EXHIBIT 99.1
News Release
[LOGO
UNITED BANKSHARES, INC.]
For Immediate Release Contact: Steven E. Wilson
October 22, 2001 Chief Financial Officer
(304)424-8704
United Bankshares, Inc. Announces Record Earnings
For Third Quarter and First Nine Months of 2001
United Bankshares, Inc. (NASDAQ: UBSI), today reported record third
quarter earnings per share for 2001 of 48(cent) or $19.8 million net profit, a
9% increase from the 44(cent) or $18.6 million earned in the third quarter of
2000. Record earnings for the first three quarters of 2001 of $1.41 a share or
$58.9 million also grew 9% over the first three quarters of 2000 earnings of
$1.29 per share or $54.7 million. Cash earnings per share were 49(cent) and
$1.45 for the third quarter and first nine months of 2001, respectively,
compared to 45(cent) and $1.33 for the third quarter and first nine months of
2000.
United's key performance ratios remain strong. Third quarter 2001
annualized returns on average assets and average equity were 1.55% and 17.31%,
respectively. For the nine months ended September 30, 2001, United achieved an
annualized return on average assets of 1.59% and an annualized return on average
equity of 17.57%. On a cash basis, the annualized return on average tangible
assets was 1.60% and 1.64% for the third quarter and first nine months of 2001,
respectively, while the annualized return on average tangible equity was 19.37%
and 19.72%, respectively for the corresponding periods in 2001. These key
financial performance indicators are reflective of United's earnings strength as
United continues to be one of the best performing regional banking companies in
the nation.
Tax-equivalent net interest income for the third quarter of 2001 was
$49.5 million; up from the second quarter of 2001 and an increase of $2.5
million from the third quarter of 2000. The net interest margin for the third
quarter 2001 of 4.14% was a 10 basis points increase over the previous year's
quarter net interest margin of 4.04%. The interest rate spread for the current
quarter increased 2 basis points from the preceding quarter as variable rate
liabilities repriced faster than variable rate assets as the Federal Reserve
continued to cut interest rates to stimulate a slowing economy. United's tax-
equivalent net interest margin for the first nine months of 2001 was also 4.14%
compared to 4.13% for the same time period in 2000.
Noninterest income, excluding security transactions, for the third
quarter of 2001 rose 26.2% from the third quarter of 2000 and 5.1% over the
second quarter of 2001. Income from mortgage banking and trust operations
increased 46.5% and 19.0%, respectively for the third quarter of 2001 as
compared to the third quarter of 2000. On a linked-quarter basis, mortgage
banking income increased by 13.5%. Noninterest income, excluding security
transactions, for the first nine months of 2001 was up 29.3% from the first nine
months of 2000.
United Bankshares, Inc. Announces...
October 22, 2001
Page Two
Noninterest expense increased 13.4% for the quarter compared to the
prior year's third quarter and was up 5.7% for the first nine months due mainly
to higher sales activity in the mortgage banking segment as compensation and
incentives for its personnel are significantly tied to activity levels. On a
linked-quarter basis, noninterest expense remained relatively constant. The
efficiency ratio was still a low 42.34% and 43.05% for the third quarter and
first nine months of 2001, respectively. This ratio compares very favorably to
regional and national peer group banking companies.
United's asset quality continues to compare favorably with peer and
industry averages. Consistent with a weakening economy, nonperforming assets
and net charge-offs rose for the quarter but remain below previous year's
levels. Nonperforming assets were $17.8 million or 0.34% of total assets at
September 30, 2001 compared to $18.2 million or 0.37% of total assets at
September 30, 2000. The provision for loan losses for the three months ended
September 30, 2001 amounted to $4.1 million compared to $4.4 million for the
same period in 2000. The provision for loan losses for the nine months ended
September 30, 2001 was $8.8 million compared to $10.8 million for the prior
year-to-date. Net charge-offs were $2.8 million for the third quarter of 2001
which was a decline from net charge-offs of $4.3 million for the prior year
quarter. Net charge-offs for the first nine months of 2001 were $6.8 million, a
decrease from net charge-offs of $11.0 million for the first nine months of
2000. As of September 30, 2001, the allowance for loan losses was $42.6 million
or 1.32% of loans, net of unearned income.
Total assets have grown $261.3 million or 5% since year end 2000.
Shareholders' equity has increased $31.6 million or 7% since year end resulting
in a book value per share of $11.23. United is categorized as well capitalized
based on the risk-based capital ratio, considerably exceeding the regulatory
minimum requirement. These measures provide evidence that United's financial
position is strong.
During the quarter, United's Board of Directors declared a cash
dividend of 23(cent) per share, a 10% increase over the 21(cent) per share
declared in the third quarter of 2000. The annualized year-to-date dividend
would equal 91(cent) per share, which would represent the twenty-eighth
consecutive year of dividend increases for United shareholders.
United recently signed a definitive merger agreement with Century
Bancshares, Inc. of Washington, D.C., with assets of approximately $415 million.
The transaction, which is expected to close during the fourth quarter of 2001,
will increase United's Virginia franchise to more than $2 billion in assets and
will rank United as the ninth largest bank in the Virginia and Washington, D.C.
MSA. Following completion of the proposed merger with Century, United will have
consolidated assets over $5.4 billion with 86 full service offices in West
Virginia, Virginia, Maryland, Ohio and Washington, D.C. Consummation of the
transaction is subject to approval of the shareholders of Century and the
receipt of all regulatory approvals, as well as other customary conditions.
United Bankshares, Inc. Announces...
October 22, 2001
Page Three
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 evolving banking industry standards.
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UNITED BANKSHARES, INC. AND SUBSIDIARIES
FINANCIAL SUMMARY
(In Thousands Except for Share and Per Share Data)
Three Months Ended Nine Months Ended
---------------------------------- ----------------------------------
September 30 September 30 September 30 September 30
2001 2000 2001 2000
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EARNINGS SUMMARY:
Interest income, taxable equivalent $93,215 $98,158 $282,674 $290,879
Interest expense 43,721 51,165 136,965 146,339
Net interest income, taxable equivalent 49,494 46,993 145,709 144,540
Taxable equivalent adjustment 2,919 2,860 8,685 8,250
Net interest income 46,575 44,133 137,024 136,290
Provision for loan losses 4,145 4,439 8,787 10,837
Income from mortgage banking operations 7,343 5,014 19,037 12,556
Gain (loss) on security transactions (647) 324 (1,223) 1,147
Other noninterest income 9,060 7,986 26,783 22,886
Noninterest expenses 28,882 25,463 85,331 80,712
Income taxes 9,524 8,994 28,587 26,658
Net income 19,780 18,561 58,916 54,672
Cash dividends declared 9,500 8,812 28,205 26,503
PER COMMON SHARE:
Net income:
Basic 0.48 0.44 1.42 1.30
Diluted 0.48 0.44 1.41 1.29
Diluted - cash basis 0.49 0.45 1.45 1.33
Cash dividends declared 0.23 0.21 0.68 0.63
Book value 11.23 10.08
Closing market price 27.000 19.625
Common shares outstanding:
Actual, net of treasury shares 41,179,287 41,825,392
Average basic 41,264,394 41,842,460 41,476,627 42,020,696
Average diluted 41,623,037 42,147,989 41,760,428 42,337,568
FINANCIAL RATIOS:
Return on average assets 1.55% 1.50% 1.59% 1.48%
Return on average shareholders' equity 17.31% 18.01% 17.57% 18.08%
Average equity to average assets 8.96% 8.31% 9.04% 8.16%
Net interest margin 4.14% 4.04% 4.14% 4.13%
September 30 September 30 December 31 June 30
2001 2000 2000 2001
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PERIOD END BALANCES:
Assets 5,165,890 4,950,442 4,904,547 5,094,607
Earning assets 4,945,559 4,717,326 4,643,668 4,858,310
Loans, net of unearned income 3,467,128 3,203,538 3,192,494 3,204,163
Loans held for sale 250,672 158,468 203,831 198,591
Investment securities 1,472,699 1,352,630 1,245,334 1,450,917
Total deposits 3,484,144 3,313,137 3,391,449 3,450,939
Shareholders' equity 462,503 421,622 430,870 444,967