BY CONTACTING CENTURY'S SHAREHOLDER RELATIONS DEPARTMENT AS FOLLOWS: SHAREHOLDER RELATIONS CENTURY BANCSHARES, INC. 1275 PENNSYLVANIA AVENUE, NW WASHINGTON, DC 20004 202-496-4100 (tables follow) -3- -4- CENTURY BANCSHARES, INC. FINANCIAL HIGHLIGHTS (UNAUDITED)
----------------------------------------------------------------------------------------------------------------------------------- Quarter Ended Nine Months Ended September 30, September 30, ------------------------------- ------------------------------- (Dollars in thousands, except per share amounts) 2001 2000 2001 2000 ------------ ------------- -------------- ------------- EARNINGS DATA: Interest Income $ 7,268 $ 7,204 $ 22,682 $ 19,615 Interest Expense 3,563 3,639 11,657 9,168 ------------ ------------- ------------- ------------- Net Interest Income 3,705 3,565 11,025 10,447 Provision for Credit Losses 725 275 1,295 715 ------------ ------------- ------------- ------------- Net Interest Income After Provision 2,980 3,290 9,730 9,732 Noninterest Income 524 519 1,963 1,469 Noninterest Expense 3,381 3,216 9,669 9,150 ------------ ------------- ------------- ------------- Income Before Income Tax Expense 123 593 2,024 2,051 Income Tax Expense 21 160 680 725 ------------ ------------- ------------- ------------- CORE OPERATING INCOME ("CORE") 102 433 1,344 1,326 Merger-Related Expense-Net of Income Tax (438) - (2,217) - Investment Portfolio Repositioning Gains-Net of Income Tax - - 951 - ------------ ------------- ------------- ------------- NET (LOSS) INCOME $ (336) $ 433 $ 78 $ 1,326 ============ ============= ============= ============= PER SHARE DATA: Basic Earnings Per Share-Net (Loss) Income $ (0.08) $ 0.10 $ 0.02 $ 0.31 Basic Earnings Per Share-Core $ 0.02 $ 0.10 $ 0.31 $ 0.31 Diluted Earnings Per Share-Net (Loss) Income $ (0.07) $ 0.10 $ 0.02 $ 0.30 Diluted Earnings Per Share-Core $ 0.02 $ 0.10 $ 0.30 $ 0.30 Book Value Per Share (Period End) $ 5.78 $ 5.44 $ 5.78 $ 5.44 Average Shares Outstanding (Basic) 4,351,993 4,285,427 4,324,332 4,276,476 Average Shares Outstanding (Diluted) 4,649,481 4,376,229 4,525,757 4,362,276 Shares Outstanding (Period End) 4,359,213 4,290,985 4,359,213 4,290,985 PERIOD END BALANCE SHEET DATA: Total Assets $ 413,437 $ 399,319 Total Loans, Net of Unearned Income 291,000 240,048 Allowance for Credit Losses 3,516 2,312 Total Earning Assets 382,791 367,822 Total Intangible Assets 5,264 6,020 Total Noninterest-Bearing Deposits 53,394 52,636 Total Interest-Bearing Deposits 276,892 263,448 Total Deposits 330,286 316,084 Total Other Interest-Bearing Liabilities 53,176 57,379 Total Liabilities 388,238 375,988 Total Stockholders' Equity 25,199 23,331 ------------- ------------- Total Liabilities and Equity $ 413,437 $ 399,319 ============= ============= SELECTED KEY DATA: Net Interest Margin 3.88% 4.29% 3.93% 4.51% Efficiency Ratio 74.47% 74.51% 69.15% 73.60% Return on Average Assets-Core 0.10% 0.48% 0.44% 0.53% Return on Average Assets-Net (Loss) Income (0.32)% 0.48% 0.03% 0.53% Return on Average Stockholders' Equity-Core 1.60% 7.51% 7.14% 7.93% Return on Average Stockholders' Equity-Net (Loss) Income (5.26)% 7.51% 0.41% 7.93% Stockholders' Equity to Total Assets (Period End) 6.10% 5.84% 6.10% 5.84% ====================================================================================================================================
-5- CENTURY BANCSHARES, INC. FINANCIAL HIGHLIGHTS (UNAUDITED)
----------------------------------------------------------------------------------------------------------------------------------- Quarter Ended Nine Months Ended September 30, September 30, -------------------------------- --------------------------------- (Dollars in thousands, except per share amounts) 2001 2000 2001 2000 -------------- -------------- -------------- --------------- SELECTED AVERAGE BALANCES: Loans (net) $ 292,421 $ 221,849 $ 281,851 $ 209,055 Investment Securities 77,491 99,107 90,235 81,692 Federal Funds Sold 6,377 9,197 4,717 12,015 Interest Bearing Deposits in Other Banks 8,184 6,344 3,853 8,974 -------------- -------------- -------------- --------------- Total Earning Assets 384,473 336,497 380,656 311,736 -------------- -------------- -------------- --------------- Total Assets $ 412,409 $ 361,814 $ 410,965 $ 334,152 ============== ============= ============== =============== Interest Bearing Deposits $ 273,768 $ 226,347 $ 272,080 $ 216,232 Borrowings 54,551 58,292 56,463 43,658 -------------- -------------- -------------- --------------- Total Interest Bearing Liabilities 328,319 284,639 328,543 259,890 -------------- -------------- -------------- --------------- Noninterest Bearing Deposits 53,645 51,393 52,654 48,803 Total Deposits 327,413 277,740 324,734 265,035 Total Liabilities 387,083 338,882 385,799 311,827 Stockholders' Equity 25,326 22,932 25,166 22,325 -------------- -------------- -------------- --------------- Total Liabilities and Equity $ 412,409 $ 361,814 $ 410,965 $ 334,152 ============== ============== ============== =============== ALLOWANCE FOR CREDIT LOSSES: Balance - Beginning of Period $ 2,955 $ 2,411 $ 2,958 $ 2,209 Provision for Credit Losses 725 275 1,545 715 Charge-offs 244 423 1,148 709 Recoveries 80 49 161 97 -------------- -------------- -------------- --------------- Balance - End of Period $ 3,516 $ 2,312 $ 3,516 $ 2,312 -------------- -------------- -------------- --------------- ASSET QUALITY: Nonaccrual Loans $ 196 $ 1,043 90 Days Past Due 477 216 Other Real Estate Owned 321 114 -------------- --------------- Total Nonperforming Assets $ 994 $ 1,373 -------------- --------------- Nonperforming Assets to Total Assets 0.24% 0.34% Allowance for Credit Losses to Nonperforming Loans 522.44% 183.64% Allowance for Credit Losses to Total Loans 1.21% 0.96%
# # #