First United Corporation Announces Fourth Quarter And Full Year 2020 Earnings

OAKLAND, Md., Feb. 19, 2021 /PRNewswire/ — First United Corporation (NASDAQ: FUNC), a bank holding company and the parent company of First United Bank & Trust (the “Bank”), today announced earnings results for the full year and three-month periods ended December 31, 2020 and 2019.

Fourth Quarter 2020 Highlights:

• Consolidated net income increased 72% to $5.0 million compared to $2.9 million for the fourth quarter of 2019
• Basic and diluted net income per common share were both $.72 compared to $.41 for the fourth quarter of 2019, a 76% increase year over year
• Pre-tax, pre-provision earnings increased 61% for the fourth quarter of 2020 compared to the fourth quarter of 2019
• Mortgage loan production, primarily in loans sold to the secondary market, totaled $42.8 million for the quarter, leading to strong net gains of $0.9 million
• Fee income of $8.5 million driven by strong wealth management revenue as assets under management increased to $1.4 billion at December 31, 2020 due to expansion of existing customer relationships, addition of new client relationships and favorable market returns
• Asset quality remained strong, with low delinquency and most modified loans returning to full principal and interest payments

“Throughout 2020 we focused on working with our local businesses and consumer borrowers to provide payment relief, fee waivers, foreclosure suspension, and non-traditional means of providing our banking services,” commented Carissa L. Rodeheaver, Chairman, President and Chief Executive Officer.  “As we executed successfully against our financial and operating strategies, we were able to close $145.0 million of mortgage loans due to robust real estate activity in our markets, while deposit activity soared as businesses and consumers conservatively built cash balances.  This had the added benefit of enabling us to cultivate and grow new relationships.  Our wealth management professionals continued to provide expert advice and counsel to their clients through turbulent markets and a disrupted economy.  Additionally, we provided financial support to our local non-profits and charity organizations who were also impacted by the 2020 health crisis.  The year culminated in 10% year-over-year growth in earnings per share and a 3.35% dividend yield for our shareholders.  These efforts, amidst a global pandemic, social unrest, and a volatile economic environment, demonstrate our passion and commitment to our customers, communities and shareholders. I am very proud of our associates as they have demonstrated flexibility and adaptability during these challenging times.”

Financial Highlights for the Comparable Periods of 2020 and 2019:

• Net income increased 9% to $14.3 million in 2020 as compared to $13.1 million in 2019; pre-tax, pre-provision income increased 34% to $23.8 million as compared to $17.9 million in 2019
• Net interest income increased $2.2 million for the year ended December 31, 2020, when compared with the same period of 2019. Highlights include:
• Increased fee income driven by Paycheck Protection Program (“PPP”) loan origination fees
• Margin compression in the context of a 1.0% rate on PPP loans, reduction in Federal Funds rate of 150 basis points early in 2020 resulting in lower yields on new loans and repricing of existing loans to lower rates, and increased cash levels
• Growth of non-interest bearing and low-cost core deposits
• The ratio of the allowance for loan losses (“ALL”) to loans outstanding was 1.41% at December 31, 2020 and 1.19% at December 31, 2019. The ALL to loans outstanding, excluding PPP loan balances of $114.0 million, was 1.55% at December 31, 2020.
• Total provision expense was $5.4 million and $1.3 million for the years ended December 31, 2020 and 2019, respectively
• Conservatively increased provision expense during 2020 due to economic uncertainty related to the pandemic
• Increased net charge offs related to a single commercial participation loan that moved from…