United Bankshares, Inc. Announces Record Earnings for Second Quarter and First Half of 2001

United Bankshares, Inc., today reported record earnings for the second quarter and the first half of 2001. Diluted earnings per share improved by 9% for the second quarter and first half of 2001 to 47¢ and 93¢ as compared to 43¢ and 85¢ for the same periods of 2000, respectively. Quarterly net income was $19.8 million compared with $18.1 million a year earlier. Net income for the first six months of 2001 was $39.1 million compared to $36.1 million for the prior year's first six months. Cash earnings per share were 49¢ and 96¢ for the second quarter and first half of 2001, respectively.

United's key performance ratios were strong for the three months and six months ended June 30, 2001, United's return on average assets was 1.60% and 1.61%, respectively while the return on average equity was 17.54% and 17.70%, respectively. On a cash basis, return on average tangible assets was 1.66% and 1.67% for the second quarter and first half of 2001, respectively while return on average tangible equity was 19.67% and 19.91%, respectively for the same periods of time. These key financial performance ratios are indicative of United's earnings strength and balanced capital levels. United continues to be one of the best performing regional banking companies in the nation.

Tax-equivalent net interest income for the second quarter was $49.1 million with a net interest margin of 4.18%; an increase of 8 basis points from the preceding quarter due to the cost of United's short-term borrowed funds declining 92 basis points for the quarter. The level of earning assets increased approximately 3% from the end of the first quarter of 2001.

Noninterest income, excluding security transactions, for the second quarter of 2001 increased 30.6% from the second quarter of 2000 and 13.1% over the first quarter of 2001. These increased revenues were the result of an expanded volume of trust and mortgage banking services for the quarter. Income from mortgage banking and trust operations increased 55.5% and 25.2%, respectively for the second quarter of 2001 as compared to the second quarter of 2000. On a linked-quarter basis, mortgage banking income increased by 23.8% while trust fees grew 8.9%.

Noninterest expense for the quarter increased 8.7% compared to the second quarter of 2000 and was up 9.1% over the first quarter of 2001 due mainly to higher sales activity in the mortgage banking segment as compensation and incentives for its personnel are significantly tied to activity levels. The efficiency ratio was still a low 43.97% and 43.42% for the second quarter and first half of 2001, respectively. This ratio compares very favorably to regional and national peer group banking companies.

United's asset quality remains sound with the nonperforming asset level at 0.27% of total assets improving from 0.29% and 0.30% at the end of the first quarter 2001 and year end 2000, respectively. Nonperforming loans were $11.2 million at June 30, 2001 as compared to $12.3 million at March 31, 2001 and $12.8 million at December 31, 2000. Net charge-offs were $2.1 million for the second quarter of 2001 as compared to net charge-offs of $4.0 million for the previous year quarter. Net charge-offs for the first half of 2001 were $4.0 million as compared to $6.7 million for the first half of 2000. As of June 30, 2001, the allowance for loan losses was $41.2 million or 1.29% of loans, net of unearned income.

Total assets have grown $190.1 million or 4% since year end 2000. Shareholders' equity has increased $14.1 million or 3% since year end resulting in a book value per share of $10.77. United is categorized as well capitalized based on the risk-based capital ratio, considerably exceeding the regulatory minimum requirement. These measures provide evidence that United's financial position is strong.

During the quarter, United's Board of Directors declared a cash dividend of 23¢ per share, a 10% increase over the 21¢ per share paid in the second quarter of 2000. The annualized first half dividend of 45¢ per share equals 90¢ which would represent the twenty-eighth consecutive year of dividend increases for United shareholders.

United recently signed a definitive merger agreement with Century Bancshares, Inc. of Washington, D.C., with assets of approximately $415 million. The transaction, which is expected to close during the fourth quarter of 2001, will increase United's Virginia franchise to more than $2 billion in assets and will rank United as the ninth largest bank in the Virginia and Washington, D.C. MSA. Following completion of the proposed merger with Century, United will have consolidated assets over $5.4 billion with 86 full service offices in West Virginia, Virginia, Maryland, Ohio and Washington, D.C. Consummation of the transaction is subject to approval of the shareholders of United and Century and the receipt of all regulatory approvals, as well as other customary conditions.

United Bankshares, with $5 billion in assets, presently has 75 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) National Market System under the quotation symbol "UBSI".

This press release contains certain forward-looking statements, including certain plans, expectations, goals and projections, which are subject to numerous assumptions, risks and uncertainties. Actual results could differ materially from those contained in or implied by such statements for a variety of factors including: changes in economic conditions; movements in interest rates; competitive pressures on product pricing and services; success and timing of business strategies; the nature and extent of governmental actions and reforms; and rapidly changing technology evolving banking industry standards.