First United Corporation Announces First Quarter 2001 Earnings

Apr 27, 2001, 01:00 ET from First United Corporation

    OAKLAND, Md., April 27 /PRNewswire/ --
 First United Corporation (Nasdaq:   FUNC), a one-bank holding company
 headquartered in Oakland, Maryland, has announced growth in earnings for the
 first quarter of 2001 over the same period in 2000.  Income for the first
 quarter of 2001 was $2.02 million, an increase of
 $.02 million or 1.00% over the $2.00 million earned during the same quarter in
 2000.  Earnings per share for the current period is $.33, which is unchanged
 as compared to the first quarter of 2000.  Book value per share was $11.22 at
 March 31, 2001, as compared to $9.67 for the quarter ending March 31, 2000.
     Return on average equity, a key ratio that measures the overall return to
 shareholders was 12.25% for the quarter ending March 31, 2001, as compared to
 the March 31, 2000, ratio of 13.10%.  This decrease is a result of the
 Company's percentage growth in shareholders equity exceeding the growth in net
 income.     Return on average assets, a profitability ratio that indicates how
 effectively a bank has used its total resources was .99% at March 31, 2001, as
 compared to 1.01% at March 31, 2000.  The return on average assets decrease
 was attributed to the growth in assets exceeding the growth in net income
 derived from those assets.  The efficiency ratio that measures the percent of
 revenue that supports overhead expenses has increased from 58.71% at March 31,
 2000, to 61.19% at March 31, 2001.  The major factor contributing to this
 change in the efficiency ratio is a result of the decrease in the net interest
 margin, as explained below.
     First United's net interest margin as a percentage of earning assets was
 3.70% at March 31, 2001, as compared to 3.91% at March 31, 2000.  The yield on
 average earning assets increased from 8.25% at March 31, 2000, to 8.57% at
 March 31, 2001.  However, the cost of funds as a percentage of average earning
 assets increased significantly from 4.34% at March 31, 2000, to 4.87% at
 March 31, 2001.
     First United's delinquency ratio at March 31, 2001 was 1.17%.  The
 delinquency ratio at March 31, 2000 was 1.16%.
     First United's risk based capital ratio at March 31, 2001, was 14.52%
 which is well above the regulatory minimum of 8.00% and the regulatory level
 to be considered well-capitalized of 10.00%.  This same ratio was 15.11% at
 March 31, 2000.
 
     Balance Sheet Review
     Total assets equaled $818.23 million at March 31, 2001.  This total is a
 decrease of  $29.36 million or 3.46% from the December 31, 2000, total asset
 number of $847.59 million.  The December 31, 2000, total Asset number included
 $20.53 million in Interest Bearing Deposits in Banks that decreased to
 $1.24 million at March 31, 2001.  This decrease is explained further in the
 section pertaining to the discussion of changes in total deposits.
     Total investment securities decreased $9.94 million from $158.81 million
 at December 31, 2000, to $148.87 million at March 31, 2001.
     During the first quarter of 2001, gross loans and leases decreased
 slightly from a total of $614.65 million at December 31, 2000, to a total of
 $614.06 million at March 31, 2001.  This equates to a decrease of $.59 million
 or .10%.  For the same time period of 2000, First United's loans grew
 $23.78 million or 4.18% to a total of $592.96 million.
     During the first quarter of 2001, 1-4 family residential mortgage loans
 grew $5.47 million and commercial mortgage loans grew $4.45 million.  This
 growth during the first quarter was offset by a decrease of $9.46 million
 within the indirect automobile installment loan portfolio.  This decrease in
 the indirect automobile installment portfolio was a direct result of
 Management's decision in the year 2000 to slow loan growth by increasing the
 credit quality standards of the portfolio as well as maintaining higher rates
 on installment loans in order to maximize yield.
     Total liabilities and subordinated debt totaled $751.03 million at
 March 31, 2001.  This total is a decrease of $31.05 million or 4.13% from the
 December 31, 2000, total of $782.08 million.  Total deposits decreased
 $40.30 million or 6.20%.  Total deposits at March 31, 2001, equaled
 $609.68 million as compared to $649.98 million at December 31, 2000.  This
 decrease in deposits was the result of two items; one, the $20.10 million of
 brokered deposits which matured in late March 2001 were not renewed, and two,
 the movement of the Trust liquid assets of approximately $28.12 million to
 investments outside of the Bank, during the first quarter of 2001.  Excluding
 these two items, core deposits grew $7.92 million during the first quarter of
 2001.  The gathering of lower cost demand deposits attributed to the majority
 of this growth, due to the success of the commercial Cash Management product
 and several other pricing initiatives developed during the first quarter of
 2001.
     Total long-term borrowings with the FHLB of Atlanta increased $10 million
 during the first quarter of 2001 to a total of $109 million, in anticipation
 of the outflow of Trust liquid assets.
     Shareholders' equity increased $1.68 million to a total of $67.20 million
 at March 31, 2001, from the December 31, 2000 total of $65.51 million.  This a
 percentage increase of  2.57%.
 
     Income Statement Review
     Total interest income during the first quarter of 2001 was $16.30 million.
 During the same quarter in 2000, total interest income was $15.21 million.
 This is an increase of $1.09 million or 7.19%.  Interest and fees on loans
 increased $1.22 million or 9.93% from a total of $12.33 million for the first
 quarter of 2000 to $13.55 million for the first quarter of 2001.  Interest on
 investment securities decreased from $2.81 million as of March 31, 2000, to
 $2.56 million as of March 31, 2001.  This is a result of Management's decision
 in the year 2000 to supplement the funding of loan growth from the Investment
 portfolio rather than through borrowed funds.
     Total interest expense was $9.36 million as of March 31, 2001, as compared
 to $8.12 million as of March 31, 2000.  This is an increase $1.25 million or
 15.38%.   Total interest on deposits for the first quarter of 2001 was
 $7.31 million.  This is an increase of $1.04 million or 16.54% over the total
 interest on deposits total of $6.27 million for the first quarter of 2000.
 Net interest income for the first quarter of 2001 was $6.94 million which is a
 decrease of  $.20 million or 2.19% from the March 31, 2000, total of
 $7.10 million.
     The provision for possible credit losses for the first quarter of 2001 was
 $.54 million as compared to $.56 million for the first quarter of 2000.  Gross
 charge-offs for the first quarter of 2001 were $.74 million and recoveries
 were $.10 million.  Gross charge-offs from the consumer installment portfolio
 amounted to $.68 million during the first quarter of 2001.  The net charge-off
 number of $.64 million for the first quarter of 2001 is $.23 million greater
 than the net charge-off total of $.41 million experienced in the first quarter
 of 2000.  Gross charge-offs for the first quarter of 2000 were $.48 million
 and recoveries for the first quarter of 2000 were  $.07 million.  Non-
 performing loans as a percentage of gross loans were .46% as of March 31,
 2001, as compared to .17% as of March 31, 2000.  This increase as of March 31,
 2001, is due to several large, well-secured commercial loans that have moved
 into non-performing status.
     Total other operating income for the first quarter of 2001 totaled
 $2.28 million as compared to $1.81 million for the first quarter of 2000.
 This is an increase of $.47 million or 25.93%.  The Trust Department's income
 as of March 31, 2001, was $.71 million.  This is an increase of 41.25% or
 $.21 million over the same time period in 2000.  A portion of this increase,
 $.11 million, is attributed to the acceleration of Trust Income as the Trust
 Department changes from a cash to an accrual accounting method in 2001.  The
 income from service charges on deposit accounts increased 11.46% or
 $.06 million to a total of $.57 million as compared to the same time period in
 2000.  This increase is a result of service fee enhancements that were
 implemented during the first quarter of 2001.   Income from First United's
 insurance subsidiaries, Oakfirst Life Insurance Company and Gonder Insurance
 Agency, increased 27.27% or $.05 million to a total of $.23 million for the
 first quarter of 2001.  Income from these subsidiaries for the first quarter
 of 2000 was $.18 million.
     Total other operating expenses were $5.74 million for the first quarter of
 2001.  Total other operating expenses for the first quarter of 2000 were
 $5.37 million.  This is an increase of $.37 million or 6.89%.  Salaries and
 Employee Benefits expense was $3.08 million in the first quarter of 2001.
 During the first quarter of 2000, this expense was $2.75 million.  This is an
 increase of 12.13% or $.33 million.  A major portion of this increase can be
 attributed to higher hospitalization costs.
     First United Corporation (Nasdaq:   FUNC) offers full-service banking
 through its banking subsidiary, First United Bank & Trust.  The Bank operates
 a traditional 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's website can be located at
 www.mybankfirstunited.com.  As of March 31, 2001, the Corporation posted
 assets of $818.23 million and had 6,080,568 shares outstanding.
 
     First United Corporation has made certain "forward-looking" statements
 with respect to this earnings release.  Such statements should not be
 construed as guarantees of future performance.  Actual results may differ from
 "forward-looking" information as a result of any number of unforeseeable
 factors, which include, but are not limited to, the effect of prevailing
 economic conditions, the overall direction of government policies,
 unforeseeable changes in the general interest rate environment, competitive
 factors in the marketplace, business risk associated with credit extensions
 and trust activities, and other risk factors.  These and other factors could
 lead to actual results, which differ, materially from management's statements
 regarding actual performance.
 
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                http://tbutton.prnewswire.com/prn/11690X17732568
 
 

SOURCE First United Corporation
    OAKLAND, Md., April 27 /PRNewswire/ --
 First United Corporation (Nasdaq:   FUNC), a one-bank holding company
 headquartered in Oakland, Maryland, has announced growth in earnings for the
 first quarter of 2001 over the same period in 2000.  Income for the first
 quarter of 2001 was $2.02 million, an increase of
 $.02 million or 1.00% over the $2.00 million earned during the same quarter in
 2000.  Earnings per share for the current period is $.33, which is unchanged
 as compared to the first quarter of 2000.  Book value per share was $11.22 at
 March 31, 2001, as compared to $9.67 for the quarter ending March 31, 2000.
     Return on average equity, a key ratio that measures the overall return to
 shareholders was 12.25% for the quarter ending March 31, 2001, as compared to
 the March 31, 2000, ratio of 13.10%.  This decrease is a result of the
 Company's percentage growth in shareholders equity exceeding the growth in net
 income.     Return on average assets, a profitability ratio that indicates how
 effectively a bank has used its total resources was .99% at March 31, 2001, as
 compared to 1.01% at March 31, 2000.  The return on average assets decrease
 was attributed to the growth in assets exceeding the growth in net income
 derived from those assets.  The efficiency ratio that measures the percent of
 revenue that supports overhead expenses has increased from 58.71% at March 31,
 2000, to 61.19% at March 31, 2001.  The major factor contributing to this
 change in the efficiency ratio is a result of the decrease in the net interest
 margin, as explained below.
     First United's net interest margin as a percentage of earning assets was
 3.70% at March 31, 2001, as compared to 3.91% at March 31, 2000.  The yield on
 average earning assets increased from 8.25% at March 31, 2000, to 8.57% at
 March 31, 2001.  However, the cost of funds as a percentage of average earning
 assets increased significantly from 4.34% at March 31, 2000, to 4.87% at
 March 31, 2001.
     First United's delinquency ratio at March 31, 2001 was 1.17%.  The
 delinquency ratio at March 31, 2000 was 1.16%.
     First United's risk based capital ratio at March 31, 2001, was 14.52%
 which is well above the regulatory minimum of 8.00% and the regulatory level
 to be considered well-capitalized of 10.00%.  This same ratio was 15.11% at
 March 31, 2000.
 
     Balance Sheet Review
     Total assets equaled $818.23 million at March 31, 2001.  This total is a
 decrease of  $29.36 million or 3.46% from the December 31, 2000, total asset
 number of $847.59 million.  The December 31, 2000, total Asset number included
 $20.53 million in Interest Bearing Deposits in Banks that decreased to
 $1.24 million at March 31, 2001.  This decrease is explained further in the
 section pertaining to the discussion of changes in total deposits.
     Total investment securities decreased $9.94 million from $158.81 million
 at December 31, 2000, to $148.87 million at March 31, 2001.
     During the first quarter of 2001, gross loans and leases decreased
 slightly from a total of $614.65 million at December 31, 2000, to a total of
 $614.06 million at March 31, 2001.  This equates to a decrease of $.59 million
 or .10%.  For the same time period of 2000, First United's loans grew
 $23.78 million or 4.18% to a total of $592.96 million.
     During the first quarter of 2001, 1-4 family residential mortgage loans
 grew $5.47 million and commercial mortgage loans grew $4.45 million.  This
 growth during the first quarter was offset by a decrease of $9.46 million
 within the indirect automobile installment loan portfolio.  This decrease in
 the indirect automobile installment portfolio was a direct result of
 Management's decision in the year 2000 to slow loan growth by increasing the
 credit quality standards of the portfolio as well as maintaining higher rates
 on installment loans in order to maximize yield.
     Total liabilities and subordinated debt totaled $751.03 million at
 March 31, 2001.  This total is a decrease of $31.05 million or 4.13% from the
 December 31, 2000, total of $782.08 million.  Total deposits decreased
 $40.30 million or 6.20%.  Total deposits at March 31, 2001, equaled
 $609.68 million as compared to $649.98 million at December 31, 2000.  This
 decrease in deposits was the result of two items; one, the $20.10 million of
 brokered deposits which matured in late March 2001 were not renewed, and two,
 the movement of the Trust liquid assets of approximately $28.12 million to
 investments outside of the Bank, during the first quarter of 2001.  Excluding
 these two items, core deposits grew $7.92 million during the first quarter of
 2001.  The gathering of lower cost demand deposits attributed to the majority
 of this growth, due to the success of the commercial Cash Management product
 and several other pricing initiatives developed during the first quarter of
 2001.
     Total long-term borrowings with the FHLB of Atlanta increased $10 million
 during the first quarter of 2001 to a total of $109 million, in anticipation
 of the outflow of Trust liquid assets.
     Shareholders' equity increased $1.68 million to a total of $67.20 million
 at March 31, 2001, from the December 31, 2000 total of $65.51 million.  This a
 percentage increase of  2.57%.
 
     Income Statement Review
     Total interest income during the first quarter of 2001 was $16.30 million.
 During the same quarter in 2000, total interest income was $15.21 million.
 This is an increase of $1.09 million or 7.19%.  Interest and fees on loans
 increased $1.22 million or 9.93% from a total of $12.33 million for the first
 quarter of 2000 to $13.55 million for the first quarter of 2001.  Interest on
 investment securities decreased from $2.81 million as of March 31, 2000, to
 $2.56 million as of March 31, 2001.  This is a result of Management's decision
 in the year 2000 to supplement the funding of loan growth from the Investment
 portfolio rather than through borrowed funds.
     Total interest expense was $9.36 million as of March 31, 2001, as compared
 to $8.12 million as of March 31, 2000.  This is an increase $1.25 million or
 15.38%.   Total interest on deposits for the first quarter of 2001 was
 $7.31 million.  This is an increase of $1.04 million or 16.54% over the total
 interest on deposits total of $6.27 million for the first quarter of 2000.
 Net interest income for the first quarter of 2001 was $6.94 million which is a
 decrease of  $.20 million or 2.19% from the March 31, 2000, total of
 $7.10 million.
     The provision for possible credit losses for the first quarter of 2001 was
 $.54 million as compared to $.56 million for the first quarter of 2000.  Gross
 charge-offs for the first quarter of 2001 were $.74 million and recoveries
 were $.10 million.  Gross charge-offs from the consumer installment portfolio
 amounted to $.68 million during the first quarter of 2001.  The net charge-off
 number of $.64 million for the first quarter of 2001 is $.23 million greater
 than the net charge-off total of $.41 million experienced in the first quarter
 of 2000.  Gross charge-offs for the first quarter of 2000 were $.48 million
 and recoveries for the first quarter of 2000 were  $.07 million.  Non-
 performing loans as a percentage of gross loans were .46% as of March 31,
 2001, as compared to .17% as of March 31, 2000.  This increase as of March 31,
 2001, is due to several large, well-secured commercial loans that have moved
 into non-performing status.
     Total other operating income for the first quarter of 2001 totaled
 $2.28 million as compared to $1.81 million for the first quarter of 2000.
 This is an increase of $.47 million or 25.93%.  The Trust Department's income
 as of March 31, 2001, was $.71 million.  This is an increase of 41.25% or
 $.21 million over the same time period in 2000.  A portion of this increase,
 $.11 million, is attributed to the acceleration of Trust Income as the Trust
 Department changes from a cash to an accrual accounting method in 2001.  The
 income from service charges on deposit accounts increased 11.46% or
 $.06 million to a total of $.57 million as compared to the same time period in
 2000.  This increase is a result of service fee enhancements that were
 implemented during the first quarter of 2001.   Income from First United's
 insurance subsidiaries, Oakfirst Life Insurance Company and Gonder Insurance
 Agency, increased 27.27% or $.05 million to a total of $.23 million for the
 first quarter of 2001.  Income from these subsidiaries for the first quarter
 of 2000 was $.18 million.
     Total other operating expenses were $5.74 million for the first quarter of
 2001.  Total other operating expenses for the first quarter of 2000 were
 $5.37 million.  This is an increase of $.37 million or 6.89%.  Salaries and
 Employee Benefits expense was $3.08 million in the first quarter of 2001.
 During the first quarter of 2000, this expense was $2.75 million.  This is an
 increase of 12.13% or $.33 million.  A major portion of this increase can be
 attributed to higher hospitalization costs.
     First United Corporation (Nasdaq:   FUNC) offers full-service banking
 through its banking subsidiary, First United Bank & Trust.  The Bank operates
 a traditional 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's website can be located at
 www.mybankfirstunited.com.  As of March 31, 2001, the Corporation posted
 assets of $818.23 million and had 6,080,568 shares outstanding.
 
     First United Corporation has made certain "forward-looking" statements
 with respect to this earnings release.  Such statements should not be
 construed as guarantees of future performance.  Actual results may differ from
 "forward-looking" information as a result of any number of unforeseeable
 factors, which include, but are not limited to, the effect of prevailing
 economic conditions, the overall direction of government policies,
 unforeseeable changes in the general interest rate environment, competitive
 factors in the marketplace, business risk associated with credit extensions
 and trust activities, and other risk factors.  These and other factors could
 lead to actual results, which differ, materially from management's statements
 regarding actual performance.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X17732568
 
 SOURCE  First United Corporation