8-K: United Bankshares Reports Record Q3 2025 Earnings

United Bankshares, Inc. announced record earnings for the third quarter of 2025, driven by organic growth, managed expenses, and strong profitability metrics.

Summary

• Record earnings for the third quarter of 2025 were $130.7 million, or $0.92 per diluted share.
• Third quarter 2025 net income increased from $120.7 million ($0.85 diluted EPS) in Q2 2025 and $95.3 million ($0.70 diluted EPS) in Q3 2024.
• Net interest income for Q3 2025 was a record $280.1 million, an increase of 2% from Q2 2025 and 22% from Q3 2024.
• Noninterest income increased $11.7 million, or 37%, from Q2 2025, primarily due to $10.0 million in net gains on investment securities.
• Noninterest expense for Q3 2025 was flat at $146.7 million, a slight decrease of $1.3 million, or less than 1%, from Q2 2025.
• The provision for credit losses was $12.1 million for Q3 2025, up from $5.9 million for Q2 2025, mainly due to two downgraded commercial real estate nonowner-occupied (CRE NOO) loans.
• Non-performing loans (NPLs) increased to $116.9 million, or 0.48% of loans & leases, net of unearned income, at September 30, 2025, from $68.3 million, or 0.28%, at June 30, 2025.
• Net charge-offs were $20.0 million, or 0.33% on an annualized basis, for Q3 2025, including $16.5 million of charge-offs on the two aforementioned CRE NOO loans.
• Repurchased approximately 735 thousand shares of common stock in Q3 2025 at an average price of $36.04, and an additional 479 thousand shares through October 22, 2025.

Sentiment

Score: 8

Explanation: The company reported record earnings and strong profitability metrics, coupled with effective expense management and robust capital. While there was an increase in non-performing loans and charge-offs due to specific commercial real estate exposures, the overall financial health and strategic execution appear strong, and the company maintains a positive outlook for growth.

Positives

• Achieved record net income of $130.7 million and record diluted earnings per share of $0.92 for Q3 2025.
• Generated strong annualized returns on average assets of 1.57%, average equity of 9.58%, and average tangible equity of 15.45% for Q3 2025.
• Achieved period-end annualized loan growth and deposit growth of approximately 8%.
• Net interest income reached a record $280.1 million, and the net interest margin remained solid at 3.80%.
• Maintained strong expense control with an efficiency ratio of 45.39% in Q3 2025.
• Consistently ranked as one of the most trustworthy banks in America by Newsweek (#1 in 2023, #2 in 2022, #4 in 2024 & 2025).
• Increased dividends to shareholders for 51 consecutive years, with a quarterly dividend of $0.37 per share.
• Capital ratios remain significantly above regulatory well-capitalized levels and exceed all internal capital targets.
• Liquidity remains strong with a granular deposit base and geographic diversification, with estimated uninsured/uncollateralized deposits flat at 33% of total deposits.
• Loan portfolio is diversified with strong underwriting practices, including a weighted average FICO of approximately 762 for consumer-related loan sectors.

Negatives

• Provision for credit losses increased significantly to $12.1 million in Q3 2025 from $5.9 million in Q2 2025.
• Non-performing loans (NPLs) increased to $116.9 million (0.48% of loans & leases) at September 30, 2025, from $68.3 million (0.28%) at June 30, 2025, primarily due to two CRE NOO loans.
• Total non-performing assets (NPAs) increased to $123.8 million (0.37% of total assets) at September 30, 2025, from $74.6 million (0.23%) at June 30, 2025.
• Net charge-offs increased to $20.0 million (0.33% annualized) in Q3 2025 from $8.4 million (0.14% annualized) in Q2 2025, largely due to $16.5 million in charge-offs on two CRE NOO loans.
• Acquired loan accretion income decreased by $4.3 million from Q2 2025.
• Mortgage loan servicing income decreased by $7.4 million from Q3 2024.
• Income from mortgage banking activities decreased by $2.0 million from Q3 2024.

Risks

• The duration of the U.S. government shutdown and the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve and trade and tariff policies.
• General competitive, economic, political, and market conditions, including changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment, and deposit practices; the impact, extent, and timing of technological changes; capital management activities; and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms.
• Risks related to the acquisition and integration of Piedmont Bancorp, Inc., including that expected growth opportunities or cost savings may not be fully realized or may take longer than expected, and reputational risk and the reaction of customers, suppliers, employees, or other business partners to the acquisition.
• Deposit attrition, client loss, or revenue loss following completed mergers or acquisitions that may be greater than anticipated.
• Regulatory change risk resulting from new laws, rules, regulations, or accounting principles, including the possibility that regulatory agencies may require higher levels of capital above current minimums and changes in accounting standards.
• The cost and effects of cyber incidents or other failures, interruptions, or security breaches of systems and those of customers or third-party providers.
• Competitive pressures on product pricing and services.
• Success, impact, and timing of business strategies, including market acceptance of any new products or services.
• Volatility and disruptions in global capital and credit markets.
• Operational, technological, cultural, regulatory, legal, credit, and other risks associated with the exploration, consummation, and integration of potential future acquisitions.
• Catastrophic events such as hurricanes, tornados, earthquakes, floods, or other natural or human disasters, including public health crises and infectious disease outbreaks, as well as any government actions in response to such events.
• Geopolitical risk from terrorist activities and armed conflicts that may result in economic and supply disruptions, and loss of market and consumer confidence.
• The risks of fluctuations in market prices for common stock that may or may not reflect economic condition or performance.
• The nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations.

Future Outlook

For the remainder of FY 2025, United Bankshares expects low to mid-single-digit annualized loan and deposit growth, with investment portfolio balances remaining relatively flat. Net interest income (non-FTE) is projected to be in the range of $1.093 billion to $1.100 billion, assuming two additional 25 bps rate cuts in Q4 2025. Loan purchase accounting accretion is estimated at ~$32 million for FY 2025. Total provision expense for 2025 is planned at $55 million, including $19 million from the Piedmont merger. Noninterest income is expected to be between $130 million and $135 million, while noninterest expense is anticipated to be in the range of $598 million to $605 million (including $12.7 million in merger-related expenses to date). The effective tax rate is estimated at approximately 21.0%. Stock buyback activity will be market dependent, and the company's capital position is expected to remain robust.

Management Comments

• "UBSIs earnings momentum from the first half of the year carried through into the third quarter of 2025. It was another quarter of record earnings, marked by continued organic growth, tightly managed expenses, and strong profitability metrics." Richard M. Adams, Jr., United's Chief Executive Officer.

Industry Context

The banking industry is navigating a dynamic interest rate environment and evolving credit quality concerns, particularly in commercial real estate. United Bankshares' strong net interest margin and continued organic growth suggest resilience, while the increase in provision for credit losses and non-performing loans, specifically in CRE NOO, reflects broader industry pressures. The focus on disciplined underwriting for office loans and diversified portfolio management is a key strategy in this environment. The company's consistent ranking as a trustworthy bank and long history of dividend increases highlight its stability in a competitive landscape.

Comparison to Industry Standards

• United Bankshares' efficiency ratio of 45.39% in Q3 2025 is generally considered strong within the banking industry, indicating effective cost management, outperforming many regional banks that aim for an efficiency ratio below 50-55%.
• The return on average assets (ROAA) of 1.57% and return on average tangible equity (ROATE) of 15.45% are robust, outperforming many peers in the current environment where average ROAA for U.S. banks might hover around 1.0-1.3% and ROATE around 10-12%.
• The increase in non-performing loans to 0.48% of total loans, driven by specific CRE NOO loans, warrants attention. While still below crisis levels, it indicates a potential area of stress that is being monitored across the banking sector, especially for exposure to office real estate. For example, some larger banks have reported NPL ratios in the 0.5-1.0% range, with specific segments like office CRE showing higher stress.
• The company's capital ratios (CET1 at 13.4%, Total Risk-Based at 15.7%) are well above regulatory minimums and generally stronger than many peers, providing a significant buffer against potential losses.
• The 51 consecutive years of dividend increases is a rare achievement, placing United Bankshares among an elite group of dividend aristocrats, demonstrating exceptional long-term financial stability and commitment to shareholder returns, comparable to companies like Northwest Bancshares or Old National Bancorp in terms of dividend consistency.

Stakeholder Impact

• Shareholders: Positive impact due to record earnings, increased diluted EPS, strong returns on equity, continued dividend increases (51 consecutive years), and ongoing share repurchase program.
• Employees: Increase in employee headcount and compensation, partially offset by higher postretirement benefit costs and medical insurance expenses.
• Customers: Continued organic loan and deposit growth indicates ongoing customer engagement and satisfaction.
• Creditors: Strong capital ratios and sound liquidity position enhance confidence in the company's ability to meet its obligations.

Next Steps

• Continue to evaluate the impact of subsequent events on critical accounting assumptions and estimates through the filing of its September 30, 2025 consolidated financial statements on Form 10-Q.
• Monitor loan and deposit growth for the remainder of 2025.
• Manage investment portfolio balances.
• Execute stock buyback plan based on market conditions.

Key Dates

Recommendation

United Bankshares delivered record earnings and strong profitability metrics for Q3 2025, demonstrating robust organic growth and disciplined expense management. While there's an uptick in non-performing loans and charge-offs related to specific commercial real estate exposures, the company's overall asset quality remains sound, and its capital position is significantly above regulatory requirements. The consistent dividend increases for 51 years and ongoing share repurchase program underscore a strong commitment to shareholder returns. The positive outlook for continued growth and strong financial ratios make it an attractive investment, despite isolated credit quality concerns.

Keywords

United Bankshares, UBSI, Banking, Financial Services, Regional Bank, Earnings, Net Income, EPS, Net Interest Income, Net Interest Margin, Loan Growth, Deposit Growth, Credit Quality, Non-Performing Loans, Charge-offs, Capital Ratios, Stock Repurchase, Piedmont Bancorp Acquisition, Commercial Real Estate, Mortgage Banking, Dividend, Asset Quality, Risk Management