United Bankshares (UBSI) Q3 2026 earnings review
United Bankshares lending income hits a record, while fees fall
United Bankshares, a regional bank across Washington, D.C. and the Southeast, grew lending income while fee revenue fell. Net interest income rose 5% from a year ago to a record $294 million as deposit costs dropped and loan growth beat the second-half plan. Total profit slipped 2% because last year's third quarter included $10 million of investment gains, but stock buybacks lifted profit per share to $0.94.
| Net interest income | $294.3M +5% from a year ago |
|---|---|
| Diluted profit per share | $0.94 +2% from a year ago |
| Total net revenue, excluding investment gains | $325.4M +4% from a year ago by our math |
| Full-year net interest income outlook | Raised $5.5M middle of the range: 5.3% growth |
⚖️ Verdict: 🟢 Bullish
The story got better because faster loan and deposit growth widened the bank's lending margin and allowed chief executive Richard M. Adams, Jr. to raise the full-year lending income outlook. Credit costs also stayed low, prompting a third straight cut to the full-year loan loss provision plan. One caution: hiring and loan commitment reserves pushed operating expenses up 7% from a year ago, while early-stage loan delinquencies ticked up.
The question now is whether core loan growth can keep lifting lending income as accounting gains from last year's Piedmont merger fade in 2027. Bulls point to 8% annualized loan growth and wider spreads; bears point to a projected $12 million drop in merger accounting income next year and rising commercial real estate concentration. Fourth-quarter loan growth and the 2027 outlook in January will tell.
🐂 Bull Case
Loan and Deposit Growth Lifted Lending Income
"Record net interest income, an expanding net interest margin, and strong organic growth drove earnings in the third quarter of 2026," chief executive Richard M. Adams, Jr. said. Net interest income is the money the bank makes on loans and bonds after paying depositors. United Bankshares grew that figure 5.0% from a year ago to $294.3 million, and raised its full-year target by $5.5 million at the middle of the range.
- Net interest margin (lending profit as a share of earning assets): 3.86%, up 0.06 percentage points from a year ago
- Rate paid on interest-bearing deposits: 2.51%, down 0.33 percentage points from a year ago
- Yield on investment securities: 3.69%, up 0.14 percentage points from a year ago
The regional lender widened its lending spread because deposit costs fell faster than loan yields over the past year. From the second quarter, new deposits funded $466 million of new loans, and bond purchases lifted investment yields. That allowed the bank to raise its full-year lending income plan even as accounting gains from acquired loans fade.
What to watch: fourth-quarter net interest income against the $296 million to $301 million plan. Reaching the top half would show core loan growth can offset the drop in accounting gains from acquired loans next year.
Buybacks Lifted Per-Share Profit Despite Lower Earnings
United Bankshares returns excess capital through dividends and stock buybacks. In the third quarter, net income fell 1.6% from a year ago to $128.7 million, but diluted profit per share rose 2.2% to $0.94 because the lender bought back its own shares.
The Washington and West Virginia bank repurchased 2.1 million shares for $98.7 million during the quarter, up from 1.5 million shares for $66.0 million in the second quarter. Its board approved a new plan for up to 6.8 million shares, and the company bought another 368 thousand shares in the first three weeks of October. That reduced the average diluted share count by 3.5% from a year ago.
What to watch: fourth-quarter share repurchases and the Common Equity Tier 1 capital ratio, which dipped 0.4 percentage points from June to 12.9%. Continued heavy buying would keep lifting per-share profit while trimming the capital buffer.
Lower Credit Reserves Cut Full-Year Provision Plan
Banks set aside a provision for credit losses each quarter to cover bad loans. United Bankshares recorded a $6.2 million provision in the third quarter, down from $12.1 million a year ago, and cut its full-year provision plan for a third straight quarter to $27.5 million.
Net loan write-offs rose to $11.6 million from $5.1 million in the second quarter. However, $6.3 million of those write-offs came from "an individually evaluated commercial loan relationship for which the charged-off exposure was fully reserved as of the prior quarter-end," the company said. Because the bank had already set aside the money, writing off the loan reduced the allowance for loan losses to 1.16% of total loans without hurting third-quarter earnings.
What to watch: fourth-quarter provision expense against the $8.5 million planning assumption. A lower figure would mean new loan losses remain scarce outside previously identified problem borrowers.
🐻 Bear Case
Hiring and Loan Reserves Drove Up Expenses
"Continuing to underpin our success are our disciplined expense control and credit underwriting cultures, as well as our ongoing focus on efficient capital allocation," Adams said. An efficiency ratio measures noninterest operating expenses as a share of revenue, so a higher number means worse cost control. United Bankshares's efficiency ratio worsened by 2.82 percentage points from a year ago to 48.21%.
Total noninterest expense rose 6.8% from a year ago to $156.7 million, while total net revenue grew 0.6% by our math. Employee compensation climbed $5.3 million, taking 1.52 percentage points more of net revenue by our math, due to "strategic hiring and a full quarter’s impact of annual salary increases," the bank said. Full-time staff grew by 58 people in the quarter to 2,812. Meanwhile, reserves for unfunded loan commitments swung from a $3.2 million benefit a year ago to a $2.8 million expense, adding 1.86 percentage points of revenue.
What to watch: fourth-quarter noninterest expense against the $155 million to $159 million outlook. A reading near the top of that range would confirm that new hires and Florida expansion costs are outpacing revenue growth.
Early Delinquencies and Commercial Property Exposure Rose
United Bankshares grew its loan book at a 7.5% annual pace in the third quarter by adding commercial real estate (CRE) loans on properties that borrowers rent out to others. Those non-owner-occupied CRE loans reached $9.0 billion, or 35% of total loans, pushing their ratio to total risk-based capital up from 292% in June to 301%.
While non-performing assets edged down to 0.35% of total assets, early-stage delinquencies moved the other way. Loans past due by 30 to 89 days rose from 0.28% of total loans in June to 0.38% in September, after sitting at 0.25% in March. At the same time, the reserve covering non-owner-occupied office loans declined from 8.5% of those balances in June to 7.9% in September.
What to watch: loans 30 to 89 days past due as a percentage of total loans in the fourth quarter. A third straight quarterly increase would signal that higher borrowing rates are pressuring commercial property borrowers.
Investment Losses and Mortgages Cut Fee Income
Noninterest income is the fee revenue a bank earns outside of lending, such as brokerage, trust and mortgage fees. United Bankshares saw noninterest income fall 28.6% from a year ago to $30.8 million, and cut its full-year outlook for the line by $2.5 million at the middle of the range.
Most of the headline drop came from investment securities, which swung from a $10.4 million unrealized equity gain a year ago to a $348 thousand loss this quarter. Even excluding investment gains and losses in both periods, fee income fell 4.8% from a year ago by our math. Mortgage banking income dropped 48.6% from a year ago to $1.3 million as mortgage loan originations fell from $91.2 million to $68.5 million.
What to watch: fourth-quarter noninterest income against the $31 million to $33 million outlook. Missing that range would show that weak mortgage volume is dragging down core fees despite higher brokerage revenue.
👓 Other Themes
Higher Interest Rates Aid Lending Margins
United Bankshares holds an asset-sensitive balance sheet, meaning its loans reprice faster than its deposits when interest rates move. About 52% of its loans carry adjustable rates, and 43% of the loan book reprices within three months. Management's fourth-quarter outlook assumes one 0.25 percentage point rate increase by the Federal Reserve, and its rate model shows a 1 percentage point rate rise would lift first-year net interest income by 1.9%.
💲 Other KPIs
Period-end loan balances grew 3.8% from a year ago and 1.9% from last quarter (about 7.5% on an annual basis). Growth sped up from the first half of the year, led by commercial real estate, residential mortgages and construction lending, outpacing the mid-single-digit second-half plan.
Customer deposits rose 3.1% from a year ago and $540 million from June (about 7.9% on an annual basis). Both interest-bearing checking accounts and noninterest-bearing accounts grew during the quarter, keeping the loan-to-deposit ratio steady at 91.9% and funding all of the quarter's loan growth.
Tangible book value per share — shareholder equity minus goodwill and other intangible assets from past mergers — rose 3.9% from $24.03 a year ago. It dipped 1.3% from $25.29 in June because the bank spent $98.7 million buying back shares at prices above book value.
🔮 Guidance
Raised. The middle of the full-year lending income range moved up $5.5 million, pointing to 5.3% growth over 2025 by our math. For the fourth quarter, the bank issued a $296 million to $301 million range, up 3.8% from a year ago at the middle of the range, assuming one 0.25 percentage point rate hike. Across four quarters, the full-year midpoint moved $0M, -$5.0M, and +$5.5M.
Cut. The bank lowered its full-year credit loss provision assumption by $2.5 million, leaving it 49.0% below last year's merger-swollen total by our math. For the fourth quarter, the planning assumption is $8.5 million, up from $6.2 million in the third quarter. It is the third cut to the full-year provision plan in three quarters: -$12.0M, -$6.0M, and -$2.5M.
Cut. The middle of the full-year fee income range dropped $2.5 million after third-quarter mortgage fees and investment values fell, leaving full-year fees down 0.1% from 2025 by our math. For the fourth quarter, United Bankshares expects $31 million to $33 million, up 3.4% from a year ago at the middle of the range. Prior full-year midpoint moves were $0M, +$7.5M, and -$2.5M.
Cut. The middle of the full-year operating cost range edged down $1.5 million to $621 million, or 3.5% growth over 2025 by our math. For the fourth quarter, the regional lender plans for $155 million to $159 million of expense, up 3.5% from a year ago at the middle of the range and in line with the third quarter's $156.7 million.
Unchanged. The bank kept its fourth-quarter target for loan, deposit and bond portfolio growth in the mid single digits on an annual basis. That points to a slower pace than the 7.5% loan growth and 7.9% deposit growth delivered in the third quarter, though management noted that loan pipelines remain strong.
Unchanged. Management expects an effective tax rate of about 20.5% in the fourth quarter, matching its prior full-year estimate and sitting just below the third quarter's 20.6% rate.
❓ Key Questions
What drove the jump in 30-to-89-day past-due loans?
Early-stage delinquencies rose from 0.28% of loans in June to 0.38% in September. Management did not say whether those late payments sit in commercial real estate or consumer loans, or whether they stem from one large borrower.
How much will the new Palm Beach office cost?
United Bankshares announced plans to open a full-service branch in Palm Beach, Florida, and added 58 employees this quarter. Investors need to know the hiring target and expense run-rate for the Florida expansion in 2027.
Why did the outlook assume a fourth-quarter rate hike?
The fourth-quarter lending income plan assumes one 0.25 percentage point rate increase, whereas July's outlook assumed no rate changes in 2026. How much of the $5.5 million full-year lending income raise depends on that rate move?
How high will commercial real estate concentration go?
Non-owner-occupied commercial real estate reached 301% of total risk-based capital in September, up from 288% at year-end 2025, because share buybacks trimmed capital while property loans grew. Does the board have an internal ceiling on that ratio?