OAKLAND,
Md., Feb. 5, 2024 /PRNewswire/ -- First United
Corporation (NASDAQ: FUNC), a bank holding company and the parent
company of First United Bank & Trust (the "Bank"), today
announced earnings results for the three- and twelve-month periods
ended December 31, 2023. For
the year ended December 31, 2023,
consolidated net income was $15.1
million, or $2.25 per basic
share and $2.24 per diluted share,
compared to $25.0 million, or
$3.77 per basic share and
$3.76 per diluted share, for the year
ended December 31, 2022.
According to Carissa Rodeheaver,
Chairman, President and CEO, "2023 was a challenging year as we
experienced industry turmoil, the impact of the rapidly increased
rate environment and strong deposit competition. Despite
these challenges, we were able to limit the impact to our margin,
achieve strong loan growth, maintain strong asset quality and
execute several strategic items. In the fourth quarter, we
accomplished a balance sheet restructuring and announced the
consolidation of our branch network. While these strategies
had a short-term impact on our fourth quarter and year-to-date
earnings, they position us well for greater efficiency and more
positive ongoing future earnings. I am proud of our
associates and their continued commitment to providing customized
financial solutions to our clients resulting in a strong 2023 total
shareholder return of 23.6%." Our team has successfully assisted
our customers in navigating this volatile and unpredictable
financial environment."
Fourth Quarter Financial Highlights:
- Total assets at December 31, 2023
decreased by $22.3 million, or 1.2%,
when compared to September 30, 2023
and increased by $57.7 million, or
3.1%, when compared to December 31,
2022. Significant changes during the fourth quarter
included:
- Cash balances decreased by $30.9
million when compared to September
30, 2023 and by $24.6 million
when compared to December 31,
2022.
- Investment securities decreased by $18.6
million when compared to September
30, 2023, and by $50.1 million
when compared to December 31, 2022.
During the fourth quarter of 2023, the Bank made a strategic
decision to restructure its balance sheet and sold
available-for-sale ("AFS") investment securities totaling
$20.4 million with a book value of
$24.6 million, resulting in pretax
loss of $4.2 million and an after-tax
loss of $3.2 million.
- Gross loans increased by $26.6
million when compared to September
30, 2023 and by $127.2 million
when compared to December 31, 2022,
as:
- commercial balances increased by $19.6
million during the fourth quarter and by $70.5 million when compared to December 31, 2022;
- residential mortgage balances increased by $8.2 million during the fourth quarter and by
$55.5 million when compared to
December 31, 2022; and
- consumer loans decreased by $1.2
million during the fourth quarter and increased by
$1.2 million when compared to
December 31, 2022.
- Deposits decreased by $24.1
million when compared to September
30, 2023 and by $19.8 million
when compared to December 31, 2022.
The Corporation had brokered deposits of $30.0 million as of December 31, 2023 compared to $60.7 million as of September 30, 2023. There were no brokered
deposits at December 31, 2022.
- Short-term borrowings decreased by $7.9
million when compared to September
30, 2023 and by $19.1 million
when compared to December 31, 2022.
The decrease in quarterly balances was due primarily to seasonal
fluctuations of municipal customer balances in overnight investment
sweep products. The decrease from December
31, 2022 was primarily related to one large municipal
customer moving approximately $12.0
million in funds from an overnight investment sweep product
to a non-interest-bearing deposit product as well as regular
fluctuations in other municipal customer balances.
- For the fourth quarter of 2023, consolidated net income, on a
non-GAAP basis was $1.8 million,
inclusive of a $3.3 million, net of
tax, securities loss and $0.5
million, net of tax, of accelerated depreciation and lease
termination expenses related to the announcement of the closure of
four branches in February 2024.
- Net interest margin, on a non-GAAP, fully tax equivalent
("FTE") basis, was 3.26% for the year ended December 31, 2023, compared to 3.56% for year
ended December 31, 2022.
- Net interest margin, on a non-GAAP, FTE basis, was 3.13% for
the fourth quarter of 2023 compared to 3.12% for the third quarter
of 2023 and 3.63% for the fourth quarter of 2022.
- Non-interest income, excluding net gains and losses, remained
stable in the fourth quarter of 2023 when compared to the third
quarter of 2023 and increased by $0.3
million when compared to the fourth quarter of 2022 due to
increases in wealth management income and debit card proceeds.
- Non-interest expense decreased by $0.5
million when compared to the third quarter of 2023. This
decrease was a result of a decrease of $0.5
million in net other real estate owned ("OREO") expenses due
to gains on sales of properties during the quarter, and a decrease
of $0.6 million in salaries and
benefits, related to reduced health insurance costs and reversal of
accrued executive performance-based incentives. These reductions
were offset by a $0.6 million
increase in occupancy and equipment costs related to the
acceleration of depreciation expense and lease termination expenses
associated with the branch closures. When compared to the fourth
quarter of 2022, non-interest expenses increased by $0.7 million. This increase was primarily due to
the $0.6 million increase in
occupancy and equipment costs related to the branch closures, a
$0.2 million increase in salaries and
benefits as a result of increased salary expense related to new
hires during 2023, increased health insurance costs offset by
reductions in executive incentives, a $0.3
million increase in employee benefit plan expense, and a
$0.2 million increase in marketing
expenses. These increases were partially offset by a decrease of
$0.6 million in net OREO expenses due
to the recognition of gains on sales of properties during the
fourth quarter of 2023.
Income Statement Overview
On a GAAP basis, net income was $1.8
million, inclusive of a $3.3
million, net of tax, loss on the sale of securities and
$0.5 million, net of tax, accelerated
depreciation and lease termination expenses related to the branch
closures, for the fourth quarter of 2023 compared to $7.0 million for the fourth quarter of 2022 and
$4.5 million for the third quarter of
2023. Basic and diluted net income was $0.82 per share, non-GAAP, and $0.26 per share, GAAP, for the fourth quarter of
2023, compared to basic net income of $1.05 per share and diluted net income of
$1.04 per share for the fourth
quarter of 2022 and $0.67 per share
for the third quarter of 2023. Exclusive of these items, net
income was $5.5 million on a non-GAAP
basis.
The decrease in quarterly net income, year-over-year, was
primarily driven by a restructuring of the investment portfolio
leading to the recognition of a $3.3
million, net of tax, loss in the fourth quarter of 2023 and
$0.5 million, net of tax, accelerated
depreciation and lease termination expenses related to the branch
closures. Additionally, net interest income decreased
by $1.0 million year-over-year as a
result of the lower net interest margin. Interest
expense increased by $5.8 million
year-over-year, which was partially offset by an increase in
interest income of $4.8
million. The provision for credit losses was
$0.4 million for the fourth quarter
of 2023 compared to a credit to the provision of $0.7 million for the fourth quarter of
2022. Salaries and employee benefits increased by
$0.2 million due to an increase of
$0.1 million in health insurance
costs, as well as increased salary expense for new hires, merit
increases effective April 1, 2023,
partially offset by decreases in executive incentives and stock
compensation. Occupancy and equipment expenses increased by
$0.6 million primarily related to the
increased expenses recognized in conjunction with the announced
branch closures. Data processing expenses increased by
$0.1 million, FDIC premiums increased
by $0.1 million and miscellaneous
expenses increased by $0.2 million
primarily attributable to increased employee benefit plan
expense.
When compared to the third quarter of 2023, net income decreased
by $2.8 million due primarily to
$3.3 million, net of tax, in
recognized losses from the restructuring of the investment
portfolio during the fourth quarter, as previously discussed.
Net interest income for the three months ended December 31, 2023 increased by $0.2 million driven by an increase in interest
income of $1.0 million, partially
offset by an increase of $0.8 million
in interest expense. Provision for credit losses increased by
$0.2 million due to the continued
strong loan growth, which was partially offset by the continued
strong credit quality of our loan portfolio and decreased
historical loss factors. Gains on the sale of residential
mortgages decreased by $0.1 million
in the fourth quarter as we experienced a seasonal decline in the
mortgage pipeline. Other operating income, including debit card
income and trust and brokerage fees, increased by $0.1 million quarter-over-quarter.
Operating expenses decreased by $0.5
million. Net OREO expenses decreased by $0.5 million due to gains on sales of OREO
properties recognized in the fourth quarter of 2023. Salaries
and employee benefits decreased by $0.6
million primarily due to decreases in incentive compensation
and health insurance costs during the quarter. These
decreases were partially offset by an increase in occupancy and
equipment expenses of $0.6 million
due to increased expenses recognized in conjunction with the
announced branch closures as discussed earlier.
For the year ended December 31,
2023, net income was $15.1
million on a GAAP basis, inclusive of a $3.3 million, net of tax, loss on the sale of
securities and $0.5 million, net of
tax, in increased expenses related to the branch closures, and
$18.8 million on a non-GAAP basis
compared to GAAP and non-GAAP basis income of $25.0 million in 2022. The year-over-year
$9.9 million decrease in GAAP net
income was driven by an increase in total operating expenses of
$7.1 million. Salaries and
employee benefits increased by $3.4
due primarily to increased salary expense of $2.0 million related to new hires, the
competitive environment for labor and merit increases effective
April 1, 2023, increased health
insurance costs of $1.0 million
associated with unusually high claims and decreases of $0.4 in deferred loan costs. Occupancy and
equipment expense increased by $0.7
million due primarily to accelerated depreciation and lease
termination expenses associated with the announced branch closures,
data processing expense increased by $0.5
million due to the implementation of new technology, and
FDIC assessments increased by $0.4
million. Other miscellaneous expenses, such as loan
service fees, dues and licenses, check fraud expenses,
employee benefit plan expense, and miscellaneous expenses increased
by $2.0 million and professional fees
increased by $0.6 million due to the
$0.8 million cash receipt related to
reimbursement of litigation expenses that was credited to expenses
in 2022. Provision for credit losses increased by
$2.2 million when compared to prior
year due to increased loan growth during 2023 and qualitative
factors with the implementation of Accounting Standards Update
2016-13: Financial Instruments- Credit Losses ("CECL").
Net losses on AFS securities increased by $4.2 million when compared to prior year due to
the sale of securities in the fourth quarter of 2023. Net
interest income decreased by $0.8
million due to compression of the net interest margin as
experienced industry-wide during 2023. These increases were
partially offset by increases in gains on sales of mortgages of
$0.3 million, service charges on
deposit accounts of $0.2 million, and
$0.1 million increase in debit card
income. Income taxes were down by $3.7
million when comparing the two periods due primarily to
reductions in pre-tax income.
Net Interest Income and Net Interest Margin
Net interest income, on a non-GAAP, FTE basis, decreased by
$1.2 million for the fourth quarter
of 2023 when compared to the fourth quarter of 2022. This
decrease was driven by an increase of $5.8
million in interest expense due to an increase of 160 basis
points on interest paid on deposit accounts as well as an increase
of $85.6 million in average balances
of interest-bearing deposit accounts when compared to the same
period of 2022. Increased deposit pricing resulted from the
continued pressure on deposits as well as a shift in the deposit
portfolio mix from non-interest-bearing deposits to
interest-bearing accounts including the Insured Cash Sweep ("ICS")
product to ensure full FDIC insurance coverage.
Interest income increased by $4.7
million. Interest income on loans increased by
$4.2 million due to the increase of
80 basis points in overall yield on the loan portfolio as new loans
were booked at higher rates as well as adjustable-rate loans
repricing in correlation to the rising rate environment and an
increase in average balances of $116.4
million. Investment income decreased by
$0.3 million primarily due to a
decrease of $22.5 million in average
balances as the Corporation made the strategic decision to reinvest
cash proceeds from the investment restructure and other principal
paydowns of its investments in higher yielding loans.
The net interest margin for the three months ended December 31, 2023 was 3.13% compared to 3.63% for
the three months ended December 31,
2022.
Comparing the fourth quarter of 2023 to the third quarter of
2023, net interest income, on a non-GAAP, FTE basis, increased by
$0.2 million This
increase was driven by an increase of $1.0
million in interest income offset by a $0.8 million increase in interest expense.
Interest income on loans increased by $1.2
million related to an overall increase of 22 basis points in
yield as well as an increase of $34.6
million in average loan balances. Interest expense on
deposits increased by $0.8 million
due to an increase of 21 basis points in the average rate paid and
an increase in average deposit balances of $39.3 million during the quarter. The
increase in deposits was primarily driven by the increase of
$47.9 million in money market
accounts, which was partially offset by a $12.3 million decrease in savings accounts as
customers moved deposit balances into a higher-yielding money
market products. Additionally, brokered deposits decreased by
an average balance of $12.8 million
quarter-over-quarter, as $30.1
million of brokered deposits matured in December
2023.
Comparing the year ended December 31,
2023 to the year ended December 31,
2022, net interest income, on a non-GAAP, FTE basis,
decreased by $1.1 million.
Interest expense on deposits increased by $16.0 million due to an increase in balances of
$120.3 million and an increase in
yield of 141 basis points. Interest expense on long-term
borrowings increased $3.5 million
related to $80.0 million in Federal
Home Loan Bank ("FHLB") borrowings obtained during the first
quarter of 2023 and an increase in interest rates on variable rate
trust preferred borrowings. The increased interest expense
resulted in an overall increase of 151 basis points on interest
bearing liabilities. This increase was partially offset
by an increase of $18.4 million in
interest income. The yield on earning assets increased
78 basis points to 4.63% in 2023 compared to 3.85% in 2022 in
correlation with the rising interest rate environment, new loans
booked at higher rates as well as adjustable rate loans
repricing. The net margin was 3.26% in 2023 compared to 3.56%
in 2022.
Non-Interest Income
Other operating income, including net (losses)/gains, for the
fourth quarter of 2023 decreased by $3.9
million when compared to the same period of 2022. The
Corporation recognized $4.2 million
in losses related to the sale of AFS securities in the fourth
quarter of 2023. Management executed the balance sheet
restructuring to reinvest lower-yielding securities to fund its
strong loan demand which is expected to increase the yield on
earning assets in future quarters. These losses were
partially offset by increases in service charges, wealth management
income, and gains on sales of mortgages.
On a linked quarter basis, other operating income, including net
(losses)/gains, decreased by $4.3
million due primarily to the $4.2
million in losses related to the sale of AFS securities as
discussed above. In addition, gains on sales of
residential mortgages decreased $0.1
million compared to the prior quarter. These decreases
were partially offset by an increase of $0.1
million in wealth management income and an increase of
$0.1 million in debit card
income.
Other operating income for the year ended December 31, 2023 decreased by $3.6 million when compared to 2022. The
$4.2 million loss related to the sale
of AFS securities in 2023 was partially offset by a $0.2 million increase in service charges on
deposit accounts, $0.1 million
increase in wealth management income, and $0.3 million increase in gains on sales of
residential mortgages.
Non-Interest Expense
Operating expenses increased by $0.7
million when comparing the fourth quarter of 2023 to the
fourth quarter of 2022. Occupancy and equipment expenses
increased by $0.6 million related to
depreciation and lease termination expenses recognized in
conjunction with announced branch closures. Salaries and
employee benefits increased by $0.2
million, marketing expenses increased by $0.2 million, FDIC premiums increased by
$0.1 million, data processing
expenses increased by $0.1 million,
and miscellaneous expenses increased by $0.2
million. These increases were partially offset
by a $0.6 million decrease in net
OREO expenses due to gains from sales of OREO recognized during
2023.
Comparing the fourth quarter of 2023 to the third quarter of
2023, operating expenses decreased by $0.5
million. This decrease was primarily attributable to a
$0.5 million decrease in net OREO
expenses due to gains recognized in the sale of OREO properties
during the fourth quarter of 2023 and a $0.6
million decrease in salaries and employee benefits due to
decreased incentive compensation and health insurance
costs. These decreases were partially offset by a
$0.5 million increase in occupancy
and equipment expense primarily related to depreciation and lease
termination expenses recognized in conjunction with the announced
branch closures.
For the year ended December 31,
2023, non-interest expenses increased by $7.1 million when compared to the year ended
December 31, 2022. Salaries and
employee benefits increased by $3.4
due primarily to increased salary expense of $2.0 million related to new hires, the
competitive environment for labor and merit increases effective
April 1, 2023, increased health
insurance costs of $1.0 million
associated with unusually high claims and decreases of $0.4 in deferred loan costs. Occupancy and
equipment expense increased by $0.7
million due to the expenses related to the branch closures,
data processing expense increased by $0.5
million as a result of the implementation of a new sales
management system, and FDIC assessments increased by $0.4 million. Professional fees increased
by $0.6 million related to increased
audit expenses in correlation to the new CECL implementation and
increased legal and professional expenses due to the receipt of an
$0.8 million in proceeds credited to
expense in 2022. Other miscellaneous expenses increased by
$2.0 million primarily driven by
increased check fraud related expenses of $0.5 million, increased employee benefit costs of
$1.1 million, increased escrow
account fees due to the rising rate environment, miscellaneous loan
fees and an increase of $0.2 million
in fees associated with the ICS product.
The effective income tax rates as a percentage of income for the
years ended December 31, 2023 and
December 31, 2022 were 22.7% and
24.5%, respectively. The decrease in the tax rate for the
2023 period was primarily related to a new low-income housing tax
credit investment in 2022 that began generating tax credits during
the fourth quarter of 2022. This tax credit will continue
through 2032.
Balance Sheet Overview
Total assets at December 31, 2023
were $1.9 billion, representing a
$57.7 million increase since
December 31, 2022. During
2023, cash and interest-bearing deposits in other banks decreased
by $24.6 million. In the first
quarter of 2023, management made the strategic decision to obtain
$61.1 million in brokered
certificates of deposit and $80.0
million in FHLB borrowings to strengthen on-balance sheet
liquidity in light of the disruption in the banking industry.
$30.0 million of the brokered
deposits were repaid in September
2023 and during the third quarter, in anticipation of
increasing rates, management pre-funded the $30.7 million of brokered deposits set to mature
and be repaid in the fourth quarter of 2023 at the same rate in
order to maintain cash balances and control interest expense.
Total brokered deposits outstanding at December 31, 2023 were $30.0 million.
The investment portfolio decreased by $50.1 million since December 31, 2022 driven by management's
strategic decision to restructure the balance sheet in the fourth
quarter by selling $20.4 million of
AFS securities and investing the proceeds into higher yielding
loans for future earnings growth. Also in the third quarter
of 2023, management opted to redeem a $17.8
million tax increment bond ("TIF") at par to boost
liquidity. Loans increased by $127.2
million since December 31,
2022 due primarily to growth in the commercial and
residential mortgage portfolios. Premises and equipment
decreased by $3.5 million primarily
due to accelerated depreciation related to announced branch
closures. Other assets, including bank owned life insurance
("BOLI") and deferred tax assets, increased by $7.0 million during 2023, as pension assets
increased by $3.2 million, deferred
tax assets increased by $1.3 million,
and BOLI increased by $1.3
million.
Total liabilities at December 31,
2023 were $1.7 billion,
representing a $47.6 million increase
since December 31, 2022.
Total deposits decreased by $19.8
million since December 31,
2022. Interest-bearing demand deposits and money
market accounts increased by $23.2
million and $20.5 million,
respectively, due to a shift in the deposit portfolio mix from
non-interest-bearing deposits to interest-bearing accounts
including the ICS product to ensure full FDIC insurance coverage,
where balances grew by approximately $104.0
million. These increases were offset by decreases in
non-interest-bearing deposits of $78.9
million and savings accounts of $59.5
million as we saw businesses and consumers utilizing cash
due to the rising rate and inflationary environment. Total
certificates of deposit increased by $75.0
million primarily due to an increase of $30.0 million in brokered certificates of
deposits and $45.0 million in retail
certificates of deposit. Short-term borrowings decreased by
$19.1 million since December 31, 2022 primarily due to one municipal
customer moving funds from an overnight investment product to a
non-interest bearing deposit product in 2023 as well as regular
fluctuations in municipal deposit balances. Long-term
borrowings increased by $80.0 million
in 2023 when compared to December 31,
2022 due to the acquisition of $80.0
million in FHLB borrowings in the first quarter of
2023.
Total AFS and held-to-maturity ("HTM") securities totaled
$311.5 million at December 31, 2023, representing a $50.1 million decrease compared to December 31, 2022. In the third
quarter of 2023, management elected to redeem $17.8 million from a non-rated municipal TIF bond
at par. During December of 2023, management made a strategic
decision to restructure the balance sheet by selling sold
available-for-sale ("AFS") investment securities totaling
$20.4 million with a book value of
$24.6 million, resulting in an
after-tax loss of $3.2 million.
The securities had a weighted average book yield of approximately
1.3% and a weighted average life of approximately 6.65
years. The proceeds from the sale will be used to fund
loans with a conservative approximate average rate of 7.85%.
The Bank projects that the earn-back period will be approximately
3.3 years. Additional decreases in the investment portfolio
were primarily related to normal principal
amortization. Proceeds from sales and principal
amortization during 2023 were used primarily to enhance on-balance
sheet liquidity and to fund loan growth throughout the year.
Outstanding loans of $1.4 billion
at December 31, 2023 reflected growth
of $127.2 million in 2023.
Since December 31, 2022, commercial
real estate loans increased by $34.9
million, acquisition and development loans increased by
$6.5 million and commercial and
industrial loans increased by $29.2
million. Growth in the commercial portfolios was
driven by increased activity with existing clients as well as
cultivating new business relationships. Residential mortgage
loans increased $55.5 million related
to management's strategic decision to book new mortgage loans at
higher rates to our in-house portfolio. The consumer loan portfolio
increased slightly by $1.2
million.
New commercial loan production for the three months ended
December 31, 2023 was
approximately $36.3 million. The pipeline of commercial
loans as of December 31, 2023 was
approximately $22.0 million. At
December 31, 2023, unfunded,
committed commercial construction loans totaled approximately
$29.6 million. Commercial
amortization and payoffs were approximately $151.6 million through December 31, 2023 due primarily to pay-offs of
short-term commercial loans as well as normal amortizations of the
commercial loan portfolio.
New residential mortgage loan production for the fourth quarter
of 2023 was approximately $17.8
million, with most of this production comprised of in-house
loans. The pipeline of in-house, portfolio loans as of
December 31, 2023 was $7.0 million. The residential mortgage
production level declined in the fourth quarter of 2023 due to the
increasing interest rates and seasonality of this line of
business. Unfunded commitments related to residential
construction loans totaled $17.6
million on December 31,
2023. Beginning in the second quarter of 2023, management
began shifting more activity towards the secondary market.
Total deposits at December 31,
2023 decreased by $19.8
million when compared to December
31, 2022. In March 2023,
the Corporation obtained $61.1
million in new brokered deposits. In August 2023, the Corporation obtained
$30.0 million of brokered deposits to
pre-fund the maturity of a $30.4
million brokered certificate of deposit that matured in
September 2023. In December
2023, $30.6 million in
brokered deposits matured and were repaid. In addition,
retail certificates of deposit increased by $45.0 million due primarily to a promotional
nine-month certificate of deposit product offered in 2023.
Interest-bearing demand deposits increased by $23.2 million and money market accounts increased
by $20.5 million due to a shift in
the deposit portfolio mix from non-interest-bearing accounts to
interest-bearing accounts including the ICS product to ensure full
FDIC insurance. These increases were offset by decreases in
non-interest-bearing deposits of $78.9
million and savings accounts of $59.5
million due to the shift to interest-bearing demand deposit
accounts, two relationships having large, planned deposit
withdrawals totaling $39.5 million
during 2023 to fund business activity, the effects of consumer and
commercial spending and the competitive market for
deposits.
The book value of the Corporation's common stock was
$24.38 per share at December 31, 2023 compared to $22.77 per share at December 31, 2022. At December 31, 2023, there were 6,639,888 of basic
outstanding shares and 6,653,200 of diluted outstanding shares of
common stock. The increase in the book value at December 31, 2023 was due to the undistributed
net income of $9.6 million during
2023, which was partially offset by a decrease in shareholders'
equity of $2.2 million, net of tax,
due to the adoption of CECL (Accounting Standards Codification
Topic 326). Accumulated other comprehensive income increased by
$3.2 million due primarily to changes
in the increased fair values of the Corporation's available for
sale investment securities, the reduction of the Corporation's
investment portfolio from the sale of investments in the fourth
quarter and pension assets during the year. In 2023, the
Corporation purchased and retired 82,098 shares of the
Corporation's common stock at an average price of $16.79 per share pursuant to the previously
announced stock repurchase program. The program, the
term of which expires on August 18,
2024 unless sooner terminated or extended by the
Corporation's Board of Directors, may be further utilized as the
Board and management deem appropriate.
Asset Quality
On January 1, 2023, the
Corporation adopted CECL, which replaced the incurred loss
impairment model with an expected loss model. As a result of
the CECL adoption, the Corporation recorded a transition adjustment
of $2.2 million, net of $0.7 million in tax, to retained earnings as of
January 1, 2023 for the cumulative
effect of the adoption of CECL. The Corporation recorded a
$2.0 million increase to the ACL
related to loans and a $0.9 million
increase to the allowance for credit losses (the "ACL") on off
balance sheet exposures.
For periods prior to the adoption of CECL, the Corporation
recognized credit losses for loans that were collectively evaluated
for impairment based on an incurred loss approach, which limited
our measurement of credit losses to credit events that were
estimated to have already occurred. The allowance for loan
losses (the "ALL") under the incurred model was a valuation
allowance for probable incurred losses inherent in the loan
portfolio. Management made the determination by taking into
consideration historical loan loss experience, diversification of
the loan portfolio, amount of secured and unsecured loans, banking
industry standards and averages, and general economic
conditions. Credit losses were charged against the ALL when
the loan balance was confirmed uncollectible. Subsequent
recoveries, if any, were credited to the ALL. Ultimate losses
varied from current estimates. The estimates were reviewed
periodically and as adjustments became necessary, they were
reported in earnings in the periods in which they become reasonably
estimable.
The ACL was $17.5 million at
December 31, 2023 compared to an ALL
of $14.6 million at December 31, 2022. The provision for credit
losses was $0.4 million for the
quarter ended December 31, 2023,
compared to a credit to provision of $0.7
million for the quarter ended December 31, 2022. The provision expense
recorded in the fourth quarter of 2023 was primarily related to
strong loan growth and increases in qualitative risk factors
related to the uncertainty of the economy, inflation levels, and
rising interest rates, which was partially offset by the reduction
of historical loss factors related to the strength of our overall
portfolio. Net charge-offs of $0.2
million were recorded for the quarters ended December 31, 2023 and 2022. The ratio of
the ACL to loans outstanding was 1.24% at December 30, 2023 and September 30, 2023 and 1.14% at December 31, 2022.
The ratio of year-to-date net charge offs to average loans for
the year ending December 31, 2023 was
an annualized 0.07%, compared to net charge offs to average loans
of 0.06% for 2022. Details of the ratio, by loan type, are
shown below. Our special assets team continues to effectively
collect on charged-off loans, resulting in ongoing overall low net
charge-off ratios.
Ratio of Net (Charge
Offs)/Recoveries to Average Loans
|
|
12/31/2023
|
12/31/2022
|
Loan
Type
|
(Charge Off) /
Recovery
|
(Charge Off) /
Recovery
|
Commercial Real
Estate
|
(0.02 %)
|
0.00 %
|
Acquisition &
Development
|
0.01 %
|
0.00 %
|
Commercial &
Industrial
|
(0.09 %)
|
(0.02 %)
|
Residential
Mortgage
|
0.00 %
|
0.03 %
|
Consumer
|
(1.04 %)
|
(1.23 %)
|
Total Net (Charge
Offs)/Recoveries
|
(0.07 %)
|
(0.06 %)
|
|
Non-accrual loans totaled $4.0
million at December 31, 2023
and $3.5 million at December 31, 2022. OREO balances decreased
by $0.2 million to $4.5 million since December 31, 2022 due to sales of OREO properties
in the fourth quarter of 2023, which was partially offset by the
addition of a new OREO property during the second quarter of
2023. OREO is comprised primarily of $4.0 for one property which has been marked to
market and is currently under contract with a targeted settlement
in the second quarter of 2024.
Non-accrual loans that have been subject to partial charge-offs
totaled $0.1 million at December 31, 2023 and $0.2
million at December 31,
2022. Loans secured by 1-4 family residential real estate
properties in the process of foreclosure totaled $1.8 million at December
31, 2023. There were no loans subject to foreclosure
at December 31,
2022. As a percentage of the loan portfolio,
accruing loans past due 30 days or more were 0.24% at December 31, 2023 compared to 0.27% at
September 30, 2023 and 0.16% at
December 31, 2022.
ABOUT FIRST UNITED CORPORATION
First United Corporation is a Maryland corporation chartered in 1985 and a
financial holding company registered with the Board of Governors of
the Federal Reserve System (the "FRB") under the Bank Holding
Company Act of 1956, as amended, that elected financial holding
company status in 2021. The Corporation's primary business is
serving as the parent company of First United Bank & Trust, a
Maryland trust company (the
"Bank"), First United Statutory Trust I ("Trust I") and First
United Statutory Trust II ("Trust II" and together with Trust I,
"the Trusts"), both Connecticut
statutory business trusts. The Trusts were formed for the
purpose of selling trust preferred securities that qualified as
Tier 1 capital. The Bank has two consumer finance company
subsidiaries- Oak First Loan Center, Inc., a West Virginia corporation, and OakFirst Loan
Center, LLC, a Maryland limited
liability company – and two subsidiaries that it uses to hold real
estate acquired through foreclosure or by deed in lieu of
foreclosure – First OREO Trust, a Maryland statutory trust, and FUBT OREO I,
LLC, a Maryland limited liability
company. In addition, the Bank owns 99.9% of the limited
partnership interests in Liberty Mews Limited Partnership, a
Maryland limited partnership
formed for the purpose of acquiring, developing and operating
low-income housing units in Garrett
County, Maryland ("Limited Mews"), and a 99.9% non-voting
membership interest in MCC FUBT Fund, LLC, an Ohio limited liability company formed for the
purpose of acquiring, developing and operating low-income housing
units in Allegany County, Maryland
(the "MCC Fund"). The Corporation's website is
www.mybank.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements as
defined by the Private Securities Litigation Reform Act of
1995. Forward-looking statements do not represent historical
facts, but are statements about management's beliefs, plans and
objectives about the future, as well as its assumptions and
judgments concerning such beliefs, plans and objectives.
These statements are evidenced by terms such as "anticipate,"
"estimate," "should," "expect," "believe," "intend," and similar
expressions. Although these statements reflect management's
good faith beliefs and projections, they are not guarantees of
future performance and they may not prove true. The beliefs,
plans and objectives on which forward-looking statements are based
involve risks and uncertainties that could cause actual results to
differ materially from those addressed in the forward-looking
statements. For a discussion of these risks and
uncertainties, see the section of the periodic reports that First
United Corporation files with the Securities and Exchange
Commission entitled "Risk Factors". In addition, investors should
understand that the Corporation is required under generally
accepted accounting principles to evaluate subsequent events
through the filing of the consolidated financial statements
included in its Annual Report on Form 10-K for the quarter ended
December 31, 2023 and the impact that
any such events have on our critical accounting assumptions and
estimates made as of December 31,
2023, which could require us to make adjustments to the
amounts reflected in this press release.
FIRST UNITED
CORPORATION
|
Oakland, MD
|
Stock Symbol :
FUNC
|
Financial Highlights
- Unaudited
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Results of
Operations:
|
|
|
|
|
|
|
|
|
Interest income
|
|
$
22,191
|
|
$
17,359
|
|
$
81,156
|
|
$
62,422
|
Interest expense
|
|
7,997
|
|
2,179
|
|
24,286
|
|
4,789
|
Net interest income
|
|
14,194
|
|
15,180
|
|
56,870
|
|
57,633
|
Provision/(credit) for credit/loan losses
|
|
419
|
|
(736)
|
|
1,620
|
|
(627)
|
Other operating income
|
|
4,793
|
|
4,479
|
|
18,331
|
|
17,878
|
Net
(losses)/gains
|
|
(4,184)
|
|
11
|
|
(3,862)
|
|
172
|
Other operating expense
|
|
12,309
|
|
11,590
|
|
50,243
|
|
43,129
|
Income before taxes
|
|
$
2,075
|
|
$
8,816
|
|
$
19,476
|
|
$
33,181
|
Income tax expense
|
|
317
|
|
1,847
|
|
4,416
|
|
8,133
|
Net income
|
|
$
1,758
|
|
$
6,969
|
|
$
15,060
|
|
$
25,048
|
|
|
|
|
|
|
|
|
|
|
Per share
data:
|
|
|
|
|
|
|
|
|
Basic net income per share
|
|
$
0.26
|
|
$
1.05
|
|
$
2.25
|
|
$
3.77
|
Diluted net income per share
|
|
$
0.26
|
|
$
1.04
|
|
$
2.24
|
|
$
3.76
|
Dividends declared per share
|
|
$
0.20
|
|
$
0.18
|
|
$
0.80
|
|
$
0.63
|
Book value
|
|
$
24.38
|
|
$
22.77
|
|
|
|
|
Diluted book value
|
|
$
24.33
|
|
$
22.68
|
|
|
|
|
Tangible book value per share
|
|
$
22.56
|
|
$
20.91
|
|
|
|
|
Diluted Tangible book value per share
|
|
$
22.51
|
|
$
20.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing market value
|
|
$
23.51
|
|
$
19.65
|
|
|
|
|
Market Range:
|
|
|
|
|
|
|
|
|
High
|
|
$
23.51
|
|
$
20.56
|
|
|
|
|
Low
|
|
$
16.12
|
|
$
16.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding at
period end: Basic
|
|
6,639,888
|
|
6,666,428
|
|
|
|
|
Shares outstanding at
period end: Diluted
|
|
6,653,200
|
|
6,692,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance ratios:
(Year to Date Period End, annualized)
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
|
0.78 %
|
|
1.39 %
|
|
|
|
|
Return on average
shareholders' equity
|
|
|
9.68 %
|
|
18.19 %
|
|
|
|
|
Net interest margin
(Non-GAAP), includes tax exempt income of $792 and $942
|
|
|
3.26 %
|
|
3.56 %
|
|
|
|
|
Net interest margin
GAAP
|
|
|
3.22 %
|
|
3.50 %
|
|
|
|
|
Efficiency ratio -
non-GAAP (1)
|
|
65.12 %
|
|
56.27 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Efficiency ratio is
a non-GAAP measure calculated by dividing total operating expenses
by the sum of tax equivalent net interest income and other
operating income, less gains/(losses) on sales of securities and/or
fixed assets.
|
|
December
31,
|
|
December
31
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
|
Financial Condition
at period end:
|
|
|
|
|
|
|
|
|
Assets
|
|
$
1,905,860
|
|
$
1,848,169
|
|
|
|
|
Earning
assets
|
|
$
1,725,236
|
|
$
1,643,964
|
|
|
|
|
Gross loans
|
|
$
1,406,667
|
|
$
1,279,494
|
|
|
|
|
Commercial Real Estate
|
|
$
493,703
|
|
$
458,831
|
|
|
|
|
Acquisition and Development
|
|
$
77,060
|
|
$
70,596
|
|
|
|
|
Commercial and Industrial
|
|
$
274,604
|
|
$
245,396
|
|
|
|
|
Residential Mortgage
|
|
$
499,871
|
|
$
444,411
|
|
|
|
|
Consumer
|
|
$
61,429
|
|
$
60,260
|
|
|
|
|
Investment
securities
|
|
$
311,466
|
|
$
361,548
|
|
|
|
|
Total
deposits
|
|
$
1,550,977
|
|
$
1,570,733
|
|
|
|
|
Noninterest bearing
|
|
$
427,670
|
|
$
506,613
|
|
|
|
|
Interest bearing
|
|
$
1,123,307
|
|
$
1,064,120
|
|
|
|
|
Shareholders'
equity
|
|
$
161,873
|
|
$
151,793
|
|
|
|
|
|
|
|
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 to risk weighted assets
|
|
14.42 %
|
|
15.06 %
|
|
|
|
|
Common Equity Tier 1 to risk weighted assets
|
|
12.44 %
|
|
12.95 %
|
|
|
|
|
Tier 1 Leverage
|
|
11.30 %
|
|
11.46 %
|
|
|
|
|
Total risk based capital
|
|
15.64 %
|
|
16.12 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
quality:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs for the
quarter
|
|
$
(195)
|
|
$
(164)
|
|
|
|
|
Nonperforming assets:
(Period End)
|
|
|
|
|
|
|
|
|
Nonaccrual loans
|
|
$
3,956
|
|
$
3,495
|
|
|
|
|
Loans 90 days past due and accruing
|
|
543
|
|
307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming loans and 90 day past due
|
|
$
4,499
|
|
$
3,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Modified/Restructured loans
|
|
$
-
|
|
$
3,028
|
|
|
|
|
Other real estate owned
|
|
$
4,493
|
|
$
4,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses to gross loans
|
|
1.24 %
|
|
1.14 %
|
|
|
|
|
Allowance for credit
losses to non-accrual loans
|
|
441.86 %
|
|
418.77 %
|
|
|
|
|
Allowance for credit
losses to non-performing assets
|
|
194.40 %
|
|
171.48 %
|
|
|
|
|
Non-performing and 90
day past due loans to total loans
|
|
0.32 %
|
|
0.30 %
|
|
|
|
|
Non-performing loans
and 90 day past due loans to total assets
|
|
0.24 %
|
|
0.21 %
|
|
|
|
|
Non-accrual loans to
total loans
|
|
0.28 %
|
|
0.27 %
|
|
|
|
|
Non-performing assets
to total assets
|
|
|
0.47 %
|
|
0.46 %
|
|
|
|
|
FIRST UNITED
CORPORATION
|
Oakland, MD
|
Stock Symbol :
FUNC
|
Financial Highlights
- Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
September
30,
|
June 30,
|
March 31,
|
|
December
31,
|
September
30,
|
June 30,
|
March 31,
|
(Dollars in thousands,
except per share data)
|
2023
|
2023
|
2023
|
2023
|
|
2022
|
2022
|
2022
|
2022
|
Results of
Operations:
|
|
|
|
|
|
|
|
|
|
Interest income
|
$
22,191
|
$
21,164
|
$
19,972
|
$
17,829
|
|
$
17,359
|
$
16,185
|
$
14,731
|
$
14,147
|
Interest expense
|
7,997
|
7,180
|
5,798
|
3,311
|
|
2,179
|
1,044
|
760
|
806
|
Net interest income
|
14,194
|
13,984
|
14,174
|
14,518
|
|
15,180
|
15,141
|
13,971
|
13,341
|
Provision/(credit) for credit/loan losses
|
419
|
263
|
395
|
543
|
|
(736)
|
(101)
|
631
|
(421)
|
Other operating income
|
4,793
|
4,716
|
4,483
|
4,339
|
|
4,479
|
4,604
|
4,413
|
4,382
|
Net gains
|
|
(4,184)
|
182
|
86
|
54
|
|
11
|
96
|
13
|
52
|
Other operating expense
|
12,309
|
12,785
|
12,511
|
12,638
|
|
11,590
|
10,329
|
10,630
|
10,580
|
Income before taxes
|
$
2,075
|
$
5,834
|
$
5,837
|
$
5,730
|
|
$
8,816
|
$
9,613
|
$
7,136
|
$
7,616
|
Income tax expense
|
317
|
1,321
|
1,423
|
1,355
|
|
1,847
|
2,677
|
1,708
|
1,901
|
Net income
|
|
$
1,758
|
$
4,513
|
$
4,414
|
$
4,375
|
|
$
6,969
|
$
6,936
|
$
5,428
|
$
5,715
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
data:
|
|
|
|
|
|
|
|
|
|
|
Basic net income per share
|
$
0.26
|
$
0.67
|
$
0.66
|
$
0.66
|
|
$
1.05
|
$
1.04
|
$
0.82
|
$
0.86
|
Diluted net income per share
|
$
0.26
|
$
0.67
|
$
0.66
|
$
0.65
|
|
$
1.04
|
$
1.04
|
$
0.82
|
$
0.86
|
Dividends declared per share
|
$
0.20
|
$
0.20
|
$
0.20
|
$
0.20
|
|
$
0.18
|
$
0.15
|
$
0.15
|
$
0.15
|
Book value
|
|
$
24.38
|
$
23.08
|
$
23.12
|
$
22.85
|
|
$
22.77
|
$
19.83
|
$
19.97
|
$
20.65
|
Diluted book value
|
$
24.33
|
$
23.03
|
$
23.07
|
$
22.81
|
|
$
22.68
|
$
19.80
|
$
19.93
|
$
20.63
|
Tangible book value per share
|
$
22.56
|
$
21.27
|
$
21.29
|
$
21.01
|
|
$
20.91
|
$
18.03
|
$
18.17
|
$
18.83
|
Diluted Tangible book value per share
|
$
22.51
|
$
21.22
|
$
21.25
|
$
20.96
|
|
$
20.87
|
$
18.00
|
$
18.14
|
$
18.82
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing market value
|
$
23.51
|
$
16.23
|
$
14.26
|
$
16.89
|
|
$
19.65
|
$
16.55
|
$
18.76
|
$
22.53
|
Market Range:
|
|
|
|
|
|
|
|
|
|
High
|
|
$
23.51
|
$
17.34
|
$
17.01
|
$
20.41
|
|
$
20.56
|
$
19.27
|
$
23.80
|
$
24.50
|
Low
|
|
$
16.12
|
$
13.70
|
$
12.56
|
$
16.75
|
|
$
16.74
|
$
16.18
|
$
17.50
|
$
18.81
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding at
period end: Basic
|
6,639,888
|
6,715,170
|
6,711,422
|
6,688,710
|
|
6,666,428
|
6,659,390
|
6,656,395
|
6,637,979
|
Shares outstanding at
period end: Diluted
|
6,653,200
|
6,728,482
|
6,724,734
|
6,703,252
|
|
6,692,039
|
6,669,785
|
6,666,790
|
6,649,604
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance ratios:
(Year to Date Period End, annualized)
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
|
0.78 %
|
0.93 %
|
0.95 %
|
0.94 %
|
|
1.39 %
|
1.35 %
|
1.26 %
|
1.31 %
|
Return on average
shareholders' equity
|
|
|
9.68 %
|
11.44 %
|
11.43 %
|
11.87 %
|
|
18.19 %
|
17.66 %
|
16.25 %
|
16.49 %
|
Net interest margin
(Non-GAAP), includes tax exempt income of $76 and $241
|
|
|
3.26 %
|
3.30 %
|
3.39 %
|
3.53 %
|
|
3.56 %
|
3.53 %
|
3.46 %
|
3.40 %
|
Net interest margin
GAAP
|
|
|
3.22 %
|
3.25 %
|
3.34 %
|
3.48 %
|
|
3.50 %
|
3.47 %
|
3.40 %
|
3.34 %
|
Efficiency ratio -
non-GAAP (1)
|
65.12 %
|
66.41 %
|
66.00 %
|
67.02 %
|
|
56.27 %
|
51.49 %
|
57.11 %
|
58.81 %
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Efficiency ratio is
a non-GAAP measure calculated by dividing total operating expenses
by the sum of tax equivalent net interest income and other
operating income, less gains/(losses) on sales of securities and/or
fixed assets.
|
December
31,
|
September
30,
|
June 30,
|
March 31,
|
|
December
31,
|
September
30,
|
June 30,
|
March 31,
|
|
|
|
2023
|
2023
|
2023
|
2023
|
|
2022
|
2022
|
2022
|
2022
|
Financial Condition
at period end:
|
|
|
|
|
|
|
|
|
|
Assets
|
|
$
1,905,860
|
$
1,928,201
|
$ 1,928,393
|
$ 1,937,442
|
|
$
1,848,169
|
$
1,803,642
|
$
1,752,455
|
$
1,760,325
|
Earning
assets
|
|
$
1,725,236
|
$
1,717,244
|
$ 1,707,522
|
$ 1,652,688
|
|
$
1,643,964
|
$
1,647,303
|
$
1,608,094
|
$
1,572,737
|
Gross loans
|
|
$
1,406,667
|
$
1,380,019
|
$ 1,350,038
|
$ 1,289,080
|
|
$
1,279,494
|
$
1,277,924
|
$
1,233,613
|
$
1,181,401
|
Commercial Real Estate
|
$
493,703
|
$
491,284
|
$
483,485
|
$
453,356
|
|
$
458,831
|
$
437,973
|
$
421,942
|
$
391,136
|
Acquisition and Development
|
$
77,060
|
$
79,796
|
$
79,003
|
$
76,980
|
|
$
70,596
|
$
83,107
|
$
116,115
|
$
133,031
|
Commercial and Industrial
|
$
274,604
|
$
254,650
|
$
249,683
|
$
241,959
|
|
$
245,396
|
$
269,004
|
$
225,640
|
$
194,914
|
Residential Mortgage
|
$
499,871
|
$
491,686
|
$
475,540
|
$
456,198
|
|
$
444,411
|
$
427,093
|
$
406,293
|
$
399,704
|
Consumer
|
|
$
61,429
|
$
62,603
|
$
62,327
|
$
60,587
|
|
$
60,260
|
$
60,747
|
$
63,623
|
$
62,616
|
Investment
securities
|
$
311,466
|
$
330,053
|
$
350,844
|
$
357,061
|
|
$
361,548
|
$
366,484
|
$
373,455
|
$
385,265
|
Total
deposits
|
|
$
1,550,977
|
$
1,575,069
|
$ 1,579,959
|
$ 1,591,285
|
|
$
1,570,733
|
$
1,511,118
|
$
1,484,354
|
$
1,507,555
|
Noninterest bearing
|
$
427,670
|
$
429,691
|
$
466,628
|
$
468,554
|
|
$
506,613
|
$
474,444
|
$
527,761
|
$
530,901
|
Interest bearing
|
$
1,123,307
|
$
1,145,378
|
$ 1,113,331
|
$ 1,122,731
|
|
$
1,064,120
|
$
1,036,674
|
$
956,593
|
$
976,654
|
Shareholders'
equity
|
$
161,873
|
$
154,990
|
$
155,156
|
$
152,868
|
|
$
151,793
|
$
132,044
|
$
132,892
|
$
137,038
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 to
risk weighted assets
|
14.42 %
|
14.60 %
|
14.40 %
|
14.90 %
|
|
15.06 %
|
14.40 %
|
14.31 %
|
14.55 %
|
Common
Equity Tier 1 to risk weighted assets
|
12.44 %
|
12.60 %
|
12.40 %
|
12.82 %
|
|
12.95 %
|
12.36 %
|
12.27 %
|
12.45 %
|
Tier 1
Leverage
|
11.30 %
|
11.25 %
|
11.25 %
|
11.47 %
|
|
11.46 %
|
11.23 %
|
11.23 %
|
10.94 %
|
Total
risk based capital
|
15.64 %
|
15.81 %
|
15.60 %
|
16.15 %
|
|
16.12 %
|
15.50 %
|
15.46 %
|
15.71 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
quality:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(charge-offs)/recoveries for the quarter
|
$
(195)
|
$
(83)
|
$
(398)
|
$
(245)
|
|
$
(164)
|
$
(89)
|
$
(179)
|
$
(244)
|
Nonperforming assets:
(Period End)
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans
|
$
3,956
|
$
3,479
|
$
2,972
|
$
3,258
|
|
$
3,495
|
$
1,943
|
$
2,149
|
$
2,332
|
Loans 90 days past due and accruing
|
543
|
145
|
160
|
87
|
|
307
|
569
|
$
325
|
37
|
|
|
|
|
|
|
|
|
0
|
|
|
|
Total nonperforming loans and 90 day past due
|
$
4,499
|
$
3,624
|
$
3,132
|
$
3,345
|
|
$
3,802
|
$
2,512
|
$
2,474
|
$
2,369
|
|
|
|
|
|
|
|
|
|
|
|
|
Modified/restructured loans
|
$
-
|
$
-
|
$
-
|
$
-
|
|
$
3,028
|
$
3,354
|
$
3,226
|
$
3,228
|
Other real estate owned
|
$
4,493
|
$
4,878
|
$
4,482
|
$
4,598
|
|
$
4,733
|
$
4,733
|
$
4,517
|
$
4,477
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses to gross loans
|
1.24 %
|
1.24 %
|
1.25 %
|
1.31 %
|
|
1.14 %
|
1.22 %
|
1.28 %
|
1.29 %
|
Allowance for credit
losses to non-accrual loans
|
441.86 %
|
492.84 %
|
568.81 %
|
517.83 %
|
|
418.77 %
|
799.85 %
|
732.29 %
|
655.75 %
|
Allowance for credit
losses to non-performing assets
|
194.40 %
|
473.12 %
|
539.79 %
|
212.40 %
|
|
171.48 %
|
214.51 %
|
225.10 %
|
223.37 %
|
Non-performing and 90
day past due loans to total loans
|
0.32 %
|
0.26 %
|
0.23 %
|
0.26 %
|
|
0.30 %
|
0.20 %
|
0.20 %
|
0.20 %
|
Non-performing loans
and 90 day past due loans to total assets
|
0.24 %
|
0.19 %
|
0.16 %
|
0.17 %
|
|
0.21 %
|
0.14 %
|
0.14 %
|
0.13 %
|
Non-accrual loans to
total loans
|
0.28 %
|
0.25 %
|
0.22 %
|
0.25 %
|
|
0.27 %
|
0.15 %
|
0.17 %
|
0.20 %
|
Non-performing assets
to total assets
|
|
|
0.47 %
|
0.44 %
|
0.39 %
|
0.41 %
|
|
0.46 %
|
0.40 %
|
0.40 %
|
0.39 %
|
Consolidated Statement
of Condition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands - Unaudited)
|
|
December 31,
2023
|
|
September 30,
2023
|
|
June 30,
2023
|
|
March 31,
2023
|
December 31,
2022
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
$
|
48,343
|
$
|
78,939
|
$
|
86,901
|
$
|
154,022
|
$
|
72,420
|
Interest bearing
deposits in banks
|
|
1,410
|
|
1,713
|
|
1,650
|
|
1,873
|
|
1,895
|
Cash and cash
equivalents
|
|
49,753
|
|
80,652
|
|
88,551
|
|
155,895
|
|
74,315
|
Investment securities –
available for sale (at fair value)
|
|
97,169
|
|
114,370
|
|
120,085
|
|
123,978
|
|
125,889
|
Investment securities –
held to maturity (at cost)
|
|
214,297
|
|
215,683
|
|
230,759
|
|
233,083
|
|
235,659
|
Restricted investment
in bank stock, at cost
|
|
5,250
|
|
5,251
|
|
4,490
|
|
4,490
|
|
1,027
|
Loans held for
sale
|
|
443
|
|
208
|
|
500
|
|
184
|
|
—
|
Loans
|
|
1,406,667
|
|
1,380,019
|
|
1,350,038
|
|
1,289,080
|
|
1,279,494
|
Unearned
fees
|
|
(340)
|
|
(371)
|
|
(327)
|
|
(257)
|
|
(174)
|
Allowance for credit
losses
|
|
(17,480)
|
|
(17,146)
|
|
(16,905)
|
|
(16,871)
|
|
(14,636)
|
Net loans
|
|
1,388,847
|
|
1,362,502
|
|
1,332,806
|
|
1,271,952
|
|
1,264,684
|
Premises and equipment,
net
|
|
31,459
|
|
32,766
|
|
33,532
|
|
34,207
|
|
34,948
|
Goodwill and other
intangible assets
|
|
12,103
|
|
12,185
|
|
12,268
|
|
12,350
|
|
12,433
|
Bank owned life
insurance
|
|
47,607
|
|
47,282
|
|
46,963
|
|
46,652
|
|
46,346
|
Deferred tax
assets
|
|
11,948
|
|
13,020
|
|
11,771
|
|
11,356
|
|
10,605
|
Other real estate
owned, net
|
|
4,493
|
|
4,878
|
|
4,842
|
|
4,598
|
|
4,733
|
Operating lease
asset
|
|
1,367
|
|
1,905
|
|
1,990
|
|
2,072
|
|
1,898
|
Accrued interest
receivable and other assets
|
|
41,124
|
|
37,499
|
|
39,836
|
|
36,625
|
|
35,632
|
Total
Assets
|
$
|
1,905,860
|
$
|
1,928,201
|
$
|
1,928,393
|
$
|
1,937,442
|
$
|
1,848,169
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing
deposits
|
$
|
427,670
|
$
|
429,691
|
$
|
466,628
|
$
|
468,554
|
$
|
506,613
|
Interest bearing
deposits
|
|
1,123,307
|
|
1,145,378
|
|
1,113,331
|
|
1,122,731
|
|
1,064,120
|
Total
deposits
|
|
1,550,977
|
|
1,575,069
|
|
1,579,959
|
|
1,591,285
|
|
1,570,733
|
Short-term
borrowings
|
|
45,418
|
|
53,330
|
|
50,078
|
|
52,030
|
|
64,565
|
Long-term
borrowings
|
|
110,929
|
|
110,929
|
|
110,929
|
|
110,929
|
|
30,929
|
Operating lease
liability
|
|
1,556
|
|
2,347
|
|
2,443
|
|
2,536
|
|
2,373
|
Allowance for credit
loss on off balance sheet exposures
|
|
873
|
|
985
|
|
1,089
|
|
1,128
|
|
133
|
Accrued interest
payable and other liabilities
|
|
32,904
|
|
29,207
|
|
27,397
|
|
25,332
|
|
26,444
|
Dividends
payable
|
|
1,330
|
|
1,344
|
|
1,342
|
|
1,334
|
|
1,199
|
Total
Liabilities
|
|
1,743,987
|
|
1,773,211
|
|
1,773,237
|
|
1,784,574
|
|
1,696,376
|
Shareholders'
Equity:
|
|
|
|
|
|
|
|
|
|
|
Common Stock – par
value $0.01 per share; Authorized 25,000,000 shares; issued and
outstanding 6,715,170 shares at September 30, 2023 and 6,666,428 at
December 31, 2022
|
|
66
|
|
67
|
|
67
|
|
67
|
|
67
|
Surplus
|
|
23,734
|
|
25,029
|
|
24,901
|
|
24,529
|
|
24,409
|
Retained
earnings
|
|
173,900
|
|
173,467
|
|
170,298
|
|
167,229
|
|
166,343
|
Accumulated other
comprehensive loss
|
|
(35,827)
|
|
(43,573)
|
|
(40,110)
|
|
(38,957)
|
|
(39,026)
|
Total Shareholders'
Equity
|
|
161,873
|
|
154,990
|
|
155,156
|
|
152,868
|
|
151,793
|
Total Liabilities
and Shareholders' Equity
|
$
|
1,905,860
|
$
|
1,928,201
|
$
|
1,928,393
|
$
|
1,937,442
|
$
|
1,848,169
|
Historical Income
Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
2022
|
|
|
Year to
Date
|
|
Q4
|
|
Q3
|
Q2
|
Q1
|
|
Year to Date
|
|
Q4
|
Q3
|
Q2
|
Q1
|
In
thousands
|
(Unaudited)
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
69,569
|
$
|
19,290
|
$
|
18,055
|
$
|
16,780
|
$
|
15,444
|
$
|
54,448
|
$
|
15,097
|
$
|
14,058
|
$
|
12,861
|
$
|
12,432
|
Interest on investment
securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
7,173
|
|
1,834
|
|
1,792
|
|
1,779
|
|
1,768
|
|
6,252
|
|
1,719
|
|
1,587
|
|
1,540
|
|
1,406
|
Exempt from federal
income tax
|
|
714
|
|
53
|
|
123
|
|
268
|
|
270
|
|
1,106
|
|
272
|
|
273
|
|
279
|
|
282
|
Total investment
income
|
|
7,887
|
|
1,887
|
|
1,915
|
|
2,047
|
|
2,038
|
|
7,358
|
|
1,991
|
|
1,860
|
|
1,819
|
|
1,688
|
Other
|
|
3,700
|
|
1,014
|
|
1,194
|
|
1,145
|
|
347
|
|
616
|
|
271
|
|
267
|
|
51
|
|
27
|
Total interest
income
|
|
81,156
|
|
22,191
|
|
21,164
|
|
19,972
|
|
17,829
|
|
62,422
|
|
17,359
|
|
16,185
|
|
14,731
|
|
14,147
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
19,198
|
|
6,498
|
|
5,672
|
|
4,350
|
|
2,678
|
|
3,226
|
|
1,729
|
|
621
|
|
401
|
|
475
|
Interest on short-term
borrowings
|
|
147
|
|
54
|
|
33
|
|
29
|
|
31
|
|
112
|
|
26
|
|
47
|
|
21
|
|
18
|
Interest on long-term
borrowings
|
|
4,941
|
|
1,445
|
|
1,475
|
|
1,419
|
|
602
|
|
1,451
|
|
424
|
|
376
|
|
338
|
|
313
|
Total interest
expense
|
|
24,286
|
|
7,997
|
|
7,180
|
|
5,798
|
|
3,311
|
|
4,789
|
|
2,179
|
|
1,044
|
|
760
|
|
806
|
Net interest
income
|
|
56,870
|
|
14,194
|
|
13,984
|
|
14,174
|
|
14,518
|
|
57,633
|
|
15,180
|
|
15,141
|
|
13,971
|
|
13,341
|
Credit loss
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
1,700
|
|
530
|
|
322
|
|
434
|
|
414
|
|
(643)
|
|
(740)
|
|
(108)
|
|
624
|
|
(419)
|
Debt securities held to
maturity
|
|
45
|
|
—
|
|
45
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Off balance sheet
credit exposures
|
|
(125)
|
|
(111)
|
|
(104)
|
|
(39)
|
|
129
|
|
16
|
|
4
|
|
7
|
|
7
|
|
(2)
|
Provision/(credit) for
credit/loan losses
|
|
1,620
|
|
419
|
|
263
|
|
395
|
|
543
|
|
(627)
|
|
(736)
|
|
(101)
|
|
631
|
|
(421)
|
Net interest income
after provision for loan losses
|
|
55,250
|
|
13,775
|
|
13,721
|
|
13,779
|
|
13,975
|
|
58,260
|
|
15,916
|
|
15,242
|
|
13,340
|
|
13,762
|
Other operating
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (losses)/gains on
investments, available for sale
|
|
(4,214)
|
|
(4,214)
|
|
—
|
|
—
|
|
—
|
|
3
|
|
—
|
|
—
|
|
—
|
|
3
|
Net (losses)/gains on
investments, held to maturity
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
91
|
|
(2)
|
|
93
|
|
—
|
|
—
|
Gains on sale of
residential mortgage loans
|
|
381
|
|
59
|
|
182
|
|
86
|
|
54
|
|
45
|
|
14
|
|
3
|
|
7
|
|
21
|
Gains/(losses) on
disposal of fixed assets
|
|
(29)
|
|
(29)
|
|
—
|
|
—
|
|
—
|
|
33
|
|
(1)
|
|
—
|
|
6
|
|
28
|
Net gains
|
|
(3,862)
|
|
(4,184)
|
|
182
|
|
86
|
|
54
|
|
172
|
|
11
|
|
96
|
|
13
|
|
52
|
Other Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on
deposit accounts
|
|
2,198
|
|
567
|
|
569
|
|
546
|
|
516
|
|
1,981
|
|
530
|
|
523
|
|
463
|
|
465
|
Other service
charges
|
|
929
|
|
223
|
|
230
|
|
244
|
|
232
|
|
925
|
|
239
|
|
241
|
|
232
|
|
213
|
Trust
department
|
|
8,282
|
|
2,148
|
|
2,139
|
|
2,025
|
|
1,970
|
|
8,244
|
|
2,006
|
|
2,005
|
|
2,044
|
|
2,189
|
Debit card
income
|
|
4,101
|
|
1,120
|
|
995
|
|
1,031
|
|
955
|
|
3,958
|
|
1,036
|
|
1,053
|
|
983
|
|
886
|
Bank owned life
insurance
|
|
1,261
|
|
325
|
|
320
|
|
311
|
|
305
|
|
1,196
|
|
305
|
|
302
|
|
297
|
|
292
|
Brokerage
commissions
|
|
1,160
|
|
360
|
|
245
|
|
258
|
|
297
|
|
1,049
|
|
244
|
|
272
|
|
313
|
|
220
|
Other
|
|
400
|
|
50
|
|
218
|
|
68
|
|
64
|
|
525
|
|
119
|
|
208
|
|
81
|
|
117
|
Total other
income
|
|
18,331
|
|
4,793
|
|
4,716
|
|
4,483
|
|
4,339
|
|
17,878
|
|
4,479
|
|
4,604
|
|
4,413
|
|
4,382
|
Total other
operating income
|
|
14,469
|
|
609
|
|
4,898
|
|
4,569
|
|
4,393
|
|
18,050
|
|
4,490
|
|
4,700
|
|
4,426
|
|
4,434
|
Other operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
27,503
|
|
6,391
|
|
6,957
|
|
6,865
|
|
7,290
|
|
24,130
|
|
6,239
|
|
6,130
|
|
5,793
|
|
5,968
|
FDIC
premiums
|
|
992
|
|
268
|
|
254
|
|
277
|
|
193
|
|
636
|
|
157
|
|
150
|
|
155
|
|
174
|
Equipment
|
|
4,356
|
|
1,188
|
|
1,029
|
|
1,047
|
|
1,092
|
|
4,163
|
|
1,053
|
|
1,037
|
|
1,029
|
|
1,044
|
Occupancy
|
|
3,445
|
|
1,171
|
|
747
|
|
743
|
|
784
|
|
2,906
|
|
734
|
|
734
|
|
711
|
|
727
|
Data
processing
|
|
3,980
|
|
1,054
|
|
1,011
|
|
946
|
|
969
|
|
3,444
|
|
928
|
|
890
|
|
805
|
|
821
|
Marketing
|
|
762
|
|
288
|
|
220
|
|
137
|
|
117
|
|
543
|
|
134
|
|
152
|
|
151
|
|
106
|
Professional
services
|
|
2,160
|
|
630
|
|
490
|
|
522
|
|
518
|
|
1,538
|
|
665
|
|
(211)
|
|
564
|
|
520
|
Contract
labor
|
|
643
|
|
172
|
|
173
|
|
159
|
|
139
|
|
618
|
|
136
|
|
159
|
|
158
|
|
165
|
Telephone
|
|
466
|
|
125
|
|
115
|
|
116
|
|
110
|
|
482
|
|
117
|
|
112
|
|
139
|
|
114
|
Other real estate
owned
|
|
(89)
|
|
(370)
|
|
139
|
|
18
|
|
124
|
|
590
|
|
215
|
|
128
|
|
152
|
|
95
|
Investor
relations
|
|
345
|
|
73
|
|
83
|
|
132
|
|
57
|
|
300
|
|
42
|
|
39
|
|
123
|
|
96
|
Contributions
|
|
229
|
|
12
|
|
74
|
|
79
|
|
64
|
|
288
|
|
104
|
|
121
|
|
42
|
|
21
|
Other
|
|
5,451
|
|
1,307
|
|
1,493
|
|
1,470
|
|
1,181
|
|
3,491
|
|
1,066
|
|
888
|
|
808
|
|
729
|
Total other
operating expenses
|
|
50,243
|
|
12,309
|
|
12,785
|
|
12,511
|
|
12,638
|
|
43,129
|
|
11,590
|
|
10,329
|
|
10,630
|
|
10,580
|
Income before income
tax expense
|
|
19,476
|
|
2,075
|
|
5,834
|
|
5,837
|
|
5,730
|
|
33,181
|
|
8,816
|
|
9,613
|
|
7,136
|
|
7,616
|
Provision for income
tax expense
|
|
4,416
|
|
317
|
|
1,321
|
|
1,423
|
|
1,355
|
|
8,133
|
|
1,847
|
|
2,677
|
|
1,708
|
|
1,901
|
Net
Income
|
$
|
15,060
|
$
|
1,758
|
$
|
4,513
|
$
|
4,414
|
$
|
4,375
|
$
|
25,048
|
$
|
6,969
|
$
|
6,936
|
$
|
5,428
|
$
|
5,715
|
Basic net income per
common share
|
$
|
2.25
|
$
|
0.26
|
$
|
0.67
|
$
|
0.66
|
$
|
0.66
|
$
|
3.77
|
$
|
1.05
|
$
|
1.04
|
$
|
0.82
|
$
|
0.86
|
Diluted net income per
common share
|
$
|
2.24
|
$
|
0.26
|
$
|
0.67
|
$
|
0.66
|
$
|
0.65
|
$
|
3.76
|
$
|
1.04
|
$
|
1.04
|
$
|
0.82
|
$
|
0.86
|
Weighted average number
of basic shares outstanding
|
|
6,649
|
|
6,649
|
|
6,714
|
|
6,704
|
|
6,675
|
|
6,666
|
|
6,666
|
|
6,658
|
|
6,650
|
|
6,628
|
Weighted average number
of diluted shares outstanding
|
|
6,663
|
|
6,663
|
|
6,728
|
|
6,718
|
|
6,697
|
|
6,692
|
|
6,692
|
|
6,669
|
|
6,661
|
|
6,636
|
Dividends declared per
common share
|
$
|
0.80
|
$
|
0.20
|
$
|
0.20
|
$
|
0.20
|
$
|
0.20
|
$
|
0.63
|
$
|
0.18
|
$
|
0.15
|
$
|
0.15
|
$
|
0.15
|
Non-GAAP Financial
Measures (unaudited)
|
Reconciliation of as
reported (GAAP) and non-GAAP financial measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables
below provide a reconciliation of certain financial measures
calculated under generally accepted accounting principles ("GAAP")
(as reported) and non-GAAP. A non-GAAP financial measure is a
numerical measure of historical or future financial performance,
financial position or cash flows that excludes or includes amounts
that are required to be disclosed in the most directly comparable
measure calculated and presented in accordance with GAAP in the
United States. The Company's management believes the presentation
of non-GAAP financial measures provide investors with a greater
understanding of the Company's operating results in addition to the
results measured in accordance with GAAP. While management uses
these non-GAAP measures in its analysis of the Company's
performance, this information should not be viewed as a substitute
for financial results determined in accordance with GAAP or
considered to be more important than financial results determined
in accordance with GAAP.
|
|
The following non-GAAP
financial measures exclude losses on the sale of Available for Sale
securities and accelerated depreciation and lease termination
expenses related to the branch closures.
|
|
|
|
Twelve months
ended
December 31,
|
|
Three months
ended
December 31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
(in thousands,
except for per share amount)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income - as
reported
|
|
$
|
15,060
|
|
$
|
25,048
|
|
$
|
1,758
|
|
$
|
6,969
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of
securities
|
|
|
4,214
|
|
|
—
|
|
|
4,214
|
|
|
—
|
Accelerated depreciation and lease termination expenses
|
|
|
623
|
|
|
—
|
|
|
623
|
|
|
—
|
Income tax effect of
adjustments
|
|
|
(1,097)
|
|
|
—
|
|
|
(1,097)
|
|
|
—
|
Adjusted net income
(non-GAAP)
|
|
$
|
18,800
|
|
$
|
25,048
|
|
$
|
5,498
|
|
$
|
6,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share - as reported
|
|
$
|
2.24
|
|
$
|
3.76
|
|
$
|
0.26
|
|
$
|
1.04
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of
securities
|
|
|
0.63
|
|
|
—
|
|
|
0.63
|
|
|
—
|
Accelerated depreciation and lease termination expenses
|
|
|
0.09
|
|
|
—
|
|
|
0.09
|
|
|
—
|
Income tax effect of adjustments
|
|
|
(0.16)
|
|
|
—
|
|
|
(0.16)
|
|
|
—
|
Adjusted basic and
diluted earnings per share (non-GAAP)
|
|
$
|
2.80
|
|
$
|
3.76
|
|
$
|
0.82
|
|
$
|
1.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the
twelve months ended
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
|
|
|
(in thousands, except
per share data)
|
|
2023
|
|
2022
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share (1) - as reported
|
|
$
|
2.25
|
|
$
|
3.77
|
|
|
|
|
|
|
Basic net income per
share (1) - non-GAAP
|
|
|
2.81
|
|
|
3.77
|
|
|
|
|
|
|
Diluted net income per
share (1) - as reported
|
|
$
|
2.24
|
|
$
|
3.76
|
|
|
|
|
|
|
Diluted net income per
share (1) - non-GAAP
|
|
|
2.80
|
|
|
3.76
|
|
|
|
|
|
|
Basic book value per
share
|
|
$
|
24.38
|
|
$
|
22.77
|
|
|
|
|
|
|
Diluted book value per
share
|
|
$
|
24.33
|
|
$
|
22.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant
Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Average
Assets (1) - as reported
|
|
|
0.78 %
|
|
|
1.39 %
|
|
|
|
|
|
|
Loss on sale of
securities
|
|
|
0.22 %
|
|
|
—
|
|
|
|
|
|
|
Accelerated depreciation and lease termination expenses
|
|
|
0.03 %
|
|
|
—
|
|
|
|
|
|
|
Income tax effect of adjustments
|
|
|
(0.06 %)
|
|
|
—
|
|
|
|
|
|
|
Adjusted Return on
Average Assets (1) (non-GAAP)
|
|
|
0.97 %
|
|
|
1.39 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Average
Equity (1) - as reported
|
|
|
9.68 %
|
|
|
18.19 %
|
|
|
|
|
|
|
Loss on sale of
securities
|
|
|
2.71 %
|
|
|
—
|
|
|
|
|
|
|
Accelerated depreciation and lease termination expenses
|
|
|
0.40 %
|
|
|
—
|
|
|
|
|
|
|
Income tax effect of adjustments
|
|
|
(0.71 %)
|
|
|
—
|
|
|
|
|
|
|
Adjusted Return on
Average Equity (1) (non-GAAP)
|
|
|
12.08 %
|
|
|
18.19 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See reconcilation
of this non-GAAP financial measure provided elsewhere
herein.
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
December
31,
|
|
|
|
2023
|
|
2022
|
|
(dollars in
thousands)
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/Rate
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/Rate
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
1,398,393
|
|
$
|
19,308
|
|
5.48
|
%
|
$
|
1,281,958
|
|
$
|
15,114
|
|
4.68
|
%
|
Investment
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
332,545
|
|
|
1,834
|
|
2.19
|
%
|
336,727
|
|
|
1,719
|
|
2.03
|
%
|
Non taxable
|
|
|
8,107
|
|
|
96
|
|
4.70
|
%
|
26,457
|
|
|
487
|
|
7.30
|
%
|
Total
|
|
|
340,652
|
|
|
1,930
|
|
2.25
|
%
|
|
363,184
|
|
|
2,206
|
|
2.41
|
%
|
Federal funds
sold
|
|
|
60,400
|
|
|
907
|
|
5.96
|
%
|
35,403
|
|
|
247
|
|
2.77
|
%
|
Interest-bearing
deposits with other banks
|
|
|
1,867
|
|
|
22
|
|
4.68
|
%
|
1,568
|
|
|
12
|
|
3.04
|
%
|
Other interest earning
assets
|
|
|
5,251
|
|
|
85
|
|
6.42
|
%
|
1,027
|
|
|
12
|
|
4.64
|
%
|
Total earning
assets
|
|
|
1,806,563
|
|
|
22,252
|
|
4.89
|
%
|
|
1,683,140
|
|
|
17,591
|
|
4.15
|
%
|
Allowance for loan
losses
|
|
|
(17,304)
|
|
|
|
|
|
|
|
(15,446)
|
|
|
|
|
|
|
Non-earning
assets
|
|
|
194,309
|
|
|
|
|
|
|
|
177,581
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
1,983,568
|
|
|
|
|
|
|
$
|
1,845,275
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand
deposits
|
|
$
|
366,450
|
|
$
|
1,440
|
|
1.56
|
%
|
$
|
316,361
|
|
$
|
486
|
|
0.61
|
%
|
Interest-bearing money
markets
|
|
|
365,439
|
|
|
3,135
|
|
3.40
|
%
|
367,866
|
|
|
909
|
|
0.98
|
%
|
Savings
deposits
|
|
|
196,777
|
|
|
51
|
|
0.10
|
%
|
253,674
|
|
|
84
|
|
0.13
|
%
|
Time deposits -
retail
|
|
|
163,253
|
|
|
1,122
|
|
2.73
|
%
|
124,417
|
|
|
250
|
|
0.80
|
%
|
Time deposits -
brokered
|
|
|
56,006
|
|
|
751
|
|
5.32
|
%
|
—
|
|
|
—
|
|
—
|
%
|
Short-term
borrowings
|
|
|
43,693
|
|
|
55
|
|
0.50
|
%
|
66,399
|
|
|
26
|
|
0.16
|
%
|
Long-term
borrowings
|
|
|
110,929
|
|
|
1,445
|
|
5.17
|
%
|
30,929
|
|
|
424
|
|
5.44
|
%
|
Total
interest-bearing liabilities
|
|
|
1,302,547
|
|
|
7,999
|
|
2.44
|
%
|
|
1,159,646
|
|
|
2,179
|
|
0.75
|
%
|
Non-interest-bearing
deposits
|
|
|
487,012
|
|
|
|
|
|
|
|
508,906
|
|
|
|
|
|
|
Other
liabilities
|
|
|
35,957
|
|
|
|
|
|
|
|
36,499
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
158,052
|
|
|
|
|
|
|
|
140,224
|
|
|
|
|
|
|
Total Liabilities
and Shareholders' Equity
|
|
$
|
1,983,568
|
|
|
|
|
|
|
$
|
1,845,275
|
|
|
|
|
|
|
Net interest income and
spread
|
|
|
|
|
$
|
14,253
|
|
2.44
|
%
|
|
|
$
|
15,412
|
|
3.40
|
%
|
Net interest
margin
|
|
|
|
|
|
|
|
3.13
|
%
|
|
|
|
|
|
3.63
|
%
|
|
|
Twelve Months
Ended
|
|
|
|
December
31,
|
|
|
|
2023
|
|
2022
|
|
(dollars in
thousands)
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/
Rate
|
|
Average
Balance
|
|
Interest
|
|
Average
Yield/
Rate
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
1,340,118
|
|
$
|
69,631
|
|
5.20
|
%
|
$
|
1,223,388
|
|
$
|
54,513
|
|
4.46
|
%
|
Investment
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
335,888
|
|
|
7,173
|
|
2.14
|
%
|
|
348,516
|
|
|
6,252
|
|
1.79
|
%
|
Non taxable
|
|
|
18,471
|
|
|
1,279
|
|
6.92
|
%
|
|
26,952
|
|
|
1,981
|
|
7.35
|
%
|
Total
|
|
|
354,359
|
|
|
8,452
|
|
2.39
|
%
|
|
375,468
|
|
|
8,233
|
|
2.19
|
%
|
Federal funds
sold
|
|
|
65,131
|
|
|
3,409
|
|
5.23
|
%
|
|
44,207
|
|
|
555
|
|
1.26
|
%
|
Interest-bearing
deposits with other banks
|
|
|
2,585
|
|
|
92
|
|
3.56
|
%
|
|
3,061
|
|
|
24
|
|
0.78
|
%
|
Other interest earning
assets
|
|
|
4,048
|
#
|
|
198
|
|
4.89
|
%
|
|
1,027
|
|
|
37
|
|
3.60
|
%
|
Total earning
assets
|
|
|
1,766,241
|
|
|
81,782
|
|
4.63
|
%
|
|
1,647,151
|
|
|
63,362
|
|
3.85
|
%
|
Allowance for loan
losses
|
|
|
(16,561)
|
|
|
|
|
|
|
|
(15,568)
|
|
|
|
|
|
|
Non-earning
assets
|
|
|
199,474
|
|
|
|
|
|
|
|
170,128
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
1,949,154
|
|
|
|
|
|
|
$
|
1,801,711
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand
deposits
|
|
$
|
362,070
|
|
$
|
4,815
|
|
1.30
|
%
|
$
|
301,183
|
|
$
|
855
|
|
0.28
|
%
|
Interest-bearing money
markets
|
|
|
333,274
|
|
|
8,672
|
|
2.60
|
%
|
|
312,978
|
|
|
1,256
|
|
0.40
|
%
|
Savings
deposits
|
|
|
219,516
|
|
|
240
|
|
0.11
|
%
|
|
250,624
|
|
|
154
|
|
0.06
|
%
|
Time deposits -
retail
|
|
|
141,921
|
|
|
2,872
|
|
2.02
|
%
|
|
138,865
|
|
|
961
|
|
0.69
|
%
|
Time deposits -
brokered
|
|
|
49,209
|
|
|
2,600
|
|
5.28
|
%
|
|
—
|
|
|
—
|
|
—
|
%
|
Short-term
borrowings
|
|
|
47,968
|
|
|
147
|
|
0.31
|
%
|
|
63,182
|
|
|
112
|
|
0.18
|
%
|
Long-term
borrowings
|
|
|
94,271
|
|
|
4,941
|
|
5.24
|
%
|
|
30,929
|
|
|
1,451
|
|
4.69
|
%
|
Total
interest-bearing liabilities
|
|
|
1,248,229
|
|
|
24,287
|
|
1.95
|
%
|
|
1,097,761
|
|
|
4,789
|
|
0.44
|
%
|
Non-interest-bearing
deposits
|
|
|
512,496
|
|
|
|
|
|
|
|
533,096
|
|
|
|
|
|
|
Other
liabilities
|
|
|
32,320
|
|
|
|
|
|
|
|
33,169
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
156,109
|
|
|
|
|
|
|
|
137,685
|
|
|
|
|
|
|
Total Liabilities
and Shareholders' Equity
|
|
$
|
1,949,154
|
|
|
|
|
|
|
$
|
1,801,711
|
|
|
|
|
|
|
Net interest income and
spread
|
|
|
|
|
$
|
57,495
|
|
2.68
|
%
|
|
|
|
$
|
58,573
|
|
3.41
|
%
|
Net interest
margin
|
|
|
|
|
|
|
|
3.26
|
%
|
|
|
|
|
|
|
3.56
|
%
|
View original
content:https://www.prnewswire.com/news-releases/first-united-corporation-announces-fourth-quarter-2023-earnings-302053475.html
SOURCE First United Corporation