UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
| [ X ] | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |||
| For Quarter Ended September 30, 2003 | ||||
| Or | ||||
| [ ] | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |||
| For the transition period |
Commission File Number: 0-13322
United Bankshares, Inc.
| West Virginia | 55-0641179 | |
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| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 300 United Center | |||
| 500 Virginia Street, East | |||
| Charleston, West Virginia | 25301 | ||
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| (Address of Principal Executive Offices) | Zip Code | ||
Registrant’s Telephone Number, including Area Code: (304) 424-8800
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act.) Yes [ X ] No [ ]
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class - Common Stock, $2.50 Par Value; 43,785,418 shares outstanding as of October 31, 2003.
UNITED BANKSHARES, INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
| Page | ||||
PART I. FINANCIAL INFORMATION |
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Item 1. Financial Statements |
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Consolidated Balance Sheets September 30, 2003 (Unaudited) and December 31,
2002
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5 | |||
Consolidated Statements of Income (Unaudited) for the Three and Nine Months Ended
September 30, 2003 and 2002
|
6 | |||
Consolidated Statement of Changes in Shareholders’ Equity (Unaudited) for the
Nine Months Ended September 30,
2003 |
7 | |||
Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months
Ended September 30, 2003 and
2002 |
8 | |||
Notes to Consolidated Financial
Statements |
9 | |||
Information required by Item 303 of Regulation S-K |
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Item 2. Management’s Discussion and Analysis of Financial Condition and
Results of
Operations
|
26 | |||
Item 3. Quantitative and Qualitative Disclosures about Market
Risk |
34 | |||
Item 4. Controls and
Procedures |
38 | |||
PART II. OTHER INFORMATION |
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Item 1. Legal
Proceedings
|
40 | |||
Item 2. Changes in Securities and Use of
Proceeds |
40 | |||
Item 3. Defaults Upon Senior
Securities |
40 | |||
2
UNITED BANKSHARES, INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS—Continued
| Page | ||||
Item 4. Submission of Matters to a Vote of Security
Holders |
40 | |||
Item 5. Other
Information
|
40 | |||
Item 6. Exhibits and Reports on Form
8-K
|
40 | |||
Signatures
|
42 | |||
3
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS (UNAUDITED)
The September 30, 2003 and December 31, 2002, consolidated balance sheets of United Bankshares, Inc. and Subsidiaries, the related consolidated statements of income for the three and nine months ended September 30, 2003 and 2002, the related consolidated statement of changes in shareholders’ equity for the nine months ended September 30, 2003, the related condensed consolidated statements of cash flows for the nine months ended September 30, 2003 and 2002, and the notes to consolidated financial statements appear on the following pages.
4
CONSOLIDATED BALANCE SHEETS
UNITED BANKSHARES, INC. AND SUBSIDIARIES
| September 30 | December 31 | |||||||||||
| (Dollars in thousands, except par value) | 2003 | 2002 | ||||||||||
| (Unaudited) | (Note 1) | |||||||||||
Assets |
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Cash and due from banks |
$ | 169,746 | $ | 162,261 | ||||||||
Interest-bearing deposits with other banks |
35,622 | 13,102 | ||||||||||
Federal funds sold |
55,575 | 0 | ||||||||||
Total cash and cash equivalents |
260,943 | 175,363 | ||||||||||
Securities available for sale at estimated fair value (amortized
cost-$1,005,440 at September 30, 2003 and $996,198 at December
31, 2002) |
1,018,309 | 1,022,314 | ||||||||||
Securities held to maturity (estimated fair value-$263,197 at
September 30, 2003 and $266,993 at December 31, 2002) |
255,656 | 263,176 | ||||||||||
Loans held for sale |
302,934 | 582,718 | ||||||||||
Loans |
3,650,578 | 3,576,280 | ||||||||||
Less: Unearned income |
(3,874 | ) | (3,119 | ) | ||||||||
Loans net of unearned income |
3,646,704 | 3,573,161 | ||||||||||
Less: Allowance for loan losses |
(46,933 | ) | (47,387 | ) | ||||||||
Net loans |
3,599,771 | 3,525,774 | ||||||||||
Bank premises and equipment |
46,395 | 48,923 | ||||||||||
Goodwill |
89,574 | 90,416 | ||||||||||
Accrued interest receivable |
24,869 | 27,577 | ||||||||||
Other assets |
133,533 | 55,758 | ||||||||||
TOTAL ASSETS |
$ | 5,731,984 | $ | 5,792,019 | ||||||||
Liabilities |
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Deposits: |
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Noninterest-bearing |
$ | 795,273 | $ | 739,228 | ||||||||
Interest-bearing |
2,971,782 | 3,161,620 | ||||||||||
Total deposits |
3,767,055 | 3,900,848 | ||||||||||
Borrowings: |
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Federal funds purchased |
14,500 | 57,153 | ||||||||||
Securities sold under agreements to repurchase |
520,026 | 511,300 | ||||||||||
Federal Home Loan Bank borrowings |
784,313 | 679,712 | ||||||||||
Mandatorily redeemable capital securities of subsidiary trusts |
28,851 | 28,861 | ||||||||||
Other borrowings |
13,867 | 5,096 | ||||||||||
Accrued expenses and other liabilities |
58,832 | 67,510 | ||||||||||
TOTAL LIABILITIES |
5,187,444 | 5,250,480 | ||||||||||
Shareholders’ Equity |
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Common stock, $2.50 par value; Authorized-100,000,000 shares;
issued-43,381,769 at September 30, 2003 and December 31, 2002
including 2,177,723 and 1,349,801 shares in treasury at
September 30, 2003 and December 31, 2002, respectively |
108,454 | 108,454 | ||||||||||
Surplus |
87,784 | 89,360 | ||||||||||
Retained earnings |
406,290 | 369,122 | ||||||||||
Accumulated other comprehensive income |
4,821 | 13,060 | ||||||||||
Treasury stock, at cost |
(62,809 | ) | (38,457 | ) | ||||||||
TOTAL SHAREHOLDERS’ EQUITY |
544,540 | 541,539 | ||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ | 5,731,984 | $ | 5,792,019 | ||||||||
See notes to consolidated unaudited financial statements.
5
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
UNITED BANKSHARES, INC. AND SUBSIDIARIES
(Dollars in thousands, except per share data)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30 | September 30 | |||||||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||||||
Interest income |
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Interest and fees on loans |
$ | 58,402 | $ | 65,278 | $ | 178,205 | $ | 192,958 | ||||||||||||
Interest on federal funds sold and other
short-term investments |
158 | 61 | 761 | 506 | ||||||||||||||||
Interest and dividends on securities: |
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Taxable |
11,331 | 18,742 | 37,935 | 55,718 | ||||||||||||||||
Tax-exempt |
2,090 | 2,332 | 6,565 | 7,207 | ||||||||||||||||
Total interest income |
71,981 | 86,413 | 223,466 | 256,389 | ||||||||||||||||
Interest expense |
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Interest on deposits |
11,994 | 19,185 | 42,072 | 61,260 | ||||||||||||||||
Interest on short-term borrowings |
1,535 | 2,732 | 5,833 | 7,497 | ||||||||||||||||
Interest on long-term borrowings |
10,930 | 10,760 | 32,716 | 31,832 | ||||||||||||||||
Total interest expense |
24,459 | 32,677 | 80,621 | 100,589 | ||||||||||||||||
Net interest income |
47,522 | 53,736 | 142,845 | 155,800 | ||||||||||||||||
Provision for loan losses |
2,222 | 1,823 | 5,973 | 5,725 | ||||||||||||||||
Net interest income after provision for loan losses |
45,300 | 51,913 | 136,872 | 150,075 | ||||||||||||||||
Other income |
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Income from mortgage banking operations |
15,834 | 11,203 | 42,073 | 24,801 | ||||||||||||||||
Service charges, commissions, and fees |
8,939 | 8,299 | 26,003 | 23,287 | ||||||||||||||||
Income from fiduciary activities |
2,389 | 2,303 | 7,126 | 6,692 | ||||||||||||||||
Security gains (losses) |
122 | (4,368 | ) | 1,919 | (4,961 | ) | ||||||||||||||
Other income |
1,366 | 1,292 | 2,915 | 2,117 | ||||||||||||||||
Total other income |
28,650 | 18,729 | 80,036 | 51,936 | ||||||||||||||||
Other expense |
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Salaries and employee benefits |
25,507 | 21,595 | 71,327 | 58,367 | ||||||||||||||||
Net occupancy expense |
3,039 | 3,252 | 9,619 | 9,312 | ||||||||||||||||
Other expense |
12,661 | 13,850 | 38,436 | 37,877 | ||||||||||||||||
Total other expense |
41,207 | 38,697 | 119,382 | 105,556 | ||||||||||||||||
Income before income taxes |
32,743 | 31,945 | 97,526 | 96,455 | ||||||||||||||||
Income taxes |
9,823 | 9,592 | 29,258 | 30,075 | ||||||||||||||||
Net income |
$ | 22,920 | $ | 22,353 | $ | 68,268 | $ | 66,380 | ||||||||||||
Earnings per common share: |
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Basic |
$ | 0.55 | $ | 0.53 | $ | 1.64 | $ | 1.56 | ||||||||||||
Diluted |
$ | 0.55 | $ | 0.52 | $ | 1.62 | $ | 1.53 | ||||||||||||
Dividends per common share |
$ | 0.25 | $ | 0.24 | $ | 0.75 | $ | 0.70 | ||||||||||||
Average outstanding shares: |
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Basic |
41,328,476 | 42,419,925 | 41,615,354 | 42,667,849 | ||||||||||||||||
Diluted |
41,823,011 | 43,103,509 | 42,091,262 | 43,348,668 | ||||||||||||||||
See notes to consolidated unaudited financial statements.
6
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
UNITED BANKSHARES, INC. AND SUBSIDIARIES
(Dollars in thousands, except per share data)
| Nine Months Ended September 30, 2003 | ||||||||||||||||||||||||||||||
| Common Stock | Accumulated | |||||||||||||||||||||||||||||
| Other | Total | |||||||||||||||||||||||||||||
| Par | Retained | Comprehensive | Treasury | Shareholders’ | ||||||||||||||||||||||||||
| Shares | Value | Surplus | Earnings | Income (Loss) | Stock | Equity | ||||||||||||||||||||||||
Balance at January 1, 2003 |
43,381,769 | $ | 108,454 | $ | 89,360 | $ | 369,122 | $ | 13,060 | ($ | 38,457 | ) | $ | 541,539 | ||||||||||||||||
Comprehensive income (loss): |
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Net income |
— | — | — | 68,268 | — | — | 68,268 | |||||||||||||||||||||||
Other comprehensive income (loss),
net of tax: |
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Unrealized loss on securities
of $9,918 net of
reclassification
adjustment for gains included
in net income of $1,247 |
— | — | — | — | (8,671 | ) | — | (8,671 | ) | |||||||||||||||||||||
Amortization of the unrealized
gain for securities transferred
from the available for sale to
the held to maturity investment
portfolio |
— | — | — | — | 432 | — | 432 | |||||||||||||||||||||||
Total comprehensive income |
60,029 | |||||||||||||||||||||||||||||
Purchase of treasury stock
(945,744 shares) |
— | — | — | — | — | (28,114 | ) | (28,114 | ) | |||||||||||||||||||||
Cash dividends ($0.75 per share) |
— | — | — | (31,100 | ) | — | — | (31,100 | ) | |||||||||||||||||||||
Common stock options exercised
(116,477 shares) |
— | — | (1,576 | ) | — | — | 3,762 | 2,186 | ||||||||||||||||||||||
Balance at September 30, 2003 |
43,381,769 | $ | 108,454 | $ | 87,784 | $ | 406,290 | $ | 4,821 | ($ | 62,809 | ) | $ | 544,540 | ||||||||||||||||
See notes to consolidated unaudited financial statements
7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
UNITED BANKSHARES, INC. AND SUBSIDIARIES
(Dollars in thousands)
| Nine Months Ended | |||||||||
| September 30 | |||||||||
| 2003 | 2002 | ||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
$ | 347,826 | $ | (83,159 | ) | ||||
INVESTING ACTIVITIES |
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