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United Bankshares Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 6, 2009 12:15PM
United Bankshares Inc. (UBSI) filed Quarterly Report for the period ended 2009-09-30. 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 $743.7 million; its shares were traded at around $17.13 with a P/E ratio of 10.5 and P/S ratio of 1.4. The dividend yield of United Bankshares Inc. stocks is 6.8%. 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 September 30, 2009 were $8.08 billion which was relatively flat from December 31, 2008, a decline of $19.28 million or less than 1%. The slight decrease was primarily the result of decreases in portfolio loans and investment securities of $224.71 million or 3.74% and $188.18 million or 14.57%, respectively. Partially offsetting these decreases to total assets was a $364.17 million increase in cash and cash equivalents. The slight decrease in total assets is reflected in a corresponding slight decrease in total liabilities of $49.12 million or less than 1% from year-end 2008. The slight decrease in total liabilities was due mainly to a reduction of $411.40 million or 25.22% in borrowings while accrued expenses and other liabilities decreased $11.97 million or 14.20%. Deposits increased $374.71 million or 6.63% from year-end 2008. Shareholders equity increased $29.83 million or 4.05% from year-end 2008.
Total investment securities at September 30, 2009 decreased $188.18 million or 14.57% from year-end 2008. Securities available for sale declined $164.35 million or 14.98%. This change in securities available for sale reflects $325.73 million in sales, maturities and calls of securities, $141.38 million in purchases, and an increase of $28.13 million in market value. Securities held to maturity decreased $23.16 million or 19.90% from year-end 2008 due mainly to calls and maturities of securities as well as an $8.00 million other-than-temporary impairment charge on a single-issue trust preferred security during the third quarter of 2009. Other investment securities were relatively flat, only declining $663 thousand or less than 1% from year-end 2008 due to an other-than-temporary impairment charge of $782 thousand on an investment security during the second quarter of 2009. The amortized cost and estimated fair value of investment securities, including types and remaining maturities are presented in Note 2 to the unaudited Notes to Consolidated Financial Statements.
Loans held for sale increased $4.10 million as loan originations exceeded loan sales in the secondary market during the first nine months of 2009. Portfolio loans, net of unearned income, decreased $224.71 million or 3.74% from year-end 2008 due mainly to a decrease in commercial loans (not secured by real estate) of $209.03 million or 16.40%. Single-family residential real estate loans and construction loans declined $31.81 million or 1.66% and $63.98 million or 10.63%, respectively. Commercial real estate loans and other real estate loans increased $23.05 million or 1.40% and $53.23 million or 21.71%, respectively. Consumer loans were relatively flat from year-end 2008, increasing $1.91 million or less than 1%.
The increase in interest-bearing deposits was due mainly to an increase in time deposits over $100,000 of $438.78 million or 43.37%. Most of this increase was due mainly to a shift in Certificate of Deposit Account Registry Service (CDARS) balances from certificate of deposits under $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) increased $108.17 million or 8.03%. In addition, regular savings balances increased $16.68 million or 5.17% and interest-bearing checking deposits increased $66.00 million or 37.70%. Time deposits under $100,000 decreased $418.19 million or 22.17% due mainly to the movement of CDARS balances to certificate of deposits over $100,000.
Net income for the third quarter of 2009 was $12.07 million or $0.28 per diluted share, as compared to $19.59 million or $0.45 per diluted share reported for the prior year third quarter. Net income for the first nine months of 2009 was $49.85 million or $1.15 per diluted share compared to $70.44 million or $1.62 per diluted share for the first nine months of 2008.
Net interest income for the third quarter of 2009 was $61.32 million, a decrease of $2.81 million or 4.39% from prior years third quarter. Net interest income for the first nine months of 2009 was $184.45 million, a decrease of $5.12 million or 2.70% from the prior years first nine months. The provision for credit losses was $8.07 million and $39.35 million for the third quarter and first nine months of 2009, respectively, as compared to $6.50 million or $12.95 million for the third quarter and first nine months of 2008, respectively.
Stocks Discussed: UBSI,