Newsroom@DominionPost.com
United Bankshares Inc. reported earnings for the second quarter and the first half of 2020.
Earnings for the second quarter of 2020 were $52.7 million as compared to earnings of $67.2 million for the second quarter of 2019.
Earnings for the first half of 2020 were $92.9 million as compared to earnings of $130.8 million for the first half of 2019.
The lower net income in 2020 was driven primarily by significant merger-related expenses from the Carolina Financial Corp. (“Carolina Financial”) acquisition and a higher provision for loan losses resulting from an adverse future economic forecast as a result of the coronavirus pandemic.
The higher amount of provision expense resulting from COVID-19 is an industry-wide issue affecting bank earnings nationwide.
Earnings per share were $0.44 and $0.84 for the second quarter and first half of 2020, respectively, as compared to earnings per share of $0.66 and $1.28 for the second quarter and first half of 2019, respectively.
For the first half of 2020, United’s annualized return on average assets was 0.85% while the annualized return on average equity was 5.16% and the annualized return on average tangible equity was 9.28%. average tangible equity were 1.36%, 8.00% and 14.78%, respectively, for the first half of 2019.
“During the second quarter of 2020, we successfully completed the acquisition of Carolina Financial Corp., headquartered in Charleston, S.C., which broadens our footprint in the Southeast,” Richard M. Adams, United’s chairman of the Board and CEO, said. “Core earnings for the second quarter of 2020 continued to be good despite the current economic environment and significant merger expenses related to the acquisition of Carolina Financial.
“In addition, United has continued its focus on meeting our customers’ needs during the COVID-19 pandemic by suspending residential property foreclosures, offering fee waivers, providing payment deferrals, and processing over 8,000 loans totaling approximately $1.3 billion under the government Paycheck Protection Program.”
The net interest margin of 3.24% for the first half of 2020 was a decrease of 26 basis points from the net interest margin of 3.50% for the first half of 2019. United’s loan quality continues to be sound relative to the current economic environment. At June 30, nonperforming loans were $156.3 million, or 0.87% of all loans & leases,
United continues to be well-capitalized based upon regulatory guidelines. United’s estimated risk-based capital ratio is 14.8% at June 30, 2020 while its estimated Common Equity Tier 1 capital, Tier 1 capital and leverage ratios are 12.6%, 12.6% and 10.7%, respectively
As of June 30, United had consolidated assets of approximately $26.2 billion.
United is the parent company of United Bank, the largest community bank headquartered in the D.C. Metro region. United Bank has 226 offices in West Virginia, Virginia, Ohio, Pennsylvania, Maryland, North Carolina, South Carolina, Georgia and the nation’s capital. United’s stock is traded on the NASDAQ Global Select Market under the quotation symbol “UBSI.”
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