FIRST UNITED CORPORATION ANNOUNCES FIRST QUARTER 2025 FINANCIAL RESULTS

Rhea-AI Summary

First United (NASDAQ: FUNC) reported Q1 2025 consolidated net income of $5.8 million, or $0.89 per diluted share, compared to $3.7 million in Q1 2024 and $6.2 million in Q4 2024. The company achieved a net interest margin of 3.56% and saw deposits increase by $48.7 million.

Key highlights include:

• $36.1 million in commercial loan originations and $11.4 million in residential mortgage originations
• Provision expense of $0.7 million driven by stable asset quality
• Operating expenses increased by $0.5 million compared to linked quarter
• Cash dividend of $0.22 per common share declared

The bank reported strong asset quality with the allowance for credit losses at $18.5 million, representing 1.25% of outstanding loans. Total assets reached $2.0 billion, with outstanding loans at $1.5 billion. The company maintains a positive outlook for 2025 despite challenges in funding due to inflation and high competition.

Positive

• Net income increased 56.8% year-over-year to $5.8 million in Q1 2025
• Net interest margin improved to 3.56%
• Deposits grew by $48.7 million
• Strong asset quality maintained with 1.25% allowance for credit losses ratio
• Net interest income increased by $2.2 million year-over-year

Negative

• Net income decreased by $0.4 million compared to Q4 2024
• Operating expenses increased by $0.5 million quarter-over-quarter
• Modest loan production with slight decrease in total loans
• Non-interest-bearing deposits decreased by $4.3 million
• Funding remains challenging due to inflation and high competition

Insights

Banking Financial Analyst

First United reports 56.8% YoY profit growth with challenges in loan production and deposits amid economic uncertainty.

First United has posted solid Q1 2025 financial results with net income of $5.8 million ($0.89 per diluted share), representing a substantial 56.8% increase from $3.7 million ($0.56 per share) in Q1 2024. However, this reflects a 6.5% sequential decline from Q4 2024's $6.2 million. Performance metrics show respectable returns with 1.19% Return on Average Assets and 12.83% Return on Average Equity.

The bank's net interest margin stands at 3.56%, benefiting from higher loan yields while keeping funding costs in check. Loan production remained modest with $36.1 million in commercial originations and $11.4 million in residential mortgages during the quarter. Total loans were essentially flat, decreasing by $0.9 million.

A concerning trend appears in deposit composition. While total deposits increased by $48.7 million, this growth came primarily from $50 million in new brokered deposits used to repay overnight borrowings. Core deposit categories showed weakness with non-interest-bearing deposits declining by $4.3 million and interest-bearing demand deposits falling by $17.9 million – attributed to seasonal fluctuations and inflation-driven spending.

Asset quality metrics remain strong with the allowance for credit losses at $18.5 million (1.25% of outstanding loans) and net charge-offs of $0.4 million versus $0.5 million a year ago. Book value per share increased to $28.35, up 2.3% from year-end 2024.

Management's commentary suggests cautious optimism but acknowledges challenges ahead. The bank plans to invest in strategic hires and enhanced technology, particularly in electronic banking, which will increase expenses throughout 2025. These investments, combined with funding pressures from inflation and high competition, may constrain near-term earnings growth despite management's target of 8% loan growth for the year.

OAKLAND, Md., April 21, 2025 /PRNewswire/ -- First United Corporation (the "Corporation, "we", "us", and "our") (NASDAQ: FUNC), a bank holding company and the parent company of First United Bank & Trust (the "Bank"), today announced financial results for the three-month period ended March 31, 2025.  Consolidated net income was $5.8 million for the first quarter of 2025, or $0.89 per diluted share, compared to $3.7 million, or $0.56 per diluted share, for the first quarter of 2024 and $6.2 million, or $0.95 per diluted share, for the fourth quarter of 2024.  Annualized Return on Average Assets and Return on Average Equity were 1.19% and 12.83%, respectively.

According to Carissa Rodeheaver, Chairman, President and CEO, "We are very pleased with the first quarter results as we saw margin expansion, solid fee income and controlled expenses.  Loan production was moderate during the quarter as many borrowers sit on the sidelines waiting for more certainty in the economic and political environments.  Funding remains a challenge as inflation has taken its toll resulting in higher spending and reduced deposit balances while competition remains high.  We are optimistic about the remainder of 2025 as we position ourselves for future growth and focus on an improved customer experience.  We intend to invest in strategic hires and enhanced technology, particularly around the electronic banking experience, which will result in higher salaries and benefits and data processing expenses over the course of this year.  However, we expect other expenses to be consistent with this quarter on a forward basis.  Our solid performance is attributable to our dedicated associates as they assist our customers through these volatile times." 

First Quarter Financial Highlights:

• Net interest margin, on a non-GAAP, fully tax equivalent ("FTE") basis, was 3.56% for the first quarter of 2025, reflecting increased loan yields and stable funding costs.
• Modest loan production, with $36.1 million in commercial loan originations and $11.4 million in residential mortgage originations in the first quarter.
• Provision expense was $0.7 million in the first quarter, driven by stable asset quality and improved qualitative factors, partially offset by the uncertainty of current economic conditions.
• Deposits increased by $48.7 million, which included $50.0 million in new brokered deposits obtained to repay $50.0 million in overnight borrowings outstanding at December 31, 2024.
• Operating income, including net gains, decreased by $0.1 million when compared to the linked quarter.
• Operating expenses increased by $0.5 million when compared to the linked quarter.
• A cash dividend of $0.22 per common share was declared in the first quarter.

Income Statement Overview

On a GAAP basis, net income for the first quarter of 2025 was $5.8 million.  This compares to $6.2 million in the fourth quarter of 2024 and $3.7 million in the first quarter of 2024.

	Q1 2025	Q4 2024	Q1 2024
Net Income, non-GAAP (millions)	$ 5.8	$ 6.2	$4.1
Net Income, GAAP (millions)	$ 5.8	$ 6.2	$ 3.7
Diluted net income per share, non-GAAP	$ 0.89	$ 0.95	$ 0.62
Diluted net income per share, GAAP	$ 0.89	$ 0.95	$ 0.56

The $2.1 million increase in quarterly net income when compared to the first quarter of 2024 was primarily driven by a $2.2 million increase in net interest income, a $0.3 million decrease in provision for credit loss, stable non-interest income, and a decrease in non-interest expense of $0.3 million, partially offset by an increase in income tax expense of $0.7 million.  Comparing the first quarter of 2025 to the same period of 2024, interest and fees on loans increased by $2.5 million resulting from new loans booked at higher rates, the repricing of adjustable-rate loans, and growth in our loan portfolio.  Interest expense remained stable when comparing year-over-year quarterly expense as reductions in the rate environment offset the increased funding.  Other operating income was stable, and other operating expenses decreased by $0.3 million driven by a $0.6 million decrease in occupancy and equipment expense related to the accelerated depreciation and lease expenses for the branch closures in the first quarter of 2024, and a $0.2 million decrease in other pension benefits expense.  These decreases were partially offset by a $0.2 million increase in salaries and benefits, an increase of $0.2 million in data processing expenses, and increases in other expenses such as miscellaneous loan fees and marketing expenses.

Compared to the linked quarter, net income decreased by $0.4 million due primarily to a $0.5 million increase in other operating expenses driven by a $0.9 million increase in salaries and employee benefit expenses due to a reversal of incentive payments in the fourth quarter of 2024 based on slower growth than originally budgeted, increased health insurance claims, and increased occupancy and equipment expenses of $0.2 million, partially offset by decreases in other expenses such as data processing, miscellaneous loan fees, and other pension benefits expenses.  Net interest income increased by $0.3 million due to a $0.3 million increase in interest income and stable interest expense.

Net Interest Income and Net Interest Margin

Net interest income, on a non-GAAP, FTE basis, increased by $2.2 million for the first quarter of 2025 when compared to the first quarter of 2024.  This increase was driven by an increase of $2.2 million in interest income.  Interest income on loans increased by $2.5 million due to the increase of 46 basis points in overall yield on the loan portfolio as new loans were booked at higher rates during 2024, upward repricing of adjustable-rate loans, and an increase in average balances of $75.3 million.  Interest income on Federal funds sold decreased by $0.4 million due to a decrease of 105 basis points in average rates and a decrease of $22.1 million in average balances.  Interest expense in the first quarter of 2025 was stable when compared to the first quarter of 2024.  Interest expense paid on deposits increased by $0.4 million due to a $141.1 million increase in average balances, partially offset by a decrease of 12 basis points on the rate paid.  Interest paid on short-term borrowings decreased by $0.4 million for the first quarter of 2025 when compared to the same period of 2024 due to the repayment of the $40.0 million from the Bank Term Funding Program ("BTFP") late in the third quarter of 2024.

Comparing the first quarter of 2025 to the fourth quarter of 2024, net interest income, on a non-GAAP, FTE basis, increased by $0.3 million.  This increase was driven by a $0.3 million increase in interest income resulting from a $0.5 million increase in interest and fees on loans, an increase in average loan balances of $30.8 million, and an 11 basis point increase in average yield.  This increase was partially offset by a $0.2 million decrease in interest earned on Federal funds sold due to $14.8 million in reduced balances and a 69 basis point reduction in average yield.  Interest expense was stable when comparing the first quarter of 2025 to the linked quarter.  Interest expense on deposits increased slightly by $0.1 million due to an increase of $39.7 million in average balances and a 2 basis point decrease in average yields.

Non-Interest Income

Other operating income, including net gains, for the first quarter of 2025 was stable when compared to the same period of 2024.  Wealth management income increased by $0.1 million due to increased market values  and growth in new and existing customer relationships.  This was offset by a decrease in brokerage commissions due to slower annuity sales comparing these quarters.

On a linked quarter basis, other operating income, including net gains, decreased by $0.1 million.  Debit card income decreased by $0.2 million due to an annual incentive payment received in the fourth quarter of 2024.  Wealth management income increased by $0.1 million due to increased brokerage commissions in the first quarter of 2025. 

Non-Interest Expense

Operating expenses decreased by $0.3 million in the first quarter of 2025 when compared to the first quarter of 2024.  The decrease was largely driven by a $0.6 million decrease in equipment and occupancy expense due to the accelerated depreciation expenses recognized in the first quarter of 2024 in conjunction with the branch closures in February 2024.  This decrease was partially offset by a $0.2 million increase in salaries and benefits primarily driven by increases in incentive pay and life and health insurance expenses due to increased claims.  Additionally, data processing expenses increased by $0.2 million in the first quarter of 2025 when compared to the first quarter of 2024, partially offset by a decrease in other miscellaneous expenses of $0.1 million due primarily to reduced net periodic pension costs and check fraud related costs.

Operating expenses increased by $0.5 million for the first quarter of 2025 when compared to the linked quarter.  Salaries and employee benefits increased by $0.9 million due to a reversal of incentive payments in the fourth quarter of 2024 based on slower growth than originally budgeted, increased health insurance expenses due to increased claims, and equipment and occupancy expenses increased $0.2 million.  Occupancy expenses increased quarter over quarter due to a credit in the fourth quarter of 2024 for a leased space exited in 2024 which was later reimbursed by the landlord.  These increases were partially offset by a decrease in professional services of $0.1 million, a decrease in data processing expenses of $0.2 million, a decrease in miscellaneous loan fees of $0.1 million, and a decrease in other miscellaneous expenses of $0.2 million. 

The effective income tax rates as a percentage of income for the three-month periods ended March 31, 2025 and March 31, 2024 were 24.6% and 23.9%, respectively. 

Balance Sheet Overview

Total assets at March 31, 2025 were $2.0 billion, representing a $6.7 million increase since December 31, 2024.  During the first quarter of 2025, cash and interest-bearing deposits in other banks increased by $6.1 million.  The investment portfolio increased by $5.2 million as bonds were purchased to gain yield before long-term rates decline. Gross loans decreased slightly by $0.9 million.  While loan production was modest during the quarter, amortization and payoffs exceeded growth levels.  Pension assets decreased by $1.8 million due to decreased market values. 

Total liabilities at March 31, 2025 were $1.8 billion, representing a $2.3 million increase since December 31, 2024.  Total deposits increased by $48.7 million when compared to December 31, 2024 related primarily to the $50.0 million in new brokered deposits that were obtained in January 2025 to fund the repayment of the $50.0 million in overnight borrowings outstanding at December 31, 2024.  Savings and money market accounts increased by $18.7 million and retail time deposits increased by $2.2 million.  Interest-bearing demand deposits, primarily our ICS product, decreased by $17.9 million and non-interest-bearing deposits decreased by $4.3 million due primarily to seasonal fluctuations in municipal deposit accounts and increased spending by businesses and consumers related to inflation, respectively.  Short-term borrowings decreased by $45.1 million primarily due to the repayment of $50.0 million in overnight borrowings outstanding at December 31, 2024, partially offset by increases in balances of the overnight investment sweep product.

Outstanding loans of $1.5 billion at March 31, 2025 reflected a $0.9 decrease since December 31, 2024.

Loan Type (in millions)		Change since December 31, 2024
Commercial		$0.0
Residential Mortgages		$1.3
Consumer		($2.2)

Since December 31, 2024, commercial real estate loans increased by $6.4 million, acquisition and development loans decreased by $1.2 million, commercial and industrial loans decreased by $5.2 million, residential mortgage loans increased $1.3 million, and consumer loans decreased by $2.2 million.

While loan production in the first quarter was modest, offset by amortization and payoffs, we are still working towards an 8% increase in loans. This growth could be tempered depending on the outcome of the current political uncertainties.  New commercial loan production for the three months ended March 31, 2025 was approximately $36.1 million.  However, the pipeline of commercial loans as of March 31, 2025 was $56.0 million and unfunded, committed commercial construction loans totaled approximately $41.7 million.  Commercial amortization and payoffs were approximately $35.0 million through March 31, 2025, due primarily to pay-offs of short-term commercial loans as well as normal amortizations of the commercial loan portfolio.

New consumer mortgage loan production for the first quarter of 2025 was approximately $11.4 million, with most of this production comprised of in-house mortgages.  The pipeline of in-house, portfolio loans as of March 31, 2025 was $10.9 million.  Unfunded commitments related to residential construction loans totaled $9.8 million at March 31, 2025.  

Total deposits at March 31, 2025 increased by $48.7 million when compared to December 31, 2024.

Deposit Type (in millions)		Change since December 31, 2024
Non-Interest-Bearing		($4.3)
Interest-Bearing Demand		($17.9)
Savings and Money Market		$18.7
Time Deposits- Brokered		$50.0
Time Deposits- Retail		$2.2
Total Deposits		$48.7

In January 2025, $50.0 million in brokered time deposits with an average interest rate of 4.24% were obtained to fund the repayment of $50.0 million in overnight borrowings that were outstanding at December 31, 2024.  Savings and money market accounts increased by $18.7 million due primarily to the expansion of current and new relationships throughout the first three months of 2025.  Non-interest-bearing checking deposits decreased by $4.3 million and interest-bearing checking deposits decreased by $17.9 million due primarily to seasonal fluctuations in municipal and commercial account balances and increased spending by businesses and consumers related to inflation.  Retail time deposits increased by $2.2 million since December 31, 2024. 

The book value of the Corporation's common stock was $28.35 per share at March 31, 2025 compared to $27.71 per share at December 31, 2024.  At March 31, 2025, there were 6,478,634 basic outstanding shares and 6,657,239 diluted outstanding shares of common stock.  The increase in the book value at March 31, 2025 was due to the undistributed net income of $4.4 million for the first quarter of 2025.

Asset Quality

The allowance for credit losses ("ACL") was $18.5 million at March 31, 2025 compared to $18.0 million recorded at March 31, 2024 and $18.2 million at December 31, 2024.  The provision for credit losses was $0.7 million for the quarter ended March 31, 2025 compared to $0.9 million for the quarter ended March 31, 2024 and $0.5 million for the fourth quarter of 2024.  The decreased provision expense recorded in the first quarter of 2025 when compared to the same period in 2024 was primarily related to the $12.1 million in commercial loan balances moved to non-accrual in the first quarter of 2024.  Asset quality remained strong during the first quarter of 2025.  Net charge-offs of $0.4 million were recorded for the quarter ended March 31, 2025 compared to net charge-offs of $0.5 million for the quarter ended March 31, 2024. The ratio of the ACL to loans outstanding was 1.25% at March 31, 2025 compared to 1.23% at December 31, 2024 and 1.27% at March 31, 2024.  Management feels it is important to maintain the ACL given the uncertainties in the economic and political environments.

The ratio of net charge offs to average loans was 0.10% for the quarter ended March 31, 2025, and 0.13% for the quarter ended March 31, 2024.  The commercial and industrial portfolio had net charge offs of 0.50% and 0.12% for the quarters ended March 31, 2025 and 2024, respectively.  This increase resulted from the charge off of equipment loan balances on one commercial restaurant relationship during the first quarter of 2025 due to depressed liquidation prices of the equipment.  The decrease in net charge offs in consumer loans in the first quarter of 2025 was primarily driven by approximately $0.3 million in charge offs of demand deposit balances during the first quarter of 2024.  Details of the ratios, by loan type, are shown below.  Our special assets team continues to actively collect on charged-off loans, resulting in overall low net charge-off ratios.

Ratio of Net (Charge Offs)/Recoveries to Average Loans
	3/31/2025	3/31/2024
Loan Type	(Charge Off) / Recovery	(Charge Off) / Recovery
Commercial Real Estate	0.00 %	0.03 %
Acquisition & Development	0.26 %	0.01 %
Commercial & Industrial	(0.50 %)	(0.12 %)
Residential Mortgage	0.01 %	0.01 %
Consumer	(0.65 %)	(2.89 %)
Total Net (Charge Offs)/Recoveries	(0.10 %)	(0.13 %)

Non-accrual loans totaled $4.0 million at March 31, 2025 compared to $4.9 million at December 31, 2024.  The decrease in non-accrual balances at March 31, 2025 was related to principal reductions. 

Non-accrual loans that have been subject to partial charge-offs totaled $0.7 million at both March 31, 2025 and December 31, 2024.  There were no loans secured by 1-4 family residential real estate properties in the process of foreclosure at March 31, 2025.  Loans secured by 1-4 family residential real estate properties in the process of foreclosure totaled $1.6 million at December 31, 2024.  As a percentage of the loan portfolio, accruing loans past due 30 days or more was 0.42% at March 31, 2025 compared to 0.32% at December 31, 2024 and 0.40% as of March 31, 2024.  The increase in the past due loans at March 31, 2025 was associated with one customer who experienced unexpected delays and cost overruns during construction of a multi-family project, thus causing cash flow disruption.

ABOUT FIRST UNITED CORPORATION

First United Corporation is a Maryland corporation chartered in 1985 and a financial holding company registered with the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956, as amended, that elected financial holding company status in 2021.  The Corporation's primary business is serving as the parent company of the Bank, First United Statutory Trust I ("Trust I") and First United Statutory Trust II ("Trust II" and together with Trust I, "the Trusts"), both Connecticut statutory business trusts.  The Trusts were formed for the purpose of selling trust preferred securities that qualified as Tier 1 capital.  The Bank has two consumer finance company subsidiaries- Oak First Loan Center, Inc., a West Virginia corporation, and OakFirst Loan Center, LLC, a Maryland limited liability company – and two subsidiaries that it uses to hold real estate acquired through foreclosure or by deed in lieu of foreclosure – First OREO Trust, a Maryland statutory trust, and FUBT OREO I, LLC, a Maryland limited liability company.  In addition, the Bank owns 99.9% of the limited partnership interests in Liberty Mews Limited Partnership, a Maryland limited partnership formed for the purpose of acquiring, developing and operating low-income housing units in Garrett County, Maryland, and a 99.9% non-voting membership interest in MCC FUBT Fund, LLC, an Ohio limited liability company formed for the purpose of acquiring, developing and operating low-income housing units in Allegany County, Maryland (the "MCC Fund").   The Corporation's website is www.mybank.com.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995.  Forward-looking statements do not represent historical facts, but are statements about management's beliefs, plans and objectives about the future, as well as its assumptions and judgments concerning such beliefs, plans and objectives.  These statements are evidenced by terms such as "anticipate," "estimate," "should," "expect," "believe," "intend," and similar expressions.  Although these statements reflect management's good faith beliefs and projections, they are not guarantees of future performance and they may not prove true.  The beliefs, plans and objectives on which forward-looking statements are based involve risks and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements.  For a discussion of these risks and uncertainties, see the section of the periodic reports that First United Corporation files with the Securities and Exchange Commission entitled "Risk Factors". In addition, investors should understand that the Corporation is required under generally accepted accounting principles to evaluate subsequent events through the filing of the consolidated financial statements included in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 and the impact that any such events have on our critical accounting assumptions and estimates made as of March 31, 2025, which could require us to make adjustments to the amounts reflected in this press release.

 

FIRST UNITED CORPORATION
Oakland, MD
Stock Symbol :  FUNC
Financial Highlights - Unaudited
(Dollars in thousands, except per share data)
				Three Months Ended
				March 31,		March 31,
				2025		2024
Results of Operations:
	Interest income			$                24,062		$                21,898
	Interest expense			8,046		8,086
	Net interest income			16,016		13,812
	Provision for credit losses			656		946
	Other operating income			4,822		4,793
	Net gains			92		82
	Other operating expense			12,576		12,881
	Income before taxes			$                   7,698		$                   4,860
	Income tax expense			1,892		1,162
	Net income			$                   5,806		$                   3,698
Per share data:
	Basic net income per share			$                     0.90		$                     0.56
	Diluted net income per share			$                     0.89		$                     0.56
	Adjusted Basic net income (1)			$                     0.90		$                     0.62
	Adjusted Diluted net income (1)			$                     0.89		$                     0.62
	Dividends declared per share			$                     0.22		$                     0.20
	Book value			$                   28.35		$                   24.89
	Diluted book value			$                   28.27		$                   24.86
	Tangible book value per share			$                   26.55		$                   23.08
	Diluted Tangible book value per share			$                   26.47		$                   23.05
	Closing market value			$                   30.02		$                   22.91
	Market Range:
	High			$                   41.61		$                   23.85
	Low			$                   29.38		$                   21.21
Shares outstanding at period end: Basic				6,478,634		6,648,645
Shares outstanding at period end: Diluted				6,497,454		6,657,239
Performance ratios: (Year to Date Period End, annualized)
Return on average assets				1.19 %		0.76 %
Adjusted return on average assets				1.19 %		0.78 %
Return on average shareholders' equity				12.83 %		9.07 %
Adjusted return on average shareholders' equity				12.83 %		9.33 %
Net interest margin (Non-GAAP), includes tax exempt income of $49 and $57				3.56 %		3.12 %
Net interest margin GAAP				3.55 %		3.10 %
Efficiency ratio - non-GAAP (1)				59.95 %		65.71 %
(1) Efficiency ratio is a non-GAAP measure calculated by dividing total operating expenses by the sum of tax equivalent net interest income and other operating income, less gains/(losses) on sales of securities and/or fixed assets.				March 31,		December 31
				2025		2024
Financial Condition at period end:
Assets				$           1,979,753		$           1,973,022
Earning assets				$           1,762,891		$           1,758,665
Gross loans				$           1,479,869		$           1,480,793
	Commercial Real Estate			$              532,764		$              526,364
	Acquisition and Development			$                94,063		$                95,314
	Commercial and Industrial			$              282,370		$              287,534
	Residential Mortgage			$              520,072		$              518,815
	Consumer			$                50,600		$                52,766
Investment securities				$              275,143		$              269,991
Total deposits				$           1,623,574		$           1,574,829
	Noninterest bearing			$              422,415		$              426,737
	Interest bearing			$           1,201,159		$           1,148,092
Shareholders' equity				$              183,694		$              179,295
				.
Capital ratios:
	Tier 1 to risk weighted assets			14.87 %		14.70 %
	Common Equity Tier 1 to risk weighted assets			12.97 %		12.79 %
	Tier 1 Leverage			11.94 %		11.88 %
	Total risk based capital			16.10 %		15.92 %
Asset quality:
Net charge-offs for the quarter				$                    (360)		$                    (362)
Nonperforming assets: (Period End)
	Nonaccrual loans			$                   4,026		$                   4,931
	Loans 90 days past due and accruing			233		918
	Total nonperforming loans and 90 day past due			$                   4,259		$                   5,849
	Other real estate owned			$                   3,062		$                   3,062
	Other repossessed assets			$                   2,802		$                   2,802
	Modified loans			$                   1,021		$                   1,006
Allowance for credit losses to gross loans				1.25 %		1.23 %
Allowance for credit losses to non-accrual loans				458.69 %		368.49 %
Allowance for credit losses to non-performing assets				182.43 %		155.13 %
Non-performing and 90 day past due loans to total loans				0.29 %		0.39 %
Non-performing loans and 90 day past due loans to total assets				0.22 %		0.30 %
Non-accrual loans to total loans				0.27 %		0.33 %
Non-performing assets to total assets				0.51 %		0.59 %

 

FIRST UNITED CORPORATION
Oakland, MD
Stock Symbol :  FUNC
Financial Highlights - Unaudited
			March 31,	December 31,	September 30,	June 30,	March 31,
(Dollars in thousands, except per share data)			2025	2024	2024	2024	2024
Results of Operations:
	Interest income		$             24,062	$             23,725	$                23,257	$         23,113	$        21,898
	Interest expense		8,046	8,025	8,029	7,875	8,086
	Net interest income		16,016	15,700	15,228	15,238	13,812
	Provision for credit losses		656	529	264	1,194	946
	Other operating income		4,822	4,924	4,912	4,782	4,793
	Net gains		92	132	141	59	82
	Other operating expense		12,576	12,081	12,314	12,364	12,881
	Income before taxes		$               7,698	$               8,146	$                  7,703	$           6,521	$          4,860
	Income tax expense		1,892	1,960	1,932	1,607	1,162
	Net income		$               5,806	$               6,186	$                  5,771	$           4,914	$          3,698
Per share data:
	Basic net income per share		$                   0.90	$                   0.95	$                      0.89	$               0.75	$              0.56
	Diluted net income per share		$                   0.89	$                   0.95	$                      0.89	$               0.75	$              0.56
	Adjusted basic net income (1)		$                   0.90	$                   0.95	$                      0.89	$               0.75	$              0.62
	Adjusted diluted net income (1)		$                   0.89	$                   0.95	$                      0.89	$               0.75	$              0.62
	Dividends declared per share		$                   0.22	$                   0.22	$                      0.22	$               0.22	$              0.20
	Book value		$                 28.35	$                 27.71	$                    26.90	$             25.39	$            24.89
	Diluted book value		$                 28.27	$                 27.65	$                    26.84	$             25.34	$            24.86
	Tangible book value per share		$                 26.55	$                 25.89	$                    25.06	$             23.55	$            23.08
	Diluted Tangible book value per share		$                 26.47	$                 25.83	$                    25.01	$             23.49	$            23.05
	Closing market value		$                 30.02	$                 33.71	$                    29.84	$             20.42	$            22.91
	Market Range:
	High		$                 41.61	$                 36.17	$                    30.77	$             22.88	$            23.85
	Low		$                 29.38	$                 29.63	$                    20.40	$             19.40	$            21.21
Shares outstanding at period end: Basic			6,478,634	6,471,096	6,468,625	6,465,601	6,648,645
Shares outstanding at period end: Diluted			6,497,454	6,485,119	6,482,648	6,479,624	6,657,239
Performance ratios: (Year to Date Period End, annualized)
Return on average assets			1.19 %	1.06 %	0.99 %	0.89 %	0.76 %
Adjusted return on average assets (1)			1.19 %	1.08 %	1.01 %	0.98 %	0.85 %
Return on average shareholders' equity			12.83 %	12.16 %	11.52 %	10.48 %	9.07 %
Adjusted return on average shareholders' equity (1)			12.83 %	12.42 %	11.78 %	11.52 %	10.11 %
Net interest margin (Non-GAAP), includes tax exempt income of $49 and $57			3.56 %	3.38 %	3.34 %	3.31 %	3.12 %
Net interest margin GAAP			3.55 %	3.36 %	3.32 %	3.29 %	3.10 %
Efficiency ratio - non-GAAP (1)			59.95 %	61.31 %	62.46 %	63.48 %	65.71 %
(1) Efficiency ratio is a non-GAAP measure calculated by dividing total operating expenses by the sum of tax equivalent net interest income and other operating income, less gains/(losses) on sales of securities and/or fixed assets.			March 31,	December 31,	September 30,	June 30,	March 31,
			2025	2024	2024	2024	2024
Financial Condition at period end:
Assets			$          1,979,753	$          1,973,022	$             1,916,126	$      1,868,599	$     1,912,953
Earning assets			$          1,762,891	$          1,758,665	$             1,722,346	$      1,695,425	$     1,695,962
Gross loans			$          1,479,869	$          1,480,793	$             1,447,883	$      1,422,975	$     1,412,327
	Commercial Real Estate		$             532,764	$             526,364	$                502,828	$         506,273	$        492,819
	Acquisition and Development		$               94,063	$               95,314	$                  92,909	$           88,215	$          83,424
	Commercial and Industrial		$             282,370	$             287,534	$                277,994	$         260,168	$        274,722
	Residential Mortgage		$             520,072	$             518,815	$                519,168	$         511,354	$        501,990
	Consumer		$               50,600	$               52,766	$                  54,984	$           56,965	$          59,372
Investment securities			$             275,143	$             269,991	$                267,214	$         267,151	$        278,716
Total deposits			$          1,623,574	$          1,574,829	$             1,540,395	$      1,537,071	$     1,563,453
	Noninterest bearing		$             422,415	$             426,737	$                419,437	$         423,970	$        422,759
	Interest bearing		$          1,201,159	$          1,148,092	$             1,120,958	$      1,113,101	$     1,140,694
Shareholders' equity			$             183,694	$             179,295	$                173,979	$         164,177	$        165,481
Capital ratios:
	Tier 1 to risk weighted assets		14.87 %	14.70 %	14.61 %	14.51 %	14.58 %
	Common Equity Tier 1 to risk weighted assets		12.97 %	12.79 %	12.66 %	12.54 %	12.60 %
	Tier 1 Leverage		11.94 %	11.88 %	11.88 %	11.69 %	11.48 %
	Total risk based capital		16.10 %	15.92 %	15.83 %	15.75 %	15.83 %
Asset quality:
Net (charge-offs)/recoveries for the quarter			$                  (360)	$                  (362)	$                     (109)	$           (1,309)	$             (459)
Nonperforming assets: (Period End)
	Nonaccrual loans		$                 4,026	$                 4,931	$                    8,073	$             9,438	$          16,007
	Loans 90 days past due and accruing		233	918	538	526	120
	Total nonperforming loans and 90 day past due		$                 4,259	$                 5,849	$                    8,611	$             9,964	$          16,127
	Other real estate owned		$                 3,062	$                 3,062	$                    2,860	$             2,978	$            4,402
	Other repossessed assets		$                 2,802	$                 2,802	$                         42	$                  32	$                 68
	Modified/restructured loans		$                 1,021	$                 1,006	$                    1,016	$                893	$                   -
Allowance for credit losses to gross loans			1.25 %	1.23 %	1.24 %	1.26 %	1.27 %
Allowance for credit losses to non-accrual loans			458.69 %	368.49 %	223.09 %	189.90 %	112.34 %
Allowance for credit losses to non-performing assets			182.43 %	155.13 %	157.00 %	138.49 %	87.59 %
Non-performing and 90 day past due loans to total loans			0.29 %	0.39 %	0.59 %	0.70 %	1.14 %
Non-performing loans and 90 day past due loans to total assets			0.22 %	0.30 %	0.45 %	0.53 %	0.84 %
Non-accrual loans to total loans			0.27 %	0.33 %	0.56 %	0.66 %	1.13 %
Non-performing assets to total assets			0.51 %	0.59 %	0.60 %	0.69 %	1.07 %

 

Consolidated Statement of Condition
(Dollars in thousands - Unaudited)		March 31, 2025		December 31, 2024
Assets
Cash and due from banks	$	82,813	$	77,020
Interest bearing deposits in banks		1,618		1,307
Cash and cash equivalents		84,431		78,327
Investment securities – available for sale (at fair value)		99,998		94,494
Investment securities – held to maturity (at cost)		174,144		175,497
Equity investments with readily determinable fair market values		1,001		—
Restricted investment in bank stock, at cost		5,815		5,768
Loans held for sale		—		806
Loans		1,479,869		1,480,793
Unearned fees		(457)		(442)
Allowance for credit losses		(18,467)		(18,170)
Net loans		1,460,945		1,462,181
Premises and equipment, net		30,010		30,081
Goodwill and other intangible assets		11,691		11,773
Bank owned life insurance		49,293		48,952
Deferred tax assets		10,021		9,989
Other real estate owned, net		3,062		3,062
Operating lease asset		1,131		1,204
Pension asset		16,064		17,824
Accrued interest receivable and other assets		32,147		33,064
Total Assets	$	1,979,753	$	1,973,022
Liabilities and Shareholders' Equity
Liabilities:
Non-interest bearing deposits	$	422,415	$	426,737
Interest bearing deposits		1,201,159		1,148,092
Total deposits		1,623,574		1,574,829
Short-term borrowings		20,342		65,409
Long-term borrowings		120,929		120,929
Operating lease liability		1,308		1,384
Allowance for credit loss on off balance sheet exposures		863		863
Accrued interest payable and other liabilities		27,617		28,889
Dividends payable		1,426		1,424
Total Liabilities		1,796,059		1,793,727
Shareholders' Equity:
Common Stock – par value $0.01 per share; Authorized 25,000,000 shares; issued and outstanding 6,6478,634 shares at March 31, 2025 and 6,471,096 at December 31, 2024		65		65
Surplus		20,606		20,476
Retained earnings		193,382		189,002
Accumulated other comprehensive loss		(30,359)		(30,248)
Total Shareholders' Equity		183,694		179,295
Total Liabilities and Shareholders' Equity	$	1,979,753	$	1,973,022

 

Historical Income Statement
		2025		2024
		Q1		Q4		Q3	Q2		Q1
In thousands	(Unaudited)
Interest income
Interest and fees on loans	$	21,755	$	21,299	$	21,018	$	20,221	$	19,218
Interest on investment securities
Taxable		1,763		1,672		1,647		1,697		1,744
Exempt from federal income tax		45		47		56		53		53
Total investment income		1,808		1,719		1,703		1,750		1,797
Other		499		707		536		1,142		883
Total interest income		24,062		23,725		23,257		23,113		21,898
Interest expense
Interest on deposits		6,683		6,585		6,579		6,398		6,266
Interest on short-term borrowings		20		40		467		509		461
Interest on long-term borrowings		1,343		1,400		983		968		1,359
Total interest expense		8,046		8,025		8,029		7,875		8,086
Net interest income		16,016		15,700		15,228		15,238		13,812
Credit loss expense/(credit)
Loans		657		522		195		1,251		961
Debt securities held to maturity		—		—		14		—		—
Off balance sheet credit exposures		(1)		7		55		(57)		(15)
Provision for credit losses		656		529		264		1,194		946
Net interest income after provision for credit losses		15,360		15,171		14,964		14,044		12,866
Other operating income
Gains on sale of residential mortgage loans		92		132		141		59		82
Net gains/(losses)		92		132		141		59		82
Other Income
Service charges on deposit accounts		547		553		555		556		556
Other service charges		206		211		236		225		215
Trust department		2,323		2,323		2,328		2,255		2,188
Debit card income		921		1,134		1,000		999		932
Bank owned life insurance		341		345		340		334		326
Brokerage commissions		421		295		297		362		495
Other		63		63		156		51		81
Total other income		4,822		4,924		4,912		4,782		4,793
Total other operating income		4,914		5,056		5,053		4,841		4,875
Other operating expenses
Salaries and employee benefits		7,331		6,456		7,160		7,256		7,157
FDIC premiums		245		260		256		285		269
Equipment		578		490		627		635		923
Occupancy		689		563		709		652		954
Data processing		1,503		1,688		1,333		1,422		1,318
Marketing		238		205		151		184		134
Professional services		476		536		477		449		486
Contract labor		163		181		149		84		183
Telephone		98		99		97		103		109
Other real estate owned		92		47		124		14		86
Investor relations		62		65		84		91		53
Contributions		56		53		65		66		50
Other		1,045		1,438		1,082		1,123		1,159
Total other operating expenses		12,576		12,081		12,314		12,364		12,881
Income before income tax expense		7,698		8,146		7,703		6,521		4,860
Provision for income tax expense		1,892		1,960		1,932		1,607		1,162
Net Income	$	5,806	$	6,186	$	5,771	$	4,914	$	3,698
Basic net income per common share	$	0.90	$	0.95	$	0.89	$	0.75	$	0.56
Diluted net income per common share	$	0.89	$	0.95	$	0.89	$	0.75	$	0.56
Weighted average number of basic shares outstanding		6,474		6,470		6,468		6,527		6,642
Weighted average number of diluted shares outstanding		6,490		6,484		6,482		6,537		6,655
Dividends declared per common share	$	0.22	$	0.22	$	0.22	$	0.20	$	0.20

 

Non-GAAP Financial Measures (unaudited)
Reconciliation of as reported (GAAP) and non-GAAP financial measures
The following tables below provide a reconciliation of certain financial measures calculated under generally accepted accounting principles ("GAAP") (as reported) and non-GAAP. A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with GAAP in the United States. The Company's management believes the presentation of non-GAAP financial measures provide investors with a greater understanding of the Company's operating results in addition to the results measured in accordance with GAAP. While management uses these non-GAAP measures in its analysis of the Company's performance, this information should not be viewed as a substitute for financial results determined in accordance with GAAP or considered to be more important than financial results determined in accordance with GAAP.
The following non-GAAP financial measures exclude accelerated depreciation expenses related to the branch closures.
		Three months ended March 31,
		2025			2024
(in thousands, except for per share amount)
Net income - as reported		$	5,806		$	3,698
Adjustments:
Accelerated depreciation expenses			—			562
Income tax effect of adjustments			—			(137)
Adjusted net income (non-GAAP)		$	5,806		$	4,123
Diluted earnings per share - as reported		$	0.89		$	0.56
Adjustments:
Accelerated depreciation expenses			—			0.08
Income tax effect of adjustments			—			(0.02)
Adjusted basic and diluted earnings per share (non-GAAP)		$	0.89		$	0.62
		As of or for the three months ended
		March 31,
(in thousands, except per share data)		2025			2024
Per Share Data
Basic net income per share - as reported		$	0.90		$	0.56
Basic net income per share - non-GAAP			0.90			0.62
Diluted net income per share - as reported		$	0.89		$	0.56
Diluted net income per share - non-GAAP			0.89			0.62
Basic book value per share		$	28.40		$	24.89
Diluted book value per share		$	28.42		$	24.86
Significant Ratios:
Return on Average Assets - as reported			1.19 %			0.76 %
Accelerated depreciation expenses			-			0.03 %
Income tax effect of adjustments			-			(0.01 %)
Adjusted Return on Average Assets (non-GAAP)			1.19 %			0.78 %
Return on Average Equity - as reported			12.83 %			9.07 %
Accelerated depreciation expenses			-			0.34 %
Income tax effect of adjustments			-			(0.08 %)
Adjusted Return on Average Equity (non-GAAP)			12.83 %			9.33 %
(1) See reconcilation of this non-GAAP financial measure provided elsewhere herein.

 

			Three Months Ended
			March 31
			2025								2024
	(dollars in thousands)		Average Balance			Interest			Average Yield/Rate		Average Balance			Interest			Average Yield/Rate
	Assets
	Loans		$	1,483,151			21,768		5.95	%	$	1,407,886		$	19,234		5.49	%
	Investment Securities:						-
	Taxable			284,303			1,763		2.51	%		294,526			1,744		2.38	%
	Non taxable			6,524			81		5.04	%		7,806			94		4.84	%
	Total			290,827			1,844		2.57	%		302,332			1,838		2.45	%
	Federal funds sold			41,750			384		3.73	%		63,843			758		4.78	%
	Interest-bearing deposits with other banks			8,488			15		0.72	%		8,787			31		1.42	%
	Other interest earning assets			5,774			100		7.02	%		5,107			94		7.40	%
	Total earning assets			1,829,990			24,111		5.34	%		1,787,955			21,955		4.94	%
	Allowance for credit losses			(18,413)								(17,696)
	Non-earning assets			165,125								188,425
	Total Assets		$	1,976,702							$	1,958,684
	Liabilities and Shareholders' Equity
	Interest-bearing demand deposits		$	373,903		$	1,652		1.79	%	$	348,998		$	1,441		1.66	%
	Interest-bearing money markets- retail			464,151			3,547		3.10	%		322,965			3,260		4.06	%
	Interest-bearing money markets- brokered			134			1		3.03	%		—			—		—	%
	Savings deposits			171,517			43		0.10	%		189,572			48		0.10	%
	Time deposits - retail			144,519			1,046		2.94	%		157,678			1,118		2.85	%
	Time deposits - brokered			36,041			394		4.43	%		30,000			399		5.35	%
	Short-term borrowings			23,053			20		0.35	%		73,351			461		2.53	%
	Long-term borrowings			120,929			1,343		4.50	%		103,017			1,359		5.31	%
	Total interest-bearing liabilities			1,334,247			8,046		2.45	%		1,225,581			8,086		2.65	%
	Non-interest-bearing deposits			427,518								534,413
	Other liabilities			31,474								34,746
	Shareholders' Equity			183,463								163,944
	Total Liabilities and Shareholders' Equity		$	1,976,702							$	1,958,684
	Net interest income and spread					$	16,065		2.89	%				$	13,869		2.29	%
	Net interest margin								3.56	%							3.12	%

 

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SOURCE First United Corporation

FAQ

What was First United 's (FUNC) earnings per share in Q1 2025?

First United reported earnings of $0.89 per diluted share in Q1 2025.

How much did First United 's (FUNC) deposits increase in Q1 2025?

Deposits increased by $48.7 million, including $50.0 million in new brokered deposits.

What was FUNC's loan production in Q1 2025?

The company originated $36.1 million in commercial loans and $11.4 million in residential mortgages.

What is First United 's (FUNC) current allowance for credit losses ratio?

The allowance for credit losses ratio was 1.25% of outstanding loans as of March 31, 2025.

How much dividend did FUNC declare in Q1 2025?

First United declared a cash dividend of $0.22 per common share in Q1 2025.