OAKLAND, Md., July 20, 2026 /PRNewswire/ -- First United Corporation (the "Corporation", "we", "us", and "our") (NASDAQ: FUNC), a bank holding company and the parent company of First United Bank & Trust (the "Bank"), today announced financial results for the three- and six-month periods ended June 30, 2026. Consolidated net income was $5.7 million on a Generally Accepted Accounting Principles ("GAAP") basis for the second quarter of 2026, or $0.87 per diluted share, compared to $6.0 million, or $0.92 per diluted share, for the second quarter of 2025 and $6.7 million, or $1.03 per diluted share, for the first quarter of 2026. Net income for the first six months of 2026 was $12.3 million, or $1.90 per diluted share, compared to $11.8 million, or $1.81 per diluted share, for the same period of 2025. Non-GAAP net income was $7.3 million and $13.9 million for the three- and six-months ended June 30, 2026, respectively. Annualized Return on Average Assets and Return on Average Equity for the six-month period ended June 30, 2026 were 1.20% and 11.92%, respectively.
According to Jason Rush, President and CEO, "We delivered solid results this quarter. Earnings benefited from a stronger net interest margin and steady growth in income from our wealth franchise. While we recorded a one-time consulting expense of approximately $2.2 million, we believe the investment in technology and pricing initiatives will position us for improved efficiency in future years to come. Loan growth was steady in the second quarter and our loan pipelines remain robust going into the third quarter. Expense control will continue to be a focus across the organization."
Second Quarter Financial Highlights:
- Net interest margin, on a non-GAAP, fully tax equivalent ("FTE") basis, was 3.98% for the second quarter of 2026, reflecting increased loan yields and reduced funding costs.
- Strong loan production during the quarter, with $66.0 million in commercial loan originations and $33.9 million in residential mortgage originations.
- Provision expense was $0.8 million in the second quarter, as a result of continued economic and political uncertainty and modest loan growth, slightly offset by improved qualitative factors.
- Operating expenses increased by $2.1 million when compared to the linked quarter driven by a one-time, non-GAAP $1.7 million, net of tax, expense related to consulting fees incurred for contract negotiations with our core processor in the second quarter of 2026.
- A cash dividend of $0.26 per share was declared in the second quarter.
Income Statement Overview
On a GAAP basis, net income for the second quarter of 2026 was $5.7 million, inclusive of a $1.7 million, net of tax, third party consulting expense incurred for core contract negotiations. This compares to $6.7 million in the first quarter of 2026 and $6.0 million for the second quarter of 2025. Excluding this expense item, net income was $7.3 million on a non-GAAP basis.
Q2 2026 Q1 2026 Q2 2025
Net Income, GAAP (millions) $5.7 $6.7 $6.0
Net Income, non-GAAP (millions) $7.3 $6.6 $6.0
Diluted net income per share, GAAP $0.87 $1.03 $0.92
Diluted net income per share, non-GAAP $1.13 $1.02 $0.92
Second Quarter 2026 Compared to Second Quarter 2025
Consolidated net income decreased by $0.3 million for the second quarter of 2026 when compared to the second quarter of 2025. The decrease was driven by an increase in other expense as a result of a one-time, non-GAAP $1.7 million, net of tax, consulting expense related to the core contract negotiations. This increase was partially offset by a $1.9 million increase in net interest income, an increase of $0.3 million in non-interest income, inclusive of gains, and a $0.1 million decrease in provision for credit losses. Comparing the second quarter of 2026 to the same period of 2025, interest and fees on loans increased by $1.5 million as a result of new loans booked at higher rates and the continued repricing of adjustable-rate loans. Interest expense decreased by $0.6 million when comparing year-over-year quarterly expense as a result of the repayment of a $25.0 million brokered certificate of deposit in January 2026 and $65.0 million in Federal Home Loan Bank ("FHLB") borrowings in March 2026. Other operating income increased by $0.3 million driven by an increase in trust and brokerage income of $0.3 million as a result of increased production and favorable market values on assets under management. Other operating expenses increased by $2.8 million driven by the one-time, non-GAAP item discussed above, a $0.8 million increase in salaries and benefits as a result of filling open positions in late 2025 and 2026, normal merit increases in April 2026 and increased incentive payouts, partially offset by reduced life and health insurance expense due to reduced claims and an increase in the reduction of costs associated with loan originations related to increased loan production.
Second Quarter 2026 Compared to First Quarter 2026
Compared to the linked quarter, net income decreased by $1.0 million driven by the increased other expenses as a result of the one-time expense discussed above, partially offset by an increase in net interest income of $0.5 million and a $0.1 million decrease in provision expense. Non-interest income was stable when comparing the second quarter of 2026 to the first quarter of 2026.
Year to date 2026 compared to Year to date 2025
Net income for the six months ended June 30, 2026 was $12.3 million on a GAAP basis, inclusive of a $1.7 million, net of tax, consulting fee incurred on core contract negotiations completed in the second quarter, and $13.9 million on a non-GAAP basis compared to GAAP and non-GAAP basis income of $11.8 million for the six months ended June 30, 2025. The year-over-year increase of $0.5 million was attributable to a $3.9 million increase in net interest income an increase in other non-interest income of $0.7 million, inclusive of net gains, as a result of increased trust and brokerage income of $0.5 million, increased bank owned life insurance ("BOLI") income of $0.2 million related to a one-time death benefit received in the first quarter of 2026, partially offset by an increase in other operating expenses of $3.9 million driven by the aforementioned consulting fee, increased salaries and benefits of $1.7 million and an increase in data processing expenses of $0.3 million. Salaries and benefits increased due to increased salaries as a result of new hires and annual merit increases in April 2026 and increased incentive payouts, partially offset by an increase in the reduction of costs associated with loan originations related to increased loan production.
Net Interest Income and Net Interest Margin
Second Quarter 2026 Compared to Second Quarter 2025
Net interest income, on a non-GAAP, FTE basis, increased by $1.9 million for the second quarter of 2026 when compared to the second quarter of 2025. This increase was driven by an increase of $1.3 million in interest income. Interest income on loans increased by $1.5 million due to the increase of 15 basis points in overall yield on the loan portfolio as new loans were booked at higher rates during 2025 and 2026 as well as the upward repricing of adjustable-rate loans. Investment income remained stable as management continued to reinvest cashflows back into the portfolio resulting in an increase in yield of 12 basis points. Interest income on federal funds sold decreased by $0.3 million due to a decrease of $22.2 million in average cash balances held at the Federal Reserve Bank as a result of loan growth in the second quarter of 2026. Interest expense decreased by $0.6 million in the second quarter of 2026 when compared to the second quarter of 2025. Interest on deposits increased slightly by $0.2 million despite an $84.4 million increase in average deposit balances, primarily in interest bearing demand and money market deposits. Long-term borrowing interest expense decreased $0.8 million due to a decrease of average balances of $90.0 million for the second quarter of 2026 when compared to the same period of 2025 primarily related to the repayment of $65.0 million and $25.0 million of FHLB advances at their maturities in March of 2026 and September of 2025, respectively.
Second Quarter 2026 Compared to First Quarter 2026
Comparing the second quarter of 2026 to the first quarter of 2026, net interest income, on a non-GAAP, FTE basis, increased by $0.5 million. Interest income increased by $0.5 million driven by an increase in average loan balances of $66.1 million in the second quarter of 2026. Interest expense was stable when comparing the second quarter of 2026 to the first quarter of 2026. Long-term borrowing expense decreased by $0.5 million due to the repayment of $65.0 million in maturing FHLB advances in March of 2026. Management's strategic focus on margin management during the second quarter of 2026 resulted in a 15 basis point increase in the net interest margin to 3.98% compared to 3.83% for the first quarter of 2026.
Year to date 2026 compared to Year to date 2025
Comparing the six months ended June 30, 2026 to the six months ended June 30, 2025, net interest income, on a non-GAAP, FTE basis, increased by $4.0 million. Interest income increased by $3.0 million, primarily driven by an increase of $2.3 million on interest and fees on loans as average loan balances increased by $39.9 million and an increase in yield by 14 basis points. Interest expense on deposits increased slightly by $0.2 million despite an increase in average deposit balances of $89.7 million driven by increases of $26.5 million in demand deposit accounts, $86.2 million in retail money market balances, partially offset by decreases in savings balances of $10.8 million and $15.0 million in brokered time deposits. Interest expense on short-term borrowings remained stable and interest expense on long-term borrowings decreased by $1.2 million as a result of a decrease in average balances of $62.0 million, primarily due to the repayment of $65.0 million of FHLB advances at their maturities in March 2026. The net interest margin for the six months ended June 30, 2026 was 3.89% compared to 3.61% for the six months ended June 30, 2025.
Non-Interest Income
Second Quarter 2026 Compared to Second Quarter 2025
Other operating income increased by $0.4 million driven by an increase in trust and brokerage income of $0.3 million as a result of increased production of new accounts as well as favorable market values in assets under management. Net gains decreased by $0.1 million as new residential mortgage production was booked in house as compared to selling to secondary market outlets.
Second Quarter 2026 Compared to First Quarter 2026
On a linked quarter basis, other operating income, including net gains, remained flat. Net gains decreased by $0.1 million related to the gain on the sale of a branch office recognized in the first quarter of 2026. BOLI income decreased by $0.2 million and was attributable to the receipt of a one-time death benefit received in the first quarter of 2026. These decreases were offset by an increase in debit card income of $0.1 million due to normal fluctuations and an increase in trust and brokerage income of $0.1 million.
Year to date 2026 compared to Year to date 2025
Comparing the six months ended June 30, 2026 to the same period of 2025, other operating income, inclusive of net gains, increased by $0.7 million, driven by an increase in trust and brokerage income of $0.5 million as a result of increased production of new business as well as favorable market values in assets under management, as well as an increase in BOLI income of $0.2 million as previously mentioned.
Non-Interest Expense
Second Quarter 2026 Compared to Second Quarter 2025
Other operating expenses increased by $2.8 million driven by a $0.8 million increase in salaries and benefits as a result of filling open positions throughout 2025, normal merit increases in April 2026 and increased incentive payouts, partially offset by reduced life and health insurance expense due to reduced claims and increased reductions in costs associated with loan originations. Professional services expenses increased by $2.1 million due to the $1.7 million, net of tax, third party consulting fee discussed above. These increases were partially offset by reductions in check fraud-related expenses and OREO expenses.
Second Quarter 2026 Compared to First Quarter 2026
Other operating expenses increased by $2.1 million driven by the one-time, non-GAAP $1.7 million, net of tax, consulting fee incurred with core contract negotiations. All other expenses were stable when comparing the second quarter of 2026 to the first quarter of 2026 as we continue a strategic focus on expense control.
Year to date 2026 compared to Year to date 2025
Comparing the six months ended June 30, 2026 to the same period of 2025, other operating expenses increased by $3.9 million driven by the one-time, non-GAAP expense previously discussed, a $1.7 million increase in salaries and benefits as a result of new hires late in 2025 and early 2026, normal merit increases in April 2026 and increased incentive payouts, partially offset by reduced life and health insurance expense due to reduced claims and increased reductions in costs associated with loan originations and a $0.3 million increase in equipment, occupancy and data processing expenses as a result of new software implementation. These increases were partially offset by reductions in OREO expenses and other miscellaneous expenses such as check fraud expenses, employee benefits expenses and miscellaneous expense related to share repurchase tax recorded in the second quarter of 2025.
The effective income tax rates, as a percentage of income, for the six-month periods ended June 30, 2026 and 2025 were 24.1% and 24.7%, respectively.
Balance Sheet Overview
Total assets at June 30, 2026 were $2.1 billion, representing a $5.4 million decrease since December 31, 2025. During the six months of 2026, cash and interest-bearing deposits in other banks decreased by $46.4 million. The investment portfolio decreased by $0.2 million. The decreases were partially offset by increases in gross loans of $50.4 million as well as an increase in pension assets of $3.2 million due to increased market values.
Total liabilities at June 30, 2026 were $1.9 billion, representing a $14.1 million decrease since December 31, 2025. Total deposits increased by $0.4 million when compared to December 31, 2025. In January 2026, a $25.0 million brokered certificate of deposit with an interest rate of 4.23% matured and was repaid. Savings and money market accounts increased by $27.6 million due primarily to the expansion of current and new relationships throughout the first six months of 2026. Non-interest-bearing demand deposits decreased by $11.6 million and interest-bearing demand deposits increased by $13.3 million. Retail time deposits decreased by $3.9 million since December 31, 2025. Short-term borrowings increased by $50.0 million at June 30, 2026 compared to December 31, 2025 as a result of overnight borrowings in anticipation of loan funding. These borrowings were subsequently fully repaid in July.
Outstanding loans of $1.6 billion at June 30, 2026 reflected a $50.4 million increase since December 31, 2025.
Loan Type Change since Change since
(in millions) March 31, 2026 December 31, 2025
Commercial $16.6 $31.9
Residential Mortgages $20.8 $10.2
Consumer $9.3 $8.3
Gross Loans $46.7 $50.4
Since December 31, 2025, commercial real estate loans increased by $55.0 million as a result of new business relationships as well as additional growth in existing relationships; acquisition and development loans increased by $11.9 million; commercial and industrial loans decreased by $35.0 million as a result of payoffs related to approximately $15.0 million due to competitive pricing, approximately $5.3 million related to sales of businesses, approximately $8.0 million as a result of a refinance to another institution, and the payoff of a floorplan line of credit. Residential mortgage loans increased by $10.2 million as a result of robust mortgage production booked in house as opposed to the selling to the secondary market outlets, offset slightly by normal amortization; and consumer loans increased by $8.3 million related to the purchase of a consumer loan pool in the second quarter of 2026.
New commercial loan production for the second quarter of 2026 was approximately $66.0 million. The pipeline of commercial loans as of June 30, 2026 was robust, and unfunded committed commercial construction loans totaled approximately $42.0 million. Commercial amortization and payoffs were approximately $71.6 million through June 30, 2026, due primarily to pay-offs of short-term commercial loans as well as normal amortizations of the commercial loan portfolio.
New consumer mortgage loan production for the second quarter of 2026 was approximately $33.9 million, with most of this production comprised of in-house mortgages. The pipeline of in-house, portfolio loans as of June 30, 2026 was $20.0 million. Unfunded commitments related to residential construction loans totaled $20.7 million at June 30, 2026.
Total deposits of $1.7 billion at June 30, 2026 remained flat when compared to December 31, 2025.
Deposit Type Change since Change since
(in millions) March 31, 2026 December 31, 2025
Non-Interest-Bearing ($9.9) ($11.6)
Interest-Bearing Demand $14.6 $13.3
Savings and Money Market ($16.8) $27.6
Time Deposits- Brokered
$ - ($25.0)
Time Deposits- Retail ($3.1) ($3.9)
Total Deposits ($15.2) $0.4
In January 2026, a $25.0 million brokered certificate of deposit, with an interest rate of 4.23%, was repaid at its maturity. Savings and money market accounts increased by $27.6 million due primarily to the expansion of current and new relationships throughout the first six months of 2026. Non-interest-bearing demand deposits decreased by $11.6 million, offset by an increase in interest-bearing demand deposits of $13.3 million, primarily related to municipality accounts. Retail time deposits decreased by $3.9 million since December 31, 2025.
The book value of the Corporation's common stock was $32.91 per share at June 30, 2026 compared to $31.33 per share at December 31, 2025. At June 30, 2026, there were 6,453,836 basic outstanding shares and 6,462,604 diluted outstanding shares of common stock. The increase in the book value at June 30, 2026 was due to the undistributed net income of $9.0 million for the first six months of 2026.
Asset Quality
The allowance for credit losses ("ACL") was $20.6 million at June 30, 2026 compared to $19.0 million at June 30, 2025 and $19.5 million at December 31, 2025. The provision for credit losses was $0.8 million for the quarter ended June 30, 2026 compared to $0.9 million for both the quarters ended March 31, 2026 and June 30, 2025. Provision for credit losses was $1.7 million and $1.5 million for the first six months of 2026 and 2025, respectively. Asset quality remained strong during the first six months of 2026. Net charge-offs of $0.1 million were recorded for the quarter ended June 30, 2026 compared to net charge-offs of $0.2 million for both the quarter ended June 30, 2025 and the quarter ended March 31, 2026. The ratio of the ACL to loans outstanding was 1.31% at June 30, 2026 compared to 1.28% at December 31, 2025 and 1.27% at June 30, 2025.
The ratio of net charge offs to average loans was 0.04% and 0.07% for the six-month periods ended June 30, 2026 and 2025, respectively. The commercial and industrial portfolio had net charge offs of (0.10%) and (0.25%) for the six-month periods ended June 30, 2026 and 2025, respectively. Net charge offs in consumer loans decreased in the first six months of 2026 when compared to the first six months of 2025 from (0.96%) to (0.86%). The decrease was primarily driven by charge-offs in unsecured consumer loans in 2025. Details of the ratios, by loan type, are shown below. Our special assets team continues to actively collect on charged-off loans, resulting in overall low net charge-off ratios.
Ratio of Net (Charge Offs)/Recoveries to Average Loans
06/30/2026 06/30/2025
Loan Type (Charge Off) / (Charge Off) /
Recovery Recovery
Commercial Real Estate 0.00 % 0.00 %
Acquisition & Development 0.03 % 0.13 %
Commercial & Industrial
(0.10 %)
(0.25 %)
Residential Mortgage 0.01 % 0.01 %
Consumer
(0.86 %)
(0.96 %)
Total Net Charge Offs
(0.04 %)
(0.07 %)
Non-accrual loans totaled $4.5 million at June 30, 2026 compared to $4.2 million at December 31, 2025. The slight increase in non-accrual balances at June 30, 2026 was related to one commercial loan moving to non-accrual status in the first quarter.
Non-accrual loans that have been subject to partial charge-offs totaled $0.1 million at June 30, 2026 and $0.2 million at December 31, 2025. Loans secured by 1-4 family residential real estate properties in the process of foreclosure totaled $1.2 million at June 30, 2026 and $0.5 million at December 31, 2025. The increase was due to one mortgage loan of approximately $1.1 million that moved in the second quarter. As a percentage of the loan portfolio, accruing loans past due 30 days or more increased to 0.50% at June 30, 2026 compared to 0.32% at December 31, 2025 and 0.27% as of June 30, 2025. This increase was attributable to one large commercial loan.
ABOUT FIRST UNITED CORPORATION
First United Corporation is a Maryland corporation chartered in 1985 and a financial holding company registered with the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956, as amended, that elected financial holding company status in 2021. The Corporation's primary business is serving as the parent company of the Bank, First United Statutory Trust I ("Trust I") and First United Statutory Trust II ("Trust II" and together with Trust I, "the Trusts"), both Connecticut statutory business trusts. The Trusts were formed for the purpose of selling trust-preferred securities that qualified as Tier 1 capital. The Bank has two consumer finance company subsidiaries- Oak First Loan Center, Inc., a West Virginia corporation, and OakFirst Loan Center, LLC, a Maryland limited liability company - and one subsidiary that it uses to hold real estate acquired through foreclosure or by deed in lieu of foreclosure - First OREO Trust, a Maryland statutory trust. In addition, the Bank owns 99.9% of the limited partnership interests in Liberty Mews Limited Partnership, a Maryland limited partnership formed for the purpose of acquiring, developing and operating low-income housing units in Garrett County, Maryland, and a 99.9% non-voting membership interest in MCC FUBT Fund, LLC, an Ohio limited liability company formed for the purpose of acquiring, developing and operating low-income housing units in Allegany County, Maryland and Mineral County, West Virginia. The Corporation's website is www.mybank.com
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not represent historical facts, but are statements about management's beliefs, plans and objectives about the future, as well as its assumptions and judgments concerning such beliefs, plans and objectives. These statements are evidenced by terms such as "anticipate," "estimate," "should," "expect," "believe," "intend," and similar expressions. Although these statements reflect management's good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. The beliefs, plans and objectives on which forward-looking statements are based involve risks and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the periodic reports that First United Corporation files with the Securities and Exchange Commission entitled "Risk Factors". In addition, investors should understand that the Corporation is required under generally accepted accounting principles to evaluate subsequent events through the filing of the consolidated financial statements included in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 and the impact that any such events have on our critical accounting assumptions and estimates made as of June 30, 2026, which could require us to make adjustments to the amounts reflected in this press release.
FIRST UNITED CORPORATION
Oakland, MD
Stock Symbol : FUNC
Financial Highlights - Unaudited
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2026 2025 2026 2025
Results of Operations:
Interest income $26,169 $24,871 $51,880 $48,933
Interest expense 7,583 8,164 15,220 16,210
Net interest income 18,586 16,707 36,660 32,723
Provision for credit losses 781 860 1,660 1,516
Other operating income 5,319 4,940 10,527 9,762
Net gains 39 146 171 238
Other operating expense 15,765 12,974 29,458 25,550
Income before taxes $7,398 $7,959 $16,240 $15,657
Income tax expense 1,731 1,975 3,910 3,867
Net income $5,667 $5,984 $12,330 $11,790
Per share data:
Basic net income per share $0.88 $0.92 $1.91 $1.82
Diluted net income per share $0.87 $0.92 $1.90 $1.81
Adjusted Basic net income (1) $1.14 $0.92 $2.16 $1.82
Adjusted Diluted net income (1) $1.13 $0.92 $2.15 $1.81
Dividends declared per share $0.26 $0.22 $0.52 $0.44
Book value $32.91 $29.43
Diluted book value $32.86 $29.38
Tangible book value per share $31.16 $27.64
Diluted Tangible book value per share $31.12 $27.59
Closing market value $44.11 $31.01
Market Range:
High $45.98 $32.09
Low $36.27 $25.90
Shares outstanding at period end: Basic 6,453,836 6,494,611
Shares outstanding at period end: Diluted 6,462,604 6,506,493
Performance ratios: (Year to Date Period End, annualized)
Return on average assets 1.20 % 1.20 %
Adjusted return on average assets (1) 1.36 % 1.20 %
Return on average shareholders' equity 11.92 % 12.78 %
Adjusted return on average shareholders' equity (1) 13.49 % 12.78 %
Net interest margin (Non-GAAP), includes tax exempt income of $138 and $103 3.89 % 3.61 %
Net interest margin GAAP 3.87 % 3.60 %
Efficiency ratio - non-GAAP (2) 57.49 % 59.66 %
(1) See reconciliation of this non-GAAP financial measure provided elsewhere herein.
(2) Efficiency ratio is a non-GAAP measure calculated by dividing total operating June 30, December 31,
expenses by the sum of tax equivalent net interest income and other operating
income, less gains/(losses) on sales of securities and/or fixed assets and costs
incurred on core contract renewal.
2026 2025
Financial Condition at period end:
Assets $2,082,092 $2,087,453
Earning assets $1,854,045 $1,807,780
Gross loans $1,572,131 $1,521,704
Commercial Real Estate $625,821 $570,808
Acquisition and Development $102,211 $90,272
Commercial and Industrial $242,013 $277,034
Residential Mortgage $547,118 $536,912
Consumer $54,968 $46,678
Investment securities $279,300 $279,534
Total deposits $1,735,513 $1,735,149
Noninterest bearing $441,365 $453,036
Interest bearing $1,294,148 $1,282,113
Shareholders' equity $212,374 $203,634
Capital ratios:
Tier 1 to risk weighted assets 15.26 % 15.36 %
Common Equity Tier 1 to risk weighted assets 13.48 % 13.52 %
Tier 1 Leverage 12.70 % 12.21 %
Total risk based capital 16.51 % 16.61 %
Asset quality:
Net charge-offs for the quarter $(96) $(99)
Nonperforming assets: (Period End)
Nonaccrual loans $4,514 $4,192
Loans 90 days past due and accruing 391 477
Total nonperforming loans and 90 day past due $4,905 $4,669
Other real estate owned
$ - $1,083
Other repossessed assets $2,780 $2,802
Modified loans $1,199 $1,209
Allowance for credit losses to gross loans 1.31 % 1.28 %
Allowance for credit losses to non-accrual loans 456.16 % 464.46 %
Allowance for credit losses to non-performing assets 267.94 % 227.61 %
Non-performing and 90 day past due loans to total loans 0.31 % 0.31 %
Non-performing loans and 90 day past due loans to total assets 0.24 % 0.22 %
Non-accrual loans to total loans 0.29 % 0.28 %
Non-performing assets to total assets 0.37 % 0.41 %
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) 2026 2026 2025 2025 2025 2025
Results of Operations:
Interest income $26,169 $25,711 $26,153 $25,762 $24,871 $24,062
Interest expense 7,583 7,637 8,166 8,359 8,164 8,046
Net interest income 18,586 18,074 17,987 17,403 16,707 16,016
Provision for credit losses 781 879 717 510 860 656
Other operating income 5,319 5,208 5,330 5,074 4,940 4,822
Net gains 39 132 (97) 261 146 92
Other operating expense 15,765 13,693 14,869 12,986 12,974 12,576
Income before taxes $7,398 $8,842 $7,634 $9,242 $7,959 $7,698
Income tax expense 1,731 2,179 1,857 2,294 1,975 1,892
Net income $5,667 $6,663 $5,777 $6,948 $5,984 $5,806
Per share data:
Basic net income per share $0.88 $1.03 $0.89 $1.07 $0.92 $0.90
Diluted net income per share $0.87 $1.03 $0.89 $1.07 $0.92 $0.89
Adjusted basic net income (1) $1.14 $1.02 $1.10 $1.07 $0.92 $0.90
Adjusted diluted net income (1) $1.13 $1.02 $1.10 $1.07 $0.92 $0.89
Dividends declared per share $0.26 $0.26 $0.26 $0.26 $0.22 $0.22
Book value $32.91 $31.84 $31.33 $30.65 $29.43 $28.35
Diluted book value $32.86 $31.78 $31.27 $30.59 $29.38 $28.27
Tangible book value per share $31.16 $30.08 $29.56 $28.87 $27.64 $26.55
Diluted Tangible book value per share $31.12 $30.02 $29.50 $28.82 $27.59 $26.47
Closing market value $44.11 $36.64 $37.19 $36.77 $31.01 $30.02
Market Range:
High $45.98 $40.53 $40.79 $38.41 $32.09 $41.61
Low $36.27 $35.02 $33.63 $32.02 $25.90 $29.38
Shares outstanding at period end: Basic 6,453,836 6,446,717 6,499,476 6,496,908 6,494,611 6,478,634
Shares outstanding at period end: Diluted 6,462,604 6,459,155 6,511,358 6,508,790 6,506,493 6,497,454
Performance ratios: (Year to Date Period End, annualized)
Return on average assets 1.20 % 1.29 % 1.21 % 1.24 % 1.20 % 1.19 %
Adjusted return on average assets (1) 1.36 % 1.28 % 1.28 % 1.24 % 1.20 % 1.19 %
Return on average shareholders' equity 11.92 % 13.06 % 12.70 % 13.23 % 12.78 % 12.83 %
Adjusted return on average shareholders' equity (1) 13.49 % 12.99 % 13.39 % 13.23 % 12.78 % 12.83 %
Net interest margin (Non-GAAP), includes tax exempt income of $138 and $103 3.89 % 3.83 % 3.67 % 3.64 % 3.61 % 3.56 %
Net interest margin GAAP 3.87 % 3.82 % 3.66 % 3.63 % 3.60 % 3.55 %
Efficiency ratio - non-GAAP (2) 57.49 % 58.45 % 58.19 % 58.73 % 59.66 % 59.95 %
(1) See reconciliation of this non-GAAP financial measure provided elsewhere herein.
(2) Efficiency ratio is a non-GAAP measure calculated by dividing total operating expenses June 30, March 31, December 31, September 30, June 30, March 31,
by the sum of tax equivalent net interest income and other operating income, less
gains/(losses) on sales of securities and/or fixed assets and costs incurred on core contract
renewal.
2026 2026 2025 2025 2025 2025
Financial Condition at period end:
Assets $2,082,092 $2,039,010 $2,087,453 $2,023,974 $2,007,471 $1,979,753
Earning assets $1,854,045 $1,810,557 $1,807,780 $1,784,056 $1,789,747 $1,762,891
Gross loans $1,572,131 $1,525,466 $1,521,704 $1,496,762 $1,502,481 $1,479,869
Commercial Real Estate $625,821 $609,491 $570,808 $554,418 $550,717 $532,764
Acquisition and Development $102,211 $97,785 $90,272 $93,968 $98,937 $94,063
Commercial and Industrial $242,013 $246,192 $277,034 $279,079 $281,484 $282,370
Residential Mortgage $547,118 $526,314 $536,912 $521,317 $521,968 $520,072
Consumer $54,968 $45,684 $46,678 $47,980 $49,375 $50,600
Investment securities $279,300 $282,711 $279,534 $278,898 $279,541 $275,143
Total deposits $1,735,513 $1,750,703 $1,735,149 $1,678,902 $1,614,207 $1,623,574
Noninterest bearing $441,365 $451,303 $453,036 $429,986 $425,784 $422,415
Interest bearing $1,294,148 $1,299,400 $1,282,113 $1,248,916 $1,188,423 $1,201,159
Shareholders' equity $212,374 $205,262 $203,634 $199,099 $191,147 $183,694
Capital ratios:
Tier 1 to risk weighted assets 15.26 % 15.82 % 15.36 % 15.59 % 15.22 % 14.87 %
Common Equity Tier 1 to risk weighted assets 13.48 % 13.94 % 13.52 % 13.68 % 13.32 % 12.97 %
Tier 1 Leverage 12.70 % 12.23 % 12.21 % 12.10 % 12.08 % 11.94 %
Total risk based capital 16.51 % 17.07 % 16.61 % 16.84 % 16.47 % 16.10 %
Asset quality:
Net (charge-offs)/recoveries for the quarter $(96) $(198) $(99) $(435) $(151) $(360)
Nonperforming assets: (Period End)
Nonaccrual loans $4,514 $4,695 $4,192 $3,825 $3,813 $4,026
Loans 90 days past due and accruing 391 66 477 801 535 233
Total nonperforming loans and 90 day past due $4,905 $4,761 $4,669 $4,626 $4,348 $4,259
Other real estate owned
$ - $1,083 $1,083 $2,718 $3,035 $3,062
Other repossessed assets $2,780 $2,692 $2,802 $3,043 $2,802 $2,802
Modified/restructured loans $1,199 $1,955 $1,209 $998 $1,198 $1,021
Allowance for credit losses to gross loans 1.31 % 1.31 % 1.28 % 1.28 % 1.27 % 1.25 %
Allowance for credit losses to non-accrual loans 456.16 % 424.94 % 464.46 % 499.06 % 499.45 % 458.69 %
Allowance for credit losses to non-performing assets 267.94 % 233.73 % 227.61 % 183.78 % 186.98 % 182.43 %
Non-performing and 90 day past due loans to total loans 0.31 % 0.31 % 0.31 % 0.31 % 0.29 % 0.29 %
Non-performing loans and 90 day past due loans to total assets 0.24 % 0.23 % 0.22 % 0.23 % 0.22 % 0.22 %
Non-accrual loans to total loans 0.29 % 0.31 % 0.28 % 0.26 % 0.25 % 0.27 %
Non-performing assets to total assets 0.37 % 0.42 % 0.41 % 0.51 % 0.51 % 0.51 %
Consolidated Statement of Condition
(Dollars in thousands - Unaudited) June 30, 2026 March 31,
2026 December 31, 2025
Assets
Cash and due from banks $
84,195 $
89,220 $
129,830
Interest bearing deposits in banks 993 627 1,782
Cash and cash equivalents 85,188 89,847 131,612
Investment securities - available for sale (at fair value) 107,997 109,004 107,144
Investment securities - held to maturity (at cost) 170,259 172,672 171,361
Equity investments with readily determinable fair market values 1,044 1,035 1,029
Restricted investment in bank stock, at cost 1,621 1,621 4,630
Loans held for sale 132 130
Loans 1,572,131 1,525,466 1,521,704
Unearned fees (592) (512) (476)
Allowance for credit losses (20,591) (19,951) (19,470)
Net loans 1,550,948 1,505,003 1,501,758
Premises and equipment, net 29,550 30,020 29,665
Goodwill and other intangible assets 11,279 11,361 11,444
Bank owned life insurance 50,501 50,125 50,360
Deferred tax assets 8,072 9,141 8,730
Other real estate owned, net 1,083 1,083
Operating lease asset 862 939 1,015
Pension asset 24,044 20,036 20,798
Accrued interest receivable and other assets 40,727 36,991 46,694
Total Assets $
2,082,092 $
2,039,010 $
2,087,453
Liabilities and Shareholders' Equity
Liabilities:
Non-interest bearing deposits $
441,365 $
451,303 $
453,036
Interest bearing deposits 1,294,148 1,299,400 1,282,113
Total deposits 1,735,513 1,750,703 1,735,149
Short-term borrowings 69,233 19,588 17,661
Long-term borrowings 30,929 30,929 95,929
Operating lease liability 1,009 1,095 1,180
Allowance for credit loss on off balance sheet exposures 1,463 1,418 1,218
Accrued interest payable and other liabilities 29,893 28,323 30,992
Dividends payable 1,678 1,692 1,690
Total Liabilities 1,869,718 1,833,748 1,883,819
Shareholders' Equity:
Common Stock - par value $0.01 per share; Authorized 25,000,000 shares; 64 64 65
issued and outstanding 6,453,836 shares at June 30, 2026; 6,494,611 at June
30, 2025; and 6,499,476 at December 31, 2025
Surplus 19,514 19,360 21,551
Retained earnings 216,262 212,255 207,284
Accumulated other comprehensive loss (23,466) (26,417) (25,266)
Total Shareholders' Equity 212,374 205,262 203,634
Total Liabilities and Shareholders' Equity $
2,082,092 $
2,039,010 $
2,087,453
Historical Income Statement
2026 2025
Q2 Q1 Year to
date Q4 Q3 Q2 Q1
In thousands
(Unaudited)
Interest income
Interest and fees on loans $
23,779 $
22,502 $
90,328 $
23,219 $
23,060 $
22,294 $
21,755
Interest on investment securities
Taxable 1,907 1,880 7,210 1,845 1,826 1,776 1,763
Exempt from federal income tax 59 59 218 59 57 57 45
Total investment income 1,966 1,939 7,428 1,904 1,883 1,833 1,808
Other 424 1,270 3,092 1,030 819 744 499
Total interest income 26,169 25,711 100,848 26,153 25,762 24,871 24,062
Interest expense
Interest on deposits 7,033 6,631 27,524 7,044 7,009 6,788 6,683
Interest on short-term borrowings 26 11 75 17 17 21 20
Interest on long-term borrowings 524 995 5,136 1,105 1,333 1,355 1,343
Total interest expense 7,583 7,637 32,735 8,166 8,359 8,164 8,046
Net interest income 18,586 18,074 68,113 17,987 17,403 16,707 16,016
Credit loss expense/(credit)
Loans 736 679 2,345 480 480 728 657
Debt securities held to maturity 43 43
Off balance sheet credit exposures 45 200 355 237 (13) 132 (1)
Provision for credit losses 781 879 2,743 717 510 860 656
Net interest income after provision for credit losses 17,805 17,195 65,370 17,270 16,893 15,847 15,360
Other operating income
Net gains on investments, available for sale 97 97
Gains on sale of residential mortgage loans 39 86 533 132 163 146 92
Gains/(Losses) on disposal of fixed assets 46 (228) (229) 1
Net gains/(losses) 39 132 402 (97) 261 146 92
Other Income
Service charges on deposit accounts 568 547 2,255 568 563 577 547
Other service charges 204 189 845 207 218 214 206
Trust department 2,684 2,554 9,824 2,667 2,448 2,386 2,323
Debit card income 1,046 931 4,057 1,173 980 983 921
Bank owned life insurance 376 539 1,408 364 355 348 341
Brokerage commissions 388 382 1,445 308 346 370 421
Other 53 66 332 43 164 62 63
Total other income 5,319 5,208 20,166 5,330 5,074 4,940 4,822
Total other operating income 5,358 5,340 20,568 5,233 5,335 5,086 4,914
Other operating expenses
Salaries and employee benefits 8,157 8,201 29,347 7,108 7,589 7,319 7,331
FDIC premiums 274 279 1,051 273 266 267 245
Equipment 525 521 2,217 559 515 565 578
Occupancy 690 725 2,860 817 679 675 689
Data processing 1,739 1,664 6,243 1,623 1,517 1,600 1,503
Marketing 193 234 904 288 182 196 238
Professional services 2,702 570 2,449 745 639 589 476
Contract labor 189 166 634 178 127 166 163
Telephone 93 96 380 97 89 96 98
Other real estate owned 59 123 2,235 1,866 69 208 92
Investor relations 85 60 306 55 57 132 62
Contributions 81 65 344 120 90 78 56
Other 978 989 4,435 1,140 1,167 1,083 1,045
Total other operating expenses 15,765 13,693 53,405 14,869 12,986 12,974 12,576
Income before income tax expense 7,398 8,842 32,533 7,634 9,242 7,959 7,698
Provision for income tax expense 1,731 2,179 8,018 1,857 2,294 1,975 1,892
Net Income $
5,667 $
6,663 $
24,515 $
5,777 $
6,948 $
5,984 $
5,806
Basic net income per common share $
0.88 $
1.03 $
3.78 $
0.89 $
1.07 $
0.92 $
0.90
Diluted net income per common share $
0.87 $
1.03 $
3.77 $
0.89 $
1.07 $
0.92 $
0.89
Weighted average number of basic shares outstanding 6,451 6,483 6,490 6,499 6,496 6,489 6,474
Weighted average number of diluted shares outstanding 6,461 6,494 6,504 6,510 6,508 6,506 6,490
Dividends declared per common share $
0.26 $
0.26 $
0.96 $
0.26 $
0.26 $
0.22 $
0.22
Non-GAAP Financial Measures (unaudited)
Reconciliation of as reported (GAAP) and non-GAAP financial measures
The following tables below provide a reconciliation of certain financial measures calculated under generally accepted
accounting principles ("GAAP") (as reported) and non-GAAP. A non-GAAP financial measure is a numerical measure of
historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required
to be disclosed in the most directly comparable measure calculated and presented in accordance with GAAP in the United
States. The Company's management believes the presentation of non-GAAP financial measures provide investors with a
greater understanding of the Company's operating results in addition to the results measured in accordance with GAAP.
While management uses these non-GAAP measures in its analysis of the Company's performance, this information should not
be viewed as a substitute for financial results determined in accordance with GAAP or considered to be more important than
financial results determined in accordance with GAAP.
The following non-GAAP financial measures exclude gains on disposal of fixed assets and consulting fees incurred with core
processing contract in 2026.
Three months ended June 30, Six months ended June 30,
2026 2025 2026 2025
(in thousands, except for per share amount)
Net income - as reported $
5,667 $
5,984 $
12,330 $
11,790
Adjustments:
Gain on disposal of fixed assets (46)
Consulting fee on core processing contract 2,179 2,179
Income tax effect of adjustments (527) (516)
Adjusted net income (non-GAAP) $
7,319 $
5,984 $
13,947 $
11,790
Basic earnings per share - as reported $
0.88 $
0.92 $
1.91 $
1.82
Adjustments:
Gain on disposal of fixed assets (0.01)
Consulting fee on core processing contract 0.26 0.26
Adjusted basic earnings per share (non-GAAP) $
1.14 $
0.92 $
2.16 $
1.82
Diluted earnings per share - as reported $
0.87 $
0.92 $
1.90 $
1.81
Adjustments:
Gain on disposal of fixed assets (0.01)
Consulting fee on core processing contract 0.26 0.26
Adjusted diluted earnings per share (non-GAAP) $
1.13 $
0.92 $
2.15 $
1.81
As of or for the three months As of or for the six months
ended ended
June 30, June 30,
(in thousands, except per share data) 2026 2025 2026 2025
Per Share Data
Basic net income per share - as reported $
0.88 $
0.92 $
1.91 $
1.82
Basic net income per share - non-GAAP 1.14 0.92 2.16 1.82
Diluted net income per share - as reported $
0.87 $
0.92 $
1.90 $
1.81
Diluted net income per share - non-GAAP 1.13 0.92 2.15 1.81
Basic book value per share $
32.91 $
29.43
Diluted book value per share $
32.86 $
29.38
As of or for the six months
ended
Significant Ratios:
June 30,
2026 2025
Return on Average Assets - as reported 1.20 % 1.20 %
Adjustments:
Gain on disposal of fixed assets (0.01 %)
Consulting fee on core processing contract 0.17 %
Adjusted Return on Average Assets (non-GAAP) 1.36 % 1.20 %
Return on Average Equity - as reported 11.92 % 12.78 %
Gain on disposal of fixed assets (0.03 %)
Consulting fee on core processing contract 1.60 %
Adjusted Return on Average Equity (non-GAAP) 13.49 % 12.78 %
Three Months Ended
June 30
2026 2025
(dollars in thousands) Average Interest Average Average Interest Average
Balance Yield/ Balance Yield/
Rate Rate
Assets
Loans $
1,549,332 23,812 6.16
%
% $
1,489,485 22,304 6.01
Investment Securities:
Taxable 291,217 1,907 2.63
%
% 283,914 1,776 2.51
Non taxable 7,488 106 5.68
%
% 7,424 101 5.46
Total 298,705 2,013 2.70
%
% 291,338 1,877 2.58
Federal funds sold 28,424 344 4.85
%
% 50,675 628 4.97
Interest-bearing deposits with other banks 861 6 2.80
%
% 3,799 20 2.11
Other interest earning assets 2,656 74 11.18
%
% 5,815 96 6.62
Total earning assets 1,879,978 26,249 5.60
%
% 1,841,112 24,925 5.43
Allowance for credit losses (20,249) (18,685)
Non-earning assets 179,343 175,323
Total Assets $
2,039,072 $
1,997,750
Liabilities and Shareholders' Equity
Deposits
Interest-bearing demand deposits $
389,083 $
1,600 1.65
%
% $
357,725 $
1,520 1.70
Interest-bearing money markets- retail 560,943 3,753 2.68
%
% 473,262 3,578 3.03
Interest-bearing money markets- brokered 1 % 496 5 4.04
%
Savings deposits 159,161 43 0.11
%
% 168,854 45 0.11
Time deposits - retail 148,020 1,370 3.71
%
% 147,433 1,122 3.05
Time deposits - brokered 25,000 267 4.28
%
% 50,000 518 4.16
Total deposits 1,282,208 7,033 2.20
%
% 1,197,770 6,788 2.27
Short-term borrowings 19,922 26 0.52
%
% 19,811 21 0.43
Long-term borrowings 30,929 524 6.80
%
% 120,929 1,355 4.49
Total interest-bearing liabilities 1,333,059 7,583 2.28
%
% 1,338,510 8,164 2.45
Non-interest-bearing deposits 463,149 440,779
Other liabilities 32,586 29,889
Shareholders' Equity 210,278 188,572
Total Liabilities and Shareholders' Equity $
2,039,072 $
1,997,750
Net interest income and spread $
18,666 3.32
%
% $
16,761 2.98
Net interest margin 3.98
%
% 3.65
Six Months Ended
June 30,
2026 2025
(dollars in thousands) Average Interest Average Average Interest Average
Balance Yield/ Balance Yield/
Rate Rate
Assets
Loans $
1,526,255 $
46,326 6.12
%
% $
1,486,334 $
44,072 5.98
Investment Securities:
Taxable 291,027 3,787 2.62
%
% 284,612 3,539 2.51
Non taxable 7,493 211 5.68
%
% 6,977 182 5.26
Total 298,520 3,998 2.70
%
% 291,589 3,721 2.57
Federal funds sold 78,697 1,513 3.88
%
% 46,213 1,012 4.42
Interest-bearing deposits with other banks 1,602 29 3.65
%
% 3,174 35 2.22
Other interest earning assets 3,946 152 7.77
%
% 5,795 196 6.82
Total earning assets 1,909,020 52,018 5.49
%
% 1,833,105 49,036 5.39
Allowance for credit losses (19,990) (18,550)
Non-earning assets 178,742 174,298
Total Assets $
2,067,772 $
1,988,853
Liabilities and Shareholders' Equity
Deposits
Interest-bearing demand deposits $
392,655 $
3,268 1.68
%
% $
366,170 $
3,173 1.75
Interest-bearing money markets- retail 554,931 7,428 2.70
%
% 468,732 7,125 3.07
Interest-bearing money markets- brokered 84 1 2.40
%
% 316 6 3.83
Savings deposits 159,415 81 0.10
%
% 170,178 88 0.10
Time deposits - retail 149,015 2,294 3.10
%
% 145,984 2,176 3.01
Time deposits - brokered 28,039 592 4.26
%
% 43,059 903 4.23
Total deposits 1,284,139 13,664 2.15
%
% 1,194,439 13,471 2.27
Short-term borrowings 19,259 37 0.39
%
% 21,423 41 0.39
Long-term borrowings 58,940 1,519 5.20
%
% 120,929 2,698 4.50
Total interest-bearing liabilities 1,362,338 15,220 2.25
%
% 1,336,791 16,210 2.45
Non-interest-bearing deposits 463,856 435,362
Other liabilities 32,985 30,682
Shareholders' Equity 208,593 186,018
Total Liabilities and Shareholders' Equity $
2,067,772 $
1,988,853
Net interest income and spread $
36,798 3.24
%
% $
32,826 2.94
Net interest margin 3.89 3.61
% %
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SOURCE First United Corporation
