On April 21, 2025, First United Corp (FUNC, Financial) released its 8-K filing detailing the financial results for the first quarter of 2025. The company reported a consolidated net income of $5.8 million, or $0.89 per diluted share, exceeding the analyst estimate of $0.80 per share. This performance marks a significant improvement from the $3.7 million, or $0.56 per diluted share, reported in the first quarter of 2024.
Company Overview
First United Corp is a financial services provider offering a range of products including checking, savings, and money market deposit accounts, as well as various loan products. The company operates primarily through its community banking and wealth management segments, with the majority of its revenue generated from community banking activities.
Performance and Challenges
The company's performance in the first quarter of 2025 was bolstered by a $2.2 million increase in net interest income and a decrease in non-interest expenses. However, challenges remain, particularly in loan production, which was moderate due to economic and political uncertainties. Funding also poses a challenge as inflation impacts spending and deposit balances.
Financial Achievements
First United Corp's net interest margin, on a non-GAAP, fully tax equivalent basis, was 3.56% for the quarter, reflecting increased loan yields and stable funding costs. The company also declared a cash dividend of $0.22 per common share, highlighting its commitment to returning value to shareholders.
Income Statement Highlights
Net income for the first quarter of 2025 was $5.8 million, compared to $6.2 million in the fourth quarter of 2024 and $3.7 million in the first quarter of 2024. The increase in quarterly net income compared to the first quarter of 2024 was primarily driven by higher net interest income and lower non-interest expenses.
| Quarter | Net Income (GAAP, millions) | Diluted EPS (GAAP) |
|---|---|---|
| Q1 2025 | $5.8 | $0.89 |
| Q4 2024 | $6.2 | $0.95 |
| Q1 2024 | $3.7 | $0.56 |
Balance Sheet and Cash Flow
Total assets at the end of the first quarter were $2.0 billion, with a slight increase in cash and interest-bearing deposits. The investment portfolio grew by $5.2 million, while gross loans saw a minor decrease. Total deposits increased by $48.7 million, driven by new brokered deposits.
Asset Quality
The allowance for credit losses was $18.5 million, with net charge-offs of $0.4 million recorded for the quarter. The ratio of the allowance for credit losses to loans outstanding was 1.25%, reflecting the company's cautious approach amidst economic uncertainties.
According to Carissa Rodeheaver, Chairman, President and CEO, "We are very pleased with the first quarter results as we saw margin expansion, solid fee income and controlled expenses. Loan production was moderate during the quarter as many borrowers sit on the sidelines waiting for more certainty in the economic and political environments."
Analysis
First United Corp's strong performance in the first quarter of 2025, particularly in surpassing analyst estimates, underscores its resilience in a challenging economic environment. The company's focus on margin expansion and cost control has been effective, although challenges in loan production and funding remain. As the company continues to navigate these challenges, its strategic investments in technology and customer experience are likely to play a crucial role in sustaining growth.
Explore the complete 8-K earnings release (here) from First United Corp for further details.
