EXHIBIT 99.1
News Release
For Immediate Release April 25, 2005 | Contact: Steven E. Wilson Chief Financial Officer (304) 424-8704 |
United Bankshares, Inc. Announces
Increased Earnings for the First Quarter of 2005
WASHINGTON, DC and CHARLESTON, WV— United Bankshares, Inc. (NASDAQ: UBSI), today reported diluted earnings per share of 57¢ for the first quarter of 2005, which represented an 8% increase from diluted earnings per share of 53¢ for first quarter of 2004. United generated net income of $24.8 million for the first quarter of 2005, an increase of 5% from the $23.5 million earned in the first quarter of 2004.
First quarter of 2005 results produced an annualized return on average assets of 1.58% and an annualized return on average equity of 15.71%, as compared to 1.52% and 15.19%, respectively, for the first quarter of 2004. United’s returns compare favorably to its most recently reported peer group banking companies’ average return on assets of 1.29% and average return on equity of 14.11%.
Earnings per diluted share from continuing operations was 57¢ for the first quarter of 2005, a 12% increase from earnings per diluted share from continuing operations of 51¢ for the first quarter of 2004. Income from continuing operations was $24.8 million for the first quarter of 2005 as compared to income from continuing operations of $22.6 million for the first quarter of 2004. No income from discontinued operations was recorded for the first quarter of 2005 because the sale of George Mason Mortgage, LLC occurred in 2004. Income from discontinued operations for the first quarter of 2004 was $897 thousand or 2¢ per diluted share.
The earnings growth for the first quarter of 2005 from last year’s first quarter was primarily due to increased net interest income. Tax-equivalent net interest income from continuing operations for the first quarter of 2005 was $55.8 million, an increase of $3.5 million or 7% from the first quarter of 2004. This increase in tax-equivalent net interest income from continuing operations was due mainly to a $399.3 million or 7% increase in average earning assets as average loans for the first quarter of 2005 grew $394.6 million or 10% over last year’s first quarter. In addition, the average yield on earning assets for the first quarter of 2005 increased 25 basis points from the first quarter of 2004 as a result of higher interest rates. Partially offsetting these increases to net interest income for the first quarter of 2005 was a 35 basis point increase in the cost of funds from the first quarter of 2004 due to the higher interest rates. On a linked-quarter basis, United’s tax-equivalent net interest income from continuing operations for the first quarter of 2005 was relatively flat compared to the fourth quarter of 2004 as growth in average loans of $97.2 million or 2% for the quarter was offset by an increase of 19 basis points in the cost of funds. On a consolidated basis, which combines the results from continuing and discontinued operations, the net interest margin for the first quarter of 2005 of 3.85% was a decrease of 1 basis point from the consolidated net interest margin of 3.86% for the first and fourth quarters of 2004.
United Bankshares, Inc. Announces...
April 25, 2005
Page Two
Noninterest income from continuing operations for the first quarter of 2005 was $12.9 million, which was a decrease of $644 thousand or 5% from the first quarter of 2004 due mainly to a decline in fees from deposit services of $906 thousand or 12%. Revenue from trust and brokerage services grew $188 thousand or 7% for the first quarter of 2005 over last year’s first quarter revenue. On a linked-quarter basis, noninterest income from continuing operations decreased $184 thousand or 1% from the fourth quarter of 2004 again due mainly to decreased revenue from deposit services. Income from trust and brokerage services showed a healthy growth of $310 thousand or 13% for the first quarter of 2005 over the fourth quarter of 2004.
Noninterest expense from continuing operations decreased $883 thousand or 3% for the first quarter of 2005 as compared to the first quarter of 2004 due to decreases in several general operating expenses, none of which were individually significant. Salaries and employee benefits expense for the first quarter of 2005 was relatively flat from last year’s first quarter expense. On a linked-quarter basis, noninterest expense decreased $3.0 million or 9% which was due mainly to a penalty of $3.0 million to refinance a Federal Home Loan Bank (FHLB) advance during the fourth quarter of 2004.
United’s credit quality continues to be sound. At March 31, 2005, nonperforming loans were $9.5 million or 0.22% of loans, net of unearned income compared to $10.8 million or 0.24% of loans, net of unearned income at December 31, 2004. Net charge-offs were $1.0 million for the first quarter of 2005 as compared to $1.3 million for the first quarter of 2004. For the quarters ended March 31, 2005 and 2004, the provision for credit losses was $1.1 million and $1.4 million, respectively. As of March 31, 2005, the allowances for loan losses and lending-related commitments totaled $51.4 million or 1.17% of loans, net of unearned income, as compared to $51.4 million or 1.16% of loans, net of unearned income at December 31, 2004.
During the first quarter, United’s Board of Directors declared a cash dividend of 26¢ per share. The 2005 annualized first quarter dividend of 26¢ per share equals $1.04, which would represent the 32nd consecutive year of dividend increases for United shareholders.
United Bankshares, with $6.3 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”.
UNITED BANKSHARES, INC. AND SUBSIDIARIES
FINANCIAL SUMMARY
(In Thousands Except for Per Share Data)
Three Months Ended | ||||||||||||
March 31 | March 31 | December 31 | ||||||||||
2005 | 2004 | 2004 | ||||||||||
EARNINGS SUMMARY: | ||||||||||||
Interest income, taxable equivalent | $ | 82,041 | $ | 73,666 | $ | 80,163 | ||||||
Interest expense | 26,286 | 21,400 | 24,175 | |||||||||
Net interest income, taxable equivalent | 55,755 | 52,266 | 55,988 | |||||||||
Taxable equivalent adjustment | 2,765 | 2,515 | 2,717 | |||||||||
Net interest income | 52,990 | 49,751 | 53,271 | |||||||||
Provision for credit losses | 1,111 | 1,357 | 1,328 | |||||||||
Noninterest income | 12,919 | 13,563 | 13,103 | |||||||||
Noninterest expenses | 28,741 | 29,624 | 31,712 | |||||||||
Income taxes related to continuing operations | 11,297 | 9,726 | 7,834 | |||||||||
Income from continuing operations | 24,760 | 22,607 | 25,500 | |||||||||
Income from discontinued operations before income taxes | — | 1,243 | — | |||||||||
Income taxes related to discontinued operations | — | 346 | — | |||||||||
Income from discontinued operations | — | 897 | — | |||||||||
Net income | $ | 24,760 | $ | 23,504 | $ | 25,500 | ||||||
PER COMMON SHARE: | ||||||||||||
From continuing operations: | ||||||||||||
Basic | $ | 0.58 | $ | 0.52 | $ | 0.59 | ||||||
Diluted | 0.57 | 0.51 | 0.58 | |||||||||
From discontinued operations: | ||||||||||||
Basic | — | 0.02 | — | |||||||||
Diluted | — | 0.02 | — | |||||||||
Net income: | ||||||||||||
Basic | 0.58 | 0.54 | 0.59 | |||||||||
Diluted | 0.57 | 0.53 | 0.58 | |||||||||
Cash dividends | 0.26 | 0.25 | 0.26 | |||||||||
Book value | 14.65 | 14.34 | 14.68 | |||||||||
Closing market price | $ | 33.14 | $ | 30.50 | $ | 38.15 | ||||||
Common shares outstanding: | ||||||||||||
Actual at period end, net of treasury shares | 42,790,954 | 43,627,204 | 43,008,445 | |||||||||
Weighted average- basic | 42,900,416 | 43,680,837 | 43,111,287 | |||||||||
Weighted average- diluted | 43,418,579 | 44,258,584 | 43,742,803 | |||||||||
FINANCIAL RATIOS: | ||||||||||||
Return on average assets | 1.58 | % | 1.52 | % | 1.60 | % | ||||||
Return on average shareholders’ equity | 15.71 | % | 15.19 | % | 15.90 | % | ||||||
Average equity to average assets | 10.05 | % | 9.98 | % | 10.09 | % | ||||||
Net interest margin | 3.85 | % | 3.86 | % | 3.86 | % |
March 31 | March 31 | December 31 | ||||||||||
2005 | 2004 | 2004 | ||||||||||
PERIOD END BALANCES: | ||||||||||||
Assets | $ | 6,311,308 | $ | 6,441,078 | $ | 6,435,971 | ||||||
Earning assets | 5,823,572 | 5,576,094 | 5,953,858 | |||||||||
Loans, net of unearned income | 4,391,093 | 4,085,741 | 4,418,276 | |||||||||
Loans held for sale | 4,488 | 765 | 3,981 | |||||||||
Investment securities | 1,389,152 | 1,462,356 | 1,510,442 | |||||||||
Total deposits | 4,350,439 | 4,057,582 | 4,297,563 | |||||||||
Shareholders’ equity | 626,683 | 625,741 | 631,507 |