FIRST UNITED CORPORATION ANNOUNCES THIRD QUARTER 2025 FINANCIAL RESULTS

, /PRNewswire/ -- First United Corporation (the "Corporation", "we", "us", and "our") (NASDAQ: FUNC), a bank holding company and the parent company of First United Bank & Trust (the "Bank"), today announced financial results for the three- and nine-month periods ended September 30, 2025. Net income was $6.9 million for the third quarter of 2025, or $1.07 per diluted common share, compared to $5.8 million, or $0.89 per diluted common share, for the third quarter of 2024 and $6.0 million, or $0.92 per diluted common share, for the second quarter of 2025. Net income for the first nine months of 2025 was $18.7 million, or $2.88 per diluted common share, compared to $14.4 million, or $2.19 per diluted common share, for the same period of 2024. Annualized Return on Average Assets and Return on Average Equity for the nine-month period ended September 30, 2025 were 1.24% and 13.23%, respectively. According to Carissa Rodeheaver, Chairman, President and CEO, "We are pleased to report another strong quarter, once again driven by increased net interest margin and expense control. Our commercial, mortgage and wealth relationship managers continue to deliver strong production, and our entire team remains focused on controlling expenses. The strong income allowed us to increase our dividend this quarter. " Third Quarter Financial Highlights: Net interest margin, on a non-GAAP, fully tax equivalent ("FTE") basis, was 3.69% for the third quarter of 2025, reflecting increased loan yields and stable funding costs. Strong loan production during the quarter, with $29.8 million in commercial loan originations and $20.8 million in residential mortgage originations, offset by unusually high payoffs. Provision expense was $0.5 million in the third quarter resulting from reduced loan growth and a charge-off related to one non-accrual commercial relationship, partially offset by improved qualitative factors. Operating income, including net gains, increased slightly by $0.2 million when compared to the linked quarter. Operating expenses were stable compared to the linked quarter. A cash dividend of $0.26 per common share was declared in the third quarter. Income Statement Overview On a GAAP basis, net income for the third quarter of 2025 was $6.9 million. This compares to $6.0 million for the second quarter of 2025 and $5.8 million for the third quarter of 2024. Q3 2025 Q2 2025 Q3 2024 Net Income, GAAP (millions) $ 6.9 $ 6.0 $ 5.8 Diluted earnings per share, GAAP $ 1.07 $ 0.92 $ 0.89 The $1.2 million increase in quarterly net income when compared to the third quarter of 2024 was primarily driven by a $2.2 million increase in net interest income and a $0.3 million increase in non-interest income, partially offset by increases in provision expense of $0.2 million, non-interest expense of $0.7 million and income tax expense of $0.4 million. Comparing the third quarter of 2025 to the same period of 2024, interest and fees on loans increased by $2.0 million primarily due to the repricing of adjustable-rate loans and new production booked at higher rates. Quarterly interest expense increased by $0.3 million on a year-over-year basis. This increase was attributable to growth in our municipal deposit balances, offset slightly by reduced interest expense on short-term borrowings related to the repayment of $40.0 million in Bank Term Funding Program ("BTFP") balances in September 2024. Other operating income increased by $0.3 million due to increases in wealth management income and net gains as a result of an investment sale transaction. Other operating expenses increased by $0.7 million due to a $0.4 million increase in salaries and benefit expenses, a $0.2 million increase in professional services, and a $0.2 million increase in data processing costs. These increases were offset by slight reductions in equipment, other real estate owned ("OREO") and investor relations expenses. Compared to the linked quarter, net income increased by $1.0 million as net interest income increased by $0.7 million due to an increase in interest and fees on loans of $0.8 million, a decrease in provision expense of $0.4 million, and an increase in other operating income of $0.2 million related to net gains on sales of investment securities, trust department income, and an incentive received on check fees. Non-interest expenses remained stable when comparing the linked quarter to the third quarter. Income tax expense increased by $0.3 million. Net income for the first nine months of 2025 was $18.7 million compared to $14.4 million for the same period in 2024. Net interest income increased by $5.8 million due to a $6.4 million increase in interest income due to loans repricing at higher rates and new loan production booked at higher rates. Interest expense increased by $0.6 million driven by a $1.2 million increase in interest on deposits related to growth in our municipal balances, partially offset by a net reduction in borrowing costs of $0.7 million resulting from the repayment of $40.0 million in BTFP balances late in the third quarter of 2024. Provision for credit losses decreased by $0.4 million due primarily to strong credit quality, lower charge-offs and lower loan growth during the first nine months of 2025 when compared to the same time period in 2024. Other operating income increased by $0.6 million primarily due to a $0.4 million increase in trust department income and a $0.2 million increase on gains from the sales of residential mortgages and investment securities.. These increases were partially offset by a $1.0 million increase in other operating expenses that were primarily related to a $0.7 million increase in salaries and employee benefits as a result of increased salary expense as we continue to build our sales teams, a $0.5 million increase in data processing expenses related to software agreements, and a $0.3 million increase in professional services expenses from increased audit fees. These increases were partially offset by a $0.8 million decrease in equipment and occupancy expenses due primarily to reduced depreciation expense related to the closure of four branches early in 2024. Net Interest Income and Net Interest Margin Net interest income, on a non-GAAP, FTE basis, increased by $2.2 million for the third quarter of 2025 when compared to the third quarter of 2024. This increase was driven by an increase of $2.5 million in interest income due to a $2.0 million increase in interest income on loans resulting from an increase of 25 basis points in the overall yield on the loan portfolio. This increase in yield was attributable to upward repricing of adjustable-rate loans and an increase in average balances of $68.4 million. Interest income on investment securities increased by $0.2 million due to an increase in average balances of $9.0 million and an increase in yield of 17 basis points. The increase in the investment portfolio resulted from management's strategic decision to reinvest cashflows in the higher rate environment to increase yield on the portfolio. Interest income on Federal funds sold increased by $0.2 million due to an increase of $37.4 million in average balances, partially offset by a decrease of 147 basis points in average rates. Interest expense increased by $0.3 million when compared to the third quarter of 2024. Interest expense paid on deposits increased by $0.4 million related to a $100.5 million increase in average balances, partially offset by a decrease of 6 basis points on the rate paid. Interest paid on short-term borrowings decreased by $0.5 million when compared to the same period of 2024 due to the repayment of the $40.0 million borrowing from the BTFP late in the third quarter of 2024. Interest paid on long-term borrowings increased by $0.4 million when compared to the third quarter of 2024 due to a $43.8 million increase in average balances, partially offset by a decrease of 80 basis points on rates paid. Comparing the third quarter of 2025 to the second quarter of 2025, net interest income, on a non-GAAP, FTE basis, increased by $0.7 million. This increase was driven by a $0.9 million increase in interest income as a result of an increase in interest and fees on loans of $0.8 million as average loan balances increased by $12.4 million and average yield increased by 8 basis points. Interest expense increased by $0.2 million due to a $0.2 million increase in interest paid on deposits attributable to a $21.9 million increase in average balances and a slight increase in average yield of 1 basis point. Interest expense on borrowing costs remained stable when comparing the third quarter of 2025 to the linked quarter. Comparing the nine months ended September 30, 2025 to the nine months ended September 30, 2024, net interest income, on a non-GAAP, FTE basis, increased by $5.8 million. Interest income increased by $6.4 million and was driven by an increase of $6.6 million on interest and fees on loans as average loan balances increased by $72.6 million and the overall yield increased by 32 basis points in correlation with upward repricing of adjustable-rate loans. Interest expense on deposits increased by $1.2 million as the average deposit balances increased by $87.6 million, driven by increases of $6.3 million in demand deposit accounts, $73.6 million in money market balances and $24.4 million in brokered time deposits, partially offset by decreases in savings balances of $15.2 million and $1.5 million in retail time deposits. Interest expense on short-term borrowings decreased by $1.4 million due to the Bank's utilization of the BTFP program in 2024 and subsequent repayment late in the third quarter of 2024. Long-term borrowing costs increased $0.7 million as a result of an increase of $37.3 million in FHLB average balances, partially offset by a decrease in rate paid of 85 basis points. The net interest margin for the nine months ended September 30, 2025 was 3.64% compared to 3.34% for the nine months ended September 30, 2024. Non-Interest Income Other operating income, including net gains, for the third quarter of 2025 increased by $0.3 million when compared to the same period of 2024. This increase was driven by a $0.2 million increase in wealth management income, reflecting higher market valuations and expanded relationships with both new and existing clients. Additionally, $0.1 million in net gains from the sale of available-for-sale investments was recognized in the third quarter of 2025. On a linked quarter basis, other operating income, including net gains, increased by $0.2 million. The increase was attributable to a $0.1 million cash incentive received in connection with check fees and $0.1 million in net gains from the sale of available-for-sale investments. Wealth management income was stable when compared to the prior quarter. Other operating income for the nine months ended September 30, 2025 increased by $0.6 million when compared to the same period of 2024. This increase was attributable to a $0.4 million increase in wealth management income, driven by improving market conditions, increased annuity sales and growth in new and existing customer relationships. Gains on sales of residential mortgages increased by $0.1 million and gains on sales of investment securities increased by $0.1 million. Service charge and debit card income were both stable when comparing the first nine months of 2025 to the same period of 2024. Non-Interest Expense Operating expenses increased by $0.7 million in the third quarter of 2025 when compared to the third quarter of 2024. Salaries and employee benefits increased by $0.4 million due to a $0.4 million increase in salary expense related to normal merit increases effective April 1, 2025 and increased staffing levels as an effort to build out our West region and a $0.1 million increase in incentive expense, partially offset by decreases in employee life and health insurance expense due to decreased claims. Additionally, data processing and professional services expenses each increased by $0.2 million year-over-year.  Compared to the linked quarter, operating expenses were stable. Net OREO expenses decreased by $0.1 million, and data processing expenses and investor relations expenses each decreased by $0.1 million. These decreases were partially offset by a $0.3 million increase in salaries and employee benefits related to increased salary and incentive expense. For the nine months ended September 30, 2025, non-interest expense increased by $1.0 million when compared to the nine months ended September 30, 2024. Salaries and employee benefits increased by $0.7 million related to normal merit increases effective April 1, 2025, increased salary expense as a result of increased staffing levels as we continue to expand our West region, increases in incentives, and 401K expenses offset by reduced life and health insurance costs related to reduced claims in 2025. Net OREO expenses increased by $0.1 million. Data processing expenses increased by $0.5 million primarily due to increased software agreements and professional services expenses increased by $0.3 million as a result of increased audit fees. These increases were partially offset by a $0.8 million decrease in occupancy and equipment expenses related to accelerated depreciation expense recognized in the first quarter of 2024 related to branch closures. The effective income tax rates as a percentage of income for the nine-month periods ended September 30, 2025 and September 30, 2024 remained stable at 24.7% and 24.6%, respectively. Balance Sheet Overview Total assets at September 30, 2025 were $2.0 billion, representing a $51.0 million increase since December 31, 2024. During the first nine months of 2025, the investment portfolio increased by $8.9 million as bonds were purchased to lock in yield in anticipation of potential declines in long-term rates. Gross loans increased by $16.0 million as new production during the nine months of 2025 was mitigated by amortization and increased payoffs. Other assets, including deferred taxes, premises and equipment, bank owned life insurance, pension assets, accrued trust income receivable, and accrued interest receivable, increased by $11.3 million. Total liabilities at September 30, 2025 were $1.8 billion, representing a $31.1 million increase since December 31, 2024. Total deposits increased by $104.1 million when compared to December 31, 2024. The increase in deposits was primarily driven by $50.0 million in new brokered time deposits obtained in January 2025 to fund the repayment of the $50.0 million in overnight borrowings outstanding at December 31, 2024. In addition, savings and money market accounts increased by $42.0 million, retail time deposits increased by $9.7 million, and non-interest-bearing deposits increased by $3.2 million. Interest-bearing demand deposits, primarily our ICS product, decreased slightly by $0.8 million due primarily to seasonal fluctuations in municipal deposit accounts. Short-term borrowings decreased by $45.2 million due to the purchase of the brokered time deposit mentioned previously which was partially offset by increases in the overnight investment sweep product. Long-term borrowings decreased by $25.0 million due to the full repayment of a matured $25.0 million Federal Home Loan Bank borrowing in September 2025. Outstanding loans of $1.5 billion at September 30, 2025 reflected a $16.0 million increase since December 31, 2024. Loan Type (in millions) Change since June 30, 2025 Change since December 31, 2024 Commercial ($3.7) $18.3 1 to 4 Family Mortgages ($0.6) $2.5 Consumer ($1.4) ($4.8) Gross Loans ($5.7) $16.0 Since December 31, 2024, commercial real estate loans increased by $28.1 million, acquisition and development loans decreased by $1.3 million, commercial and industrial loans decreased by $8.5 million, residential mortgage loans increased by $2.5 million, and consumer loans decreased by $4.8 million. New commercial loan production for the third quarter of 2025 was approximately $29.8 million. Year to date commercial production was approximately $139.0 million, which compares to $117.0 million for the nine months ended September 30, 2024. The commercial pipeline was strong as of September 30, 2025 at $50.4 million, and unfunded, commercial construction loans totaled approximately $42.8 million. Commercial amortization and payoffs were unusually high at approximately $29.4 million for the three months ended September 30, 2025. Included in that amount were payoffs of approximately $20.9 million during the third quarter primarily attributable to four relationships either utilizing cash to repay or consolidating debt. New consumer mortgage loan production for the third quarter of 2025 was approximately $20.8 million, most of which was comprised of in-house mortgages booked to our portfolio. The pipeline of in-house, portfolio loans as of September 30, 2025 was $23.0 million. Unfunded commitments related to residential construction loans totaled $12.1 million at September 30, 2025.  Total deposits at September 30, 2025 increased by $104.1 million when compared to December 31, 2024. Deposit Type (in millions) Change since June 30, 2025 Change since December 31, 2024 Non-Interest-Bearing $4.2 $3.2 Interest-Bearing Demand $38.3 ($0.8) Savings and Money Market $16.5 $42.0 Time Deposits- Retail $5.7 $9.7 Tim Deposits- Brokered $0.0 $50.0 Total Deposits $64.7 $104.1 In January 2025, $50.0 million in brokered time deposits with an average interest rate of 4.24% were obtained to fund the repayment of $50.0 million in overnight borrowings that were outstanding on December 31, 2024. Savings and money market accounts increased by $42.0 million due primarily to the expansion of current and new relationships throughout the first nine months of 2025. Non-interest-bearing checking deposits increased by $3.2 million and interest-bearing checking deposits decreased by $0.8 million as we experienced seasonal fluctuations in municipal and commercial account balances and increased spending by businesses and consumers related to inflation. Retail time deposits increased by $9.7 million since December 31, 2024. The book value of the Corporation's common stock was $30.65 per share at September 30, 2025 compared to $27.71 per share at December 31, 2024. At September 30, 2025, there were 6,496,908 basic outstanding shares and 6,508,790 diluted outstanding shares of common stock. The increase in the book value at September 30, 2025 was due to the undistributed net income of $14.2 million for the first nine months of 2025. Asset Quality The allowance for credit losses ("ACL") was $19.1 million at September 30, 2025 compared to $18.0 million at September 30, 2024 and $18.2 million at December 31, 2024. The provision for credit losses was $0.5 million for the quarter ended September 30, 2025 compared to $0.3 million for the quarter ended September 30, 2024 and $0.9 million for the second quarter of 2025. The increased provision expense recorded in the third quarter of 2025 when compared to the same period in 2024 resulted from increased net charge-offs of $0.4 million in the third quarter of 2025 compared to $0.1 million in the third quarter of 2024. The decrease in provision expense compared to the linked quarter was due to decreases in the overall loan portfolio and improved qualitative factors, partially offset by the increased net charge-offs primarily related to one non-accrual commercial and industrial relationship. Asset quality remained strong during the third quarter of 2025. The ratio of the ACL to loans outstanding remained stable at 1.28%at September 30, 2025 compared to 1.27% at June 30, 2025 and 1.24% at September 30, 2024. The ratio of net charge offs to average loans was 0.08% for the nine months ended September 30, 2025, and 0.18% for the nine months ended September 30, 2024. The commercial and industrial portfolio had net charge offs of 0.41% and 0.53% for the nine-month periods ended September 30, 2025 and 2024, respectively, due primarily to charge offs on one non-accrual commercial relationship. The acquisition and development portfolio had net recoveries of 0.42% and 0.08% for the nine-month periods ended September 30, 2025 and 2024, respectively. This shift was due primarily to recoveries recognized in 2025 related to one relationship previously charged off in 2016. The decrease in net charge offs in consumer loans in the first nine months of 2025 was primarily driven by approximately $0.3 million in charge offs of demand deposit balances during the first quarter of 2024. Details of the ratios, by loan type, are shown below. Our special assets team continues to actively collect on charged-off loans, resulting in overall low net charge-off ratios. Ratio of Net (Charge Offs)/Recoveries to Average Loans 9/30/2025 9/30/2024 Loan Type (Charge Off) / Recovery (Charge Off) / Recovery Commercial Real Estate 0.00 % 0.01 % Acquisition & Development 0.42 % 0.08 % Commercial & Industrial (0.41 %) (0.53 %) Residential Mortgage 0.01 % 0.01 % Consumer (1.06 %) (2.04 %) Total Net (Charge Offs)/Recoveries (0.08 %) (0.18 %) Non-accrual loans totaled $3.8 million at September 30, 2025 compared to $4.9 million at December 31, 2024. The decrease in non-accrual balances at September 30, 2025 was related to principal paydowns and the charge-off of $0.5 million of related to a non-accrual commercial and industrial relationship that was recorded during the third quarter of 2025. Non-accrual loans that have been subject to partial charge-offs totaled $0.3 million and $0.7 million at September 30, 2025 and December 31, 2024, respectively. Loans secured by 1-4 family residential real estate properties in the process of foreclosure totaled $0.2 million and $1.6 million at September 30, 2025 and December 31, 2024, respectively. As a percentage of the loan portfolio, accruing loans past due 30 days or more were 0.26% at September 30, 2025 compared to 0.32% at December 31, 2024 and 0.37% as September 30, 2024. ABOUT FIRST UNITED CORPORATION First United Corporation is a Maryland corporation chartered in 1985 and a financial holding company registered with the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956, as amended, that elected financial holding company status in 2021. The Corporation's primary business is serving as the parent company of the Bank, First United Statutory Trust I ("Trust I") and First United Statutory Trust II ("Trust II" and together with Trust I, "the Trusts"), both Connecticut statutory business trusts. The Trusts were formed for the purpose of selling trust preferred securities that qualified as Tier 1 capital. The Bank has two consumer finance company subsidiaries- Oak First Loan Center, Inc., a West Virginia corporation, and OakFirst Loan Center, LLC, a Maryland limited liability company – and one subsidiary that it uses to hold real estate acquired through foreclosure or by deed in lieu of foreclosure – First OREO Trust, a Maryland statutory trust. In addition, the Bank owns 99.9% of the limited partnership interests in Liberty Mews Limited Partnership, a Maryland limited partnership formed for the purpose of acquiring, developing and operating low-income housing units in Garrett County, Maryland, and a 99.9% non-voting membership interest in MCC FUBT Fund, LLC, an Ohio limited liability company formed for the purpose of acquiring, developing and operating low-income housing units in Allegany County, Maryland and Mineral County, West Virginia. The Corporation's website is www.mybank.com. FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not represent historical facts, but are statements about management's beliefs, plans and objectives about the future, as well as its assumptions and judgments concerning such beliefs, plans and objectives. These statements are evidenced by terms such as "anticipate," "estimate," "should," "expect," "believe," "intend," and similar expressions. Although these statements reflect management's good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. The beliefs, plans and objectives on which forward-looking statements are based involve risks and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the periodic reports that First United Corporation files with the Securities and Exchange Commission entitled "Risk Factors". In addition, investors should understand that the Corporation is required under generally accepted accounting principles to evaluate subsequent events through the filing of the consolidated financial statements included in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 and the impact that any such events have on our critical accounting assumptions and estimates made as of September 30, 2025, 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 Nine Months Ended September 30, September 30, September 30, September 30, 2025 2024 2025 2024 Results of Operations: Interest income $ 25,762 $ 23,257 $ 74,695 $ 68,268 Interest expense 8,359 8,029 24,569 23,990 Net interest income 17,403 15,228 50,126 44,278 Provision for credit losses 510 264 2,026 2,404 Other operating income 5,074 4,912 14,836 14,487 Net gains 261 141 499 282 Other operating expense 12,986 12,314 38,536 37,559 Income before taxes $ 9,242 $ 7,703 $ 24,899 $ 19,084 Income tax expense 2,294 1,932 6,161 4,701 Net income $ 6,948 $ 5,771 $ 18,738 $ 14,383 Per share data: Basic net income per share $ 1.07 $ 0.89 $ 2.89 $ 2.20 Diluted net income per share $ 1.07 $ 0.89 $ 2.88 $ 2.19 Adjusted Basic net income (1) $ 1.07 $ 0.89 $ 2.89 $ 2.26 Adjusted Diluted net income (1) $ 1.07 $ 0.89 $ 2.88 $ 2.25 Dividends declared per share $ 0.26 $ 0.22 $ 0.70 $ 0.62 Book value $ 30.65 $ 26.90 Diluted book value $ 30.59 $ 26.84 Tangible book value per share $ 28.87 $ 25.06 Diluted Tangible book value per share $ 28.82 $ 25.01 Closing market value $ 36.77 $ 29.84 Market Range: High $ 38.41 $ 30.77 Low $ 32.02 $ 20.40 Shares outstanding at period end: Basic 6,496,908 6,468,625 Shares outstanding at period end: Diluted 6,508,790 6,482,648 Performance ratios: (Year to Date Period End, annualized) Return on average assets 1.24 % 0.99 % Adjusted return on average assets 1.24 % 1.01 % Return on average shareholders' equity 13.23 % 11.52 % Adjusted return on average shareholders' equity 13.23 % 11.78 % Net interest margin (Non-GAAP), includes tax exempt income of $160 and $176 3.64 % 3.34 % Net interest margin GAAP 3.63 % 3.32 % Efficiency ratio - non-GAAP (1) 58.73 % 62.46 % (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. September 30, December 31 2025 2024 Financial Condition at period end: Assets $ 2,023,974 $ 1,973,022 Earning assets $ 1,784,056 $ 1,758,665 Gross loans $ 1,496,762 $ 1,480,793 Commercial Real Estate $ 554,418 $ 526,364 Acquisition and Development $ 93,968 $ 95,314 Commercial and Industrial $ 279,079 $ 287,534 Residential Mortgage $ 521,317 $ 518,815 Consumer $ 47,980 $ 52,766 Investment securities $ 278,898 $ 269,991 Total deposits $ 1,678,902 $ 1,574,829 Noninterest bearing $ 429,986 $ 426,737 Interest bearing $ 1,248,916 $ 1,148,092 Shareholders' equity $ 199,099 $ 179,295 Capital ratios: Tier 1 to risk weighted assets 15.59 % 14.70 % Common Equity Tier 1 to risk weighted assets 13.68 % 12.79 % Tier 1 Leverage 12.10 % 11.88 % Total risk based capital 16.84 % 15.92 % Asset quality: Net charge-offs for the quarter $ (435) $ (362) Nonperforming assets: (Period End) Nonaccrual loans $ 3,825 $ 4,931 Loans 90 days past due and accruing 801 918 Total nonperforming loans and 90 day past due $ 4,626 $ 5,849 Other real estate owned $ 2,718 $ 3,062 Other repossessed assets $ 3,043 $ 2,802 Modified loans $ 998 $ 1,006 Allowance for credit losses to gross loans 1.28 % 1.23 % Allowance for credit losses to non-accrual loans 499.06 % 368.49 % Allowance for credit losses to non-performing assets 183.78 % 155.13 % Non-performing loans and 90 day past due loans to total loans 0.31 % 0.39 % Non-performing loans and 90 day past due loans to total assets 0.23 % 0.30 % Non-accrual loans to total loans 0.26 % 0.33 % Non-performing assets to total assets 0.51 % 0.59 % FIRST UNITED CORPORATION Oakland, MD Stock Symbol : FUNC Financial Highlights - Unaudited September 30, June 30, March 31, December 31, September 30, June 30, March 31, (Dollars in thousands, except per share data) 2025 2025 2025 2024 2024 2024 2024 Results of Operations: Interest income $ 25,762 $ 24,871 $ 24,062 $ 23,725 $ 23,257 $ 23,113 $ 21,898 Interest expense 8,359 8,164 8,046 8,025 8,029 7,875 8,086 Net interest income 17,403 16,707 16,016 15,700 15,228 15,238 13,812 Provision for credit losses 510 860 656 529 264 1,194 946 Other operating income 5,074 4,940 4,822 4,924 4,912 4,782 4,793 Net gains 261 146 92 132 141 59 82 Other operating expense 12,986 12,974 12,576 12,081 12,314 12,364 12,881 Income before taxes $ 9,242 $ 7,959 $ 7,698 $ 8,146 $ 7,703 $ 6,521 $ 4,860 Income tax expense 2,294 1,975 1,892 1,960 1,932 1,607 1,162 Net income $ 6,948 $ 5,984 $ 5,806 $ 6,186 $ 5,771 $ 4,914 $ 3,698 Per share data: Basic net income per share $ 1.07 $ 0.92 $ 0.90 $ 0.95 $ 0.89 $ 0.75 $ 0.56 Diluted net income per share $ 1.07 $ 0.92 $ 0.89 $ 0.95 $ 0.89 $ 0.75 $ 0.56 Adjusted basic net income (1) $ 1.07 $ 0.92 $ 0.90 $ 0.95 $ 0.89 $ 0.75 $ 0.62 Adjusted diluted net income (1) $ 1.07 $ 0.92 $ 0.89 $ 0.95 $ 0.89 $ 0.75 $ 0.62 Dividends declared per share $ 0.26 $ 0.22 $ 0.22 $ 0.22 $ 0.22 $ 0.22 $ 0.20 Book value $ 30.65 $ 29.43 $ 28.35 $ 27.71 $ 26.90 $ 25.39 $ 24.89 Diluted book value $ 30.59 $ 29.38 $ 28.27 $ 27.65 $ 26.84 $ 25.34 $ 24.86 Tangible book value per share $ 28.87 $ 27.64 $ 26.55 $ 25.89 $ 25.06 $ 23.55 $ 23.08 Diluted Tangible book value per share $ 28.82 $ 27.59 $ 26.47 $ 25.83 $ 25.01 $ 23.49 $ 23.05 Closing market value $ 36.77 $ 31.01 $ 30.02 $ 33.71 $ 29.84 $ 20.42 $ 22.91 Market Range: High $ 38.41 $ 32.09 $ 41.61 $ 36.17 $ 30.77 $ 22.88 $ 23.85 Low $ 32.02 $ 25.90 $ 29.38 $ 29.63 $ 20.40 $ 19.40 $ 21.21 Shares outstanding at period end: Basic 6,496,908 6,494,611 6,478,634 6,471,096 6,468,625 6,465,601 6,648,645 Shares outstanding at period end: Diluted 6,508,790 6,506,493 6,497,454 6,485,119 6,482,648 6,479,624 6,657,239 Performance ratios: (Year to Date Period End, annualized) Return on average assets 1.24 % 1.20 % 1.19 % 1.06 % 0.99 % 0.89 % 0.76 % Adjusted return on average assets (1) 1.24 % 1.20 % 1.19 % 1.08 % 1.01 % 0.98 % 0.85 % Return on average shareholders' equity 13.23 % 12.78 % 12.83 % 12.16 % 11.52 % 10.48 % 9.07 % Adjusted return on average shareholders' equity (1) 13.23 % 12.78 % 12.83 % 12.42 % 11.78 % 11.52 % 10.11 % Net interest margin (Non-GAAP), includes tax exempt income of $160 and $176 3.64 % 3.61 % 3.56 % 3.38 % 3.34 % 3.31 % 3.12 % Net interest margin GAAP 3.63 % 3.60 % 3.55 % 3.36 % 3.32 % 3.29 % 3.10 % Efficiency ratio - non-GAAP (1) 58.73 % 59.66 % 59.95 % 61.31 % 62.46 % 63.48 % 65.71 % (1) Efficiency ratio is a non-GAAP measure calculated by dividing total operating expenses by the sum of tax equivalent net interest income. September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2025 2025 2025 2024 2024 2024 2024 Financial Condition at period end: Assets $ 2,023,974 $ 2,007,471 $ 1,979,753 $ 1,973,022 $ 1,916,126 $ 1,868,599 $ 1,912,953 Earning assets $ 1,784,056 $ 1,789,747 $ 1,762,891 $ 1,758,665 $ 1,722,346 $ 1,695,425 $ 1,695,962 Gross loans $ 1,496,762 $ 1,502,481 $ 1,479,869 $ 1,480,793 $ 1,447,883 $ 1,422,975 $ 1,412,327 Commercial Real Estate $ 554,418 $ 550,717 $ 532,764 $ 526,364 $ 502,828 $ 506,273 $ 492,819 Acquisition and Development $ 93,968 $ 98,937 $ 94,063 $ 95,314 $ 92,909 $ 88,215 $ 83,424 Commercial and Industrial $ 279,079 $ 281,484 $ 282,370 $ 287,534 $ 277,994 $ 260,168 $ 274,722 Residential Mortgage $ 521,317 $ 521,968 $ 520,072 $ 518,815 $ 519,168 $ 511,354 $ 501,990 Consumer $ 47,980 $ 49,375 $ 50,600 $ 52,766 $ 54,984 $ 56,965 $ 59,372 Investment securities $ 278,898 $ 279,541 $ 275,143 $ 269,991 $ 267,214 $ 267,151 $ 278,716 Total deposits $ 1,678,902 $ 1,614,207 $ 1,623,574 $ 1,574,829 $ 1,540,395 $ 1,537,071 $ 1,563,453 Noninterest bearing $ 429,986 $ 425,784 $ 422,415 $ 426,737 $ 419,437 $ 423,970 $ 422,759 Interest bearing $ 1,248,916 $ 1,188,423 $ 1,201,159 $ 1,148,092 $ 1,120,958 $ 1,113,101 $ 1,140,694 Shareholders' equity $ 199,099 $ 191,147 $ 183,694 $ 179,295 $ 173,979 $ 164,177 $ 165,481 Capital ratios: Tier 1 to risk weighted assets 15.59 % 15.22 % 14.87 % 14.70 % 14.61 % 14.51 % 14.58 % Common Equity Tier 1 to risk weighted assets 13.68 % 13.32 % 12.97 % 12.79 % 12.66 % 12.54 % 12.60 % Tier 1 Leverage 12.10 % 12.08 % 11.94 % 11.88 % 11.88 % 11.69 % 11.48 % Total risk based capital 16.84 % 16.47 % 16.10 % 15.92 % 15.83 % 15.75 % 15.83 % Asset quality: Net (charge-offs)/recoveries for the quarter $ (435) $ (151) $ (360) $ (362) $ (109) $ (1,309) $ (459) Nonperforming assets: (Period End) Nonaccrual loans $ 3,825 $ 3,813 $ 4,026 $ 4,931 $ 8,073 $ 9,438 $ 16,007 Loans 90 days past due and accruing 801 535 233 918 538 526 120 Total nonperforming loans and 90 day past due $ 4,626 $ 4,348 $ 4,259 $ 5,849 $ 8,611 $ 9,964 $ 16,127 Other real estate owned $ 2,718 $ 3,035 $ 3,062 $ 3,062 $ 2,860 $ 2,978 $ 4,402 Other repossessed assets $ 3,043 $ 2,802 $ 2,802 $ 2,802 $ 42 $ 32 $ 68 Modified loans $ 998 $ 1,198 $ 1,021 $ 1,006 $ 1,016 $ 893 $ - Allowance for credit losses to gross loans 1.28 % 1.27 % 1.25 % 1.23 % 1.24 % 1.26 % 1.27 % Allowance for credit losses to non-accrual loans 499.06 % 499.45 % 458.69 % 368.49 % 223.09 % 189.90 % 112.34 % Allowance for credit losses to non-performing assets 183.78 % 186.98 % 182.43 % 155.13 % 157.00 % 138.49 % 87.59 % Non-performing loans and 90 day past due loans to total loans 0.31 % 0.29 % 0.29 % 0.39 % 0.59 % 0.70 % 1.14 % Non-performing loans and 90 day past due loans to total assets 0.23 % 0.22 % 0.22 % 0.30 % 0.45 % 0.53 % 0.84 % Non-accrual loans to total loans 0.26 % 0.25 % 0.27 % 0.33 % 0.56 % 0.66 % 1.13 % Non-performing assets to total assets 0.51 % 0.51 % 0.51 % 0.59 % 0.60 % 0.69 % 1.07 % Consolidated Statement of Condition (Dollars in thousands - Unaudited) September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 Assets Cash and due from banks $ 92,268 $ 77,313 $ 82,813 $ 77,020 Interest bearing deposits in banks 2,907 1,800 1,618 1,307 Cash and cash equivalents 95,175 79,113 84,431 78,327 Investment securities – available for sale (at fair value) 105,060 103,582 99,998 94,494 Investment securities – held to maturity (at cost) 172,818 174,951 174,144 175,497 Equity investments with readily determinable fair market values 1,020 1,008 1,001 — Restricted investment in bank stock, at cost 4,628 5,815 5,815 5,768 Loans held for sale 861 110 — 806 Loans 1,496,762 1,502,481 1,479,869 1,480,793 Unearned fees (473) (533) (457) (442) Allowance for credit losses (19,089) (19,044) (18,467) (18,170) Net loans 1,477,200 1,482,904 1,460,945 1,462,181 Premises and equipment, net 30,369 29,644 30,010 30,081 Goodwill and other intangible assets 11,526 11,609 11,691 11,773 Bank owned life insurance 49,997 49,642 49,293 48,952 Deferred tax assets 8,228 9,151 10,021 9,989 Other real estate owned, net 2,718 3,035 3,062 3,062 Operating lease asset 984 1,058 1,131 1,204 Pension asset 21,382 18,537 16,064 17,824 Accrued interest receivable and other assets 42,008 37,312 32,147 33,064 Total Assets $ 2,023,974 $ 2,007,471 $ 1,979,753 $ 1,973,022 Liabilities and Shareholders' Equity Liabilities: Non-interest bearing deposits $ 429,986 $ 425,784 $ 422,415 $ 426,737 Interest bearing deposits 1,248,916 1,188,423 1,201,159 1,148,092 Total deposits 1,678,902 1,614,207 1,623,574 1,574,829 Short-term borrowings 20,207 50,954 20,342 65,409 Long-term borrowings 95,929 120,929 120,929 120,929 Operating lease liability 1,152 1,231 1,308 1,384 Allowance for credit loss on off balance sheet exposures 982 995 863 863 Accrued interest payable and other liabilities 26,014 26,579 27,617 28,889 Dividends payable 1,689 1,429 1,426 1,424 Total Liabilities 1,824,875 1,816,324 1,796,059 1,793,727 Shareholders' Equity:  Common Stock – par value $0.01 per share; Authorized 25,000,000 shares; issued and outstanding 6,496,908 at September 30, 2025; 6,494,611 shares at June 30, 2025; 6,478,634 at March 31, 2025; and 6,471,096 at December 31, 2024 65 65 65 65 Surplus 21,290 21,121 20,606 20,476 Retained earnings 203,197 197,938 193,382 189,002 Accumulated other comprehensive loss (25,453) (27,977) (30,359) (30,248) Total Shareholders' Equity 199,099 191,147 183,694 179,295 Total Liabilities and Shareholders' Equity $ 2,023,974 $ 2,007,471 $ 1,979,753 $ 1,973,022 Historical Income Statement 2025 2024 Q3 Q2 Q1 Q4 Q3 Q2 Q1 In thousands (Unaudited) Interest income Interest and fees on loans $ 23,060 $ 22,294 $ 21,755 $ 21,299 $ 21,018 $ 20,221 $ 19,218 Interest on investment securities Taxable 1,826 1,776 1,763 1,672 1,647 1,697 1,744 Exempt from federal income tax 57 57 45 47 56 53 53 Total investment income 1,883 1,833 1,808 1,719 1,703 1,750 1,797 Other 819 744 499 707 536 1,142 883 Total interest income 25,762 24,871 24,062 23,725 23,257 23,113 21,898 Interest expense Interest on deposits 7,009 6,788 6,683 6,585 6,579 6,398 6,266 Interest on short-term borrowings 17 21 20 40 467 509 461 Interest on long-term borrowings 1,333 1,355 1,343 1,400 983 968 1,359 Total interest expense 8,359 8,164 8,046 8,025 8,029 7,875 8,086 Net interest income 17,403 16,707 16,016 15,700 15,228 15,238 13,812 Credit loss expense/(credit) Loans 480 728 657 522 195 1,251 961 Debt securities held to maturity 43 — — — 14 — — Off balance sheet credit exposures (13) 132 (1) 7 55 (57) (15) Provision for credit losses 510 860 656 529 264 1,194 946 Net interest income after provision for credit losses 16,893 15,847 15,360 15,171 14,964 14,044 12,866 Other operating income Net gains on investments, available for sale 97 — — — — — — Gains on sale of residential mortgage loans 163 146 92 132 141 59 82 Losses on disposal of fixed assets 1 — — — — — — Net gains 261 146 92 132 141 59 82 Other Income Service charges on deposit accounts 563 577 547 553 555 556 556 Other service charges 218 214 206 211 236 225 215 Trust department 2,448 2,386 2,323 2,323 2,328 2,255 2,188 Debit card income 980 983 921 1,134 1,000 999 932 Bank owned life insurance 355 348 341 345 340 334 326 Brokerage commissions 346 370 421 295 297 362 495 Other 164 62 63 63 156 51 81 Total other income 5,074 4,940 4,822 4,924 4,912 4,782 4,793 Total other operating income 5,335 5,086 4,914 5,056 5,053 4,841 4,875 Other operating expenses Salaries and employee benefits 7,589 7,319 7,331 6,456 7,160 7,256 7,157 FDIC premiums 266 267 245 260 256 285 269 Equipment 515 565 578 490 627 635 923 Occupancy 679 675 689 563 709 652 954 Data processing 1,517 1,600 1,503 1,688 1,333 1,422 1,318 Marketing 182 196 238 205 151 184 134 Professional services 639 589 476 536 477 449 486 Contract labor 127 166 163 181 149 84 183 Telephone 89 96 98 99 97 103 109 Other real estate owned 69 208 92 47 124 14 86 Investor relations 57 132 62 65 84 91 53 Contributions 90 78 56 53 65 66 50 Other 1,167 1,083 1,045 1,438 1,082 1,123 1,159 Total other operating expenses 12,986 12,974 12,576 12,081 12,314 12,364 12,881 Income before income tax expense 9,242 7,959 7,698 8,146 7,703 6,521 4,860 Provision for income tax expense 2,294 1,975 1,892 1,960 1,932 1,607 1,162 Net Income $ 6,948 $ 5,984 $ 5,806 $ 6,186 $ 5,771 $ 4,914 $ 3,698 Basic net income per common share $ 1.07 $ 0.92 $ 0.90 $ 0.95 $ 0.89 $ 0.75 $ 0.56 Diluted net income per common share $ 1.07 $ 0.92 $ 0.89 $ 0.95 $ 0.89 $ 0.75 $ 0.56 Weighted average number of basic shares outstanding 6,496 6,489 6,474 6,470 6,468 6,527 6,642 Weighted average number of diluted shares outstanding 6,508 6,506 6,490 6,484 6,482 6,537 6,655 Dividends declared per common share $ 0.26 $ 0.22 $ 0.22 $ 0.22 $ 0.22 $ 0.20 $ 0.20 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 accelerated depreciation expenses related to the branch closures. Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 (in thousands, except for per share amount) Net income - as reported $ 6,948 $ 5,771 $ 18,738 $ 14,383 Adjustments: Accelerated depreciation expenses — — — 562 Income tax effect of adjustments — — — (137) Adjusted net income (non-GAAP) $ 6,948 $ 5,771 $ 18,738 $ 14,808 Diluted earnings per share - as reported $ 1.07 $ 0.89 $ 2.88 $ 2.19 Adjustments: Accelerated depreciation expenses — — — 0.08 Income tax effect of adjustments — — — (0.02) Adjusted diluted earnings per share (non-GAAP) $ 1.07 $ 0.89 $ 2.88 $ 2.25 As of or for the three months ended As of or for the nine months ended September 30, September 30, (in thousands, except per share data) 2025 2024 2025 2024 Per Share Data Basic net income per share - as reported $ 1.07 $ 0.89 $ 2.89 $ 2.20 Basic net income per share - non-GAAP $ 1.07 $ 0.89 $ 2.89 $ 2.26 Diluted net income per share - as reported $ 1.07 $ 0.89 $ 2.88 $ 2.19 Diluted net income per share - non-GAAP $ 1.07 $ 0.89 $ 2.88 $ 2.25 Basic book value per share $ 30.65 $ 26.90 Diluted book value per share $ 30.59 $ 26.84 As of or for the nine months ended Significant Ratios: September 30, 2025 2024 Return on Average Assets - as reported 1.24 % 0.99 % Accelerated depreciation expenses - 0.03 % Income tax effect of adjustments - (0.01 %) Adjusted Return on Average Assets (non-GAAP) 1.24 % 1.01 % Return on Average Equity - as reported 13.23 % 11.52 % Accelerated depreciation expenses - 0.34 % Income tax effect of adjustments - (0.08 %) Adjusted Return on Average Equity (non-GAAP) 13.23 % 11.78 % Three Months Ended September 30, 2025 2024 (dollars in thousands) Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/Rate Assets Loans $ 1,501,876 23,072 6.09 % $ 1,433,508 $ 21,035 5.84 % Investment Securities: Taxable 285,623 1,826 2.54 % 276,343 1,647 2.37 % Non taxable 7,516 102 5.38 % 7,795 100 5.10 % Total 293,139 1,928 2.61 % 284,138 1,747 2.44 % Federal funds sold 70,731 697 3.91 % 33,372 451 5.38 % Interest-bearing deposits with other banks 5,324 30 2.24 % 2,179 26 4.75 % Other interest earning assets 5,660 92 6.45 % 3,987 59 5.89 % Total earning assets 1,876,730 25,819 5.46 % 1,757,184 23,318 5.28 % Allowance for credit losses (19,343) (18,197) Non-earning assets 185,364 173,875 Total Assets $ 2,042,751 $ 1,912,862 Liabilities and Shareholders' Equity Deposits Interest-bearing demand deposits $ 367,771 $ 1,509 1.63 % $ 370,040 $ 1,604 1.72 % Interest-bearing money markets- retail 489,088 3,834 3.11 % 422,393 3,793 3.57 % Interest-bearing money markets- brokered 436 1 0.91 % 1 — 0.10 % Savings deposits 163,433 43 0.10 % 176,799 44 0.10 % Time deposits - retail 148,955 1,064 2.83 % 141,354 1,021 2.87 % Time deposits - brokered 50,000 558 4.43 % 8,641 117 5.39 % Total deposits 1,219,683 7,009 2.28 % 1,119,228 6,579 2.34 % Short-term borrowings 21,378 17 0.32 % 57,553 467 3.23 % Long-term borrowings 117,668 1,333 4.49 % 73,864 983 5.29 % Total interest-bearing liabilities 1,358,729 8,359 2.44 % 1,250,645 8,029 2.55 % Non-interest-bearing deposits 456,773 479,232 Other liabilities 31,020 32,155 Shareholders' Equity 196,229 170,753 Total Liabilities and Shareholders' Equity $ 2,042,751 $ 1,912,862 Net interest income and spread $ 17,460 3.02 % $ 15,289 2.73 % Net interest margin 3.69 % 3.46 % Nine Months Ended September 30, 2025 2024 (dollars in thousands) Average Balance Interest Average Yield/ Rate Average Balance Interest Average Yield/ Rate Assets Loans $ 1,491,573 $ 67,144 6.02 % $ 1,418,964 $ 60,506 5.70 % Investment Securities: Taxable 285,293 5,365 2.51 % 288,977 5,088 2.35 % Non taxable 7,158 284 5.30 % 7,800 289 4.95 % Total 292,451 5,649 2.58 % 296,777 5,377 2.42 % Federal funds sold 54,385 1,709 4.20 % 54,624 2,246 5.49 % Interest-bearing deposits with other banks 3,899 65 2.23 % 1,628 75 6.15 % Other interest earning assets 5,749 288 6.70 % 4,161 240 7.70 % Total earning assets 1,848,057 74,855 5.42 % 1,776,154 68,444 5.15 % Allowance for loan losses (18,812) (18,020) Non-earning assets 184,309 185,660 Total Assets $ 2,013,554 $ 1,943,794 Liabilities and Shareholders' Equity Deposits Interest-bearing demand deposits $ 368,384 $ 4,682 1.70 % $ 362,102 4,541 1.68 % Interest-bearing money markets- retail 475,592 10,958 3.08 % 402,314 10,567 3.51 % Interest-bearing money markets- brokered 357 7 2.62 % 37 1 3.61 % Savings deposits 167,905 131 0.10 % 183,096 138 0.10 % Time deposits - retail 146,985 3,241 2.95 % 148,458 3,155 2.84 % Time deposits - brokered 45,398 1,461 4.30 % 20,967 841 5.36 % Total deposits 1,204,621 20,480 2.27 % 1,116,974 19,243 2.30 % Short-term borrowings 21,408 58 0.36 % 70,755 1,437 2.71 % Long-term borrowings 119,830 4,031 4.50 % 82,571 3,310 5.35 % Total interest-bearing liabilities 1,345,859 24,569 2.44 % 1,270,300 23,990 2.52 % Non-interest-bearing deposits 447,478 473,610 Other liabilities 30,795 33,134 Shareholders' Equity 189,422 166,750 Total Liabilities and Shareholders' Equity $ 2,013,554 $ 1,943,794 Net interest income and spread $ 50,286 2.98 % $ 44,454 2.63 % Net interest margin 3.64 % 3.34 % View original content to download multimedia:https://www.prnewswire.com/news-releases/first-united-corporation-announces-third-quarter-2025-financial-results-302589378.html SOURCE First United Corporation