United Bankshares’ earnings slumped by more than a fifth, sapped by its acquisition of a South Carolina bank and a higher provision for loan losses expected as a result of the coronavirus.
Second-quarter earnings dipped to $52.7 million from $67.2 million over the same period last year. United recorded a 29% drop in the first half, from $130.8 million a year ago to $92.9 million.
Net interest income for the second quarter of 2020 was $170.6 million, an increase of $20 million or 13% from the second quarter of 2019.
United acquired Carolina Financial Corporation on May 1 spending $48 million on the merger while fueling two months of increased average balances and income.
Adding the Charleston, South Carolina-based bank “broadens our footprint in the Southeast,” said Richard M. Adams, United CEO and board chairman. “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.”
COVID-19 has dramatically impacted operations, Adams said.
The bank has suspended home foreclosures, offered fee waivers, allowed payment deferrals and processed more than 8,000 loans totaling $1.3 billion under the federal Payroll Protection Program to aid businesses sent reeling by the virus.
Still, net income increased 13% to $170.6 million in the second quarter compared to last year.
Following the acquisition of Carolina Financial, United’s assets total $25 billion. Headquartered in Charleston and Washington, D.C., United operates 230 offices in West Virginia, Virginia, Ohio, Pennsylvania, Maryland, North Carolina, South Carolina, Georgia and Washington. United’s stock is traded on the NASDAQ Global Select Market under the quotation symbol “UBSI”.