United Bankshares, Inc. Announces Increased Earnings for the First Quarter of 2011

United Bankshares, Inc. Announces Increased Earnings for the First Quarter of 2011

United Bankshares, Inc. (NASDAQ: UBSI), today announced net income of $17.9 million or $0.41 per diluted share for the first quarter of 2011. These earnings results for the first quarter of 2011 marked an increase from net income of $17.4 million or $0.40 per diluted share for the first quarter of 2010.

United’s first quarter of 2011 results produced an annualized return on average assets of 1.02% and an annualized return on average equity of 9.04%. These returns compare very favorably to United’s most recently reported peer group banking companies’ (bank holding companies with total assets between $3 and $10 billion) average return on assets of 0.29% and average return on equity of 1.58% for the year of 2010. United’s annualized returns on average assets and average equity were 0.92% and 9.17%, respectively, for the first quarter of 2010.

United’s asset quality also continues to outperform its peers. United’s percentage of nonperforming loans to loans, net of unearned income, of 1.40% at March 31, 2011 compares favorably to the most recently reported percentage of 3.99% at December 31, 2010 for United’s Federal Reserve peer group. At March 31, 2011, nonperforming loans were $73.0 million, up $5.7 million or 9% from nonperforming loans of $67.2 million or 1.28% of loans, net of unearned income, at December 31, 2010. As of March 31, 2011, the allowance for loan losses was $73.0 million or 1.40% of loans, net of unearned income, which was comparable to $73.0 million or 1.39% of loans, net of unearned income, at December 31, 2010. United’s coverage ratio of its allowance for loan losses to nonperforming loans also compares favorably to its peers. The coverage ratio for United was 100.0% and 108.6% at March 31, 2011 and December 31, 2010, respectively. The coverage ratio for United’s Federal Reserve peer group was 77.6% at December 31, 2010. Total nonperforming assets of $117.3 million, including OREO of $44.4 million at March 31, 2011, represented 1.63% of total assets which also compares favorably to the most recently reported percentage of 3.38% at December 31, 2010 for United’s Federal Reserve peer group.

United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 13.9% at March 31, 2011 while its estimated Tier I capital and leverage ratios are 12.5% and 10.5%, respectively. The regulatory requirements for a well-capitalized financial institution are a risk-based capital ratio of 10%, a Tier I capital ratio of 6% and a leverage ratio of 5%.

The results for the first quarter of 2011 include noncash, before-tax, other-than-temporary impairment charges of $2.1 million on certain investment securities. The results for the first quarter of 2010 included noncash, before-tax, other-than-temporary impairment charges of $1.5 million on certain investment securities and a before-tax, net gain of $1.2 million on the sale of a corporate bond.

“Considering the current economic environment, United’s earnings continue to be strong with asset quality favorable to peers,” stated Richard M. Adams, United’s Chairman of the Board and Chief Executive Officer. “United also continues to be well-capitalized based upon regulatory guidelines.”

The net interest margin for the first quarter of 2011 was 3.92%, which was an increase of 27 basis points from a net interest margin of 3.65% for the first quarter of 2010. However, tax-equivalent net interest income for the first quarter of 2011 was $60.8 million, a decrease of $1.2 million or 2% from the first quarter of 2010. This decrease in tax-equivalent net interest income was primarily attributable to a decline in average earning assets of $594.3 million or 9% from the first quarter of 2010. Average net loans declined $444.5 million or 8% for the first quarter of 2011 while average investments decreased $154.2 million or 16% due mainly to maturities and calls of securities which were not fully reinvested from the first quarter of 2010. The average yield on earning assets declined 19 basis points for the first quarter of 2011 as compared to the first quarter of 2010. Partially offsetting the decreases to tax-equivalent net interest income was a decrease of 46 basis points in the first quarter of 2011 average cost of funds compared to the first quarter of 2010.

On a linked-quarter basis, United’s net interest margin of 3.92% for the first quarter of 2011 was an increase of 30 basis points from the net interest margin of 3.62% for the fourth quarter of 2010. United’s tax-equivalent net interest income for the first quarter of 2011 increased $840 thousand or 1% from the fourth quarter of 2010 due mainly to a decline in average interest-bearing liabilities. Average interest-bearing liabilities decreased $480.5 million or 9% from the fourth quarter of 2010 due in large part to the repayment of approximately $359.9 million in Federal Home Loan Bank (FHLB) advances during the first quarter of 2011 and the fourth quarter of 2010. In addition, the first quarter of 2011 average yield on earning assets increased 12 basis points while the average cost of funds decreased 17 basis points from the fourth quarter of 2010. Partially offsetting the increases to tax-equivalent net interest income was a decline in average earning assets of $340.3 million or 5% from the fourth quarter of 2010 as average short-term investments decreased $190.1 million or 38%, average net loans declined $90.7 million or 2% and average investment securities decreased $59.5 million or 7%.

For the quarters ended March 31, 2011 and 2010, the provision for loan losses was $4.4 million and $6.9 million, respectively. Net charge-offs were $4.5 million for the first quarter of 2011 as compared to $6.5 million for the first quarter of 2010. Annualized net charge-offs as a percentage of average loans were 0.34% for the first quarter of 2011 as compared to 1.45% for United’s Federal Reserve peer group for the year of 2010. On a linked-quarter basis, United recovered funds from its insurance carrier in the amount of $15.0 million during the fourth quarter of 2010 related to claims it made under its insurance policies for losses United incurred as a result of fraudulent loans previously charged-off in 2009. The $15.0 million of insurance proceeds were recorded as a recovery within United’s allowance for loan losses. As a result, a negative provision for loan losses expense of $5.6 million was recorded for the fourth quarter of 2010 as compared to the provision for loan losses expense of $4.4 million for the first quarter of 2011. The $15.0 million recovery on these loans in the fourth quarter of 2010 resulted in net recoveries of $7.9 million for the fourth quarter of 2010 as compared to net charge-offs of $4.5 million for the first quarter of 2011.

Noninterest income for the first quarter of 2011 was $14.7 million, which was a decrease of $922 thousand from the first quarter of 2010. Included in noninterest income for the first quarter of 2011 were noncash, before-tax, other-than-temporary impairment charges of $2.1 million on certain investment securities as compared to noncash, before-tax other-than-temporary impairment charges of $1.5 million on certain investment securities for the first quarter of 2010. Also, included in noninterest income for the first quarter of 2011 was before-tax, net gains of $551 thousand as compared to before-tax, net gains of $1.1 million for the first quarter of 2010. Excluding the results of the noncash, other-than-temporary impairment charges as well as net gains from sales and calls of investment securities, noninterest income for the first quarter of 2011 would have increased $259 thousand or 2% from the first quarter of 2010. This increase for the first quarter of 2011 was due primarily to increases of $407 thousand in fees from deposit services due to higher ATM and check card income and $147 thousand in income from bank-owned life insurance policies due to an increase in the cash surrender values. Partially offsetting these increases was a decrease in fees from bankcard services of $487 thousand due mainly to the sale of United’s merchant business in the fourth quarter of 2010. A reduction in bankcard processing costs as a result of the sale of United’s merchant business is included in other expense in the income statement.

On a linked-quarter basis, noninterest income for the first quarter of 2011 increased $1.3 million from the fourth quarter of 2010. Included in the results for the first quarter of 2011 and fourth quarter of 2010 were noncash, before-tax, other-than-temporary impairment charges of $2.1 million and $5.4 million, respectively. Excluding the results of the noncash, other-than-temporary impairment charges as well as net gains and losses from sales and calls of investment securities, noninterest income would have decreased $2.6 million or 14% on a linked-quarter basis due primarily to decreases of $1.0 million in fees from bankcard services due mainly to the sale of United’s merchant business, $660 thousand in income from derivatives not in hedge relationships due to a change in the fair value, $379 thousand in fees from trust and brokerage services due to a decline in the value of assets under management and $150 thousand in fees from deposit services due mainly to the impact of Regulation E. A similar amount of expense related to the change in the fair value of other derivative financial instruments as well as a reduction in bankcard processing costs as a result of the sale of United’s merchant business is included in other expense in the income statement.

Noninterest expense for the first quarter of 2011 was $43.5 million, which was relatively flat from the first quarter of 2010, decreasing $282 thousand or less than 1%. This slight decrease was due mainly to decreases of $504 thousand in bankcard processing expense due mainly to the sale of United’s merchant business and $284 thousand in net occupancy expense due mainly to lower building rental and maintenance costs. Partially offsetting these decreases were increases of $277 thousand in equipment expense due to more repairs and $147 thousand in other real estate owned (OREO) expense due mainly to declines in the fair values of OREO properties.

On a linked-quarter basis, noninterest expense for the first quarter of 2011 decreased $5.9 million or 12% from the fourth quarter of 2010 due primarily to decreases of $3.1 million in OREO expense due mainly to lower losses on sales and smaller declines in the fair values of OREO properties, $1.3 million in employee compensation due to lower commissions and incentives, $660 thousand in expense from derivatives not in hedge relationships due to a change in the fair value and $655 thousand in bankcard processing expense due mainly to the sale of United’s merchant business. Partially offsetting these decreases were increases of $583 thousand in employee benefits expense due to higher pension costs, $273 thousand in net occupancy expense due mainly to higher utilities and maintenance costs and $266 thousand in data processing fees.

On December 15, 2010, United entered into a definitive agreement to merge with Centra Financial Holdings, Inc. (Centra). United and Centra are in the process of filing the necessary documents to seek approval of the merger by Centra’s shareholders as well as regulatory agencies. The merger transaction is expected to close early in the third quarter of 2011 pending the approval of the merger by the shareholders of Centra and the receipt of all required regulatory approvals, as well as other customary conditions.

During the first quarter of 2011, United’s Board of Directors declared a cash dividend of $0.30 per share. The annualized 2011 dividend of $1.20 equates to a yield of approximately 5% based on recent UBSI market prices. The year of 2010 represented the 37th consecutive year of dividend increases for United shareholders.

United Bankshares, with $7.2 billion in assets, presently has 111 full-service offices in West Virginia, Virginia, Maryland, Ohio, and Washington, D.C. United Bankshares stock is traded on the NASDAQ Global Select Market under the quotation symbol "UBSI."

Cautionary Statements

The Company is required under generally accepted accounting principles to evaluate subsequent events through the filing of its March 31, 2011 consolidated financial statements on Form 10-Q. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of March 31, 2011 and will adjust amounts preliminarily reported, if necessary.

Forward-Looking Statements

This press release contains certain forward-looking statements, including certain plans, expectations, goals and projections, which are subject to numerous assumptions, risks and uncertainties. Actual results could differ materially from those contained in or implied by such statements for a variety of factors including: changes in economic conditions; movements in interest rates; competitive pressures on product pricing and services; success and timing of business strategies; the nature and extent of governmental actions and reforms; and rapidly changing technology and evolving banking industry standards.

UNITED BANKSHARES, INC. AND SUBSIDIARIES FINANCIAL SUMMARY (In Thousands Except for Per Share Data)
		Three Months Ended
		March 31 2011			March 31 2010			December 31 2010
EARNINGS SUMMARY:
Interest income, taxable equivalent		$	75,310		$	85,653		$	78,623
Interest expense			14,494			23,617			18,647
Net interest income, taxable equivalent			60,816			62,036			59,976
Taxable equivalent adjustment			1,453			1,557			1,415
Net interest income			59,363			60,479			58,561
Provision for loan losses			4,436			6,868			(5,618)
Noninterest income			14,651			15,573			13,356
Noninterest expense			43,469			43,751			49,375
Income taxes			8,224			8,011			8,870
Net income		$	17,885		$	17,422		$	19,290
PER COMMON SHARE:
Net income:
Basic		$	0.41		$	0.40		$	0.44
Diluted			0.41			0.40			0.44
Cash dividends			0.30			0.30			0.30
Book value			18.32			17.68			18.18
Closing market price		$	26.52		$	26.22		$	29.20
Common shares outstanding:
Actual at period end, net of treasury shares			43,645,650			43,498,754			43,621,635
Weighted average- basic			43,629,364			43,455,296			43,606,591
Weighted average- diluted			43,700,436			43,534,435			43,677,279
FINANCIAL RATIOS:
Return on average assets			1.02%			0.92%			1.03%
Return on average shareholders’ equity			9.04%			9.17%			9.64%
Average equity to average assets			11.33%			10.04%			10.69%
Net interest margin			3.92%			3.65%			3.62%
		March 31 2011			March 31 2010			December 31 2010
PERIOD END BALANCES:
Assets		$	7,191,336		$	7,615,243		$	7,155,719
Earning assets			6,344,359			6,786,218			6,334,914
Loans, net of unearned income			5,222,959			5,601,763			5,260,326
Loans held for sale			890			1,953			6,869
Investment securities			806,482			914,001			794,715
Total deposits			5,711,923			5,791,903			5,713,534
Shareholders’ equity			799,463			769,050			793,012

UNITED BANKSHARES, INC. AND SUBSIDIARIES Charleston, WV Stock Symbol: UBSI (In Thousands Except for Per Share Data)
Consolidated Statements of Income
		Three Months Ended
		March			March			December
			2011			2010			2010
Interest & Loan Fees Income		$	73,857		$	84,096		$	77,208
Tax equivalent adjustment			1,453			1,557			1,415
Interest & Fees Income (FTE)			75,310			85,653			78,623
Interest Expense			14,494			23,617			18,647
Net Interest Income (FTE)			60,816			62,036			59,976
Provision for Loan Losses			4,436			6,868			(5,618)
Non-Interest Income:
Fees from trust & brokerage services			3,310			3,272			3,689
Fees from deposit services			9,631			9,224			9,781
Bankcard fees and merchant discounts			555			1,042			1,573
Other charges, commissions, and fees			454			358			562
Income from bank owned life insurance			1,175			1,028			1,178
Mortgage banking income			234			112			303
Other non-interest revenue			851			915			1,669
Net other-than-temporary impairment losses			(2,110)			(1,486)			(5,369)
Net gains (losses) on sales/calls of investment securities			551			1,108			(30)
Total Non-Interest Income			14,651			15,573			13,356
Non-Interest Expense:
Employee compensation			14,870			14,901			16,202
Employee benefits			4,378			4,494			3,795
Net occupancy			4,387			4,671			4,114
Other expenses			15,347			15,140			17,611
Amortization of intangibles			383			534			411
OREO expense			1,767			1,620			4,862
FDIC expense			2,337			2,391			2,380
Total Non-Interest Expense			43,469			43,751			49,375
Income Before Income Taxes (FTE)			27,562			26,990			29,575
Tax equivalent adjustment			1,453			1,557			1,415
Income Before Income Taxes			26,109			25,433			28,160
Income taxes			8,224			8,011			8,870
Net Income		$	17,885		$	17,422		$	19,290
MEMO: Effective Tax Rate			31.50%			31.50%			31.50%

UNITED BANKSHARES, INC. AND SUBSIDIARIES Charleston, WV Stock Symbol: UBSI (In Thousands Except for Per Share Data)
Consolidated Balance Sheets
		March 31			March 31
			2011			2010		March 31			December 31
		Q-T-D Average			Q-T-D Average				2011			2010
Cash & Cash Equivalents		$	443,625		$	436,514		$	530,771		$	461,389
Securities Available for Sale			650,757			790,026			669,342			653,276
Securities Held to Maturity			64,741			74,160			64,477			67,036
Other Investment Securities			73,669			79,161			72,663			74,403
Total Securities			789,167			943,347			806,482			794,715
Total Cash and Securities			1,232,792			1,379,861			1,337,253			1,256,104
Loans Held for Sale			2,715			3,872			890			6,869
Commercial Loans			3,518,647			3,751,314			3,541,507			3,533,559
Mortgage Loans			1,442,937			1,592,216			1,423,725			1,459,286
Consumer Loans			263,980			321,136			260,994			270,506
Gross Loans			5,225,564			5,664,666			5,226,226			5,263,351
Unearned Income			(3,082)			(3,897)			(3,267)			(3,025)
Loans, Net of Unearned Income			5,222,482			5,660,769			5,222,959			5,260,326
Allowance for Loan Losses			(72,941)			(67,900)			(72,975)			(73,033)
Goodwill			311,763			312,069			311,641			311,765
Other Intangibles			2,756			4,586			2,557			2,940
Total Intangibles			314,519			316,655			314,198			314,705
Real Estate Owned			44,922			40,167			44,362			44,770
Other Assets			334,850			341,998			344,649			345,978
Total Assets		$	7,079,339		$	7,675,422		$	7,191,336		$	7,155,719
MEMO: Earning Assets		$	6,257,807		$	6,852,056		$	6,344,359		$	6,334,914
Interest-bearing Deposits		$	4,322,396		$	4,791,431		$	4,354,849		$	4,510,279
Noninterest-bearing Deposits			1,320,246			1,078,209			1,357,074			1,203,255
Total Deposits			5,642,642			5,869,640			5,711,923			5,713,534
Short-term Borrowings			243,653			257,585			271,309			193,214
Long-term Borrowings			337,467			717,678			336,240			386,458
Total Borrowings			581,120			975,263			607,549			579,672
Other Liabilities			53,390			59,758			72,401			69,501
Total Liabilities			6,277,152			6,904,661			6,391,873			6,362,707
Preferred Equity			---			---			---			---
Common Equity			802,187			770,761			799,463			793,012
Total Shareholders' Equity			802,187			770,761			799,463			793,012
Total Liabilities & Equity		$	7,079,339		$	7,675,422		$	7,191,336		$	7,155,719
MEMO: Interest-bearing Liabilities		$	4,903,516		$	5,766,694		$	4,962,398		$	5,089,951

UNITED BANKSHARES, INC. AND SUBSIDIARIES Charleston, WV Stock Symbol: UBSI (In Thousands Except for Per Share Data)
		Three Months Ended
		March			March			December
Quarterly Share Data:			2011			2010			2010
Earnings Per Share:
Basic		$	0.41		$	0.40		$	0.44
Diluted		$	0.41		$	0.40		$	0.44
Common Dividend Declared Per Share		$	0.30		$	0.30		$	0.30
High Common Stock Price		$	30.84		$	28.00		$	30.25
Low Common Stock Price		$	25.66		$	20.15		$	24.15
Average Shares Outstanding (Net of Treasury Stock):
Basic			43,629,364			43,455,296			43,606,591
Diluted			43,700,436			43,534,435			43,677,279
Memorandum Items:
Tax Applicable to Security Sales/Calls		$	193		$	388		$	(11)
Common Dividends		$	13,095		$	13,051		$	13,087
		March			March			December
EOP Share Data:			2011			2010			2010
Book Value Per Share		$	18.32		$	17.68		$	18.18
Tangible Book Value Per Share		$	11.12		$	10.41		$	10.96
52-week High Common Stock Price		$	31.99		$	28.00		$	31.99
Date			04/23/10			03/23/10			04/23/10
52-week Low Common Stock Price		$	22.09		$	16.39		$	20.15
Date			08/24/10			11/20/09			01/06/10
EOP Shares Outstanding (Net of Treasury Stock):			43,645,650			43,498,754			43,621,635
Memorandum Items:
EOP Employees (full-time equivalent)			1,426			1,465			1,451

UNITED BANKSHARES, INC. AND SUBSIDIARIES Charleston, WV Stock Symbol: UBSI (In Thousands Except for Per Share Data)
		Three Months Ended
		March			March			December
		2011			2010			2010
Selected Yields and Net Interest Margin:
Net Loans		5.24%			5.32%			5.24%
Investment Securities		4.19%			4.97%			4.33%
Money Market Investments/FFS		0.37%			0.38%			0.28%
Average Earning Assets Yield		4.86%			5.05%			4.74%
Interest-bearing Deposits		0.99%			1.35%			1.06%
Short-term Borrowings		0.04%			0.05%			0.04%
Long-term Borrowings		4.75%			4.32%			4.24%
Average Liability Costs		1.20%			1.66%			1.37%
Net Interest Spread		3.66%			3.39%			3.37%
Net Interest Margin		3.92%			3.65%			3.62%
Selected Financial Ratios:
Return on Average Common Equity		9.04%			9.17%			9.64%
Return on Average Assets		1.02%			0.92%			1.03%
Loan / Deposit Ratio		91.44%			96.72%			92.07%
Allowance for Loan Losses/ Loans, net of unearned income		1.40%			1.22%			1.39%
Allowance for Credit Losses (1)/ Loans, net of unearned income		1.44%			1.26%			1.43%
Nonaccrual Loans / Loans, net of unearned income		1.20%			1.11%			1.14%
90-Day Past Due Loans/ Loans, net of unearned income		0.13%			0.18%			0.13%
Non-performing Loans/ Loans, net of unearned income		1.40%			1.29%			1.28%
Non-performing Assets/ Total Assets		1.63%			1.49%			1.57%
Primary Capital Ratio		12.04%			10.92%			12.00%
Shareholders' Equity Ratio		11.12%			10.10%			11.08%
Price / Book Ratio		1.45	x		1.48	x		1.61	x
Price / Earnings Ratio		16.20	x		16.38	x		17.71	x
Efficiency Ratio		53.44%			53.34%			56.02%
Note: (1) Includes allowances for loan losses and lending-related commitments.

UNITED BANKSHARES, INC. AND SUBSIDIARIES Charleston, WV Stock Symbol: UBSI (In Thousands Except for Per Share Data)
	March			March			December
Asset Quality Data:		2011			2010			2010
EOP Non-Accrual Loans	$	62,703		$	62,449		$	59,996
EOP 90-Day Past Due Loans		6,539			9,959			6,798
EOP Restructured Loans (2)		3,716			---			437
Total EOP Non-performing Loans	$	72,958		$	72,408		$	67,231
EOP Other Real Estate & Assets Owned		44,362			41,179			44,770
Total EOP Non-performing Assets	$	117,320		$	113,587		$	112,001
	Three Months Ended
	March			March			December
Allowance for Credit Losses:(1)		2011			2010			2010
Beginning Balance	$	75,039		$	70,010		$	72,806
Provision for Credit Losses (3)		4,590			6,868			(5,618)
		79,629			76,878			67,188
Gross Charge-offs		(4,741)			(6,935)			(7,422)
Recoveries		247			423			15,273
Net Charge-offs		(4,494)			(6,512)			7,851
Ending Balance	$	75,135		$	70,366		$	75,039
Note: (1) Includes allowances for loan losses and lending-related commitments.
(2) Restructured loans with an aggregate balance of $1,067 at March 31, 2011 are on nonaccrual status, but are not included in the “EOP Non-Accrual Loans.” A restructured loan with a balance of $437 thousand at December 31, 2010 was past due 90 days or more, but was not included in the “EOP 90-Day Past due Loans” category.
(3) Includes the Provision for Loan Losses and a provision for lending-related commitments included in Other Expenses.

United Bankshares, Inc.
Steven E. Wilson, 800-445-1347 ext. 8704
Chief Financial Officer