EXHIBIT 99.1
News Release
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[LOGO]UNITED
BANKSHARES, INC.
For Immediate Release Contact: Steven E. Wilson
October 21, 2002 Chief Financial Officer
(304) 424-8704
United Bankshares, Inc. Posts 13% Increase
for Record Earnings in the Third Quarter of 2002
PARKERSBURG, WV--United Bankshares, Inc. (NASDAQ: UBSI), today reported
record earnings for the third quarter and the first nine months of 2002. Net
income was $22.4 million for the third quarter of 2002, up 13% from $19.8
million earned during the third quarter of 2001. Diluted earnings per share were
52(cent) for the third quarter, up 8% compared to 48(cent) per share for the
third quarter of 2001. Net income for the first nine months of 2002 was $66.4
million or $1.53 per diluted share, which was also an increase of 13% compared
to $58.9 million or $1.41 per diluted share for the prior year's first nine
months.
United's return on average assets was 1.58% for the quarter, up from 1.55%
in the third quarter of 2001. Return on average equity was 16.37% for the third
quarter of 2002 compared to 17.31% for last year's third quarter. For the nine
months ended September 30, 2002, United achieved an annualized return on average
assets of 1.60% and an annualized return on average equity of 16.85% compared
with 1.59% and 17.57%, respectively, for the same time periods in 2001. 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 third quarter of 2002 was $56.5
million, an increase of $7.0 million or 14% from the third quarter of 2001.
Tax-equivalent net interest income for the first nine months of 2002 was $164.1
million, an increase of $18.4 million or 13% from the prior year's first nine
months. The net interest margin for the third quarter of 2002 was 4.26% which is
12 basis points higher than the previous year's third quarter net interest
margin of 4.14%. For the first nine months of 2002, the net interest margin was
4.22%, which is 8 basis points higher than the same period in 2001. The margin
increases from last year's results were primarily attributable to a decrease in
funding costs and an increase in average earning assets due mainly to the
Century Bancshares acquisition that was consummated in December of 2001. The
cost of interest-bearing funds declined 133 and 152 basis points for the quarter
and year-to-date, respectively, when compared to the same periods in 2001. On a
linked quarter basis, tax-equivalent net interest income increased $2.3 million
or 4% while the net interest margin increased 4 basis points from the second
quarter of 2002. These increases were the result of a higher level of loans held
for sale and the associated interest income earned until settlement, plus an 18
basis point decline in the cost of interest-bearing deposits. In addition,
United received a $1.1 million dividend payment plus interest during the quarter
on a $10 million trust preferred security previously classified as nonaccrual.
United Bankshares, Inc. Posts...
October 21, 2002
Page Two
Noninterest income, excluding security transactions, for the third quarter
of 2002 was $23.1 million, which represented increases of 41% and 32% from the
third quarter of 2001 and second quarter of 2002, respectively. These results
were achieved primarily due to increased revenues from the mortgage banking
segment. Income from mortgage banking operations increased $3.9 million or 53%
for the third quarter of 2002 as compared to the third quarter of 2001. On a
linked-quarter basis, mortgage banking income increased $4.1 million or 57%.
Noninterest income, excluding security transactions, for the first nine months
of 2002 increased $11.1 million or 24% from the same time period in 2001
primarily due to increases of $5.8 million and $3.9 million in mortgage banking
income and deposit services fees, respectively. Including security transactions,
noninterest income increased 19% and 16% for the third quarter and first nine
months of 2002, respectively, when compared to the same time periods in 2001.
Included in the security transactions' totals for 2002 and 2001 are recognized
impairment charges of $5.4 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 nine months ended September 30, 2002 and 2001. This
decline was the result of an increase in the level of prepayment and default
activity during the time periods, which effected the valuation of those
securities.
Noninterest expense increased 34% and 24% for the third quarter and first
nine months of 2002, respectively, compared to the third quarter and first nine
months of 2001. These increases from last year were mainly due to increased
employee salaries and benefits from the Century Bancshares acquisition in
December of 2001, which more than offset the reduction in goodwill amortization
expense related to a change in accounting rules effective January 1, 2002. On a
linked-quarter basis, noninterest expense was up 11% over the second 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 47.64% and 46.88% for the third
quarter and first nine months of 2002, respectively. This ratio compares very
favorably to regional and national peer group banking companies.
United's credit quality continues to be sound. Nonperforming loans were
$12.9 million at September 30, 2002, as compared to $15.0 million at June 30,
2002 and $17.6 million at December 31, 2001. At quarter end, nonperforming loans
represented 0.36% of loans, net of unearned income. The provision for loan
losses for the three months ended September 30, 2002 amounted to $1.8 million
compared to $4.1 million for the same period in 2001. The provision for loan
losses for the nine months ended September 30, 2002 was $5.7 million compared to
$8.8 million for the prior year-to-date. Net charge-offs were $2.2 million for
the third quarter of 2002 which was a decline from net charge-offs of $2.8
million for the prior year quarter. Net charge-offs for the first nine months of
2002 were $5.8 million, a decrease from net charge-offs of $6.8 million for the
first nine months of 2001. As of September 30, 2002, the allowance for loan
losses was $47.4 million or 1.33% of loans, net of unearned income, compared to
1.35% at December 31, 2001.
United Bankshares, Inc. Posts...
October 21, 2002
Page Three
During the quarter, United's Board of Directors declared a cash dividend of
24(cent) per share, which represented a 4% increase over the 23(cent) paid in
both the second quarter of 2002 and the third quarter of 2001. The annualized
year-to-date dividend of 70(cent) per share equals 93(cent), which would
represent the twenty-ninth consecutive year of dividend increases for United's
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 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 Share and Per Share Data)
Three Months Ended Nine Months Ended
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September 30 September 30 September 30 September 30
2002 2001 2002 2001
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EARNINGS SUMMARY:
Interest income, taxable equivalent $ 89,138 $ 93,216 $ 264,695 $ 282,674
Interest expense 32,677 43,721 100,589 136,965
Net interest income, taxable equivalent 56,461 49,495 164,106 145,709
Taxable equivalent adjustment 2,725 2,920 8,306 8,685
Net interest income 53,736 46,575 155,800 137,024
Provision for loan losses 1,823 4,145 5,725 8,787
Income from mortgage banking operations 11,203 7,343 24,801 19,037
Loss on security transactions (4,368) (647) (4,961) (1,223)
Other noninterest income 11,894 9,060 32,096 26,783
Noninterest expenses 38,697 28,882 105,556 85,331
Income taxes 9,592 9,524 30,075 28,587
Net income 22,353 19,780 66,380 58,916
Net income adjusted for impact of FAS 142 /(1)/ 22,353 20,325 66,380 60,557
Cash dividends declared 10,193 9,500 29,863 28,205
PER COMMON SHARE:
Net income:
Basic 0.53 0.48 1.56 1.42
Diluted 0.52 0.48 1.53 1.41
Diluted adjusted for impact of FAS 142 /(1)/ 0.52 0.49 1.53 1.45
Cash dividends declared 0.24 0.23 0.70 0.68
Book value 12.72 11.23
Closing market price 29.01 27.00
Common shares outstanding:
Actual, net of treasury shares 42,277,711 41,179,287
Average basic 42,419,925 41,264,394 42,667,849 41,476,627
Average diluted 43,103,509 41,623,037 43,348,668 41,760,428
FINANCIAL RATIOS:
Return on average assets 1.58% 1.55% 1.60% 1.59%
Return on average shareholders' equity 16.37% 17.31% 16.85% 17.57%
Average equity to average assets 9.62% 8.96% 9.52% 9.04%
Net interest margin 4.26% 4.14% 4.22% 4.14%
September 30 September 30 December 31 June 30
2002 2001 2001 2002
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PERIOD END BALANCES:
Assets $ 5,848,573 $ 5,165,890 $ 5,631,775 $5,625,130
Earning assets 5,480,448 4,945,559 5,301,211 5,294,773
Loans, net of unearned income 3,572,280 3,216,456 3,502,334 3,590,305
Loans held for sale 519,786 250,672 368,625 284,230
Investment securities 1,372,408 1,472,699 1,428,716 1,412,112
Total deposits 3,982,265 3,484,144 3,787,793 3,815,311
Shareholders' equity 537,773 462,503 506,529 533,183
/(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.