EXHIBIT 99.1
News Release
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[LOGO]UNITED
BANKSHARES, INC.
For Immediate Release Contact: Steven E. Wilson
January 21, 2003 Chief Financial Officer
(304) 424-8704
United Bankshares, Inc. Achieves Record Earnings
PARKERSBURG, WV-- United Bankshares, Inc. (NASDAQ: UBSI), announced today
record earnings for both the year and fourth quarter of 2002. United's 2002
annual earnings totaled a record $88.9 million, an 11.2% increase over the $80.0
million earned for 2001. Diluted earnings per share were $2.06 for 2002 compared
to $1.90 for 2001, an increase of 8.4% for the year. United generated net income
of $22.6 million for the fourth quarter of 2002, an increase of 7.1% over the
$21.1 million earned in the fourth quarter of 2001. Diluted earnings per share
for the fourth quarter of 2002 were 53(cent), an increase of 8.2% compared with
49(cent) reported during the fourth quarter last year.
United's earnings performance produced a return on average assets of 1.59%
and a return on average shareholders' equity of 16.73% for the year of 2002, as
compared to 1.59% and 17.51%, respectively, for the year 2001. For the fourth
quarter of 2002, the annualized return on average assets was 1.55% and the
annualized return on average shareholders' equity was 16.39% compared with
annualized returns of 1.58% and 17.36%, respectively, for the fourth quarter of
2001. These key financial performance indicators are reflective of United's
earnings strength as United continues to compare very favorably with the best
performing regional banking companies in the nation.
Noninterest income growth of 18.1% and 22.4% for the year and fourth
quarter of 2002, respectively, was driven primarily by increased
mortgage-banking income. For the fourth quarter of 2002, noninterest income,
excluding security transactions, totaled $22.8 million, an increase of $5.9
million or 35.2% from the fourth quarter of 2001. The growth in noninterest
income for both periods was primarily the result of increased revenues from the
mortgage-banking segment as United's mortgage subsidiary originated mortgage
loans for sale in the secondary market of over $1.0 billion during the fourth
quarter and over $3.1 billion for the year ended December 31, 2002. Mortgage
loan originations increased by 40% and 36%, respectively, for the fourth quarter
and year of 2002 when compared to the same periods of 2001. Income from
mortgage-banking operations increased $3.9 million or 51.6% for the fourth
quarter of 2002 as compared to the fourth quarter of 2001. On a linked-quarter
basis, mortgage-banking income for the fourth quarter of 2002 was 1.2% higher
than the $11.2 million earned for the third quarter of 2002. Also contributing
to the increase in noninterest income during the fourth quarter of 2002 was a
$1.5 million increase in deposit service fees. Noninterest income, excluding
security transactions, for the year of 2002 was $79.7 million, an increase of
$17.0 million or 27.1% from the same period in 2001 primarily due to increases
of $9.6 million and $3.7 million in mortgage-banking income and deposit services
fees, respectively.
Trust and brokerage income also showed increases quarter-over-quarter and
year-over-year as estate and trust distribution fees and brokerage commissions
increased due to growth in both the number of accounts and volume of
transactions. Trust and brokerage revenues totaled $2.2 million for the fourth
quarter, an increase of 14.5% compared to the fourth quarter of 2001. For the
year trust and brokerage income was up a healthy 8.3% over 2001.
United Bankshares, Inc. Achieves...
January 21, 2003
Page Two
Included in the security transactions' totals for 2002 and 2001 are
recognized charges of $7.0 million and $1.2 million, respectively, related to an
other-than-temporary decline in the fair value of retained interests in
securitized assets for the years ended December 31, 2002 and 2001. The decline
in the value of these available for sale securities was the result of an
increase in the level of prepayment and default activity during the time
periods, which negatively effected the valuation of those securities.
Also contributing to United's record earnings performance was increased
tax-equivalent net interest income for the fourth quarter and year of 2002 as
compared with the same periods of 2001. Tax-equivalent net interest income for
the fourth quarter of 2002 was $53.8 million, an increase of $2.8 million or
5.4% from the fourth quarter of 2001. The net interest margin for the fourth
quarter of 2002 was 3.96%, which is an 11 basis point contraction from the
previous year's fourth quarter net interest margin of 4.07%. Tax-equivalent net
interest income for the year of 2002 reached $217.9 million, an increase of
$21.2 million or 10.8% from the prior year. The 2002 net interest margin
reflected a 3 basis point increase from 4.12% for 2001 to 4.15% for 2002. This
year's increased tax-equivalent net interest income over last year's results was
primarily due to increases in the volume of interest earning assets and interest
bearing liabilities from the Century Bancshares acquisition that was consummated
in December of 2001 and increases in average loans held for sale. On a linked
quarter basis, tax-equivalent net interest income decreased $2.7 million or 4.7%
while the net interest margin decreased 30 basis points from the third quarter
of 2002. The third quarter 2002 results included a $1.1 million dividend payment
plus interest during the quarter on a $10 million trust preferred security
previously classified as nonaccrual. As in the case with many financial
institutions, management anticipates that the net interest margin will continue
to contract in the coming months as United's assets reprice at historically low
levels with little flexibility for a corresponding decrease in rates paid on its
interest-bearing liabilities.
United's credit quality continues to be sound, comparing favorably to
national peer group averages. Nonperforming loans were $15.4 million or 0.43% of
loans, net of unearned income at December 31, 2002 compared to $17.6 million or
0.50% of loans, net of unearned income at December 31, 2001. Net charge-offs
were $2.2 million for the fourth quarter of 2002, a decline from $3.9 million
for the fourth quarter of 2001. Net charge-offs were $8.0 million for the year
of 2002, down $2.6 million from net charge-offs of $10.6 million for the year of
2001. For the quarters ended December 31, 2002 and 2001, the provision for loan
losses was $2.2 million and $4.0 million, respectively, while the provision for
the year was $7.9 million for 2002 as compared to $12.8 million for 2001. As of
December 31, 2002, the allowance for loan losses was $47.4 million or 1.33% of
loans, net of unearned income, compared to 1.35% reported at December 31, 2001.
Noninterest expense increased $8.2 million or 26.8% and $28.4 million or
24.5% during the three and twelve-month periods ended December 31, 2002,
respectively, as compared to the same periods last year. Noninterest expense
totaled $38.6 million for the fourth quarter of 2002 compared with $30.4 million
for the fourth quarter of 2001 and $38.7 million for the third quarter of 2002.
For the year 2002, noninterest expense amounted to $144.1 million as compared to
$115.7 million for 2001. The noninterest expense increases for the year and the
fourth quarter over the same periods of last year were primarily due to
increased employee salaries and related benefits. The increase in salaries
resulted from record originations in the mortgage-banking segment
United Bankshares, Inc. Achieves...
January 21, 2003
Page Three
where compensation and incentives for personnel are tied to activity levels. The
increase in benefits was due to additional pension expense in 2002. United's net
occupancy expense increased for both the year and fourth quarter of 2002
compared to the same periods of 2001 due to building and rental costs from the
additional branch locations added by the Century acquisition which was only
included in United's results for one month of 2001. Other noninterest expense
reflected an increase of $0.93 million or 7.6% for the fourth quarter of 2002
and an increase of $7.0 million or 15.8% for the year as compared to the fourth
quarter and year of 2001, respectively. The increases in other expense for the
quarter and year were from the higher level of general operating expenses from
the Century acquisition. On a linked-quarter basis, noninterest expense remained
flat as it declined less than one-half of one percent. The efficiency ratio was
still very low at 49.66% and 47.59% for the fourth quarter and year of 2002,
respectively. This ratio compares very favorably to regional and national peer
group banking companies.
As a result of United's fourth quarter 2002 adoption of SFAS No. 147, which
changed the accounting rules for the recognition of goodwill amortization
associated with certain branch acquisitions, United ceased amortization of
goodwill on branch acquisitions that were acquisitions of businesses. The
favorable reduction in goodwill amortization expense was approximately $302
thousand. In accordance with the adoption of SFAS No. 142 effective January 1,
2002, United ceased amortization of goodwill associated with certain prior
business combinations. Prior to the adoption of SFAS No. 142, other noninterest
expense for the fourth quarter and year of 2001 included amortization of
goodwill of $0.6 million and $2.5 million, respectively.
During the fourth quarter, United's Board of Directors declared a cash
dividend of 25(cent) per share, which represented a 9% increase over the
23(cent) paid in the fourth quarter of 2001 and a 4% increase from the 24(cent)
paid in the third quarter of 2002. Dividends per share of 95(cent) for 2002
represented a 4% increase over the 91(cent) per share paid for 2001. The year
2002 was the 29th consecutive year of dividend increases to United shareholders.
United Bankshares, with $5.8 billion in assets, presently has 85
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.
UNITED BANKSHARES, INC. AND SUBSIDIARIES
FINANCIAL SUMMARY
(In Thousands Except for Per Share Data)
Three Months Ended Year Ended
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December 31 December 31 December 31 December 31
2002 2001 2002 2001
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EARNINGS SUMMARY:
Interest income, taxable equivalent $85,759 $89,575 $350,453 $372,208
Interest expense 31,968 38,542 132,557 175,507
Net interest income, taxable equivalent 53,791 51,033 217,896 196,741
Taxable equivalent adjustment 2,670 2,954 10,975 11,638
Net interest income 51,121 48,079 206,921 185,103
Provision for loan losses 2,212 4,046 7,937 12,833
Income from mortgage banking operations 11,341 7,481 36,142 26,518
Gain (loss) on security transactions (1,305) 705 (6,266) (518)
Other noninterest income 11,507 9,422 43,603 36,205
Noninterest expenses 38,574 30,414 144,130 115,745
Income taxes 9,325 10,152 39,400 38,739
Net income 22,553 21,075 88,933 79,991
Net income adjusted for FAS 142 and 147/(1)/ 22,327 21,696 88,933 82,474
Cash dividends paid 10,526 9,892 40,388 38,096
PER COMMON SHARE:
Net income:
Basic 0.53 0.51 2.09 1.93
Diluted 0.53 0.49 2.06 1.90
Diluted adjusted for FAS 142 and 147/(1)/ 0.52 0.51 2.06 1.96
Cash dividends paid 0.25 0.23 0.95 0.91
Book value 12.88 11.80
Closing market price 29.06 28.86
Common shares outstanding:
Actual, net of treasury shares 42,031,968 42,926,511
Average basic 42,155,892 41,559,161 42,537,980 41,497,304
Average diluted 42,669,955 42,217,513 43,113,347 42,064,919
FINANCIAL RATIOS:
Return on average assets 1.55% 1.58% 1.59% 1.59%
Return on average shareholders' equity 16.39% 17.36% 16.73% 17.51%
Average equity to average assets 9.47% 9.11% 9.51% 9.06%
Net interest margin 3.96% 4.07% 4.15% 4.12%
December 31 December 31
2002 2001
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PERIOD END BALANCES:
Assets $5,792,019 $5,631,775
Earning assets 5,454,471 5,301,211
Loans, net of unearned income 3,573,161 3,502,334
Loans held for sale 582,718 368,625
Investment securities 1,285,490 1,428,716
Total deposits 3,900,848 3,787,793
Shareholders' equity 541,539 506,529
/(1)/ As required, United discontinued the amortization of goodwill in
accordance with Financial Accounting Standards Board Statements No. 142
and No. 147. These amounts have been adjusted for periods prior to January
1, 2002 to present those amounts on a comparable basis with the periods
subsequent to January 1, 2002.