FIRST UNITED CORPORATION ANNOUNCES THIRD QUARTER 2026 FINANCIAL RESULTS

Higher loan yields and lower funding costs supported earnings, while credit-loss provisions and year-over-year operating expenses increased.

Rhea-AI Summary

First United Corporation (NASDAQ: FUNC) reported third-quarter 2026 GAAP net income of $7.2 million, up from the year-earlier quarter. Diluted earnings were $1.11, versus $1.07 a year earlier and $0.88 in the second quarter. Net income compared with $6.9 million and $5.7 million, respectively. Nine-month net income rose to $19.5 million, or $3.01 per diluted share, from $18.7 million, or $2.88.

The third-quarter net interest margin, measured on a non-GAAP, fully tax-equivalent basis, rose to 4.05% from 3.98% sequentially. Commercial loan originations were $115.0 million and residential mortgage originations were $34.7 million. Credit-loss provision expense reached $1.9 million. Operating expenses fell $2.0 million sequentially following a second-quarter consulting charge, but rose $0.8 million year over year. Gross loans increased $83.7 million since December 31, 2025.

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Positive

• Moderate pointThird-quarter GAAP earnings reached $7.2 million and $1.11 diluted EPS, versus $6.9 million and $1.07 a year earlier.
• Moderate pointThird-quarter net interest income increased $2.2 million year over year and $1.0 million sequentially.
• Moderate pointGross loans increased $83.7 million during the first nine months of 2026.
• Minor pointSequential GAAP earnings increased from $5.7 million and $0.88 diluted EPS in second-quarter 2026.
• Minor pointNine-month GAAP earnings rose to $19.5 million and $3.01 diluted EPS, versus $18.7 million and $2.88.

14 minor points

• Minor pointNine-month net interest income increased $6.1 million year over year.
• Minor pointThird-quarter tax-equivalent net interest margin rose 7 basis points sequentially to 4.05% from 3.98%.
• Minor pointNine-month tax-equivalent net interest margin increased to 3.94% from 3.64% a year earlier.
• Minor pointCommercial loan originations totaled $115.0 million in third-quarter 2026.
• Minor pointResidential mortgage originations totaled $34.7 million in third-quarter 2026.
• Minor pointOperating expenses decreased $2.0 million sequentially, following second-quarter consulting fees.
• Minor pointInterest expense declined $1.0 million year over year and $0.2 million sequentially in third-quarter 2026.
• Minor pointNine-month interest expense on interest-bearing liabilities decreased $2.0 million year over year.
• Minor pointFunding repayments included $50.0 million in brokered certificates of deposit and $65.0 million in FHLB borrowings during 2026.
• Minor pointTrust and brokerage income increased $0.3 million quarterly and $0.8 million year to date, both year over year.
• Minor pointNine-month bank-owned life insurance income increased $0.3 million, reflecting a one-time first-quarter death benefit.
• Minor pointNine-month debit card income increased $0.1 million year over year.
• Minor pointThird-quarter check fees increased $0.1 million sequentially from a one-time cash incentive.
• Minor pointNine-month effective income tax rate decreased to 24.1% from 24.7% a year earlier.

Negative

• Moderate pointThird-quarter credit-loss provision was $1.9 million, up $1.4 million year over year and $1.2 million sequentially.
• Moderate pointNine-month operating expenses increased $4.7 million year over year, reflecting consulting, compensation and technology-related costs.
• Minor pointThird-quarter operating expenses increased $0.8 million year over year, driven by compensation and technology-related costs.
• Minor pointNon-GAAP quarterly earnings declined sequentially to $7.2 million and $1.11 diluted EPS from $7.3 million and $1.14.
• Minor pointThird-quarter net gains decreased $0.1 million year over year, despite increasing $0.1 million sequentially.
• Minor pointCash and interest-bearing deposits in other banks decreased $56.7 million during the first nine months of 2026.

News Explained

For the nine months ended September 30, 2026, First United reported cash and interest-bearing deposits down $56.7 million while gross loans rose $83.7 million.

Key Figures

GAAP net income: $7.2 million Diluted EPS: $1.11 Net income: $19.5 million +5 more

GAAP net income

$7.2 million

Third quarter 2026

Diluted EPS

$1.11

Third quarter 2026, GAAP

Net income

$19.5 million

First nine months of 2026, GAAP

Diluted EPS

$3.01

First nine months of 2026, GAAP

Net interest margin

4.05%

Third quarter 2026, non-GAAP FTE basis

Commercial loan originations

$115.0 million

Third quarter 2026

Residential mortgage originations

$34.7 million

Third quarter 2026

Cash dividend

$0.28 per share

Declared in the third quarter

Previous Earnings Reports

3 past events · Latest: Jul 20

Same Type 3 events

1. Jul 20

   Q2 earnings

   24h Move

   -1.0%

   Non-GAAP income was $7.3 million and FTE net interest margin rose to 3.98%.

2. Apr 20

   Q1 earnings

   24h Move

   +1.1%

   Reported $6.7 million GAAP net income and 3.83% non-GAAP FTE net interest margin.

3. Oct 20

   Q3 earnings

   24h Move

   +6.9%

   Reported $6.9 million net income and $1.07 diluted EPS for the comparable quarter.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

gaap, non-gaap, fte, net interest margin, +1 more

5 terms

gaap financial

"Consolidated net income was $7.2 million on a Generally Accepted Accounting Principles"

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.

View in glossary

non-gaap financial

"Non-GAAP net income was $7.2 million and $21.1 million"

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.

View in glossary

fte financial

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

A full-time equivalent (FTE) is a way to count labor by converting part-time and variable hours into the number of full-time workers they equal; for example, two half-time employees equal one FTE. Investors use FTEs to compare staffing levels, payroll exposure, and productivity across periods or companies, similar to comparing vehicle fleet size rather than counting drivers who work varying shifts. It helps standardize workforce cost and capacity measures.

net interest margin financial

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

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.

provision for credit losses financial

"An increase of $1.2 million in the provision for credit losses was recognized"

Provision for credit losses is an amount set aside by a financial institution to cover potential future losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution manage risks and stay financially healthy. For investors, it signals how cautious a lender is about potential loan defaults and can impact the company's profitability and financial stability.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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OAKLAND, Md., Oct. 19, 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 nine-month periods ended September 30, 2026.  Consolidated net income was $7.2 million on a Generally Accepted Accounting Principles ("GAAP") basis for the third quarter of 2026, or $1.11 per diluted share, compared to $6.9 million, or $1.07 per diluted share, for the third quarter of 2025 and $5.7 million, or $0.88 per diluted share, for the second quarter of 2026.  Net income for the first nine months of 2026 was $19.5 million, or $3.01 per diluted share, compared to $18.7 million, or $2.88 per diluted share, for the same period of 2025.  Non-GAAP net income was $7.2 million and $21.1 million for the three- and nine-months ended September 30, 2026, respectively.  Annualized Return on Average Assets and Return on Average Equity for the nine-month period ended September 30, 2026 were 1.26% and 12.37%, respectively.

According to Jason Rush, Chairman of the Board, President and CEO, "We delivered another solid quarter, benefiting from an improved net interest margin, continued growth in wealth management income, and steady loan growth. Our loan pipelines remain robust heading into the fourth quarter, providing positive momentum as we close out the year.  Credit quality remains strong. However, given continued inflationary pressures and uncertainty surrounding interest rates, we believe it is prudent to maintain a disciplined approach to reserves.  We also remain focused on expense management and are continuing to identify opportunities to improve efficiency across the organization."

Third Quarter Financial Highlights:

• Net interest margin, on a non-GAAP, fully tax equivalent ("FTE") basis, was 4.05% for the third quarter of 2026, reflecting increased loan yields and reduced funding costs.
• Strong loan production during the quarter, with $115.0 million in commercial loan originations and $34.7 million in residential mortgage originations.
• Provision expense was $1.9 million in the third quarter, primarily due to solid growth in loans and unfunded commitments, and the continued economic and political uncertainty.
• Operating expenses decreased by $2.0 million when compared to the linked quarter driven by a one-time, $1.7 million, net of tax, expense related to consulting fees incurred for contract negotiations with our core processor recorded in the second quarter of 2026.
• A cash dividend of $0.28 per share was declared in the third quarter.

Income Statement Overview

On a GAAP basis, net income for the third quarter of 2026 was $7.2 million, compared to $5.7 million for the second quarter of 2026, inclusive of a $1.7 million, net of tax, third-party consulting expense incurred for core contract negotiations, and $6.9 million for the third quarter of 2025. 

	Q3 2026	Q2 2026	Q3 2025
Net Income, GAAP (millions)	$   7.2	$   5.7	$   6.9
Net Income, non-GAAP (millions)	$   7.2	$   7.3	$   6.9
Diluted net income per share, GAAP	$ 1.11	$ 0.88	$ 1.07
Diluted net income per share, non-GAAP	$ 1.11	$ 1.14	$ 1.07

Third Quarter 2026 Compared to Third Quarter 2025

Consolidated net income increased by $0.2 million for the third quarter of 2026 when compared to the third quarter of 2025.  The increase was driven by an increase of $2.2 million in net interest income, and an increase of $0.3 million in non-interest income, inclusive of gains, offset by a $1.4 million increase in provision for credit losses as a result of solid growth in loans and unfunded commitments and a $0.8 million increase in other operating expenses.  Comparing the third quarter of 2026 to the same period of 2025, interest and fees on loans increased by $1.8 million driven by solid loan growth and the continued repricing of adjustable-rate loans.  Interest expense decreased by $1.0 million when comparing year-over-year quarterly expenses.  The decrease was attributable to the repayment of $50.0 million in brokered certificates of deposit in January and July 2026 at their maturities and $65.0 million in Federal Home Loan Bank ("FHLB") borrowings in March 2026.  Other operating income increased slightly by $0.3 million driven by an increase in trust and brokerage income of $0.3 million as a result of increased production and favorable market values on assets under management.  Other operating expenses increased by $0.8 million, driven by a $0.5 million increase in salaries and benefits attributable to new hires to complete the build out of talent in our West and East regions, normal merit increases in April 2026 and increased life and health insurance costs due to increased claims. Equipment, occupancy and data processing expenses increased by $0.3 million  as a result of the implementation of new loan origination software in late 2025.  Other expenses, such as marketing and contract labor, increased slightly and were offset by decreases in professional services and other real estate owned ("OREO") expenses and contributions.

Third Quarter 2026 Compared to Second Quarter 2026

Compared to the linked quarter, net income increased by $1.5 million driven by an increase in net interest income of $1.0 million as a result of increased yields on loans and reduced funding costs and an increase of $0.2 million in other operating income, inclusive of net gains.  The increase in net gains was due to gains on sales of mortgages to the secondary market and the receipt of funds related to a branch sale in late 2025.   Other miscellaneous income increased as a result of a one-time cash receipt of incentives related to check fees and the increased other expenses in the second quarter as a result of the one-time third-party expense incurred for core contract negotiations.  An increase of $1.2 million in the provision for credit losses was recognized due to the growth in loans and unfunded commitments experienced in the third quarter as well as the continued economic and political uncertainty. 

Year to date 2026 compared to Year to date 2025

Net income for the nine months ended September 30, 2026 was $19.5 million on a GAAP basis, inclusive of a $1.7 million, net of tax, consulting fee incurred on core contract negotiations completed in the second quarter, and $21.1 million on a non-GAAP basis compared to GAAP and non-GAAP basis income of $18.7 million for the nine months ended September 30, 2025.  The year-over-year increase of $0.8 million was attributable to a $6.1 million increase in net interest income driven by the continued increase on the yield on earning assets and overall decrease in funding costs, an increase in other non-interest income of $1.0 million, inclusive of net gains, as a result of increased trust and brokerage income of $0.8 million, and increased bank owned life insurance ("BOLI") income of $0.3 million related to a one-time death benefit received in the first quarter of 2026, partially offset by an increase in other operating expenses of $4.7 million driven by the aforementioned consulting fee, increased salaries and benefits of $2.2 million and an increase in equipment, occupancy and data processing expenses of $0.6 million, primarily due to the implementation of a new loan origination software in late 2025.  The increase in salaries and benefits was the result of new hires to complete the build out of talent in our West and East regions, annual merit increases in April 2026, increased incentives related to the accruals for projected annual payouts, and increased life and health insurance costs due to higher claims, partially offset by the reduction of costs associated with loan originations.

Net Interest Income and Net Interest Margin

Third Quarter 2026 Compared to Third Quarter 2025

Net interest income, on a non-GAAP, FTE basis, increased by $2.2 million for the third quarter of 2026 when compared to the third quarter of 2025.  This increase was driven by an increase of $1.2 million in interest income.  Interest income on loans increased by $1.8 million due to the increase of 16 basis points in overall yield on the loan portfolio as a result of growth in average balances of $78.8 million and the continued upward repricing of adjustable-rate loans.  Investment income remained stable year over year.  Interest income on federal funds sold decreased by $0.5 million due to a decrease of $18.5 million in average cash balances held at the Federal Reserve Bank as a result of funding the loan growth in the third quarter of 2026.  Interest expense decreased by $1.0 million in the third quarter of 2026 when compared to the third quarter of 2025.  Interest on deposits decreased by $0.2 million despite a $65.1 million increase in average deposit balances, primarily in interest bearing demand and money market deposits, primarily in our value money market product as customers desire to maintain liquid funding. Interest expense on long-term borrowings decreased $0.8 million due to an $86.7 million decrease in average balances for the third quarter of 2026 when compared to the same period of 2025, primarily related to the repayment of $25.0 million and $65.0 million of FHLB advances at their maturities in September 2025 and March 2026, respectively.

Third Quarter 2026 Compared to Second Quarter 2026

Comparing the third quarter of 2026 to the second quarter of 2026, net interest income, on a non-GAAP, FTE basis, increased by $1.0 million.  Interest income increased by $0.8 million driven by an increase in average loan balances of $31.3 million in the third quarter of 2026 and a 9 basis point increase in yield.  Interest expense decreased by $0.2 million when comparing the third quarter of 2026 to the second quarter of 2026.  While we saw an increase in average deposit balances of $2.6 million, we continue to be focused on funding costs and recognized a decrease of 9 basis points.  Management's strategic focus on margin management during the third quarter of 2026 resulted in a 7 basis point increase in the net interest margin to 4.05% compared to 3.98% for the second quarter of 2026.

Year to date 2026 compared to Year to date 2025

Comparing the nine months ended September 30, 2026 to the nine months ended September 30, 2025, net interest income, on a non-GAAP, FTE basis, increased by $6.2 million.  Interest income increased by $4.2 million, primarily driven by an increase of $4.1 million on interest and fees on loans, as average loan balances increased by $53.0 million and the yield increased by 15 basis points.  Interest expense on interest-bearing liabilities decreased by $2.0 million despite an increase in average deposit balances of $79.6 million driven by increases of $28.7 million in demand deposit accounts and $84.1 million in retail money market balances, partially offset by decreases in savings balances of $9.4 million and brokered time deposits of $24.7 million.  Interest expense on short-term borrowings remained stable and interest expense on long-term borrowings decreased by $2.0 million as a result of a decrease in average balances of $70.3 million,  due to the repayment of $65.0 million of FHLB advances at their maturities in March 2026.  The net interest margin for the nine months ended September 30, 2026 was 3.94% compared to 3.64% for the nine months ended September 30, 2025.

Non-Interest Income

Third Quarter 2026 Compared to Third Quarter 2025

Other operating income, inclusive of net gains, increased by $0.3 million driven by an increase in trust and brokerage income of $0.3 million as a result of increased production of new accounts as well as favorable market values in assets under management.  Net gains decreased by $0.1 million as new residential mortgage production is more favorable to book to our in-house portfolio as compared to selling to secondary market outlets. Debit card income, service charge income and BOLI income were stable when comparing the quarters.

Third Quarter 2026 Compared to Second Quarter 2026

On a linked quarter basis, other operating income, inclusive of net gains, increased by $0.2 million.  Net gains increased by $0.1 million as a result of the receipt of proceeds on the previously recorded branch office sale as well as an increase in gains on sale of mortgages. Check fees increased by $0.1 million when comparing the third quarter of 2026 to the linked quarter as a result of a one-time cash incentive received during the third quarter.

Year to date 2026 compared to Year to date 2025

Comparing the nine months ended September 30, 2026 to the same period of 2025, other operating income, inclusive of net gains, increased by $1.0 million. The increase was primarily driven by an increase in trust and brokerage income of $0.8 million as a result of increased production of new business as well as favorable market values in assets under management, a $0.1 million increase in debit card income, and an increase in BOLI income of $0.3 million as previously mentioned, partially offset by a reduction in net gains as new production of residential mortgage loans were booked in house rather than selling them to the secondary market.

Non-Interest Expense

Third Quarter 2026 Compared to Third Quarter 2025

Other operating expenses increased by $0.8 million driven by a $0.5 million increase in salaries and benefits as a result of new hires to complete the build out of our West and East regions, normal merit increases in April 2026 and increased life and health insurance costs due to increased claims in the third quarter of 2026, partially offset by the reduction of costs associated with loan originations.  Equipment, occupancy and data processing expenses increased $0.3 million as a result of the implementation of a new loan origination software in late 2025.  These increases were partially offset by reductions in professional services and  OREO expenses and contributions.

Third Quarter 2026 Compared to Second Quarter 2026

Other operating expenses decreased by $2.0 million driven by the one-time, $1.7 million, net of tax, consulting fee incurred with core contract negotiations in the second quarter. All other expenses were stable when comparing the third quarter of 2026 to the second quarter of 2026 as we continue a strategic focus on expense control.

Year to date 2026 compared to Year to date 2025

Comparing the nine months ended September 30, 2026 to the same period of 2025, other operating expenses increased by $4.7 million primarily driven by the one-time, third-party consulting expense incurred for core contract negotiations discussed above, a $2.2 million increase in salaries and benefits as a result of new hires to complete the build out of talent in our West and East regions, normal merit increases in April 2026, increased incentives related to the accrual for projected annual payouts, increased life and health insurance costs due to higher claims, partially offset by the reductions of costs associated with loan originations, and an increase in equipment, occupancy and data processing expenses of $0.6 million, primarily due to a new loan origination software implementation in late 2025. 

The effective income tax rates, as a percentage of income, for the nine-month periods ended September 30, 2026 and 2025 were 24.1% and 24.7%, respectively. 

Balance Sheet Overview

Total assets at September 30, 2026 were $2.1 billion, representing a $10.6 million increase since December 31, 2025.  During the first nine months of 2026, gross loans increased by $83.7 million and the pension assets increased $2.3 million due to increased market values.  These increases were partially offset by a $56.7 million decrease in cash and interest-bearing deposits in other banks, a decrease in the investment portfolio of $8.3 million related to principal and interest cashflows, and a decrease in the investments in bank stock related to the reduction in FHLB stock that resulted from the full repayment of borrowings in March 2026.

Total liabilities at September 30, 2026 were $1.9 billion, representing a $0.2 million increase since December 31, 2025.  Total deposits increased by $52.6 million when compared to December 31, 2025.  Non-interest-bearing demand deposits slightly increased by $2.1 million, savings and money market accounts increased by $45.0 million due primarily to the expansion of current and new relationships throughout the first nine months of 2026 and interest-bearing demand deposits increased $61.0 million, primarily related to municipality accounts. A total of $50.0 million in brokered certificates of deposit were fully repaid in January 2026 and July 2026 at their maturities. Retail time deposits decreased by $5.5 million since December 31, 2025.  Short-term borrowings increased by $15.2 million at September 30, 2026 when compared to December 31, 2025 as a result of overnight borrowings in anticipation of loan funding.  These borrowings were subsequently fully repaid in October 2026.

Outstanding loans of $1.6 billion at September 30, 2026 reflected an $83.7 million increase since December 31, 2025.

Loan Type (in millions)	Change since June 30, 2026					Change since December 31, 2025
Commercial	$ 7.2					$39.1
Residential Mortgages	$17.0					$27.2
Consumer	$  9.1					$17.4
Gross Loans	$33.3					$83.7

Since December 31, 2025, commercial real estate loans increased by $45.7 million as a result of new business relationships as well as additional growth in existing relationships; acquisition and development loans increased by $34.1 million; commercial and industrial loans decreased by $40.7 million as a result of payoffs related to approximately $15.0 million due to competitive pricing, approximately $7.3 million related to sales of businesses, approximately $18.0 million due to a loan refinancing with another institution, and the payoff of a floorplan line of credit.  Residential mortgage loans increased by $27.2 million as a result of robust mortgage production booked in house as opposed to selling to the secondary market outlets, offset slightly by normal amortization.  Consumer loans increased by $17.4 million related to the purchases of approximately $18.0 million in consumer loan pools in the second and third quarters of 2026, offset by normal paydowns.

New commercial loan production for the third quarter of 2026 was approximately $115.0 million.  The pipeline of commercial loans as of September 30, 2026 was $138.0 million and unfunded committed commercial construction loans totaled approximately $37.0 million.  Commercial amortization and payoffs were approximately $137.0 million through September 30, 2026, 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 third quarter of 2026 was approximately $34.7 million, with most of that production comprised of in-house mortgages.  The pipeline of in-house, portfolio loans as of September 30, 2026 was $29.8 million.  Unfunded commitments related to residential construction loans totaled $26.0 million at September 30, 2026.  

Total deposits of $1.8 billion at September 30, 2026, representing an increase of $52.6 million when compared to December 31, 2025.

Deposit Type (in millions)		Change since June 30, 2026	Change since December 31, 2025
Non-Interest-Bearing		$13.8	$2.1
Interest-Bearing Demand		$47.7	$61.0
Savings and Money Market		$17.4	$45.0
Time Deposits- Brokered		($25.0)	($50.0)
Time Deposits- Retail		($1.7)	($5.5)
Total Deposits		$52.2	$52.6

Non-interest-bearing demand deposits increased by $2.1 million, savings and money market accounts increased by $45.0 million due primarily to the expansion of current and new relationships throughout the first nine months of 2026 primarily in our value money market product as customers continue to desire liquid funds and interest-bearing demand deposits increased $61.0 million, primarily related to municipality accounts.  Brokered certificates of deposit were fully repaid at their maturities in January and July 2026.  Retail time deposits decreased by $5.5 million since December 31, 2025. 

The book value of the Corporation's common stock was $33.15 per share at September 30, 2026 compared to $31.33 per share at December 31, 2025.  At September 30, 2026, there were 6,456,055 basic outstanding shares and 6,464,823 diluted outstanding shares of common stock.  The increase in the book value at September 30, 2026 was due to the undistributed net income of $14.4 million for the first nine months of 2026.

Asset Quality

The allowance for credit losses ("ACL") was $21.8 million at September 30, 2026 compared to $19.1 million at September 30, 2025 and $19.5 million at December 31, 2025.  The provision for credit losses was $1.9 million for the quarter ended September 30, 2026 compared to $0.8 million for the quarter ended June 30, 2026 and $0.5 million for the quarter ended September 30, 2025.  Provision for credit losses was $3.6 million and $2.0 million for the first nine months of 2026 and 2025, respectively.  The increase in the provision for credit losses in the third quarter of 2026 was primarily attributable to solid loan growth as well as growth in the unfunded commitments of approximately $39.0 million during the quarter, and the continued economic and political uncertainty.  Asset quality remained strong during the first nine months of 2026.  Net charge-offs of $0.1 million were recorded for the quarter ended September 30, 2026 compared to net charge-offs of $0.4 million for the quarter ended September 30, 2025 and $0.1 million for the quarter ended June 30, 2026. The ratio of the ACL to loans outstanding was 1.36% at September 30, 2026 compared to 1.28% at December 31, 2025 and 1.28% at September 30, 2025. 

The ratio of net charge offs to average loans was 0.04% and 0.08% for the nine-month periods ended September 30, 2026 and 2025, respectively.  The commercial and industrial portfolio had net charge offs of 0.06% and 0.41% for the nine-month periods ended September 30, 2026 and 2025, respectively.  The acquisition and development portfolio had net recoveries of 0.02% and 0.42% for the nine-month periods ended September 30, 2026 and 2025, respectively.  The decrease in net recoveries was due primarily to recoveries recognized in 2025 related to one relationship previously charged off in 2016.  Net charge offs in consumer loans decreased in the first nine months of 2026 when compared to the first nine months of 2025 from 1.06% to 0.91%.  The decrease was primarily driven by charge-offs in unsecured consumer loans in 2025.  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
	09/30/2026	09/30/2025
Loan Type	(Charge Off) / Recovery	(Charge Off) / Recovery
Commercial Real Estate	0.00 %	0.00 %
Acquisition & Development	0.02 %	0.42 %
Commercial & Industrial	(0.06 %)	(0.41 %)
Residential Mortgage	0.01 %	0.01 %
Consumer	(0.91 %)	(1.06 %)
Total Net Charge Offs	(0.04 %)	(0.08 %)

Non-accrual loans totaled $3.2 million at September 30, 2026 compared to $4.2 million at December 31, 2025.  The decrease in non-accrual balances at September 30, 2026 was related to a large paydown on one commercial and industrial loan. 

Non-accrual loans that have been subject to partial charge-offs totaled $41,000 at September 30, 2026 and $0.2 million at December 31, 2025.  Loans secured by 1-4 family residential real estate properties in the process of foreclosure totaled $1.3 million at September 30, 2026 and $0.5 million at December 31, 2025.  The increase was primarily related to one residential mortgage loan of approximately $1.1 million.  As a percentage of the loan portfolio, accruing loans past due 30 days or more increased to 0.45% at September 30, 2026 compared to 0.32% at December 31, 2025 and 0.26% as of September 30, 2025.  This increase was attributable to one large non-owner occupied commercial real estate loan.

Loans that have been modified in accordance with ASU 2022-02 increased from $1.2 million at December 31, 2025 to $6.9 million at September 30, 2026.  The increase was due to one large commercial and industrial loan of $5.9 million that had a term extension accommodation completed in the third quarter of 2026.

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- OakFirst 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 and the impact that any such events have on our critical accounting assumptions and estimates made as of September 30, 2026, 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					Nine Months Ended
				September 30,		September 30,		September 30,		September 30,
				2026		2025		2026		2025
Results of Operations:
Interest income				$                26,979		$                25,762		$                78,859		$                 74,695
Interest expense				7,365		8,359		22,585		24,569
Net interest income				19,614		17,403		56,274		50,126
Provision for credit losses				1,930		510		3,590		2,026
Other operating income				5,486		5,074		16,013		14,836
Net gains				121		261		292		499
Other operating expense				13,815		12,986		43,273		38,536
Income before taxes				$                  9,476		$                  9,242		$                25,716		$                 24,899
Income tax expense				2,295		2,294		6,205		6,161
Net income				$                  7,181		$                  6,948		$                19,511		$                 18,738
Per share data:
Basic net income per share				$                    1.11		$                    1.07		$                    3.02		$                     2.89
Diluted net income per share				$                    1.11		$                    1.07		$                    3.01		$                     2.88
Adjusted Basic net income (1)				$                    1.11		$                    1.07		$                    3.27		$                     2.89
Adjusted Diluted net income (1)				$                    1.11		$                    1.07		$                    3.26		$                     2.88
Dividends declared per share				$                    0.28		$                    0.26		$                    0.80		$                     0.70
Book value				$                  33.15		$                  30.65
Diluted book value				$                  33.10		$                  30.59
Tangible book value per share				$                  31.41		$                  28.87
Diluted Tangible book value per share				$                  31.37		$                  28.82
Closing market value				$                  42.77		$                  36.77
Market Range:
High				$                  46.18		$                  38.41
Low				$                  42.16		$                  32.02
Shares outstanding at period end: Basic				6,456,055		6,496,908
Shares outstanding at period end: Diluted				6,464,823		6,508,790
Performance ratios: (Year to Date Period End, annualized)
Return on average assets				1.26 %		1.24 %
Adjusted return on average assets (1)				1.36 %		1.24 %
Return on average shareholders' equity				12.37 %		13.23 %
Adjusted return on average shareholders' equity (1)				13.38 %		13.23 %
Net interest margin (Non-GAAP), includes tax exempt income of $221 and $160				3.94 %		3.64 %
Net interest margin GAAP				3.93 %		3.63 %
Efficiency ratio - non-GAAP (2)				56.51 %		58.73 %
(1) See reconciliation of this non-GAAP financial measure provided elsewhere herein.
(2) 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 and costs incurred on core contract renewal.				September 30,		December 31,
				2026		2025
Financial Condition at period end:
Assets				$           2,098,046		$           2,087,453
Earning assets				$           1,879,432		$           1,807,780
Gross loans				$           1,605,422		$           1,521,704
Commercial Real Estate				$              616,483		$              570,808
Acquisition and Development				$              124,429		$                90,272
Commercial and Industrial				$              236,362		$              277,034
Residential Mortgage				$              564,073		$              536,912
Consumer				$                64,075		$                46,678
Investment securities				$              271,242		$              279,534
Total deposits				$           1,787,729		$           1,735,149
Noninterest bearing				$              455,127		$              453,036
Interest bearing				$           1,332,602		$           1,282,113
Shareholders' equity				$              213,988		$              203,634
Capital ratios:
Tier 1 to risk weighted assets				15.34 %		15.36 %
Common Equity Tier 1 to risk weighted assets				13.59 %		13.52 %
Tier 1 Leverage				12.83 %		12.21 %
Total risk based capital				16.60 %		16.61 %
Asset quality:
Net charge-offs for the quarter				$                    (138)		$                      (99)
Nonperforming assets: (Period End)
Nonaccrual loans				$                  3,162		$                  4,192
Loans 90 days past due and accruing				604		477
Total nonperforming loans and 90 day past due				$                  3,766		$                  4,669
Other real estate owned				$                          -		$                  1,083
Other repossessed assets				$                  2,692		$                  2,802
Modified loans				$                  6,913		$                  1,209
Allowance for credit losses to gross loans				1.36 %		1.28 %
Allowance for credit losses to non-accrual loans				688.20 %		464.46 %
Allowance for credit losses to non-performing assets				336.96 %		227.61 %
Non-performing and 90 day past due loans to total loans				0.23 %		0.31 %
Non-performing loans and 90 day past due loans to total assets				0.18 %		0.22 %
Non-accrual loans to total loans				0.20 %		0.28 %
Non-performing assets to total assets				0.31 %		0.41 %

 

FIRST UNITED CORPORATION
Oakland, MD
Stock Symbol :  FUNC
Financial Highlights - Unaudited
			September 30,	June 30,	March 31,	December 31,	September 30,	June 30,	March 31,
(Dollars in thousands, except per share data)			2026	2026	2026	2025	2025	2025	2025
Results of Operations:
Interest income			$                  26,979	$           26,169	$             25,711	$             26,153	$                25,762	$          24,871	$        24,062
Interest expense			7,365	7,583	7,637	8,166	8,359	8,164	8,046
Net interest income			19,614	18,586	18,074	17,987	17,403	16,707	16,016
Provision for credit losses			1,930	781	879	717	510	860	656
Other operating income			5,486	5,319	5,208	5,330	5,074	4,940	4,822
Net gains			121	39	132	(97)	261	146	92
Other operating expense			13,815	15,765	13,693	14,869	12,986	12,974	12,576
Income before taxes			$                    9,476	$             7,398	$               8,842	$               7,634	$                  9,242	$            7,959	$          7,698
Income tax expense			2,295	1,731	2,179	1,857	2,294	1,975	1,892
Net income			$                    7,181	$             5,667	$               6,663	$               5,777	$                  6,948	$            5,984	$          5,806
Per share data:
Basic net income per share			$                      1.11	$               0.88	$                 1.03	$                 0.89	$                    1.07	$              0.92	$            0.90
Diluted net income per share			$                      1.11	$               0.88	$                 1.03	$                 0.89	$                    1.07	$              0.92	$            0.89
Adjusted basic net income (1)			$                      1.11	$               1.14	$                 1.02	$                 1.10	$                    1.07	$              0.92	$            0.90
Adjusted diluted net income (1)			$                      1.11	$               1.14	$                 1.02	$                 1.10	$                    1.07	$              0.92	$            0.89
Dividends declared per share			$                      0.28	$               0.26	$                 0.26	$                 0.26	$                    0.26	$              0.22	$            0.22
Book value			$                    33.15	$             32.91	$               31.84	$               31.33	$                  30.65	$            29.43	$          28.35
Diluted book value			$                    33.10	$             32.86	$               31.78	$               31.27	$                  30.59	$            29.38	$          28.27
Tangible book value per share			$                    31.41	$             31.16	$               30.08	$               29.56	$                  28.87	$            27.64	$          26.55
Diluted Tangible book value per share			$                    31.37	$             31.12	$               30.02	$               29.50	$                  28.82	$            27.59	$          26.47
Closing market value			$                    42.77	$             44.11	$               36.64	$               37.19	$                  36.77	$            31.01	$          30.02
Market Range:
High			$                    46.18	$             45.98	$               40.53	$               40.79	$                  38.41	$            32.09	$          41.61
Low			$                    42.16	$             36.27	$               35.02	$               33.63	$                  32.02	$            25.90	$          29.38
Shares outstanding at period end: Basic			6,456,055	6,453,836	6,446,717	6,499,476	6,496,908	6,494,611	6,478,634
Shares outstanding at period end: Diluted			6,464,823	6,462,604	6,459,155	6,511,358	6,508,790	6,506,493	6,497,454
Performance ratios: (Year to Date Period End, annualized)
Return on average assets			1.26 %	1.20 %	1.29 %	1.21 %	1.24 %	1.20 %	1.19 %
Adjusted return on average assets (1)			1.36 %	1.36 %	1.28 %	1.28 %	1.24 %	1.20 %	1.19 %
Return on average shareholders' equity			12.37 %	11.92 %	13.06 %	12.70 %	13.23 %	12.78 %	12.83 %
Adjusted return on average shareholders' equity (1)			13.38 %	13.49 %	12.99 %	13.39 %	13.23 %	12.78 %	12.83 %
Net interest margin (Non-GAAP), includes tax exempt income of $221 and $160			3.94 %	3.89 %	3.83 %	3.67 %	3.64 %	3.61 %	3.56 %
Net interest margin GAAP			3.93 %	3.87 %	3.82 %	3.66 %	3.63 %	3.60 %	3.55 %
Efficiency ratio - non-GAAP (2)			56.51 %	57.49 %	58.45 %	58.19 %	58.73 %	59.66 %	59.95 %
(1) See reconciliation of this non-GAAP financial measure provided elsewhere herein.
(2) 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 and costs incurred on core contract renewal.			September 30,	June 30,	March 31,	December 31,	September 30,	June 30,	March 31,
			2026	2026	2026	2025	2025	2025	2025
Financial Condition at period end:
Assets			$             2,098,046	$      2,082,092	$        2,039,010	$        2,087,453	$           2,023,974	$     2,007,471	$   1,979,753
Earning assets			$             1,879,432	$      1,854,045	$        1,810,557	$        1,807,780	$           1,784,056	$     1,789,747	$   1,762,891
Gross loans			$             1,605,422	$      1,572,131	$        1,525,466	$        1,521,704	$           1,496,762	$     1,502,481	$   1,479,869
Commercial Real Estate			$                616,483	$         625,821	$           609,491	$           570,808	$              554,418	$        550,717	$      532,764
Acquisition and Development			$                124,429	$         102,211	$             97,785	$             90,272	$                93,968	$          98,937	$        94,063
Commercial and Industrial			$                236,362	$         242,013	$           246,192	$           277,034	$              279,079	$        281,484	$      282,370
Residential Mortgage			$                564,073	$         547,118	$           526,314	$           536,912	$              521,317	$        521,968	$      520,072
Consumer			$                  64,075	$           54,968	$             45,684	$             46,678	$                47,980	$          49,375	$        50,600
Investment securities			$                271,242	$         279,300	$           282,711	$           279,534	$              278,898	$        279,541	$      275,143
Total deposits			$             1,787,729	$      1,735,513	$        1,750,703	$        1,735,149	$           1,678,902	$     1,614,207	$   1,623,574
Noninterest bearing			$                455,127	$         441,365	$           451,303	$           453,036	$              429,986	$        425,784	$      422,415
Interest bearing			$             1,332,602	$      1,294,148	$        1,299,400	$        1,282,113	$           1,248,916	$     1,188,423	$   1,201,159
Shareholders' equity			$                213,988	$         212,374	$           205,262	$           203,634	$              199,099	$        191,147	$      183,694
Capital ratios:
Tier 1 to risk weighted assets			15.34 %	15.26 %	15.82 %	15.36 %	15.59 %	15.22 %	14.87 %
Common Equity Tier 1 to risk weighted assets			13.59 %	13.48 %	13.94 %	13.52 %	13.68 %	13.32 %	12.97 %
Tier 1 Leverage			12.83 %	12.70 %	12.23 %	12.21 %	12.10 %	12.08 %	11.94 %
Total risk based capital			16.60 %	16.51 %	17.07 %	16.61 %	16.84 %	16.47 %	16.10 %
Asset quality:
Net (charge-offs)/recoveries for the quarter			$                      (138)	$                 (96)	$                 (198)	$                   (99)	$                    (435)	$             (151)	$            (360)
Nonperforming assets: (Period End)
Nonaccrual loans			$                    3,162	$             4,514	$               4,695	$               4,192	$                  3,825	$            3,813	$          4,026
Loans 90 days past due and accruing			604	391	66	477	801	535	233
Total nonperforming loans and 90 day past due			$                    3,766	$             4,905	$               4,761	$               4,669	$                  4,626	$            4,348	$          4,259
Other real estate owned			$                            -	$                     -	$               1,083	$               1,083	$                  2,718	$            3,035	$          3,062
Other repossessed assets			$                    2,692	$             2,780	$               2,692	$               2,802	$                  3,043	$            2,802	$          2,802
Modified loans			$                    6,913	$             1,199	$               1,955	$               1,209	$                     998	$            1,198	$          1,021
Allowance for credit losses to gross loans			1.36 %	1.31 %	1.31 %	1.28 %	1.28 %	1.27 %	1.25 %
Allowance for credit losses to non-accrual loans			688.20 %	456.16 %	424.94 %	464.46 %	499.06 %	499.45 %	458.69 %
Allowance for credit losses to non-performing assets			336.96 %	267.94 %	233.73 %	227.61 %	183.78 %	186.98 %	182.43 %
Non-performing and 90 day past due loans to total loans			0.23 %	0.31 %	0.31 %	0.31 %	0.31 %	0.29 %	0.29 %
Non-performing loans and 90 day past due loans to total assets			0.18 %	0.24 %	0.23 %	0.22 %	0.23 %	0.22 %	0.22 %
Non-accrual loans to total loans			0.20 %	0.29 %	0.31 %	0.28 %	0.26 %	0.25 %	0.27 %
Non-performing assets to total assets			0.31 %	0.37 %	0.42 %	0.41 %	0.51 %	0.51 %	0.51 %

 

Consolidated Statement of Condition
(Dollars in thousands - Unaudited)		September 30, 2026		June 30, 2026		March 31, 2026		December 31, 2025
Assets
Cash and due from banks	$	73,725	$	84,195	$	89,220	$	129,830
Interest bearing deposits in banks		1,147		993		627		1,782
Cash and cash equivalents		74,872		85,188		89,847		131,612
Investment securities – available for sale (at fair value)		101,978		107,997		109,004		107,144
Investment securities – held to maturity (at cost)		168,212		170,259		172,672		171,361
Equity investments with readily determinable fair market values		1,052		1,044		1,035		1,029
Restricted investment in bank stock, at cost		1,621		1,621		1,621		4,630
Loans held for sale		—		—		132		130
Loans		1,605,422		1,572,131		1,525,466		1,521,704
Unearned fees		(711)		(592)		(512)		(476)
Allowance for credit losses		(21,761)		(20,591)		(19,951)		(19,470)
Net loans		1,582,950		1,550,948		1,505,003		1,501,758
Premises and equipment, net		29,149		29,550		30,020		29,665
Goodwill and other intangible assets		11,196		11,279		11,361		11,444
Bank owned life insurance		50,884		50,501		50,125		50,360
Deferred tax assets		9,499		8,072		9,141		8,730
Other real estate owned, net		—		—		1,083		1,083
Operating lease asset		788		862		939		1,015
Pension asset		23,140		24,044		20,036		20,798
Accrued interest receivable and other assets		42,705		40,727		36,991		46,694
Total Assets	$	2,098,046	$	2,082,092	$	2,039,010	$	2,087,453
Liabilities and Shareholders' Equity
Liabilities:
Non-interest bearing deposits	$	455,127	$	441,365	$	451,303	$	453,036
Interest bearing deposits		1,332,602		1,294,148		1,299,400		1,282,113
Total deposits		1,787,729		1,735,513		1,750,703		1,735,149
Short-term borrowings		32,838		69,233		19,588		17,661
Long-term borrowings		30,929		30,929		30,929		95,929
Operating lease liability		927		1,009		1,095		1,180
Allowance for credit loss on off balance sheet exposures		2,074		1,463		1,418		1,218
Accrued interest payable and other liabilities		27,753		29,893		28,323		30,992
Dividends payable		1,808		1,678		1,692		1,690
Total Liabilities		1,884,058		1,869,718		1,833,748		1,883,819
Shareholders' Equity:
Common Stock – par value $0.01 per share; Authorized 25,000,000 shares; issued and outstanding 6,456,055 shares at September 30, 2026, and 6,499,476 at December 31, 2025		65		64		64		65
Surplus		19,706		19,514		19,360		21,551
Retained earnings		221,636		216,262		212,255		207,284
Accumulated other comprehensive loss		(27,419)		(23,466)		(26,417)		(25,266)
Total Shareholders' Equity		213,988		212,374		205,262		203,634
Total Liabilities and Shareholders' Equity	$	2,098,046	$	2,082,092	$	2,039,010	$	2,087,453

 

Historical Income Statement
		2026						2025
	Q3		Q2			Q1		Year to date		Q4		Q3	Q2		Q1
In thousands	(Unaudited)
Interest income
Interest and fees on loans	$	24,861	$	23,779	$	22,502	$	90,328	$	23,219	$	23,060	$	22,294	$	21,755
Interest on investment securities
Taxable		1,837		1,907		1,880		7,210		1,845		1,826		1,776		1,763
Exempt from federal income tax		59		59		59		218		59		57		57		45
Total investment income		1,896		1,966		1,939		7,428		1,904		1,883		1,833		1,808
Other		222		424		1,270		3,092		1,030		819		744		499
Total interest income		26,979		26,169		25,711		100,848		26,153		25,762		24,871		24,062
Interest expense
Interest on deposits		6,784		7,033		6,631		27,524		7,044		7,009		6,788		6,683
Interest on short-term borrowings		50		26		11		75		17		17		21		20
Interest on long-term borrowings		531		524		995		5,136		1,105		1,333		1,355		1,343
Total interest expense		7,365		7,583		7,637		32,735		8,166		8,359		8,164		8,046
Net interest income		19,614		18,586		18,074		68,113		17,987		17,403		16,707		16,016
Credit loss expense/(credit)
Loans		1,308		736		679		2,345		480		480		728		657
Debt securities held to maturity		11		—		—		43		—		43		—		—
Off balance sheet credit exposures		611		45		200		355		237		(13)		132		(1)
Provision for credit losses		1,930		781		879		2,743		717		510		860		656
Net interest income after provision for credit losses		17,684		17,805		17,195		65,370		17,270		16,893		15,847		15,360
Other operating income
Net gains on investments, available for sale		—		—		—		97		—		97		—		—
Gains on sale of residential mortgage loans		89		39		86		533		132		163		146		92
Gains/(Losses) on disposal of fixed assets		32		—		46		(228)		(229)		1		—		—
Net gains/(losses)		121		39		132		402		(97)		261		146		92
Other Income
Service charges on deposit accounts		590		568		547		2,255		568		563		577		547
Other service charges		201		204		189		845		207		218		214		206
Trust department		2,723		2,684		2,554		9,824		2,667		2,448		2,386		2,323
Debit card income		1,045		1,046		931		4,057		1,173		980		983		921
Bank owned life insurance		384		376		539		1,408		364		355		348		341
Brokerage commissions		385		388		382		1,445		308		346		370		421
Other		158		53		66		332		43		164		62		63
Total other income		5,486		5,319		5,208		20,166		5,330		5,074		4,940		4,822
Total other operating income		5,607		5,358		5,340		20,568		5,233		5,335		5,086		4,914
Other operating expenses
Salaries and employee benefits		8,122		8,157		8,201		29,347		7,108		7,589		7,319		7,331
FDIC premiums		280		274		279		1,051		273		266		267		245
Equipment		484		525		521		2,217		559		515		565		578
Occupancy		683		690		725		2,860		817		679		675		689
Data processing		1,845		1,739		1,664		6,243		1,623		1,517		1,600		1,503
Marketing		263		193		234		904		288		182		196		238
Professional services		599		2,702		570		2,449		745		639		589		476
Contract labor		156		189		166		634		178		127		166		163
Telephone		96		93		96		380		97		89		96		98
Other real estate owned		4		59		123		2,235		1,866		69		208		92
Investor relations		60		85		60		306		55		57		132		62
Contributions		66		81		65		344		120		90		78		56
Other		1,157		978		989		4,435		1,140		1,167		1,083		1,045
Total other operating expenses		13,815		15,765		13,693		53,405		14,869		12,986		12,974		12,576
Income before income tax expense		9,476		7,398		8,842		32,533		7,634		9,242		7,959		7,698
Provision for income tax expense		2,295		1,731		2,179		8,018		1,857		2,294		1,975		1,892
Net Income	$	7,181	$	5,667	$	6,663	$	24,515	$	5,777	$	6,948	$	5,984	$	5,806
Basic net income per common share	$	1.11	$	0.88	$	1.03	$	3.78	$	0.89	$	1.07	$	0.92	$	0.90
Diluted net income per common share	$	1.11	$	0.88	$	1.03	$	3.77	$	0.89	$	1.07	$	0.92	$	0.89
Weighted average number of basic shares outstanding		6,455		6,451		6,483		6,490		6,499		6,496		6,489		6,474
Weighted average number of diluted shares outstanding		6,464		6,461		6,494		6,504		6,510		6,508		6,506		6,490
Dividends declared per common share	$	0.28	$	0.26	$	0.26	$	0.96	$	0.26	$	0.26	$	0.22	$	0.22

 

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 gains on disposal of fixed assets and consulting fees incurred with core processing contract in 2026.
		Three months ended September 30,						Nine months ended September 30,
		2026			2025			2026			2025
(in thousands, except for per share amount)
Net income - as reported		$	7,181		$	6,948		$	19,511		$	18,738
Adjustments:
Gain on disposal of fixed assets			(32)			—			(78)			—
Consulting fee on core processing contract			—			—			2,179			—
Income tax effect of adjustments			8			—			(508)			—
Adjusted net income (non-GAAP)		$	7,157		$	6,948		$	21,104		$	18,738
Basic earnings per share - as reported		$	1.11		$	1.07		$	3.02		$	2.89
Adjustments:
Gain on disposal of fixed assets			—			—			(0.01)			—
Consulting fee on core processing contract			—			—			0.26			—
Adjusted basic earnings per share (non-GAAP)		$	1.11		$	1.07		$	3.27		$	2.89
Diluted earnings per share - as reported		$	1.11		$	1.07		$	3.01		$	2.88
Adjustments:
Gain on disposal of fixed assets			—			—			(0.01)			—
Consulting fee on core processing contract			—			—			0.26			—
Adjusted diluted earnings per share (non-GAAP)		$	1.11		$	1.07		$	3.26		$	2.88
		As of or for the three months ended						As of or for the nine months ended
		September 30,						September 30,
(in thousands, except per share data)		2026			2025			2026			2025
Per Share Data
Basic net income per share - as reported		$	1.11		$	1.07		$	3.02		$	2.89
Basic net income per share - non-GAAP			1.11			1.07			3.27			2.89
Diluted net income per share - as reported		$	1.11		$	1.07		$	3.01		$	2.88
Diluted net income per share - non-GAAP			1.11			1.07			3.26			2.88
Basic book value per share		$	33.15		$	30.65
Diluted book value per share			33.10			30.59
			As of or for the nine months ended
Significant Ratios:
			September 30,
		2026			2025
Return on Average Assets - as reported			1.26 %			1.24 %
Adjustments:
Gain on disposal of fixed assets			(0.01 %)			-
Consulting fee on core processing contract			0.11 %			-
Adjusted Return on Average Assets (non-GAAP)			1.36 %			1.24 %
Return on Average Equity - as reported			12.37 %			13.23 %
Gain on disposal of fixed assets			(0.04 %)			-
Consulting fee on core processing contract			1.05 %			-
Adjusted Return on Average Equity (non-GAAP)			13.38 %			13.23 %

 

		Three Months Ended
		September 30
		2026								2025
(dollars in thousands)		Average Balance			Interest			Average Yield/Rate		Average Balance			Interest			Average Yield/Rate
Assets
Loans		$	1,580,631		$	24,897		6.25	%	$	1,501,876			23,072		6.09	%
Investment Securities:
Taxable			286,479			1,837		2.54	%		285,623			1,826		2.54	%
Non taxable			7,480			106		5.62	%		7,516			102		5.38	%
Total			293,959			1,943		2.62	%		293,139			1,928		2.61	%
Federal funds sold			52,274			177		1.34	%		70,731			697		3.91	%
Interest-bearing deposits with other banks			1,102			14		5.04	%		5,324			30		2.24	%
Other interest earning assets			2,668			31		4.61	%		5,660			92		6.45	%
Total earning assets			1,930,634			27,062		5.56	%		1,876,730			25,819		5.46	%
Allowance for credit losses			(20,866)								(19,343)
Non-earning assets			160,300								185,364
Total Assets		$	2,070,068							$	2,042,751
Liabilities and Shareholders' Equity
Deposits
Interest-bearing demand deposits		$	406,335		$	1,798		1.76	%	$	367,771		$	1,509		1.63	%
Interest-bearing money markets- retail			569,149			3,848		2.68	%		489,088			3,834		3.11	%
Interest-bearing money markets- brokered			1			—		—	%		436			1		0.91	%
Savings deposits			156,736			39		0.10	%		163,433			43		0.10	%
Time deposits - retail			146,182			1,030		2.80	%		148,955			1,064		2.83	%
Time deposits - brokered			6,371			69		4.30	%		50,000			558		4.43	%
Total deposits			1,284,774			6,784		2.09	%		1,219,683			7,009		2.28	%
Short-term borrowings			20,732			50		0.96	%		21,378			17		0.32	%
Long-term borrowings			30,929			531		6.81	%		117,668			1,333		4.49	%
Total interest-bearing liabilities			1,336,435			7,365		2.19	%		1,358,729			8,359		2.44	%
Non-interest-bearing deposits			486,337								456,773
Other liabilities			31,965								31,020
Shareholders' Equity			215,331								196,229
Total Liabilities and Shareholders' Equity		$	2,070,068							$	2,042,751
Net interest income and spread					$	19,697		3.37	%				$	17,460		3.02	%
Net interest margin								4.05	%							3.69	%

 

		Nine Months Ended
		September 30,
		2026								2025
(dollars in thousands)		Average Balance			Interest			Average Yield/ Rate		Average Balance			Interest			Average Yield/ Rate
Assets
Loans		$	1,544,575		$	71,223		6.17	%	$	1,491,573		$	67,144		6.02	%
Investment Securities:
Taxable			289,495			5,624		2.60	%		285,293			5,365		2.51	%
Non taxable			7,488			317		5.66	%		7,158			284		5.30	%
Total			296,983			5,941		2.67	%		292,451			5,649		2.58	%
Federal funds sold			69,889			1,690		3.23	%		54,385			1,709		4.20	%
Interest-bearing deposits with other banks			1,433			43		4.01	%		3,899			65		2.23	%
Other interest earning assets			3,515			183		6.96	%		5,749			288		6.70	%
Total earning assets			1,916,395			79,080		5.52	%		1,848,057			74,855		5.42	%
Allowance for credit losses			(20,285)								(18,812)
Non-earning assets			172,002								184,309
Total Assets		$	2,068,112							$	2,013,554
Liabilities and Shareholders' Equity
Deposits
Interest-bearing demand deposits		$	397,119		$	5,066		1.71	%	$	368,384		$	4,682		1.70	%
Interest-bearing money markets- retail			559,723			11,276		2.69	%		475,592			10,958		3.08	%
Interest-bearing money markets- brokered			56			1		2.39	%		357			7		2.62	%
Savings deposits			158,512			120		0.10	%		167,905			131		0.10	%
Time deposits - retail			148,061			3,324		3.00	%		146,985			3,241		2.95	%
Time deposits - brokered			20,737			661		4.26	%		45,398			1,461		4.30	%
Total deposits			1,284,208			20,448		2.13	%		1,204,621			20,480		2.27	%
Short-term borrowings			19,755			87		0.59	%		21,408			58		0.36	%
Long-term borrowings			49,500			2,050		5.54	%		119,830			4,031		4.50	%
Total interest-bearing liabilities			1,353,463			22,585		2.23	%		1,345,859			24,569		2.44	%
Non-interest-bearing deposits			471,165								447,478
Other liabilities			32,645								30,795
Shareholders' Equity			210,839								189,422
Total Liabilities and Shareholders' Equity		$	2,068,112							$	2,013,554
Net interest income and spread					$	56,495		3.29	%				$	50,286		2.98	%
Net interest margin								3.94	%							3.64	%

 

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SOURCE First United Corporation

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were First United's third-quarter 2026 earnings?

First United reported GAAP net income of $7.2 million, or $1.11 per diluted share, for third-quarter 2026. That compares with $6.9 million, or $1.07 per diluted share, in third-quarter 2025 and $5.7 million, or $0.88 per diluted share, in second-quarter 2026.

Why did First United increase its third-quarter 2026 credit-loss provision?

First United attributed the higher provision to growth in loans and unfunded commitments, along with continued economic and political uncertainty. Third-quarter provision expense was $1.9 million, increasing $1.4 million from the year-earlier quarter and $1.2 million from the second quarter.

What consulting expense affected First United's second-quarter 2026 results?

First United incurred a one-time $1.7 million, net-of-tax consulting expense for negotiations with its core processor in second-quarter 2026. Third-quarter operating expenses subsequently decreased $2.0 million from the second quarter; all other expenses were stable sequentially.

What dividend did First United declare in third-quarter 2026?

First United declared a cash dividend of $0.28 per share in third-quarter 2026.