United Bankshares NII Edges Higher as Deposit Costs Recede
Net interest income rose 1% sequentially to $285.3 million as a decline in funding costs offset lower asset yields.
Net interest income for United Bankshares (UBSI), a regional banking provider, rose 1% sequentially to $285.3 million and 4% year-over-year to $285.3 million. The net interest margin expanded 1 bp from the prior quarter to 3.81%, remaining flat on a year-over-year basis.
The result followed a slight expansion in the interest spread, which increased 1 bp sequentially to 3.07%. This move was driven by a 3 bp decrease in the average cost of funds, which offset a 2 bp decrease in the yield on average earning assets.
Balance sheet growth remained steady as average net loans and loans held for sale increased 4% year-over-year, rising by $970.6 million. Average interest-bearing deposits grew 5% year-over-year, or $900.5 million, while the rate paid on those deposits decreased 38 bps over the same period.
Noninterest income provided additional lift, increasing 13% sequentially and 22% year-over-year to $38.5 million. The growth was driven by higher brokerage fees and net gains on investment securities. Noninterest expense rose 1% sequentially to $154.7 million, primarily due to higher employee compensation and benefits.
Credit quality metrics showed a mix of improving and deteriorating trends. The provision for credit losses decreased to $5.0 million, down from $7.8 million in the first quarter and $5.9 million in the second quarter of 2025. Net charge-offs also declined to $5.1 million, or 0.08% annualized, compared to 0.09% in the prior quarter and 0.14% a year ago.
However, non-performing loans increased to $110.6 million as of June 30, 2026, representing 0.44% of loans and leases. This was up from $102.8 million, or 0.41%, as of March 31, 2026.
The bank maintained a CET1 capital ratio of 13.3% as of June 30, 2026. During the second quarter, the company repurchased approximately 1.5 million shares of common stock at an average price of $43.93.