EXHIBIT 99.1
News Release
[LOGO] UNITED
BANKSHARES, INC.
For Immediate Release Contact: Steven E. Wilson
July 19, 2002 Chief Financial Officer
(304) 424-8704
United Bankshares, Inc. Announces 12% Increase
In Earnings for the Second Quarter of 2002
PARKERSBURG, WV--United Bankshares, Inc. (NASDAQ: UBSI), today reported
record earnings for the second quarter and the first half of 2002. Net income
was $22.2 million or 51(cent) per diluted share for the second quarter of 2002,
up 12% from $19.8 million or 47(cent) per diluted share earned during the second
quarter of 2001. Net income for the first six months of 2002 was $44.0 million
or $1.01 per diluted share, an increase of 13% compared to $39.1 million or
93(cent) per diluted share for the prior year's first six months.
United's key performance indicators were strong for the three months
and six months ended June 30, 2002. United's return on average assets was 1.62%
for the quarter and first half of 2002 while the return on average equity was
17.02% and 17.10%, respectively. These key financial performance ratios are
indicative of United's earnings strength and balanced capital levels. United
continues to be one of the best performing regional banking companies in the
nation.
Tax-equivalent net interest income for the second quarter of 2002 was
$54.2 million, an increase of $5.1 million or 10% from the second quarter of
2001. Tax-equivalent net interest income for the first six months of 2002 was
$107.6 million, an increase of $11.4 million or 12% from the prior year's first
six months. The net interest margin for the second quarter and first half of
2002 was 4.22% and 4.19%, respectively, as compared to net interest margins of
4.18% and 4.14% during the same periods last year. The margin increases from
last year's results were primarily attributable to a $439 million and $497
million increase in average earning assets for the quarter and year-to-date,
respectively, resulting mainly from the Century Bancshares acquisition that was
consummated in December of 2001. On a linked quarter basis, tax-equivalent net
interest income increased $744 thousand while the net interest margin increased
6 basis points to 4.22% from the first quarter of 2002.
Noninterest income, excluding security transactions, for the second
quarter of 2002 increased 12% from the second quarter of 2001 and 8% over the
first quarter of 2002. These results were achieved primarily due to a
combination of increased revenues from the mortgage banking and deposit services
areas. Income from mortgage banking and deposit services increased 10% and 18%,
respectively for the second quarter of 2002 as compared to the second quarter of
2001. On a linked-quarter basis, mortgage banking income increased by 11% while
deposit services fees grew 9%. Noninterest income, excluding security
transactions, for the first half of 2002 increased 15% from the first half of
2001 primarily due to increases of 16% and 18% in mortgage banking income and
deposit services fees, respectively, during the first half of 2002.
United Bankshares, Inc. Announces
July 19, 2002
Page Two
Noninterest expense increased 18% for the second quarter and first half
of 2002 compared to the second quarter and first half of 2001 mainly due to
increased employee salaries and benefits from the Century Bancshares
acquisition. On a linked-quarter basis, noninterest expense was up 9% over the
first quarter of 2002 due mainly to higher sales activity in the mortgage
banking segment as compensation and incentives for its personnel are
significantly tied to activity levels. The efficiency ratio was still a low
47.96% and 46.44% for the second quarter and first half of 2002, respectively.
This ratio compares very favorably to regional and national peer group banking
companies.
Portfolio loans grew at an 11% annualized rate during the second
quarter of 2002 paced by consumer and commercial loans, which grew at a 27% and
14% annualized rate, respectively. Total assets increased at a 5% annualized
rate during the quarter. Shareholders' equity grew at an annualized rate of 22%
during the second quarter while total deposits and total liabilities remained
relatively flat. At June 30, 2002, book value per share was $12.53 compared to
$11.81 per share at March 31, 2002.
United's credit quality continues to be sound. Nonperforming loans were
$15.0 million at June 30, 2002 as compared to $14.4 million at March 31, 2002
and $17.6 million at December 31, 2001. At quarter end, nonperforming loans
represented 0.42% of loans, net of unearned income. Net charge-offs of $1.8
million for the second quarter of 2002 represented only 0.05% of average loans
for the quarter compared to 0.05% and 0.11% of average loans for the quarters
ended March 31, 2002 and December 31, 2001, respectively. Net charge-offs for
the first half of 2002 were $3.6 million as compared to $4.0 million for the
first half of 2001. For the quarters ended June 30, 2002 and 2001, the provision
for loan losses was $1.7 million and $2.1 million, respectively, while the
provision for the first six months was $3.9 million for 2002 as compared to $4.6
million for 2001. As of June 30, 2002, the allowance for loan losses was $47.7
million or 1.33% of loans, net of unearned income, compared to 1.35% at December
31, 2001.
During the quarter, United's Board of Directors declared a cash
dividend of 23(cent) per share. The annualized first half dividend of 46(cent)
per share equals 92(cent) which would represent the twenty-ninth consecutive
year of dividend increases for United shareholders.
United Bankshares, with $5.6 billion in assets, presently has 84
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 evolving banking industry standards.
[LOGO] UNITED
BANKSHARES, INC.
THE CHALLENGE TO BE THE BEST NEVER ENDS
UNITED BANKSHARES, INC. AND SUBSIDIARIES
FINANCIAL SUMMARY
(In Thousands Except for Per Share Data)
Three Months Ended Six Months Ended
----------------------------- -----------------------------
June 30 June 30 June 30 June 30
2002 2001 2002 2001
----------------------------- -----------------------------
EARNINGS SUMMARY:
Interest income, taxable equivalent $ 87,517 $ 94,593 $ 175,558 $ 189,458
Interest expense 33,322 45,467 67,912 93,244
Net interest income, taxable equivalent 54,195 49,126 107,646 96,214
Taxable equivalent adjustment 2,779 2,897 5,582 5,765
Net interest income 51,416 46,229 102,064 90,449
Provision for loan losses 1,675 2,143 3,902 4,642
Income from mortgage banking operations 7,148 6,469 13,598 11,694
Loss on security transactions (289) (718) (593) (576)
Other noninterest income 10,411 9,145 20,202 17,723
Noninterest expenses 34,829 29,453 66,859 56,449
Income taxes 9,976 9,745 20,483 19,063
Net income 22,206 19,784 44,027 39,136
Net income adjusted for impact of FAS 142/(1)/ 22,206 20,335 44,027 40,232
Cash dividends declared 9,801 9,530 19,670 18,705
PER COMMON SHARE:
Net income:
Basic 0.52 0.48 1.03 0.94
Diluted 0.51 0.47 1.01 0.93
Diluted adjusted for impact of FAS 142/(1)/ 0.51 0.49 1.01 0.96
Cash dividends 0.23 0.23 0.46 0.45
Book value 12.53 10.77
Closing market price 29.38 26.80
Common shares outstanding:
Actual at period end, net of treasury shares 42,560,428 41,308,168
Weighted average- basic 42,691,886 41,466,564 42,793,408 41,584,502
Weighted average- diluted 43,391,049 41,823,411 43,466,954 41,914,814
FINANCIAL RATIOS:
Return on average assets 1.62% 1.60% 1.62% 1.61%
Return on average shareholders' equity 17.02% 17.54% 17.10% 17.70%
Average equity to average assets 9.54% 9.12% 9.47% 9.09%
Net interest margin 4.22% 4.18% 4.19% 4.14%
June 30 June 30 December 31 March 31
2002 2001 2001 2002
----------------------------- -----------------------------
PERIOD END BALANCES:
Assets 5,625,130 5,094,607 $ 5,631,775 $ 5,557,581
Earning assets 5,294,773 4,858,310 5,301,211 5,290,237
Loans, net of unearned income 3,590,305 3,204,163 3,502,334 3,491,455
Loans held for sale 284,230 198,591 368,625 223,388
Investment securities 1,412,112 1,450,917 1,428,716 1,473,583
Total deposits 3,815,311 3,450,939 3,787,793 3,818,901
Shareholders' equity 533,183 444,967 506,529 505,636
/(1)/ As required, United discontinued the amortization of goodwill in
accordance with Financial Accounting Standards Board Statement No. 142.
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.