Exhibit 99.1
FIRST UNITED CORPORATION ANNOUNCES FOURTH
QUARTER AND 2003 EARNINGS
OAKLAND, MARYLAND--March 1, 2004: First United Corporation (Nasdaq: FUNC), a
financial holding company and the parent company of First United Bank & Trust,
announces net income for the year ended December 31, 2003 of $10.75 million
($1.77 earnings per share) compared to $9.65 million ($1.59 earnings per share)
for the prior year, an 11.4% increase.
For the quarter ended December 31, 2003, net income totaled $2.80 million ($.46
earnings per share), a 15.7% increase over net income of $2.42 million ($.40
earnings per share) for the fourth quarter of 2002.
For the year ended December 31, 2003 the Corporation's returns on average assets
and average shareholders' equity were 1.03% and 13.10%, respectively, compared
with 1.13% and 12.75% respectively, for 2002.
During the third quarter of 2003, the Corporation acquired four banking offices
and a commercial banking center located in Berkeley County, West Virginia, from
Huntington Bancshares Incorporated and its bank subsidiary, the Huntington
National Bank. As a result of this acquisition, which was accounted for under
the purchase method of accounting, approximately $131 million in deposits and
$49 million in loans were purchased.
Loans and leases were $792.03 million at December 31, 2003 compared to $665.83
million at December 31, 2002, an increase of 18.9%. The acquisition, discussed
previously, contributed $49 million to the increase in loans, coupled with loan
growth in commercial, consumer, and residential mortgage loans. Deposits were
$750.16 million at December 31, 2003 compared to $610.46 million at December 31,
2002, an increase of 22.9%. The increase in deposits was primarily due to the
acquisition. Total assets were $1.11 billion at December 31, 2003, a 16.8%
increase from $.95 billion at December 31, 2002.
Shareholders' equity increased 6.2% from $79.28 million at December 31, 2002, to
$84.19 million at December 31, 2003, resulting in book value per share
increasing from $13.04 to $13.83. Total common shares outstanding, as of
December 31, 2003, were 6,087,287.
Net-Interest Income
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Net interest income for 2003 increased 6.9% to $34.10 million, compared to
$31.89 million for 2002. Net interest margin was 3.58% at December 31, 2003,
decreasing 50 basis points as compared to 4.08% at December 31, 2002. The margin
compression was greatly influenced by the interest rate environment, coupled
with high prepayments in the Corporation's security and loan portfolios, thus
having to reinvest in lower interest rates. Comparing the fourth quarter of 2003
and 2002, net interest income increased by $.52 million, or 6.3%.
Non-Interest Income
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Non-interest income for 2003 was $11.87 million, compared with $9.00 million for
2002, a 31.9% increase. Non-interest income for the fourth quarter of 2003 was
$3.50 million, compared to $1.87 million for the fourth quarter of 2002, an
87.2% increase.
During 2003, the Corporation achieved noteworthy increases of income from 2002.
These increases were a result of services on deposit accounts (16.8%), trust
services (17.4%), brokerage commission (22.4%), and secondary market fees
arising from mortgage lending (90.6%). Also, the Corporation realized $1.01
million in security gains for 2003, $.66 million of the gains being recorded in
the fourth quarter of 2003.
Non-Interest Expense
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Non-interest expense for 2003 was $29.82 million, compared with $26.04 million
for 2002, a 14.5% increase. Non-interest expense for the fourth quarter of 2003
was $7.92 million, compared to $6.55 million for the fourth quarter of 2002, a
20.9% increase.
The increase in non-interest expense was a result of various factors. However,
the Corporation's continued concentration on growth and expansion of the
organization contributed to the increase. Upon the acquisition, previously
discussed, advertising along with traditional overhead expenses were incurred in
order to vie in the marketplace. Additionally, a large contributor to the
increase resulted from compensation expense, including incentives, due to the
Corporation's growth during 2003.
Asset Quality
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The Corporation's asset quality continues to be satisfactory. Nonperforming and
past-due loans to total loans at year-end 2003 was .51%, compared to .50% as of
year-end 2002. Nonperforming and past-due loans to total assets at year-end 2003
was .36%, compared to .35% as of year-end 2002. For the year ended December 31,
2003, the provision for loan losses was $.83 million, compared to $1.51 million
for the year ended December 31, 2002.
ABOUT FIRST UNITED CORPORATION
First United Corporation offers full-service banking through its banking
subsidiary, First United Bank & Trust, and consumer finance products through its
subsidiaries, OakFirst Loan Center, Inc. and OakFirst Loan Center, LLC. The
Corporation also offers a full range of insurance products and services to
customers in its market areas through Gonder Insurance Agency. These
subsidiaries operate a network of offices throughout Garrett, Allegany,
Washington, and Frederick counties in Maryland, as well as Mineral, Hardy,
Hampshire, and Berkeley counties in West Virginia. First United Corporation's
website is www.mybankfirstunited.com.
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This press release may contain forward-looking statements as defined by the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
present management's expectations, beliefs, plans and objectives regarding
future financial performance, and assumptions or judgments concerning such
performance. Any discussions contained in this press release, except to the
extent that they contain historical facts, are forward-looking and accordingly
involve estimates, assumptions, judgments and uncertainties. There are a number
of factors that could cause actual results or outcomes to differ materially from
those addressed in the forward-looking statements. Such factors are detailed in
"Risk Factors" in Part I, Item 1, of First United Corporation's Annual Report on
Form 10-K for the year ended December 31, 2002. Except as required by applicable
laws, we do not intend to publish updates or revisions of any forward-looking
statements it makes to reflect new information, future events or otherwise.
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Three Months Ended Twelve Months Ended
(unaudited) (unaudited)
Dec 31 Dec 31 Sept 30 June 30 March 31 Dec 31 Dec 31
2003 2002 2003 2003 2003 2003 2002
EARNINGS SUMMARY
Interest income $ 14,458 $ 14,900 $ 14,534 $ 14,471 $ 14,240 $ 57,703 $ 57,589
Interest expense $ 5,686 $ 6,649 $ 5,919 $ 5,850 $ 6,146 $ 23,601 $ 25,702
Net interest income $ 8,772 $ 8,251 $ 8,615 $ 8,621 $ 8,094 $ 34,102 $ 31,887
Provision for loan
and lease loss $ 137 $ 245 $ 357 $ (317) $ 656 $ 833 $ 1,506
Noninterest income $ 3,501 $ 1,872 $ 2,786 $ 2,509 $ 3,071 $ 11,867 $ 9,007
Noninterest expense $ 7,918 $ 6,546 $ 7,992 $ 6,801 $ 7,110 $ 29,821 $ 26,038
Income taxes $ 1,422 $ 918 $ 872 $ 1,325 $ 947 $ 4,566 $ 3,695
Net income $ 2,796 $ 2,414 $ 2,180 $ 3,321 $ 2,452 $ 10,749 $ 9,655
Cash dividends paid $ 1,067 $ 1,065 $ 1,065 $ 1,065 $ 1,065 $ 4,262 $ 4,166
Three Months Ended
(unaudited)
Dec 31 Dec 31 Sept 30 June 30 March 31
2003 2002 2003 2003 2003
PER COMMON SHARE
Earnings per share
Basic/Diluted $ 0.46 $ 0.40 $ 0.36 $ 0.55 $ 0.40
Book value $ 13.83 $ 13.04 $ 13.61 $ 13.74 $ 13.14
Closing market value $ 24.37 $ 16.41 $ 22.55 $ 21.00 $ 21.42
Common shares
outstanding at period end
Basic/Diluted 6,087,287 6,080,589 6,087,433 6,087,433 6,087,433
PERFORMANCE RATIOS (Period End)
Return on average assets 1.03% 1.13% 1.04% 1.19% 1.03%
Return on average shareholders'
equity 13.10% 12.75% 13.06% 14.36% 12.44%
Net interest margin 3.58% 4.08% 3.63% 3.77% 3.71%
Efficiency ratio 63.62% 62.39% 63.80% 61.11% 62.39%
PERIOD END BALANCES
Assets $1,108,241 $ 954,388 $ 1,119,328 $1,004,551 $ 984,977
Earning assets $1,019,800 $ 890,359 $ 1,030,449 $ 936,214 $ 922,863
Gross loans and leases $ 792,025 $ 665,826 $ 778,587 $ 712,427 $ 685,909
Consumer Real Estate $ 280,823 $ 244,959 $ 262,866 $ 246,478 $ 240,152
Commercial $ 307,524 $ 242,470 $ 314,165 $ 281,699 $ 261,737
Consumer $ 203,678 $ 178,397 $ 201,556 $ 184,250 $ 184,020
Investment securities $ 232,475 $ 224,394 $ 246,704 $ 217,626 $ 225,841
Total deposits $ 750,161 $ 610,460 $ 775,800 $ 666,814 $ 659,393
Noninterest bearing $ 99,181 $ 72,789 $ 100,313 $ 71,346 $ 73,496
Interest bearing $ 650,980 $ 537,671 $ 675,487 $ 595,468 $ 585,897
Shareholders' equity $ 84,191 $ 79,283 $ 82,825 $ 83,614 $ 79,970
CAPITAL RATIOS
Period end capital to risk-
weighted assets:
Tier 1 10.32% 13.76% 9.99% 11.35% 11.16%
Total 11.77% 14.31% 11.60% 14.66% 14.84%
ASSET QUALITY
Net charge-offs $ 333 $ 158 $ 273 $ 97 $ 524
Nonperforming assets:
(Period End)
Nonaccrual loans $ 2,775 $ 1,847 $ 1,791 $ 1,874 $ 2,101
Restructured loans $ 554 $ 565 $ 557 $ 561 $ 564
Loans 90 days past due
and accruing $ 1,236 $ 1,458 $ 780 $ 1,153 $ 1,111
Other real estate owned $ 177 $ 294 $ 177 $ 260 $ 267
Total nonperforming assets
and past due loans $ 4,011 $ 8,708 $ 12,829 $ 8,327 $ 7,718
Allowance for credit losses
to gross loans, at period end 0.76% 0.91% 0.80% 0.81% 0.92%
Nonperforming and past-due loans
to total loans at period end 0.51% 0.50% 0.33% 0.42% 0.48%
Nonperforming loans and past-due
loans to total assets, at period 0.36% 0.35% 0.23% 0.30% 0.33%