United Bankshares (UBSI)

Regional banking company United Bankshares (NASDAQ:UBSI) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 23.1% year on year to $323.3 million. Its GAAP profit of $0.92 per share was 13.3% above analysts’ consensus estimates.

Company Overview

With roots dating back to 1982 and a strong presence in the Mid-Atlantic region, United Bankshares (NASDAQ:UBSI) is a bank holding company that provides commercial and retail banking services through its United Bank subsidiary across multiple states.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

United Bankshares competes with other regional banks such as WesBanco (NASDAQ:WSBC), F.N.B. Corporation (NYSE:FNB), and S&T Bancorp (NASDAQ:STBA), as well as larger national institutions like JPMorgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC) in its operating markets.

In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees. Over the last five years, United Bankshares grew its revenue at a mediocre 4.7% compounded annual growth rate. This fell short of our benchmark for the banking sector and is a rough starting point for our analysis.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. United Bankshares’s annualized revenue growth of 5% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, United Bankshares reported robust year-on-year revenue growth of 23.1%, and its $323.3 million of revenue topped Wall Street estimates by 5.1%.

Net interest income made up 83.3% of the company’s total revenue during the last five years, meaning United Bankshares barely relies on non-interest income to drive its overall growth.

While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

United Bankshares’s solid 6.2% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For United Bankshares, its two-year annual EPS growth of 3.3% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q3, United Bankshares reported EPS of $0.92, up from $0.70 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects United Bankshares’s full-year EPS of $3.05 to grow 6.4%.

The balance sheet drives banking profitability since earnings flow from the spread between borrowing and lending rates. As such, valuations for these companies concentrate on capital strength and sustainable equity accumulation potential.

When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. EPS can become murky due to acquisition impacts or accounting flexibility around loan provisions, and TBVPS resists financial engineering manipulation.

United Bankshares’s TBVPS grew at a mediocre 4.9% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 8.6% annually over the last two years from $20.39 to $24.03 per share.

Over the next 12 months, Consensus estimates call for United Bankshares’s TBVPS to grow by 6.7% to $25.64, mediocre growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, United Bankshares has averaged a Tier 1 capital ratio of 13.5%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of bank funding. Banks maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.

Over the last five years, United Bankshares has averaged an ROE of 8.1%, respectable for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired.

We were impressed by how significantly United Bankshares blew past analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 2.3% to $35.98 immediately after reporting.

Updated: December 4, 2025 at 11:26 PM EST

When considering an investment in United Bankshares, investors should account for its valuation and business qualities as well as what’s happened in the latest quarter.

United Bankshares falls short of our quality standards. First off, its revenue growth was weak over the last five years. And while its expanding net interest margin shows its loan book is becoming more profitable, the downside is its weak EPS growth over the last five years shows it’s failed to produce meaningful profits for shareholders. On top of that, its estimated sales for the next 12 months are weak.

United Bankshares’s P/B ratio based on the next 12 months is 1x. This valuation multiple is fair, but we don’t have much confidence in the company. There are superior stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $40.90 on the company (compared to the current share price of $38.03).