Exhibit 99.1
FIRST UNITED CORPORATION ANNOUNCES FIRST
QUARTER EARNINGS
OAKLAND, MARYLAND--May 07, 2004: First United Corporation (Nasdaq: FUNC), a
financial holding company and the parent company of First United Bank & Trust,
announces net income for the quarter ended March 31, 2004 of $2.71 million ($.45
earnings per share) compared to $2.45 million ($.40 earnings per share) for the
first quarter of 2003, a 10.6% increase.
For the quarter ended March 31, 2004, the Corporation's returns on average
assets and average shareholders' equity were .97% and 12.75%, respectively,
compared to 1.03% and 12.44%, respectively, for the same period in 2003.
During the first quarter, the Corporation established two Connecticut statutory
trusts, First United Statutory Trust I and First United Statutory Trust II
(collectively, the "Trusts"), for the purpose of issuing $10 million of Floating
Rate Trust Preferred Securities and $20 million of Fixed/Floating Rate Trust
Preferred Securities, respectively, in private placements. The Corporation owns
100% of the outstanding shares of common stock of the Trusts. The Trusts used
the proceeds from the issuance of their preferred securities to purchase an
equal principal amount of junior subordinated debentures from the Corporation,
and they used the proceeds from their sales of common stock to the Corporation
to purchase an additional $.31 million and $.62 million of junior subordinated
debentures, respectively.
Loans and leases were $826.29 million at March 31, 2004 compared to $685.91
million at March 31, 2003, an increase of 20.5%. The branch acquisition that
occurred in July of 2003, contributed $49 million to the increase in loans,
coupled with sizable loan growth in commercial and residential mortgage loans.
Deposits were $763.36 million at March 31, 2004 compared to $659.98 million at
March 31, 2003, an increase of 15.7%. Affecting the first quarter year-to-year
comparisons was the $131 million of deposits gained from the branch acquisition,
completed in July 2003. Netting out this amount, deposits decreased $27.62
million when compared to the same period last year. Total assets were $1.15
billion at March 31, 2004, a 17.3% increase from $.98 billion at March 31, 2003.
Comparing March 31, 2004 to March 31, 2003, shareholders' equity increased 7.6%,
from $79.97 million at March 31, 2003 to $86.01 million at March 31, 2004,
resulting in book value per share increasing from $13.14 to $14.13. At March 31,
2004, there were 6,087,287 issued and outstanding shares of the Corporation's
common stock.
Net-Interest Income
Net interest income, on a fully tax-equivalent basis, for 2004 increased 12.0%
to $9.31 million compared to $8.31 million for 2003. Net interest margin was
3.60% at March 31, 2004, decreasing 5 basis points as compared to 3.65% at March
31, 2003. The margin compression continues to be a reflection of the interest
rate environment.
Non-Interest Income
Non-interest income for the first quarter of 2004 was $3.44 million compared to
$3.07 million for the first quarter of 2003, a 12.05% increase.
During the first quarter of 2004, the Corporation achieved noteworthy increases
of income compared to the first quarter of 2003. These increases were a result
of service charges on deposit accounts (28.8%), trust services (10.2%), and
brokerage commission (62.9%). Also, the Corporation realized $.67 million in
security gains during the first quarter of 2004, as compared to $.53 million
during the first quarter of 2003.
Non-Interest Expense
Non-interest expense for the first quarter of 2004 was $8.40 million compared to
$7.11 million for the first quarter of 2003, an 18.1% increase.
The increase in non-interest expense was a result of various factors. The
Corporation's continued concentration on growth and expansion of the
organization contributed to the increase. The branch acquisition completed in
July of 2003 added additional personnel and corresponding increases in salaries
and benefits. Furthermore, the amortization of the core deposit intangible
goodwill, resulting from the acquisition, increased the variance of non-interest
expense over the same time period of 2003. Professional fees incurred in
connection with the Corporation's focus on compliance with the Sarbanes-Oxley
Act of 2002, particularly its provisions addressing management's assessment of
internal controls, also contributed to the increase in non-interest expense for
the three-month period ended March 31, 2004.
Asset Quality
The Corporation's asset quality continues to be sound. Nonperforming and
past-due loans to total loans at March 31, 2004 was .48%, equivalent to the
ratio at March 31, 2003. Nonperforming and past-due loans to total assets at
March 31, 2004 was .35% compared to .33% at March 31, 2003. For the quarter
ended March 31, 2004, the provision for loan losses was $.05 million compared to
$.66 million for the quarter ended March 31, 2003.
ABOUT FIRST UNITED CORPORATION
First United Corporation offers full-service banking products and services
through its trust company subsidiary, First United Bank & Trust, and consumer
finance products through its consumer finance subsidiaries, OakFirst Loan
Center, Inc. and OakFirst Loan Center, LLC. The Corporation also offers a full
range of insurance products and services to customers in its market areas
through Gonder Insurance Agency, which is a subsidiary of the Bank. These
entities operate a network of offices throughout Garrett, Allegany, Washington,
and Frederick Counties in Maryland, as well as Mineral, Hampshire, Hardy, and
Berkeley Counties in West Virginia. The Corporation's website is
www.mybankfirstunited.com.
This press release may contain forward-looking statements as defined by the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
present management's expectations, beliefs, plans and objectives regarding
future financial performance, and assumptions or judgments concerning such
performance. Any discussions contained in this press release, except to the
extent that they contain historical facts, are forward-looking and accordingly
involve estimates, assumptions, judgments and uncertainties. There are a number
of factors that could cause actual results or outcomes to differ materially from
those addressed in the forward-looking statements. Such factors are detailed in
the "Risk Factors" filed as Exhibit 99.1 to the Annual Report of First United
Corporation on Form 10-K for the year ended December 31, 2003. Except as
required by applicable laws, we do not intend to publish updates or revisions of
any forward-looking statements it makes to reflect new information, future
events or otherwise.
FIRST UNITED CORPORATION
Oakland, MD
Stock Symbol : FUNC
(Dollars in thousands, except per share data)
- ----------------------------------------------------------------------------------------------
Three Months Ended
unaudited
Mar 31 Mar 31
2004 2003
EARNINGS SUMMARY
Interest income $ 14,601 $ 14,240
Interest expense $ 5,493 $ 6,146
Net interest income $ 9,108 $ 8,094
Provision for loan and lease losses $ 45 $ 656
Noninterest income $ 3,441 $ 3,071
Noninterest expense $ 8,396 $ 7,110
Income taxes $ 1,396 $ 947
Net income $ 2,712 $ 2,452
Cash dividends paid $ 1,096 $ 1,065
Three Months Ended
unaudited
Mar 31 Mar 31
2004 2003
PER COMMON SHARE
Earnings per share
Basic/Diluted $ 0.45 $ 0.40
Book value $ 14.13 $ 13.14
Closing market value $ 23.15 $ 21.42
Common shares
outstanding at period end
Basic/Diluted 6,087,287 6,087,433
PERFORMANCE RATIOS (Period End)
Return on average assets 0.97% 1.03%
Return on average shareholders'
equity 12.75% 12.44%
Net interest margin (FTE) 3.60% 3.65%
Efficiency ratio 65.92% 62.39%
PERIOD END BALANCES
Assets $ 1,150,491 $ 984,976
Earning assets $ 1,068,49 $ 922,862
Gross loans and leases $ 826,294 $ 685,909
Consumer Real Estate $ 296,292 $ 240,152
Commercial $ 322,542 $ 261,737
Consumer $ 207,460 $ 184,020
Investment securities $ 212,479 $ 216,867
Total deposits $ 763,362 $ 659,977
Noninterest bearing $ 103,382 $ 73,496
Interest bearing $ 659,980 $ 586,481
Shareholders' equity $ 86,013 $ 79,969
CAPITAL RATIOS
Period end capital to risk-
weighted assets:
Tier 1 11.50% 11.16%
Total 15.16% 14.84%
ASSET QUALITY
Net charge-offs $ 202 $ 524
Nonperforming assets: (Period End)
Nonaccrual loans $ 2,722 $ 2,101
Restructured loans $ 552 $ 564
Loans 90 days past due
and accruing $ 1,266 $ 1,111
Other real estate owned $ 139 $ 263
Total nonperforming assets
and past due loans $ 15,350 $ 7,672
Allowance for credit losses
to gross loans, at period end 0.71% 0.92%
Nonperforming and 90 day past-due loans
to total loans at period end 0.48% 0.48%
Nonperforming loans and 90 day past-due
loans to total assets, at
period end 0.35% 0.33%