Safe and Sound

United Bank

Parkersburg, WV
4
Star Rating
Started in 1839, United Bank is an FDIC-insured bank headquartered in Parkersburg, WV. As of June 30, 2017, the bank had equity of $706.9 million on assets of $6.13 billion.

Thanks to the work of 899 full-time employees in 58 offices in multiple states, the bank currently holds loans and leases worth $4.91 billion, including $3.31 billion worth of real estate loans. U.S. bank customers currently have $4.89 billion in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, United Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank faired on the three important criteria Bankrate used to score American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a crucial measurement of an institution's financial fortitude. It acts as a buffer against losses and affords protection for accountholders during periods of economic instability for the bank. From a safety and soundness perspective, the more capital, the better.
United Bank fell short of the national average of 13.38 on our test to measure the adequacy of a bank's capital, scoring 12 out of a possible 30 points.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. United Bank's Tier 1 capital ratio was 12.54 percent, exceeding the 6 percent level regulators consider adequate, but less than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather financial challenges.

Overall, United Bank held equity amounting to 11.53 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test is intended to estimate how the bank's loan loss reserves and overall capitalization could be affected by troubled assets, such as unpaid mortgages.

Having large numbers of these kinds of assets may eventually force a bank to use capital to cover losses, shrinking its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in depressed earnings and potentially more risk of a failure in the future.

United Bank finished below the national average of 37.62 on Bankrate's test of asset quality, racking up 32 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of June 30, 2017, 2.21 percent of United Bank's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.04 percent.

Banks keep a reserve to deal with troubled assets known as an "allowance for loan and lease losses." Comparing the how large that reserve is to the total amount of problem loans can be a widely used indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on United Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its safety and soundness. Earnings can be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. Conversely, losses diminish a bank's ability to do those things.

United Bank scored 18 out of a possible 30 on Bankrate's test of earnings, beating out the national average of 16.52.

One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for United Bank was 8.68 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank reported net income of $29.6 million on total equity of $706.9 million. The bank reported an annualized return on average assets, or ROA, of 0.97 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.