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Oakland, Maryland - -
The Board of Directors of First United Corporation, a one-bank holding company headquartered in Oakland, Maryland, declared a cash dividend of $0.175 per share at its board meeting on March 19, 2003. The dividend will be payable on May 1, 2003 to shareholders of record as of April 18, 2003.
First United Corporation (NASDAQ:FUNC) operates one full-service commercial bank, First United Bank & Trust. The bank has a network of community offices in Garrett, Allegany, Washington, and Frederick Counties in Maryland, as well as Mineral, Hardy, Hampshire and Berkeley Counties in West Virginia. First United's website can be located at www.mybankfirstunited.com. As of February 28, 2003, the Corporation posted assets of $979 million.
First United Corporation, (Nasdaq: FUNC) a financial holding company and the parent company of First United Bank & Trust, has announced net income for the first quarter of 2003 of $2.45 million or $.40 earnings per share compared to $2.33 million or $.38 earnings per share for the same time period of 2002. This is a net income increase of 5.39% and an earnings per share increase of 5.26%.
Book value per share was $13.14 as of March 31, 2003, as compared to $11.87 as of March 31, 2002. Returns on average assets for the three months ended March 31, 2003 and 2002 were 1.03 % and 1.17% respectively. Returns on average shareholders’ equity were 12.44% and 13.06% for the three months ended March 31, 2003 and 2002 respectively.
Although interest income remained flat when compared to the first quarter of 2003, interest expense decreased 3.85% when comparing the same time periods. In comparing March 31, 2003 ratios with March 31, 2002, the yield on average earnings assets was 6.46% as compared to 7.72%, and the average cost of funds was 2.73% as compared to 3.46%. First United’s net interest margin has decreased from 4.26% to 3.71% during this same 12-month period.
Operating Income
For the first quarter of 2003 total operating income totaled $3.07 million as compared to $2.33 million for the same time period of 2002. This is an increase of $.74 million or 31.56%. Items affecting this increase were net securities gains as well as increases in service charges on deposit accounts.
The net securities gains included gains on the sale of securities of $.88 million and $.35 million in write-downs on two securities exhibiting other-than-temporary impairment. In this historically low interest rate environment, First United chose to sell several mortgage-backed securities that were exhibiting accelerated payback thus resulting in reduced yield for the Corporation. The proceeds from these sales were reinvested in securities in which the underlying collateral is consumer mortgage loans originated at lower interest rates; therefore, being less likely to experience accelerated payback. "These securities sales were executed to better position the Corporation during what appears to be a longer than originally anticipated period of low interest rates. First United accepted a slightly lower coupon on the securities and extended the average life of the investments to slightly greater than four years as compared to the average life of one year for the original investment", stated William B. Grant and Chairman of the Board. Unrelated to the sale of securities was a write-down on two securities under an interpretation of the other-than-temporary impairment rules. Mr. Grant continued, "These were the same securities that were adjusted at year-end 2002. The adjustment on the securities was caused by the continued record low-rate environment, and the impact it has on securities such as these. While we believe there is no credit risk associated with the securities, their value has been adversely impacted by low interest rates. It is expected that the market value of the securities will increase with a rise in interest rates."
Operating Expense
Total operating expense was $7.11 million for the first quarter of 2003, as compared to $6.34 million for the same time period in 2002.
The largest item in this category, salaries and employee benefits increased $.54 million or 15.40% in 2003 as compared to the same time period in 2002. Increased incentive payments related to employee performance and increased pension costs contributed to this increase.Asset Quality
First United’s asset quality continues to be high. The provision for probable credit losses was $.66 million for the first quarter of 2003. The provision for probable credit losses for the first quarter of 2002 was $.66 million as well. The loan delinquency ratio at March 31, 2003 was .83%, as compared to .98% at March 31, 2002. Non-accrual loans totaled $2.10 million as of March 31, 2003 as compared to a total of $1.73 million at March 31, 2002. "Of the $2.10 million in non-accrual loans, there is one credit totaling $1.46 million. This credit is well-secured, and no loss is anticipated", stated Mr. Grant. Total non-performing loans were $7.67 million at March 31, 2003 as compared to $7.50 million at March 31, 2002. The reserve for loan and lease losses as a percentage of gross loans equaled .92% as of March 31, 2003 as compared to .99% as of March 31, 2002.
First United Corporation offers full-service banking through its banking subsidiary, First United Bank & Trust, and consumer finance products through its subsidiaries, OakFirst Loan Center, Inc. and OakFirst Loan Center, LLC. These subsidiaries operate a network of offices throughout Garrett, Allegany, Washington, and Frederick counties in Maryland, as well as Mineral, Hardy, Hampshire, and Berkeley counties in West Virginia. First United’s website can be located at
www.mybankfirstunited.com. As of March 31, 2003 the Corporation posted assets of $984.98 million and had 6,087,433 shares outstanding.First United Corporation has made certain "forward-looking" statements with respect to this earnings release. Such statements should not be construed as guarantees of future performance. Actual results may differ from "forward-looking" information as a result of any number of unforeseeable factors, which include, but are not limited to, the effect of prevailing economic conditions, the overall direction of government policies, unforeseeable changes in the general interest rate environment, competitive factors in the marketplace, business risk associated with credit extensions and trust activities, and other risk factors. These and other factors could lead to actual results, which differ, materially from management’s statements regarding actual performance.
Oakland, MD –
At its 108th Annual Convention, First United’s Chief Executive Officer and Chairman of the Board, William B. Grant, was elected by the membership of the Maryland Bankers Association (MBA) to serve on its Board of Directors for 2003-2004, as the Chairman Elect. As a Board member, Mr. Grant will help to establish association goals and strategies over the course of the coming year.
At the convention, Grant said, "I am looking forward to working with our new chairman, Hunter Holler, to develop and implement a strong advocacy program in Annapolis and in Washington, through grassroots lobbying and other efforts. We also will look towards building upon our financial literacy efforts for adults and children. We will continue to deliver timely, well-designed educational and professional development programs to our members, so that bankers may better serve our customers and our communities."
Mr. Grant is a graduate of West Virginia Wesleyan College, the Duquesne University School of Law, the Stonier Graduate School of Banking and the National Graduate Trust School at Northwestern University. He also holds the certification of a Certified Financial Planner. He has been with First United since 1978.
Grant is involved in many Oakland area organizations, with memberships at St Paul’s United Methodist Church, Oakland Lodge #192 AF & AM, Oakland-Mt. Lake Park Lions Club, Garrett Choral Society, and the Garrett County Memorial Hospital Foundation.
He and his wife Laurie reside in Oakland and have two children, Jennifer and Andrew.
Founded in 1896, the Maryland Bankers Association is committed to maintaining the competitiveness of Maryland’s banks and thrifts. The Association is dedicated to serving its membership as an advocate for the industry, as a provider of banker education and member services, and as a public relations voice for the industry.
Oakland, MD ---
The Board of Directors of First United Corporation, a one-bank holding company headquartered in Oakland, Maryland, declared a cash dividend of $0.175 per share at its board meeting on June 18, 2003. The dividend will be payable on August 1, 2003 to shareholders of record as of July 18, 2003.First United Corporation (NASDAQ:FUNC) operates one full-service commercial bank, First United Bank & Trust. The bank has a network of community offices in Garrett, Allegany, Washington, and Frederick Counties in Maryland, as well as Mineral, Hardy, Hampshire and Berkeley Counties in West Virginia. First United’s website can be located at www.mybankfirstunited.com
FOR IMMEDIATE RELEASE (Oakland, Maryland) --- On July 9, 2003, it was announced by the Frank Russell Company, that First United Corporation has been added to the Russell 3000® index. The Russell 3000® index is comprised of the 3,000 largest U.S. companies ranked by market capitalization. Annually, on May 30, the Frank Russell Company compiles a list of all U.S. stocks ranked by capitalization. During the month of June, preliminary lists of additions and deletions to the Russell 3000 are posted, with final decisions made on July 9 of each year. This realignment of companies within the index provides a ranking of stock market activity and performance. It is estimated that $250 billion is invested in index funds based on the Russell 3000 index.
"We are pleased with the addition of First United Corporation into the Russell 3000®, because it recognizes the response of our investment community to First United’s growth and strong financial performance", stated William B. Grant, Chairman and Chief Executive Officer of First United Corporation.
First United Corporation (NASDAQ:FUNC) operates one full-service commercial bank, First United Bank & Trust. The Bank has a network of community offices in Garrett, Allegany, Washington, and Frederick Counties in Maryland, as well as Mineral, Hardy, Hampshire, and Berkeley Counties in West Virginia. First United’s website can be located at
www.mybankfirstunited.comFirst United Corporation, (Nasdaq: FUNC) a financial holding company and the parent company of First United Bank & Trust, has announced net income for the second quarter of 2003 of $3.32 million or $.54 earnings per share compared to $2.37 million or $.39 earnings per share for the same time period of 2002. This is a net income increase of 40.07% and an earnings per share increase of 38.46%.
"The significant increase in income was due to adjustments made to the reserve for probable loan and lease losses during the second quarter of 2003. The regulatory methodology that is used in the calculation for this reserve indicated that First United Corporation had a higher level of reserve than what was required for the current credit quality of the loan and lease portfolios," stated William B. Grant, Chairman of the Board and Chief Executive Officer. "Additionally, a re-evaluation of the collateral for a large commercial loan, currently in non-accrual status, proved that First United is in a secure collateral position relative to the loan balance, with no loss anticipated, resulting in a special allocation for that loan facility being removed from the reserve. The total adjustment to the reserve was $.71 million, " continued Mr. Grant. Both of these items contributed to a negative provision for probable loan and lease losses of $.32 million for the second quarter of 2003. The provision for loan and lease losses was $.34 million for the first six months of 2003 as compared to $1.22 million one year ago.
Book value per share was $13.74 as of June 30, 2003, as compared to $12.34 as of June 30, 2002. Returns on average assets for the six months ended June 30, 2003 and 2002 were 1.19 % and 1.17% respectively. Returns on average shareholders’ equity were 14.36% and 12.98% for the six months ended June 30, 2003 and 2002 respectively.
Investment securities decreased $8.22 million during the second quarter of 2003. "First United Corporation decided to sell two specific issues of FreddieMac securities that were initially written down to market value in December 2002 under an interpretation of the other-than-temporary impairment rules. At the time of the sale, these securities had a book value of $4.29 million", stated Mr.Grant. He continued, "After much research through a variety of venues, we determined that in the interest of our shareholders, the best decision was to divest ourselves of these holdings." The sale of the two securities resulted in a capital loss of $.34 million during the second quarter.
Net Interest Income
Net interest income was $8.62 million for the second quarter of 2003. This is an increase of $.89 million or 11.45% as compared to the same time period of 2002. Interest income increased $.49 million or 3.50% when comparing the quarter periods ending June 30, 2003 and June 30, 2002. Interest expense for the quarter was $5.85 million or $.40 million less than for the same time period one-year ago. This equates to a percentage decrease of 6.35%. In comparing June 30, 2003 ratios with June 30, 2002, the yield on average earnings assets was 6.40% as compared to 7.58%, and the average cost of funds was 2.63% as compared to 3.38%. First United’s net interest margin has decreased from 4.20% to 3.77% during this same 12-month period.
Operating Income
For the second quarter of 2003 total operating income totaled $2.51 million as compared to $2.39 million for the same time period of 2002. This is an increase of $.12 million or 5.18%. Included in this category were net losses on the sale of securities of $.19 million, a gain on the sale of a bank property of $.23 million, and secondary market fees of $.12 million. "Although our residential mortgage portfolio is not growing dramatically, our mortgage division has recognized an opportunity in the market to service those customers interested in refinancing their mortgages in this historically low interest rate environment. This effort has resulted in increased secondary market fee income for the Corporation", commented Mr. Grant.
Operating Expense
Total operating expense was $6.80 million for the second quarter of 2003, as compared to $6.26 million for the same time period in 2002.
The largest item in this category, salaries and employee benefits increased $.48 million or 14.62% during the second quarter of 2003 as compared to the same time period in 2002. Increased incentive payments related to employee performance and normal salary increases contributed to this change.Asset Quality
First United’s asset quality continues to be high. The loan delinquency ratio at June 30, 2003 was .90%, as compared to 1.13% at June 30, 2002. Non-accrual loans totaled $1.87 million as of June 30, 2003 as compared to a total of $1.68 million at June 30, 2002. Total non-performing loans were $3.00 million at June 30, 2003 as compared to $2.39 million at March 31, 2002. The reserve for probable loan and lease losses as a percentage of gross loans equaled .81% as of June 30, 2003 as compared to 1.00% as of June 30, 2002.
First United Corporation offers full-service banking through its banking subsidiary, First United Bank & Trust, and consumer finance products through its subsidiaries, OakFirst Loan Center, Inc. and OakFirst Loan Center, LLC. These subsidiaries operate a network of offices throughout Garrett, Allegany, Washington, and Frederick counties in Maryland, as well as Mineral, Hardy, Hampshire, and Berkeley counties in West Virginia. First United’s website can be located at
www.mybankfirstunited.com. As of June 30, 2003 the Corporation posted assets of $1.00 billion and had 6,087,433 shares outstanding.This earnings release of First United Corporation (the "Corporation") may contain forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Readers of this release should be aware of the speculative nature of "forward-looking statements." Statements that are not historical in nature, including those that include the words "anticipate," "estimate," "should," "expect," "believe," "intend," and similar expressions, are based on current expectations, estimates and projections about, among other things, the industry and the markets in which the Corporation operates, and they are not guarantees of future performance. Whether actual results will conform to expectations and predictions is subject to known and unknown risks and uncertainties, including risks and uncertainties discussed in this report; general economic, market, or business conditions; changes in interest rates, deposit flow, the cost of funds, and demand for loan products and financial services; changes in the Corporation’s competitive position or competitive actions by other companies; changes in the quality or composition of loan and investment portfolios; the ability to manage growth; changes in laws or regulations or policies of federal and state regulators and agencies; and other circumstances beyond the Corporation’s control. Consequently, all of the forward-looking statements made in this document are qualified by these cautionary statements, and there can be no assurance that the actual results anticipated will be realized, or if substantially realized, will have the expected consequences on the Corporation’s business or operations. For a more complete discussion of these risk factors, see "Risk Factors" in Part I, Item 1 of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2002. Except as required by applicable laws, the Corporation does not intend to publish updates or revisions of any forward-looking statements it makes to reflect new information, future events or otherwise.
Oakland, MD ---
The Board of Directors of First United Corporation, a one-bank holding company headquartered in Oakland, Maryland, declared a cash dividend of $0.175 per share at its board meeting on September 17, 2003. The dividend will be payable on November 1, 2003 to shareholders of record as of October 17, 2003.
First United Corporation (NASDAQ:FUNC) operates one full-service commercial bank, First United Bank & Trust. The bank has a network of community offices in Garrett, Allegany, Washington, and Frederick Counties in Maryland, as well as Mineral, Hardy, Hampshire and Berkeley Counties in West Virginia. First United’s website can be located at
www.mybankfirstunited.comThe Board of Directors of First United Corporation, a one-bank holding company headquartered in Oakland, Maryland, declared a cash dividend of $0.18 per share at its board meeting on December 17, 2003. The dividend will be payable on February 1, 2004 to shareholders of record as of January 16, 2004.
First United Corporation (NASDAQ:FUNC) operates one full-service commercial bank, First United Bank & Trust. The bank has a network of community offices in Garrett, Allegany, Washington, and Frederick Counties in Maryland, as well as Mineral, Hardy, Hampshire and Berkeley Counties in West Virginia. First United’s website can be located at
www.mybankfirstunited.comOAKLAND, MARYLAND—March 1, 2004: First United Corporation (Nasdaq: FUNC), a financial holding company and the parent company of First United Bank & Trust, announces net income for the year ended December 31, 2003 of $10.75 million ($1.77 earnings per share)
compared to $9.65 million ($1.59 earnings per share) for the prior year, an 11.4% increase.For the quarter ended December 31, 2003, net income totaled $2.80 million ($.46 earnings per share), a 15.7% increase over net income of $2.42 million ($.40 earnings per share) for the fourth quarter of 2002.
For the year ended December 31, 2003 the Corporation’s returns on average assets and average shareholders’ equity were 1.03% and 13.10%, respectively, compared with 1.13% and 12.75% respectively, for 2002.
During the third quarter of 2003, the Corporation acquired four banking offices and a commercial banking center located in Berkeley County, West Virginia, from Huntington Bancshares Incorporated and its bank subsidiary, the Huntington National Bank. As a result of this acquisition, which was accounted for under the purchase method of accounting, approximately $131 million in deposits and $49 million in loans were purchased.
Loans and leases were $792.03 million at December 31, 2003 compared to $665.83 million at December 31, 2002, an increase of 18.9%. The acquisition, discussed previously, contributed $49 million to the increase in loans, coupled with loan growth in commercial, consumer, and residential mortgage loans. Deposits were $750.16 million at December 31, 2003 compared to $610.46 million at December 31, 2002, an increase of 22.9%. The increase in deposits was primarily due to the acquisition. Total assets were $1.11 billion at December 31, 2003, a 16.8% increase from $.95 billion at December 31, 2002.
Shareholders’ equity increased 6.2% from $79.28 million at December 31, 2002, to $84.19 million at December 31, 2003, resulting in book value per share increasing from $13.04 to $13.83. Total common shares outstanding, as of December 31, 2003, were 6,087,287.
Net-Interest Income
Net interest income for 2003 increased 6.9% to $34.10 million, compared to $31.89 million for 2002. Net interest margin was 3.58% at December 31, 2003, decreasing 50 basis points as compared to 4.08% at December 31, 2002. The margin compression was greatly influenced by the interest rate environment, coupled with high prepayments in the Corporation’s security and loan portfolios, thus having to reinvest in lower interest rates. Comparing the fourth quarter of 2003 and 2002, net interest income increased by $.52 million, or 6.3%.
Non-Interest Income
Non-interest income for 2003 was $11.87 million, compared with $9.00 million for 2002, a 31.9% increase. Non-interest income for the fourth quarter of 2003 was $3.50 million, compared to $1.87 million for the fourth quarter of 2002, an 87.2% increase.
During 2003, the Corporation achieved noteworthy increases of income from 2002. These increases were a result of services on deposit accounts (16.8%), trust services (17.4%), brokerage commission (22.4%), and secondary market fees arising from mortgage lending (90.6%). Also, the Corporation realized $1.01 million in security gains for 2003, $.66 million of the gains being recorded in the fourth quarter of 2003.
Non-Interest Expense
Non-interest expense for 2003 was $29.82 million, compared with $26.04 million for 2002, a 14.5% increase. Non-interest expense for the fourth quarter of 2003 was $7.92 million, compared to $6.55 million for the fourth quarter of 2002, a 20.9% increase.
The increase in non-interest expense was a result of various factors. However, the Corporation’s continued concentration on growth and expansion of the organization contributed to the increase. Upon the acquisition, previously discussed, advertising along with traditional overhead expenses were incurred in order to vie in the marketplace. Additionally, a large contributor to the increase resulted from compensation expense, including incentives, due to the Corporation’s growth during 2003.
Asset Quality
The Corporation’s asset quality continues to be satisfactory. Nonperforming and past-due loans to total loans at year-end 2003 was .51%, compared to .50% as of year-end 2002. Nonperforming and past-due loans to total assets at year-end 2003 was .36%, compared to .35% as of year-end 2002. For the year ended December 31, 2003, the provision for loan losses was $.83 million, compared to $1.51 million for the year ended December 31, 2002.
ABOUT FIRST UNITED CORPORATION
First United Corporation offers full-service banking through its banking subsidiary, First United Bank & Trust, and consumer finance products through its subsidiaries, OakFirst Loan Center, Inc. and OakFirst Loan Center, LLC. The Corporation also offers a full range of insurance products and services to customers in its market areas through Gonder Insurance Agency. These subsidiaries operate a network of offices throughout Garrett, Allegany, Washington, and Frederick counties in Maryland, as well as Mineral, Hardy, Hampshire, and Berkeley counties in West Virginia. The Corporation’s website is
www.mybankfirstunited.comOakland, Maryland – First United Corporation (NASDAQ:FUNC), announced today that it has consummated, through its bank subsidiary, First United Bank & Trust, the acquisition of four banking offices and a commercial banking center in Berkeley County, West Virginia from Huntington Bancshares Incorporated (NASDAQ:HBAN) and its bank subsidiary, The Huntington National Bank.
The transaction includes the acquisition of approximately $134 million in deposits and $49 million of loans as of July 11, 2003, and has positioned First United Bank & Trust as the second largest bank in Berkeley County with a 19% deposit market share.
Diane Armentrout, district manager for the Martinsburg offices stated, "First United has a reputation for providing personalized, locally delivered banking services. We are excited about this transaction and look forward to becoming part of the First United team."
"All of our Martinsburg customers will continue to do business in the same community office locations and with the same great people. With access to First United’s other regional banking offices in Martinsburg, as well as offices in Washington and Frederick Counties, banking in this area will become more convenient than ever," stated William B. Grant, Chairman and CEO.
First United held a series of employee meetings and hosted a family dinner for employees of all four Huntington offices. "We are a family-oriented organization, so getting to know each employee and their families is important to us. We wanted to welcome each employee to the First United team by holding a special reception for this group as well as their families," said Jeannette Fitzwater, Director of Human Resources for First United.
Two of the offices purchased are located in Martinsburg, West Virginia, with the other two located in Falling Waters, West Virginia, and Inwood, West Virginia.
About First United
First United Corporation is a Maryland financial holding company that, along with its affiliates, provides a wide range of financial products, including Trust, Insurance, and Investment Services. These services are customized to support and enhance the lives of people and businesses in Maryland’s Garrett, Allegany, Washington and Frederick counties, as well as West Virginia’s Mineral, Hardy, Hampshire and Berkeley counties through 20 offices, one financial center and a nationally recognized Customer Service Center. Since its founding in 1900, First United has remained independent and grown steadily through sound financial management practices and by investing time, energy and resources in the communities it serves. As of March 31, 2003, First United Corporation posted assets of $985 million and had 6,087,433 common shares outstanding. First United’s website is www.mybankfirstunited.com.
Forward-looking Statements
First United Corporation has made certain "forward-looking" statements with respect to this news release. Such statements should not be construed as guarantees of future performance. Actual results may differ from "forward-looking" information as a result of any number of unforeseeable factors, which include, but are not limited to, the effect of prevailing economic conditions, the overall direction of government policies, unforeseeable changes in the general interest rate environment, competitive factors in the marketplace, business risk associated with credit extensions and trust activities, and other risk factors. These and other factors could lead to actual results, which differ, materially from management’s statements regarding actual performance. For a more complete discussion of these and other risk factors, please see "Rick Factors" in Part I, Item 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.
Oakland, Maryland – First United Corporation (NASDAQ:FUNC) has been granted regulatory approval to acquire, through its bank subsidiary, First United Bank & Trust, four banking offices and a commercial banking center in Berkeley County, West Virginia from Huntington Bancshares Incorporated (NASDAQ:HBAN) and its bank subsidiary, The Huntington National Bank. This transaction will be complete at the close of business on July 25, 2003.
"We have been working very closely with Huntington to ensure a smooth transition for all our new customers and look forward to serving all their financial needs. Our new Martinsburg customers will continue to do business in the same community office locations and with the same great people. All four Huntington offices will remain open. In addition with access to First United’s other regional banking offices in Martinsburg, as well as offices in Washington and Frederick Counties, banking will become more convenient than ever," stated William B. Grant, Chairman and Chief Executive Officer.
First United held a series of employee meetings and hosted a family dinner for employees of all four Huntington offices. "We are a family-oriented organization, so getting to know each employee and their families is important to us. We wanted to welcome each employee to the First United team by holding a special reception for this group as well as their families," said Jeannette Fitzwater, Director of Human Resources for First United.
Diane Armentrout, district manager for Huntington stated, "We are looking forward to joining the First United team. First United has a reputation for providing personalized, locally delivered banking services and has implemented several initiatives for both employees and customers to make certain this transaction goes as smoothly as possible. I am pleased to announce that all four offices will remain open and all employees will be retained."
Two of the offices to be purchased are located in Martinsburg, West Virginia, with the other two located in Falling Waters, West Virginia, and Inwood, West Virginia. This transaction will position First United as the second largest bank in Berkeley County with a 19% deposit market share.
About First United
First United Corporation is a Maryland financial holding company that, along with its affiliates, provides a wide range of financial products, including Trust, Insurance, and Investment Services. These services are customized to support and enhance the lives of people and businesses in Maryland’s Garrett, Allegany, Washington and Frederick counties, as well as West Virginia’s Mineral, Hardy, Hampshire and Berkeley counties through 20 offices, one financial center and a nationally recognized Customer Service Center. Since its founding in 1900, First United has remained independent and grown steadily through sound financial management practices and by investing time, energy and resources in the communities it serves. As of March 31, 2003, the Corporation posted assets of $985 million and had 6,087,433 shares outstanding common stock. First United’s website is www.mybankfirstunited.com
First United Corporation, (Nasdaq: FUNC) a financial holding company and the parent company of First United Bank & Trust, has announced net income for the fourth quarter of 2002 of $ 2.41 million, a 6.58% increase over the fourth quarter earnings in 2001. Earnings per share for the fourth quarter were $.40, up 8.10% over the $.37 reported for the same period last year. The Corporation had core earnings in 2002 of $9.87 million, a 7.63% increase over the $9.17 million reported in 2001. There was, however, a special charge in the fourth quarter of 2002 of $.36 million due to recognition of a "realized loss" on investment securities as discussed below. Consequently, the Corporation is reporting net income for 2002 of $9.66 million, representing a 5.29% increase over the previous year.
The special charge taken on December 31, 2002, relates to a $.36 million "realized loss" on an equity security issued by the Federal Home Loan Mortgage Corporation. William B. Grant, Chief Executive Officer and Chairman of the Board explained , "Generally accepted accounting principles require a write-down on the investment’s value when the market value has been below the original cost basis for several months. This is referred to as an other-than-temporary impairment. The loss in value is attributed to the sharp decline in interest rates over the past two years. As the yield of this issue is tied to a spread over the two-year Treasury, that yield spread has declined sharply, resulting in a decrease in the market value of the security. With rates at a 40-year low, most experts believe that rates will, at some point in time, increase. When this happens, the market value of the security will rise also. As the time and degree of interest rate increases can not be determined, the adjustment downward of the security is required. The credit quality of the security is not in question, nor is the ability or willingness of the Corporation to hold the security to its maturity." Mr. Grant further stated, "It is important to note that the security is still in the Corporation’s investment portfolio, and has not been sold. The recovery of the special charge could only occur when and if the Corporation decides to sell the security for an amount greater than its original cost basis."
Book value per share was $13.04 as of December 31, 2002 as compared to $11.69 as of December 31, 2001. Returns on average assets for the 12 months ended December 31, 2002 and 2001 were 1.13 % and 1.11% respectively. Returns on average shareholders’ equity were 12.75% and 13.26% for the years 2002 and 2001 respectively.
Operating Income
For the fourth quarter of 2002 total operating income totaled $1.87 million as compared to $2.43 million for the same time period of 2001. Total operating income was $9.01 million for the period ending December 31, 2002. Total operating income for the period ending December 31, 2001 was $9.32 million. This is a decrease of $.31 million or 3.31%. Non-operating items affecting this comparison include security gains of $.58 million that were recognized in 2001 and the loss on investment securities recognized in 2002 of $.36 million. There were no security gains in 2002.
Income from trust and fiduciary activities in 2002 was $2.15 million. This is a decrease of $.36 million from the $2.51 million earned in 2001. Trust and fiduciary activity income is directly affected by the performance of the equity and bond markets because the majority of trust account fees are calculated based on the market value of assets under management. Despite the market conditions, First United’s Trust Department has seen significant growth in new trust business and increased management fees.
Service charges on deposit accounts increased $.28 million in 2002 over the $2.43 million reported for 2001. This increase is due to revised product pricing and increased NSF fees.
Operating Expense
Total operating expense was $6.55 million for the fourth quarter of 2002, as compared to $6.04 million for the same time period in 2001. Total operating expense for the full year 2002 was $26.04 million as compared to $23.38 million in 2001. This is an increase of $2.66 million or 11.37%.
The largest item in this category, salaries and employee benefits increased $1.42 million or 11.36% in 2002. Salaries and employee benefits totaled $13.92 million in 2002 as compared to $12.50 million in 2001. Salary increases and an expanded incentive program related to employee performance contributed to this increase.
Other expense increased $.85 million in 2002 or 13.00% resulting from increased legal and professional fees, increased consultants fees, vendor commission expense and other miscellaneous cost increases.
Asset Quality
First United’s asset quality continues to be high. The provision for probable credit losses was $.25 million for the fourth quarter of 2002 as compared to $1.07 million for the fourth quarter of 2001. The provision for probable credit losses totaled $1.51 million for the year 2002 as compared to $2.93 million for 2001. The loan delinquency ratio at December 31, 2002 was 1.05%. The loan delinquency ratio at December 31, 2001 was 1.30%. Non-accrual loans totaled $1.85 million as of December 31, 2002 as compared to a total of $3.20 million at December 31, 2001. This decrease was due to the resolution of a large commercial loan that resulted in no loss to the Corporation. Total non-performing loans were $3.30 million at December 31, 2002 as compared to $4.42 million at December 31, 2001. The reserve for loan and lease losses as a percentage of gross loans equaled .91% as of December 31, 2002 as compared to .95% as of December 31, 2001. The reserve for loan losses totaled $6.07 million at December 31, 2002 and $5.75 million at December 31, 2001.
First United Corporation offers full-service banking through its banking subsidiary, First United Bank & Trust, and consumer finance products through its subsidiaries, OakFirst Loan Center, Inc. and OakFirst Loan Center, LLC. These subsidiaries operate a network of offices throughout Garrett, Allegany, Washington, and Frederick counties in Maryland, as well as Mineral, Hardy, Hampshire, and Berkeley counties in West Virginia. First United’s website can be located at
www.mybankfirstunited.com. As of December 31, 2002, the Corporation posted assets of $953.68 million and had 6,080,589 shares outstanding.First United Corporation has made certain "forward-looking" statements with respect to this earnings release. Such statements should not be construed as guarantees of future performance. Actual results may differ from "forward-looking" information as a result of any number of unforeseeable factors, which include, but are not limited to, the effect of prevailing economic conditions, the overall direction of government policies, unforeseeable changes in the general interest rate environment, competitive factors in the marketplace, business risk associated with credit extensions and trust activities, and other risk factors. These and other factors could lead to actual results, which differ, materially from management’s statements regarding actual performance.
FIRST UNITED CORPORATION TO ACQUIRE FOUR BANKING OFFICES
IN BERKELEY COUNTY, WEST VIRGINIA
OAKLAND, Maryland -- First United Corporation (NASDAQ: FUNC) today announced the signing of a definitive agreement to acquire, through its bank subsidiary, First United Bank & Trust, four banking offices and a commercial banking center in Berkeley County, West Virginia from Huntington Bancshares Incorporated (NASDAQ: HBAN) and its bank subsidiary, The Huntington National Bank, for an amount based on an 11% deposit premium. The transaction includes the acquisition of $140 million in deposits and $54 million of loans as of December 31, 2002. First United will retain all of Huntington's employees. The transaction does not require approval by either First United or Huntington shareholders and is expected to close sometime in the 2003 third quarter following customary regulatory approvals.
"First United has had one banking office and one financial center in Martinsburg for six years," said William B. Grant, Chairman and Chief Executive Officer, "and we have been looking for ways to increase our presence. This transaction positions First United as the second largest bank in Berkeley County with a 19% deposit market share. Importantly, our new Martinsburg customers will continue to do business in the same locations and with the same people. We are already working very closely with Huntington to ensure a smooth transition for all our new customers. And with access to First United's other regional banking offices, their banking becomes more convenient than ever."
"We are looking forward to joining the First United family," said Diane Armentrout, district manager for Huntington. "The Martinsburg area is a closely knit community and many on the First United staff are our neighbors. Further, like us, First United has a reputation for focusing on personalized, locally delivered banking services."
Two of the offices to be purchased are located in Martinsburg, West Virginia, with the other two located in Falling Waters, West Virginia, and Inwood, West Virginia.
About First United
First United Corporation is a Maryland financial holding company that, along with its affiliates, provides a wide range of financial products, including Trust, Insurance, and Investment Services. These services are customized to support and enhance the lives of people and businesses in Maryland's Garrett, Allegany, Washington and Frederick counties, as well as West Virginia's Mineral, Hardy, Hampshire and Berkeley counties through 20 offices, one financial center and a nationally recognized Customer Service Center. Since its founding in 1900, First United has remained independent and grown steadily through sound financial management practices and by investing time, energy and resources in the communities it serves. As of December 31, 2002, the Corporation posted assets of $953 million and had 6,080,589 shares outstanding common stock. First United's website is www.mybankfirstunited.com.
Forward-looking Statements
In addition to historical information, this press release contains certain "forward-looking" statements that involve risks and uncertainties, such as statements regarding the plans and expectations of First United Corporation (the "Company") in connection with the pending acquisition. Such statements should not be construed as guarantees of future performance. Actual results could differ materially from management's expectations. Factors that could contribute to those differences include, but are not limited to, changes in regulations applicable to the business of the Company, Huntington Bancshares Incorporated ("Huntington"), and their affiliates, the possibility of economic recession or slow down (which could impact credit quality, adequacy of loan loss reserve and loan growth), changes in the general interest rate environment, competitive factors in the Company's and/or Huntington's marketplace, and business risk associated with credit extensions and trust activities. For a more complete discussion of these and other risk factors, please see "Risk Factors" in Part I, Item 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2001.
William B. Grant, Chairman of the Board of Directors and Chief Executive Officer of First United Corporation, recently announced the election of Gary R. Ruddell to its Board of Directors of First United Corporation and its subsidiary, First United Bank & Trust.
Mr. Ruddell has been affiliated with First United for several years. In 1991, he was appointed to serve on First United’s Advisory Board. He was active on this board and contributed to several of its strategic initiatives. He was nominated by the Board of Directors to serve on First United’s Advisory Council in 2002, until his recent appointment to the Board of Directors.
Mr. Grant commented, "Gary has been a tremendous asset to our Advisory Board and Council over his past years of service. His dedication to First United, coupled with his leadership, has served us well, and I am pleased that he has accepted this appointment."
Mr. Ruddell graduated from Northwestern Senior High School in Hyattsville, Maryland. In 1973 he graduated from University of Maryland, College Park, with a Bachelor of Science in Business and Management. Mr. Ruddell is currently Chief Executive Officer and Entrepreneur of Total Biz Fulfillment, devoting the past few years to reengineering his company for future expansion.
Gary’s strong commitment to his community is evident with his various leadership roles, including his involvement with several community projects over the years. Two of his most recent projects were the spearheading of the Renew Grantsville’s Library Committee and the Maryland Salem Children’s Trust Fund Raising Steering Committee. He has been a member for 10 years and has served as President of the Grantsville Rotary. He is also a member of the Board of Directors of the Adventure Sports Center in McHenry, Maryland and serves as Vice Chairman of the Garrett County Development Corporation.
"I look forward to adding my business talents to First United’s Board of Directors. It is a dream experience being associated with this dynamic team of associates that provide financial service and solutions to commercial customers and consumers," Mr. Ruddell remarked on his recent election.
Gary currently resides in McHenry, Maryland with his wife Luanne. He has one son, Paul Ruddell, and two daughters, Mary Beth and Amy, and a step-daughter, Chrissy Wingate and two grandchildren, Ky’Juan and Ra’Shad Wingate.
William B. Grant, Chairman of the Board of Directors and Chief Executive Officer of First United Corporation, recently announced the election of Faye E. Cannon to its Board of Directors of First United Corporation, and its subsidiary, First United Bank & Trust.
Ms. Cannon has been affiliated with First United since 2003. Before her appointment to the Board of Directors, she served on First United’s Advisory Council. Mr. Grant commented, "I am extremely pleased that Faye has accepted this appointment to our Board. Her exemplary leadership skills and prestigious banking career will enhance our Board of Directors Team. Our shareholders will benefit from her expertise and vast experience in the banking industry."
Ms. Cannon was previously Chief Executive Officer, President and Director of F&M Bancorp and Farmers & Mechanics Bank. Currently she is a Director of Dan Ryan Builders, a regional homebuilder corporation headquartered in Frederick, Maryland, and serves as Chair of the Hood College Board of Trustees in Frederick, Maryland. Ms. Cannon is a Director of Frederick Memorial Healthcare Systems/Frederick Memorial Hospital and is a member of the Rotary Club of Frederick.
Ms. Cannon is a past Director of the American Bankers Association, serving as Chair of the ABA’s Government Relations Council. Ms. Cannon also served as President of the National Bank Marketing Association, currently a subsidiary of the American Bankers Association, and is the leading provider of marketing information, education and services to the financial services industry. She began her service with the organization as a Director, working on a variety of committees and national conferences for six years.
In addition to Ms. Cannon’s banking service at the national level, she also was active at the state level, serving as Vice Chairman of the Maryland Banker’s Association as well as a Director. She also was active on various committees including Chair of the Maryland Banking School.
Ms. Cannon was honored as a recipient of the 2001 Maryland Top 100 Women Award. She is a 1971 graduate of Shepherd College and pursued undergraduate work at Frostburg State University. She is a graduate of the School of Bank Marketing and the School of Bank Marketing and Strategic Planning, meeting the credentials as a Certified Financial Marketing Professional.
Ms. Cannon lives with her husband, Robert, in Frederick.
Andrew (Mac) M. Warner has been elected to serve on First United Corporation’s Advisory Council.
William B. Grant, Chairman of the Board of Directors and Chief Executive Officer of First United Bank & Trust stated, "I am pleased that Mac has been serving on First United’s Advisory Council for over a year now. His insights into the business climate of Morgantown have been extremely valuable as the Bank continues to expand in this dynamic market."
Mr. Warner graduated from George Washington High School in Charleston, West Virginia. He later went on to West Point, where he earned a Bachelor of Science degree. He also obtained a Doctor of Jurisprudence Law degree from West Virginia University in 1982. In 1986, Mr. Warner earned a Legum Magister Master of Laws degree in Military Law from the Judge Advocate General’s School, and in 1991 he acquired a Legum Magister Master of Law degree in International Law from the University of Virginia.
Mr. Warner spent 23 years from 1977 to 2000 in the United States Army, culminating with assignments as Chief of International Law for the US Army Europe and at the US Army War College. In 1982, along with his brothers, he established McCoy 6 Apartments in Morgantown. Today, Mr. Warner works as a real estate developer for The Square at Falling Run.
Mr. Warner is involved with various activities in the community. Since 1995, he has been extensively involved in community youth leagues and activities, including basketball, football, scouts, and teaching Sunday school. He initiated the September 11th Tree Memorial on Morgantown's Rail Trail, he serves on the WVU Rifle Endowment Team, Main Street Morgantown's Economic Restructuring Committee, and is a member of Morgantown's Growth by Design Committee.
Mr. Warner currently resides in Morgantown, West Virginia with his wife, Debbie Law Warner. They have two sons, Steven and Scott, and two daughters, Krista and Lisa.
OAKLAND, MARYLAND— March 14, 2005: First United Corporation (Nasdaq: FUNC), a financial holding company and the parent company of First United Bank & Trust, announces net income for the quarter ended December 31, 2004 of $1.8 million ($.29 per share),
compared to $2.8 million ($.46 per share) for the fourth quarter of 2003, a 36% decrease. During the fourth quarter, management strategically decided to early redeem two Federal Home Loan Bank advances resulting in a $1.8 million prepayment penalty ($0.20 per share, net of tax). For the year ended December 31, 2004, net income totaled $7.6 million ($1.25 per share), a 29% decrease compared to net income of $10.7 million ($1.77 per share) for the year ended 2003. Full year results were impacted by the redemption of $23.7 million of Junior Subordinated Debentures that resulted in a charge of $0.9 million ($0.10 per share, net of tax) related to the write-off of unamortized issuance costs.For the year ended December 31, 2004, the Corporation’s returns on average assets and average shareholders’ equity were .65% and 8.91%, respectively, compared to 1.03% and 13.10%, respectively, for the same period in 2003.
Loans and leases were $911.5 million at December 31, 2004, compared to $792.0 million at December 31, 2003, an increase of 15.1%. This increase is attributable primarily to sizable growth in commercial and residential mortgage loans. Existing commercial relationships in core markets are responsible for much of the commercial loan growth during the year. Deposits were $850.7 million at December 31, 2004, compared to $750.2 million at December 31, 2003, an increase of 13.4%. The increase in deposits is primarily attributable to an increase in brokered certificates of deposit, of $100,000 or over. Brokered certificates of deposit were purchased in order to fund the rapid loan growth during the period. Total assets were $1.2 billion at December 31, 2004, a 9.1% increase from $1.1 billion at December 31, 2003.
Comparing December 31, 2004 to December 31, 2003, shareholders’ equity increased 2.7%, from $84.2 million at December 31, 2003 to $86.4 million at December 31, 2004. As a result, book value per share increased from $13.83 to $14.17. At December 31, 2004, there were 6,093,505 issued and outstanding shares of the Corporation’s common stock.
On September 30, 2004, the Corporation redeemed all of its 9.375% Junior Subordinated Deferrable Interest Debentures that it issued to First United Capital Trust ("Capital Trust") in 1999. The aggregate redemption price paid by the Corporation was approximately $23.7 million. Capital Trust was dissolved on October 12, 2004.
Net-Interest Income
Net interest income, on a fully tax-equivalent basis, increased $.9 million in the fourth quarter of 2004 when compared to the fourth quarter of 2003. The increase resulted from a $1.5 million increase in interest income during the period, coupled with a $.6 million increase in interest expense. Net interest income, on a fully tax-equivalent basis, for the year ended December 31, 2004 increased 6.9% to $37.4 million, compared to $35.0 million for the year ended December 31, 2003. This increase is due primarily to the increase in interest income of $2.8 million, offset by a slight increase in interest expense of $.4 million. Net interest margin was 3.43% for the twelve months ended December 31, 2004, decreasing 15 basis points when compared to 3.58% for the year ended December 31, 2003. During 2004, the Bank implemented a loan pricing model that is being used to set pricing for mortgage, commercial and consumer loan products throughout the Bank, and ensures loan pricing is consistent with targeted net interest margins.
Non-Interest Income
Comparing the fourth quarter of 2004 to the fourth quarter of 2003, non-interest income increased slightly to $3.7 million or 5.8% from $3.5 million. For the twelve months of 2004, non-interest income was $13.0 million, compared to $11.9 million for the same period of 2003, a 9.3% increase.
The increase in non-interest income for the period ended December 31, 2004 was primarily a result of a $.65 million increase in service charges on deposit accounts, attributable to a renewed concentration on the Corporation’s overdraft protection program and an increase of $.63 million in Trust Department income from $2.52 million in 2003 to $3.15 million in 2004. Average assets under management by the Trust department were $395 million in 2004 compared to $332 million in 2003. These increases in non-interest income were offset by a $.3 million decrease in securities gains in 2004 as compared to 2003.
Non-Interest Expense
Non-interest expense for the fourth quarter of 2004 was $10.2 million, compared to $7.9 million for the fourth quarter of 2003, a 29.2% increase. The $1.8 million prepayment penalty related to the early redemption of FHLB advances comprised most of this increase. For the year ended December 31, 2004, non-interest expense was $36.0 million, compared to $29.8 million for the same period of 2003, a 20.8% increase.
These increases in non-interest expense for the year ended December 31, 2004, were the result of various factors. Salaries and benefits increased $.9 million in 2004 compared to the same time period of 2003. These increases are directly related to increased staffing to support the Corporation’s growth objectives and increasing health costs. 2004 salaries and benefits also include a full year of compensation costs related to the branches acquired in 2003 from Huntington National Bank. A full year of amortization expense related to the core deposit intangible also attributed to $.4 million of the increase. Other contributing factors of this increase were additional professional fees incurred in 2004 to comply with the requirements of the Sarbanes-Oxley Act and costs related to conversion of our network lines related to branch expansion and modernization. During the third quarter 2004, the Corporation also expensed $.9 million of unamortized issuance costs related to the early redemption of the subordinated debentures.
Asset Quality
The Corporation’s asset quality continues to be sound. The ratio of nonperforming loans and past-due loans to total loans at December 31, 2004 was .50%, compared to .51% at December 31, 2003. The ratio of nonperforming and past-due loans to total assets at December 31, 2004 was .37%, compared to .36% at December 31, 2003. The ratio of the allowance for loan losses to gross loans at December 31, 2004 was .75%, compared to .76% at December 31, 2003. For the quarter ended December 31, 2004, the provision for loan losses was $.90 million, compared to $.14 million for the quarter ended December 31, 2003. This $.8 million increase was due to continued growth in the loan portfolio and to provide for specific losses on two commercial loans that have been settled without further losses.
ABOUT FIRST UNITED CORPORATION
First United Corporation offers full-service banking products and services through its trust company subsidiary, First United Bank & Trust, and consumer finance products through its consumer finance subsidiaries, OakFirst Loan Center, Inc. and OakFirst Loan Center, LLC. The Corporation also offers a full range of insurance products and services to customers in its market areas through Gonder Insurance Agency, Inc. These entities operate a network of offices throughout Garrett, Allegany, Washington, and Frederick Counties in Maryland, as well as Mineral, Hardy, and Berkeley Counties in West Virginia. First United has now opened their first location in Monongalia county in West Virginia. The Corporation’s website is
www.mybankfirstunited.comOAKLAND, MARYLAND—May 2, 2005: First United Corporation (Nasdaq: FUNC), a financial holding company and the parent company of First United Bank & Trust, announces net income for the quarter ended March 31, 2005 of $2.76 million ($.45 earnings per share)
Non-interest income for the first quarter of 2005 was $3.08 million compared to $3.44 million for the first quarter of 2004, a
decline of $.4 million (10%). This decline was primarily attributable to a $.7 million decrease in income from security gains in 2005. Security gains were recognized in the first quarter of 2004 in anticipation of the planned dissolution of one of our subsidiaries, First United Securities, Inc., in the second quarter of 2004. This decrease was offset by increases in insurance premium income, Trust department income and other income of approximately $.3 million during the first quarter of 2005.Non-interest expense for the first quarter of 2005 was $8.48 million compared to $8.40 million for the first quarter of 2004, an increase of less than $.1 million (2%). Salaries and employee benefits, which represent slightly more than half of total non-interest expenses, increased $.3 million (7%) during the first quarter of 2005 when compared to the same period of 2004. This increase is primarily attributable to increased incentive pay, expansion into the Morgantown, West Virginia market in late 2004 and increased staffing to support our growth objectives and regulatory compliance. Occupancy, equipment and data processing expense for the first quarter of 2005 increased $.1 million (6%) when compared to the same period of 2004 principally due to branch expansion in our existing and new market areas. Other expenses for the first quarter of 2005 decreased $.3 million (10%) when compared to the same period of 2004, resulting from decreased business insurance costs, contract labor and expenses associated with our Arizona reinsurance subsidiary, Oakfirst Life Insurance Corporation ("Oakfirst Life"). These decreases were offset slightly by increased costs associated with conversion of network lines for branch expansion and modernization and a focused advertising campaign in the first quarter of 2005.
ABOUT FIRST UNITED CORPORATION
First United Corporation is a Maryland corporation that was incorporated in 1985 and is registered as a financial holding company under the federal Bank Holding Company Act of 1956, as amended. The Corporation’s primary business activity is acting as the parent company of First United Bank & Trust, the Bank, a Maryland trust company (the "Bank"), Oakfirst Life, OakFirst Loan Center, Inc., a West Virginia finance company, OakFirst Loan Center, LLC, a Maryland finance company, two Connecticut statutory trusts, First United Statutory Trust I and First United Statutory Trust II, and First United Insurance Group, LLC, a Maryland full service insurance agency. OakFirst Loan Center, Inc. has one subsidiary, First United Insurance Agency, Inc., which is a Maryland insurance agency. The Bank provides a complete range of retail and commercial banking services to a customer base serviced by a network of 24 offices and 34 automated teller machines. It has two direct subsidiaries: First United Investment Trust, a Maryland real estate investment trust that invests in mortgage loans; and First United Auto Finance, LLC, an inactive indirect automobile leasing company. The Corporation’s website is
www.mybankfirstunited.com.This press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking statements. Such factors are detailed in the "Risk Factors" filed as Exhibit 99.1 to the Annual Report of First United Corporation on Form 10-K for the year ended December 31, 2004. Except as required by applicable laws, we do not intend to publish updates or revisions of any forward-looking statements it makes to reflect new information, future events or otherwise.
My Bank/First United recently celebrated the Grand Opening of its Sabraton Community Office with their "My Bank Fantastic Plastic Payoff" event. With the help of 101.9 FM WVAQ, nearly 300 members of the community turned out to take part in the festivities.
Sue H. Alexander, Community Office Manager at the Sabraton Community Office, was on hand to help with all of the family oriented fun and activities. Sue commented, "My Bank is focused on catering to families and businesses in our community. First United takes pride in assisting our customers plan for the future through personal attention, as well as providing the products and services they need and want most."
The highlight of the Grand Opening was the giveaways, which included $3,400 cash prizes. Two $1,000 prizes were awarded to Misti Weber and Alesia Allison. First United congratulates all of the winners and thanks all those in attendance for making this a very successful event.
The Sabraton Community Office lobby is open Monday through Friday, 9 a.m. to 5 p.m. and on Saturday from 9 a.m. to Noon. First United’s award winning, Customer Service Center is also available through their toll-free number, 1-888-MYBANK4, until 10 p.m. on weekdays and from 8:30 a.m. until 4 p.m. on Saturdays, helping customers with any type of account opening or inquiry. My Bank also offers banking services online at their website, MyBank4.com.
Oakland, MD ---
The Board of Directors of First United Corporation, a one-bank holding company headquartered in Oakland, Maryland, declared a cash dividend of $0.185 per share at its board meeting on June 15, 2005. The dividend will be payable on August 1, 2005 to shareholders of record as of July 15, 2005.
First United Corporation (NASDAQ:FUNC) operates one full-service commercial bank, First United Bank & Trust. The bank has a network of community offices in Garrett, Allegany, Washington, and Frederick Counties in Maryland, as well as Mineral, Hardy, Berkeley and Monongalia Counties in West Virginia. First United’s website can be located at
www.mybankfirstunited.comOAKLAND, MARYLAND—August 5, 2005: First United Corporation (Nasdaq: FUNC), a financial holding company and the parent company of First United Bank & Trust, announces net income for the quarter ended June 30, 2005 of $2.1 million ($.35 earnings per share)
compared to $2.0 million ($.33 earnings per share) for the second quarter of 2004, a 5% increase.For the six month period ended June 30, 2005, the Corporation’s annualized return on average assets and average shareholders’ equity were .78% and 11.22%, respectively, compared to .83% and 11.10%, respectively, for the same period in 2004. Net income thru June 30, 2005 was $4.9 million ($.80 earnings per share) compared to $4.7 million ($.77 earnings per share) for the first six months of 2004.
Loans and leases were $957.3 million at June 30, 2005 compared to $911.5 million at December 31, 2004, an increase of 5.0%. Deposits were $911.7 million at June 30, 2005 compared to $850.7 million at December 31, 2004, an increase of 7.2%. The Corporation experienced significant growth in deposits primarily due to our successful 13 month CD promotion, and the deposit of approximately $29 million of money market funds brought in house from the Bank’s trust department. Total assets were $1.27 billion at June 30, 2005, a 3.3% increase from $1.23 billion at December 31, 2004.
Comparing June 30, 2005 to December 31, 2004, shareholders’ equity increased 3%, from $86.4 million at December 31, 2004 to $88.7 million at June 30, 2005, resulting in a slight increase in book value per share from $14.17 at December 31, 2004 to $14.54 at June 30, 2005. At June 30, 2005, 6,105,521 shares of the Corporation’s common stock were issued and outstanding.
Net interest income increased $1.5 million during the first six months of 2005 over the same period in 2004. The increase in interest income resulted primarily from an increase in average interest-earning assets of $107 million or 10% during the first six months of 2005 when compared to the first six months of 2004. This increase is primarily attributable to the significant growth experienced by the Corporation in its loan portfolio throughout all of 2004 and continuing into 2005. The increase in interest income was offset by increased interest expense due to rising interest rates, a shift in the Corporation’s interest-bearing liabilities and the overall increase in average interest-bearing liabilities of $102 million in the first six months of 2005 when compared to the first six months of 2004. Overall, net interest income, before the provision for loan losses, improved by $1.5 million, or 8% for the first six months of 2005 and $1.0 million or 11% for the second quarter of 2005 when compared to the same periods of 2004. Net interest margin, on a fully tax equivalent basis, was 3.45% for the six month period ended June 30, 2005, decreasing eight basis points as compared to 3.53% for the six month period ended June 30, 2004.
The Corporation’s asset quality continues to be sound. The ratio of non-performing and 90 days past-due loans to total loans at June 30, 2005 was .47% compared to .50% at December 31, 2004 and .78% at June 30, 2004. The ratio of non-performing and 90 days past-due loans to total assets at June 30, 2005 was .35% compared to .37% at December 31, 2004 and .58% at June 30, 2004.
The provision for loan losses increased by $.3 million or 36% for the three months ended June 30, 2005 and by $.1 million or 17% for the six months ended June 30, 2005 when compared to the same periods in 2004, due primarily to a specific allocation of $.4 million made for a commercial loan during the second quarter of 2005. As a result of our evaluation of the loan portfolio, the allowance for loan losses increased slightly to $7.2 million at June 30, 2005, compared to $6.8 million at December 31, 2004. Management believes that the allowance at June 30, 2005 is adequate to provide for probable losses inherent in our loan portfolio.
Other operating income decreased $.5 million (7%) during the first six months of 2005 compared to the same period for 2004. For the second quarter of 2005, other operating income was $2.88 million compared to $3.00 million for the second quarter of 2004, a decline of $.1 million (4%). The decrease is primarily attributable to $.2 million in losses recognized in the second quarter of 2005 related to sales of certain securities held in our investment portfolio, compared to $.7 million in security gains for the six months ended June 30, 2004. The proceeds from these sales were reinvested into longer-term mortgage-backed securities and municipals, resulting in improved yields and a better match with scheduled maturities of our liabilities. This decrease was offset by an increase of $.2 million in trust income and an increase of $.1 million in insurance commissions during the six months ended June 30, 2005.
Other operating expense increased $.4 million (2%) for the first six months of 2005 when compared to the same period of 2004. For the second quarter of 2005, other operating expense was $8.51 million compared to $8.23 million for the second quarter of 2004, an increase of $.3 million (4%). Salaries and employee benefits, which represent slightly more than half of total other operating expenses, increased $.5 million (6%) and $.2 million (5%) during the first six months and the second quarter of 2005, respectively, when compared to the same periods of 2004. These increases are primarily attributable to increased incentive pay, expansion into the Morgantown, West Virginia market in late 2004 and increased staffing to support our growth objectives. Occupancy, equipment and data processing expenses for the first six months and second quarter of 2005, increased $.2 million (8%) and $.1 million (10%), respectively, when compared to the same periods of 2004 principally due to branch expansion in our existing and new market areas. Other expenses decreased $.4 million (9%) for the first six months and decreased $.1 million (3%) for the second quarter 2005 when compared to the same periods of 2004, resulting from reduced professional fees associated with compliance costs related to the Sarbanes-Oxley Act.
ABOUT FIRST UNITED CORPORATION
First United Corporation is a Maryland corporation that was incorporated in 1985 and is registered as a financial holding company under the federal Bank Holding Company Act of 1956, as amended. The Corporation’s primary business activity is acting as the parent company of First United Bank & Trust, a Maryland trust company. Oakfirst Life Insurance Company, OakFirst Loan Center, Inc., a West Virginia finance company, OakFirst Loan Center, LLC, a Maryland finance company, two Connecticut statutory trusts, First United Statutory Trust I and First United Statutory Trust II, and First United Insurance Group, LLC, a Maryland full service insurance agency. OakFirst Loan Center, Inc. has one subsidiary, First United Insurance Agency, Inc., which is a Maryland insurance agency. The Bank provides a complete range of retail and commercial banking services to a customer base serviced by a network of 24 offices and 34 automated teller machines. It has two direct subsidiaries: First United Investment Trust, a Maryland real estate investment trust that invests in mortgage loans; and First United Auto Finance, LLC, an inactive indirect automobile leasing company. The Corporation’s website is
www.mybankfirstunited.comThis press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking statements. Such factors are detailed in the "Risk Factors" filed as Exhibit 99.1 to the Annual Report of First United Corporation on Form 10-K for the year ended December 31, 2004. Except as required by applicable laws, we do not intend to publish updates or revisions of any forward-looking statements it makes to reflect new information, future events or otherwise.
Previously a member of the First United Bank & Trust Advisory Council, Mrs. Burkey now brings her expertise to the Board of Directors. Mrs. Burkey is a self-employed Certified Public Accountant with an office in Cumberland, Maryland, specializing in Accounting and Tax Services for individuals and growing businesses.
Burkey also currently serves as the Chairman of the Board of Directors for the Western Maryland Health System and as a member of the Cumberland Memorial Hospital Corporation Board of Directors. Additionally, Burkey is a member of the Judicial Nominations Committee for District 5.
Mr. Grant stated, "Mrs. Burkey is a great compliment to our Board of Directors. Her experience and expertise has always been seen as a tremendous asset within our Advisory Council and will continue to be relied upon in her role as a Director."
Formerly, Burkey was a member of the Boards of Directors for the Allegany County, Maryland League for Crippled Children, Inc., St. John Neumann School, Crossroads Venture Center, Memorial Hospital and Medical Center of Cumberland, Inc., the Maryland Healthcare Education Institute, Maryland Hospital Association and Associated Catholic Charities, Inc. – Archdiocese of Baltimore.
Mrs. Burkey was also formerly the Vice-Chairman of the Canal Place Preservation and Development Authority from 1993 to 2000, as well as a member of the FSU College of Business Advisory Board and a member of the Western Maryland Economic Development Taskforce. Burkey has also acted as a contributing member of the governing Council of the American Institute of Certified Public Accountants.
In her role as a Certified Public Accountant, Mrs. Burkey has acted as the President of the Maryland Association of Certified Public Accountants (MACPA) from 1992 to 1993. She has also been of service to MACPA in the form of Treasurer, Secretary, President-Elect, as well as Treasurer of the original Western Maryland Chapter and Chairman of the Committee to organize the current chapter. Mrs. Burkey was the first President of the Western Maryland Chapter for Allegany and Garrett Counties and has also served as a member of the MACPA Board of Directors.
Mrs. Burkey was recognized as the Cumberland Business and Professional Women’s – ‘Woman of the Year’ in 1999 and was a contributing author for the book Our Past, Our Future – 100 Years of CPAs in Maryland.
Mrs. Burkey currently resides in LaVale with her husband John.
Oakland, MD - -
The Board of Directors of First United Corporation, a one-bank holding company headquartered in Oakland, Maryland, declared a cash dividend of $0.185 per share at its board meeting on September 21, 2005. The dividend will be payable on November 1, 2005 to shareholders of record as of October 14, 2005.
First United Corporation (NASDAQ:FUNC) operates one full-service commercial bank, First United Bank & Trust. The bank has a network of community offices in Garrett, Allegany, Washington, and Frederick Counties in Maryland, as well as Mineral, Hardy, Berkeley and Monongalia Counties in West Virginia. First United’s website can be located at www.mybankfirstunited.com. As of June 30, 2005, the Corporation posted assets of $1.26 billion.
OAKLAND, MARYLAND—November 4, 2005: First United Corporation (Nasdaq: FUNC), a financial holding company and the parent company of First United Bank & Trust, announces net income for the quarter ended September 30, 2005 of $3.0 million ($.50 earnings per share) compared to $1.1 million ($.18 earnings per share) for the third quarter of 2004.
For the nine-month period ended September 30, 2005, the Corporation’s annualized return on average assets and average shareholders’ equity were .84% and 11.97%, respectively, compared to .67% and 9.05%, respectively, for the same period in 2004. Net income through September 30, 2005 was $7.9 million ($1.30 earnings per share) compared to $5.8 million ($.95 earnings per share) for the first nine months of 2004.
Loans and leases were $986.2 million at September 30, 2005 compared to $911.5 million at December 31, 2004, an increase of 8.2%. Deposits were $927.8 million at September 30, 2005 compared to $850.7 million at December 31, 2004, an increase of 9.1%. The Corporation experienced significant growth in deposits primarily due to our successful 13-month CD promotion, and the deposit of approximately $29 million of trust department money market funds into Bank money market accounts. Total assets were $1.30 billion at September 30, 2005, a 5.7% increase from $1.23 billion at December 31, 2004.
Comparing September 30, 2005 to December 31, 2004, shareholders’ equity increased 4.7%, from $86.4 million at December 31, 2004 to $90.5 million at September 30, 2005, resulting in an increase in book value per share from $14.17 at December 31, 2004 to $14.83 at September 30, 2005. At September 30, 2005, 6,112,067 shares of the Corporation’s common stock were issued and outstanding.
Net interest income increased $3.1 million during the first nine months of 2005 when compared to the same period in 2004, due to a $6.5 million (14%) increase in interest income offset by a $3.4 million (19%) increase in interest expense. The increase in interest income resulted from an increase in average interest-earning assets of $94 million (9%) during the first nine months of 2005 when compared to the first nine months of 2004. This increase is primarily attributable to the significant growth that we experienced in our loan portfolio as well as the increasing interest rate environment. Rates on our adjustable rate commercial real estate loans and home equity lines of credit have increased during 2005 as most are prime-rate based loans. Increases on these adjustable rate loans, coupled with improved yields on the investment portfolio, have contributed to the 28 basis point increase in the average rate on our average earning assets from 5.63% for the first nine months of 2004 to 5.91% for the first nine months of 2005 (on a fully tax equivalent basis). Net interest income for the third quarter of 2005 increased $1.6 million when compared to the third quarter of 2004. This increase resulted from a $3.0 million increase in interest income during the period, offset by an increase in interest expense of $1.4 million.
The Corporation’s asset quality is sound. The ratio of non-accrual and 90 days past-due loans to total loans at September 30, 2005 was .50% compared to .50% at December 31, 2004 and .79% at September 30, 2004. The ratio of non-accrual and 90 days past-due loans to total assets at September 30, 2005 was .37% compared to .37% at December 31, 2004 and .59% at September 30, 2004.
The provision for loan losses was $1.3 million for the first nine months of 2005, compared to $1.6 million for the same period of 2004. The decrease in the provision for loan losses is due to a decrease in the required amount of special allocations required for certain non-accrual loans and a reduction in the amount of actual net credit losses during the period. Additionally, total non-performing loans decreased by $0.3 million due to improvements in the delinquency rate on our consumer loans. As a result of the evaluation of the loan portfolio at September 30, 2005, the allowance for loan losses was $7.3 million at September 30, 2005, compared to $6.8 million at December 31, 2004. Management believes that the allowance at September 30, 2005 is adequate to provide for probable losses inherent in our loan portfolio.
Other operating income increased by $.7 million for the third quarter of 2005 and by $.2 million for the nine months ended September 30, 2005 when compared to the same time periods of 2004. The third quarter increase was due primarily to increases of $.2 million each in service charge income, trust department income and other income. Other operating income increases for the nine months ended September 30, 2005 consisted of increases of $.2 million each in service charge income and insurance premium income, $.4 million in trust department income and $.3 million in other income, offset by a decline in securities gains/(losses) of $.8 million. The difference in securities gains/(losses) was the result of a net $.2 million loss on the sale of securities during the first nine months of 2005 compared to a $.7 million gain during the same period of 2004.
Other operating expenses increased $.1 million (.2%) for the first nine months of 2005 when compared to the same period of 2004. For the third quarter of 2005, other operating expenses decreased $.3 million (3%) when compared to the third quarter of 2004. Salaries and employee benefits represent slightly more than half of total other operating expenses and increased $.9 million (7%) and $.4 million (10%) during the first nine months and third quarter of 2005, respectively, when compared to the corresponding periods of 2004. These increases are mainly attributable to the expansion into the Morgantown, West Virginia market in December of 2004, merit pay increases and to increased incentive pay during the periods discussed.
Occupancy, equipment and data processing expense for the first nine months and third quarter of 2005 increased $.3 million (6%) and $.1 million (4%), respectively, when compared to the same periods of 2004. These increases were principally due to branch expansion in existing and new market areas.
Other expenses decreased $.3 million (4%) during the first nine months of 2005 and increased $.1 million (4%) during the third quarter of 2005 when compared to the same periods of 2004. The year-to-date 2005 decrease is primarily due to reduced professional fees associated with various compliance costs, such as the Sarbanes-Oxley Act. In addition, third quarter and nine month 2004 other operating expenses include a $.9 million charge for the write-off of remaining unamortized issuance costs related to the exercise of an early redemption option on $23.7 million of the Company’s Junior Subordinated Debentures in the third quarter of 2004.
ABOUT FIRST UNITED CORPORATION
First United Corporation is a Maryland corporation that was incorporated in 1985 and is registered as a financial holding company under the federal Bank Holding Company Act of 1956, as amended. The Corporation’s primary business activity is acting as the parent company of First United Bank & Trust, a Maryland trust company, Oakfirst Life Insurance Company, OakFirst Loan Center, Inc., a West Virginia finance company, OakFirst Loan Center, LLC, a Maryland finance company, two Connecticut statutory trusts, First United Statutory Trust I and First United Statutory Trust II, and First United Insurance Group, LLC, a Maryland full service insurance agency. OakFirst Loan Center, Inc. has one subsidiary, First United Insurance Agency, Inc., which is a Maryland insurance agency. The Bank provides a complete range of retail and commercial banking services to a customer base serviced by a network of 25 offices and 35 automated teller machines. It has two direct subsidiaries: First United Investment Trust, a Maryland real estate investment trust that invests in mortgage loans; and First United Auto Finance, LLC, an inactive indirect automobile leasing company. The Corporation’s website is www.mybankfirstunited.com.
This press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking statements. Such factors are detailed in the “Risk Factors” filed as Exhibit 99.1 to the Annual Report of First United Corporation on Form 10-K for the year ended December 31, 2004. Except as required by applicable laws, we do not intend to publish updates or revisions of any forward-looking statements it makes to reflect new information, future events or otherwise.
OAKLAND, MARYLAND— February 23, 2006: First United Corporation (Nasdaq: FUNC), a financial holding company and the parent company of First United Bank & Trust, announces net income for the quarter ended December 31, 2005 of $4.2 million ($.69 per share), compared to $1.8 million ($.29 per share) for the fourth quarter of 2004. During the fourth quarter of 2005, management prepaid $25 million of Federal Home Loan Bank advances resulting in a net gain of $.4 million. The Corporation’s 2005 net income was $12.1 million, an increase of 59% from 2004 net income of $7.6 million. The increase in 2005 net income was due to strategic decisions made by management during 2004 and 2005, the Bank’s ability to maintain its net interest margin, and a focus on controlling our operating expenses. Management viewed 2004 as a transition year, implementing several strategies that were expected to positively impact net income in future periods. This was achieved in 2005 as earnings per share increased to $1.99 per share from $1.25 per share in 2004 and $1.77 per share in 2003 – an average annual growth rate of 6.2% from 2003 to 2005.
For the year ended December 31, 2005, the Corporation’s returns on average assets and average shareholders’ equity were .95% and 13.61%, respectively, compared to .65% and 8.91%, respectively, for the same period in 2004.
Loans and leases were $960.9 million at December 31, 2005, compared to $911.5 million at December 31, 2004, an increase of 5.4%. This increase was attributable primarily to growth in residential and commercial loans. During the fourth quarter, $31.1 million of mortgage loans were sold, offsetting residential mortgage loan growth of $50 million for the fourth quarter of 2005. The decision to sell these loans was made after an extensive analysis of the Bank’s mortgage portfolio and the identification of loans (primarily those with adjustable rate features) that management believed presented limited opportunities for improved yields over the next few years. Proceeds from the loan sale were invested in the Bank’s investment portfolio, primarily in higher yielding tax-exempt municipal securities.
Deposits were $955.9 million at December 31, 2005, compared to $850.7 million at December 31, 2004, an increase of 12.4%. The increase in deposits in 2005 over 2004 resulted primarily from the Corporation’s successful promotion of a 13-month certificate of deposit product in early 2005, an increase in brokered certificates of deposit of $19 million, and the movement of $30 million in trust money market funds into the Bank during the second quarter of 2005. At December 31, 2005 and 2004, brokered certificates of deposit in excess of $100,000 were $165.0 million and $146.0 million, respectively, or 18% of total deposits at both year-ends. Total assets were $1.3 billion at December 31, 2005, an 8.3% increase from $1.2 billion at December 31, 2004.
Comparing December 31, 2005 to December 31, 2004, shareholders’ equity increased 6.5%, from $86.4 million at December 31, 2004 to $92.0 million at December 31, 2005. As a result, book value per share increased from $14.17 to $15.04. The number of issued and outstanding shares of the Corporation’s common stock at December 31, 2005 was 6,118,103.
Net-Interest Income
Net interest income, on a fully tax-equivalent basis, for the fourth quarter of 2005 increased $.7 million when compared to net interest income for the fourth quarter of 2004. This increase resulted from a $2.7 million increase in interest income when comparing periods, offset by a $2.0 million increase in interest expense. Net interest income, on a fully tax-equivalent basis, for the year ended December 31, 2005 increased 9.9% to $41.1 million, from $37.4 million for the year ended December 31, 2004. This increase was due primarily to an increase in interest income of $9.1 million, offset by an increase in interest expense of $5.4 million for the period. The net interest margin for the year ended December 31, 2005 was 3.49%, an increase of 6 basis points when compared to the year ended December 31, 2004 of 3.43%.
Non-Interest Income
Non-interest income for the fourth quarter of 2005 increased by 24.3% to $4.6 million when compared to $3.7 million for the same period of 2004. For the year ended December 31, 2005, non-interest income was $14.1 million, an 8.5% increase when compared to the year ended December 31, 2004 ($13.0 million).
The increase in non-interest income for the period ended December 31, 2005 was driven primarily by continued growth in service charge income as well as increased production in our trust and insurance lines of business. The Corporation also recognized a pre-tax gain of $.9 million on the prepayment of long-term FHLB advances. These increases were offset by a decline of $.8 million in realized gains on the sale of investment securities as compared to 2004.
Non-Interest Expense
Non-interest expense for the fourth quarter of 2005 was $ 8.9 million, compared to $10.2 million for the fourth quarter of 2004, a 12.75% decrease. The early redemption of long-term borrowings in 2005 and 2004 resulted in prepayment fees of $.4 million and $1.8 million, respectively. The Corporation also recognized a $.9 million write-off of unamortized issuance costs in 2004 related to the early redemption of subordinated debentures. For the year ended December 31, 2005, non-interest expense was $34.7 million, compared to $36.0 million for the same period of 2004, a 3.6% decrease due primarily to the reduction in prepayment expense along with reduced professional fees associated with various compliance costs in 2005. Additionally, the Corporation experienced cost savings in 2005 over 2004 as a result of corporate reorganizations that occurred during the first and second quarters of 2004.
Asset Quality
The Corporation’s asset quality is sound. The ratio of nonperforming and past-due loans to total loans at December 31, 2005 was .35%, compared to .50% at December 31, 2004. The ratio of nonperforming and past-due loans to total assets at December 31, 2005 was .26%, compared to .37% at December 31, 2004. The ratio of the allowance for loan losses to gross loans at December 31, 2005 was .67%, compared to .75% at December 31, 2004. For the quarter ended December 31, 2005, the provision for loan losses was ($.20) million, compared to $.90 million for the quarter ended December 31, 2004. This $1.1 million decrease was attributable to the sale by the Bank of $31 million in mortgage loans in December 2005, a reduction in specific allocations on nonperforming loans and the decrease in net charge-offs as a percentage of average loans during 2005.
ABOUT FIRST UNITED CORPORATION
First United Corporation offers full-service banking products and services through its trust company subsidiary, First United Bank & Trust, and consumer finance products through its consumer finance subsidiaries, OakFirst Loan Center, Inc. and OakFirst Loan Center, LLC. The Corporation also offers a full range of insurance products and services to customers in its market areas through First United Insurance Group, LLC. These entities operate a network of offices throughout Garrett, Allegany, Washington, and Frederick Counties in Maryland, as well as Mineral, Hardy, Berkeley, and Monongalia Counties in West Virginia. The Corporation’s website is www.mybankfirstunited.com.
This press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking statements. Such factors are discussed in detail in Exhibit 99.1 of the Annual Report of First United Corporation on Form 10-K for the year ended December 31, 2004. Except as required by applicable laws, we do not intend to publish updates or revisions of any forward-looking statements it makes to reflect new information, future events or otherwise.
First United Corporation (NASDAQ:FUNC) operates one full-service commercial bank, First United Bank & Trust. The bank has a network of community offices in Garrett, Allegany, Washington, and Frederick Counties in Maryland, as well as Mineral, Hardy, Berkeley and Monongalia Counties in West Virginia. First United’s website can be located at www.mybankfirstunited.com. As of December 31, 2005, the Corporation posted assets of $1.31 billion.
First United Corporation
19 South Second Street Oakland, MD 21550
FOR IMMEDIATE RELEASE
Date: 5/5/2006
Contact: Carissa Rodeheaver
301-533-2362 Fax: 301-331-1421
FIRST UNITED CORPORATION ANNOUNCES FIRST
QUARTER EARNINGS
OAKLAND, MARYLAND—May 5, 2006: First United Corporation (Nasdaq: FUNC), a financial holding company and the parent company of First United Bank & Trust, announces net income for the quarter ended March 31, 2006 of $2.81 million ($.46 earnings per share) compared to $2.76 million ($.45 earnings per share) for the first quarter of 2005, a 1.8% increase.
For the three-month period ended March 31, 2006, the Corporation’s annualized return on average assets and average shareholders’ equity were .87% and 12.12%, respectively, compared to .90% and 12.81%, respectively, for the same period in 2005.
Total assets were $1.30 billion at March 31, 2006, a $13.2 million decrease from $1.31 billion at December 31, 2005.
Loans and leases were $955.6 million at March 31, 2006 compared to $960.9 million at December 31, 2005, a decrease of $5.4 million (1%). Continued growth in commercial loans and mortgage loans was offset by a decline in the installment portfolio. The decrease in installment loans resulted from management’s strategy to de-emphasize this type of highly rate-competitive lending in our major markets.
Comparing March 31, 2006 to December 31, 2005, shareholders’ equity increased 1.5%, from $92.0 million to $93.4 million, resulting in an increase in book value per share from $15.04 at December 31, 2005 to $15.25 at March 31, 2006. There were 6,123,381 shares of the Corporation’s common stock issued and outstanding at March 31, 2006.
Net-Interest Income
Net interest income increased $.5 million during the first three months of 2006 when compared to the same period in 2005. The increase in interest income resulted from an increase in average interest-earning assets of $25 million (2%) during the first quarter of 2006 when compared to the first quarter of 2005. The increase in interest-earning assets is primarily attributable to the growth experienced in our loan portfolio throughout 2005 and the increase in the investment portfolio. The sale of $31 million in lower yielding mortgage loans that was completed in December 2005 and the impact of rising interest rates during 2005 contributed to the increase in the average rate on our loan portfolio of 84 basis points, from 6.20% for the first quarter of 2005 to 7.04% for the first quarter of 2006 (on a fully tax equivalent basis). The increase in interest expense was due to the combined effect of the increasing rate environment and the overall increase in average interest-bearing liabilities of $53 million, which resulted in a 70 basis point increase in the cost of funds to 3.18% in 2006 compared to 2.48% for 2005. The net interest margin, on a fully tax equivalent basis, was 3.57% for the quarter ended March 31, 2006, increasing from 3.38% for the first quarter of 2005.
Asset Quality
The Corporation’s asset quality continues to be sou