WASHINGTON, DC and CHARLESTON, WV-- United Bankshares, Inc. (NASDAQ: UBSI), today reported diluted earnings per share from continuing operations of 57¢ and $1.14 for the second quarter and first half of 2005, respectively. These results represent a 12% increase from earnings per diluted share from continuing operations of 51¢ and $1.02 for the second quarter and first half of 2004, respectively. Income from continuing operations was $24.5 million for the second quarter of 2005 as compared to income from continuing operations of $22.5 million for the second quarter of 2004. Income from continuing operations was $49.3 million and $45.1 million for the first half of 2005 and 2004, respectively.

No income from discontinued operations was recorded for the second quarter and first half of 2005 because the sale of United’s mortgage banking subsidiary occurred in 2004. Income from discontinued operations for the second quarter of 2004 was $1.8 million or 4¢ per diluted share. Income from discontinued operations for the first half of 2004 was $2.7 million or 6¢ per diluted share.

Net income per diluted share was 57¢ for the second quarter of 2005, which represented a 4% increase from diluted earnings per share of 55¢ for the second quarter of 2004. United generated net income of $24.5 million for the second quarter of 2005 as compared to $24.2 million earned in the second quarter of 2004. Net income per diluted share for the first half of 2005 was $1.14, up 6% from net income per diluted share of $1.08 for the first half of 2004. Net income was $49.3 million and $47.7 million for the first half of 2005 and 2004, respectively.

Net income for the second quarter of 2005 resulted in a return on average assets of 1.55% and a return on average equity of 15.50%, as compared to 1.51% and 15.38%, respectively, for the second quarter of 2004. For the first half of 2005, United’s return on average assets was 1.56% while the return on average equity was 15.60% as compared to 1.51% and 15.28%, respectively, for the first half of 2004.

The earnings growth for the second quarter of 2005 from last year’s second quarter was primarily due to increased net interest income. Tax-equivalent net interest income from continuing operations for the second quarter of 2005 was $56.4 million, an increase of $3.9 million or 7% from the second quarter of 2004. This increase in tax-equivalent net interest income from continuing operations was due mainly to a $275.0 million or 5% increase in average earning assets as average loans for the second quarter of 2005 grew $341.0 million or 8% over last year’s second quarter. In addition, the average yield on earning assets for the second quarter of 2005 increased 54 basis points from the second quarter of 2004 as a result of higher interest rates. Partially offsetting these increases to net interest income for the second quarter of 2005 was a corresponding 54 basis point increase in the cost of funds from the second quarter of 2004 due to the higher interest rates. The consolidated net interest margin, which combines the results from continuing and discontinued operations, for the second quarter of 2005 increased 11 basis points to 3.88% from the second quarter 2004 consolidated net interest margin of 3.77%. On a linked-quarter basis, United’s tax-equivalent net interest income from continuing operations for the second quarter of 2005 increased $671 thousand compared to the first quarter of 2005 due primarily to average loan growth of $45.0 million or 1% for the quarter. Portfolio loans outstanding at June 30, 2005 actually grew $131.5 million or 3% from the end of March 2005. However, most of this growth occurred in June and, thus, did not significantly impact the average loans for the quarter. The yield on loans for the second quarter of 2005 increased 17 basis points from the first quarter, but this increase was more than offset by an increase of 19 basis points in the cost of funds. The net interest margin for the second quarter of 2005 of 3.88% was an increase of 3 basis points from the net interest margin of 3.85% for the first quarter of 2005.

Tax-equivalent net interest income from continuing operations for the first six months of 2005 was $112.2 million, an increase of $7.4 million or 7% from the prior year’s first six months as average earning assets increased $337.1 million or 6% due mainly to average loan growth of $367.9 million or 9%. In addition, the average yield on earning assets for the first half of 2005 increased 40 basis points from the first half of 2004 due to higher interest rates. However, as a result of the higher interest rates, the average cost of funds for the first half of 2005 increased 45 basis points from the first half of 2004. The consolidated net interest margin for the first half of 2005 was 3.86%, up 4 basis points from a consolidated net interest margin of 3.82% during the same period last year.

Noninterest income from continuing operations for the second quarter and first half of 2005 decreased $342 thousand or 3% and $986 thousand or 4%, respectively, from the second quarter and first half of 2004. The decreases were primarily due to declines in fees from deposit services of $772 thousand or 10% and $1.7 million or 11%, respectively, for the second quarter and first half of 2005 as compared to the same periods last year. Income from bank owned life insurance policies increased $441 thousand and $407 thousand for the second quarter and first half of 2005, respectively, as compared to last year’s income during the same periods. In the third quarter of 2004, United commenced operations of a mortgage title insurance company. Fees from the title company totaled $185 thousand and $304 thousand, respectively, for the second quarter and first half of 2005. Revenue from trust and brokerage services grew $78 thousand or 3% for the second quarter of 2005 over last year’s second quarter revenue. For the first half of 2005, revenue from trust and brokerage services grew $266 thousand or 5% from last year’s first half revenue. On a linked-quarter basis, noninterest income from continuing operations increased $440 thousand or 3% from the first quarter of 2005 due mainly to increased income from deposit services of $510 thousand and bank owned life insurance policies of $495 thousand. Net gains on investment securities’ transactions were down $866 thousand from the first quarter to the second quarter of 2005.

Noninterest expense from continuing operations for the second quarter of 2005 increased $1.1 million or 4% from the second quarter of 2004. This rise in noninterest expense was primarily due to an increase of $746 thousand or 5% in salaries and benefits expense as a result of higher salaries and increased health insurance and pension costs. Noninterest expense from continuing operations for the first half of 2005 was relatively flat from the first half of 2004, increasing only $221 thousand or less than 1%. On a linked-quarter basis, noninterest expense for the second quarter of 2005 increased $1.8 million or 6% from the first quarter of 2005. This increase was primarily due to increases in several general operating expenses, none of which were individually significant. The efficiency ratio was a low 42.80% and 42.08% for the second quarter and first half of 2005, respectively.

At June 30, 2005, nonperforming loans were $15.5 million or 0.34% of loans, net of unearned income compared to nonperforming loans of $9.5 million or 0.22% of loans, net of unearned income at March 31, 2005 and $10.8 million or 0.24% of loans, net of unearned income at December 31, 2004, respectively. The increase for the quarter and year-to-date was due mainly to $4.3 million in loans to two commercial customers and one consumer customer that were either 90 days past due or placed on nonaccural at June 30, 2005. These credits are adequately collateralized and were appropriately considered in assessing the adequacy of the allowance for credit losses. United’s credit quality continues to compare favorably to its most recently reported peer group banking companies’ averages despite the increase in nonperforming loans. Net charge-offs were $295 thousand and $1.3 million for the second quarter and first half of 2005, respectively, as compared to $511 thousand and $1.8 million for the second quarter and first half of 2004. For the quarters ended June 30, 2005 and 2004, the provision for credit losses was $504 thousand and $539 thousand, respectively, while the provision for the first six months of 2005 was $1.6 million as compared to $1.9 million for 2004. As of June 30, 2005, the allowances for loan losses and lending-related commitments totaled $51.6 million or 1.14% of loans, net of unearned income, as compared to $51.4 million or 1.16% of loans, net of unearned income at December 31, 2004.

During the second quarter, United’s Board of Directors declared a cash dividend of 26¢ per share, which represented a 4% increase over the 25¢ per share dividend paid for the second quarter of 2004. The annualized first half dividend of 52¢ per share equals $1.04 which would represent the 32nd consecutive year of dividend increases for United shareholders.

United Bankshares, with $6.5 billion in assets, presently has 90 full-service offices in West Virginia, Virginia, Maryland, Ohio, and Washington, D.C. United Bankshares stock is traded on the NASDAQ (National Association of Securities Dealers Quotation System) Stock Market System under the quotation symbol "UBSI".