2017 Was Another Strong Year For United Bankshares
United Bankshares had a record-breaking year for earnings. The bank holding company reported that earnings for 2017 were $150.6M or $1.54 per diluted share, compared to earnings of $147.1M or $1.99 per diluted share in 2016.
“2017 was another successful year,” United Bankshares Chairman of the Board and CEO Richard M. Adams said. “We increased earnings before income taxes to a record $285M and increased dividends to $1.33 per share, which represented the 44th consecutive year of dividend increases to our shareholders.”
United is one of two major banking companies in the U.S. that have been able to achieve such a positive earning streak, Adams said.
Anticipation of the Tax Cuts and Jobs Act, signed into law on Dec. 22, had an impact on Q4 earnings. Results included additional income tax expense of $37.7M or $0.36 per diluted share.
United Bankshares reported Q4 earnings of $18M or $0.17 per diluted share, lower than the $39.1M or $0.51 per diluted share observed in Q4 2016.
United’s acquisition of Cardinal Financial Corp. was a highlight of the past year. The merger was United’s 31st and largest acquisition made under the current leadership. The merger followed its previous acquisition of the Bank of Georgetown of Washington, D.C., in June 2016. Due to the Cardinal acquisition, Q4 and 2017 totals were impacted by increased levels of average balances, income and expenses compared to the same period in 2016, which saw the Bank of Georgetown acquisition.
Q4 and 2017 included merger-related expenses of $1.8M and $26.8M, respectively, compared to merger-related expenses of $523K and $6.1M for the same period in 2016, respectively. United also consolidated its banking subsidiaries in Q4.
Net interest income for Q4 was $154.9M, an increase of $41.6M or 37% from Q4 2016. The increase in net interest income occurred because total interest income increased $50.9M while total interest expense only increased $9.3M from Q4 2016. Tax-equivalent net interest income, which adjusts for the tax-favored status of income from certain loans and investments, was $157.1M in Q4. Average earning assets from the Cardinal acquisition led to an increase of $42.3M compared to Q4 2016 income totals.
Average earning assets for Q4 increased $3.9B or 31% from the Q4 2016, due to a $2.9B increase in average net loans.
United Bankshares also saw average short-term investments increase $439.8M, or 47%, while average investment securities increased by $580.3M or 42%. Q4 average yield on earning assets increased 29 basis points from Q4 2016, due to additional loan accretion of $8.7M on acquired loans and higher market interest rates.
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