FIRST UNITED CORPORATION ANNOUNCES FOURTH QUARTER 2025 FINANCIAL RESULTS

Rhea-AI Summary

First United Corporation (NASDAQ: FUNC) reported 2025 net income of $24.5M GAAP ($3.77 diluted) and record core non-GAAP net income of $25.8M ($3.97 diluted). Fourth-quarter GAAP net income was $5.8M ($0.89 diluted); non-GAAP Q4 net income was $7.2M ($1.10 diluted). NIM improved to 3.67% for 2025 and announced a $0.26 per-share cash dividend. The company named Jason B. Rush as President and CEO, citing strong loan, deposit and trust production and disciplined expense management.

Positive

• Core non-GAAP net income of $25.8M for 2025
• GAAP net income increased +19% year-over-year to $24.5M
• Net interest margin rose to 3.67% in 2025
• Declared cash dividend of $0.26 per share
• Appointed Jason B. Rush as President and CEO

Negative

• Q4 2025 GAAP net income down to $5.8M from prior quarter
• OREO fair-value write-down of $1.6M in Q4 2025
• Other operating expenses increased by $3.8M year-to-date

News Market Reaction

+0.48%

1 alert

+0.48% News Effect

On the day this news was published, FUNC gained 0.48%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

GAAP net income: $24.5M GAAP diluted EPS: $3.77 Q4 2025 GAAP net income: $5.8M +5 more

8 metrics

GAAP net income $24.5M Full year 2025 vs $20.6M in 2024

GAAP diluted EPS $3.77 Full year 2025 vs $3.15 in 2024

Q4 2025 GAAP net income $5.8M Q4 2025 vs $6.2M in Q4 2024 and $6.9M in Q3 2025

Non-GAAP net income $25.8M Core 2025 earnings vs $21.0M in 2024

Net interest margin (FTE) 3.75% Q4 2025 non-GAAP basis

Commercial loan originations $108.0M Q4 2025 production

Residential mortgage originations $25.3M Q4 2025 production

Cash dividend $0.26/share Declared in Q4 2025

Market Reality Check

Price: $39.60 Vol: Volume 10,700 vs 20-day a...

low vol

$39.60 Last Close

Volume Volume 10,700 vs 20-day average 19,058 – activity was below recent norms before the release. low

Technical Price $39.72 is above the $34.83 200-day MA, reflecting a pre-news uptrend.

Peers on Argus

FUNC was up 0.4% pre-release. Peers showed mixed moves: ISBA, LCNB, and MYFW wer...

FUNC was up 0.4% pre-release. Peers showed mixed moves: ISBA, LCNB, and MYFW were positive, while MBCN and PWOD were negative, indicating stock-specific rather than broad sector momentum.

Previous Earnings Reports

5 past events · Latest: Oct 20 (Positive)

Same Type Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Oct 20	Q3 2025 earnings	Positive	+1.7%	Higher Q3 2025 earnings and margin expansion versus prior periods.
Jul 21	Q2 2025 earnings	Positive	+2.7%	Strong Q2 2025 profit growth and 3.65% net interest margin.
Apr 21	Q1 2025 earnings	Positive	+1.8%	Higher Q1 2025 earnings with 3.56% net interest margin and loan growth.
Feb 05	Q4 2024 earnings	Positive	+9.1%	Strong Q4 2024 and full‑year 2024 earnings with robust loan growth.
Oct 21	Q3 2024 earnings	Positive	-0.7%	Improved Q3 2024 earnings and margin but modest negative price reaction.

Pattern Detected

Earnings releases have generally coincided with modestly positive next-day moves, especially on stronger quarters.

Recent Company History

Over the past year, FUNC has reported steadily improving results across five earnings releases, with net income and net interest margin trending higher. Q3 2025 and earlier 2025 quarters highlighted expanding loan production, widening margins, and consistent dividend payments. Price reactions after earnings were usually positive, with moves such as +9.1% on Q4 2024 results and mid‑single‑digit gains on 2025 quarters. Today’s full‑year and Q4 2025 report extends that narrative with higher annual GAAP and non‑GAAP earnings.

Historical Comparison

earnings

+2.9 %

Average Historical Move

Historical Analysis

Past earnings headlines saw an average next‑day move of 2.91%. Pre‑news, FUNC was up only 0.4%, leaving room for a potentially larger reaction once results are digested.

Typical Pattern

Earnings releases from Q3 2024 through Q3 2025 showed rising net income and expanding net interest margins, and today’s full‑year 2025 results continue that progression with record core earnings.

Market Pulse Summary

This announcement highlights record 2025 core earnings, with GAAP net income of $24.5M and non‑GAAP ...

Analysis

This announcement highlights record 2025 core earnings, with GAAP net income of $24.5M and non‑GAAP net income of $25.8M, supported by a Q4 net interest margin of 3.75%. Quarterly GAAP profit softened to $5.8M due to OREO write‑downs, but underlying profitability and loan production remained solid. Compared with prior earnings releases that also showed rising margins and steady dividends, investors may focus on how management manages credit costs, loan growth, and net interest margin as 2026 progresses.

Key Terms

gaap, non-gaap, other real estate owned ("oreo"), net interest margin, +4 more

8 terms

gaap financial

"Generally Accepted Accounting Principles ("GAAP") net income was $24.5 million..."

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

non-gaap financial

"Non-GAAP net income, exclusive of losses on contracted sale..."

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

other real estate owned ("oreo") financial

"write-downs of other real estate owned ("OREO"), and net gains..."

Other real estate owned (OREO) are properties a lender ends up owning after taking back collateral for unpaid loans, such as foreclosed homes or repossessed commercial buildings. It matters to investors because rising OREO signals troubled lending and potential losses, while the value and saleability of these properties affect a lender’s balance sheet, ongoing costs, and future earnings, much like a store suddenly having to sell off returned merchandise and cover storage and repair expenses.

net interest margin financial

"Net interest margin, on a non-GAAP, fully tax equivalent ("FTE") basis, was 3.75%..."

Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.

federal home loan bank ("fhlb") financial

"repayment of a $25.0 million Federal Home Loan Bank ("FHLB") advance..."

A Federal Home Loan Bank (FHLB) is one of a group of regional, government-sponsored cooperative banks that lend money to member financial institutions to support housing finance and local lending. Think of it as a wholesale lender or credit union for banks that helps ensure they have funds for mortgages and community loans; its role matters to investors because it affects banks’ access to affordable funding, liquidity, and overall financial stability.

bank term funding program ("btfp") financial

"repayment of $40.0 million in Bank Term Funding Program ("BTFP") balances..."

A bank term funding program (BTFP) is a central bank lending facility that offers short- to medium-term loans to banks using safe securities as collateral, so banks can meet withdrawals or funding needs without selling assets quickly at a loss. Think of it as a temporary bridge loan or safety valve that prevents forced asset fire-sales and helps stabilize the banking system; investors watch it because it can reduce bank liquidity stress, influence bank share prices and credit conditions, and limit broader market contagion.

federal funds sold financial

"Interest income from Federal funds sold increased by $0.3 million..."

Federal funds sold are short-term loans that a bank makes to other banks, usually overnight, using excess reserves it holds. Think of it as parking spare cash in a neighbor’s account for a night to earn a small return; it appears as an asset on the lender’s balance sheet. Investors watch this number because it signals a bank’s liquidity, how it manages short-term funding, and its exposure to changes in overnight interest rates.

basis points financial

"overall yield on the loan portfolio. This increase in yield was attributable to upward repricing... basis points"

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

AI-generated analysis. Not financial advice.

OAKLAND, Md., Feb. 4, 2026 /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- and twelve-month periods ended December 31, 2025.  Generally Accepted Accounting Principles ("GAAP") net income was $24.5 million for the year, or $3.77 per diluted share compared to $20.6 million, or $3.15 per diluted share for the same period of 2024.  GAAP net income was $5.8 million for the fourth quarter of 2025, or $0.89 per diluted share, compared to $6.2 million, or $0.95 per diluted share, for the fourth quarter of 2024 and $6.9 million, or $1.07 per diluted share, for the third quarter of 2025.  Non-GAAP net income, exclusive of losses on contracted sale of a retail branch office, write-downs of other real estate owned ("OREO"), and net gains on sales of investments, was $25.8 million, or $3.97 per diluted share yielding record core earnings for the year ended December 31, 2025.  Non-GAAP net income, exclusive of accelerated depreciation of fixed assets associated with branch closures, was $21.0 million, or $3.21 per diluted share for the year ended December 31, 2024.   Non-GAAP net income was $7.2 million, or $1.10 per diluted share, for the fourth quarter of 2025 compared to $6.2 million, or $0.95 per diluted share for the fourth quarter of 2024 and $6.9 million, or $1.07 per diluted share, for the third quarter of 2025.  GAAP Return on Average Assets and Return on Average Equity for the year ended December 31, 2025, were 1.21% and 12.70%, respectively.

According to Carissa L. Rodeheaver, Executive Chairman of the Board, "2025 was a truly remarkable year for First United as we celebrated our 125th anniversary—an extraordinary milestone in our history. Throughout the year, we had the privilege of honoring the relationships we've built with our clients while highlighting our ongoing commitment to future generations through trust, innovation, and meaningful community impact. In addition to commemorating our legacy, we delivered a record year of core earnings, excluding a non‑recurring markdown on a foreclosure property. Our performance was driven by a strong net interest margin, robust loan, deposit and trust production, and our continued disciplined approach to expense management.  As we look to the future, I am pleased to recognize Jason B. Rush as First United's newly appointed President and Chief Executive Officer. We are confident that Jason will continue to advance our mission and uphold our uncommon commitment to exceptional service and comprehensive financial solutions for our clients and communities."

Fourth Quarter Financial Highlights:

• Net interest margin, on a non-GAAP, fully tax equivalent ("FTE") basis, was 3.75% for the fourth quarter of 2025, reflecting increased loan yields and stable funding costs.
• Strong loan production during the quarter, with $108.0 million in commercial loan originations and $25.3 million in residential mortgage originations, offset by unusually high payoffs in the commercial loan portfolio.
• Provision expense was $0.7 million in the fourth quarter resulting from increased loan growth and increased off-balance sheet loan commitments, partially offset by improved qualitative factors.
• Operating income, including net gains/(losses), for the fourth quarter decreased slightly by $0.1 million when compared to the linked quarter.
• Operating expenses for the fourth quarter increased by $1.9 million when compared to the linked quarter related to a write-down of $1.6 million on a legacy loan participation now residing in other real estate owned ("OREO").
• A cash dividend of $0.26 per share was declared in the fourth quarter.

Income Statement Overview

On a GAAP basis, net income for the fourth quarter of 2025 was $5.8 million, which was inclusive of a $1.2 million, net of tax, write-down on an OREO property and a $0.2 million, net of tax, contracted sale of a retail branch office compared to $6.9 million, which was inclusive of $0.1 million, net of tax, in net gains on sales of investment securities for the third quarter of 2025 and $6.2 million for the fourth quarter of 2024.  The write-down was attributable to a legacy participation loan, originated in 2013, that was taken into OREO several years ago.  The property is serviced by another lender and, following the cancellation of a previous contract, the Company made the decision, alongside other participants, to entertain a new letter of intent and to mark the property based on the new fair value.  Exclusive of these items, net income for the fourth quarter of 2025 was $7.2 million on a non-GAAP basis.

	YTD 2025	YTD 2024	Q4 2025	Q3 2025	Q4 2024
Net Income, GAAP (millions)	$24.5	$20.6	$5.8	$6.9	$6.2
Net Income, non-GAAP (millions)	$25.8	$21.0	$7.2	$6.8	$6.2
Diluted earnings per share, GAAP	$3.77	$3.15	$0.89	$1.07	$0.95
Diluted earnings per share, non-GAAP	$3.97	$3.21	$1.11	$1.06	$0.95

Fourth Quarter 2025 Compared to Fourth Quarter 2024

On a GAAP basis, the $0.4 million decrease in quarterly net income when compared to the fourth quarter of 2024 was primarily driven by increases in provision expense of $0.2 million and non-interest expense of $2.8 million, offset by a $2.3 million increase in net interest income, primarily attributable to disciplined loan and deposit pricing and repricing of adjustable-rate loans and a $0.2 million increase in non-interest income.  Interest and fees on loans increased by $1.9 million primarily due to the repricing of adjustable-rate loans and new production booked at higher rates.  Quarterly interest expense increased slightly by $0.1 million on a year-over-year basis despite strong growth in deposits.  This minimal increase was a result of our strategic focus on reducing deposit costs along with the rate cuts by the Federal Reserve as well as reduced interest expense of $0.3 million on long-term borrowings due to the repayment of a $25.0 million Federal Home Loan Bank ("FHLB") advance at its maturity in September 2025.  Other operating income increased by $0.2 million primarily driven by a $0.4 million increase in wealth management income offset by a $0.2 million increase in net losses on the contracted sale of a retail branch office.  Other operating expenses increased by $2.8 million due to a $0.7 million increase in salaries and benefit expenses, a $0.3 million increase in equipment and occupancy expenses, a $0.2 million increase in professional services, and a $1.8 million increase in OREO expenses primarily driven by the $1.6 million fair value write-down discussed above.  These increases were partially offset by reductions in investor relations and other miscellaneous expenses, such as miscellaneous loan fees and employee benefits expenses.

Fourth Quarter 2025 Compared to Third Quarter 2025

Compared to the linked quarter, net income decreased by $1.2 million. Net interest income increased by $0.6 million due to an increase in interest and fees on loans of $0.2 million, an increase in interest on Federal Funds sold of $0.2 million, and a decrease of interest expense on long-term borrowings of $0.2 million.  Provision for credit losses increased by $0.2 million due to increased loan growth and an increase in unfunded loan commitment balances quarter over quarter.  Other operating income decreased by $0.1 million as a result of increases in wealth management income of $0.2 million and debit card income of $0.2 million, offset by a $0.2 million loss on the contracted sale of a retail branch office in the fourth quarter of 2025 and a decrease in other income of $0.1 million.  Non-interest expense increased by $1.9 million when comparing the fourth quarter to the linked quarter and was driven by the $1.6 million write-down and related expenses of the OREO property discussed above, slight increases in occupancy, data processing, marketing and professional services, offset by decreased salaries and benefits.  Income tax expense decreased by $0.4 million.

Year to Date 2025 Compared to Year to Date 2024

For the year ended December 31, 2025, net income increased by $3.9 when compared to the year ended December 31, 2024.   Net interest income increased by $8.1 million due to an $8.6 million increase in interest and fees on loans resulting from loans repricing at higher rates and new loan production booked at higher rates.  Interest expense increased by only $0.7 million despite strong deposit growth, driven by a $1.7 million increase in interest on deposits related to the strong growth in existing balances and new deposit accounts, primarily our money market product, and the purchase of a $50.0 million brokered certificate of deposit in January 2025. Interest expense on long-term borrowings increased by $0.4 million as a result of new borrowings late in the third quarter of 2024.  These increases were partially offset by a reduction in short-term borrowing costs of $1.4 million resulting from the repayment of $40.0 million in Bank Term Funding Program ("BTFP") balances late in the third quarter of 2024.  Provision for credit losses decreased by $0.2 million due primarily to strong credit quality, lower charge-offs, and lower loan growth in 2025 when compared to 2024.   Other operating income increased by $0.7 million primarily due to a $0.7 million increase in wealth management income driven by strong production.  Net gains were stable year over year, as a $0.2 million increase on gains from the sales of residential mortgages and investment securities was offset by a $0.2 million loss on the sale of a retail branch office.   These increases were partially offset by a $3.8 million increase in other operating expenses that was attributable to increases of  $1.3 million in salaries and employee benefits related to growth of our sales teams, $0.5 million in data processing expenses related to software agreements, $0.2 million in marketing expenses related to increased awareness of our 125^th Anniversary, $0.5 million in professional services expenses from increased audit fees, and $1.9 million in net OREO expenses driven by the fair value write-down of $1.6 million as discussed above.  These increases were partially offset by a $0.5 million decrease in equipment and occupancy expenses as a result of accelerated depreciation expense related to the closure of four branches early in 2024.

Net Interest Income and Net Interest Margin

Fourth Quarter 2025 Compared to Fourth Quarter 2024

Net interest income, on a non-GAAP, FTE basis, increased by $2.3 million for the fourth quarter of 2025 when compared to the fourth quarter of 2024.  This increase was driven by an increase of $2.4 million in interest income due primarily to a $1.9 million increase in interest and fees on loans that resulted from an increase of 26 basis points in the overall yield on the loan portfolio.  This increase in yield was attributable to upward repricing of adjustable-rate loans and an increase in average balances of $57.3 million.  Interest income on investment securities increased by $0.2 million due to an increase in average balances of $9.9 million and an increase in yield of 17 basis points.  The increase in the investment portfolio resulted from management's strategic decision to reinvest cashflows in the higher rate environment to increase the yield on the portfolio.  Interest income from Federal funds sold increased by $0.3 million due to an increase of $31.3 million in average balances, partially offset by a decrease of 30 basis points in average rates.  Interest expense increased by $0.1 million when compared to the fourth quarter of 2024.  Interest expense paid on deposits increased by $0.5 million related to a $107.3 million increase in average balances driven by growth in money market accounts and the purchase of a $50.0 million brokered certificate of deposit in January 2025, partially offset by a decrease of 6 basis points on the rate paid.  Interest paid on long-term borrowings decreased by $0.3 million when compared to the fourth quarter of 2024 due to a $25.0 million decrease in average balances related to the repayment of a $25.0 million FHLB advance at its maturity in the third quarter of 2025 and a decrease of 4 basis points on rates paid.

Fourth Quarter 2025 Compared to Third Quarter 2025

Comparing the fourth quarter of 2025 to the third quarter of 2025, net interest income, on a non-GAAP, FTE basis, increased by $0.6 million.  This increase was driven by a $0.4 million increase in interest income as a result of an increase in interest and fees on loans of $0.2 million, as average loan balances increased by $7.8 million and average yield increased by 1 basis point.  Interest income from Federal funds sold increased by $0.2 million due to an increase of $17.1 million in average balances and an increase of 21 basis points in average rates.  Cash balances increased during the quarter due to repayment of loans late in the year and loan closings that were anticipated to occur in the fourth quarter of 2025 but were delayed until the first quarter of 2026.  Interest expense decreased by $0.2 million when compared to the third quarter of 2025.  Interest expense paid on deposits was stable as a $38.1 million increase in average balances was partially offset by a decrease of 6 basis points on the rate paid.  Interest paid on long-term borrowings decreased by $0.2 million when compared to the third quarter of 2025 due to a $21.7 million decrease in average balances related to the repayment of a $25.0 million FHLB advance at its maturity late in the third quarter, partially offset by an increase of 8 basis points on rates paid. 

Year to Date 2025 Compared to Year to Date 2024

Comparing the year ended December 31, 2025, to the year ended December 31, 2024, net interest income, on a non-GAAP, FTE basis, increased by $8.1 million.  Interest income increased by $8.8 million driven by an increase of $8.6 million on interest and fees on loans, as average loan balances increased by $68.8 million and the overall yield increased by 31 basis points in correlation with upward repricing of adjustable-rate loans.  Interest income on the investment portfolio increased by $0.5 million as a result of reinvesting the cashflow back into the portfolio in an effort to increase the overall yield in the current rate environment.  The overall yield on the investment portfolio increased 17 basis points.  Interest expense increased by $0.7 million as a result of a $1.7 million increase in interest on deposits, as the average deposit balances increased by $90.0 million, driven by a $70.9 million increase in retail money market average balances and $30.9 million increase in average brokered time deposits, partially offset by decreases in average savings balances of $14.8 million.  The overall rate paid on deposits decreased 3 basis points.  Interest expense on short-term borrowings decreased by $1.4 million due to the Bank's utilization of the BTFP program in 2024 and subsequent repayment of the balances due under that program late in the third quarter of 2024. Long-term borrowing costs increased by $0.4 million as a result of an increase of $21.6 million in FHLB average balances due to borrowings obtained in the third quarter of 2024 and subsequent repayment of a $25.0 million advance at its maturity in September 2025, partially offset by a decrease in rate paid of 60 basis points. The net interest margin was 3.67% and 3.38% for the years ending December 31, 2025, and 2024, respectively.  Management continues to place a strong focus on margin management as we move into 2026.  Higher cash levels at December 31, 2025, should allow us to repay outstanding debt and brokered deposits at their maturities.  In January 2026, a $25.0 million brokered certificate of deposit was repaid at its maturity.

Non-Interest Income

Fourth Quarter 2025 Compared to Fourth Quarter 2024

Other operating income, including net gains, for the fourth quarter of 2025 increased by $0.2 million when compared to the same period of 2024.  This increase was driven by a $0.4 million increase in wealth management income, reflecting higher market valuations and expanded relationships with both new and existing clients.   This was partially offset by a $0.2 million increase in net losses related to the sale of a retail branch office due to the relocation to a more convenient site in Morgantown, WV, to better serve our customers. 

Fourth Quarter 2025 Compared to Third Quarter 2025

On a linked quarter basis, other operating income, including net gains, decreased by $0.1 million.   A $0.2 million loss on the sale of the retail branch office was recognized in the fourth quarter of 2025, and net gains on sales of investment securities decreased by $0.1 million due to a gain on sales of available-for-sale securities recognized in the third quarter of 2025.  Wealth management income increased by $0.2 million and debit card income increased by $0.2 million due primarily to the receipt of an annual VISA cash incentive in the fourth quarter of 2025. 

Year to Date 2025 Compared to Year to Date 2024

Other operating income for the year ended December 31, 2025 increased by $0.7 million when compared to the same period of 2024.  This increase was attributable to a $0.7 million increase in wealth management income, driven by improving market conditions, increased annuity sales, and growth in new and existing customer relationships. Net gains were stable year over year, as a $0.2 million increase in gains from the sales of residential mortgages and investment securities was offset by a $0.2 million loss on the sale of a retail office.  Service charge and debit card income were both stable when comparing the year ended December 31, 2025 to the same period of 2024.

Non-Interest Expense

Fourth Quarter 2025 Compared to Fourth Quarter 2024

Operating expenses increased by $2.8 million in the fourth quarter of 2025 when compared to the fourth quarter of 2024.  Net OREO expenses increased by $1.8 million as a result of the $1.6 million fair value write-down discussed above and an additional expense of $0.2 million associated with the same OREO property in 2025.  Salaries and employee benefits increased by $0.6 million due to a $0.4 million increase in salary expense related to normal merit increases effective April 1, 2025 and increased staffing levels, as we enhanced our sales presence in Morgantown, WV, and a $0.1 million increase in incentive expense, partially offset by decreases in employee life and health insurance expense due to decreased claims.  Additionally, occupancy and equipment expenses increased by $0.3 million and professional services increased by $0.2 million.    

Fourth Quarter 2025 Compared to Third Quarter 2025

Compared to the linked quarter, operating expenses increased by $1.9 million.  Net OREO expenses increased by $1.8 million related to the $1.6 million fair value write-down and an additional expense of $0.2 million associated with the same OREO property in the fourth quarter.  Equipment and occupancy expense increased by $0.2 million.  These increases were partially offset by a $0.5 reduction in salaries and employee benefits due primarily to reduced incentive expense and reduced health insurance costs on account of decreased claims.

Year to Date 2025 Compared to Year to Date 2024

For the year ended December 31, 2025, non-interest expense increased by $3.8 million when compared to the year ended December 31, 2024.  Salaries and employee benefits increased by $1.3 million related to normal merit increases effective April 1, 2025, increased salary expense as a result of increased staffing levels as we enhanced our sales presence in Morgantown, WV, increases in incentives, and 401(k) expenses, offset by reduced life and health insurance costs related to reduced claims in 2025. Net OREO expenses increased by $2.0 million due to the previously mentioned fair value write-down and expenses recorded in the fourth quarter of 2025.  Data processing expenses increased by $0.5 million due primarily to increased software agreements, and professional services expenses increased by $0.5 million driven by increased audit fees.   These increases were partially offset by a $0.5 million decrease in occupancy and equipment expenses related to accelerated depreciation expense related to branch closures that were recognized in the first quarter of 2024.

The effective income tax rates as a percentage of income for the years ended December 31, 2025 and December 31, 2024 remained stable at 24.6% and 24.5%, respectively. 

Balance Sheet Overview

Total assets at December 31, 2025 were $2.1 billion, representing a $114.4 million increase since December 31, 2024.  During the year, the investment portfolio increased by $9.5 million as bonds were purchased to lock in yield in anticipation of potential declines in long-term rates. Gross loans increased by $40.9 million as new production during the year was mitigated by amortization and unusually high payoffs in the commercial portfolio.  These payoffs were a result of sales of businesses of approximately $10.5 million and approximately $33.5 million related to refinancings and balance sheet restructurings.  Other assets, including deferred taxes, premises and equipment, bank owned life insurance, pension assets, accrued trust income receivable, and accrued interest receivable, increased by $13.6 million.

Total liabilities at December 31, 2025 were $1.9 billion, representing a $90.1 million increase since December 31, 2024.  Total deposits increased by $160.3 million when compared to December 31, 2024.   Brokered time deposits increased by $50.0 million as new brokered time deposits were obtained in January 2025 to fund the repayment of the $50.0 million in overnight borrowings outstanding at December 31, 2024. In addition, savings and money market accounts increased by $70.2 million, retail time deposits increased by $7.8 million, and non-interest-bearing deposits increased by $26.3 million.  Interest-bearing demand deposits, primarily our IntraFi Cash Service product, increased by $6.0 million due primarily to seasonal fluctuations in municipal deposit accounts.  Short-term borrowings decreased by $47.7 million due to the purchase of the brokered time deposit mentioned above, which was partially offset by increases in the overnight investment sweep product.  Long-term borrowings decreased by $25.0 million due to the full repayment of a matured $25.0 million FHLB borrowing in September 2025.

Outstanding loans of $1.5 billion at December 31, 2025 reflected a $40.9 million increase since December 31, 2024.

Loan Type (in millions)	Change since September 30, 2025	Change since December 31, 2024
Commercial	$10.6	$28.9
Residential Mortgages	$15.6	$18.1
Consumer	($1.3)	($6.1)
Gross Loans	($24.9)	$40.9

Since December 31, 2024, commercial real estate loans increased by $44.4 million, acquisition and development loans decreased by $5.0 million as construction projects were completed and rolled into permanent financing, commercial and industrial loans decreased by $10.5 million, residential mortgage loans increased by $18.1 million, and consumer loans decreased by $6.1 million as production continued to be outpaced by amortization. Commercial growth was offset during 2025 by unusually high payoffs as a result of clients utilizing cash to repay or consolidate debt.

New commercial loan production for the fourth quarter of 2025 was approximately $108.0 million. Commercial production for the year ended December 31, 2025 was approximately $247.0 million, which compares to $189.5 million for the year ended December 31, 2024.  The commercial pipeline continued to be strong at December 31, 2025 at $61.0 million, and unfunded, commercial construction loans totaled approximately $46.5 million.  Commercial amortization and payoffs were approximately $79.1 million for the three months ended December 31, 2025.

New consumer mortgage loan production for the fourth quarter of 2025 was approximately $25.3 million, most of which was comprised of in-house mortgages booked to our portfolio.  The pipeline of in-house, portfolio loans at December 31, 2025 was $4.5 million.  Unfunded commitments related to residential construction loans totaled $15.3 million at December 31, 2025.  

Total deposits at December 31, 2025 increased by $160.3 million when compared to December 31, 2024.

Deposit Type (in millions)	Change since September 30, 2025	Change since December 31, 2024
Non-Interest-Bearing	$23.1	$26.3
Interest-Bearing Demand	$6.8	$6.0
Savings and Money Market	$28.2	$70.2
Time Deposits- Retail	($1.9)	$7.8
Time Deposits- Brokered	$0.0	$50.0
Total Deposits	$56.2	$160.3

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 on December 31, 2024.  Savings and money market accounts increased by $70.2 million due primarily to the expansion of current and new relationships throughout 2025.  Non-interest-bearing checking deposits increased by $26.3 million due primarily to seasonal fluctuations of deposit balances of two commercial customers in the healthcare sector, and interest-bearing checking deposits increased by $6.0 million as we experienced seasonal fluctuations in municipal and commercial account balances.  Retail time deposits increased by $7.8 million since December 31, 2024.  Subsequently in January 2026, a $25.0 million brokered certificate of deposit was fully repaid at its maturity.

The book value of the Corporation's common stock was $31.33 per share at December 31, 2025 compared to $27.71 per share at December 31, 2024. At December 31, 2025, there were 6,499,476 basic outstanding shares of common stock and 6,511,358 diluted outstanding shares of common stock.  The increase in the book value at December 31, 2025 was primarily due to the undistributed net income of $18.3 million.  The Board of Directors of the Corporation increased the quarterly dividend to $0.26 per share in the third quarter of 2025.

Asset Quality

The allowance for credit losses ("ACL") was $19.5 million at December 31, 2025 compared to $18.2 million at December 31, 2024.  The provision for credit losses was $0.7 million for the quarter ended December 31, 2025 compared to $0.5 million for both of the quarters ended December 31, 2024 and September 30, 2025.  Provision for credit losses was $2.7 million for the year ended December 31, 2025 and $2.9 million for the year ended December 31, 2024.  The decreased provision expense in 2025 was primarily related to charge-offs in our commercial and consumer loan portfolios during 2024, partially offset by growth in our loan portfolio and an increase of $18.7 million in unfunded loan commitments during 2025.  Asset quality remained strong during the fourth quarter of 2025.  The ratio of the ACL to loans outstanding remained stable at 1.28% at both December 31, 2025 and September 30, 2025 and 1.23% at December 31, 2024.

The ratio of net charge offs to average loans was 0.07% for the year ended December 31, 2025 and 0.16% for the year ended December 31, 2024.  The commercial and industrial portfolio had net charge offs of 0.33% and 0.50% for the years ended December 31, 2025 and 2024, respectively, due primarily to charge offs on one non-accrual commercial relationship.  The acquisition and development portfolio had net recoveries of 0.33% and 0.06% for the years ended December 31, 2025 and 2024, respectively.  This shift was due primarily to recoveries recognized in 2025 related to one relationship previously charged off in 2016 as additional collateral was brought into OREO in the third quarter of 2025.  The decrease in net charge offs in consumer loans in 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
	12/31/2025	12/31/2024
Loan Type	(Charge Off) / Recovery	(Charge Off) / Recovery
Commercial Real Estate	0.00 %	0.02 %
Acquisition & Development	0.33 %	0.06 %
Commercial & Industrial	(0.33 %)	(0.50 %)
Residential Mortgage	0.00 %	0.01 %
Consumer	(0.88 %)	(1.76 %)
Total Net (Charge Offs)/Recoveries	(0.07 %)	(0.16 %)

Non-accrual loans totaled $4.2 million at December 31, 2025 compared to $4.9 million at December 31, 2024.  The decrease in non-accrual balances at December 31, 2025 was due to principal paydowns and the charge-off of $0.6 million related to a non-accrual commercial and industrial relationship that was recorded during the second half of 2025. 

Non-accrual loans that have been subject to partial charge-offs totaled $0.2 million and $0.7 million at December 31, 2025 and December 31, 2024, respectively.  Loans secured by 1-4 family residential real estate properties in the process of foreclosure totaled $0.5 million and $1.6 million at December 31, 2025 and December 31, 2024, respectively.  As a percentage of the loan portfolio, accruing loans past due 30 days or more were 0.32% at both December 31, 2025 and 2024. 

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 one subsidiary that it uses to hold real estate acquired through foreclosure or by deed in lieu of foreclosure – First OREO Trust, a Maryland statutory trust.  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 and Mineral County, West Virginia.   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 Annual Report on Form 10-K for the year ended December 31, 2025 and the impact that any such events have on our critical accounting assumptions and estimates made as of December 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					Twelve Months Ended
				December 31,		December 31,		December 31,		December 31,
				2025		2024		2025		2024
Results of Operations:
Interest income				$                 26,153		$                 23,725		$               100,848		$                 91,993
Interest expense				8,166		8,025		32,735		32,015
Net interest income				17,987		15,700		68,113		59,978
Provision for credit losses				717		529		2,743		2,933
Other operating income				5,330		4,924		20,166		19,411
Net (losses)/gains				(97)		132		402		414
Other operating expense				14,869		12,081		53,405		49,640
Income before taxes				$                   7,634		$                   8,146		$                 32,533		$                 27,230
Income tax expense				1,857		1,960		8,018		6,661
Net income				$                   5,777		$                   6,186		$                 24,515		$                 20,569
Per share data:
Basic net income per share				$                     0.89		$                     0.95		$                     3.78		$                     3.15
Diluted net income per share				$                     0.89		$                     0.95		$                     3.77		$                     3.15
Adjusted Basic net income (1)				$                     1.10		$                     0.95		$                     3.98		$                     3.21
Adjusted Diluted net income (1)				$                     1.10		$                     0.95		$                     3.97		$                     3.21
Dividends declared per share				$                     0.26		$                     0.22		$                     0.96		$                     0.84
Book value				$                   31.33		$                   27.71
Diluted book value				$                   31.27		$                   27.65
Tangible book value per share				$                   29.56		$                   25.89
Diluted Tangible book value per share				$                   29.50		$                   25.83
Closing market value				$                   37.19		$                   33.71
Market Range:
High				$                   40.79		$                   36.17
Low				$                   33.63		$                   29.63
Shares outstanding at period end: Basic				6,499,476		6,471,096
Shares outstanding at period end: Diluted				6,511,358		6,485,119
Performance ratios: (Year to Date Period End)
Return on average assets				1.21 %		1.06 %
Adjusted return on average assets				1.28 %		1.08 %
Return on average shareholders' equity				12.70 %		12.16 %
Adjusted return on average shareholders' equity				13.39 %		12.42 %
Net interest margin (Non-GAAP), includes tax exempt income of $218 and $229				3.67 %		3.38 %
Net interest margin GAAP				3.66 %		3.36 %
Efficiency ratio - non-GAAP (1)				58.19 %		61.31 %
(1) Efficiency ratio is a non-GAAP measure calculated by dividing total operating expenses less write downs of OREO properties by the sum of tax equivalent net interest income and other operating income, less gains/(losses) on sales of securities, gains/(losses) on disposals or accelerated depreciation of fixed assets.				December 31,		December 31
				2025		2024
Financial Condition at period end:
Assets				$            2,087,453		$            1,973,022
Earning assets				$            1,807,780		$            1,758,665
Gross loans				$            1,521,704		$            1,480,793
Commercial Real Estate				$               570,808		$               526,364
Acquisition and Development				$                 90,272		$                 95,314
Commercial and Industrial				$               277,034		$               287,534
Residential Mortgage				$               536,912		$               518,815
Consumer				$                 46,678		$                 52,766
Investment securities				$               279,534		$               269,991
Total deposits				$            1,735,149		$            1,574,829
Noninterest bearing				$               453,036		$               426,737
Interest bearing				$            1,282,113		$            1,148,092
Shareholders' equity				$               203,634		$               179,295
Capital ratios:
Tier 1 to risk weighted assets				15.36 %		14.70 %
Common Equity Tier 1 to risk weighted assets				13.52 %		12.79 %
Tier 1 Leverage				12.21 %		11.88 %
Total risk based capital				16.61 %		15.92 %
Asset quality:
Net charge-offs for the quarter				$                      (99)		$                    (362)
Nonperforming assets: (Period End)
Nonaccrual loans				$                   4,192		$                   4,931
Loans 90 days past due and accruing				477		918
Total nonperforming loans and 90 day past due				$                   4,669		$                   5,849
Other real estate owned				$                   1,083		$                   3,062
Other repossessed assets				$                   2,802		$                   2,802
Modified loans				$                   1,209		$                   1,006
Allowance for credit losses to gross loans				1.28 %		1.23 %
Allowance for credit losses to non-accrual loans				464.46 %		368.49 %
Allowance for credit losses to non-performing assets				227.61 %		155.13 %
Non-performing loans and 90 day past due loans to total loans				0.31 %		0.39 %
Non-performing loans and 90 day past due loans to total assets				0.22 %		0.30 %
Non-accrual loans to total loans				0.28 %		0.33 %
Non-performing assets to total assets				0.41 %		0.59 %

 

FIRST UNITED CORPORATION Oakland, MD Stock Symbol :  FUNC Financial Highlights - Unaudited
			December 31,	September 30,	June 30,	March 31,	December 31,	September 30,	March 31,
(Dollars in thousands, except per share data)			2025	2025	2025	2025	2024	2024	2024
Results of Operations:
Interest income			$                  26,153	$              25,762	$           24,871	$              24,062	$              23,725	$                23,257	$        21,898
Interest expense			8,166	8,359	8,164	8,046	8,025	8,029	8,086
Net interest income			17,987	17,403	16,707	16,016	15,700	15,228	13,812
Provision for credit losses			717	510	860	656	529	264	946
Other operating income			5,330	5,074	4,940	4,822	4,924	4,912	4,793
Net (losses)/gains			(97)	261	146	92	132	141	82
Other operating expense			14,869	12,986	12,974	12,576	12,081	12,314	12,881
Income before taxes			$                    7,634	$                9,242	$             7,959	$                7,698	$                8,146	$                  7,703	$          4,860
Income tax expense			1,857	2,294	1,975	1,892	1,960	1,932	1,162
Net income			$                    5,777	$                6,948	$             5,984	$                5,806	$                6,186	$                  5,771	$          3,698
Per share data:
Basic net income per share			$                      0.89	$                  1.07	$               0.92	$                  0.90	$                  0.95	$                    0.89	$            0.56
Diluted net income per share			$                      0.89	$                  1.07	$               0.92	$                  0.89	$                  0.95	$                    0.89	$            0.56
Adjusted basic net income (1)			$                      1.10	$                  1.07	$               0.92	$                  0.90	$                  0.95	$                    0.89	$            0.62
Adjusted diluted net income (1)			$                      1.10	$                  1.07	$               0.92	$                  0.89	$                  0.95	$                    0.89	$            0.62
Dividends declared per share			$                      0.26	$                  0.26	$               0.22	$                  0.22	$                  0.22	$                    0.22	$            0.20
Book value			$                    31.33	$                30.65	$             29.43	$                28.35	$                27.71	$                  26.90	$          24.89
Diluted book value			$                    31.27	$                30.59	$             29.38	$                28.27	$                27.65	$                  26.84	$          24.86
Tangible book value per share			$                    29.56	$                28.87	$             27.64	$                26.55	$                25.89	$                  25.06	$          23.08
Diluted Tangible book value per share			$                    29.50	$                28.82	$             27.59	$                26.47	$                25.83	$                  25.01	$          23.05
Closing market value			$                    37.19	$                36.77	$             31.01	$                30.02	$                33.71	$                  29.84	$          22.91
Market Range:
High			$                    40.79	$                38.41	$             32.09	$                41.61	$                36.17	$                  30.77	$          23.85
Low			$                    33.63	$                32.02	$             25.90	$                29.38	$                29.63	$                  20.40	$          21.21
Shares outstanding at period end: Basic			6,499,476	6,496,908	6,494,611	6,478,634	6,471,096	6,468,625	6,648,645
Shares outstanding at period end: Diluted			6,511,358	6,508,790	6,506,493	6,497,454	6,485,119	6,482,648	6,657,239
Performance ratios: (Year to Date Period End, annualized)
Return on average assets			1.21 %	1.24 %	1.20 %	1.19 %	1.06 %	0.99 %	0.76 %
Adjusted return on average assets (1)			1.28 %	1.24 %	1.20 %	1.19 %	1.08 %	1.01 %	0.85 %
Return on average shareholders' equity			12.70 %	13.23 %	12.78 %	12.83 %	12.16 %	11.52 %	9.07 %
Adjusted return on average shareholders' equity (1)			13.39 %	13.23 %	12.78 %	12.83 %	12.42 %	11.78 %	10.11 %
Net interest margin (Non-GAAP), includes tax exempt income of $218 and $229			3.67 %	3.64 %	3.61 %	3.56 %	3.38 %	3.34 %	3.12 %
Net interest margin GAAP			3.66 %	3.63 %	3.60 %	3.55 %	3.36 %	3.32 %	3.10 %
Efficiency ratio - non-GAAP (1)			58.19 %	58.73 %	59.66 %	59.95 %	61.31 %	62.46 %	65.71 %
(1) Efficiency ratio is a non-GAAP measure calculated by dividing total operating expenses less write downs of OREO properties by the sum of tax equivalent net interest income and other operating income, less gains/(losses) on sales of securities, gains/(losses) on disposals or accelerated depreciation of fixed assets.			December 31,	September 30,	June 30,	March 31,	December 31,	September 30,	March 31,
			2025	2025	2025	2025	2024	2024	2024
Financial Condition at period end:
Assets			$             2,087,453	$         2,023,974	$      2,007,471	$         1,979,753	$         1,973,022	$           1,916,126	$   1,912,953
Earning assets			$             1,807,780	$         1,784,056	$      1,789,747	$         1,762,891	$         1,758,665	$           1,722,346	$   1,695,962
Gross loans			$             1,521,704	$         1,496,762	$      1,502,481	$         1,479,869	$         1,480,793	$           1,447,883	$   1,412,327
Commercial Real Estate			$                570,808	$            554,418	$         550,717	$            532,764	$            526,364	$              502,828	$      492,819
Acquisition and Development			$                  90,272	$              93,968	$           98,937	$              94,063	$              95,314	$                92,909	$        83,424
Commercial and Industrial			$                277,034	$            279,079	$         281,484	$            282,370	$            287,534	$              277,994	$      274,722
Residential Mortgage			$                536,912	$            521,317	$         521,968	$            520,072	$            518,815	$              519,168	$      501,990
Consumer			$                  46,678	$              47,980	$           49,375	$              50,600	$              52,766	$                54,984	$        59,372
Investment securities			$                279,534	$            278,898	$         279,541	$            275,143	$            269,991	$              267,214	$      278,716
Total deposits			$             1,735,149	$         1,678,902	$      1,614,207	$         1,623,574	$         1,574,829	$           1,540,395	$   1,563,453
Noninterest bearing			$                453,036	$            429,986	$         425,784	$            422,415	$            426,737	$              419,437	$      422,759
Interest bearing			$             1,282,113	$         1,248,916	$      1,188,423	$         1,201,159	$         1,148,092	$           1,120,958	$   1,140,694
Shareholders' equity			$                203,634	$            199,099	$         191,147	$            183,694	$            179,295	$              173,979	$      165,481
Capital ratios:
Tier 1 to risk weighted assets			15.36 %	15.59 %	15.22 %	14.87 %	14.70 %	14.61 %	14.58 %
Common Equity Tier 1 to risk weighted assets			13.52 %	13.68 %	13.32 %	12.97 %	12.79 %	12.66 %	12.60 %
Tier 1 Leverage			12.21 %	12.10 %	12.08 %	11.94 %	11.88 %	11.88 %	11.48 %
Total risk based capital			16.61 %	16.84 %	16.47 %	16.10 %	15.92 %	15.83 %	15.83 %
Asset quality:
Net (charge-offs)/recoveries for the quarter			$                       (99)	$                  (435)	$              (151)	$                 (360)	$                 (362)	$                    (109)	$            (459)
Nonperforming assets: (Period End)
Nonaccrual loans			$                    4,192	$                3,825	$             3,813	$                4,026	$                4,931	$                  8,073	$        16,007
Loans 90 days past due and accruing			477	801	535	233	918	538	120
Total nonperforming loans and 90 day past due			$                    4,669	$                4,626	$             4,348	$                4,259	$                5,849	$                  8,611	$        16,127
Other real estate owned			$                    1,083	$                2,718	$             3,035	$                3,062	$                3,062	$                  2,860	$          4,402
Other repossessed assets			$                    2,802	$                3,043	$             2,802	$                2,802	$                2,802	$                       42	$               68
Modified loans			$                    1,209	$                   998	$             1,198	$                1,021	$                1,006	$                  1,016	$                  -
Allowance for credit losses to gross loans			1.28 %	1.28 %	1.27 %	1.25 %	1.23 %	1.24 %	1.27 %
Allowance for credit losses to non-accrual loans			464.46 %	499.06 %	499.45 %	458.69 %	368.49 %	223.09 %	112.34 %
Allowance for credit losses to non-performing assets			227.61 %	183.78 %	186.98 %	182.43 %	155.13 %	157.00 %	87.59 %
Non-performing loans and 90 day past due loans to total loans			0.31 %	0.31 %	0.29 %	0.29 %	0.39 %	0.59 %	1.14 %
Non-performing loans and 90 day past due loans to total assets			0.22 %	0.23 %	0.22 %	0.22 %	0.30 %	0.45 %	0.84 %
Non-accrual loans to total loans			0.28 %	0.26 %	0.25 %	0.27 %	0.33 %	0.56 %	1.13 %
Non-performing assets to total assets			0.41 %	0.51 %	0.51 %	0.51 %	0.59 %	0.60 %	1.07 %

 

Consolidated Statement of Condition
(Dollars in thousands - Unaudited)		December 31, 2025		September 30, 2025		June 30, 2025		March 31, 2025		December 31, 2024
Assets
Cash and due from banks	$	129,830	$	92,268	$	77,313	$	82,813	$	77,020
Interest bearing deposits in banks		1,782		2,907		1,800		1,618		1,307
Cash and cash equivalents		131,612		95,175		79,113		84,431		78,327
Investment securities – available for sale (at fair value)		107,144		105,060		103,582		99,998		94,494
Investment securities – held to maturity (at cost)		171,361		172,818		174,951		174,144		175,497
Equity investments with readily determinable fair market values		1,029		1,020		1,008		1,001		—
Restricted investment in bank stock, at cost		4,630		4,628		5,815		5,815		5,768
Loans held for sale		130		861		110		—		806
Loans		1,521,704		1,496,762		1,502,481		1,479,869		1,480,793
Unearned fees		(476)		(473)		(533)		(457)		(442)
Allowance for credit losses		(19,470)		(19,089)		(19,044)		(18,467)		(18,170)
Net loans		1,501,758		1,477,200		1,482,904		1,460,945		1,462,181
Premises and equipment, net		29,665		30,369		29,644		30,010		30,081
Goodwill and other intangible assets		11,444		11,526		11,609		11,691		11,773
Bank owned life insurance		50,360		49,997		49,642		49,293		48,952
Deferred tax assets		8,730		8,228		9,151		10,021		9,989
Other real estate owned, net		1,083		2,718		3,035		3,062		3,062
Operating lease asset		1,015		984		1,058		1,131		1,204
Pension asset		20,798		21,382		18,537		16,064		17,824
Accrued interest receivable and other assets		46,694		42,008		37,312		32,147		33,064
Total Assets	$	2,087,453	$	2,023,974	$	2,007,471	$	1,979,753	$	1,973,022
Liabilities and Shareholders' Equity
Liabilities:
Non-interest bearing deposits	$	453,036	$	429,986	$	425,784	$	422,415	$	426,737
Interest bearing deposits		1,282,113		1,248,916		1,188,423		1,201,159		1,148,092
Total deposits		1,735,149		1,678,902		1,614,207		1,623,574		1,574,829
Short-term borrowings		17,661		20,207		50,954		20,342		65,409
Long-term borrowings		95,929		95,929		120,929		120,929		120,929
Operating lease liability		1,180		1,152		1,231		1,308		1,384
Allowance for credit loss on off balance sheet exposures		1,218		982		995		863		863
Accrued interest payable and other liabilities		30,992		26,014		26,579		27,617		28,889
Dividends payable		1,690		1,689		1,429		1,426		1,424
Total Liabilities		1,883,819		1,824,875		1,816,324		1,796,059		1,793,727
Shareholders' Equity:
Common Stock – par value $0.01 per share; Authorized 25,000,000 shares; issued and outstanding 6,499,476 at December 31, 2025; 6,496,908 at September 30, 2025;  6,494,611 shares at June 30, 2025; 6,478,634 at March 31, 2025; and 6,471,096 at December 31, 2024		65		65		65		65		65
Surplus		21,551		21,290		21,121		20,606		20,476
Retained earnings		207,284		203,197		197,938		193,382		189,002
Accumulated other comprehensive loss		(25,266)		(25,453)		(27,977)		(30,359)		(30,248)
Total Shareholders' Equity		203,634		199,099		191,147		183,694		179,295
Total Liabilities and Shareholders' Equity	$	2,087,453	$	2,023,974	$	2,007,471	$	1,979,753	$	1,973,022

 

Historical Income Statement
		2025										2024
	Year to date		Q4		Q3		Q2			Q1		Year to Date		Q4		Q3	Q2		Q1
In thousands							(Unaudited)
Interest income
Interest and fees on loans	$	90,328	$	23,219	$	23,060	$	22,294	$	21,755	$	81,756	$	21,299	$	21,018	$	20,221	$	19,218
Interest on investment securities
Taxable		7,210		1,845		1,826		1,776		1,763		6,760		1,672		1,647		1,697		1,744
Exempt from federal income tax		218		59		57		57		45		209		47		56		53		53
Total investment income		7,428		1,904		1,883		1,833		1,808		6,969		1,719		1,703		1,750		1,797
Other		3,092		1,030		819		744		499		3,268		707		536		1,142		883
Total interest income		100,848		26,153		25,762		24,871		24,062		91,993		23,725		23,257		23,113		21,898
Interest expense
Interest on deposits		27,524		7,044		7,009		6,788		6,683		25,828		6,585		6,579		6,398		6,266
Interest on short-term borrowings		75		17		17		21		20		1,477		40		467		509		461
Interest on long-term borrowings		5,136		1,105		1,333		1,355		1,343		4,710		1,400		983		968		1,359
Total interest expense		32,735		8,166		8,359		8,164		8,046		32,015		8,025		8,029		7,875		8,086
Net interest income		68,113		17,987		17,403		16,707		16,016		59,978		15,700		15,228		15,238		13,812
Credit loss expense/(credit)
Loans		2,345		480		480		728		657		2,929		522		195		1,251		961
Debt securities held to maturity		43		—		43		—		—		14		—		14		—		—
Off balance sheet credit exposures		355		237		(13)		132		(1)		(10)		7		55		(57)		(15)
Provision for credit losses		2,743		717		510		860		656		2,933		529		264		1,194		946
Net interest income after provision for credit losses		65,370		17,270		16,893		15,847		15,360		57,045		15,171		14,964		14,044		12,866
Other operating income
Net gains on investments, available for sale		97		—		97		—		—		—		—		—		—		—
Gains on sale of residential mortgage loans		533		132		163		146		92		414		132		141		59		82
(Losses)/gains on disposal of fixed assets		(228)		(229)		1		—		—		—		—		—		—		—
Net gains/(losses)		402		(97)		261		146		92		414		132		141		59		82
Other Income
Service charges on deposit accounts		2,255		568		563		577		547		2,220		553		555		556		556
Other service charges		845		207		218		214		206		887		211		236		225		215
Trust department		9,824		2,667		2,448		2,386		2,323		9,094		2,323		2,328		2,255		2,188
Debit card income		4,057		1,173		980		983		921		4,065		1,134		1,000		999		932
Bank owned life insurance		1,408		364		355		348		341		1,345		345		340		334		326
Brokerage commissions		1,445		308		346		370		421		1,449		295		297		362		495
Other		332		43		164		62		63		351		63		156		51		81
Total other income		20,166		5,330		5,074		4,940		4,822		19,411		4,924		4,912		4,782		4,793
Total other operating income		20,568		5,233		5,335		5,086		4,914		19,825		5,056		5,053		4,841		4,875
Other operating expenses
Salaries and employee benefits		29,347		7,108		7,589		7,319		7,331		28,029		6,456		7,160		7,256		7,157
FDIC premiums		1,051		273		266		267		245		1,070		260		256		285		269
Equipment		2,217		559		515		565		578		2,675		490		627		635		923
Occupancy		2,860		817		679		675		689		2,878		563		709		652		954
Data processing		6,243		1,623		1,517		1,600		1,503		5,761		1,688		1,333		1,422		1,318
Marketing		904		288		182		196		238		674		205		151		184		134
Professional services		2,449		745		639		589		476		1,948		536		477		449		486
Contract labor		634		178		127		166		163		597		181		149		84		183
Telephone		380		97		89		96		98		408		99		97		103		109
Other real estate owned		2,235		1,866		69		208		92		271		47		124		14		86
Investor relations		306		55		57		132		62		293		65		84		91		53
Contributions		344		120		90		78		56		234		53		65		66		50
Other		4,435		1,140		1,167		1,083		1,045		4,802		1,438		1,082		1,123		1,159
Total other operating expenses		53,405		14,869		12,986		12,974		12,576		49,640		12,081		12,314		12,364		12,881
Income before income tax expense		32,533		7,634		9,242		7,959		7,698		27,230		8,146		7,703		6,521		4,860
Provision for income tax expense		8,018		1,857		2,294		1,975		1,892		6,661		1,960		1,932		1,607		1,162
Net Income	$	24,515	$	5,777	$	6,948	$	5,984	$	5,806	$	20,569	$	6,186	$	5,771	$	4,914	$	3,698
Basic net income per common share	$	3.78	$	0.89	$	1.07	$	0.92	$	0.90	$	3.15	$	0.95	$	0.89	$	0.75	$	0.56
Diluted net income per common share	$	3.77	$	0.89	$	1.07	$	0.92	$	0.89	$	3.15	$	0.95	$	0.89	$	0.75	$	0.56
Weighted average number of basic shares outstanding		6,490		6,499		6,496		6,489		6,474		6,527		6,470		6,468		6,527		6,642
Weighted average number of diluted shares outstanding		6,504		6,510		6,508		6,506		6,490		6,540		6,484		6,482		6,537		6,655
Dividends declared per common share	$	0.96	$	0.26	$	0.26	$	0.22	$	0.22	$	0.84	$	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 net gains on sale of investment securities, losses on disposal of fixed assets and write-downs of other real estate owned ("OREO") in 2025 and accelerated depreciation expenses related to the branch closures in 2024.
		Three months ended December 31,						Twelve months ended December 31,
		2025			2024			2025			2024
(in thousands, except for per share amount)
Net income - as reported		$	5,777		$	6,186		$	24,515		$	20,569
Adjustments:
Loss on write-down of OREO property			1,635			—			1,635			—
Loss on disposal of fixed assets			228			—			228			—
Net gains on sale of investment securities			—			—			(97)			—
Accelerated depreciation expenses			—			—			—			562
Income tax effect of adjustments			(459)			—			(435)			(137)
Adjusted net income (non-GAAP)		$	7,181		$	6,186		$	25,846		$	20,994
Diluted earnings per share - as reported		$	0.89		$	0.95		$	3.77		$	3.15
Adjustments:
Loss on write-down of OREO property			0.25			—			0.25			—
Loss on disposal of fixed assets			0.03			—			0.03			—
Net gains on sale of investment securities			—			—			(0.01)			—
Accelerated depreciation expenses			—			—			—			0.08
Income tax effect of adjustments			(0.07)			—			(0.07)			(0.02)
Adjusted diluted earnings per share (non-GAAP)		$	1.10		$	0.95		$	3.97		$	3.21
		As of or for the three months ended						As of or for the twelve months ended
		December 31,						December 31,
(in thousands, except per share data)		2025			2024			2025			2024
Per Share Data
Basic net income per share - as reported		$	0.89		$	0.95		$	3.78		$	3.15
Basic net income per share - non-GAAP		$	1.10		$	0.95		$	3.98		$	3.21
Diluted net income per share - as reported		$	0.89		$	0.95		$	3.77		$	3.15
Diluted net income per share - non-GAAP		$	1.10		$	0.95		$	3.97		$	3.21
Basic book value per share		$	31.33		$	27.71
Diluted book value per share		$	31.27		$	27.65
			As of or for the twelve months ended
Significant Ratios:
			December 31,
			2025			2024
Return on Average Assets - as reported			1.21 %			1.06 %
Adjustments:
Loss on write-down of OREO property			0.08 %			—
Loss on disposal of fixed assets			0.02 %			—
Net gains on sale of investment securities			(0.01 %)			—
Accelerated depreciation expenses			—			0.03 %
Income tax effect of adjustments			(0.02 %)			(0.01 %)
Adjusted Return on Average Assets (non-GAAP)			1.28 %			1.08 %
Return on Average Equity - as reported			12.70 %			12.16 %
Adjustments:
Loss on write-down of OREO property			0.85 %			—
Loss on disposal of fixed assets			0.12 %			—
Net gains on sale of investment securities			(0.05 %)			—
Accelerated depreciation expenses			—			0.34 %
Income tax effect of adjustments			(0.23 %)			(0.08 %)
Adjusted Return on Average Equity (non-GAAP)			13.39 %			12.42 %

 

		Three Months Ended
		December 31,
		2025								2024
(dollars in thousands)		Average Balance			Interest			Average Yield/Rate		Average Balance			Interest			Average Yield/Rate
Assets
Loans		$	1,509,632			23,230		6.10	%	$	1,452,332		$	21,313		5.84	%
Investment Securities:
Taxable			284,976			1,845		2.57	%		275,785			1,672		2.41	%
Non taxable			7,506			106		5.60	%		6,758			86		5.06	%
Total			292,482			1,951		2.65	%		282,543			1,758		2.48	%
Federal funds sold			87,819			913		4.12	%		56,552			628		4.42	%
Interest-bearing deposits with other banks			13,163			24		0.72	%		3,138			16		2.03	%
Other interest earning assets			4,629			93		7.97	%		5,767			63		4.35	%
Total earning assets			1,907,725			26,211		5.45	%		1,800,332			23,778		5.25	%
Allowance for credit losses			(19,388)								(18,199)
Non-earning assets			182,613								162,438
Total Assets		$	2,070,950							$	1,944,571
Liabilities and Shareholders' Equity
Deposits
Interest-bearing demand deposits		$	387,148		$	1,673		1.71	%	$	388,451		$	1,747		1.79	%
Interest-bearing money markets- retail			509,895			3,736		2.91	%		446,230			3,721		3.32	%
Interest-bearing money markets- brokered			58			1		6.84	%		110			1		3.62	%
Savings deposits			158,859			41		0.10	%		172,342			45		0.10	%
Time deposits - retail			151,860			1,057		2.76	%		143,424			1,071		2.97	%
Time deposits - brokered			50,000			536		4.25	%		—			—		—	%
Total deposits			1,257,820			7,044		2.22	%		1,150,557			6,585		2.28	%
Short-term borrowings			19,036			17		0.35	%		12,797			40		1.24	%
Long-term borrowings			95,929			1,105		4.57	%		120,928			1,400		4.61	%
Total interest-bearing liabilities			1,372,785			8,166		2.36	%		1,284,282			8,025		2.49	%
Non-interest-bearing deposits			461,214								449,878
Other liabilities			33,213								33,904
Shareholders' Equity			203,738								176,507
Total Liabilities and Shareholders' Equity		$	2,070,950							$	1,944,571
Net interest income and spread					$	18,045		3.09	%				$	15,753		2.76	%
Net interest margin								3.75	%							3.48	%

 

		Twelve Months Ended
		December 31,
		2025								2024
(dollars in thousands)		Average Balance			Interest			Average Yield/ Rate		Average Balance			Interest			Average Yield/ Rate
Assets
Loans		$	1,496,125		$	90,374		6.04	%	$	1,427,351		$	81,819		5.73	%
Investment Securities:
Taxable			284,659			7,210		2.53	%		285,661			6,760		2.37	%
Non taxable			7,246			390		5.38	%		7,538			375		4.97	%
Total			291,905			7,600		2.60	%		293,199			7,135		2.43	%
Federal funds sold			62,744			2,623		4.18	%		55,117			2,874		5.21	%
Interest-bearing deposits with other banks			6,152			89		1.45	%		2,009			91		4.53	%
Other interest earning assets			5,467			380		6.95	%		4,565			303		6.64	%
Total earning assets			1,862,393			101,066		5.43	%		1,782,241			92,222		5.17	%
Allowance for loan losses			(18,963)								(18,064)
Non-earning assets			178,572								182,548
Total Assets		$	2,022,002							$	1,946,725
Liabilities and Shareholders' Equity
Deposits
Interest-bearing demand deposits		$	370,516		$	6,355		1.72	%	$	368,725			6,288		1.71	%
Interest-bearing money markets- retail			484,238			14,694		3.03	%		413,353			14,287		3.46	%
Interest-bearing money markets- brokered			281			7		2.49	%		55			3		5.45	%
Savings deposits			165,625			172		0.10	%		180,393			183		0.10	%
Time deposits - retail			148,214			4,299		2.90	%		147,193			4,226		2.87	%
Time deposits - brokered			46,558			1,997		4.29	%		15,697			841		5.36	%
Total deposits			1,215,432			27,524		2.26	%		1,125,416			25,828		2.29	%
Short-term borrowings			20,810			75		0.36	%		58,444			1,477		2.53	%
Long-term borrowings			113,806			5,136		4.51	%		92,213			4,710		5.11	%
Total interest-bearing liabilities			1,350,048			32,735		2.42	%		1,276,073			32,015		2.51	%
Non-interest-bearing deposits			447,553								468,137
Other liabilities			31,400								33,326
Shareholders' Equity			193,001								169,189
Total Liabilities and Shareholders' Equity		$	2,022,002							$	1,946,725
Net interest income and spread					$	68,331		3.01	%				$	60,207		2.66	%
Net interest margin								3.67	%							3.38	%

 

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SOURCE First United Corporation

FAQ

What were First United (FUNC) full-year 2025 earnings per share?

GAAP diluted earnings per share were $3.77 for 2025. According to the company, non-GAAP diluted EPS was $3.97, excluding certain one-time items such as OREO markdowns and contracted sale losses.

How did First United's net interest margin (NIM) change in 2025 for FUNC?

NIM improved to 3.67% for the year ended 2025. According to the company, higher loan yields, reinvestment in securities, and disciplined pricing drove the margin increase versus 2024.

Why did First United (FUNC) report a Q4 2025 write-down on OREO?

The company recorded a $1.6M fair-value write-down on an OREO property in Q4 2025. According to the company, the markdown reflected a legacy participation loan and a revised letter of intent affecting fair value.

What dividend did First United (FUNC) declare in Q4 2025 and when is it payable?

First United declared a cash dividend of $0.26 per share in Q4 2025. According to the company, the dividend was declared during the quarter; investors should check the company’s investor relations for the payment date.

How did loan production and balances affect FUNC's Q4 2025 results?

Q4 saw $108.0M in commercial and $25.3M in residential mortgage originations. According to the company, increased loan yields and higher average loan balances contributed materially to higher interest income.

What leadership change did First United announce and why does it matter for FUNC shareholders?

Jason B. Rush was named President and CEO effective in 2026. According to the company, the appointment supports continuity and leadership to advance strategy after a year of record core earnings.