OAKLAND,
Md., July 24, 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 six-month periods
ended June 30, 2023.
Consolidated net income was $4.4
million for the second quarter of 2023, or $0.66 per share (basic and diluted), compared to
$5.4 million, or $0.82 per share (basic and diluted), for the
second quarter of 2022 and $4.4
million, or $0.66 per basic
share and $0.65 per diluted share,
for the first quarter of 2023. Year to date income was
$8.8 million, or $1.32 per basic share $1.31 per diluted share, compared to $11.1 million, or $1.68 per share (basic and diluted) for the same
period of 2022.
According to Carissa Rodeheaver,
President and CEO, "Despite the challenging and competitive
environment, net income for the second quarter remained stable as
we saw improved fee income and were able to hold expenses.
The net interest margin declined as we expected, driven by the
increased expense of our deposit portfolio. We experienced
strong loan growth in both the consumer and commercial portfolios
although we expect growth to slow as we head into the second half
of the year. Asset quality, capital and available
liquidity remain strong."
Second Quarter Financial Highlights:
- Total assets at June 30, 2023
decreased by $9.0 million, or 0.5%,
when compared to March 31, 2023 and
increased by $80.2 million, or 4.3%,
when compared to December 31, 2022.
Significant changes during the second quarter included:
-
- Cash balances decreased by $67.3
million when compared to March 31,
2023 and increased $14.2
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 Loans Bank ("FHLB")
borrowings and $61.1 million in
brokered deposits in the first quarter, offset by strong loan
growth in the second quarter.
- Investment securities decreased by $6.2
million when compared to March 31,
2023 and by $10.7 million when
compared to December 31, 2022, due
primarily to the normal principal amortization in 2023.
- Gross loans increased by $61.0
million when compared to March 31,
2023 and by $70.5 million when
compared to December 31, 2022,
as:
-
- commercial balances increased by $39.9
million during the second quarter and by $37.3 million when compared to December 31, 2022,
- residential mortgage balances increased by $19.4 million during the second quarter and by
$31.1 million when compared to
December 31, 2022; and
- consumer loans increased by $1.7
million during the second quarter and by $2.1 million when compared to December 31, 2022.
- Deposits decreased by $11.3
million when compared to March 31,
2023 and increased by $9.2
million when compared to December 31,
2022 due to the addition of $61.1
million in brokered deposits, which was partially offset by
decreases in other deposit balances due to customer spending habits
and two large commercial customers utilizing $39.5 million in cash in the second quarter of
2023.
- The ratio of the allowance for credit losses ("ACL") to loans
outstanding was 1.25% at June 30,
2023 as compared to 1.31% at March
31, 2023 and to an allowance for loan loss ("ALL") of 1.14%
at December 31, 2022.
-
- On January 1, 2023, the Company
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 Company
recognized ALL based on an incurred loss model.
- Total provision expense related to credit losses was
$0.4 million for the second quarter
of 2023 as compared to provision expense of $0.5 million for the first quarter of 2022 and
$0.6 million for the second quarter
of 2022.
- Consolidated net income was $4.4
million for the second quarter of 2023.
-
- Net interest margin, on a non-GAAP, fully tax equivalent
("FTE") basis, was 3.39% for the second quarter of 2023 compared to
3.53% for the first quarter of 2023 and 3.46% for the second
quarter of 2022.
- Non-interest income increased by $0.2
million in the second quarter of 2023 when compared to the
first quarter of 2023, due to increases in service charges, debit
card income, wealth management and gains on sales of
mortgages.
Operating expenses decreased by $0.1
million quarter over quarter in 2023 driven by a
$0.4 million decrease in salaries and
benefits, a $0.1 million decrease in
occupancy and equipment and $0.1
million decline in net expenses attributable to other real
estate owned ("OREO"). These decreases were offset by increases of
$0.1 million in FDIC assessments,
$0.1 million in investor relations
expenses and $0.3 million in other
expenses.
Income Statement Overview
Consolidated net income was $4.4
million for the second quarter of 2023 compared to
$5.4 million for the second quarter
of 2022 and $4.4 million for the
first quarter of 2023. Basic and diluted net income was
$0.66 per share for the second
quarter of 2023, compared to basic and diluted net income per share
of $0.82 for the second quarter of
2022. For the first quarter of 2023, basic net income was
$0.66 per share and diluted net
income was $0.65 per share.
The decrease in net income year-over-year was primarily driven
by a $1.1 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, increased incentive
compensation, and decreases in deferred loan costs due to decrease
in loan reductions. Data processing expenses increased by
$0.1 million, FDIC premiums increased
by $0.1 million and miscellaneous
expenses increased by $0.7 million
primarily attributable to increased pension plan of $0.3 million, check fraud related
expenses of $0.2 million, and
increases in membership dues and licenses, mortgage escrow, debit
card expense, and miscellaneous loan fees, partially offset by
decreases in personnel related expense and loan service fees.
An increase in net interest income of $0.2
million and a decrease in income tax expense of $0.3 million also partially offset the
decrease. The provision for credit losses was
$0.4 million for the second quarter
of 2023 compared to provision for loan loss of $0.6 million for the second quarter of 2022.
Compared to the linked quarter, net income was stable. Net
interest income for the three months ended June 30, 2023 decreased by $0.3 million and was driven by an increase in
interest expense of $2.5 million,
partially offset by an increase of $2.1
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 remained stable,
including service charges, wealth management income, and debit card
income. Salaries and employee benefits decreased by
$0.4 million primarily due to
decreases in health insurance costs and incentive
compensation. Net other real estate owned
expenses decreased by $0.1
million related to gains on sales of OREO properties
recognized in the second quarter of 2023. Miscellaneous
expenses increased by $0.3 million
due to increases in FDIC assessments of $0.1
million, check fraud related expenses of
$0.1 million, and investor relations
costs of $0.1 million.
Year to date net income for the first six months of 2023 was
$8.8 million compared to $11.1 million for the same period in 2022.
The year-over-year decrease was primarily driven by a $2.4 million in salaries and employee benefits
year over year due primarily to increased salary expense of
$1.1 million related to new hires and
merit increases effective April 1,
2023, increased health insurance costs of $0.8 million associated with unusually high
claims and increased incentive payouts of $0.2 million. Occupancy and equipment expense
increased by $0.2 million, data
processing expense increased by $0.3
million, and FDIC assessments increased by $0.1 million. Other miscellaneous expenses,
such as loan service fees, dues and licenses, check
fraud expenses, employee benefit plan expense, and
miscellaneous expenses increased by $1.1
million. Provision for credit losses increased by
$0.7 million when compared to prior
year. These increases were partially offset by an increase in
net interest income of $1.4 million,
gains on sales of mortgages of $0.1
million, service charges on deposit accounts of $0.1 million, and debit card income of
$0.1 million.
Net Interest Income and Net Interest Margin
Net interest income, on a non-GAAP, FTE basis, increased by
$0.2 million for the second quarter
of 2023 when compared to the second quarter of 2022. This
increase was driven by an increase of $5.2
million in interest income from an overall increase in yield
of 86 basis points on interest earning assets and an increase in
average balances of $152.7
million. Interest income on loans increased by
$3.9 million due to the increase of
81 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 $117.1
million. Investment income increased by $0.2 million. The increase of $5.0 million in interest expense was driven by an
increase of 142 basis points on interest paid on deposit accounts
as well as an increase of $126.1
million in average balances of interest-bearing deposit
accounts when compared to the same period of 2022. Increased
deposit pricing is a result of 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. The net interest margin for the three
months ended June 30, 2023 was 3.24%
compared to 3.52% for the three months ended June 30, 2022.
Comparing the second quarter of 2023 to the first 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 $2.1
million in interest income offset by a $2.5 million increase in interest expense.
Interest paid on long-term borrowings increased by $0.8 million due to $80.0
million in FHLB borrowings obtained during the first quarter
and an increase of interest rates on variable rate trust preferred
borrowings. Interest expense on deposits increased by
$1.7 million due to an increase in
the average rate paid and an increase in average deposit balances
of $31.2 million during the quarter.
The increase in deposit balances was attributable to the addition
of $61.1 million in brokered deposits
late in the first quarter, offset by customary fluctuations in
commercial and municipal deposits in the quarter and declines due
to intense competition for deposits and increased customer
utilization of cash. Interest income on loans increased by
$1.3 million related to an overall
increase of 21 basis points in yield.
Comparing the six months ended June 30,
2023 to the six months ended June 30,
2022, net interest income, on a non-GAAP, FTE basis,
increased by $1.4 million.
Interest income increased by $8.9
million and interest expense increased by $7.5 million. The yield on earning assets
increased 79 basis points to 4.45% in 2023 compared to 3.66% in
2022 in correlation with the rising interest rate environment and
new loans booked at higher rates. Interest expense on
deposits increased $6.2 million while
the average balances increased $100.0
million and interest on long-term borrowings increased
$1.4 million relating to $80.0 million in FHLB borrowings obtained during
the first quarter of 2023 and an increase of interest rates on
variable rate trust preferred borrowings. The increased
interest expense resulted in an overall increase of 122 basis
points on interest bearing liabilities. The net interest
margin for the six months ended June 30,
2023 was 3.39% compared to 3.46% for the six months ended
June 30, 2022.
Non-Interest Income
Other operating income, including gains, for the second quarter
of 2023 increased slightly by $0.1
million when compared to the same period of 2022.
Increases in service charges, debit card income, and gains on sales
of mortgages were partially offset by decreases in wealth
management income attributable to the decline in market values of
assets under management.
On a linked quarter basis, other operating income, including
gains on sales of mortgages, debit card income, service charges,
and wealth management income, remained stable.
Other operating income for the six months ended June 30, 2023 remained stable when compared to
the same period of 2022. This increase was primarily due to
the increase in gains on sales of residential mortgage loans of
$0.1 million, service charges on
deposit accounts of $0.1 million, and
debit card income of $0.1 million,
which was partially offset by decreases in wealth management income
attributable to the decline in market values of assets under
management.
Non-Interest Expense
Operating expenses increased by $1.9
million when comparing the second quarter of 2023 to the
second quarter of 2022. This increase was primarily driven by
a $1.1 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 increased incentive
compensation. Data processing expenses increased by
$0.1 million, FDIC premiums increased
by $0.1 million and miscellaneous
expenses increased by $0.7 million
primarily attributable to increased employee benefit plan costs of
$0.3 million, check
fraud related expenses of $0.2
million, and increases in membership dues and licenses,
mortgage escrow interest expense, debit card expense, and
miscellaneous loan fees, partially offset by decreases in personnel
related expense and loan service fees.
Comparing the second quarter of 2023 to the first quarter of
2023, operating expenses decreased by $0.1
million. Salaries and employee benefits decreased by
$0.4 million primarily due to
decreases in health insurance costs, incentive compensation and
reduced in loan costs. Net OREO expenses decreased by
$0.1 million related to gains on
sales of OREO properties recognized in the second quarter.
Miscellaneous expenses increased by $0.3
million due to increases in FDIC assessments of $0.1 million, check fraud related
expenses of $0.1 million, and
investor relations costs of $0.1
million attributable to our annual shareholder meeting and
proxy.
For the six months ended June 30,
2023, non-interest expenses increased by $3.9 million when compared to the six months
ended June 30, 2022.
Salaries and employee benefits increased by $2.4 million year over year due primarily to
increased salary expense of $1.1
million related to new hires and merit increases effective
April 1, 2023, increased health
insurance costs of $0.8 million
associated with unusually high claims and increased incentive
payouts of $0.2 million. Occupancy
and equipment expense increased by $0.2
million, data processing expense increased by $0.3 million, and FDIC assessments increased by
$0.1 million. Other
miscellaneous expenses, such as loan service fees, dues and
licenses, check fraud expenses, employee benefit plan
expense, and miscellaneous expenses increased by $1.1 million.
The effective income tax rates as a percentage of income for the
six months ended June 30, 2023 and
June 30, 2022 were 24.0% and 24.5%,
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 June 30, 2023 were
$1.9 billion, representing a
$80.2 million increase since
December 31, 2022. During the
first six months of 2023, cash and interest-bearing deposits in
other banks increased by $14.2
million resulting from implementation of the contingency
funding plan and obtaining $61.1
million of brokered certificates of deposit and $80.0 million in FHLB borrowings.
Implementing the contingency funding plan and the increase in
on-balance sheet liquidity was a precautionary move given the
market disruption associated with the volatile banking environment
and the near-term uncertainties regarding growth in the deposit
portfolio. The increase in cash obtained from contingency funding
was partially offset by the funding of loan growth during
2023. The investment portfolio decreased by $10.7 million associated with normal principal
amortization and gross loans increased by $70.5 million. Other assets, including
deferred taxes, premises and equipment, and accrued interest
receivable, increased by $4.0 million
as pension assets increased by $0.6
million, equity investments increased by $0.7 million, and deferred tax assets increased
by $1.2 million.
Total liabilities at June 30, 2023
were $1.8 billion, representing a
$76.9 million increase since
December 31, 2022. Total
deposits increased by $9.2 million
since December 31, 2022. The
increase in deposits during the first six months was primarily
attributable to $61.1 million in new
brokered deposits, which was partially offset by a decrease of
approximately $40.0 million in
non-interest-bearing deposits due to a shift to interest bearing
accounts, two large commercial customers 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.
Short term borrowings decreased by $14.5 million since December 31, 2022 due to municipalities utilizing
cash in our treasury management product for normal spending.
Long term borrowings increased by $80.0
million in the first six months of 2023 when compared to
December 31, 2022 due to the
acquisition of $80.0 million in FHLB
borrowings. The addition of brokered deposits and the FHLB
borrowings was a precautionary move as described above.
Outstanding loans of $1.4 billion
at June 30, 2023 reflected growth of
$70.5 million for the first six
months of 2023. Since December 31,
2022, commercial real estate loans increased by $24.7 million and acquisition and development
loans increased by $8.4 million.
Commercial and industrial loans increased by $4.3 million since December 31, 2022. Growth in the commercial
portfolios was driven by increased activity with existing clients
as well as cultivating new business relationships.
Residential mortgage loans increased $31.1
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 $2.1 million.
New commercial loan production for the three months ended
June 30, 2023 was
approximately $67.6 million. The pipeline of commercial
loans as of June 30, 2023 was
$22.5 million. At June 30, 2023, unfunded, committed commercial
construction loans totaled approximately $42.6 million. Commercial amortization and
payoffs were approximately $99.3
million through June 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 second quarter of
2023 was approximately $32.3 million,
with most of this production comprised of in-house mortgages.
The pipeline of in-house, portfolio loans as of June 30, 2023, was $6.2
million. The residential mortgage production level
normalized in the second quarter of 2023 due to the increasing
interest rates that occurred throughout 2022 and 2023.
Unfunded commitments related to residential construction loans
totaled $21.0 million at June 30, 2023. Management began shifting
activity towards the secondary market in the second quarter to
reduce the need for additional funding.
Total deposits at June 30, 2023
increased by $9.2 million when
compared to December 31, 2022.
During the first six months of 2023, non-interest-bearing deposits
decreased by $40.0 million primarily
due 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,
consumer and commercial spending and the competitive deposit
market. Interest bearing demand deposits increased by
$65.5 million and traditional savings
and money market accounts decreased by $85.3
million, which is primarily related to consumer spending
habits during 2023, businesses utilizing cash, and two large
customers reducing deposits by $39.5
million for regular business purposes. Total time deposits
increased by $103.0 million.
This increase in time deposits was primarily driven by management's
decision to acquire $61.1 million in
brokered deposits during the first quarter of 2023 due to the
heightened uncertainty in the deposit market associated with the
volatile banking environment as well as increased interest rates on
a promotional nine-month CD product offered in 2023.
The book value of the Company's common stock was $23.12 per share at June
30, 2023 compared to $22.77
per share at December 31, 2022.
At June 30, 2023, there were
6,711,422 of basic outstanding shares and 6,724,734 of diluted
outstanding shares of common stock. The increase in the book
value at June 30, 2023 was due to the
undistributed net income of $6.1
million for the first six 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 326- CECL.
Asset Quality
On January 1, 2023, the Company
adopted CECL, which replaced the incurred loss impairment model
with an expected loss model. As a result of the CECL
adoption, the Company 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 Company 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 Company
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 $16.9 million at
June 30, 2023 compared to the ALL of
$15.7 million recorded at
June 30, 2022 and $14.6 million at December
31, 2022. The provision for credit losses was
$0.4 million for the quarter ended
June 30, 2023, compared to provision
expense of $0.6 million for the
quarter ended June 30, 2022.
The provision expense recorded in the second 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
$0.4 million were recorded for the
quarter ended June 30, 2023 compared
to net charge-offs of $0.2 million
for the quarter ended June 30, 2022.
The ratio of the ACL to loans outstanding was 1.25% at June 30, 2023 compared to 1.31% at March 31, 2023 and 1.14% at December 31, 2022.
The ratio of year-to-date net charge offs to average loans for
the six months ending June 30, 2023
was an annualized 0.10%, compared to net charge offs to average
loans of 0.07% 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
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6/30/2023
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6/30/2022
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Loan
Type
|
(Charge Off) /
Recovery
|
(Charge Off) /
Recovery
|
Commercial Real
Estate
|
(0.04 %)
|
0.00 %
|
Acquisition &
Development
|
0.02 %
|
0.03 %
|
Commercial &
Industrial
|
(0.13 %)
|
(0.04 %)
|
Residential
Mortgage
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0.01 %
|
0.03 %
|
Consumer
|
(1.40 %)
|
(1.45 %)
|
Total Net (Charge
Offs)/Recoveries
|
(0.10 %)
|
(0.07 %)
|
Non-accrual loans totaled $3.0
million at June 30, 2023
compared to $3.5 million at
December 31, 2022. The decrease
in non-accrual balances at June 30,
2023 was primarily driven by principal reductions in the
residential mortgage portfolio. 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 June 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 June
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 0.18% at June 30, 2023 compared to 0.17% at March 31, 2023 and 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
June 30, 2023 and the impact that any
such events have on our critical accounting assumptions and
estimates made as of June 30, 2023,
which could require us to make adjustments to the amounts reflected
in this press release.
FIRST UNITED
CORPORATION
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Oakland,
MD
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Stock Symbol :
FUNC
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Financial Highlights -
Unaudited
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(Dollars in thousands,
except per share data)
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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June 30,
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June 30,
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2023
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2022
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2023
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2022
|
|
Results of Operations:
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$
19,972
|
|
$
14,731
|
|
$
37,801
|
|
$
28,878
|
|
|
Interest
expense
|
|
5,798
|
|
760
|
|
9,109
|
|
1,566
|
|
|
Net interest
income
|
|
14,174
|
|
13,971
|
|
28,692
|
|
27,312
|
|
|
Provision/(credit) for
credit/loan losses
|
395
|
|
631
|
|
938
|
|
210
|
|
|
Other operating
income
|
4,483
|
|
4,413
|
|
8,822
|
|
8,795
|
|
|
Net gains
|
|
86
|
|
13
|
|
140
|
|
65
|
|
|
Other operating
expense
|
|
12,511
|
|
10,631
|
|
25,149
|
|
21,210
|
|
|
Income before
taxes
|
|
$
5,837
|
|
$
7,135
|
|
$
11,567
|
|
$
14,752
|
|
|
Income tax
expense
|
|
1,423
|
|
1,708
|
|
2,778
|
|
3,609
|
|
|
Net income
|
|
$
4,414
|
|
$
5,427
|
|
$
8,789
|
|
$
11,143
|
|
|
|
|
|
|
|
|
|
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share
|
|
$
0.66
|
|
$
0.82
|
|
$
1.32
|
|
$
1.68
|
|
|
Diluted net income per
share
|
|
$
0.66
|
|
$
0.82
|
|
$
1.31
|
|
$
1.68
|
|
|
Dividends declared per
share
|
|
$
0.20
|
|
$
0.15
|
|
$
0.40
|
|
$
0.30
|
|
|
Book value
|
|
$
23.12
|
|
$
19.97
|
|
|
|
|
|
|
Diluted book
value
|
|
$
23.07
|
|
$
19.93
|
|
|
|
|
|
|
Tangible book value per
share
|
|
$
21.29
|
|
$
18.17
|
|
|
|
|
|
|
Diluted Tangible book
value per share
|
|
$
21.25
|
|
$
18.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing market
value
|
|
$
14.26
|
|
$
18.76
|
|
|
|
|
|
|
Market
Range:
|
|
|
|
|
|
|
|
|
|
|
High
|
|
$
17.01
|
|
$
23.80
|
|
|
|
|
|
|
Low
|
|
$
12.56
|
|
$
17.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding at
period end: Basic
|
|
6,711,422
|
|
6,656,395
|
|
|
|
|
|
Shares outstanding at
period end: Diluted
|
|
6,724,734
|
|
6,666,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance ratios: (Year to Date Period End,
annualized)
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
0.95 %
|
|
1.26 %
|
|
|
|
|
|
Return on average
shareholders' equity
|
|
11.43 %
|
|
16.25 %
|
|
|
|
|
|
Net interest margin
(Non-GAAP), includes tax exempt income of $452 and $444
|
|
3.39 %
|
|
3.46 %
|
|
|
|
|
|
Net interest margin
GAAP
|
|
3.34 %
|
|
3.40 %
|
|
|
|
|
|
Efficiency ratio -
non-GAAP (1)
|
|
66.00 %
|
|
57.11 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
June 30
|
|
December 31
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
Financial Condition at period
end:
|
|
|
|
|
|
|
|
|
|
Assets
|
|
$
1,928,393
|
|
$
1,848,169
|
|
|
|
|
|
Earning
assets
|
|
$
1,707,522
|
|
$
1,643,964
|
|
|
|
|
|
Gross loans
|
|
$
1,350,038
|
|
$
1,279,494
|
|
|
|
|
|
|
Commercial Real
Estate
|
|
$
483,485
|
|
$
458,831
|
|
|
|
|
|
|
Acquisition and
Development
|
|
$
79,003
|
|
$
70,596
|
|
|
|
|
|
|
Commercial and
Industrial
|
|
$
249,683
|
|
$
245,396
|
|
|
|
|
|
|
Residential
Mortgage
|
|
$
475,540
|
|
$
444,411
|
|
|
|
|
|
|
Consumer
|
|
$
62,327
|
|
$
60,260
|
|
|
|
|
|
Investment
securities
|
|
$
350,844
|
|
$
361,548
|
|
|
|
|
|
Total
deposits
|
|
$
1,579,959
|
|
$
1,570,733
|
|
|
|
|
|
|
Noninterest
bearing
|
|
$
466,628
|
|
$
506,613
|
|
|
|
|
|
|
Interest
bearing
|
|
$
1,113,331
|
|
$
1,064,120
|
|
|
|
|
|
Shareholders'
equity
|
|
$
155,156
|
|
$
151,793
|
|
|
|
|
|
|
|
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 to risk weighted
assets
|
|
14.40 %
|
|
15.06 %
|
|
|
|
|
|
|
Common Equity Tier 1 to
risk weighted assets
|
|
12.40 %
|
|
12.95 %
|
|
|
|
|
|
|
Tier 1
Leverage
|
|
11.25 %
|
|
11.46 %
|
|
|
|
|
|
|
Total risk based
capital
|
|
15.60 %
|
|
16.12 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs for the
quarter
|
|
$
(398)
|
|
$
(164)
|
|
|
|
|
|
Nonperforming assets:
(Period End)
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans
|
|
$
2,972
|
|
$
3,495
|
|
|
|
|
|
|
Loans 90 days past due
and accruing
|
|
160
|
|
307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming
loans and 90 day past due
|
|
$
3,132
|
|
$
3,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Modified/Restructured
loans
|
|
$
-
|
|
$
3,028
|
|
|
|
|
|
|
Other real estate
owned
|
|
$
4,482
|
|
$
4,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses to gross loans
|
|
1.25 %
|
|
1.14 %
|
|
|
|
|
|
Allowance for credit
losses to non-accrual loans
|
|
568.81 %
|
|
418.77 %
|
|
|
|
|
|
Allowance for credit
losses to non-performing assets
|
|
539.79 %
|
|
171.48 %
|
|
|
|
|
|
Non-performing and 90
day past due loans to total loans
|
|
0.23 %
|
|
0.30 %
|
|
|
|
|
|
Non-performing loans
and 90 day past due loans to total assets
|
|
0.16 %
|
|
0.21 %
|
|
|
|
|
|
Non-accrual loans to
total loans
|
|
0.22 %
|
|
0.27 %
|
|
|
|
|
|
Non-performing assets
to total assets
|
|
0.39 %
|
|
0.46 %
|
|
|
|
|
|
FIRST UNITED
CORPORATION
|
|
Oakland,
MD
|
|
Stock Symbol :
FUNC
|
|
Financial Highlights -
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
March 31,
|
|
December
31,
|
September
30,
|
June 30,
|
March 31,
|
|
|
(Dollars in thousands,
except per share data)
|
2023
|
2023
|
|
2022
|
2022
|
2022
|
2022
|
|
|
Results of Operations:
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
$
19,972
|
$
17,829
|
|
$
17,359
|
$
16,185
|
$
14,731
|
$
14,147
|
|
|
|
Interest
expense
|
5,798
|
3,311
|
|
2,179
|
1,044
|
760
|
806
|
|
|
|
Net interest
income
|
14,174
|
14,518
|
|
15,180
|
15,141
|
13,971
|
13,341
|
|
|
|
Provision/(credit) for
credit/loan losses
|
395
|
543
|
|
(736)
|
(101)
|
631
|
(421)
|
|
|
|
Other operating
income
|
4,483
|
4,339
|
|
4,479
|
4,604
|
4,413
|
4,382
|
|
|
|
Net gains
|
86
|
54
|
|
11
|
96
|
13
|
52
|
|
|
|
Other operating
expense
|
12,511
|
12,638
|
|
11,590
|
10,329
|
10,630
|
10,580
|
|
|
|
Income before
taxes
|
$
5,837
|
$
5,730
|
|
$
8,816
|
$
9,613
|
$
7,136
|
$
7,616
|
|
|
|
Income tax
expense
|
1,423
|
1,355
|
|
1,847
|
2,677
|
1,708
|
1,901
|
|
|
|
Net income
|
$
4,414
|
$
4,375
|
|
$
6,969
|
$
6,936
|
$
5,428
|
$
5,715
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share
|
$
0.66
|
$
0.66
|
|
$
1.05
|
$
1.04
|
$
0.82
|
$
0.86
|
|
|
|
Diluted net income per
share
|
$
0.66
|
$
0.65
|
|
$
1.04
|
$
1.04
|
$
0.82
|
$
0.86
|
|
|
|
Dividends declared per
share
|
$
0.20
|
$
0.20
|
|
$
0.18
|
$
0.15
|
$
0.15
|
$
0.15
|
|
|
|
Book value
|
$
23.12
|
$
22.85
|
|
$
22.77
|
$
19.83
|
$
19.97
|
$
20.65
|
|
|
|
Diluted book
value
|
$
23.07
|
$
22.81
|
|
$
22.68
|
$
19.80
|
$
19.93
|
$
20.63
|
|
|
|
Tangible book value per
share
|
$
21.29
|
$
21.01
|
|
$
20.91
|
$
18.03
|
$
18.17
|
$
18.83
|
|
|
|
Diluted Tangible book
value per share
|
$
21.25
|
$
20.96
|
|
$
20.87
|
$
18.00
|
$
18.14
|
$
18.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing market
value
|
$
14.26
|
$
16.89
|
|
$
19.65
|
$
16.55
|
$
18.76
|
$
22.53
|
|
|
|
Market
Range:
|
|
|
|
|
|
|
|
|
|
|
High
|
$
17.01
|
$
20.41
|
|
$
20.56
|
$
19.27
|
$
23.80
|
$
24.50
|
|
|
|
Low
|
$
12.56
|
$
16.75
|
|
$
16.74
|
$
16.18
|
$
17.50
|
$
18.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding at
period end: Basic
|
6,711,422
|
6,688,710
|
|
6,666,428
|
6,659,390
|
6,656,395
|
6,637,979
|
|
|
Shares outstanding at
period end: Diluted
|
6,724,734
|
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
|
0.95 %
|
0.94 %
|
|
1.39 %
|
1.35 %
|
1.26 %
|
1.31 %
|
|
|
Return on average
shareholders' equity
|
11.43 %
|
11.87 %
|
|
18.19 %
|
17.66 %
|
16.25 %
|
16.49 %
|
|
|
Net interest margin
(Non-GAAP), includes tax exempt income of $225 and $241
|
3.39 %
|
3.53 %
|
|
3.56 %
|
3.53 %
|
3.46 %
|
3.40 %
|
|
|
Net interest margin
GAAP
|
3.34 %
|
3.48 %
|
|
3.50 %
|
3.47 %
|
3.40 %
|
3.34 %
|
|
|
Efficiency ratio -
non-GAAP (1)
|
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.
|
June 30,
|
March 31,
|
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
|
|
|
2023
|
2023
|
|
2022
|
2022
|
2022
|
2022
|
|
|
Financial Condition at period
end:
|
|
|
|
|
|
|
|
|
|
Assets
|
$ 1,928,393
|
$ 1,937,442
|
|
$
1,848,169
|
$
1,803,642
|
$
1,752,455
|
$
1,760,325
|
|
|
Earning
assets
|
$ 1,707,522
|
$ 1,652,688
|
|
$
1,643,964
|
$
1,647,303
|
$
1,608,094
|
$
1,572,737
|
|
|
Gross loans
|
$ 1,350,038
|
$ 1,289,080
|
|
$
1,279,494
|
$
1,277,924
|
$
1,233,613
|
$
1,181,401
|
|
|
|
Commercial Real
Estate
|
$
483,485
|
$
453,356
|
|
$
458,831
|
$
437,973
|
$
421,942
|
$
391,136
|
|
|
|
Acquisition and
Development
|
$
79,003
|
$
76,980
|
|
$
70,596
|
$
83,107
|
$
116,115
|
$
133,031
|
|
|
|
Commercial and
Industrial
|
$
249,683
|
$
241,959
|
|
$
245,396
|
$
269,004
|
$
225,640
|
$
194,914
|
|
|
|
Residential
Mortgage
|
$
475,540
|
$
456,198
|
|
$
444,411
|
$
427,093
|
$
406,293
|
$
399,704
|
|
|
|
Consumer
|
$
62,327
|
$
60,587
|
|
$
60,260
|
$
60,747
|
$
63,623
|
$
62,616
|
|
|
Investment
securities
|
$
350,844
|
$
357,061
|
|
$
361,548
|
$
366,484
|
$
373,455
|
$
385,265
|
|
|
Total
deposits
|
$ 1,579,959
|
$ 1,591,285
|
|
$
1,570,733
|
$
1,511,118
|
$
1,484,354
|
$
1,507,555
|
|
|
|
Noninterest
bearing
|
$
466,628
|
$
468,554
|
|
$
506,613
|
$
474,444
|
$
527,761
|
$
530,901
|
|
|
|
Interest
bearing
|
$ 1,113,331
|
$ 1,122,731
|
|
$
1,064,120
|
$
1,036,674
|
$
956,593
|
$
976,654
|
|
|
Shareholders'
equity
|
$
155,156
|
$
152,868
|
|
$
151,793
|
$
132,044
|
$
132,892
|
$
137,038
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 to risk weighted
assets
|
14.40 %
|
14.90 %
|
|
15.06 %
|
14.40 %
|
14.31 %
|
14.55 %
|
|
|
|
Common Equity Tier 1 to
risk weighted assets
|
12.40 %
|
12.82 %
|
|
12.95 %
|
12.36 %
|
12.27 %
|
12.45 %
|
|
|
|
Tier 1
Leverage
|
11.25 %
|
11.47 %
|
|
11.46 %
|
11.23 %
|
11.23 %
|
10.94 %
|
|
|
|
Total risk based
capital
|
15.60 %
|
16.15 %
|
|
16.12 %
|
15.50 %
|
15.46 %
|
15.71 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(charge-offs)/recoveries for the quarter
|
$
(398)
|
$
(245)
|
|
$
(164)
|
$
(89)
|
$
(179)
|
$
(244)
|
Nonperforming assets:
(Period End)
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans
|
$
2,972
|
$
3,258
|
|
$
3,495
|
$
1,943
|
$
2,149
|
$
2,332
|
|
|
|
Loans 90 days past due
and accruing
|
160
|
87
|
|
307
|
569
|
$
325
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming
loans and 90 day past due
|
$
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
|
$
4,482
|
$
4,598
|
|
$
4,733
|
$
4,733
|
$
4,517
|
$
4,477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses to gross loans
|
1.25 %
|
1.31 %
|
|
1.14 %
|
1.22 %
|
1.28 %
|
1.29 %
|
|
|
Allowance for credit
losses to non-accrual loans
|
568.81 %
|
517.83 %
|
|
418.77 %
|
799.85 %
|
732.29 %
|
655.75 %
|
|
|
Allowance for credit
losses to non-performing assets
|
539.79 %
|
212.40 %
|
|
171.48 %
|
214.51 %
|
225.10 %
|
223.37 %
|
|
|
Non-performing and 90
day past due loans to total loans
|
0.23 %
|
0.26 %
|
|
0.30 %
|
0.20 %
|
0.20 %
|
0.20 %
|
|
|
Non-performing loans
and 90 day past due loans to total assets
|
0.16 %
|
0.17 %
|
|
0.21 %
|
0.14 %
|
0.14 %
|
0.13 %
|
|
|
Non-accrual loans to
total loans
|
0.22 %
|
0.25 %
|
|
0.27 %
|
0.15 %
|
0.17 %
|
0.20 %
|
|
|
Non-performing assets
to total assets
|
0.39 %
|
0.41 %
|
|
0.46 %
|
0.40 %
|
0.40 %
|
0.39 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Condition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands -
Unaudited)
|
|
June 30, 2023
|
|
March 31,
2023
|
December 31,
2022
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Cash and due from
banks
|
$
|
86,901
|
$
|
154,022
|
$
|
72,420
|
Interest bearing
deposits in banks
|
|
1,650
|
|
1,873
|
|
1,895
|
Cash and cash
equivalents
|
|
88,551
|
|
155,895
|
|
74,315
|
Investment securities
– available for sale (at fair value)
|
|
120,085
|
|
123,978
|
|
125,889
|
Investment securities
– held to maturity (at cost)
|
|
230,759
|
|
233,083
|
|
235,659
|
Restricted investment
in bank stock, at cost
|
|
4,490
|
|
4,490
|
|
1,027
|
Loans held for
sale
|
|
500
|
|
184
|
|
—
|
Loans
|
|
1,350,038
|
|
1,289,080
|
|
1,279,494
|
Unearned
fees
|
|
(327)
|
|
(257)
|
|
(174)
|
Allowance for credit
losses
|
|
(16,905)
|
|
(16,871)
|
|
(14,636)
|
Net loans
|
|
1,332,806
|
|
1,271,952
|
|
1,264,684
|
Premises and
equipment, net
|
|
33,532
|
|
34,207
|
|
34,948
|
Goodwill and other
intangible assets
|
|
12,268
|
|
12,350
|
|
12,433
|
Bank owned life
insurance
|
|
46,963
|
|
46,652
|
|
46,346
|
Deferred tax
assets
|
|
11,771
|
|
11,356
|
|
10,605
|
Other real estate
owned, net
|
|
4,842
|
|
4,598
|
|
4,733
|
Operating lease
asset
|
|
1,990
|
|
2,072
|
|
1,898
|
Accrued interest
receivable and other assets
|
|
39,836
|
|
36,625
|
|
35,632
|
Total Assets
|
$
|
1,928,393
|
$
|
1,937,442
|
$
|
1,848,169
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Non-interest bearing
deposits
|
$
|
466,628
|
$
|
468,554
|
$
|
506,613
|
Interest bearing
deposits
|
|
1,113,331
|
|
1,122,731
|
|
1,064,120
|
Total
deposits
|
|
1,579,959
|
|
1,591,285
|
|
1,570,733
|
Short-term
borrowings
|
|
50,078
|
|
52,030
|
|
64,565
|
Long-term
borrowings
|
|
110,929
|
|
110,929
|
|
30,929
|
Operating lease
liability
|
|
2,443
|
|
2,536
|
|
2,373
|
Allowance for credit
loss on off balance sheet exposures
|
|
1,089
|
|
1,128
|
|
133
|
Accrued interest
payable and other liabilities
|
|
27,397
|
|
25,332
|
|
26,444
|
Dividends
payable
|
|
1,342
|
|
1,334
|
|
1,199
|
Total
Liabilities
|
|
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 6,711,422 shares at June 30, 2023 and
6,666,428 at
December 31, 2022
|
|
67
|
|
67
|
|
67
|
Surplus
|
|
24,901
|
|
24,529
|
|
24,409
|
Retained
earnings
|
|
170,298
|
|
167,229
|
|
166,343
|
Accumulated other
comprehensive loss
|
|
(40,110)
|
|
(38,957)
|
|
(39,026)
|
Total Shareholders'
Equity
|
|
155,156
|
|
152,868
|
|
151,793
|
Total Liabilities and Shareholders'
Equity
|
$
|
1,928,393
|
$
|
1,937,442
|
$
|
1,848,169
|
|
|
|
|
|
|
|
Historical Income Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
2023
|
2022
|
|
Q2
|
Q1
|
|
Q4
|
Q3
|
Q2
|
Q1
|
In thousands
|
(Unaudited)
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
16,780
|
$
|
15,444
|
$
|
15,097
|
$
|
14,058
|
$
|
12,861
|
$
|
12,432
|
Interest on investment
securities
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
1,779
|
|
1,768
|
|
1,719
|
|
1,587
|
|
1,540
|
|
1,406
|
Exempt from federal
income tax
|
|
268
|
|
270
|
|
272
|
|
273
|
|
279
|
|
282
|
Total investment
income
|
|
2,047
|
|
2,038
|
|
1,991
|
|
1,860
|
|
1,819
|
|
1,688
|
Other
|
|
1,145
|
|
347
|
|
271
|
|
267
|
|
51
|
|
27
|
Total interest
income
|
|
19,972
|
|
17,829
|
|
17,359
|
|
16,185
|
|
14,731
|
|
14,147
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
4,350
|
|
2,678
|
|
1,729
|
|
621
|
|
401
|
|
475
|
Interest on short-term
borrowings
|
|
29
|
|
31
|
|
26
|
|
47
|
|
21
|
|
18
|
Interest on long-term
borrowings
|
|
1,419
|
|
602
|
|
424
|
|
376
|
|
338
|
|
313
|
Total interest
expense
|
|
5,798
|
|
3,311
|
|
2,179
|
|
1,044
|
|
760
|
|
806
|
Net interest
income
|
|
14,174
|
|
14,518
|
|
15,180
|
|
15,141
|
|
13,971
|
|
13,341
|
Credit loss expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
434
|
|
414
|
|
(740)
|
|
(108)
|
|
624
|
|
(419)
|
Off balance sheet
credit exposures
|
|
(39)
|
|
129
|
|
4
|
|
7
|
|
7
|
|
(2)
|
Provision/(credit) for
credit/loan losses
|
|
395
|
|
543
|
|
(736)
|
|
(101)
|
|
631
|
|
(421)
|
Net interest income
after provision for loan losses
|
|
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
|
|
86
|
|
54
|
|
14
|
|
3
|
|
7
|
|
21
|
Gains/(losses) on
disposal of fixed assets
|
|
—
|
|
—
|
|
(1)
|
|
—
|
|
6
|
|
28
|
Net gains
|
|
86
|
|
54
|
|
11
|
|
96
|
|
13
|
|
52
|
Other
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on
deposit accounts
|
|
546
|
|
516
|
|
530
|
|
523
|
|
463
|
|
465
|
Other service
charges
|
|
244
|
|
232
|
|
239
|
|
241
|
|
232
|
|
213
|
Trust
department
|
|
2,025
|
|
1,970
|
|
2,006
|
|
2,005
|
|
2,044
|
|
2,189
|
Debit card
income
|
|
1,031
|
|
955
|
|
1,036
|
|
1,053
|
|
983
|
|
886
|
Bank owned life
insurance
|
|
311
|
|
305
|
|
305
|
|
302
|
|
297
|
|
292
|
Brokerage
commissions
|
|
258
|
|
297
|
|
244
|
|
272
|
|
313
|
|
220
|
Other
|
|
68
|
|
64
|
|
119
|
|
208
|
|
81
|
|
117
|
Total other
income
|
|
4,483
|
|
4,339
|
|
4,479
|
|
4,604
|
|
4,413
|
|
4,382
|
Total other operating income
|
|
4,569
|
|
4,393
|
|
4,490
|
|
4,700
|
|
4,426
|
|
4,434
|
Other operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
6,865
|
|
7,290
|
|
6,239
|
|
6,130
|
|
5,793
|
|
5,968
|
FDIC
premiums
|
|
277
|
|
193
|
|
157
|
|
150
|
|
155
|
|
174
|
Equipment
|
|
1,047
|
|
1,092
|
|
1,053
|
|
1,037
|
|
1,029
|
|
1,044
|
Occupancy
|
|
743
|
|
784
|
|
734
|
|
734
|
|
711
|
|
727
|
Data
processing
|
|
946
|
|
969
|
|
928
|
|
890
|
|
805
|
|
821
|
Marketing
|
|
137
|
|
117
|
|
134
|
|
152
|
|
151
|
|
106
|
Professional
services
|
|
522
|
|
518
|
|
665
|
|
(211)
|
|
564
|
|
520
|
Contract
labor
|
|
159
|
|
139
|
|
136
|
|
159
|
|
158
|
|
165
|
Telephone
|
|
116
|
|
110
|
|
117
|
|
112
|
|
139
|
|
114
|
Other real estate
owned
|
|
18
|
|
124
|
|
215
|
|
128
|
|
152
|
|
95
|
Investor
relations
|
|
132
|
|
57
|
|
42
|
|
39
|
|
123
|
|
96
|
Contributions
|
|
79
|
|
64
|
|
104
|
|
121
|
|
42
|
|
21
|
Other
|
|
1,470
|
|
1,181
|
|
1,066
|
|
888
|
|
808
|
|
729
|
Total other operating expenses
|
|
12,511
|
|
12,638
|
|
11,590
|
|
10,329
|
|
10,630
|
|
10,580
|
Income before income
tax expense
|
|
5,837
|
|
5,730
|
|
8,816
|
|
9,613
|
|
7,136
|
|
7,616
|
Provision for income
tax expense
|
|
1,423
|
|
1,355
|
|
1,847
|
|
2,677
|
|
1,708
|
|
1,901
|
Net Income
|
$
|
4,414
|
$
|
4,375
|
$
|
6,969
|
$
|
6,936
|
$
|
5,428
|
$
|
5,715
|
Basic net income per
common share
|
$
|
0.66
|
$
|
0.66
|
$
|
1.05
|
$
|
1.04
|
$
|
0.82
|
$
|
0.86
|
Diluted net income per
common share
|
$
|
0.66
|
$
|
0.65
|
$
|
1.04
|
$
|
1.04
|
$
|
0.82
|
$
|
0.86
|
Weighted average number
of basic shares outstanding
|
|
6,704
|
|
6,675
|
|
6,666
|
|
6,658
|
|
6,650
|
|
6,628
|
Weighted average number
of diluted shares outstanding
|
|
6,718
|
|
6,697
|
|
6,692
|
|
6,669
|
|
6,661
|
|
6,636
|
Dividends declared per
common share
|
$
|
0.20
|
$
|
0.20
|
$
|
0.18
|
$
|
0.15
|
$
|
0.15
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
(dollars in thousands)
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/Rate
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/Rate
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
1,317,728
|
|
$
|
16,794
|
|
5.11
|
%
|
$
|
1,200,651
|
|
$
|
12,876
|
|
4.30
|
%
|
|
|
Investment
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
337,032
|
|
|
1,779
|
|
2.12
|
%
|
|
350,602
|
|
|
1,540
|
|
1.76
|
%
|
|
|
Non taxable
|
|
|
26,093
|
|
|
479
|
|
7.36
|
%
|
|
26,879
|
|
|
500
|
|
7.46
|
%
|
|
|
Total
|
|
|
363,125
|
|
|
2,258
|
|
2.49
|
%
|
|
377,481
|
|
|
2,040
|
|
2.17
|
%
|
|
|
Federal funds
sold
|
|
|
84,629
|
|
|
1,102
|
|
5.22
|
%
|
|
36,151
|
|
|
39
|
|
0.43
|
%
|
|
|
Interest-bearing
deposits with other banks
|
|
|
1,735
|
|
|
19
|
|
4.39
|
%
|
|
3,728
|
|
|
4
|
|
0.43
|
%
|
|
|
Other interest earning
assets
|
|
|
4,490
|
|
|
25
|
|
2.23
|
%
|
|
1,026
|
|
|
8
|
|
3.13
|
%
|
|
|
Total earning assets
|
|
|
1,771,707
|
|
|
20,198
|
|
4.57
|
%
|
|
1,619,037
|
|
|
14,967
|
|
3.71
|
%
|
|
|
Allowance for loan
losses
|
|
|
(16,982)
|
|
|
|
|
|
|
|
(15,221)
|
|
|
|
|
|
|
|
|
Non-earning
assets
|
|
|
175,369
|
|
|
|
|
|
|
|
166,785
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
1,930,094
|
|
|
|
|
|
|
$
|
1,770,601
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand
deposits
|
|
$
|
377,773
|
|
$
|
1,132
|
|
1.20
|
%
|
$
|
298,571
|
|
$
|
93
|
|
0.12
|
%
|
|
|
Interest-bearing money
markets
|
|
|
304,322
|
|
|
1,809
|
|
2.38
|
%
|
|
282,083
|
|
|
74
|
|
0.11
|
%
|
|
|
Savings
deposits
|
|
|
226,172
|
|
|
56
|
|
0.10
|
%
|
|
251,187
|
|
|
18
|
|
0.03
|
%
|
|
|
Time deposits -
retail
|
|
|
130,634
|
|
|
552
|
|
1.69
|
%
|
|
142,013
|
|
|
216
|
|
0.61
|
%
|
|
|
Time deposits -
brokered
|
|
|
61,081
|
|
|
801
|
|
5.26
|
%
|
|
—
|
|
|
—
|
|
—
|
%
|
|
|
Short-term
borrowings
|
|
|
47,356
|
|
|
29
|
|
0.25
|
%
|
|
60,727
|
|
|
21
|
|
0.14
|
%
|
|
|
Long-term
borrowings
|
|
|
110,929
|
|
|
1,419
|
|
5.13
|
%
|
|
30,929
|
|
|
338
|
|
4.38
|
%
|
|
|
Total interest-bearing
liabilities
|
|
|
1,258,267
|
|
|
5,798
|
|
1.85
|
%
|
|
1,065,510
|
|
|
760
|
|
0.29
|
%
|
|
|
Non-interest-bearing
deposits
|
|
|
484,952
|
|
|
|
|
|
|
|
539,488
|
|
|
|
|
|
|
|
|
Other
liabilities
|
|
|
31,517
|
|
|
|
|
|
|
|
30,564
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
155,358
|
|
|
|
|
|
|
|
136,039
|
|
|
|
|
|
|
|
|
Total Liabilities and Shareholders'
Equity
|
|
$
|
1,930,094
|
|
|
|
|
|
|
$
|
1,771,601
|
|
|
|
|
|
|
|
|
Net interest income and
spread
|
|
|
|
|
$
|
14,401
|
|
2.72
|
%
|
|
|
|
$
|
14,207
|
|
3.42
|
%
|
|
|
Net interest
margin
|
|
|
|
|
|
|
|
3.26
|
%
|
|
|
|
|
|
|
3.52
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
|
|
2023
|
|
2022
|
|
|
(dollars in thousands)
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/
Rate
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/
Rate
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
1,298,743
|
|
$
|
32,251
|
|
5.01
|
%
|
$
|
1,184,804
|
|
$
|
25,326
|
|
4.31
|
%
|
|
Investment
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
338,817
|
|
|
3,547
|
|
2.11
|
%
|
|
356,878
|
|
|
2,946
|
|
1.66
|
%
|
|
Non taxable
|
|
|
26,099
|
|
|
963
|
|
7.44
|
%
|
|
27,447
|
|
|
1,005
|
|
7.38
|
%
|
|
Total
|
|
|
364,916
|
|
|
4,510
|
|
2.49
|
%
|
|
384,325
|
|
|
3,951
|
|
2.07
|
%
|
|
Federal funds
sold
|
|
|
62,361
|
|
|
1,409
|
|
4.56
|
%
|
|
44,689
|
|
|
57
|
|
0.26
|
%
|
|
Interest-bearing
deposits with other banks
|
|
|
3,342
|
|
|
45
|
|
2.72
|
%
|
|
4,487
|
|
|
5
|
|
0.22
|
%
|
|
Other interest earning
assets
|
|
|
3,069
|
|
|
39
|
|
2.56
|
%
|
|
1,028
|
|
|
16
|
|
3.14
|
%
|
|
Total earning assets
|
|
|
1,732,431
|
|
|
38,254
|
|
4.45
|
%
|
|
1,619,333
|
|
|
29,355
|
|
3.66
|
%
|
|
Allowance for loan
losses
|
|
|
(15,905)
|
|
|
|
|
|
|
|
(15,558)
|
|
|
|
|
|
|
|
Non-earning
assets
|
|
|
172,461
|
|
|
|
|
|
|
|
172,839
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
1,888,987
|
|
|
|
|
|
|
$
|
1,776,614
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand
deposits
|
|
$
|
365,491
|
|
$
|
2,020
|
|
1.11
|
%
|
$
|
291,220
|
|
$
|
182
|
|
0.13
|
%
|
|
Interest-bearing money
markets
|
|
|
314,246
|
|
|
3,107
|
|
1.99
|
%
|
|
289,377
|
|
|
137
|
|
0.1
|
%
|
|
Savings
deposits
|
|
|
236,383
|
|
|
135
|
|
0.12
|
%
|
|
247,573
|
|
|
36
|
|
0.03
|
%
|
|
Time deposits -
retail
|
|
|
124,684
|
|
|
832
|
|
1.35
|
%
|
|
148,377
|
|
|
521
|
|
0.71
|
%
|
|
Time deposits -
brokered
|
|
|
35,771
|
|
|
933
|
|
5.26
|
%
|
|
—
|
|
|
—
|
|
—
|
%
|
|
Short-term
borrowings
|
|
|
52,332
|
|
|
60
|
|
0.23
|
%
|
|
60,144
|
|
|
39
|
|
0.13
|
%
|
|
Long-term
borrowings
|
|
|
77,338
|
|
|
2,022
|
|
5.27
|
%
|
|
30,929
|
|
|
651
|
|
4.24
|
%
|
|
Total interest-bearing
liabilities
|
|
|
1,206,245
|
|
|
9,109
|
|
1.52
|
%
|
|
1,067,620
|
|
|
1,566
|
|
0.30
|
%
|
|
Non-interest-bearing
deposits
|
|
|
497,226
|
|
|
|
|
|
|
|
541,992
|
|
|
|
|
|
|
|
Other
liabilities
|
|
|
30,497
|
|
|
|
|
|
|
|
29,337
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
155,019
|
|
|
|
|
|
|
|
137,665
|
|
|
|
|
|
|
|
Total Liabilities and Shareholders'
Equity
|
|
$
|
1,888,987
|
|
|
|
|
|
|
$
|
1,776,614
|
|
|
|
|
|
|
|
Net interest income and
spread
|
|
|
|
|
$
|
29,145
|
|
2.93
|
%
|
|
|
|
$
|
27,789
|
|
3.36
|
%
|
|
Net interest
margin
|
|
|
|
|
|
|
|
3.39
|
%
|
|
|
|
|
|
|
3.46
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:https://www.prnewswire.com/news-releases/first-united-corporation-announces-second-quarter-2023-earnings-301884386.html
SOURCE First United Corporation