OAKLAND,
Md., Oct. 23, 2023 /PRNewswire/ -- First United
Corporation (NASDAQ: FUNC), a bank holding company and the parent
company of First United Bank & Trust (the "Bank"), today
announced earnings results for the three- and nine-month periods
ended September 30, 2023.
Consolidated net income was $4.5
million for the third quarter of 2023, or $0.67 per share (basic and diluted), compared to
$6.9 million, or $1.04 per share (basic and diluted), for the
third quarter of 2022 and $4.4
million, or $0.66 per share
(basic and diluted), for the second quarter of 2023. Year to
date income was $13.3 million,
or $1.99 and $1.98 per basic and
diluted share, respectively, compared to $18.1 million, or $2.72 per share (basic and diluted), for the same
period of 2022.
According to Carissa Rodeheaver,
Chairman, President and CEO, "We continue to be encouraged by the
strong loan growth and the positive asset quality metrics of our
loan portfolio. While we saw continued compression of our net
interest margin during the quarter due to the rising funding costs,
we believe the pricing is stabilizing. We remain focused on
utilizing technology to bring efficiencies to our operations to
control future expenses. Our team has successfully assisted
our customers in navigating this volatile and unpredictable
financial environment."
Third Quarter Financial Highlights:
- Total assets at September 30,
2023 remained stable when compared to June 30, 2023 and increased by $80.0 million, or 4.3%, when compared to
December 31, 2022. Significant
changes during the third quarter included:
- Cash balances decreased by $7.9
million when compared to June 30,
2023 and increased by $6.3
million when compared to December 31,
2022. The year-to-date increase in cash was related to
management's strategic decision to obtain $80.0 million in Federal Home Loan Bank ("FHLB")
borrowings and $61.1 million in
brokered deposits in the first quarter of 2023, offset by strong
year-to-date loan growth.
- Investment securities decreased by $20.8
million when compared to June 30,
2023 and by $31.5 million when
compared to December 31, 2022. The
decrease in the third quarter was primarily related to the
redemption of a non-rated municipal tax increment fund ("TIF") bond
at par for approximately $17.3
million to fund continued loan demand. Additional decreases
related to principal amortization and reductions in the fair market
value of the available for sale portfolio offset by the purchase of
securities for Community Reinvestment Act purposes.
- Gross loans increased by $30.0
million when compared to June 30,
2023 and by $100.5 million
when compared to December 31, 2022,
as:
- commercial balances increased by $13.6
million during the third quarter and by $50.9 million when compared to December 31, 2022,
- residential mortgage balances increased by $16.1 million during the third quarter and by
$47.3 million when compared to
December 31, 2022; and
- consumer loans increased by $0.3
million during the third quarter and by $2.3 million when compared to December 31, 2022.
- Deposits decreased by $4.9
million when compared to June 30,
2023 and increased by $4.3
million when compared to December 31,
2022 due to the addition of $61.1
million in brokered deposits, the latter of which was
partially offset by decreases in other deposit balances due to
increased consumer, commercial and municipal spending and two
relationships with planned deposit reductions of $39.5 million.
- Short-term borrowings increased by $3.3
million when compared to June 30,
2023 and decreased by $11.2
million when compared to December 31,
2022. The increase in quarterly balances was due primarily
to seasonal fluctuations of municipal customer balances in
overnight investment sweep products. The decrease from December 31, 2022 is primarily related to one
large municipal customer moving approximately $12.0 million in funds from an overnight
investment sweep product to a non-interest-bearing deposit
product.
- The ratio of the allowance for credit losses ("ACL") to loans
outstanding was 1.24% at September 30,
2023 as compared to 1.25% at June 30,
2023 and to an allowance for loan loss ("ALL") of 1.14% at
December 31, 2022.
- On January 1, 2023, the
Corporation adopted Accounting Standards Codification ("ASC") 326 –
Financial Instruments, Credit Losses (CECL) and increased the ACL
by $2.9 million for the Day 1
adjustment, which included $2.0
million to the ACL and $0.9
million related to life-of-loan reserve on unfunded loan
commitments. For periods prior to adoption of CECL, the Corporation
recognized ALL based on an incurred loss model.
- Total provision expense related to credit losses was
$0.3 million for the third quarter of
2023 as compared to provision expense of $0.4 million for the second quarter of 2023 and a
credit of $0.1 million for the third
quarter of 2022. The low provisioning is primarily due to low
historical losses, strong asset quality metrics, and improved
qualitative factors such as unemployment rates and consumer
spending.
- Consolidated net income was $4.5
million for the third quarter of 2023.
- Net interest margin, on a non-GAAP, fully tax equivalent
("FTE") basis, was 3.30% for the nine months ended September 30, 2023 as compared to 3.53% for the
same time period in 2022.
- Net interest margin, on a non-GAAP, FTE basis, was 3.12%
for the third quarter of 2023 compared to 3.26% for the second
quarter of 2023 and 3.66% for the third quarter of 2022.
- Non-interest income increased by $0.2
million in the third quarter of 2023 when compared to the
second quarter of 2023 due to increases in wealth management
income, gains on sales of mortgages, and an increase in check fees
collected related to the receipt of incentive proceeds of
$0.1 million.
- Operating expenses increased by $0.3
million quarter-over-quarter in 2023 driven by a
$0.1 million increase in salaries and
benefits, a $0.1 million increase in
net expenses attributable to other real estate owned ("OREO"), and
a $0.1 million increase in data
processing expenses. Increases in other operating expenses such as
marketing, check fraud, and contract labor were
partially offset by decreases in professional services, contract
labor and investor relations.
Income Statement Overview
Consolidated net income was $4.5
million for the third quarter of 2023 compared to
$6.9 million for the third quarter of
2022 and $4.4 million for the second
quarter of 2023. Basic and diluted net income was $0.67 per share for the third quarter of 2023,
compared to basic and diluted net income of $1.04 per share for the third quarter of 2022 and
$0.66 per share for the second
quarter of 2023.
The decrease in quarterly net income, year-over-year, was
primarily driven by a $1.3 million
decrease in net interest income. Interest expense increased
by $6.1 million year-over-year, which
was partially offset by an increase in interest income of
$4.9 million. The provision for
credit losses was $0.3 million for
the third quarter of 2023 compared to a credit to the provision of
$0.1 million for the third quarter of
2022. Salaries and employee benefits increased by
$0.8 million due to an increase in
health insurance costs related to unusually high claims, as well as
increased salary expense for new hires, merit increases effective
April 1, 2023, a one-time severance
pay-out, and decreases in deferred loan costs, partially offset by
decreases in incentives and stock compensation. Data
processing expenses increased by $0.1
million, FDIC premiums increased by $0.1 million and miscellaneous expenses
increased by $0.6 million primarily
attributable to increased net periodic pension plan costs of
$0.3 million and check
fraud related expenses of $0.3
million. Check fraud has been on the rise
throughout 2023 industry-wide. During the third
quarter, management implemented additional procedures to help
mitigate this increased risk.
Compared to the linked quarter, net income increased slightly by
$0.1 million due to a decrease in the
provision for income taxes. Net interest income for the three
months ended September 30, 2023
decreased by $0.2 million driven by
an increase in interest expense of $1.4
million, partially offset by an increase of $1.2 million in interest income. Provision
for credit losses decreased by $0.1
million due primarily to the continued strong credit quality
of our loan portfolio and decreased historical loss factors, which
was offset slightly by the strong loan growth and increases in
other qualitative factors related to the uncertain economic
environment. Other operating income, including gains on sales
of residential mortgages, wealth management income, and check fees
collected related to the receipt of incentive proceeds of
$0.1 million, increased by
$0.3 million. Operating expenses
increased by $0.3 million.
Salaries and employee benefits increased by $0.1 million primarily due to increased life and
health insurance related to continued higher claims in the third
quarter. Net OREO expenses increased by $0.1 million due to gains on sales of OREO
properties which were recognized in the second quarter of 2023.
Increases in marketing, data processing, and contract labor were
partially offset by decreases in FDIC premiums, investor relations,
professional services, and equipment expenses. The provision
for income taxes decreased by $0.1
million due to a slight reduction in the effective income
tax rate.
Net income for the first nine months of 2023 was $13.3 million compared to $18.1 million for the same period in 2022, a
$4.8 million decrease. The
year-over-year decrease was driven by an increase in total
operating expenses of $7.0
million. Salaries and employee benefits increased by
$3.2 due primarily to increased
salary expense of $1.8 million
related to new hires, the competitive environment for labor and
merit increases effective April 1,
2023, increased health insurance costs of $1.0 million associated with unusually high
claims and decreases of $0.4 in
deferred loan costs. Occupancy and equipment expense increased by
$0.2 million, data processing expense
increased by $0.4 million due to
planned implementation of new technology, and FDIC assessments
increased by $0.2 million.
Other miscellaneous expenses, such as loan service fees, dues and
licenses, check fraud expenses, employee benefit plan
expense, and miscellaneous expenses increased by $1.7 million and professional fees increased by
$0.7 million due to the one-time
$0.8 million cash receipt related to
reimbursement of litigation expenses that was credited to expenses
in 2022. Provision for credit losses increased by
$1.1 million when compared to prior
year. These increases were partially offset by increases in
net interest income of $0.2 million,
gains on sales of mortgages of $0.2
million, service charges on deposit accounts of $0.2 million, and $0.1
million increase in miscellaneous income. Income taxes
were down by $2.2 million comparing
the two periods.
Net Interest Income and Net Interest Margin
Net interest income, on a non-GAAP, FTE basis, decreased by
$1.3 million for the third quarter of
2023 when compared to the third quarter of 2022. This
decrease was driven by an increase of $6.1
million in interest expense due to an increase of 175 basis
points on interest paid on deposit accounts as well as an increase
of $127.7 million in average balances
of interest-bearing deposit accounts when compared to the same
period of 2022. Increased deposit pricing resulted from the
continued pressure on deposits as well as a shift in the deposit
portfolio mix from non-interest-bearing deposits to
interest-bearing accounts including the Insured Cash Sweep ("ICS")
product to ensure full FDIC insurance coverage. In
anticipation of increasing rates, management made the decision to
pre-fund the $30.4 million brokered
certificate of deposit set to mature in the fourth quarter of 2023
at the same rate in order to maintain cash balances. Interest
income increased by $4.9
million. Interest income on loans increased by
$4.0 million due to the increase of
76 basis points in 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 rising rate environment and an
increase in average balances of $123.1
million. Investment income decreased by
$0.1 million as cashflow from the
portfolio was used to fund higher yielding loans. The
net interest margin for the three months ended September 30, 2023 was 3.12% compared to 3.66%
for the three months ended September
30, 2022.
Comparing the third quarter of 2023 to the second quarter of
2023, net interest income, on a non-GAAP, FTE basis, decreased by
$0.3 million This
decrease was driven by an increase of $1.1
million in interest income offset by a $1.4 million increase in interest expense.
Interest expense on deposits increased by $1.3 million due to an increase of 41 basis
points in the average rate paid and an increase in average deposit
balances of $26.7 million during the
quarter. The increase in deposits was primarily driven by the
increase of $31.6 million in time
deposits due to a promotional nine-month certificate of deposit
special offered in 2023 as well as the pre-funding of a
$30.4 million brokered deposit in the
third quarter. These increases were offset by the decline of
$6.9 million in non-interest bearing
deposits. Interest income on loans increased by $1.3 million related to an overall increase of 15
basis points in yield.
Comparing the nine months ended September
30, 2023 to the nine months ended September 30, 2022, net interest income, on a
non-GAAP, FTE basis, increased by $0.1
million. Interest income increased by $13.8 million and interest expense increased by
$13.7 million. The yield on
earning assets increased 80 basis points to 4.54% in 2023 compared
to 3.74% in 2022 in correlation with the rising interest rate
environment and new loans booked at higher rates. Interest
expense on deposits increased $11.2
million while the average balances increased $108.4 million and interest on long-term
borrowings increased $2.5 million
related to $80.0 million in FHLB
borrowings obtained during the first quarter of 2023 and an
increase in interest rates on variable rate trust preferred
borrowings. The increased interest expense resulted in an
overall increase of 145 basis points on interest bearing
liabilities. The net interest margin for the nine months
ended September 30, 2023 was 3.30%
compared to 3.53% for the nine months ended September 30, 2022.
Non-Interest Income
Other operating income, including gains, for the third quarter
of 2023 increased by $0.2 million
when compared to the same period of 2022. Increases in
service charges, wealth management income, and gains on sales of
mortgages were partially offset by a decrease in debit card
income.
On a linked quarter basis, other operating income, including
gains on sales of mortgages, service charges, wealth management
income, and other miscellaneous income (primarily check fees
collected due to the receipt of incentives of $0.1 million) increased by $0.3 million. These increases were
partially offset by a decrease in debit card income.
Other operating income for the nine months ended September 30, 2023 increased by $0.3 million when compared to the same period of
2022. This increase was primarily due to the increase in
gains on sales of mortgages of $0.3
million, service charges on deposit accounts of $0.2 million, and debit card income of
$0.1 million, partially offset by a
decrease of $0.1 million in wealth
management income attributable to the decline in market values of
assets under management.
Non-Interest Expense
Operating expenses increased by $2.5
million when comparing the third quarter of 2023 to the
third quarter of 2022. This increase was primarily driven by
a $0.8 million increase in salaries
and employee benefits due to an increase in health insurance costs
related to unusually high claims, as well as increased salary
expense for new hires, merit increases effective April 1, 2023, and reduced loan costs.
Legal and professional expenses increased by $0.7 million attributable to the one-time
$0.8 million cash receipt related to
reimbursement of litigation expenses that was credited to expense
in 2022. Miscellaneous expenses increased by $0.6 million due primarily to increases of
$0.3 in check fraud
related expenses and net periodic pension plan costs of
$0.3 million. Data processing
expenses, FDIC premiums, and marketing expenses each increased by
$0.1 million year over year.
Comparing the third quarter of 2023 to the second quarter of
2023, operating expenses increased by $0.3
million. Salaries and employee benefits increased by
$0.1 million due primarily to
increased life and health insurance related to unusually high
claims. Net OREO expenses increased by $0.1 million related to gains on sales of OREO
properties recognized in the second quarter. Increases in data
processing expense of $0.1 million,
marketing expense of $0.1 million
were partially offset by decreases in investor relations and FDIC
premiums.
For the nine months ended September 30,
2023, non-interest expenses increased by $6.4 million when compared to the nine months
ended September 30, 2022.
Salaries and employee benefits increased by $3.2 million year over year due primarily to
increased salary expense of $1.9
million related to new hires and merit increases effective
April 1, 2023 and increased health
insurance costs of $1.0 million
associated with unusually high claims. Occupancy and equipment
expense increased by $0.2 million,
data processing expense increased by $0.4
million, and FDIC assessments increased by $0.2 million. Other miscellaneous expenses,
such as loan service fees, dues and licenses, check
fraud expenses, employee benefit plan expense, and
miscellaneous expenses increased by $1.7
million.
The effective income tax rates as a percentage of income for the
nine months ended September 30, 2023
and September 30, 2022 were 23.6% and
25.8%, respectively. The decrease in the tax rate for the
2023 period was primarily related to a new low-income housing tax
credit investment in 2022 that began generating tax credits during
the fourth quarter of 2022. This tax credit will continue
through 2032.
Balance Sheet Overview
Total assets at September 30, 2023
were $1.9 billion, representing an
$80.0 million increase since
December 31, 2022. During
the first nine months of 2023, cash and interest-bearing deposits
in other banks increased by $6.3
million as a result of management's strategic decision to
obtain $61.1 million in brokered
certificates of deposit and $80.0
million in FHLB borrowings during the first quarter of 2023
to strength on-balance sheet liquidity. The increase in cash
obtained from this strategic decision was partially offset by the
funding of strong loan growth in 2023. The investment
portfolio decreased by $31.5 million
since December 31, 2022.
Management elected to redeem $17.8
million from a non-rated municipal TIF bond at par to
increase on-balance sheet liquidity to fund future loan
growth. Additional decreases in the investment
portfolio were primarily associated with normal principal
amortization. Loans increased by $100.5 million since December 31, 2022 due primarily to growth in the
commercial and consumer mortgage portfolios. Other
assets, including deferred taxes, premises and equipment, and
accrued interest receivable, increased by $2.0 million as deferred tax assets increased by
$2.4 million, equity investments
increased by $1.1 million, and
pension assets decreased by $0.5
million.
Total liabilities at September 30,
2023 were $1.8 billion,
representing a $76.9 million increase
since December 31, 2022.
Total deposits increased by $4.3
million since December 31,
2022. Total certificates of deposit increased by $100.5 million primarily due to an increase of
$60.6 million in brokered
certificates of deposits and $39.9 in
retail certificates of deposit. Interest-bearing demand
deposits also increased by $54.1
million due to a shift in the deposit portfolio mix from
non-interest-bearing deposits to interest-bearing accounts
including the ICS product to ensure full FDIC insurance coverage as
well as a new municipal customer bringing approximately
$40.0 million new deposits during the
year. These increases were offset by decreases in
non-interest-bearing deposits of $76.9
million and savings and money market accounts of
$73.4 million. Short term
borrowings decreased by $11.2 million
since December 31, 2022 primarily due
to one municipal customer moving funds from an overnight investment
product to a non-interest bearing deposit product in 2023.
Long term borrowings increased by $80.0
million in the first nine months of 2023 when compared to
December 31, 2022 due to the
acquisition of $80.0 million in FHLB
borrowings.
Outstanding loans of $1.4 billion
at September 30, 2023 reflected
growth of $100.5 million for the
first nine months of 2023. Since December 31, 2022, commercial real estate loans
increased by $32.5 million,
acquisition and development loans increased by $9.2 million and commercial and industrial loans
increased by $9.3 million.
Growth in the commercial portfolios was driven by increased
activity with existing clients as well as cultivating new business
relationships. Residential mortgage loans increased
$47.3 million related to management's
strategic decision to book new mortgage loans at higher rates to
our in-house portfolio. The consumer loan portfolio increased
slightly by $2.3
million.
New commercial loan production for the three months ended
September 30, 2023 was
approximately $40.3 million. The pipeline of commercial
loans as of September 30, 2023 was
$41.7 million. At September 30, 2023, unfunded, committed
commercial construction loans totaled approximately $40.6 million. Commercial amortization and
payoffs were approximately $144.6
million through September 30,
2023 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
2023 was approximately $27.5 million,
with most of this production comprised of in-house loans. The
pipeline of in-house, portfolio loans as of September 30, 2023, was $13.5 million. The residential mortgage
production level normalized in the third quarter of 2023 due to the
increasing interest rates. Unfunded commitments related to
residential construction loans totaled $20.5
million on September 30,
2023. Management began shifting more activity towards the
secondary market in the second and third quarters to reduce the
need for additional funding.
Total deposits at September 30,
2023 increased by $4.3 million
when compared to December 31,
2022. In March 2023, the
Corporation obtained $61.1 million in
new brokered deposits. In August
2023, the Corporation obtained $30.0
million of brokered deposits to pre-fund the maturity of a
$30.4 million brokered certificate of
deposit that matured in September 2023. In addition,
retail certificates of deposit increased by $39.9 million due primarily to promotional
nine-month certificate of deposit product offered in 2023.
Interest-bearing demand deposits increased by $54.1 million due to a shift in the deposit
portfolio mix from non-interest-bearing accounts to
interest-bearing accounts including the ICS product to ensure full
FDIC insurance, including approximately $40.0 million of funds from a local
municipality. These increases were offset by decreases in
non-interesting bearing deposits of $76.9
million, money market accounts of $27.0 million, and savings accounts of
$46.3 million due to the shift to
interest-bearing demand deposit accounts, two relationships having
large deposit withdrawals totaling $39.5
million during 2023 to fund business activity, the effects
of consumer and commercial spending and the competitive market for
deposits.
The book value of the Corporation's common stock was
$23.08 per share at September 30, 2023 compared to $22.77 per share at December 31, 2022. At September 30, 2023, there were 6,715,170 of basic
outstanding shares and 6,728,482 of diluted outstanding shares of
common stock. The increase in the book value at September 30, 2023 was due to the undistributed
net income of $9.3 million for the
first nine months of 2023, which was partially offset by a decrease
in shareholders' equity of $2.2
million, net of tax, due to the adoption of ASC Topic 326
and other comprehensive losses of $4.5
million resulting from changes in the unrealized losses of
the Corporation's available for sale investment securities in this
rising rate environment. In September
2023, the Corporation purchased and retired 1,298 shares of
the Corporation's common stock at an average price of $16.25 per share pursuant to the previously
announced stock repurchase program. The program, the
term of which expires on August 18,
2024 unless sooner terminated or extended by the
Corporation's Board of Directors, will be further utilized as the
Board and management deem appropriate.
Asset Quality
On January 1, 2023, the
Corporation adopted CECL, which replaced the incurred loss
impairment model with an expected loss model. As a result of
the CECL adoption, the Corporation recorded a transition adjustment
of $2.2 million, net of $0.7 million in tax, to retained earnings as of
January 1, 2023 for the cumulative
effect of the adoption of CECL. The Corporation recorded a
$2.0 million increase to the ACL
related to loans and a $0.9 million
increase to the allowance for credit losses on off balance sheet
exposures.
For periods prior to the adoption of CECL, the Corporation
recognized credit losses for loans that were collectively evaluated
for impairment based on an incurred loss approach, which limited
our measurement of credit losses to credit events that were
estimated to have already occurred. The ALL under the
incurred model was a valuation allowance for probable incurred
losses inherent in the loan portfolio. Management made the
determination by taking into consideration historical loan loss
experience, diversification of the loan portfolio, amount of
secured and unsecured loans, banking industry standards and
averages, and general economic conditions. Credit losses were
charged against the ALL when the loan balance was confirmed
uncollectible. Subsequent recoveries, if any, were credited
to the ALL. Ultimate losses varied from current
estimates. The estimates were reviewed periodically and as
adjustments became necessary, they were reported in earnings in the
periods in which they become reasonably estimable.
The ACL was $17.1 million at
September 30, 2023 compared to the
ALL of $15.5 million recorded at
September 30, 2022 and $14.6 million at December
31, 2022. The provision for credit losses was
$0.3 million for the quarter ended
September 30, 2023, compared to a
credit to provision of $0.1 million
for the quarter ended September 30,
2022. The provision expense recorded in the third quarter of
2023 was primarily related to strong loan growth and increases in
qualitative risk factors related to the uncertainty of the economy,
inflation levels, and rising interest rates, which was partially
offset by the reduction of historical loss factors related to the
strength of our overall portfolio. Net charge-offs of
$0.1 million were recorded for the
quarter ended September 30, 2023 and
2022. The ratio of the ACL to loans outstanding was 1.24% at
September 30, 2023 compared to 1.25%
at June 30, 2023 and 1.14% at
December 31, 2022.
The ratio of year-to-date net charge offs to average loans for
the nine months ending September 30,
2023 was an annualized 0.07%, compared to net charge offs to
average loans of 0.06% for 2022. Details of the ratio, by
loan type, are shown below. Our special assets team continues
to effectively collect on charged-off loans, resulting in ongoing
overall low net charge-off ratios.
Ratio of Net (Charge
Offs)/Recoveries to Average Loans
|
|
9/30/2023
|
9/30/2022
|
Loan
Type
|
(Charge Off) /
Recovery
|
(Charge Off) /
Recovery
|
Commercial Real
Estate
|
(0.02 %)
|
0.00 %
|
Acquisition &
Development
|
0.01 %
|
0.00 %
|
Commercial &
Industrial
|
(0.07 %)
|
(0.03 %)
|
Residential
Mortgage
|
0.00 %
|
0.05 %
|
Consumer
|
(1.15 %)
|
(1.26 %)
|
Total Net (Charge
Offs)/Recoveries
|
(0.07 %)
|
(0.06 %)
|
Non-accrual loans totaled $3.5
million at September 30, 2023
and December 31, 2022. OREO
balances increased by $0.1 million
since December 31, 2022 due to the
addition of a new OREO property during the second quarter, which
was partially offset by sale of OREO held by the Bank at
December 31, 2022.
Non-accrual loans that have been subject to partial charge-offs
totaled $0.1 million at September 30, 2023 and $0.2 million at December
31, 2022. Loans secured by 1-4 family residential real
estate properties in the process of foreclosure totaled
$1.8 million at September 30, 2023. There were no loans
subject to foreclosure at December
31, 2022. As a percentage of the loan
portfolio, accruing loans past due 30 days or more was 0.27% at
September 30, 2023 compared to 0.18%
at June 30, 2023 and an ALL to loans
outstanding of 0.16% at December 31,
2022.
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 (the "FRB") 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 First United Bank & Trust, a
Maryland trust company (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 ("Limited Mews"), 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
September 30, 2023 and the impact
that any such events have on our critical accounting assumptions
and estimates made as of September 30,
2023, 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,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Results of
Operations:
|
|
|
|
|
|
|
|
|
Interest income
|
|
$
21,164
|
|
$
16,185
|
|
$
58,965
|
|
$
45,063
|
Interest expense
|
|
7,180
|
|
1,044
|
|
16,289
|
|
2,610
|
Net
interest income
|
|
13,984
|
|
15,141
|
|
42,676
|
|
42,453
|
Provision/(credit) for credit/loan losses
|
|
263
|
|
(101)
|
|
1,201
|
|
97
|
Other operating income
|
|
4,716
|
|
4,604
|
|
13,538
|
|
13,399
|
Net
gains
|
|
182
|
|
96
|
|
322
|
|
161
|
Other operating expense
|
|
12,785
|
|
10,329
|
|
37,934
|
|
31,551
|
Income before taxes
|
|
$
5,834
|
|
$
9,613
|
|
$
17,401
|
|
$
24,365
|
Income tax expense
|
|
1,321
|
|
2,677
|
|
4,099
|
|
6,286
|
Net
income
|
|
$
4,513
|
|
$
6,936
|
|
$
13,302
|
|
$
18,079
|
|
|
|
|
|
|
|
|
|
Per share
data:
|
|
|
|
|
|
|
|
|
Basic net income per share
|
|
$
0.67
|
|
$
1.04
|
|
$
1.99
|
|
$
2.72
|
Diluted net income per share
|
|
$
0.67
|
|
$
1.04
|
|
$
1.98
|
|
$
2.72
|
Dividends declared per share
|
|
$
0.20
|
|
$
0.15
|
|
$
0.60
|
|
$
0.45
|
Book value
|
|
$
23.08
|
|
$
19.83
|
|
|
|
|
Diluted book value
|
|
$
23.03
|
|
$
19.80
|
|
|
|
|
Tangible book value per share
|
|
$
21.27
|
|
$
18.03
|
|
|
|
|
Diluted Tangible book value per share
|
|
$
21.22
|
|
$
18.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing market value
|
|
$
16.23
|
|
$
16.55
|
|
|
|
|
Market Range:
|
|
|
|
|
|
|
|
|
High
|
|
$
17.34
|
|
$
19.27
|
|
|
|
|
Low
|
|
$
13.70
|
|
$
16.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding at
period end: Basic
|
|
6,715,170
|
|
6,659,390
|
|
|
|
|
Shares outstanding at
period end: Diluted
|
|
6,728,482
|
|
6,669,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance ratios:
(Year to Date Period End, annualized)
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
0.93 %
|
|
1.35 %
|
|
|
|
|
Return on average
shareholders' equity
|
|
11.44 %
|
|
17.66 %
|
|
|
|
|
Net interest margin
(Non-GAAP), includes tax exempt income of $578 and $709
|
|
3.30 %
|
|
3.53 %
|
|
|
|
|
Net interest margin
GAAP
|
|
3.25 %
|
|
3.47 %
|
|
|
|
|
Efficiency ratio -
non-GAAP (1)
|
|
66.41 %
|
|
51.49 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
|
Financial Condition
at period end:
|
|
|
|
|
|
|
|
|
Assets
|
|
$
1,928,201
|
|
$
1,848,169
|
|
|
|
|
Earning
assets
|
|
$
1,717,244
|
|
$
1,643,964
|
|
|
|
|
Gross loans
|
|
$
1,380,019
|
|
$
1,279,494
|
|
|
|
|
Commercial Real Estate
|
|
$
491,284
|
|
$
458,831
|
|
|
|
|
Acquisition and Development
|
|
$
79,796
|
|
$
70,596
|
|
|
|
|
Commercial and Industrial
|
|
$
254,650
|
|
$
245,396
|
|
|
|
|
Residential Mortgage
|
|
$
491,686
|
|
$
444,411
|
|
|
|
|
Consumer
|
|
$
62,603
|
|
$
60,260
|
|
|
|
|
Investment
securities
|
|
$
330,053
|
|
$
361,548
|
|
|
|
|
Total
deposits
|
|
$
1,575,069
|
|
$
1,570,733
|
|
|
|
|
Noninterest bearing
|
|
$
429,691
|
|
$
506,613
|
|
|
|
|
Interest bearing
|
|
$
1,145,378
|
|
$
1,064,120
|
|
|
|
|
Shareholders'
equity
|
|
$
154,990
|
|
$
151,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 to risk weighted assets
|
|
14.60 %
|
|
14.40 %
|
|
|
|
|
Common Equity Tier 1 to risk weighted assets
|
|
12.60 %
|
|
12.36 %
|
|
|
|
|
Tier 1 Leverage
|
|
11.25 %
|
|
11.23 %
|
|
|
|
|
Total risk based capital
|
|
15.81 %
|
|
15.50 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
quality:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs for the
quarter
|
|
$
(83)
|
|
$
(89)
|
|
|
|
|
Nonperforming assets:
(Period End)
|
|
|
|
|
|
|
|
|
Nonaccrual loans
|
|
$
3,479
|
|
$
1,943
|
|
|
|
|
Loans 90 days past due and accruing
|
|
145
|
|
569
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming loans and 90 day past due
|
|
$
3,624
|
|
$
2,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Modified/Restructured loans
|
|
$
-
|
|
$
3,354
|
|
|
|
|
Other real estate owned
|
|
$
4,878
|
|
$
4,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses to gross loans
|
|
1.24 %
|
|
1.22 %
|
|
|
|
|
Allowance for credit
losses to non-accrual loans
|
|
492.84 %
|
|
799.85 %
|
|
|
|
|
Allowance for credit
losses to non-performing assets
|
|
473.12 %
|
|
214.51 %
|
|
|
|
|
Non-performing and 90
day past due loans to total loans
|
|
0.26 %
|
|
0.20 %
|
|
|
|
|
Non-performing loans
and 90 day past due loans to total assets
|
|
0.19 %
|
|
0.14 %
|
|
|
|
|
Non-accrual loans to
total loans
|
|
0.25 %
|
|
0.15 %
|
|
|
|
|
Non-performing assets
to total assets
|
|
0.44 %
|
|
0.40 %
|
|
|
|
|
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)
|
2023
|
2023
|
2023
|
|
2022
|
2022
|
2022
|
2022
|
Results of
Operations:
|
|
|
|
|
|
|
|
|
Interest income
|
|
$
21,164
|
$
19,972
|
$
17,829
|
|
$
17,359
|
$
16,185
|
$
14,731
|
$
14,147
|
Interest expense
|
|
7,180
|
5,798
|
3,311
|
|
2,179
|
1,044
|
760
|
806
|
Net
interest income
|
|
13,984
|
14,174
|
14,518
|
|
15,180
|
15,141
|
13,971
|
13,341
|
Provision/(credit) for credit/loan losses
|
|
263
|
395
|
543
|
|
(736)
|
(101)
|
631
|
(421)
|
Other operating income
|
|
4,716
|
4,483
|
4,339
|
|
4,479
|
4,604
|
4,413
|
4,382
|
Net
gains
|
|
182
|
86
|
54
|
|
11
|
96
|
13
|
52
|
Other operating expense
|
|
12,785
|
12,511
|
12,638
|
|
11,590
|
10,329
|
10,630
|
10,580
|
Income before taxes
|
|
$
5,834
|
$
5,837
|
$
5,730
|
|
$
8,816
|
$
9,613
|
$
7,136
|
$
7,616
|
Income tax expense
|
|
1,321
|
1,423
|
1,355
|
|
1,847
|
2,677
|
1,708
|
1,901
|
Net
income
|
|
$
4,513
|
$
4,414
|
$
4,375
|
|
$
6,969
|
$
6,936
|
$
5,428
|
$
5,715
|
|
|
|
|
|
|
|
|
|
|
Per share
data:
|
|
|
|
|
|
|
|
|
|
Basic net income per share
|
|
$
0.67
|
$
0.66
|
$
0.66
|
|
$
1.05
|
$
1.04
|
$
0.82
|
$
0.86
|
Diluted net income per share
|
|
$
0.67
|
$
0.66
|
$
0.65
|
|
$
1.04
|
$
1.04
|
$
0.82
|
$
0.86
|
Dividends declared per share
|
|
$
0.20
|
$
0.20
|
$
0.20
|
|
$
0.18
|
$
0.15
|
$
0.15
|
$
0.15
|
Book value
|
|
$
23.08
|
$
23.12
|
$
22.85
|
|
$
22.77
|
$
19.83
|
$
19.97
|
$
20.65
|
Diluted book value
|
|
$
23.03
|
$
23.07
|
$
22.81
|
|
$
22.68
|
$
19.80
|
$
19.93
|
$
20.63
|
Tangible book value per share
|
|
$
21.27
|
$
21.29
|
$
21.01
|
|
$
20.91
|
$
18.03
|
$
18.17
|
$
18.83
|
Diluted Tangible book value per share
|
|
$
21.22
|
$
21.25
|
$
20.96
|
|
$
20.87
|
$
18.00
|
$
18.14
|
$
18.82
|
|
|
|
|
|
|
|
|
|
|
Closing market value
|
|
$
16.23
|
$
14.26
|
$
16.89
|
|
$
19.65
|
$
16.55
|
$
18.76
|
$
22.53
|
Market Range:
|
|
|
|
|
|
|
|
|
|
High
|
|
$
17.34
|
$
17.01
|
$
20.41
|
|
$
20.56
|
$
19.27
|
$
23.80
|
$
24.50
|
Low
|
|
$
13.70
|
$
12.56
|
$
16.75
|
|
$
16.74
|
$
16.18
|
$
17.50
|
$
18.81
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding at
period end: Basic
|
6,715,170
|
6,711,422
|
6,688,710
|
|
6,666,428
|
6,659,390
|
6,656,395
|
6,637,979
|
Shares outstanding at
period end: Diluted
|
6,728,482
|
6,724,734
|
6,703,252
|
|
6,692,039
|
6,669,785
|
6,666,790
|
6,649,604
|
|
|
|
|
|
|
|
|
|
|
Performance ratios:
(Year to Date Period End, annualized)
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
0.93 %
|
0.95 %
|
0.94 %
|
|
1.39 %
|
1.35 %
|
1.26 %
|
1.31 %
|
Return on average
shareholders' equity
|
|
11.44 %
|
11.43 %
|
11.87 %
|
|
18.19 %
|
17.66 %
|
16.25 %
|
16.49 %
|
Net interest margin
(Non-GAAP), includes tax exempt income of $125 and $241
|
|
3.30 %
|
3.39 %
|
3.53 %
|
|
3.56 %
|
3.53 %
|
3.46 %
|
3.40 %
|
Net interest margin
GAAP
|
|
3.25 %
|
3.34 %
|
3.48 %
|
|
3.50 %
|
3.47 %
|
3.40 %
|
3.34 %
|
Efficiency ratio -
non-GAAP (1)
|
66.41 %
|
66.00 %
|
67.02 %
|
|
56.27 %
|
51.49 %
|
57.11 %
|
58.81 %
|
|
|
|
|
|
|
|
|
|
|
(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,
|
|
|
2023
|
2023
|
2023
|
|
2022
|
2022
|
2022
|
2022
|
Financial Condition
at period end:
|
|
|
|
|
|
|
|
|
Assets
|
|
$
1,928,201
|
$
1,928,393
|
$
1,937,442
|
|
$
1,848,169
|
$
1,803,642
|
$
1,752,455
|
$
1,760,325
|
Earning
assets
|
|
$
1,717,244
|
$
1,707,522
|
$
1,652,688
|
|
$
1,643,964
|
$
1,647,303
|
$
1,608,094
|
$
1,572,737
|
Gross loans
|
|
$
1,380,019
|
$
1,350,038
|
$
1,289,080
|
|
$
1,279,494
|
$
1,277,924
|
$
1,233,613
|
$
1,181,401
|
Commercial Real Estate
|
|
$
491,284
|
$
483,485
|
$
453,356
|
|
$
458,831
|
$
437,973
|
$
421,942
|
$
391,136
|
Acquisition and Development
|
|
$
79,796
|
$
79,003
|
$
76,980
|
|
$
70,596
|
$
83,107
|
$
116,115
|
$
133,031
|
Commercial and Industrial
|
|
$
254,650
|
$
249,683
|
$
241,959
|
|
$
245,396
|
$
269,004
|
$
225,640
|
$
194,914
|
Residential Mortgage
|
|
$
491,686
|
$
475,540
|
$
456,198
|
|
$
444,411
|
$
427,093
|
$
406,293
|
$
399,704
|
Consumer
|
|
$
62,603
|
$
62,327
|
$
60,587
|
|
$
60,260
|
$
60,747
|
$
63,623
|
$
62,616
|
Investment
securities
|
$
330,053
|
$
350,844
|
$
357,061
|
|
$
361,548
|
$
366,484
|
$
373,455
|
$
385,265
|
Total
deposits
|
|
$
1,575,069
|
$
1,579,959
|
$
1,591,285
|
|
$
1,570,733
|
$
1,511,118
|
$
1,484,354
|
$
1,507,555
|
Noninterest bearing
|
|
$
429,691
|
$
466,628
|
$
468,554
|
|
$
506,613
|
$
474,444
|
$
527,761
|
$
530,901
|
Interest bearing
|
|
$
1,145,378
|
$
1,113,331
|
$
1,122,731
|
|
$
1,064,120
|
$
1,036,674
|
$
956,593
|
$
976,654
|
Shareholders'
equity
|
$
154,990
|
$
155,156
|
$
152,868
|
|
$
151,793
|
$
132,044
|
$
132,892
|
$
137,038
|
|
|
|
|
|
|
|
|
|
|
Capital
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 to risk weighted assets
|
|
14.60 %
|
14.40 %
|
14.90 %
|
|
15.06 %
|
14.40 %
|
14.31 %
|
14.55 %
|
Common Equity Tier 1 to risk weighted assets
|
|
12.60 %
|
12.40 %
|
12.82 %
|
|
12.95 %
|
12.36 %
|
12.27 %
|
12.45 %
|
Tier 1 Leverage
|
|
11.25 %
|
11.25 %
|
11.47 %
|
|
11.46 %
|
11.23 %
|
11.23 %
|
10.94 %
|
Total risk based capital
|
|
15.81 %
|
15.60 %
|
16.15 %
|
|
16.12 %
|
15.50 %
|
15.46 %
|
15.71 %
|
|
|
|
|
|
|
|
|
|
|
Asset
quality:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(charge-offs)/recoveries for the quarter
|
$
(83)
|
$
(398)
|
$
(245)
|
|
$
(164)
|
$
(89)
|
$
(179)
|
$
(244)
|
Nonperforming assets:
(Period End)
|
|
|
|
|
|
|
|
|
Nonaccrual loans
|
|
$
3,479
|
$
2,972
|
$
3,258
|
|
$
3,495
|
$
1,943
|
$
2,149
|
$
2,332
|
Loans 90 days past due and accruing
|
|
145
|
160
|
87
|
|
307
|
569
|
$
325
|
37
|
|
|
|
|
|
|
0
|
|
|
|
Total nonperforming loans and 90 day past due
|
|
$
3,624
|
$
3,132
|
$
3,345
|
|
$
3,802
|
$
2,512
|
$
2,474
|
$
2,369
|
|
|
|
|
|
|
|
|
|
|
Modified/restructured loans
|
|
$
-
|
$
-
|
$
-
|
|
$
3,028
|
$
3,354
|
$
3,226
|
$
3,228
|
Other real estate owned
|
|
$
4,878
|
$
4,482
|
$
4,598
|
|
$
4,733
|
$
4,733
|
$
4,517
|
$
4,477
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses to gross loans
|
1.24 %
|
1.25 %
|
1.31 %
|
|
1.14 %
|
1.22 %
|
1.28 %
|
1.29 %
|
Allowance for credit
losses to non-accrual loans
|
492.84 %
|
568.81 %
|
517.83 %
|
|
418.77 %
|
799.85 %
|
732.29 %
|
655.75 %
|
Allowance for credit
losses to non-performing assets
|
473.12 %
|
539.79 %
|
212.40 %
|
|
171.48 %
|
214.51 %
|
225.10 %
|
223.37 %
|
Non-performing and 90
day past due loans to total loans
|
0.26 %
|
0.23 %
|
0.26 %
|
|
0.30 %
|
0.20 %
|
0.20 %
|
0.20 %
|
Non-performing loans
and 90 day past due loans to total assets
|
0.19 %
|
0.16 %
|
0.17 %
|
|
0.21 %
|
0.14 %
|
0.14 %
|
0.13 %
|
Non-accrual loans to
total loans
|
0.25 %
|
0.22 %
|
0.25 %
|
|
0.27 %
|
0.15 %
|
0.17 %
|
0.20 %
|
Non-performing assets
to total assets
|
|
0.44 %
|
0.39 %
|
0.41 %
|
|
0.46 %
|
0.40 %
|
0.40 %
|
0.39 %
|
Consolidated Statement of Condition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands - Unaudited)
|
September 30,
2023
|
|
June 30,
2023
|
|
March 31,
2023
|
December 31,
2022
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
$
|
78,939
|
$
|
86,901
|
$
|
154,022
|
$
|
72,420
|
Interest bearing
deposits in banks
|
|
1,713
|
|
1,650
|
|
1,873
|
|
1,895
|
Cash and cash
equivalents
|
|
80,652
|
|
88,551
|
|
155,895
|
|
74,315
|
Investment securities –
available for sale (at fair value)
|
|
114,370
|
|
120,085
|
|
123,978
|
|
125,889
|
Investment securities –
held to maturity (at cost)
|
|
215,683
|
|
230,759
|
|
233,083
|
|
235,659
|
Restricted investment
in bank stock, at cost
|
|
5,251
|
|
4,490
|
|
4,490
|
|
1,027
|
Loans held for
sale
|
|
208
|
|
500
|
|
184
|
|
—
|
Loans
|
|
1,380,019
|
|
1,350,038
|
|
1,289,080
|
|
1,279,494
|
Unearned
fees
|
|
(371)
|
|
(327)
|
|
(257)
|
|
(174)
|
Allowance for credit
losses
|
|
(17,146)
|
|
(16,905)
|
|
(16,871)
|
|
(14,636)
|
Net loans
|
|
1,362,502
|
|
1,332,806
|
|
1,271,952
|
|
1,264,684
|
Premises and equipment,
net
|
|
32,766
|
|
33,532
|
|
34,207
|
|
34,948
|
Goodwill and other
intangible assets
|
|
12,185
|
|
12,268
|
|
12,350
|
|
12,433
|
Bank owned life
insurance
|
|
47,282
|
|
46,963
|
|
46,652
|
|
46,346
|
Deferred tax
assets
|
|
13,020
|
|
11,771
|
|
11,356
|
|
10,605
|
Other real estate
owned, net
|
|
4,878
|
|
4,842
|
|
4,598
|
|
4,733
|
Operating lease
asset
|
|
1,905
|
|
1,990
|
|
2,072
|
|
1,898
|
Accrued interest
receivable and other assets
|
|
37,499
|
|
39,836
|
|
36,625
|
|
35,632
|
Total
Assets
|
$
|
1,928,201
|
$
|
1,928,393
|
$
|
1,937,442
|
$
|
1,848,169
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Non-interest bearing
deposits
|
$
|
429,691
|
$
|
466,628
|
$
|
468,554
|
$
|
506,613
|
Interest bearing
deposits
|
|
1,145,378
|
|
1,113,331
|
|
1,122,731
|
|
1,064,120
|
Total
deposits
|
|
1,575,069
|
|
1,579,959
|
|
1,591,285
|
|
1,570,733
|
Short-term
borrowings
|
|
53,330
|
|
50,078
|
|
52,030
|
|
64,565
|
Long-term
borrowings
|
|
110,929
|
|
110,929
|
|
110,929
|
|
30,929
|
Operating lease
liability
|
|
2,347
|
|
2,443
|
|
2,536
|
|
2,373
|
Allowance for credit
loss on off balance sheet exposures
|
|
985
|
|
1,089
|
|
1,128
|
|
133
|
Accrued interest
payable and other liabilities
|
|
29,207
|
|
27,397
|
|
25,332
|
|
26,444
|
Dividends
payable
|
|
1,344
|
|
1,342
|
|
1,334
|
|
1,199
|
Total
Liabilities
|
|
1,773,211
|
|
1,773,237
|
|
1,784,574
|
|
1,696,376
|
Shareholders'
Equity:
|
|
|
|
|
|
|
|
|
Common Stock – par
value $0.01 per share; Authorized 25,000,000 shares;
issued and outstanding 6,715,170 shares at September 30, 2023
and
6,666,428 at December 31, 2022
|
|
67
|
|
67
|
|
67
|
|
67
|
Surplus
|
|
25,029
|
|
24,901
|
|
24,529
|
|
24,409
|
Retained
earnings
|
|
173,467
|
|
170,298
|
|
167,229
|
|
166,343
|
Accumulated other
comprehensive loss
|
|
(43,573)
|
|
(40,110)
|
|
(38,957)
|
|
(39,026)
|
Total Shareholders'
Equity
|
|
154,990
|
|
155,156
|
|
152,868
|
|
151,793
|
Total Liabilities
and Shareholders' Equity
|
$
|
1,928,201
|
$
|
1,928,393
|
$
|
1,937,442
|
$
|
1,848,169
|
Historical Income
Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
2023
|
2022
|
|
|
Q3
|
Q2
|
Q1
|
|
Q4
|
Q3
|
Q2
|
Q1
|
In
thousands
|
(Unaudited)
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
18,055
|
$
|
16,780
|
$
|
15,444
|
$
|
15,097
|
$
|
14,058
|
$
|
12,861
|
$
|
12,432
|
Interest on investment
securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
1,792
|
|
1,779
|
|
1,768
|
|
1,719
|
|
1,587
|
|
1,540
|
|
1,406
|
Exempt from federal
income tax
|
|
123
|
|
268
|
|
270
|
|
272
|
|
273
|
|
279
|
|
282
|
Total investment
income
|
|
1,915
|
|
2,047
|
|
2,038
|
|
1,991
|
|
1,860
|
|
1,819
|
|
1,688
|
Other
|
|
1,194
|
|
1,145
|
|
347
|
|
271
|
|
267
|
|
51
|
|
27
|
Total interest
income
|
|
21,164
|
|
19,972
|
|
17,829
|
|
17,359
|
|
16,185
|
|
14,731
|
|
14,147
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
5,672
|
|
4,350
|
|
2,678
|
|
1,729
|
|
621
|
|
401
|
|
475
|
Interest on short-term
borrowings
|
|
33
|
|
29
|
|
31
|
|
26
|
|
47
|
|
21
|
|
18
|
Interest on long-term
borrowings
|
|
1,475
|
|
1,419
|
|
602
|
|
424
|
|
376
|
|
338
|
|
313
|
Total interest
expense
|
|
7,180
|
|
5,798
|
|
3,311
|
|
2,179
|
|
1,044
|
|
760
|
|
806
|
Net interest
income
|
|
13,984
|
|
14,174
|
|
14,518
|
|
15,180
|
|
15,141
|
|
13,971
|
|
13,341
|
Credit loss
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
322
|
|
434
|
|
414
|
|
(740)
|
|
(108)
|
|
624
|
|
(419)
|
Debt securities held to
maturity
|
|
45
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Off balance sheet
credit exposures
|
|
(104)
|
|
(39)
|
|
129
|
|
4
|
|
7
|
|
7
|
|
(2)
|
Provision/(credit) for
credit/loan losses
|
|
263
|
|
395
|
|
543
|
|
(736)
|
|
(101)
|
|
631
|
|
(421)
|
Net interest income
after provision for loan losses
|
|
13,721
|
|
13,779
|
|
13,975
|
|
15,916
|
|
15,242
|
|
13,340
|
|
13,762
|
Other operating
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains on
investments, available for sale
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3
|
Gains on sale of
residential mortgage loans
|
|
182
|
|
86
|
|
54
|
|
14
|
|
3
|
|
7
|
|
21
|
Gains/(losses) on
disposal of fixed assets
|
|
—
|
|
—
|
|
—
|
|
(1)
|
|
—
|
|
6
|
|
28
|
Net gains
|
|
182
|
|
86
|
|
54
|
|
11
|
|
96
|
|
13
|
|
52
|
Other Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on
deposit accounts
|
|
569
|
|
546
|
|
516
|
|
530
|
|
523
|
|
463
|
|
465
|
Other service
charges
|
|
230
|
|
244
|
|
232
|
|
239
|
|
241
|
|
232
|
|
213
|
Trust
department
|
|
2,139
|
|
2,025
|
|
1,970
|
|
2,006
|
|
2,005
|
|
2,044
|
|
2,189
|
Debit card
income
|
|
995
|
|
1,031
|
|
955
|
|
1,036
|
|
1,053
|
|
983
|
|
886
|
Bank owned life
insurance
|
|
320
|
|
311
|
|
305
|
|
305
|
|
302
|
|
297
|
|
292
|
Brokerage
commissions
|
|
245
|
|
258
|
|
297
|
|
244
|
|
272
|
|
313
|
|
220
|
Other
|
|
218
|
|
68
|
|
64
|
|
119
|
|
208
|
|
81
|
|
117
|
Total other
income
|
|
4,716
|
|
4,483
|
|
4,339
|
|
4,479
|
|
4,604
|
|
4,413
|
|
4,382
|
Total other
operating income
|
|
4,898
|
|
4,569
|
|
4,393
|
|
4,490
|
|
4,700
|
|
4,426
|
|
4,434
|
Other operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
6,957
|
|
6,865
|
|
7,290
|
|
6,239
|
|
6,130
|
|
5,793
|
|
5,968
|
FDIC
premiums
|
|
254
|
|
277
|
|
193
|
|
157
|
|
150
|
|
155
|
|
174
|
Equipment
|
|
1,029
|
|
1,047
|
|
1,092
|
|
1,053
|
|
1,037
|
|
1,029
|
|
1,044
|
Occupancy
|
|
747
|
|
743
|
|
784
|
|
734
|
|
734
|
|
711
|
|
727
|
Data
processing
|
|
1,011
|
|
946
|
|
969
|
|
928
|
|
890
|
|
805
|
|
821
|
Marketing
|
|
220
|
|
137
|
|
117
|
|
134
|
|
152
|
|
151
|
|
106
|
Professional
services
|
|
490
|
|
522
|
|
518
|
|
665
|
|
(211)
|
|
564
|
|
520
|
Contract
labor
|
|
173
|
|
159
|
|
139
|
|
136
|
|
159
|
|
158
|
|
165
|
Telephone
|
|
115
|
|
116
|
|
110
|
|
117
|
|
112
|
|
139
|
|
114
|
Other real estate
owned
|
|
139
|
|
18
|
|
124
|
|
215
|
|
128
|
|
152
|
|
95
|
Investor
relations
|
|
83
|
|
132
|
|
57
|
|
42
|
|
39
|
|
123
|
|
96
|
Contributions
|
|
74
|
|
79
|
|
64
|
|
104
|
|
121
|
|
42
|
|
21
|
Other
|
|
1,493
|
|
1,470
|
|
1,181
|
|
1,066
|
|
888
|
|
808
|
|
729
|
Total other
operating expenses
|
|
12,785
|
|
12,511
|
|
12,638
|
|
11,590
|
|
10,329
|
|
10,630
|
|
10,580
|
Income before income
tax expense
|
|
5,834
|
|
5,837
|
|
5,730
|
|
8,816
|
|
9,613
|
|
7,136
|
|
7,616
|
Provision for income
tax expense
|
|
1,321
|
|
1,423
|
|
1,355
|
|
1,847
|
|
2,677
|
|
1,708
|
|
1,901
|
Net
Income
|
$
|
4,513
|
$
|
4,414
|
$
|
4,375
|
$
|
6,969
|
$
|
6,936
|
$
|
5,428
|
$
|
5,715
|
Basic net income per
common share
|
$
|
0.67
|
$
|
0.66
|
$
|
0.66
|
$
|
1.05
|
$
|
1.04
|
$
|
0.82
|
$
|
0.86
|
Diluted net income per
common share
|
$
|
0.67
|
$
|
0.66
|
$
|
0.65
|
$
|
1.04
|
$
|
1.04
|
$
|
0.82
|
$
|
0.86
|
Weighted average number
of basic shares outstanding
|
|
6,714
|
|
6,704
|
|
6,675
|
|
6,666
|
|
6,658
|
|
6,650
|
|
6,628
|
Weighted average number
of diluted shares outstanding
|
|
6,728
|
|
6,718
|
|
6,697
|
|
6,692
|
|
6,669
|
|
6,661
|
|
6,636
|
Dividends declared per
common share
|
$
|
0.20
|
$
|
0.20
|
$
|
0.20
|
$
|
0.18
|
$
|
0.15
|
$
|
0.15
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
September
30,
|
|
|
|
2023
|
|
2022
|
|
(dollars in
thousands)
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/Rate
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/Rate
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
1,363,821
|
|
$
|
18,071
|
|
5.26
|
%
|
$
|
1,240,706
|
|
$
|
14,073
|
|
4.50
|
%
|
Investment
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
333,468
|
|
|
1,792
|
|
2.13
|
%
|
|
343,581
|
|
|
1,587
|
|
1.83
|
%
|
Non taxable
|
|
|
13,826
|
|
|
219
|
|
6.28
|
%
|
|
26,471
|
|
|
489
|
|
7.33
|
%
|
Total
|
|
|
347,294
|
|
|
2,011
|
|
2.30
|
%
|
|
370,052
|
|
|
2,076
|
|
2.23
|
%
|
Federal funds
sold
|
|
|
75,404
|
|
|
1,093
|
|
5.75
|
%
|
|
52,019
|
|
|
251
|
|
1.91
|
%
|
Interest-bearing
deposits with other banks
|
|
|
1,812
|
|
|
25
|
|
5.47
|
%
|
|
1,552
|
|
|
7
|
|
1.79
|
%
|
Other interest earning
assets
|
|
|
4,771
|
|
|
76
|
|
6.32
|
%
|
|
1,026
|
|
|
9
|
|
3.48
|
%
|
Total earning
assets
|
|
|
1,793,102
|
|
|
21,276
|
|
4.71
|
%
|
|
1,665,355
|
|
|
16,416
|
|
3.91
|
%
|
Allowance for loan
losses
|
|
|
(17,110)
|
|
|
|
|
|
|
|
(15,715)
|
|
|
|
|
|
|
Non-earning
assets
|
|
|
178,115
|
|
|
|
|
|
|
|
170,092
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
1,954,107
|
|
|
|
|
|
|
$
|
1,819,732
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand
deposits
|
|
$
|
368,409
|
|
$
|
1,354
|
|
1.46
|
%
|
$
|
305,608
|
|
$
|
187
|
|
0.24
|
%
|
Interest-bearing money
markets
|
|
|
325,810
|
|
|
2,430
|
|
2.96
|
%
|
|
305,185
|
|
|
210
|
|
0.27
|
%
|
Savings
deposits
|
|
|
209,070
|
|
|
54
|
|
0.10
|
%
|
|
253,576
|
|
|
34
|
|
0.05
|
%
|
Time deposits -
retail
|
|
|
154,503
|
|
|
918
|
|
2.36
|
%
|
|
134,600
|
|
|
190
|
|
0.56
|
%
|
Time deposits -
brokered
|
|
|
68,850
|
|
|
916
|
|
5.28
|
%
|
|
—
|
|
|
—
|
|
—
|
%
|
Short-term
borrowings
|
|
|
49,190
|
|
|
33
|
|
0.27
|
%
|
|
66,172
|
|
|
47
|
|
0.28
|
%
|
Long-term
borrowings
|
|
|
110,929
|
|
|
1,475
|
|
5.28
|
%
|
|
30,929
|
|
|
376
|
|
4.82
|
%
|
Total
interest-bearing liabilities
|
|
|
1,286,761
|
|
|
7,180
|
|
2.21
|
%
|
|
1,096,070
|
|
|
1,044
|
|
0.38
|
%
|
Non-interest-bearing
deposits
|
|
|
478,673
|
|
|
|
|
|
|
|
550,978
|
|
|
|
|
|
|
Other
liabilities
|
|
|
32,327
|
|
|
|
|
|
|
|
37,499
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
156,346
|
|
|
|
|
|
|
|
135,186
|
|
|
|
|
|
|
Total Liabilities
and Shareholders' Equity
|
|
$
|
1,954,107
|
|
|
|
|
|
|
$
|
1,819,733
|
|
|
|
|
|
|
Net interest income and
spread
|
|
|
|
|
$
|
14,096
|
|
2.50
|
%
|
|
|
|
$
|
15,372
|
|
3.53
|
%
|
Net interest
margin
|
|
|
|
|
|
|
|
3.12
|
%
|
|
|
|
|
|
|
3.66
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
2023
|
|
2022
|
|
(dollars in
thousands)
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/
Rate
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/
Rate
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
1,320,674
|
|
$
|
50,323
|
|
5.09
|
%
|
$
|
1,203,650
|
|
$
|
39,399
|
|
4.38
|
%
|
Investment
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
337,014
|
|
|
5,339
|
|
2.12
|
%
|
352,446
|
|
|
4,533
|
|
1.72
|
%
|
Non taxable
|
|
|
21,963
|
|
|
1,183
|
|
7.20
|
%
|
27,118
|
|
|
1,494
|
|
7.37
|
%
|
Total
|
|
|
358,977
|
|
|
6,522
|
|
2.43
|
%
|
|
379,564
|
|
|
6,027
|
|
2.12
|
%
|
Federal funds
sold
|
|
|
66,708
|
|
|
2,502
|
|
5.01
|
%
|
47,173
|
|
|
308
|
|
0.87
|
%
|
Interest-bearing
deposits with other banks
|
|
|
2,827
|
|
|
70
|
|
3.31
|
%
|
3,564
|
|
|
12
|
|
0.45
|
%
|
Other interest earning
assets
|
|
|
3,643
|
|
|
114
|
|
4.18
|
%
|
1,027
|
|
|
25
|
|
3.25
|
%
|
Total earning
assets
|
|
|
1,752,829
|
|
|
59,531
|
|
4.54
|
%
|
|
1,634,978
|
|
|
45,771
|
|
3.74
|
%
|
Allowance for loan
losses
|
|
|
(16,311)
|
|
|
|
|
|
|
|
(15,611)
|
|
|
|
|
|
|
Non-earning
assets
|
|
|
174,411
|
|
|
|
|
|
|
|
166,594
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
1,910,929
|
|
|
|
|
|
|
$
|
1,785,961
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand
deposits
|
|
$
|
358,883
|
|
$
|
3,375
|
|
1.26
|
%
|
$
|
296,069
|
|
$
|
369
|
|
0.17
|
%
|
Interest-bearing money
markets
|
|
|
324,583
|
|
|
5,537
|
|
2.28
|
%
|
294,481
|
|
|
347
|
|
0.16
|
%
|
Savings
deposits
|
|
|
227,179
|
|
|
189
|
|
0.11
|
%
|
249,596
|
|
|
70
|
|
0.04
|
%
|
Time deposits -
retail
|
|
|
134,732
|
|
|
1,750
|
|
1.74
|
%
|
143,734
|
|
|
711
|
|
0.66
|
%
|
Time deposits -
brokered
|
|
|
46,918
|
|
|
1,849
|
|
5.27
|
%
|
—
|
|
|
—
|
|
—
|
%
|
Short-term
borrowings
|
|
|
51,780
|
|
|
93
|
|
0.24
|
%
|
62,175
|
|
|
86
|
|
0.18
|
%
|
Long-term
borrowings
|
|
|
89,394
|
|
|
3,496
|
|
5.23
|
%
|
30,929
|
|
|
1,027
|
|
4.44
|
%
|
Total
interest-bearing liabilities
|
|
|
1,233,469
|
|
|
16,289
|
|
1.77
|
%
|
|
1,076,984
|
|
|
2,610
|
|
0.32
|
%
|
Non-interest-bearing
deposits
|
|
|
490,891
|
|
|
|
|
|
|
|
540,082
|
|
|
|
|
|
|
Other
liabilities
|
|
|
31,108
|
|
|
|
|
|
|
|
32,057
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
155,461
|
|
|
|
|
|
|
|
136,838
|
|
|
|
|
|
|
Total Liabilities
and Shareholders' Equity
|
|
$
|
1,910,929
|
|
|
|
|
|
|
$
|
1,785,961
|
|
|
|
|
|
|
Net interest income and
spread
|
|
|
|
|
$
|
43,242
|
|
2.77
|
%
|
|
|
$
|
43,161
|
|
3.42
|
%
|
Net interest
margin
|
|
|
|
|
|
|
|
3.30
|
%
|
|
|
|
|
|
3.53
|
%
|
View original
content:https://www.prnewswire.com/news-releases/first-united-corporation-announces-third-quarter-2023-earnings-301964981.html
SOURCE First United Corporation