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United Bankshares reports 2Q 2021 earnings

PARKERSBURG — United Bankshares Inc. has reported earnings for the second quarter and first half of 2021.

Earnings for the second quarter of 2021 were $94.8 million, or 73 cents per diluted share, as compared to earnings of $52.7 million, or 44 cents per diluted share, for the second quarter of 2020. Earnings for the first half of 2021 were $201.7 million, or $1.56 per diluted share, as compared to earnings of $92.9 million, or 84 cents per diluted share, for the first half of 2020. Second quarter 2021 results produced annualized returns on average assets, average equity and average tangible common equity, a non-GAAP measure, of 1.41 percent, 8.69 percent and 14.95 percent, respectively, compared to annualized returns on average assets, average equity and average tangible equity of 0.87 percent, 5.40 percent and 9.58 percent, respectively, for the second quarter of 2020.

For the first half of 2021, United’s annualized returns on average assets, average equity and average tangible equity were 1.52 percent, 9.32 percent and 16.06 percent, respectively, compared to annualized returns on average assets, average equity and average tangible equity of 0.85 percent, 5.16 percent and 9.28 percent, respectively, for the first half of 2020.Earnings for the second quarter and first half of 2021, as compared to the second quarter and first half of 2020, benefited from additional net earnings related to the Carolina Financial Corporation acquisition and a lower provision for credit losses primarily due to better performance trends within the loan portfolio and an improved future macroeconomic forecast under the Current Expected Credit Loss accounting standard. The second quarter and first half of 2020 also included significant merger-related expenses from the Carolina Financial acquisition. During the second quarter of 2021, United announced that it entered into a definitive merger agreement with Community Bankers Trust Corporation. Under the merger agreement, United will acquire 100 percent of the outstanding shares of Community Bankers Trust in exchange for common shares of United. The combined organization will have approximately $29 billion in assets with nearly 250 locations in some of the most desirable banking markets in the nation. The merger is expected to close in the fourth quarter of 2021, subject to satisfaction of customary closing conditions, including receipt of customary regulatory approvals and approval by the shareholders of Community Bankers Trust.

“Our earnings continued to be strong in the second quarter of 2021 as we earned net income of $94.8 million, diluted earnings per share of 73 cents and delivered an annualized return on average assets of 1.41 percent,” Richard M. Adams, United’s chairman of the board and Chief Executive Officer, said. “We were also pleased to announce the intent to acquire Community Bankers Trust Corporation during the second quarter, our 33rd acquisition of the current administration as we continue to strengthen United’s position as one of the largest and best performing regional banking companies in the Mid-Atlantic and Southeast.”

The results of operations for Carolina Financial are included in the consolidated results of operations from the date of acquisition, May 1, 2020. As a result of the acquisition, the second quarter and first half of 2021 reflected higher average balances, income, and expense as compared to the second quarter and first half of 2020. The second quarter and first half of 2020 included merger-related expenses of $46.4 million and $48.0million, respectively, associated with the acquisition of Carolina Financial compared to $183 thousand of merger-related expenses incurred in the second quarter and first half of 2021 related to the announced Community Bankers Trust acquisition.

Net interest income and net interest margin net interest income for the second quarter of 2021 was $186.5 million, an increase of $15.9 million, or 9 percent, from the second quarter of 2020. Tax-equivalent net interest income, a non-GAAP measure which adjusts for the tax-favored status of income from certain loans and investments, for the second quarter of 2021 increased $16.0 million, or 9 percent, from the second quarter of 2020 to $187.6 million. The increase in net interest income and tax-equivalent net interest income was primarily due to lower interest expense on deposits and borrowings, reflecting a decline in market interest rates, and due to an increase in average earning assets from the Carolina Financial acquisition and Paycheck Protection Program loans.

The net interest spread for the second quarter of 2021 increased 10 basis points from the second quarter of 2020 due to a 43 basis point decrease in the average cost of funds partially offset by a 33 basis point decrease in the average yield on earning assets. Average earning assets for the second quarter of 2021 increased $2.3 billion, or 11 percent, from the second quarter of 2020 due to a $1.4 billion increase in average short-term investments, a $537.2 million increase in average investment securities, and a $420.0 million increase in average net loans and loans held for sale. Net PPP loan fee income of $9.0 million was recognized in the second quarter of 2021 driven primarily by loan forgiveness, as compared to $4.5 million for the second quarter of 2020. The net interest margin of 3.14 percent for the second quarter of 2021 was a decrease of 4 basis points from the net interest margin of 3.18 percent for the second quarter of 2020. Net interest income for the first six months of 2021 was $377.5 million, which was an increase of $65.4 million, or 21 percent, from the first six months of 2020. Tax-equivalent net interest income for the first six months of 2021 was $379.6 million, an increase of $65.7 million, or 21 percent, from the first six months of 2020. The increase in net interest income and tax-equivalent net interest income was primarily due to lower interest expense as well as an increase in average earning assets from the Carolina Financial acquisition and PPP loans. The net interest spread for the first six months of 2021 increased 20 basis points from the first six months of 2020 due to a 67 basis point decrease in the average cost of funds partially offset by a 47 basis point decrease in the average yield on earning assets. Average earning assets for the first six months of 2021 increased $4.3 billion, or 22 percent, from the first six months of 2020 due to a $2.2 billion increase in average net loans and loans held for sale, a $1.5 billion increase in average short-term investments and a $555.7 million increase in average investment securities. Net PPP loan fee income of $20.3 million was recognized in the first half of 2021 driven primarily by loan forgiveness, as compared to $4.5 million for the first half of 2020. The net interest margin of 3.22 percent for the first six months of 2021 was a decrease of 2 basis points from the net interest margin of 3.24 percent for the first six months of 2020.

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