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United Bankshares Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 8, 2012 12:22PM

United Bankshares Inc. (UBSI) filed Quarterly Report for the period ended 2012-06-30. United Bankshares, Inc. has a market cap of $1.17 billion; its shares were traded at around $23.77 with a P/E ratio of 14.1 and P/S ratio of 3.2. The dividend yield of United Bankshares, Inc. stocks is 5.3%.



Highlight of Business Operations:

Loans held for sale increased $5.38 million or 137.80% as loan originations exceeded loan sales in the secondary market during the first six months of 2012. Portfolio loans, net of unearned income, increased $78.21 million or 1.25% from year-end 2011 mainly due to an $86.17 million or 2.46% increase in the total commercial, financial and agricultural loans category, a $23.06 million or 4.19% increase in construction and land development loans and a $9.22 million or 3.25% increase in other consumer loans. Within the commercial, financial and agricultural loans category, commercial real estate loans increased $107.61 million or 4.69% while commercial loans (not secured by real estate) decreased $21.44 million or 1.77%. Partially offsetting these increases in portfolio loans was a decrease of $31.86 million or 1.68% in residential real estate loans.

Net interest income for the first six months of 2012 was $138.02 million, which was an increase of $20.04 million or 16.98% from the first half of 2011. The $20.04 million increase in net interest income occurred because total interest income increased $16.60 million while total interest expense declined $3.44 million from the first six months of 2011. Net interest income for the second quarter of 2012 was $69.06 million, which was an increase of $10.43 million or 17.80% from the second quarter of 2011. The $10.43 million increase in net interest income occurred because total interest income increased $8.67 million while total interest expense declined $1.76 million from the second quarter of 2011. On a linked-quarter basis, net interest income for the second quarter of 2012 was flat from the first quarter of 2012, increasing $89 thousand or less than 1%. The $89 thousand increase in net interest income occurred because total interest income declined $683 thousand while total interest expense declined $772 thousand from the first quarter of 2012. For the purpose of this remaining discussion, net interest income is presented on a tax-equivalent basis to provide a comparison among all types of interest earning assets. The tax-equivalent basis adjusts for the tax-favored status of income from certain loans and investments. Although this is a non-GAAP measure, United’s management believes this measure is more widely used within the financial services industry and provides better comparability of net interest income arising from taxable and tax-exempt sources. United uses this measure to monitor net interest income performance and to manage its balance sheet composition.

Tax-equivalent net interest income for the first half of 2012 was $141.25 million, an increase of $20.18 million or 16.66% from the first half of 2011. This increase in tax-equivalent net interest income was primarily attributable to an increase in average earning assets from the Centra acquisition. Average earning assets increased $1.23 billion or 19.63% from the first half of 2011. Average net loans increased $1.00 billion or 19.50% for the first half of 2012. In addition, the average cost of funds declined 30 basis points from the first half of 2011. Partially offsetting the increases to tax-equivalent net interest income for the first half of 2012 was a decline of 34 basis points in the average yield on earning assets for the first half of 2012 as compared to the same period in 2011. The net interest margin for the first half of 2012 was 3.77%, which was a decrease of 11 basis points from a net interest margin of 3.88% for the first half of 2011.

Tax-equivalent net interest income for the second quarter of 2012 was $70.62 million, an increase of $10.36 million or 17.19% from the second quarter of 2011. This increase in tax-equivalent net interest income was primarily attributable to an increase in average earning assets from the Centra acquisition. Average earning assets increased $1.23 billion or 19.44% from the second quarter of 2011. Average net loans increased $1.01 billion or 19.68% for the second quarter of 2012. In addition, the average cost of funds declined 29 basis points from the second quarter of 2011. Partially offsetting the increases to tax-equivalent net interest income for the second quarter of 2012 was a decline of 30 basis points in the average yield on earning assets for the second quarter of 2012 as compared to the same quarter in 2011. The net interest margin for the second quarter of 2012 was 3.76%, which was a decrease of 7 basis points from a net interest margin of 3.83% for the second quarter of 2011.

For the six months ended June 30, 2012, cash of $61.07 million was provided by operating activities due mainly to net income of $42.06 million for the first six months of 2012. Net cash of $8.38 million was provided by investing activities which was primarily due to net proceeds of $89.74 million from the sales, calls and maturities of investment securities over purchases. Partially offsetting the net cash provided from the sales of investment securities was cash used for the net growth in loans of $86.24 million. During the first six months of 2012, net cash of $32.25 million was used in financing activities due primarily to the net repayment of $55.20 million in long-term FHLB advances and the payment of cash dividends in the amount of $31.14 million for the first six months of 2012. Partially offsetting these uses of cash in financing activities was cash provided by a growth in deposits of $43.55 million and short-term borrowings of $10.31 million. The net effect of the cash flow activities was an increase in cash and cash equivalents of $37.21 million for the first six months of 2012.

Read the The complete Report



Stocks Discussed: UBSI,
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