Yahoo Finance United Bankshares Inc Reports Q1 2024 Earnings: A Close Look Against Analyst Expectations
Net Income: $86.8 million for Q1 2024, a decrease from $98.3 million in Q1 2023, and below the estimated $87.43 million.
Earnings Per Share (EPS): Reported at $0.64, falling short of the estimated $0.65, and down from $0.73 in Q1 2023.
Revenue: Net interest income for Q1 2024 was $222.49 million, down 5% year-over-year and below the estimated $257.63 million.
Provision for Credit Losses: Decreased to $5.74 million in Q1 2024 from $6.9 million in Q1 2023, indicating improved credit quality.
Noninterest Income: Decreased by 2% to $32.2 million in Q1 2024 from $32.7 million in Q1 2023, driven by a drop in mortgage loan servicing income.
Noninterest Expense: Reduced by 8% to $140.7 million in Q1 2024 from $152.3 million in Q4 2023, mainly due to lower FDIC insurance and other noninterest expenses.
Asset Quality: Non-performing loans were $74.4 million, or 0.35% of total loans at the end of Q1 2024, an increase from 0.21% at the end of 2023.
On April 25, 2024, United Bankshares Inc (NASDAQ:UBSI) disclosed its financial results for the first quarter of 2024 through an 8-K filing. The company reported earnings of $86.8 million, or $0.64 per diluted share, slightly below the analyst estimates of $0.65 per share. Despite the modest miss in earnings per share, the company showcased robust operational metrics amidst economic challenges.
Company Profile
United Bankshares Inc, a financial holding entity, primarily engages through its Community Banking segment, which includes personal, credit card, commercial, and construction loans, alongside offering brokerage services. The Mortgage Banking segment, though smaller, complements the primary operations by focusing on home mortgages. The majority of the company's revenue is generated from the Community Banking segment.
Quarterly Financial Performance
The first quarter results showed a decrease in net interest income to $222.49 million, down 3% from the previous quarter, primarily due to higher interest expenses and lower loan fees. The net interest margin also saw a decline, settling at 3.44% from 3.55% in the previous quarter. Despite these challenges, noninterest expense was reduced by 8%, amounting to $140.74 million, reflecting effective cost management.
Year-Over-Year Comparison
Comparing year-over-year, UBSI's earnings for Q1 2024 were lower than the $98.3 million reported in Q1 2023. The decrease was largely due to a rise in interest expense and a drop in net interest income, which fell by 5% to $222.49 million. The provision for credit losses was slightly reduced to $5.7 million from $6.9 million in Q1 2023, indicating a stable credit environment.
Operational and Strategic Insights
Richard M. Adams, Jr., CEO of United, commented on the results, stating, "UBSI delivered solid performance in the first quarter of 2024." He acknowledged the ongoing economic headwinds but affirmed the company's strong operational metrics and strategic positioning for future success. This sentiment underscores UBSI's resilience in a fluctuating economic landscape.
Asset Quality and Capital Adequacy
The asset quality of UBSI remains sound with non-performing loans comprising only 0.35% of total loans and leases. The bank's capital ratios also highlight its financial stability, with a risk-based capital ratio of 15.6%, comfortably above the regulatory requirement for being well-capitalized.
Conclusion
In summary, United Bankshares Inc's first quarter of 2024 reflects a stable financial condition with effective cost control and solid capital adequacy, despite the slight miss in earnings per share compared to analyst expectations. The bank's strategic initiatives and operational adjustments in response to economic pressures demonstrate its proactive approach to maintaining profitability and shareholder value in challenging times.
For detailed financial tables and further information, refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from United Bankshares Inc for further details.
This article first appeared on GuruFocus.
