CHARLESTON — United Bankshares Inc. announced its results for the second quarter and first half of 2022.
The company this week reported earnings of $95.6 million, or $0.71 per diluted share, in the second quarter, compared with earnings of $81.7 million, or $0.60 per diluted share, for the first quarter of 2022 and $94.8 million, or $0.73 per diluted share, for the second. quarter 2021.
Earnings for the first six months of 2022 were $177.3 million, or $1.30 per diluted share, compared to earnings of $201.7 million, or $1.56 per diluted share, for the same period in 2021.
Annualized loan growth, excluding Paycheck Protection Program loans, was 15% for the second quarter and 13% for the first half of 2022. Net interest margin of 3.38% in the second quarter increased by 39 basis points compared to the first quarter of 2022. performing loans as a percentage of loans and leases, net of deferred income, amounted to 0.37% as of June 30, 2022.
Q2 2022 results produced annualized returns on average assets, average equity and average tangible equity of 1.32%, 8.33% and 14.23%, respectively, from annualized returns by 1.13%, 6.96% and 11.63%, respectively, for the first quarter of 2022.
Publication of UBSI results for the 2nd quarter of 2022
“During the second quarter, we continued our strong momentum from the start of the year and are well positioned for the second half of 2022,” said Richard M. Adams Jr., United’s chief executive. “We have experienced significant net interest margin expansion and continue to experience promising loan growth in our markets. We remain well capitalized with strong asset quality, have strong liquidity levels and maintain our long-standing commitments to strong risk management practices, credit underwriting discipline and meeting the needs of our customers.
Net interest income for the second quarter increased $23.4 million, or 12%, compared to the first quarter of 2022, primarily due to higher market interest rates and a change in the asset mix.
The interest rate differential of 3.24% for the second quarter increased by 38 basis points compared to the first quarter due to a 42 basis point increase in the average return on earning assets partially offset by a 4 basis point increase in the average cost of funds.
A decrease in average earning assets of $426 million, or 2%, from the first quarter, driven by a $1.3 billion decrease in short-term investments, was partially offset by increases in average net lending higher yielding and loans held for sale of $489.9. million and average investment securities of $375.8 million. The net interest margin of 3.38% for the second quarter of 2022 represents an increase of 39 basis points compared to 2.99% for the first quarter of 2022.
Provision for credit losses was a net benefit of $1.8 million for the second quarter of 2022, compared to $3.4 million for the first quarter of 2022. Net benefit in the second quarter reflects trends continued strong returns within the loan portfolio, partially offset by loan growth and the impact of reasonable and supportable forecasts of future macroeconomic conditions.
Non-interest revenue for the second quarter decreased $2.4 million, or 5%, from the first, primarily due to a $6.8 million decline in mortgage banking revenue , primarily due to lower mortgage origination and sale volume due to higher interest rates and a lower margin on loans sold in the secondary market. Bank-owned life insurance revenue increased $1.9 million from the first quarter to $4.1 million, primarily due to the recognition of death benefits.
Non-interest expense for the second quarter increased $2 million, or 1%, from the first quarter of 2022 due to higher amounts of certain general operating expenses.
United continues to be well capitalized based on regulatory guidelines. The company’s estimated risk-based capital ratio is 14.8% as of June 30, while the estimated Common Equity Tier 1, Tier 1 capital and leverage ratios are 12.7% , 12.7% and 10.5%, respectively. The ratios reflect United’s election of a five-year transition provision, authorized by the Federal Reserve Board and other federal banking agencies in response to the COVID-19 pandemic, to delay the full impact of currently expected credit losses on regulatory capital, followed by a three-year transition period. The regulatory requirements for a well-capitalized financial institution are a risk-based capital ratio of 10%, a Common Equity Tier 1 capital ratio of 6.5%, a Tier 1 capital ratio of 8% and a leverage ratio of 5%.
During the first halves of 2022 and 2021, United repurchased, under a previously announced stock repurchase plan, shares of its common stock. During the second quarter of 2022, United repurchased approximately 1.5 million common shares at an average price per share of $34.47. United did not repurchase any shares of its common stock during the second quarter of 2021. During the first half of 2022, United repurchased approximately 2.3 million shares of its common stock at an average price per share of 34 $.69. During the first half of 2021, United repurchased approximately 306,000 common shares at an average price per share of $32.52.
As of June 30, United had consolidated assets of approximately $28.8 billion. United is the parent company of United Bank, which has nearly 250 offices in West Virginia, Ohio, Virginia, Maryland, North Carolina, South Carolina, Georgia, Pennsylvania and Washington, D.C. United shares are traded on the NASDAQ Global Select Market under the ticker symbol “UBSI”.