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United Bankshares announces record earnings

PARKERSBURG — United Bankshares has announced record earnings for 2019.

Earnings for the fourth quarter of 2019 were $63.3 million or 62 cents per diluted share as compared to earnings of $64 million or 62 cents per diluted share for the fourth quarter of 2018, the company said.

Earnings for the year of 2019 were a record $260.1 million or $2.55 per diluted share as compared to earnings of $256.3 million or $2.45 per diluted share for the year of 2018.

Fourth quarter of 2019 results produced an annualized return on average assets of 1.29 percent, an annualized return on average equity of 7.42 percent and an annualized return on average tangible equity of 13.38 percent. For 2019, United’s return on average assets was 1.34 percent while the return on average equity was 7.80 percent and the return on average tangible equity was 14.26 percent. United’s annualized returns on average assets, average equity and average tangible equity were 1.33 percent, 7.77 percent and 14.52 percent, respectively, for the fourth quarter of 2018 while the returns on average assets, average equity and average tangible equity were 1.36 percent, 7.84 percent and 14.65 percent, respectively, for the year of 2018.

“2019 was another great year for United Bankshares,” Richard M. Adams, United chairman of the Board and Chief Executive Officer, said. “We earned record net income of $260 million and record diluted earnings per share of $2.55, announced the intent to acquire Carolina Financial Corp., our 32nd acquisition of the current administration, and increased dividends to our shareholders for the 46th consecutive year, a record only one other major banking company in the USA has been able to achieve.”

Net interest income for the fourth quarter of 2019 was $141.3 million, which was a decrease of $5.4 million or 4 percent from the fourth quarter of 2018. Net interest income for the year of 2019 was $577.9 million, which was a decrease of $10.7 million or 2 percent from the year of 2018.

On a linked-quarter basis, net interest income for the fourth quarter of 2019 was relatively flat from the third quarter of 2019, decreasing $635 thousand or less than 1 percent.

For the quarters ended Dec. 31, 2019, and 2018, the provision for loan losses was $5.9 million and $5.8 million, respectively, while the provision for the year of 2019 was $21.3 million as compared to $22 million for the year of 2018.

Noninterest income for the fourth quarter of 2019 was $37.2 million, which was an increase of $7.4 million or 25 percent from the fourth quarter of 2018.

Noninterest income for the year of 2019 was $150.5 million, which was an increase of $21.8 million or 17 percent from the year of 2018. The increase was due mainly to an increase of $18.8 million in income from mortgage banking activities primarily due to increased loan originations and a higher realized gain on sale margin by George Mason.

On a linked-quarter ba sis, noninterest income for the fourth quarter of 2019 decreased $5 million or 12 percent from the third quarter of 2019.

Noninterest expense for the fourth quarter of 2019 was $96.9 million, an increase of $5.9 million or 6 percent from the fourth quarter of 2018 due mainly to an increase of $5.2 million in employee compensation expense.

Noninterest expense for the year of 2019 was $382.7 million, an increase of $14.5 million or 4 percent from the year of 2018. In particular, employee compensation expense increased $9.5 million due mainly to increased salaries and commissions expense primarily related to the increase in production and sales of mortgage loans at George Mason.

On a linked-quarter basis, noninterest expense for the fourth quarter of 2019 was relatively flat from the third quarter of 2019, increasing $766 thousand or less than 1 percent.

For the fourth quarter and year of 2019, income tax expense was $12.5 million and $64.3 million, respectively, as compared to $15.8 million and $70.8 million, respective ly, in the fourth quarter and year of 2018.

United’s asset quality continues to be sound. At Dec. 31, nonperforming loans were $131.1 million, or 0.96 percent of loans, net of unearned income, a de cline from nonperforming loans of $142.8 million, or 1.06 percent of loans, net of unearned income, at Dec. 31, 2018.

United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 14.7 percent at Dec. 31, while its estimated Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 12.5 percent, 12.5 percent and 10.5 percent, respectively.

During the fourth quarter of 2019, United announced that it entered into a definitive merger agreemen twith Carolina Financial Corp. Under the merger agreement, United will acquire 100 percent of the outstanding shares of Carolina Financial Corporation in exchange for common shares of United. The combined organization will be approximately $25 billion in assets with more than 200 locations in some of the most desirable banking markets in the nation. United recently filed a For m S-4 with the Securities and Exchange Commission regarding the proposed merger. United expects the merger to close during the second quarter of 2020.

As of Dec. 31, United had consolidated assets of approximately $19.7 billion.

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