In The Midst Of A Difficult Year, United Bank Continues To Thrive
Despite the unprecedented upheaval in the market, United Bankshares Inc. continues to report record earnings in 2020.
The company recently reported earnings for the third quarter and the first nine months of 2020. Earnings for Q3 2020 were a record $103.8M, or $0.80 per diluted share, as compared to earnings of $66M, or $0.65 per diluted share for Q3 2019. Earnings for the first nine months of 2020 were $196.7M, or $1.68 per diluted share, as compared to earnings of $196.8M, or $1.93 per diluted share, for the first nine months of 2019.
Q3 2020 results produced an annualized return on average assets of 1.56%, an annualized return on average equity of 9.68% and an annualized return on average tangible equity of 16.94%, compared to annualized returns on average assets, average equity and average tangible equity of 1.33%, 7.79% and 14.16%, respectively, for Q3 2019. For the nine months of 2020, United’s annualized return on average assets was 1.12%, the annualized return on average equity was 6.85% and the annualized return on average tangible equity was 12.19% compared to annualized returns on average assets, average equity and average tangible equity of 1.35%, 7.93% and 14.56%, respectively, for the first nine months of 2019.
Higher net income in Q3 2020 compared to Q3 2019 was primarily due to higher income from mortgage banking activities, driven by an elevated volume of mortgage loan originations and sales in the secondary market, as well as the impact of the Carolina Financial Corp. acquisition.
“Despite the continued uncertainty in the economic environment, we achieved record earnings during the third quarter of 2020 and successfully completed the Carolina Financial system conversion,” Richard M. Adams, United’s chairman of the board and CEO, said in a statement. “United has continued to focus on meeting our customers’ needs during the COVID-19 pandemic by suspending residential property foreclosures, offering fee waivers, providing payment deferrals and processing over 8,900 loans totaling approximately $1.3B under the government Paycheck Protection Program. Our credit quality and regulatory ratios remain strong and position us well to continue delivering for our customers and for continued growth”.
Partially offsetting the increase in net income were merger-related expenses from the Carolina Financial acquisition, $10.4M in prepayment penalties on the early payoff of three long-term FHLB advances and higher provisions for credit losses resulting from an adverse future macroeconomic forecast as a result of the coronavirus pandemic under the Current Expected Credit Loss accounting standard.
The results of operations for Carolina Financial are included in the consolidated results of operations from the date of acquisition, May 1. As a result of the acquisition, the third quarter and first nine months of 2020 reflected higher average balances, income and expense, including merger-related expenses of $5.7M and $5.3M for the third quarter and first nine months of 2020, respectively, as compared to the same time periods in 2019.
“While the environment with COVID-19, the recession, social unrest and bank stocks out of favor has never been more challenging, we continue to be optimistic about our future together,” Adams said. “We are confident that we shall meet the challenges ahead. We have been among the best of the best in the past, and we will be among the best of the best in the future. As we say at United, the challenge to be the best never ends.”
As of Sept. 30, United had consolidated assets of approximately $25.9B. United is the parent company of United Bank, the largest community bank headquartered in the D.C. Metro region. United Bank has 231 offices in West Virginia, Virginia, Ohio, Pennsylvania, Maryland, North Carolina, South Carolina, Georgia and the nation’s capital. United’s stock is traded on the Nasdaq Global Select Market under the symbol UBSI.
This feature was produced in collaboration between the Bisnow Branded Content Studio and United Bank. Bisnow news staff was not involved in the production of this content.