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First United Corp

FIRST UNITED CORPORATION ANNOUNCES FIRST QUARTER 2025 FINANCIAL RESULTS

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

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

First Quarter Financial Highlights:

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

Income Statement Overview

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

Q1 2025

Q4 2024

Q1 2024

Net Income, non-GAAP (millions)

$ 5.8

$ 6.2

$4.1

Net Income, GAAP (millions)

$ 5.8

$ 6.2

$ 3.7

Diluted net income per share, non-GAAP     

$ 0.89

$ 0.95

$ 0.62

Diluted net income per share, GAAP

$ 0.89

$ 0.95

$ 0.56

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

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

Net Interest Income and Net Interest Margin

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

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

Non-Interest Income

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

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

Non-Interest Expense

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

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

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

Balance Sheet Overview

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

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

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

Loan Type

(in millions)


Change since
December 31, 2024

Commercial


$0.0

Residential Mortgages     


$1.3

Consumer


($2.2)

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

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

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

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

Deposit Type

(in millions)


Change since
December 31, 2024

Non-Interest-Bearing


($4.3)

Interest-Bearing Demand          


($17.9)

Savings and Money Market


$18.7

Time Deposits- Brokered


$50.0

Time Deposits- Retail


$2.2

Total Deposits


$48.7

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

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

Asset Quality

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

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

Ratio of Net (Charge Offs)/Recoveries to Average Loans


3/31/2025

3/31/2024

Loan Type

(Charge Off) / Recovery

(Charge Off) / Recovery

Commercial Real Estate

0.00 %

0.03 %

Acquisition & Development

0.26 %

0.01 %

Commercial & Industrial

(0.50 %)

(0.12 %)

Residential Mortgage

0.01 %

0.01 %

Consumer

(0.65 %)

(2.89 %)

Total Net (Charge Offs)/Recoveries

(0.10 %)

(0.13 %)

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

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

ABOUT FIRST UNITED CORPORATION

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

FORWARD-LOOKING STATEMENTS

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

 

FIRST UNITED CORPORATION

Oakland, MD

Stock Symbol :  FUNC

Financial Highlights - Unaudited


(Dollars in thousands, except per share data)








Three Months Ended




March 31,


March 31,




2025


2024

Results of Operations:






Interest income 


$                24,062


$                21,898


Interest expense 


8,046


8,086


Net interest income


16,016


13,812


Provision for credit losses


656


946


Other operating income


4,822


4,793


Net gains


92


82


Other operating expense


12,576


12,881


Income before taxes


$                   7,698


$                   4,860


Income tax expense


1,892


1,162


Net income


$                   5,806


$                   3,698







Per share data:






Basic net income per share


$                     0.90


$                     0.56


Diluted net income per share


$                     0.89


$                     0.56


Adjusted Basic net income (1)


$                     0.90


$                     0.62


Adjusted Diluted net income (1)


$                     0.89


$                     0.62


Dividends declared per share


$                     0.22


$                     0.20


Book value


$                   28.35


$                   24.89


Diluted book value


$                   28.27


$                   24.86


Tangible book value per share


$                   26.55


$                   23.08


Diluted Tangible book value per share


$                   26.47


$                   23.05








Closing market value


$                   30.02


$                   22.91


Market Range:






    High


$                   41.61


$                   23.85


    Low


$                   29.38


$                   21.21







Shares outstanding at period end: Basic


6,478,634


6,648,645

Shares outstanding at period end: Diluted


6,497,454


6,657,239






Performance ratios: (Year to Date Period End, annualized)





Return on average assets


1.19 %


0.76 %

Adjusted return on average assets 


1.19 %


0.78 %

Return on average shareholders' equity


12.83 %


9.07 %

Adjusted return on average shareholders' equity 


12.83 %


9.33 %

Net interest margin (Non-GAAP), includes tax exempt income of $49 and $57


3.56 %


3.12 %

Net interest margin GAAP


3.55 %


3.10 %

Efficiency ratio - non-GAAP (1)


59.95 %


65.71 %






(1) Efficiency ratio is a non-GAAP measure calculated by dividing total operating expenses by the sum of tax equivalent net interest income and other operating income, less gains/(losses) on sales of securities and/or fixed assets.


March 31,


December 31



2025


2024

Financial Condition at period end:





Assets


$           1,979,753


$           1,973,022

Earning assets


$           1,762,891


$           1,758,665

Gross loans


$           1,479,869


$           1,480,793


Commercial Real Estate


$              532,764


$              526,364


Acquisition and Development


$                94,063


$                95,314


Commercial and Industrial


$              282,370


$              287,534


Residential Mortgage


$              520,072


$              518,815


Consumer


$                50,600


$                52,766

Investment securities


$              275,143


$              269,991

Total deposits


$           1,623,574


$           1,574,829


Noninterest bearing


$              422,415


$              426,737


Interest bearing


$           1,201,159


$           1,148,092

Shareholders' equity


$              183,694


$              179,295



.








Capital ratios:











Tier 1 to risk weighted assets


14.87 %


14.70 %


Common Equity Tier 1 to risk weighted assets


12.97 %


12.79 %


Tier 1 Leverage


11.94 %


11.88 %


Total risk based capital


16.10 %


15.92 %







Asset quality:










Net charge-offs for the quarter


$                    (360)


$                    (362)

Nonperforming assets: (Period End)






Nonaccrual loans


$                   4,026


$                   4,931


Loans 90 days past due and accruing


233


918








Total nonperforming loans and 90 day past due


$                   4,259


$                   5,849








Other real estate owned


$                   3,062


$                   3,062


Other repossessed assets


$                   2,802


$                   2,802


Modified loans


$                   1,021


$                   1,006







Allowance for credit losses to gross loans


1.25 %


1.23 %

Allowance for credit losses to non-accrual loans


458.69 %


368.49 %

Allowance for credit losses to non-performing assets


182.43 %


155.13 %

Non-performing and 90 day past due loans to total loans


0.29 %


0.39 %

Non-performing loans and 90 day past due loans to total assets


0.22 %


0.30 %

Non-accrual loans to total loans


0.27 %


0.33 %

Non-performing assets to total assets


0.51 %


0.59 %

 

FIRST UNITED CORPORATION

Oakland, MD

Stock Symbol :  FUNC

Financial Highlights - Unaudited









March 31,

December 31,

September 30,

June 30,

March 31,


(Dollars in thousands, except per share data)

2025

2024

2024

2024

2024


Results of Operations:








Interest income 

$             24,062

$             23,725

$                23,257

$         23,113

$        21,898



Interest expense 

8,046

8,025

8,029

7,875

8,086



Net interest income

16,016

15,700

15,228

15,238

13,812



Provision for credit losses

656

529

264

1,194

946



Other operating income

4,822

4,924

4,912

4,782

4,793



Net gains

92

132

141

59

82



Other operating expense

12,576

12,081

12,314

12,364

12,881



Income before taxes

$               7,698

$               8,146

$                  7,703

$           6,521

$          4,860



Income tax expense

1,892

1,960

1,932

1,607

1,162



Net income

$               5,806

$               6,186

$                  5,771

$           4,914

$          3,698










Per share data:








Basic net income per share 

$                   0.90

$                   0.95

$                      0.89

$               0.75

$              0.56



Diluted net income per share

$                   0.89

$                   0.95

$                      0.89

$               0.75

$              0.56



Adjusted basic net income (1)

$                   0.90

$                   0.95

$                      0.89

$               0.75

$              0.62



Adjusted diluted net income (1)

$                   0.89

$                   0.95

$                      0.89

$               0.75

$              0.62



Dividends declared per share

$                   0.22

$                   0.22

$                      0.22

$               0.22

$              0.20



Book value

$                 28.35

$                 27.71

$                    26.90

$             25.39

$            24.89



Diluted book value

$                 28.27

$                 27.65

$                    26.84

$             25.34

$            24.86



Tangible book value per share

$                 26.55

$                 25.89

$                    25.06

$             23.55

$            23.08



Diluted Tangible book value per share

$                 26.47

$                 25.83

$                    25.01

$             23.49

$            23.05











Closing market value

$                 30.02

$                 33.71

$                    29.84

$             20.42

$            22.91



Market Range:








    High

$                 41.61

$                 36.17

$                    30.77

$             22.88

$            23.85



    Low

$                 29.38

$                 29.63

$                    20.40

$             19.40

$            21.21










Shares outstanding at period end: Basic 

6,478,634

6,471,096

6,468,625

6,465,601

6,648,645


Shares outstanding at period end: Diluted

6,497,454

6,485,119

6,482,648

6,479,624

6,657,239









Performance ratios: (Year to Date Period End, annualized)







Return on average assets

1.19 %

1.06 %

0.99 %

0.89 %

0.76 %


Adjusted return on average assets (1)

1.19 %

1.08 %

1.01 %

0.98 %

0.85 %


Return on average shareholders' equity

12.83 %

12.16 %

11.52 %

10.48 %

9.07 %


Adjusted return on average shareholders' equity (1)

12.83 %

12.42 %

11.78 %

11.52 %

10.11 %


Net interest margin (Non-GAAP), includes tax exempt income of $49 and $57

3.56 %

3.38 %

3.34 %

3.31 %

3.12 %


Net interest margin GAAP

3.55 %

3.36 %

3.32 %

3.29 %

3.10 %


Efficiency ratio - non-GAAP (1)

59.95 %

61.31 %

62.46 %

63.48 %

65.71 %









(1) Efficiency ratio is a non-GAAP measure calculated by dividing total operating expenses by the sum of tax equivalent net interest income and other operating income, less gains/(losses) on sales of securities and/or fixed assets.

March 31,

December 31,

September 30,

June 30,

March 31,



2025

2024

2024

2024

2024


Financial Condition at period end:







Assets

$          1,979,753

$          1,973,022

$             1,916,126

$      1,868,599

$     1,912,953


Earning assets

$          1,762,891

$          1,758,665

$             1,722,346

$      1,695,425

$     1,695,962


Gross loans

$          1,479,869

$          1,480,793

$             1,447,883

$      1,422,975

$     1,412,327



Commercial Real Estate

$             532,764

$             526,364

$                502,828

$         506,273

$        492,819



Acquisition and Development

$               94,063

$               95,314

$                  92,909

$           88,215

$          83,424



Commercial and Industrial

$             282,370

$             287,534

$                277,994

$         260,168

$        274,722



Residential Mortgage

$             520,072

$             518,815

$                519,168

$         511,354

$        501,990



Consumer

$               50,600

$               52,766

$                  54,984

$           56,965

$          59,372


Investment securities

$             275,143

$             269,991

$                267,214

$         267,151

$        278,716


Total deposits

$          1,623,574

$          1,574,829

$             1,540,395

$      1,537,071

$     1,563,453



Noninterest bearing

$             422,415

$             426,737

$                419,437

$         423,970

$        422,759



Interest bearing

$          1,201,159

$          1,148,092

$             1,120,958

$      1,113,101

$     1,140,694


Shareholders' equity

$             183,694

$             179,295

$                173,979

$         164,177

$        165,481









Capital ratios:















Tier 1 to risk weighted assets

14.87 %

14.70 %

14.61 %

14.51 %

14.58 %



Common Equity Tier 1 to risk weighted assets

12.97 %

12.79 %

12.66 %

12.54 %

12.60 %



Tier 1 Leverage

11.94 %

11.88 %

11.88 %

11.69 %

11.48 %



Total risk based capital

16.10 %

15.92 %

15.83 %

15.75 %

15.83 %










Asset quality:














Net (charge-offs)/recoveries for the quarter

$                  (360)

$                  (362)

$                     (109)

$           (1,309)

$             (459)


Nonperforming assets: (Period End)








Nonaccrual loans

$                 4,026

$                 4,931

$                    8,073

$             9,438

$          16,007



Loans 90 days past due and accruing

233

918

538

526

120











Total nonperforming loans and 90 day past due

$                 4,259

$                 5,849

$                    8,611

$             9,964

$          16,127











Other real estate owned

$                 3,062

$                 3,062

$                    2,860

$             2,978

$            4,402



Other repossessed assets

$                 2,802

$                 2,802

$                         42

$                  32

$                 68



Modified/restructured loans

$                 1,021

$                 1,006

$                    1,016

$                893

$                   -










Allowance for credit losses to gross loans

1.25 %

1.23 %

1.24 %

1.26 %

1.27 %


Allowance for credit losses to non-accrual loans

458.69 %

368.49 %

223.09 %

189.90 %

112.34 %


Allowance for credit losses to non-performing assets

182.43 %

155.13 %

157.00 %

138.49 %

87.59 %


Non-performing and 90 day past due loans to total loans

0.29 %

0.39 %

0.59 %

0.70 %

1.14 %


Non-performing loans and 90 day past due loans to total assets

0.22 %

0.30 %

0.45 %

0.53 %

0.84 %


Non-accrual loans to total loans

0.27 %

0.33 %

0.56 %

0.66 %

1.13 %


Non-performing assets to total assets

0.51 %

0.59 %

0.60 %

0.69 %

1.07 %


 

Consolidated Statement of Condition










(Dollars in thousands - Unaudited)


March 31,
2025


December 31,
2024






Assets





Cash and due from banks

$

82,813

$

77,020

Interest bearing deposits in banks


1,618


1,307

Cash and cash equivalents


84,431


78,327

Investment securities – available for sale (at fair value)


99,998


94,494

Investment securities – held to maturity (at cost)


174,144


175,497

Equity investments with readily determinable fair market values


1,001


—

Restricted investment in bank stock, at cost


5,815


5,768

Loans held for sale


—


806

Loans


1,479,869


1,480,793

Unearned fees


(457)


(442)

Allowance for credit losses


(18,467)


(18,170)

Net loans


1,460,945


1,462,181

Premises and equipment, net


30,010


30,081

Goodwill and other intangible assets


11,691


11,773

Bank owned life insurance


49,293


48,952

Deferred tax assets


10,021


9,989

Other real estate owned, net


3,062


3,062

Operating lease asset


1,131


1,204

Pension asset


16,064


17,824

Accrued interest receivable and other assets


32,147


33,064

Total Assets

$

1,979,753

$

1,973,022

Liabilities and Shareholders' Equity





Liabilities:





Non-interest bearing deposits

$

422,415

$

426,737

Interest bearing deposits


1,201,159


1,148,092

Total deposits


1,623,574


1,574,829

Short-term borrowings


20,342


65,409

Long-term borrowings


120,929


120,929

Operating lease liability


1,308


1,384

Allowance for credit loss on off balance sheet exposures


863


863

Accrued interest payable and other liabilities


27,617


28,889

Dividends payable


1,426


1,424

Total Liabilities


1,796,059


1,793,727

Shareholders' Equity:  





Common Stock – par value $0.01 per share; Authorized 25,000,000 shares; issued and outstanding 6,6478,634 shares at March 31, 2025 and 6,471,096 at December 31, 2024


65


65

Surplus


20,606


20,476

Retained earnings


193,382


189,002

Accumulated other comprehensive loss


(30,359)


(30,248)

Total Shareholders' Equity


183,694


179,295

Total Liabilities and Shareholders' Equity

$

1,979,753

$

1,973,022

 

Historical Income Statement

















2025


2024



Q1


Q4


Q3

Q2

Q1

In thousands

(Unaudited)

Interest income











Interest and fees on loans

$

21,755

$

21,299

$

21,018

$

20,221

$

19,218

Interest on investment securities











Taxable


1,763


1,672


1,647


1,697


1,744

Exempt from federal income tax


45


47


56


53


53

Total investment income


1,808


1,719


1,703


1,750


1,797

Other


499


707


536


1,142


883

Total interest income


24,062


23,725


23,257


23,113


21,898

Interest expense











Interest on deposits


6,683


6,585


6,579


6,398


6,266

Interest on short-term borrowings


20


40


467


509


461

Interest on long-term borrowings


1,343


1,400


983


968


1,359

Total interest expense


8,046


8,025


8,029


7,875


8,086

Net interest income


16,016


15,700


15,228


15,238


13,812

Credit loss expense/(credit)











Loans


657


522


195


1,251


961

Debt securities held to maturity


—


—


14


—


—

Off balance sheet credit exposures


(1)


7


55


(57)


(15)

Provision for credit losses


656


529


264


1,194


946

Net interest income after provision for credit losses


15,360


15,171


14,964


14,044


12,866

Other operating income











Gains on sale of residential mortgage loans


92


132


141


59


82

Net gains/(losses)


92


132


141


59


82

Other Income











Service charges on deposit accounts


547


553


555


556


556

Other service charges


206


211


236


225


215

Trust department


2,323


2,323


2,328


2,255


2,188

Debit card income


921


1,134


1,000


999


932

Bank owned life insurance


341


345


340


334


326

Brokerage commissions


421


295


297


362


495

Other


63


63


156


51


81

Total other income


4,822


4,924


4,912


4,782


4,793

Total other operating income


4,914


5,056


5,053


4,841


4,875

Other operating expenses











Salaries and employee benefits


7,331


6,456


7,160


7,256


7,157

FDIC premiums


245


260


256


285


269

Equipment


578


490


627


635


923

Occupancy


689


563


709


652


954

Data processing


1,503


1,688


1,333


1,422


1,318

Marketing


238


205


151


184


134

Professional services


476


536


477


449


486

Contract labor


163


181


149


84


183

Telephone


98


99


97


103


109

Other real estate owned


92


47


124


14


86

Investor relations


62


65


84


91


53

Contributions


56


53


65


66


50

Other


1,045


1,438


1,082


1,123


1,159

Total other operating expenses


12,576


12,081


12,314


12,364


12,881

Income before income tax expense


7,698


8,146


7,703


6,521


4,860

Provision for income tax expense


1,892


1,960


1,932


1,607


1,162

Net Income

$

5,806

$

6,186

$

5,771

$

4,914

$

3,698

Basic net income per common share

$

0.90

$

0.95

$

0.89

$

0.75

$

0.56

Diluted net income per common share

$

0.89

$

0.95

$

0.89

$

0.75

$

0.56

Weighted average number of basic shares outstanding


6,474


6,470


6,468


6,527


6,642

Weighted average number of diluted shares outstanding


6,490


6,484


6,482


6,537


6,655

Dividends declared per common share

$

0.22

$

0.22

$

0.22

$

0.20

$

0.20

 

Non-GAAP Financial Measures (unaudited)

Reconciliation of as reported (GAAP) and non-GAAP financial measures


The following tables below provide a reconciliation of certain financial measures calculated under generally accepted accounting principles ("GAAP") (as reported) and non-GAAP. A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with GAAP in the United States. The Company's management believes the presentation of non-GAAP financial measures provide investors with a greater understanding of the Company's operating results in addition to the results measured in accordance with GAAP. While management uses these non-GAAP measures in its analysis of the Company's performance, this information should not be viewed as a substitute for financial results determined in accordance with GAAP or considered to be more important than financial results determined in accordance with GAAP.

The following non-GAAP financial measures exclude accelerated depreciation expenses related to the branch closures.



Three months ended March 31, 





2025


2024



(in thousands, except for per share amount)









Net income - as reported


$

5,806


$

3,698



Adjustments:









    Accelerated depreciation expenses



—



562



     Income tax effect of adjustments



—



(137)



Adjusted net income (non-GAAP)


$

5,806


$

4,123












Diluted earnings per share - as reported


$

0.89


$

0.56



Adjustments:









    Accelerated depreciation expenses



—



0.08



    Income tax effect of adjustments



—



(0.02)



Adjusted basic and diluted earnings per share (non-GAAP)


$

0.89


$

0.62























As of or for the three months ended





March 31, 



(in thousands, except per share data)


2025


2024



Per Share Data









Basic net income per share - as reported


$

0.90


$

0.56



Basic net income per share - non-GAAP



0.90



0.62



Diluted net income per share - as reported


$

0.89


$

0.56



Diluted net income per share - non-GAAP



0.89



0.62



Basic book value per share 


$

28.40


$

24.89



Diluted book value per share 


$

28.42


$

24.86





















Significant Ratios:


















Return on Average Assets - as reported



1.19 %



0.76 %



    Accelerated depreciation expenses



-



0.03 %



    Income tax effect of adjustments



-



(0.01 %)



Adjusted Return on Average Assets (non-GAAP)



1.19 %



0.78 %












Return on Average Equity - as reported



12.83 %



9.07 %



    Accelerated depreciation expenses



-



0.34 %



    Income tax effect of adjustments



-



(0.08 %)



Adjusted Return on Average Equity (non-GAAP)



12.83 %



9.33 %












(1) See reconcilation of this non-GAAP financial measure provided elsewhere herein.









 







































Three Months Ended





March 31





2025


2024



(dollars in thousands)


Average
Balance


Interest


Average
Yield/Rate


Average
Balance


Interest


Average
Yield/Rate



Assets



















Loans


$

1,483,151



21,768


5.95

%

$

1,407,886


$

19,234


5.49

%


Investment Securities:






-













     Taxable



284,303



1,763


2.51

%

294,526



1,744


2.38

%


     Non taxable



6,524



81


5.04

%

7,806



94


4.84

%


     Total



290,827



1,844


2.57

%


302,332



1,838


2.45

%


Federal funds sold



41,750



384


3.73

%

63,843



758


4.78

%


Interest-bearing deposits with other banks



8,488



15


0.72

%

8,787



31


1.42

%


Other interest earning assets



5,774



100


7.02

%

5,107



94


7.40

%


Total earning assets



1,829,990



24,111


5.34

%


1,787,955



21,955


4.94

%


Allowance for credit losses



(18,413)








(17,696)








Non-earning assets



165,125








188,425








Total Assets


$

1,976,702







$

1,958,684








Liabilities and Shareholders' Equity



















Interest-bearing demand deposits


$

373,903


$

1,652


1.79

%

$

348,998


$

1,441


1.66

%


Interest-bearing money markets- retail



464,151



3,547


3.10

%

322,965



3,260


4.06

%


Interest-bearing money markets- brokered



134



1


3.03

%

—



—


—

%


Savings deposits



171,517



43


0.10

%

189,572



48


0.10

%


Time deposits - retail



144,519



1,046


2.94

%

157,678



1,118


2.85

%


Time deposits - brokered



36,041



394


4.43

%

30,000



399


5.35

%


Short-term borrowings



23,053



20


0.35

%

73,351



461


2.53

%


Long-term borrowings



120,929



1,343


4.50

%

103,017



1,359


5.31

%


Total interest-bearing liabilities



1,334,247



8,046


2.45

%


1,225,581



8,086


2.65

%


Non-interest-bearing deposits



427,518








534,413








Other liabilities



31,474








34,746








Shareholders' Equity



183,463








163,944








Total Liabilities and Shareholders' Equity


$

1,976,702







$

1,958,684








Net interest income and spread





$

16,065


2.89

%



$

13,869


2.29

%


Net interest margin








3.56

%






3.12

%




















 

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SOURCE First United Corporation