Commercial lending and mortgage income surged at United Bankshares in Charleston, W.Va., in the fourth quarter thanks to two acquisitions, but a tax charge deflated profits.
Net income at the $19.1 billion-asset company fell 54% to $18 million from a year earlier. Yet earnings per share of 17 cents were 2 cents better than the mean estimate of analysts tracked by FactSet Research Systems.
The company recorded a $37.7 million income tax expense due to the new federal tax law.
Net interest income rose 37% to $154.9 million on an increase in average earning assets. Net loans rose 26% to $13 billion. Average commercial loans increased 25% to $9.8 billion. The average yield on loans rose 50 basis points to 4.84%.
“We increased earnings before income taxes to a record $285 million” for the full-year 2017, Chairman and CEO Richard Adams said in a news release Tuesday. “We increased dividends to $1.33 per share which represented the 44th consecutive year of dividend increases to our shareholders."
Noninterest income increased 97% to $32.8 million. In April, United acquired Cardinal Financial in Tysons Corner, Va., and its George Mason Mortgage subsidiary, one of the largest mortgage lenders based in the Washington metro area. With its expanded mortgage operations, United’s mortgage banking income surged from about $1 million to $15.3 million.
Noninterest expense climbed 53% to $95.8 million on higher costs from the additional employees gained in the Cardinal acquisition.