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FIRST UNITED CORP/MD/ (FUNC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered solid profitability: net income of $5.8M ($0.89 diluted EPS), up 57% YoY, modestly down from Q4 2024 ($6.2M, $0.95) as operating expenses normalized; ROAA 1.19% and ROAE 12.83% .
  • Net interest margin expanded to 3.56% (FTE, non-GAAP), with higher loan yields and stable funding costs; efficiency ratio improved to 59.95% vs 65.71% in Q1 2024 .
  • Versus S&P Global consensus, EPS beat ($0.89 vs $0.80*) while revenue modestly missed ($20.27M* vs $20.60M*); limited coverage (1 estimate) suggests muted sell-side attention. Values retrieved from S&P Global.
  • Management guided to investing in strategic hires and enhanced technology (electronic banking), implying higher salaries/benefits and data processing in 2025, while other expenses expected consistent with Q1; dividend of $0.22 declared for Q2 2025 .
  • Funding mix shifted: $50M brokered time deposits replaced $50M overnight borrowings; deposits rose $48.7M QoQ while short-term borrowings fell $45.1M; asset quality remained strong with non-accruals down to $4.0M .

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expansion to 3.56% on FTE basis, reflecting improved loan yields and stable funding costs; GAAP NIM 3.55% .
  • Strong year-over-year earnings growth: net income up $2.1M YoY to $5.8M, driven by +$2.2M net interest income, -$0.3M provision, and -$0.3M non-interest expense .
  • Management tone confident on growth and customer experience: “We are very pleased… margin expansion, solid fee income and controlled expenses… invest in strategic hires and enhanced technology… optimistic about the remainder of 2025” — Carissa Rodeheaver, CEO .

What Went Wrong

  • Linked-quarter earnings dipped by $0.4M as operating expenses increased $0.5M (notably +$0.9M salaries/benefits from reversal of Q4 incentives and higher health claims) .
  • Loan balances were flat to slightly down QoQ (gross loans -$0.9M) as amortization/payoffs offset modest production; pipeline remains healthy but growth timing uncertain .
  • Deposit composition showed pressure in non-interest-bearing (-$4.3M) and interest-bearing demand (-$17.9M) due to inflationary spending and municipal seasonality, partially offset by savings/MM +$18.7M and brokered time deposits +$50.0M .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Net Interest Income ($USD Thousands)$13,812 $15,700 $16,016
Total Other Operating Income ($USD Thousands)$4,875 $5,056 $4,914
Provision for Credit Losses ($USD Thousands)$946 $529 $656
Other Operating Expense ($USD Thousands)$12,881 $12,081 $12,576
Net Income ($USD Thousands)$3,698 $6,186 $5,806
Diluted EPS ($USD)$0.56 $0.95 $0.89
Margins and EfficiencyQ1 2024Q4 2024Q1 2025
Net Interest Margin (Non-GAAP, FTE)3.12% 3.38% 3.56%
Net Interest Margin (GAAP)3.10% 3.36% 3.55%
Efficiency Ratio (Non-GAAP)65.71% 61.31% 59.95%
Balance Sheet KPIsMar 31, 2024Dec 31, 2024Mar 31, 2025
Total Assets ($USD Thousands)$1,912,953 $1,973,022 $1,979,753
Gross Loans ($USD Thousands)$1,412,327 $1,480,793 $1,479,869
Investment Securities ($USD Thousands)$278,716 $269,991 $275,143
Total Deposits ($USD Thousands)$1,563,453 $1,574,829 $1,623,574
Noninterest-Bearing Deposits ($USD Thousands)$422,759 $426,737 $422,415
Interest-Bearing Deposits ($USD Thousands)$1,140,694 $1,148,092 $1,201,159
Shareholders’ Equity ($USD Thousands)$165,481 $179,295 $183,694
ACL to Gross Loans (%)1.27% 1.23% 1.25%
Non-Accrual Loans ($USD Thousands)$16,007 $4,931 $4,026
Loan Portfolio by Type ($USD Thousands)Q1 2024Q4 2024Q1 2025
Commercial Real Estate$492,819 $526,364 $532,764
Acquisition & Development$83,424 $95,314 $94,063
Commercial & Industrial$274,722 $287,534 $282,370
Residential Mortgage$501,990 $518,815 $520,072
Consumer$61,429 $52,766 $50,600
Deposit Mix Change Since Dec 31, 2024 ($USD Millions)Q1 2025 Change
Non-Interest-Bearing($4.3)
Interest-Bearing Demand($17.9)
Savings and Money Market+$18.7
Time Deposits – Brokered+$50.0
Time Deposits – Retail+$2.2
Total Deposits+$48.7

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Loan Growth TargetFY 2025Not quantified in prior release“Working towards an 8% increase in loans” (subject to political uncertainty) Maintained/Reaffirmed
Salaries & BenefitsFY 2025No explicit increaseExpected higher salaries and benefits due to strategic hires Raised
Data ProcessingFY 2025No explicit increaseExpected higher data processing expenses tied to enhanced technology Raised
Other ExpensesForward basisNot specifiedExpected consistent with Q1 2025 levels going forward Maintained
DividendQ2 2025$0.22 (Q4/Q1)Declared $0.22 per share payable May 1, 2025 Maintained

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript was available in our document catalog. We assessed themes via press releases.

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Technology/Electronic BankingFocus on balance sheet positioning; no explicit tech initiative Entering 2025 with focus on investing resources to grow market share and wealth presence Plan to invest in enhanced technology, particularly electronic banking experience Increasing investment emphasis
Funding/Mix & CostRepayment of brokered CDs; added FHLB borrowings at 3.89%; deposit shifts Replaced overnight borrowings with brokered CDs in Jan 2025; deposit mix shifts $50M brokered deposits replacing $50M overnight borrowings; deposits +$48.7M QoQ Mix actively managed; funding cost stabilization
Asset QualityNon-accruals elevated during early 2024; improving by Q3; NCOs low ACL 1.23%; non-accruals $4.9M; continued liquidation of collateral Non-accruals down to $4.0M; ACL 1.25%; NCOs $0.36M; asset quality “strong” Improving/stable
Margin/ProfitabilityNIM 3.46%; efficiency improved; provision moderation NIM 3.38%; efficiency 61.31%; strong earnings momentum NIM 3.56%; efficiency 59.95%; EPS $0.89 Positive momentum
Macro/Customer BehaviorCompetitive pricing; deposit shifts; BTFP dynamics Competitive intensity; municipal seasonality; pricing discipline Inflation driving higher spending and reduced deposit balances; political uncertainty affecting loan demand Persistent headwinds

Management Commentary

  • “We are very pleased with the first quarter results as we saw margin expansion, solid fee income and controlled expenses… We intend to invest in strategic hires and enhanced technology, particularly around the electronic banking experience… we expect other expenses to be consistent with this quarter on a forward basis.” — Carissa Rodeheaver, Chairman, President and CEO .
  • On loan demand and macro: borrowers “sit on the sidelines waiting for more certainty in the economic and political environments” .
  • On funding: “Funding remains a challenge as inflation has taken its toll resulting in higher spending and reduced deposit balances while competition remains high” .

Q&A Highlights

No Q1 2025 earnings call transcript was available; no analyst Q&A items or clarifications were recorded in accessible documents.

Estimates Context

Metric (Q1 2025)Consensus*Actual*Surprise
Primary EPS Consensus Mean$0.80*$0.89*+$0.09 (Beat)
Revenue Consensus Mean$20.60M*$20.27M*-$0.33M (Miss)

Values retrieved from S&P Global. Limited coverage: EPS estimates count 1; revenue estimates count 1.

Key Takeaways for Investors

  • Earnings quality improved: margin expansion to 3.56% and efficiency ratio to 59.95% underpin EPS beat; watch for sustainability as deposit mix evolves .
  • Expense outlook: salaries/benefits and data processing expected higher with strategic hires and tech investments; other expenses guided flat, implying controlled opex ex-investment .
  • Funding strategy: $50M brokered deposits replaced overnight borrowings; deposit growth +$48.7M QoQ while NIB/IB demand saw seasonal/inflation-driven declines — manageable cost profile and liquidity .
  • Asset quality strong: non-accruals fell to $4.0M; ACL coverage ratios improved; NCOs remain low — supports lower credit cost volatility .
  • Loan growth pacing: modest production, strong pipeline ($56M commercial; $41.7M unfunded construction); management working toward ~8% loan growth but timing may be tempered by political uncertainty .
  • Dividend continuity ($0.22) supports yield; capital ratios healthy (CET1 12.97%, Tier 1 14.87%) provide flexibility for growth and shareholder returns .
  • Near-term trading: EPS beat vs light coverage could catalyze positive reaction; medium-term thesis hinges on balancing margin tailwinds with investment-led opex and competitive deposit dynamics.

Appendix: Additional Data Points

  • Q1 2025 interest income $24.06M; interest expense $8.05M; other operating income $4.82M; net gains $0.09M; tax rate 24.6% .
  • Deposit detail QoQ: NIB -$4.3M; IB demand -$17.9M; savings/MM +$18.7M; brokered time +$50.0M; retail time +$2.2M .
  • Book value per share increased to $28.35 (diluted $28.27); tangible BVPS $26.55 (diluted $26.47); shares diluted 6,497,454 .

Notes:

  • No 8-K 2.02 filing and no earnings call transcript were found in the document catalog for Q1 2025; analysis relies on the Q1 earnings press release and related company communications –.
  • Estimates comparisons and actuals in the Estimates Context section are per S&P Global consensus and standardized revenue definitions; press release operating revenue components (net interest income + total other operating income) may differ from S&P’s reported “Revenue.” Values retrieved from S&P Global.