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United Bankshares Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 7, 2009 08:08PM
United Bankshares Inc. (UBSI) filed Quarterly Report for the period ended 2009-06-30. United Bankshares Inc. is a bank holding company whose business is the operation of its bank subsidiaries. All of United\'s subsidiary banks are full-service commercial banks. Included among the banking services offered are the acceptance of deposits in checking savings time and money market accounts; the making and servicing of personal commercial floor plan and student loans; and the making of construction and real estate loans. Also offered are individual retirement accounts safe deposit boxes wire transfers and other standard banking products and services. United Bankshares Inc. has a market cap of $927.3 million; its shares were traded at around $21.37 with a P/E ratio of 12.6 and P/S ratio of 1.9. The dividend yield of United Bankshares Inc. stocks is 5.4%. United Bankshares Inc. had an annual average earning growth of 6.6% over the past 10 years. GuruFocus rated United Bankshares Inc. the business predictability rank of 2.5-star.
Highlight of Business Operations:
Uniteds total assets as of June 30, 2009 were $7.85 billion which was a decline of $254.58 million or 3.14% from December 31, 2008. The decrease was primarily the result of decreases in portfolio loans, investment securities, and cash and cash equivalents of $124.00 million or 2.06%, $153.60 million or 11.89% and $11.64 million or 5.45%, respectively. The decrease in total assets is reflected in a corresponding decrease in total liabilities of $274.25 million or 3.72% from year-end 2008. The decrease in total liabilities was due mainly to a reduction of $351.75 million or 21.57% in borrowings while accrued expenses and other liabilities decreased $10.65 million or 12.64%. Deposits increased $87.96 million or 1.56% from year-end 2008. Shareholders equity increased $19.67 million or 2.67% from year-end 2008.
Loans held for sale increased $11.32 million as loan originations exceeded loan sales in the secondary market during the first six months of 2009. Portfolio loans, net of unearned income decreased $124.00 million or 2.06% from year-end 2008 due mainly to a decrease in commercial loans (not secured by real estate) of $155.10 million or 12.17%. Single-family residential real estate loans, commercial real estate loans and installment loans were relatively flat from year-end 2008, declining $3.68 million and increasing $3.72 million and $1.71 million, respectively. All of these changes were less than 1%. Construction loans and other real estate loans increased $19.67 million or 3.27% and $8.35 million or 3.40%, respectively.
The decrease in interest-bearing deposits was due mainly to a decline in time deposits under $100,000 of $349.85 million or 18.55%. Most of this decline was due mainly to a shift in Certificate of Deposit Account Registry Service (CDARS) balances to certificate of deposits over $100,000 as a result of the temporary increase in the Federal Deposit Insurance Corporation (FDIC) insurance coverage from $100,000 to $250,000. Interest bearing money market accounts (MMDAs) decreased $66.77 million or 4.96%. Time deposits over $100,000 increased $247.86 million or 24.50%. Regular savings balances increased $22.80 million or 7.07% and interest-bearing checking deposits increased $73.81 million or 42.16%.
Net income for the first six months of 2009 was $37.79 million or $0.87 per diluted share compared to $50.84 million or $1.17 per diluted share for the first six months of 2008. Net income for the second quarter of 2009 was $8.16 million or $0.19 per diluted share, as compared to $25.15 million or $0.58 per diluted share reported for the prior year second quarter.
Net interest income for the first six months of 2009 was $123.13 million, a decrease of $2.30 million or 1.84% from the prior years first six months. Net interest income for the second quarter of 2009 was $62.21 million, a decrease of $943 thousand or 1.49% from prior years second quarter. The provision for credit losses was $31.28 million and $23.25 million for the first six months and second quarter of 2009, respectively, as compared to $6.45 million or $4.35 million for the first six months and second quarter of 2008, respectively.
Net interest income for the first six months of 2009 was $123.13 million, a decrease of $2.30 million or 1.84% from the first six months of 2008. The $2.30 million decrease in net interest income occurred because total interest income declined $32.73 million while total interest expense only declined $30.42 million from the first six months of 2008. Net interest income for the second quarter of 2009 was $62.21 million, a decrease of $943 thousand or 1.49% from the second quarter of 2008. The $943 thousand decrease in net interest income occurred because total interest income declined $13.89 million while total interest expense only declined $12.94 million from the second quarter of 2008. On a linked-quarter basis, net interest income for the second quarter of 2009 increased $1.29 million or 2.12% from the first quarter of 2009. The $1.29 million increase in net interest income occurred because total interest income declined $2.17 million while total interest expense declined $3.47 million from the first quarter of 2009. 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, Uniteds 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.
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