FIRST UNITED CORPORATION ANNOUNCES THIRD QUARTER 2024 FINANCIAL RESULTS

Rhea-AI Summary

First United (NASDAQ: FUNC) reported consolidated net income of $5.8 million for Q3 2024, or $0.89 per diluted share, compared to $4.5 million, or $0.67 per diluted share, for Q3 2023. Year-to-date income was $14.4 million, or $2.19 per diluted share, compared to $13.3 million for the same period in 2023. Key highlights include:

• Net interest margin (FTE) was 3.46% for Q3 2024
• Strong loan production with $52.1 million in commercial and $19.9 million in residential mortgage originations
• Decreased provision expense due to improved asset quality
• Slight increase in deposits due to seasonal municipal deposit fluctuations
• Repayment of $15.0 million in higher-cost brokered CDs
• Obtained $90.0 million in new FHLB borrowings at 3.89% average rate
• Declared a cash dividend of $0.22 per share, a 10% increase over Q2

Positive

• Consolidated net income increased to $5.8 million in Q3 2024, up from $4.5 million in Q3 2023
• Earnings per diluted share rose to $0.89 in Q3 2024, compared to $0.67 in Q3 2023
• Year-to-date income increased to $14.4 million, up from $13.3 million in the same period of 2023
• Strong loan production with $52.1 million in commercial and $19.9 million in residential mortgage originations
• Decreased provision expense due to improved asset quality
• Declared a cash dividend of $0.22 per share, representing a 10% increase over the previous quarter

Negative

• Repayment of $15.0 million in higher-cost brokered CDs, potentially impacting funding sources
• Slight decrease in total deposits by $10.6 million compared to December 31, 2023
• Decrease in investment portfolio by $44.3 million due to maturities and principal amortization

Insights

Financial Analyst

First United 's Q3 2024 results show solid performance with notable improvements:

• Net income increased to $5.8 million (28.9% YoY increase), or $0.89 per diluted share
• Net interest margin (FTE) was 3.46%, reflecting stable net interest income
• Strong loan production: $52.1 million in commercial loans and $19.9 million in residential mortgages
• Decreased provision expense due to improved asset quality
• Slight increase in deposits, despite competitive pressures
• Non-interest income growth, particularly in wealth management
• Stable non-interest expenses, demonstrating cost control

The company's strategic moves, including repaying higher-cost borrowings and obtaining new FHLB borrowings at lower rates, show prudent balance sheet management. The 10% increase in quarterly dividend signals confidence in financial stability. However, challenges remain with competitive deposit pricing and the need to manage interest rate risk in the current environment.

Market Research Analyst

First United's Q3 results reveal several positive trends for investors:

• Improved profitability: EPS growth of 32.8% YoY indicates enhanced operational efficiency
• Asset quality: Reduced provision expense suggests strengthening credit quality
• Deposit stability: Slight deposit growth amid competitive pressures demonstrates customer loyalty
• Diversified revenue: Growth in wealth management income offsets pressure on net interest margin
• Effective cost management: Stable non-interest expenses show disciplined approach

The bank's focus on relationship banking and strategic balance sheet management positions it well in a challenging rate environment. The increased dividend payout reflects management's confidence in sustainable earnings growth. However, investors should monitor the impact of potential rate cuts on net interest margin and the bank's ability to retain deposits as competition for funds remains high.

OAKLAND, Md., Oct. 21, 2024 /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, 2024.  Consolidated net income was $5.8 million for the third quarter of 2024, or $0.89 per diluted share, compared to $4.5 million, or $0.67 per diluted share, for the third quarter of 2023 and $4.9 million, or $0.75 per diluted share, for the second quarter of 2024.  Year-to-date income was $14.4 million, or $2.19 per diluted share, compared to $13.3 million, or $1.98 per diluted share, for both of the nine-month periods ended September 30, 2024 and 2023.

According to Carissa Rodeheaver, Chairman, President and CEO, "Earnings for the third quarter were marked by stable net interest income, non-interest income and expenses.  Provision expense decreased as compared to prior quarters this year as we saw improvements in our asset quality contributing to our increased net income.  We continue to remain disciplined in our pricing despite competitive pressure as we build our balance sheet for current earnings and protect our long-term profitability.  Our team of dedicated associates worked diligently during the quarter to maintain, build and support high levels of production and to assist our customers with their financial needs in this volatile economic environment." 

Financial Highlights:

• Net interest margin, on a non-GAAP, fully tax equivalent ("FTE") basis, was 3.46% for the third quarter of 2024
• Loan production was strong, with $52.1 million in commercial loan originations and $19.9 million in residential mortgage originations
• Provision expense decreased in the third quarter due to continued strong asset quality and improvement in qualitative factors
• Deposits increased slightly due to seasonal fluctuations in municipal deposit balances, partially offset by runoff of retail certificates of deposit due to competitive pricing
• We repaid $15.0 million of higher cost brokered certificates of deposit
• Non-interest income, including net gains, increased slightly due to increases in gains on sales of residential mortgages and wealth management income
• Non-interest expense was stable for the quarter and continues to be a focus for management
• We obtained $90.0 million in new FHLB borrowings at a weighted average interest rate of 3.89%.  Portions of the proceeds from the borrowings were used to repay $41.4 million of principal and accrued interest of Bank Term Funding Program ("BTFP") borrowings and $40.0 million in FHLB borrowings that matured in September 2024
• We declared a cash dividend of $0.22 per common share in the third quarter, representing a 10% increase over the linked quarter

Income Statement Overview

On a GAAP basis, net income for the third quarter of 2024 was $5.8 million.  This compares to $4.9 million for the second quarter of 2024 and $4.5 million for the third quarter of 2023.

	Q3 2024	Q2 2024	Q3 2023
Net Income, GAAP (millions)	$ 5.8	$ 4.9	$ 4.5
Basic and diluted net income per share, GAAP	$ 0.89	$ 0.75	$ 0.67

 

The $1.3 million increase in quarterly net income year over year was primarily driven by a $1.2 million increase in net interest income.  The increase in net interest income was related to the $3.0 million increase in interest on loans due to new loans being booked at higher rates and the repricing of adjustable-rate loans.   This increase was partially offset by the $0.9 million increase in interest paid on deposits due to continued competitive pricing pressures.  An increase of $0.4 million in interest expense on short-term borrowings related to the BTFP was offset by the $0.5 million reduction in interest expense on long-term borrowings related to the repayment of $80.0 million of FHLB advances in the first nine months of 2024.  Comparing the third quarter of 2024 to the same period in 2023, other activity was a $0.2 million increase in wealth management income due to improving market conditions and growth of new relationships and a decrease in operating expenses of $0.5 million driven by reductions in check fraud related expenses, occupancy and equipment, data processing, and marketing expenses, partially offset by increased salaries and benefits.  The provision for income tax was up $0.6 million when comparing the two quarters due to increased net income before tax.

Compared to the linked quarter, net income increased by $0.9 million due primarily to a $0.9 million decrease in provision for credit losses during the third quarter.  This decrease was driven by reduced net charge offs due to the $1.1 million charge off booked in the second quarter of 2024 and improvement in qualitative factors related to the reduction of non-accrual balances during the quarter, partially offset by strong loan growth during the third quarter.  Net interest income and operating expenses were stable and operating income increased by $0.2 million compared to the linked quarter.

Year-to-date net income for the first nine months of 2024 was $14.4 million compared to $13.3 million for the same period in 2023.   The increased net income was driven by a year-over-year increase of $1.6 million in net interest income driven by a $9.3 million increase in interest income primarily related to increased interest and fees on loans, partially offset by a $7.7 million increase in interest expense due to continued pricing pressure on deposits and our use of the BTFP.  This increase was partially offset by a $1.2 million increase in provision for credit losses driven by net charge-offs of $1.1 million in the commercial and industrial portfolio related to one non-accrual credit where collateral was sold through a liquidation auction at depressed prices.  Operating income increased $0.9 million, primarily as the result of increased wealth management income.  Operating expenses decreased by $0.4 million and was driven by reductions in professional services, pension benefits expense, a $0.5 million reduction in check fraud expense, and other miscellaneous expenses partially offset by a $0.4 million increase in salaries and benefits.

Net Interest Income and Net Interest Margin

Net interest income, on a non-GAAP, FTE basis, increased by $1.2 million for the third quarter of 2024 when compared to the third quarter of 2023.  This increase was driven by a $2.0 million increase in interest income.   Interest income on loans increased by $3.0 million due to the increase in average balances of $69.7 million and a 58 basis point increase in the overall yield on the loan portfolio as new loans were booked at higher rates as well as adjustable-rate loans repricing in correlation to the elevated rate environment.   Investment income decreased by $0.3 million due to a decrease of $63.2 million in average balances related to the balance sheet restructuring of our investment portfolio in the fourth quarter of 2023 and the maturity of $37.5 million in U.S. Treasury bonds in the first four months of 2024.  The overall yield on the investment portfolio increased by 14 basis points primarily driven by the increased rate on the trust preferred portfolio and the maturity and sale of lower rate investments.   Average cash balances declined $42.0 million as cash from the investment portfolio and on balance sheet liquidity was shifted to fund higher yielding loans.  Interest expense increased by $0.8 million year over year due to an increase of 9 basis points on interest paid on deposit accounts.   The average deposit balances decreased by $7.4 million when compared to the third quarter of 2023 due primarily to the decrease of $13.1 million in retail time deposits, a $60.2 million decrease in brokered time deposits and a $32.3 million decrease in savings accounts, which was mostly offset by an increase of $96.6 million in money market accounts and a slight increase of $1.6 million in interest-bearing demand deposits.  

Comparing the third quarter of 2024 to the second quarter of 2024, net interest income, on a non-GAAP, FTE basis, remained stable.  Interest income increased by $0.1 million during the quarter.  Interest income on loans increased by $0.8 million related to the overall increase of 9 basis points in yield and $18.2 million in average balances during the third quarter.  This was partially offset by a $0.6 million decrease in interest income on cash balances related to a decreased yield of 88 basis points and decreased balances of $33.3 million during the quarter as cash was used to fund loan growth.  Interest expense increased by $0.2 million, driven primarily by the $0.2 increase in deposit expense related to the increase in average balances of $21.6 million in money market accounts, which was partially offset by the $15.8 million decrease in average balances of brokered certificates of deposit related to the maturity and repayment of a $15.0 million brokered certificate of deposit ("CD") in August 2024.

Comparing the nine months ended September 30, 2024 to the nine months ended September 30, 2023, net interest income, on a non-GAAP, FTE basis, increased by $1.2 million.  Interest income increased by $8.9 million.   Average loan balances increased by $98.3 million and the overall yield increased by 61 basis points in correlation with the elevated rate environment as new loans were booked at higher rates as well as the repricing of adjustable-rate loans.  Interest expense on deposits increased by $6.5 million while the average deposit balances increased by $24.7 million, driven by increases of $77.7 million in money market balances and $13.7 million in retail time deposits, partially offset by decreases in savings balances of $44.1 million and brokered time deposits of $26.0 million.  Interest expense on short-term borrowings increased by $1.3 million due to the Bank's utilization of the BTFP program since January 2024.  The increased interest expense resulted in an overall increase of 75 basis points on the cost of interest-bearing liabilities.  The net interest margin for the nine months ended September 30, 2024 was 3.34% compared to 3.30% for the nine months ended September 30, 2023.

Non-Interest Income

Other operating income, including net gains, for the third quarter of 2024 increased by $0.2 million when compared to the same period of 2023.  The increase was driven by an increase of $0.2 million in trust and brokerage income due to improving market conditions, increased annuity sales and growth in new and existing customer relationships.  Gains on sales of mortgages declined slightly when comparing the third quarter of 2024 to the same period of 2023 primarily due to reduced activity in the elevated interest rate environment.  Service charge income and debit card income remained stable.

On a linked quarter basis, other operating income, including net gains, increased by $0.2 million.  This increase was primarily attributable to a $0.1 million increase in gains on sales of mortgage loans due to increased activity in the third quarter and a $0.1 million cash incentive received in connection with check fees collected.

Other operating income for the nine months ended September 30, 2024 increased by $0.9 million when compared to the same period of 2023.  This increase was primarily due to the $1.0 million increase in trust and brokerage income due to improving market conditions, increased annuity sales and growth in new and existing customer relationships.  Service charge and debit card income were both stable when comparing the first nine months of 2024 to the same period of 2023.

Non-Interest Expense

Non-interest expenses decreased by $0.5 million in the third quarter of 2024 when compared to the third quarter of 2023.  The decrease was related to a $0.2 million decrease in occupancy, equipment and data processing expenses, a $0.3 million decrease in check fraud related expenses as well as decreases in other miscellaneous expenses such as marketing, contributions, net other real estate owned ("OREO") expenses, and pension benefit expenses.  These decreases were partially offset by a $0.2 million increase in salaries and benefits related to increased executive and employee incentive accruals, 401(k) plan expense and wellness costs offset by overall reduced salaries and wages.

Non-interest expense was stable when compared to the linked quarter.  Decreases in salaries and benefits, data processing, FDIC assessments, marketing, debit card, schools and seminars, and investor relations expenses were offset by slight increases in professional services, occupancy, OREO expenses due to a gain booked in the second quarter of 2024, and contract labor.

For the nine months ended September 30, 2024, non-interest expenses decreased by $0.4 million when compared to the nine months ended September 30, 2023.  The decrease was primarily attributable to a $0.5 million decrease in check fraud expenses and decreases in professional services, equipment, net OREO expense, line rentals, pension benefit expenses, and other miscellaneous expenses such as marketing, contributions, contract labor, and investor relations.  These decreases were partially offset by increased occupancy, data processing expenses and salaries and benefits related to increased incentives, 401K expense, wellness expense and loan origination costs, offset by reductions in life and health insurance costs.

The effective income tax rates as a percentage of income for the nine months ended September 30, 2024 and September 30, 2023 were 24.6% and 23.6%, respectively. 

Balance Sheet Overview

Total assets at September 30, 2024 were $1.9 billion, representing a $10.3 million increase since December 31, 2023.  During the first nine months of 2024, cash and interest-bearing deposits in other banks increased by $12.6 million.  The investment portfolio decreased by $44.3 million due to the maturities of $37.5 million of U.S. Treasury bonds during the year and normal principal amortization of our mortgage-backed securities ("MBS") portfolio.  Cash from the investment maturities was shifted to gross loans which increased by $41.2 million and other real estate OREO decreased by $1.6 million due to sales of properties.  Pension assets increased by $5.1 million due to increased market values.  Deferred tax assets decreased by $1.8 million due to the increased fair values of available for sale securities and pension assets compared to December 31, 2023.

Total liabilities at September 30, 2024 were $1.7 billion, representing a $1.8 million decrease since December 31, 2023.  Total deposits decreased by $10.6 million when compared to December 31, 2023 related to decreases in savings deposits of $14.8 million, non-interest-bearing demand deposits of $8.2 million, retail time deposits of $23.7 million and the repayment of $30.0 million in brokered certificates of deposits, partially offset by increases in interest-bearing demand deposits of $31.6 million and money markets of $34.6 million.  Short-term borrowings increased by $4.8 million since December 31, 2023, which were comprised of $29.0 million in overnight borrowings from the Federal Reserve offset by a shift of approximately $22.0 million in overnight investment sweep balances to FDIC insured accounts as a result of management's strategy to release pledging of investment securities for municipalities to provide additional liquidity.  Long-term borrowings increased by $10.0 million in the first nine months of 2024 when compared to December 31, 2023.  Maturities of FHLB advances of $40.0 million in March and $40.0 million in September were fully repaid.  During the third quarter and after the Fed announcement to reduce rates by 50 basis points, management made the strategic decision to reduce funding costs and borrowed $90.0 million in three new FHLB advances with maturities of 12 and 18-months and a weighted average rate of 3.89%.  $41.1 million was utilized to prepay the principal and accrued interest of the BTFP borrowings at a rate of 4.87% that was scheduled to mature in January of 2025 and approximately $30.0 million was utilized to repay overnight borrowings related to the repayment of the September $40.0 million maturity.  The remainder is currently held in overnight cash investments.

Total available for sale and held to maturity securities totaled $267.2 million at September 30, 2024, representing a $44.3 million decrease when compared to December 31, 2023.   In the first nine months of 2024, $37.5 million in U.S. Treasury bonds matured and the proceeds were used to repay the $40.0 million maturing FHLB advance.  Additionally, there were $2.7 million of maturities in our municipal portfolio and $5.7 million of other principal amortizations in our MBS portfolio year to date that were used for loan funding. 

Outstanding loans of $1.4 billion at September 30, 2024 reflected growth of $24.9 million since June 30, 2024 and $41.2 million for the first nine months of 2024.

Loan Type (in millions)	Change since June 30, 2024	Change since December 31, 2023
Commercial	$19.1	$28.4
Residential Mortgages	$7.8	$19.3
Consumer	($2.0)	($6.5)
Gross Loans	$24.9	$41.2

 

Since December 31, 2023, commercial real estate loans increased by $9.1 million, acquisition and development loans increased by $15.8 million, commercial and industrial loans increased by $3.4 million, residential mortgage loans increased $19.3 million, and consumer loans decreased by $6.5 million.

New commercial loan production for the three months ended September 30, 2024 was approximately $52.1 million.  The pipeline of commercial loans at September 30, 2024 was $19.5 million.  At September 30, 2024, unfunded, committed commercial construction loans totaled approximately $8.3 million.  Commercial amortization and payoffs were approximately $92.8 million through September 30, 2024, 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 2024 was approximately $19.9 million, with most of this production comprised of mortgages to be held on balance sheet.  The pipeline of in-house, portfolio loans as of September 30, 2024 was $12.8 million.  The residential mortgage production level increased in the third quarter of 2024 due to the seasonality of this line of business, particularly construction lending.  Unfunded commitments related to residential construction loans totaled $11.9 million at September 30, 2024.  

Total deposits at September 30, 2024 decreased by $10.6 million when compared to December 31, 2023.  

Deposit Type (in millions)	Change since June 30, 2024	Change since December 31, 2023
Non-Interest-Bearing	($4.5)	($8.2)
Interest-Bearing Demand	$9.4	$31.6
Savings and Money Market	$15.0	$19.8
Time Deposits	($16.6)	($53.7)
Total Deposits	$3.3	($10.6)

 

Interest-bearing demand deposits increased by $31.6 million year-to-date, primarily related to the shift of approximately $22.0 million in overnight investment sweep balances into FDIC insured accounts due to management's strategy to release pledging of investment securities for municipalities to provide additional liquidity as well as seasonal fluctuations in municipal deposit balances compared to December 2023.  Money market accounts increased by $34.6 million due primarily to the expansion of current relationships and new relationships during the first nine months.  Traditional savings accounts decreased by $14.8 million and time deposits decreased by $53.7 million.  The decrease in time deposits was due to a decrease of $23.7 million in retail CDs related to maturities of a nine-month special CD promotion in 2023 and the maturity and repayment of $30.0 million in brokered CDs during the year.  The Bank has worked closely with customers as these CDs mature to transition them to other deposit and wealth management products offered by the Bank.

Short-term borrowings increased by $4.8 million compared to December 31, 2023, which were comprised of $29.0 million in overnight borrowings from the Federal Reserve offset by a shift of approximately $22.0 million in overnight investment sweep balances into FDIC insured accounts due to management's strategy to release pledging of investment securities for municipalities to provide additional liquidity.  Long-term borrowings increased by $10.0 million in the first nine months of 2024 when compared to December 31, 2023.  Maturities of FHLB advances of $40.0 million in March and $40.0 million in September were fully repaid.  During the third quarter and after the Fed announcement to reduce rates by 50 basis points, management made the strategic decision to reduce funding costs and borrowed $90.0 million in three new FHLB advances with maturities of 12 and 18-months and a weighted average rate of 3.89%.  $41.1 million was utilized to prepay the principal and accrued interest of the BTFP borrowing at a rate of 4.87% that was scheduled to mature in January of 2025 and approximately $30.0 million was utilized to repay overnight borrowings related to the repayment of the September $40.0 million maturity.   The remainder is currently held in overnight cash investments.

The book value of the Corporation's common stock was $26.90 per basic share at September 30, 2024 compared to $24.38 per share at December 31, 2023.  At September 30, 2024, there were 6,468,625 of basic outstanding shares and 6,482,648 of diluted outstanding shares of common stock.  During the first nine months of 2024, the Company purchased and retired 201,800 shares of First United Corporation stock as part of its previously announced stock repurchase plan at an average price of $19.99 per share. The increase in the book value at September 30, 2024 was due to the undistributed net income of $10.3 million for the first nine months of 2024.

Asset Quality

The allowance for credit losses ("ACL") was $18.0 million at September 30, 2024 compared to $17.1 million recorded at September 30, 2023 and $17.5 million at December 31, 2023.  The provision for credit losses was $0.3 million for the quarter ended September 30, 2024 compared to $0.3 million for the quarter ended September 30, 2023 and $1.2 million for the second quarter of 2024.  The increased provision expense recorded year to date in 2024 was primarily related to $1.1 million in net charge-offs related to one non-accrual commercial loan relationship, partially offset by improving qualitative risk factors of our loan portfolio.  Net charge-offs of $0.1 million were recorded for the quarter ended September 30, 2024 and September 30, 2023. The ratio of the ACL to loans outstanding was 1.24% at September 30, 2024, September 30, 2023 and December 31, 2023.

The ratio of year-to-date net charge offs to average loans was 0.18% for the nine-month period ended September 30, 2024, and 0.07% for the nine-month period ended September 30, 2023.  The commercial and industrial portfolio had net charge offs of 0.53% for the nine-month period ended September 30, 2024 compared to a net charge offs of 0.07% for the nine-month period ended September 30, 2023.  This shift was due primarily to charge offs of equipment loan balances on one non-accrual commercial relationship during 2024.  The consumer portfolio had net charge offs of 2.04% for the nine-month period ended September 30, 2024 compared to net charge offs of 1.15% for the nine-month period ended September 30, 2023.  The increase in net charge offs in consumer loans in 2024 was primarily driven by approximately $0.4 million in charge offs of overdrawn demand deposit balances during the first quarter of 2024 and student loan accounts in the second quarter.  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
Loan Type	9/30/2024 (Charge Off) / Recovery	9/30/2023 (Charge Off) / Recovery
Commercial Real Estate	0.01 %	(0.02 %)
Acquisition & Development	0.08 %	0.01 %
Commercial & Industrial	(0.53 %)	(0.07 %)
Residential Mortgage	0.01 %	0.00 %
Consumer	(2.04 %)	(1.15 %)
Total Net (Charge Offs)/Recoveries	(0.18 %)	(0.07 %)

 

Non-accrual loans totaled $8.1 million at September 30, 2024 compared to $4.0 million at December 31, 2023.  The increase in non-accrual balances at September 30, 2024 was related to two commercial and industrial loan relationships totaling $12.1 million that were moved to non-accrual during the first quarter of 2024.  Subsequent to being moved to non-accrual, one of the borrowers sold a piece of collateral to reduce outstanding balances by approximately $5.5 million and the bank recognized approximately $1.1 million in net charge-offs and $3.0 million in principal reductions on the other commercial and industrial credit from the liquidation of collateral at depressed prices.

Non-accrual loans that have been subject to partial charge-offs totaled $1.2 million at September 30, 2024 and $0.1 million at December 31, 2023.  Loans secured by 1-4 family residential real estate properties in the process of foreclosure totaled $1.6 million at September 30, 2024 and $1.8 million at December 31, 2023.  As a percentage of the loan portfolio, accruing loans past due 30 days or more was 0.37% at September 30, 2024 compared to 0.24% at December 31, 2023 and 0.27% as of September 30, 2023. 

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 (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 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, 2024 and the impact that any such events have on our critical accounting assumptions and estimates made as of September 30, 2024, 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,
				2024		2023		2024		2023
Results of Operations:
	Interest income			$                 23,257		$                 21,164		$                 68,268		$                 58,965
	Interest expense			8,029		7,180		23,990		16,289
	Net interest income			15,228		13,984		44,278		42,676
	Provision for credit losses			264		263		2,404		1,201
	Other operating income			4,912		4,716		14,487		13,538
	Net gains			141		182		282		322
	Other operating expense			12,314		12,785		37,559		37,934
	Income before taxes			$                   7,703		$                   5,834		$                 19,084		$                 17,401
	Income tax expense			1,932		1,321		4,701		4,099
	Net income			$                   5,771		$                   4,513		$                 14,383		$                 13,302
Per share data:
	Basic net income per share			$                     0.89		$                     0.67		$                     2.20		$                     1.99
	Diluted net income per share			$                     0.89		$                     0.67		$                     2.19		$                     1.98
	Adjusted Basic net income (1)			$                     0.89		$                     0.67		$                     2.26		$                     1.99
	Adjusted Diluted net income (1)			$                     0.89		$                     0.67		$                     2.25		$                     1.98
	Dividends declared per share			$                     0.22		$                     0.20		$                     0.62		$                     0.60
	Book value			$                   26.90		$                   23.08
	Diluted book value			$                   26.84		$                   23.03
	Tangible book value per share			$                   25.06		$                   21.27
	Diluted Tangible book value per share			$                   25.01		$                   21.22
	Closing market value			$                   29.84		$                   16.23
	Market Range:
	High			$                   30.77		$                   17.34
	Low			$                   20.40		$                   13.70
Shares outstanding at period end: Basic				6,468,625		6,715,170
Shares outstanding at period end: Diluted				6,482,648		6,728,482
Performance ratios: (Year to Date Period End, annualized)
Return on average assets				0.99 %		0.93 %
Adjusted return on average assets (1)				1.01 %		0.93 %
Return on average shareholders' equity				11.52 %		11.44 %
Adjusted return on average shareholders' equity (1)				11.78 %		11.44 %
Net interest margin (Non-GAAP), includes tax exempt income of $176 and $578				3.34 %		3.30 %
Net interest margin GAAP				3.32 %		3.25 %
Efficiency ratio - non-GAAP (1)				62.46 %		66.41 %
(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.				September 30,		December 31
				2024		2023
Financial Condition at period end:
Assets				$            1,916,126		$            1,905,860
Earning assets				$            1,722,346		$            1,725,236
Gross loans				$            1,447,883		$            1,406,667
	Commercial Real Estate			$               502,828		$               493,703
	Acquisition and Development			$                 92,909		$                 77,060
	Commercial and Industrial			$               277,994		$               274,604
	Residential Mortgage			$               519,168		$               499,871
	Consumer			$                 54,984		$                 61,429
Investment securities				$               267,214		$               311,466
Total deposits				$            1,540,395		$            1,550,977
	Noninterest bearing			$               419,437		$               427,670
	Interest bearing			$            1,120,958		$            1,123,307
Shareholders' equity				$               173,979		$               161,873
Capital ratios:
	Tier 1 to risk weighted assets			14.61 %		14.42 %
	Common Equity Tier 1 to risk weighted assets			12.66 %		12.44 %
	Tier 1 Leverage			11.88 %		11.30 %
	Total risk based capital			15.83 %		15.64 %
Asset quality:
Net charge-offs for the quarter				$                    (109)		$                    (195)
Nonperforming assets: (Period End)
	Nonaccrual loans			$                   8,073		$                   3,956
	Loans 90 days past due and accruing			538		543
	Total nonperforming loans and 90 day past due			$                   8,611		$                   4,499
	Other real estate owned			$                   2,860		$                   4,493
	Modified loans			$                   1,016		$                          -
Allowance for credit losses to gross loans				1.24 %		1.24 %
Allowance for credit losses to non-accrual loans				223.09 %		441.86 %
Allowance for credit losses to non-performing assets				157.00 %		194.40 %
Non-performing and 90 day past due loans to total loans				0.59 %		0.32 %
Non-performing loans and 90 day past due loans to total assets				0.45 %		0.24 %
Non-accrual loans to total loans				0.56 %		0.28 %
Non-performing assets to total assets				0.60 %		0.47 %

 

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)			2024	2024	2024	2023	2023	2023	2023
Results of Operations:
	Interest income		$                  23,257	$             23,113	$             21,898	$             22,191	$                21,164	$          19,972	$        17,829
	Interest expense		8,029	7,875	8,086	7,997	7,180	5,798	3,311
	Net interest income		15,228	15,238	13,812	14,194	13,984	14,174	14,518
	Provision for credit losses		264	1,194	946	419	263	395	543
	Other operating income		4,912	4,782	4,793	4,793	4,716	4,483	4,339
	Net gains/(losses)		141	59	82	(4,184)	182	86	54
	Other operating expense		12,314	12,364	12,881	12,309	12,785	12,511	12,638
	Income before taxes		$                    7,703	$               6,521	$               4,860	$               2,075	$                  5,834	$            5,837	$          5,730
	Income tax expense		1,932	1,607	1,162	317	1,321	1,423	1,355
	Net income		$                    5,771	$               4,914	$               3,698	$               1,758	$                  4,513	$            4,414	$          4,375
Per share data:
	Basic net income per share		$                              0.89	$                        0.75	$                        0.56	$                        0.26	$                           0.67	$                   0.66	$                 0.66
	Diluted net income per share		$                              0.89	$                        0.75	$                        0.56	$                        0.26	$                           0.67	$                   0.66	$                 0.65
	Adjusted basic net income (1)		$                              0.89	$                        0.75	$                        0.62	$                        0.82	$                           0.67	$                   0.66	$                 0.66
	Adjusted diluted net income (1)		$                              0.89	$                        0.75	$                        0.62	$                        0.82	$                           0.67	$                   0.66	$                 0.65
	Dividends declared per share		$                              0.22	$                 0.22	$                        0.20	$                        0.20	$                           0.20	$              0.62	$                 0.20
	Book value		$                            26.90	$                     25.39	$                     24.89	$                     24.38	$                         23.08	$                 23.12	$               22.85
	Diluted book value		$                            26.84	$                     25.34	$                     24.86	$                     24.33	$                         23.03	$                 23.07	$               22.81
	Tangible book value per share		$                            25.06	$                     23.55	$                     23.08	$                     22.56	$                         21.27	$                 21.29	$               21.01
	Diluted Tangible book value per share		$                            25.01	$                     23.49	$                     23.05	$                     22.51	$                         21.22	$                 21.25	$               20.96
	Closing market value		$                            29.84	$                     20.42	$                     22.91	$                     23.51	$                         16.23	$                 14.26	$               16.89
	Market Range:
	High		$                            30.77	$                     22.88	$                     23.85	$                     23.51	$                         17.34	$                 17.01	$               20.41
	Low		$                            20.40	$                     19.40	$                     21.21	$                     16.12	$                         13.70	$                 12.56	$               16.75
Shares outstanding at period end: Basic			6,468,625	6,465,601	6,648,645	6,639,888	6,715,170	6,711,422	6,688,710
Shares outstanding at period end: Diluted			6,482,648	6,479,624	6,657,239	6,653,200	6,728,482	6,724,734	6,703,252
Performance ratios: (Year to Date Period End, annualized)
Return on average assets			0.99 %	0.89 %	0.76 %	0.78 %	0.93 %	0.95 %	0.94 %
Adjusted return on average assets (1)			1.01 %	0.98 %	0.85 %	0.94 %	0.93 %	0.95 %	0.94 %
Return on average shareholders' equity			11.52 %	10.48 %	9.07 %	9.68 %	11.44 %	11.43 %	11.87 %
Adjusted return on average shareholders' equity (1)			11.78 %	11.52 %	10.11 %	11.87 %	11.44 %	11.43 %	11.87 %
Net interest margin (Non-GAAP), includes tax exempt income of $176 and $578			3.34 %	3.31 %	3.12 %	3.26 %	3.30 %	3.39 %	3.53 %
Net interest margin GAAP			3.32 %	3.29 %	3.10 %	3.22 %	3.25 %	3.34 %	3.48 %
Efficiency ratio - non-GAAP (1)			62.46 %	63.48 %	65.71 %	65.12 %	66.41 %	66.00 %	67.02 %
(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.			September 30,	June 30,	March 31,	December 31,	September 30,	June 30,	March 31,
			2024	2024	2024	2023	2023	2023	2023
Financial Condition at period end:
Assets			$                    1,916,126	$              1,868,599	$              1,912,953	$              1,905,860	$                 1,928,201	$         1,928,393	$       1,937,442
Earning assets			$                    1,722,346	$              1,695,425	$              1,695,962	$              1,725,236	$                 1,717,244	$         1,707,522	$       1,652,688
Gross loans			$                    1,447,883	$              1,422,975	$              1,412,327	$              1,406,667	$                 1,380,019	$         1,350,038	$       1,289,080
	Commercial Real Estate		$                       502,828	$                 506,273	$                 492,819	$                 493,703	$                    491,284	$            483,485	$           453,356
	Acquisition and Development		$                         92,909	$                   88,215	$                   83,424	$                   77,060	$                       79,796	$              79,003	$             76,980
	Commercial and Industrial		$                       277,994	$                 260,168	$                 274,722	$                 274,604	$                    254,650	$            249,683	$           241,959
	Residential Mortgage		$                       519,168	$                 511,354	$                 501,990	$                 499,871	$                    491,686	$            475,540	$           456,198
	Consumer		$                         54,984	$                   56,965	$                   59,372	$                   61,429	$                       62,603	$              62,327	$             60,587
Investment securities			$                       267,214	$                 267,151	$                 278,716	$                 311,466	$                    330,053	$            350,844	$           357,061
Total deposits			$                    1,540,395	$              1,537,071	$              1,563,453	$              1,550,977	$                 1,575,069	$         1,579,959	$       1,591,285
	Noninterest bearing		$                       419,437	$                 423,970	$                 422,759	$                 427,670	$                    429,691	$            466,628	$           468,554
	Interest bearing		$                    1,120,958	$              1,113,101	$              1,140,694	$              1,123,307	$                 1,145,378	$         1,113,331	$       1,122,731
Shareholders' equity			$                       173,979	$                 164,177	$                 165,481	$                 161,873	$                    154,990	$            155,156	$           152,868
Capital ratios:
	Tier 1 to risk weighted assets		14.61 %	14.51 %	14.58 %	14.42 %	14.60 %	14.40 %	14.90 %
	Common Equity Tier 1 to risk weighted assets		12.66 %	12.54 %	12.60 %	12.44 %	12.60 %	12.40 %	12.82 %
	Tier 1 Leverage		11.88 %	11.69 %	11.48 %	11.30 %	11.25 %	11.25 %	11.47 %
	Total risk based capital		15.83 %	15.75 %	15.83 %	15.64 %	15.81 %	15.60 %	16.15 %
Asset quality:
Net (charge-offs)/recoveries for the quarter			$                             (109)	$                    (1,309)	$                       (459)	$                       (195)	$                             (83)	$                  (398)	$                 (245)
Nonperforming assets: (Period End)
	Nonaccrual loans		$                            8,073	$                     9,438	$                   16,007	$                     3,956	$                         3,479	$                 2,972	$               3,258
	Loans 90 days past due and accruing		538	526	120	543	145	160	87
	Total nonperforming loans and 90 day past due		$                            8,611	$                     9,964	$                   16,127	$                     4,499	$                         3,624	$                 3,132	$               3,345
	Other real estate owned		$                            2,860	$                     2,978	$                     4,402	$                     4,493	$                         4,878	$                 4,482	$               4,598
	Modified loans		$                            1,016	$                         893	$                              -	$                              -	$                                  -	$                         -	$                        -
Allowance for credit losses to gross loans			1.24 %	1.26 %	1.27 %	1.24 %	1.24 %	1.25 %	1.31 %
Allowance for credit losses to non-accrual loans			223.09 %	189.90 %	112.34 %	441.86 %	492.84 %	568.81 %	517.83 %
Allowance for credit losses to non-performing assets			157.00 %	138.49 %	87.59 %	194.40 %	473.12 %	539.79 %	212.40 %
Non-performing and 90 day past due loans to total loans			0.59 %	0.70 %	1.14 %	0.32 %	0.26 %	0.23 %	0.26 %
Non-performing loans and 90 day past due loans to total assets			0.45 %	0.53 %	0.84 %	0.24 %	0.19 %	0.16 %	0.17 %
Non-accrual loans to total loans			0.56 %	0.66 %	1.13 %	0.28 %	0.25 %	0.22 %	0.25 %
Non-performing assets to total assets			0.60 %	0.69 %	1.07 %	0.47 %	0.44 %	0.39 %	0.41 %

 

Consolidated Statement of Condition
(Dollars in thousands - Unaudited)		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023
Assets
Cash and due from banks	$	61,140	$	43,635	$	85,578	$	48,343
Interest bearing deposits in banks		1,252		1,457		1,354		1,410
Cash and cash equivalents		62,392		45,092		86,932		49,753
Investment securities – available for sale (at fair value)		93,160		92,954		95,580		97,169
Investment securities – held to maturity (at cost)		174,054		174,197		183,136		214,297
Restricted investment in bank stock, at cost		5,765		3,395		3,390		5,250
Loans held for sale		232		447		175		443
Loans		1,447,883		1,422,975		1,412,327		1,406,667
Unearned fees		(333)		(306)		(314)		(340)
Allowance for credit losses		(18,010)		(17,923)		(17,982)		(17,480)
Net loans		1,429,540		1,404,746		1,394,031		1,388,847
Premises and equipment, net		30,704		29,688		30,268		31,459
Goodwill and other intangible assets		11,856		11,938		12,021		12,103
Bank owned life insurance		48,608		48,267		47,933		47,607
Deferred tax assets		9,357		11,214		10,736		11,948
Other real estate owned, net		2,860		2,978		4,402		4,493
Operating lease asset		1,163		1,230		1,299		1,367
Accrued interest receivable and other assets		46,435		42,453		43,050		41,124
Total Assets	$	1,916,126	$	1,868,599	$	1,912,953	$	1,905,860
Liabilities and Shareholders' Equity
Liabilities:
Non-interest bearing deposits	$	419,437	$	423,970	$	422,759	$	427,670
Interest bearing deposits		1,120,958		1,113,101		1,140,694		1,123,307
Total deposits		1,540,395		1,537,071		1,563,453		1,550,977
Short-term borrowings		50,206		62,564		79,494		45,418
Long-term borrowings		120,929		70,929		70,929		110,929
Operating lease liability		1,343		1,412		1,484		1,556
Allowance for credit loss on off balance sheet exposures		856		801		858		873
Accrued interest payable and other liabilities		26,994		30,352		29,925		32,904
Dividends payable		1,424		1,293		1,329		1,330
Total Liabilities		1,742,147		1,704,422	$	1,747,472		1,743,987
Shareholders' Equity:
Common Stock – par value $0.01 per share; Authorized 25,000,000 shares; issued and outstanding 6,4668,625 shares at September 30, 2024 and 6,639,888 at December 31, 2023		65		65		66		66
Surplus		20,288		20,280		23,865		23,734
Retained earnings		184,239		179,892		176,272		173,900
Accumulated other comprehensive loss		(30,613)		(36,060)		(34,722)		(35,827)
Total Shareholders' Equity		173,979		164,177		165,481		161,873
Total Liabilities and Shareholders' Equity	$	1,916,126	$	1,868,599	$	1,912,953	$	1,905,860

 

Historical Income Statement
	2024							2023
		Q3		Q2		Q1		Q4		Q3	Q2		Q1
In thousands					(Unaudited)
Interest income
Interest and fees on loans	$	21,018	$	20,221	$	19,218	$	19,290	$	18,055	$	16,780	$	15,444
Interest on investment securities
Taxable		1,647		1,697		1,744		1,834		1,792		1,779		1,768
Exempt from federal income tax		56		53		53		53		123		268		270
Total investment income		1,703		1,750		1,797		1,887		1,915		2,047		2,038
Other		536		1,142		883		1,014		1,194		1,145		347
Total interest income		23,257		23,113		21,898		22,191		21,164		19,972		17,829
Interest expense
Interest on deposits		6,579		6,398		6,266		6,498		5,672		4,350		2,678
Interest on short-term borrowings		467		509		461		54		33		29		31
Interest on long-term borrowings		983		968		1,359		1,445		1,475		1,419		602
Total interest expense		8,029		7,875		8,086		7,997		7,180		5,798		3,311
Net interest income		15,228		15,238		13,812		14,194		13,984		14,174		14,518
Credit loss expense/(credit)
Loans		195		1,251		961		530		322		434		414
Debt securities held to maturity		14		—		—		—		45		—		—
Off balance sheet credit exposures		55		(57)		(15)		(111)		(104)		(39)		129
Provision for credit losses		264		1,194		946		419		263		395		543
Net interest income after provision for credit losses		14,964		14,044		12,866		13,775		13,721		13,779		13,975
Other operating income
Net losses on investments, available for sale		—		—		—		1		—		—		—
Gains on sale of residential mortgage loans		141		59		82		59		182		86		54
Losses on disposal of fixed assets		—		—		—		(29)		—		—		—
Net gains/(losses)		141		59		82		31		182		86		54
Other Income
Service charges on deposit accounts		555		556		556		567		569		546		516
Other service charges		236		225		215		223		230		244		232
Trust department		2,328		2,255		2,188		2,148		2,139		2,025		1,970
Debit card income		1,000		999		932		1,120		995		1,031		955
Bank owned life insurance		340		334		326		325		320		311		305
Brokerage commissions		297		362		495		360		245		258		297
Other		156		51		81		50		218		68		64
Total other income		4,912		4,782		4,793		4,793		4,716		4,483		4,339
Total other operating income		5,053		4,841		4,875		4,824		4,898		4,569		4,393
Other operating expenses
Salaries and employee benefits		7,160		7,256		7,157		6,390		6,964		6,870		7,296
FDIC premiums		256		285		269		268		254		277		193
Equipment		627		635		923		912		718		747		780
Occupancy		709		652		954		1,169		745		742		785
Data processing		1,333		1,422		1,318		1,384		1,388		1,306		1,306
Marketing		151		184		134		311		242		160		120
Professional services		477		449		486		631		488		520		494
Contract labor		149		84		183		170		155		157		134
Telephone		97		103		109		125		115		116		110
Other real estate owned		124		14		86		(370)		139		18		124
Investor relations		84		91		53		65		74		123		83
Contributions		65		66		50		12		74		79		64
Other		1,082		1,123		1,159		1,242		1,429		1,396		1,149
Total other operating expenses		12,314		12,364		12,881		12,309		12,785		12,511		12,638
Income before income tax expense		7,703		6,521		4,860		6,290		5,834		5,837		5,730
Provision for income tax expense		1,932		1,607		1,162		317		1,321		1,423		1,355
Net Income	$	5,771	$	4,914	$	3,698	$	5,973	$	4,513	$	4,414	$	4,375
Basic net income per common share	$	0.89	$	0.75	$	0.56	$	0.26	$	0.67	$	0.66	$	0.66
Diluted net income per common share	$	0.89	$	0.75	$	0.56	$	0.26	$	0.67	$	0.66	$	0.65
Weighted average number of basic shares outstanding		6,468		6,527		6,642		6,649		6,714		6,704		6,675
Weighted average number of diluted shares outstanding		6,482		6,537		6,655		6,663		6,728		6,718		6,697
Dividends declared per common share	$	0.22	$	0.20	$	0.20	$	0.20	$	0.20	$	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 September 30,						Nine months ended September 30,
		2024			2023			2024			2023
(in thousands, except for per share amount)
Net income - as reported		$	5,771		$	4,513		$	14,383		$	13,302
Adjustments:
Accelerated depreciation expenses			—			—			562			—
Income tax effect of adjustments			—			—			(137)			—
Adjusted net income (non-GAAP)		$	5,771		$	4,513		$	14,808		$	13,302
Diluted earnings per share - as reported		$	0.89		$	0.67		$	2.19		$	1.99
Adjustments:
Accelerated depreciation expenses			—			—			0.08			—
Income tax effect of adjustments			—			—			(0.02)			—
Adjusted basic and diluted earnings per share (non-GAAP)		$	0.89		$	0.67		$	2.25		$	1.99
		As of or for the three months ended							As of or for the nine months ended
		September 30,							Septmber 30,
(in thousands, except per share data)		2024			2023				2024			2023
Per Share Data				0				1
Basic net income per share (1) - as reported		$	0.89		$	0.67		$	2.20		$	1.99
Basic net income per share (1) - non-GAAP			0.89			0.67			2.26			1.99
Diluted net income per share (1) - as reported		$	0.89		$	0.67		$	2.19		$	1.98
Diluted net income per share (1) - non-GAAP			0.89			0.67			2.25			1.98
Basic book value per share		$	26.90		$	23.08
Diluted book value per share		$	26.84		$	23.03
Significant Ratios:			As of or for the nine months ended
			September 30,
Return on Average Assets (1) - as reported			0.99 %			0.93 %
Accelerated depreciation expenses			0.03 %			—
Income tax effect of adjustments			-0.01 %			—
Adjusted Return on Average Assets (1) (non-GAAP)			1.01 %			0.93 %
Return on Average Equity (1) - as reported			11.52 %			11.44 %
Accelerated depreciation expenses			0.34 %			—
Income tax effect of adjustments			(0.08 %)			—
Adjusted Return on Average Equity (1) (non-GAAP)			11.78 %			11.44 %
(1) See reconciliation of this non-GAAP financial measure provided elsewhere herein.

 

		Three Months Ended
		September 30
		2024								2023
(dollars in thousands)		Average Balance			Interest			Average Yield/Rate		Average Balance			Interest			Average Yield/Rate
Assets
Loans		$	1,433,508		$	21,035		5.84	%	$	1,363,821		$	18,071		5.26	%
Investment Securities:
Taxable			276,343			1,646		2.37	%		333,468			1,792		2.13	%
Non taxable			7,795			100		5.10	%		13,826			219		6.28	%
Total			284,138			1,746		2.44	%		347,294			2,011		2.30	%
Federal funds sold			33,372			451		5.38	%		75,404			1,093		5.75	%
Interest-bearing deposits with other banks			2,179			26		4.75	%		1,812			25		5.47	%
Other interest earning assets			3,987			59		5.89	%		4,771			76		6.32	%
Total earning assets			1,757,184			23,317		5.28	%		1,793,102			21,276		4.71	%
Allowance for credit losses			(18,197)								(17,110)
Non-earning assets			173,875								178,115
Total Assets		$	1,912,862							$	1,954,107
Liabilities and Shareholders' Equity
Interest-bearing demand deposits		$	370,040		$	1,604		1.72	%	$	368,409		$	1,354		1.46	%
Interest-bearing money markets - retail			422,393			3,793		3.57	%		325,810			2,430		2.96	%
Interest-bearing money markets - brokered			1			—		0.10	%		—			—		—	%
Savings deposits			176,799			44		0.10	%		209,070			54		0.10	%
Time deposits - retail			141,354			1,021		2.87	%		154,503			918		2.36	%
Time deposits - brokered			8,641			117		5.39	%		68,850			916		5.28	%
Short-term borrowings			57,553			467	1	3.23	%		49,190			33		0.27	%
Long-term borrowings			73,864			983		5.29	%		110,929			1,475		5.28	%
Total interest-bearing liabilities			1,250,645			8,029		2.55	%		1,286,761			7,180		2.21	%
Non-interest-bearing deposits			459,309								478,673
Other liabilities			32,155								32,327
Shareholders' Equity			170,753								156,346
Total Liabilities and Shareholders' Equity		$	1,912,862							$	1,954,107
Net interest income and spread					$	15,288		2.73	%				$	14,096		2.50	%
Net interest margin								3.46	%							3.12	%

 

		Nine Months Ended
		September 30,
		2024								2023
(dollars in thousands)		Average Balance			Interest			Average Yield/ Rate		Average Balance			Interest			Average Yield/ Rate
Assets
Loans		$	1,418,964		$	60,506		5.70	%	$	1,320,674		$	50,323		5.09	%
Investment Securities:
Taxable			288,977			5,087		2.35	%		337,014			5,339		2.12	%
Non taxable			7,800			289		4.95	%		21,963			1,183		7.20	%
Total			296,777			5,376		2.42	%		358,977			6,522		2.43	%
Federal funds sold			54,624			2,246		5.49	%		66,708			2,502		5.01	%
Interest-bearing deposits with other banks			1,628			75		6.15	%		2,827			70		3.31	%
Other interest earning assets			4,161			240		7.70	%		3,643			114		4.18	%
Total earning assets			1,776,154			68,443		5.15	%		1,752,829			59,531		4.54	%
Allowance for loan losses			(18,020)								(16,311)
Non-earning assets			185,660								174,411
Total Assets		$	1,943,794							$	1,910,929
Liabilities and Shareholders' Equity
Interest-bearing demand deposits		$	362,102			4,541		1.68	%	$	358,883		$	3,375		1.26	%
Interest-bearing money markets - retail			402,314			10,567		3.51	%		324,583			5,537		2.28	%
Interest-bearing money markets - brokered			37			1		3.61	%		—			—		—	%
Savings deposits			183,096			138		0.10	%		227,179			189		0.11	%
Time deposits - retail			148,458			3,155		2.84	%		134,732			1,750		1.74	%
Time deposits - brokered			20,967			841		5.36	%		46,918			1,849		5.27	%
Short-term borrowings			70,755			1,437		2.71	%		51,780			93		0.24	%
Long-term borrowings			82,571			3,310		5.35	%		89,394			3,496		5.23	%
Total interest-bearing liabilities			1,270,300			23,990		2.52	%		1,233,469			16,289		1.77	%
Non-interest-bearing deposits			473,610								490,891
Other liabilities			33,134								31,108
Shareholders' Equity			166,750								155,461
Total Liabilities and Shareholders' Equity		$	1,943,794							$	1,910,929
Net interest income and spread					$	44,453		2.63	%				$	43,242		2.77	%
Net interest margin								3.34	%							3.30	%

 

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SOURCE First United Corporation

FAQ

What was First United 's (FUNC) net income for Q3 2024?

First United (FUNC) reported a consolidated net income of $5.8 million for the third quarter of 2024.

How did First United 's (FUNC) Q3 2024 earnings compare to Q3 2023?

First United 's Q3 2024 earnings of $5.8 million ($0.89 per diluted share) increased compared to Q3 2023 earnings of $4.5 million ($0.67 per diluted share).

What was First United 's (FUNC) loan production in Q3 2024?

First United (FUNC) reported strong loan production in Q3 2024, with $52.1 million in commercial loan originations and $19.9 million in residential mortgage originations.

Did First United (FUNC) increase its dividend in Q3 2024?

Yes, First United (FUNC) declared a cash dividend of $0.22 per common share in the third quarter of 2024, representing a 10% increase over the linked quarter.