Company Quick10K Filing
Quick10K
First United
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$21.30 7 $151
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-09-26 Other Events, Exhibits
8-K 2019-09-16 Regulation FD
8-K 2019-09-05 Regulation FD
8-K 2019-07-18 Other Events
8-K 2019-07-15 Earnings, Exhibits
8-K 2019-06-19 Other Events, Exhibits
8-K 2019-05-16 Shareholder Vote
8-K 2019-05-16 Regulation FD, Exhibits
8-K 2019-04-30 Other Events
8-K 2019-04-09 Earnings, Exhibits
8-K 2019-03-27 Other Events, Exhibits
8-K 2019-03-11 Earnings, Exhibits
8-K 2019-02-01 Exhibits
8-K 2018-12-19 Other Events, Exhibits
8-K 2018-09-26 Other Events, Exhibits
8-K 2018-08-08 Earnings, Exhibits
8-K 2018-06-20 Other Events, Exhibits
8-K 2018-05-17 Officers, Shareholder Vote, Exhibits
8-K 2018-05-09 Earnings, Exhibits
8-K 2018-03-09 Earnings, Exhibits
8-K 2018-01-02 Other Events
PB Prosperity Bancshares 4,418
IBTX Independent Bank Group 2,141
PPBI Pacific Premier Bancorp 1,812
SBCF Seacoast Banking of Florida 1,205
BY Byline Bancorp 644
BHBK Blue Hills Bancorp 616
AROW Arrow Financial 475
EQBK Equity Bancshares 404
STND Standard Avb Financial 131
GFED Guaranty Federal Bancshares 106
FUNC 2019-06-30
Part I. Financial Information
Item 1. Financial Statements
Note 1 – Basis of Presentation
Note 2 – Earnings per Common Share
Note 3 – Net Gains
Note 4 – Investments
Note 5 – Loans and Related Allowance for Loan Losses
Note 6 - Other Real Estate Owned
Note 7 – Fair Value of Financial Instruments
Note 8 – Accumulated Other Comprehensive Loss
Note 9 – Leases
Note 10 –Borrowed Funds
Note 11 – Employee Benefit Plans
Note 12 - Equity Compensation Plan Information
Note 13 – Letters of Credit and Off Balance Sheet Liabilities
Note 14 – Derivative Financial Instruments
Note 15 – Assets and Liabilities Subject To Enforceable Master Netting Arrangements
Note 16 – Adoption of New Accounting Standards and Effects of New Accounting Pronouncements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 func-20190630xex31_1.htm
EX-31.2 func-20190630xex31_2.htm
EX-32 func-20190630xex32.htm

First United Earnings 2019-06-30

FUNC 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 func-20190630x10q.htm 10-Q 20190630 10Q Q2

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



        For quarterly period ended June 30, 2019



    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT



        For the transition period from _______________ to ________________



Commission file number 0-14237



First United Corporation

(Exact name of registrant as specified in its charter)



Maryland

 

52-1380770

(State or other jurisdiction of
incorporation or organization)

 

(I. R. S. Employer Identification No.)



 

 

19 South Second Street, Oakland, Maryland

 

21550-0009

(Address of principal executive offices)

 

(Zip Code)



(800) 470-4356

(Registrant's telephone number, including area code)



Securities registered pursuant to Section 12(b) of the Act:



Title of each class

Trading Symbols

Name of each exchange on which registered

Common Stock

FUNC

Nasdaq Stock Market



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes    No 



Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes    No 



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.  (Check one): 



Large accelerated filer

Accelerated filer 

Non-accelerated filer 

Smaller reporting company 

Emerging growth company 

 



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act. 



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    No 



Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 7,105,775 shares of common stock, par value $.01 per share, as of July 31, 2019.



 


 

 



INDEX TO QUARTERLY REPORT

FIRST UNITED CORPORATION 





 

Page

PART I.  FINANCIAL INFORMATION

Item 1.

Financial Statements (unaudited)



Consolidated Statement of Financial Condition – June 30, 2019 and December 31, 2018



Consolidated Statement of Operations – for the six and three months ended June 30, 2019 and 2018



Consolidated Statement of Comprehensive Income – for the six and three months ended June 30, 2019 and 2018



Consolidated Statement of Changes in Shareholders’ Equity – for three months ended March 31, June 30, 2019 and 2018



Consolidated Statement of Cash Flows – for the six months ended June 30, 2019 and 2018



Notes to Consolidated Financial Statements

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

42 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

64 

Item 4.

Controls and Procedures

64 



 

 

PART II. OTHER INFORMATION

65 

Item 1.

Legal Proceedings

65 

Item 1A.  

Risk Factors

65 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

65 

Item 3.

Defaults upon Senior Securities

65 

Item 4.

Mine Safety Disclosures

65 

Item 5.

Other Information

65 

Item 6.

Exhibits

65 

SIGNATURES

66 



 

2


 

 

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements



FIRST UNITED CORPORATION

Consolidated Statement of Financial Condition

(In thousands, except per share data)









 

 

 

 

 

 



 

 

 

 

 

 



 

June 30,
2019

 

December 31,
2018



 

(Unaudited)

 

 

 

Assets

 

 

 

 

 

 

Cash and due from banks

 

$

38,584 

 

$

22,187 

Interest bearing deposits in banks

 

 

405 

 

 

1,354 

Cash and cash equivalents

 

 

38,989 

 

 

23,541 

Investment securities – available for sale (at fair value)

 

 

135,809 

 

 

137,641 

Investment securities – held to maturity (fair value $102,503 at June 30, 2019 and $93,760 at December 31, 2018)

 

 

97,499 

 

 

94,010 

Restricted investment in bank stock, at cost

 

 

4,415 

 

 

5,394 

Loans

 

 

1,003,616 

 

 

1,007,714 

Allowance for loan losses

 

 

(11,976)

 

 

(11,047)

Net loans

 

 

991,640 

 

 

996,667 

Premises and equipment, net

 

 

38,138 

 

 

37,855 

Goodwill and other intangible assets, net

 

 

11,004 

 

 

11,004 

Bank owned life insurance

 

 

43,908 

 

 

43,317 

Deferred tax assets

 

 

6,208 

 

 

7,844 

Other real estate owned

 

 

5,531 

 

 

6,598 

Operating lease right-of-use asset

 

 

2,594 

 

 

 —

Accrued interest receivable and other assets

 

 

29,894 

 

 

20,645 

Total Assets

 

$

1,405,629 

 

$

1,384,516 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Non-interest bearing deposits

 

$

281,307 

 

$

262,250 

Interest bearing deposits

 

 

841,774 

 

 

805,277 

Total deposits

 

 

1,123,081 

 

 

1,067,527 

Short-term borrowings

 

 

31,155 

 

 

77,707 

Long-term borrowings

 

 

100,929 

 

 

100,929 

Operating lease liability

 

 

3,177 

 

 

 —

Accrued interest payable and other liabilities

 

 

20,492 

 

 

20,649 

Dividends payable

 

 

640 

 

 

638 

Total Liabilities

 

 

1,279,474 

 

 

1,267,450 

Shareholders’ Equity: 

 

 

 

 

 

 

Common Stock – par value $.01 per share;
Authorized 25,000 shares; issued and outstanding
7,106 shares at June 30, 2019 and 7,087 at December 31, 2018

 

 

71 

 

 

71 

Surplus

 

 

32,133 

 

 

31,921 

Retained earnings

 

 

113,951 

 

 

109,477 

Accumulated other comprehensive loss

 

 

(20,000)

 

 

(24,403)

Total Shareholders’ Equity

 

 

126,155 

 

 

117,066 

Total Liabilities and Shareholders’ Equity

 

$

1,405,629 

 

$

1,384,516 



See accompanying notes to the consolidated financial statements

 

3


 

 

FIRST UNITED CORPORATION

Consolidated Statement of Operations

(In thousands, except per share data)







 

 

 

 

 

 



 

 

 

 

 

 



 

Six Months Ended



 

June 30,



 

2019

 

2018



 

(Unaudited)

Interest income

 

 

 

 

 

 

Interest and fees on loans

 

$

24,686 

 

$

21,408 

Interest on investment securities

 

 

 

 

 

 

Taxable

 

 

2,917 

 

 

2,921 

Exempt from federal income tax

 

 

522 

 

 

473 

Total investment income

 

 

3,439 

 

 

3,394 

Other

 

 

358 

 

 

284 

Total interest income

 

 

28,483 

 

 

25,086 

Interest expense

 

 

 

 

 

 

Interest on deposits

 

 

3,736 

 

 

1,784 

Interest on short-term borrowings

 

 

131 

 

 

124 

Interest on long-term borrowings

 

 

1,743 

 

 

1,728 

Total interest expense

 

 

5,610 

 

 

3,636 

Net interest income

 

 

22,873 

 

 

21,450 

Provision for loan losses

 

 

682 

 

 

716 

Net interest income after provision for loan losses

 

 

22,191 

 

 

20,734 

Other operating income

 

 

 

 

 

 

Net gains

 

 

44 

 

 

181 

Service charges on deposit accounts

 

 

1,074 

 

 

1,120 

Other service charges

 

 

433 

 

 

440 

Trust department

 

 

3,547 

 

 

3,305 

Debit card income

 

 

1,276 

 

 

1,201 

Bank owned life insurance

 

 

591 

 

 

584 

Brokerage commissions

 

 

441 

 

 

551 

Other

 

 

254 

 

 

210 

Total other income

 

 

7,616 

 

 

7,411 

Total other operating income

 

 

7,660 

 

 

7,592 

Other operating expenses

 

 

 

 

 

 

Salaries and employee benefits

 

 

12,364 

 

 

12,038 

FDIC premiums

 

 

294 

 

 

303 

Equipment

 

 

1,819 

 

 

1,436 

Occupancy

 

 

1,418 

 

 

1,252 

Data processing

 

 

1,995 

 

 

1,843 

Professional services

 

 

522 

 

 

643 

Contract labor

 

 

331 

 

 

337 

Line rentals

 

 

415 

 

 

430 

Other real estate owned

 

 

929 

 

 

493 

Other

 

 

2,344 

 

 

2,541 

Total other operating expenses

 

 

22,431 

 

 

21,316 

Income before income tax expense

 

 

7,420 

 

 

7,010 

Provision for income tax expense

 

 

1,667 

 

 

1,488 

Net Income

 

$

5,753 

 

$

5,522 

Basic and diluted net income per common share

 

$

0.81 

 

$

0.78 

Weighted average number of basic and diluted shares outstanding

 

 

7,094 

 

 

7,072 

Dividends declared per common share

 

$

0.18 

 

$

0.18 



See accompanying notes to the consolidated financial statements

 

4


 

 

FIRST UNITED CORPORATION

Consolidated Statement of Operations

(In thousands, except per share data)





 

 

 

 

 

 



 

 

 

 

 

 



 

Three Months Ended



 

June 30,



 

2019

 

2018



 

(Unaudited)

Interest income

 

 

 

 

 

 

Interest and fees on loans

 

$

12,496 

 

$

10,927 

Interest on investment securities

 

 

           

 

 

           

Taxable

 

 

1,450 

 

 

1,474 

Exempt from federal income tax

 

 

242 

 

 

235 

Total investment income

 

 

1,692 

 

 

1,709 

Other

 

 

223 

 

 

88 

Total interest income

 

 

14,411 

 

 

12,724 

Interest expense

 

 

 

 

 

 

Interest on deposits

 

 

1,965 

 

 

928 

Interest on short-term borrowings

 

 

28 

 

 

94 

Interest on long-term borrowings

 

 

891 

 

 

834 

Total interest expense

 

 

2,884 

 

 

1,856 

Net interest income

 

 

11,527 

 

 

10,868 

Provision for loan losses

 

 

333 

 

 

269 

Net interest income after provision for loan losses

 

 

11,194 

 

 

10,599 

Other operating income

 

 

 

 

 

 

Net gains

 

 

30 

 

 

147 

Service charges on deposit accounts

 

 

555 

 

 

557 

Other service charges

 

 

225 

 

 

211 

Trust department

 

 

1,832 

 

 

1,641 

Debit card income

 

 

676 

 

 

648 

Bank owned life insurance

 

 

288 

 

 

285 

Brokerage commissions

 

 

203 

 

 

306 

Other

 

 

130 

 

 

87 

Total other income

 

 

3,909 

 

 

3,735 

Total other operating income

 

 

3,939 

 

 

3,882 

Other operating expenses

 

 

 

 

 

 

Salaries and employee benefits

 

 

6,146 

 

 

6,119 

FDIC premiums

 

 

183 

 

 

170 

Equipment

 

 

936 

 

 

753 

Occupancy

 

 

706 

 

 

614 

Data processing

 

 

1,054 

 

 

911 

Professional services

 

 

318 

 

 

307 

Contract labor

 

 

175 

 

 

161 

Line rentals

 

 

198 

 

 

219 

Other real estate owned

 

 

786 

 

 

108 

Other

 

 

1,239 

 

 

1,263 

Total other operating expenses

 

 

11,741 

 

 

10,625 

Income before income tax expense

 

 

3,392 

 

 

3,856 

Provision for income tax expense

 

 

790 

 

 

840 

Net Income

 

$

2,602 

 

$

3,016 

Basic and diluted net income per common share

 

$

0.37 

 

$

0.43 

Weighted average number of basic and diluted shares outstanding

 

 

7,100 

 

 

7,077 

Dividends declared per common share

 

$

0.09 

 

$

0.09 



See accompanying notes to the consolidated financial statements



 

5


 

 

FIRST UNITED CORPORATION

Consolidated Statement of Comprehensive Income

(In thousands)





 

 

 

 

 

 



 

 

 

 

 

 



 

Six Months Ended



 

June 30,



 

2019

 

2018

Comprehensive Income (in thousands)

 

(Unaudited)

Net Income

 

$

5,753 

 

$

5,522 

Other comprehensive income, net of tax and reclassification adjustments:

 

 

 

 

 

 

Net unrealized (losses)/gains on investments with OTTI

 

 

(274)

 

 

1,590 

Net unrealized gains/(losses) on all other AFS securities

 

 

2,482 

 

 

(1,308)

Net unrealized gains on HTM securities

 

 

118 

 

 

83 

Net unrealized (losses)/gains on cash flow hedges

 

 

(801)

 

 

551 

Net unrealized gains/(losses) on pension

 

 

2,836 

 

 

(794)

Net unrealized gains on SERP

 

 

42 

 

 

58 

Other comprehensive income, net of tax

 

 

4,403 

 

 

180 

Comprehensive income

 

$

10,156 

 

$

5,702 



See accompanying notes to the consolidated financial statements





FIRST UNITED CORPORATION

Consolidated Statement of Comprehensive Income

(In thousands)





 

 

 

 

 

 



 

 

 

 

 

 



 

Three Months Ended



 

June 30,



 

2019

 

2018

Comprehensive Income (in thousands)

 

(Unaudited)

Net Income

 

$

2,602 

 

$

3,016 

Other comprehensive income, net of tax and reclassification adjustments:

 

 

 

 

 

 

Net unrealized (losses)/gains on investments with OTTI

 

 

(194)

 

 

945 

Net unrealized gains/(losses) on all other AFS securities

 

 

1,577 

 

 

(230)

Net unrealized gains on HTM securities

 

 

63 

 

 

38 

Net unrealized (losses)/gains on cash flow hedges

 

 

(486)

 

 

108 

Net unrealized gains/(losses) on pension

 

 

707 

 

 

(1,530)

Net unrealized gains on SERP

 

 

21 

 

 

29 

   Other comprehensive income/(loss), net of tax

 

 

1,688 

 

 

(640)

Comprehensive income

 

$

4,290 

 

$

2,376 



See accompanying notes to the consolidated financial statements

 

6


 

 

FIRST UNITED CORPORATION

Consolidated Statement of Changes in Shareholders’ Equity

(In thousands, except per share data)









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Common
Stock

 

Surplus

 

Retained
Earnings

 

Accumulated
Other
Comprehensive
Loss

 

Total
Shareholders'
Equity

Balance at January 1, 2019

 

$

71 

 

$

31,921 

 

$

109,477 

 

$

(24,403)

 

$

117,066 

Net income

 

 

 

 

 

 

 

 

3,151 

 

 

 

 

 

3,151 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

2,715 

 

 

2,715 

Stock based compensation

 

 

 

 

 

67 

 

 

 

 

 

 

 

 

67 

Common stock issued

 

 

 

 

 

39 

 

 

 

 

 

 

 

 

39 

Common stock dividend declared -
$.09 per share

 

 

 

 

 

 

 

 

(639)

 

 

 

 

 

(639)

Balance at March 31, 2019

 

$

71 

 

$

32,027 

 

$

111,989 

 

$

(21,688)

 

$

122,399 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

2,602 

 

 

 

 

 

2,602 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

1,688 

 

 

1,688 

Stock based compensation

 

 

 

 

 

67 

 

 

 

 

 

 

 

 

67 

Common stock issued

 

 

 

 

 

39 

 

 

 

 

 

 

 

 

39 

Common stock dividend declared -
$.09 per share

 

 

 

 

 

 

 

 

(640)

 

 

 

 

 

(640)

Balance at June 30, 2019

 

$

71 

 

$

32,133 

 

$

113,951 

 

$

(20,000)

 

$

126,155 





FIRST UNITED CORPORATION

Consolidated Statement of Changes in Shareholders’ Equity

(In thousands, except per share data)







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Common
Stock

 

Surplus

 

Retained
Earnings

 

Accumulated
Other
Comprehensive
Loss

 

Total
Shareholders'
Equity

Balance at January 1, 2018

 

$

71 

 

$

31,553 

 

$

101,359 

 

$

(24,593)

 

$

108,390 

Net income

 

 

 

 

 

 

 

 

2,506 

 

 

 

 

 

2,506 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

820 

 

 

820 

Stock based compensation

 

 

 

 

 

53 

 

 

 

 

 

 

 

 

53 

Common stock dividend declared -
$.09 per share

 

 

 

 

 

 

 

 

(635)

 

 

 

 

 

(635)

Balance at March 31, 2018

 

$

71 

 

$

31,606 

 

$

103,230 

 

$

(23,773)

 

$

111,134 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

3,016 

 

 

 

 

 

3,016 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(640)

 

 

(640)

Stock based compensation

 

 

 

 

 

63 

 

 

 

 

 

 

 

 

63 

Common stock issued

 

 

 

 

 

40 

 

 

 

 

 

 

 

 

40 

Common stock dividend declared -
$.09 per share

 

 

 

 

 

 

 

 

(639)

 

 

 

 

 

(639)

Balance at June 30, 2018

 

$

71 

 

$

31,709 

 

$

105,607 

 

$

(24,413)

 

$

112,974 



See accompanying notes to the consolidated financial statements

 

7


 

 

FIRST UNITED CORPORATION

Consolidated Statement of Cash Flows

(In thousands)



 

 

 

 

 

 



 

 

 

 

 

 



 

Six Months Ended



 

June 30,



 

2019

 

2018



 

(Unaudited)

Operating activities

 

 

 

 

 

 

Net income

 

$

5,753 

 

$

5,522 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

           

 

 

           

Provision for loan losses

 

 

682 

 

 

716 

Depreciation

 

 

1,529 

 

 

1,117 

Stock compensation

 

 

134 

 

 

116 

Gains on sales of other real estate owned

 

 

(11)

 

 

(183)

Write-downs of other real estate owned

 

 

828 

 

 

478 

Originations of loans held for sale

 

 

(6,122)

 

 

(7,166)

Proceeds from sale of loans held for sale

 

 

5,861 

 

 

6,820 

Gains from sale of loans held for sale

 

 

(45)

 

 

(55)

Losses on disposal of fixed assets

 

 

 

 

 —

Net (accretion)/amortization of investment securities discounts and premiums- AFS

 

 

(2)

 

 

27 

Net amortization of investment securities discounts and premiums- HTM

 

 

20 

 

 

40 

Gains on sales/calls of investment securities – available-for-sale

 

 

 —

 

 

(126)

Earnings on bank owned life insurance

 

 

(591)

 

 

(584)

Amortization of deferred loan fees

 

 

(336)

 

 

(358)

Amortization of operating lease right-of-use asset

 

 

136 

 

 

 —

Increase in accrued interest receivable and other assets

 

 

(5,138)

 

 

(1,673)

Increase in deferred tax benefit

 

 

(2)

 

 

(744)

Decrease in operating lease liability

 

 

(140)

 

 

 —

(Decrease)/increase in accrued interest payable and other liabilities

 

 

(666)

 

 

2,203 

Net cash provided by operating activities

 

 

1,891 

 

 

6,150 

Investing activities

 

 

 

 

 

         

Proceeds from maturities/calls of investment securities available-for-sale

 

 

4,228 

 

 

6,058 

Proceeds from maturities/calls of investment securities held-to-maturity

 

 

3,323 

 

 

3,297 

Proceeds from sales of investment securities available-for-sale

 

 

5,378 

 

 

 —

Purchases of investment securities available-for-sale

 

 

(4,744)

 

 

(1,405)

Purchases of investment securities held-to-maturity

 

 

(6,832)

 

 

 —

Proceeds from sales of other real estate owned

 

 

870 

 

 

1,637 

Net decrease in FHLB stock

 

 

979 

 

 

872 

Net decrease/(increase) in loans

 

 

4,367 

 

 

(23,969)

Purchases of loans

 

 

 —

 

 

(25,168)

Purchases of premises and equipment

 

 

(1,813)

 

 

(5,413)

Net cash provided by/(used in) investing activities

 

 

5,756 

 

 

(44,091)

Financing activities

 

 

 

 

 

 

Net increase in deposits

 

 

55,554 

 

 

1,730 

Proceeds from sale of common stock

 

 

78 

 

 

40 

Cash dividends on common stock

 

 

(1,279)

 

 

(1,274)

Net decrease in short-term borrowings

 

 

(46,552)

 

 

(916)

Payments on long-term borrowings

 

 

 —

 

 

(20,000)

Net cash provided by/(used in) financing activities

 

 

7,801 

 

 

(20,420)

Increase/(decrease) in cash and cash equivalents

 

 

15,448 

 

 

(58,361)

Cash and cash equivalents at beginning of the year

 

 

23,541 

 

 

83,752 

Cash and cash equivalents at end of period

 

$

38,989 

 

$

25,391 

Supplemental information

 

 

 

 

 

 

Interest paid

 

$

5,562 

 

$

3,506 

Taxes paid

 

$

671 

 

$

 —

Non-cash investing activities:

 

 

 

 

 

 

Transfers from loans to other real estate owned

 

$

620 

 

$

294 

Initial recognition of operating lease right-of-use assets

 

$

2,730 

 

$

 —

Initial recognition of operating lease liabilities

 

$

3,317 

 

$

 —

See accompanying notes to the consolidated financial statements

 

8


 

 

FIRST UNITED CORPORATION

NoteS to Consolidated Financial Statements (UNAUDITED)





Note 1 – Basis of Presentation



The accompanying unaudited consolidated financial statements of First United Corporation and its consolidated subsidiaries, including First United Bank & Trust (the “Bank”), have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information, as required by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 270, Interim Reporting, and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X.  Accordingly, they do not include all the information and footnotes required for annual financial statements.  In the opinion of management, all adjustments considered necessary for a fair presentation, consisting of normal recurring items, have been included.  Operating results for the six and three-month periods ended June 30, 2019 are not necessarily indicative of the results that may be expected for the full year or for any future interim period.  These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in First United Corporation’s Annual Report on Form 10-K for the year ended December 31, 2018.  For purposes of comparability, certain prior period amounts have been reclassified to conform to the 2019 presentation.  Such reclassifications had no impact on net income or equity.



As used in these notes, the term “the Corporation” refers to First United Corporation and, unless the context clearly requires otherwise, its consolidated subsidiaries.



The Corporation has evaluated events and transactions occurring subsequent to the statement of financial condition date of June 30, 2019 for items that should potentially be recognized or disclosed in these financial statements.

 

Note 2 – Earnings Per Common Share



Basic earnings per common share is derived by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period and does not include the effect of any potentially dilutive common stock equivalents.  Diluted earnings per share is derived by dividing net income available to common shareholders by the weighted-average number of shares outstanding, adjusted for the dilutive effect of outstanding common stock equivalents.  No common stock equivalents were outstanding at June 30, 2019.



The following tables set forth the calculation of basic and diluted earnings per common share for the six- and three-month periods ended June 30, 2019 and 2018:







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Six months ended June 30,



 

2019

 

2018



 

 

 

 

Average

 

Per Share

 

 

 

 

Average

 

Per Share

(in thousands, except for per share amount)

 

Income

 

Shares

 

Amount

 

Income

 

Shares

 

Amount

Basic and Diluted Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

5,753 

 

7,094 

 

$

0.81 

 

$

5,522 

 

7,072 

 

$

0.78 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Three months ended June 30,



 

2019

 

2018



 

 

 

 

Average

 

Per Share

 

 

 

 

Average

 

Per Share

(in thousands, except for per share amount)

 

Income

 

Shares

 

Amount

 

Income

 

Shares

 

Amount

Basic and Diluted Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,602 

 

7,100 

 

$

0.37 

 

$

3,016 

 

7,077 

 

$

0.43 

 

 

9


 

 

Note 3 – Net Gains



The following table summarizes the gain/(loss) activity for the six- and three-month periods ended June 30, 2019 and 2018:









 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Six Months Ended

 

Three Months Ended



 

June 30,

 

June 30,

(in thousands)

 

2019

 

2018

 

2019

 

2018

Net gains/(losses):

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

Realized gains

 

$

73 

 

$

145 

 

$

73 

 

$

145 

Realized losses

 

 

(73)

 

 

(19)

 

 

(67)

 

 

(10)

Gains on sale of consumer loans

 

 

45 

 

 

55 

 

 

25 

 

 

12 

Losses on disposal of fixed assets

 

 

(1)

 

 

 —

 

 

(1)

 

 

 —

Net gains

 

$

44 

 

$

181 

 

$

30 

 

$

147 

 

Note 4 – Investments



The investment portfolio is classified and accounted for based on the guidance of ASC Topic 320, Investments – Debt and Equity Securities.



The amortized cost of debt securities classified as available-for-sale is adjusted for the amortization of premiums to the first call date, if applicable, or to maturity, and for the accretion of discounts to maturity, or, in the case of mortgage-backed securities, over the estimated life of the security.  Such amortization and accretion is included in interest income from investments.  Interest and dividends are included in interest income from investments.  Gains and losses on the sale of securities are recorded using the specific identification method. 



 

10


 

 

The following table shows a comparison of amortized cost and fair values of investment securities at June 30, 2019 and December 31, 2018:







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

Amortized
Cost

 

Gross
Unrealized
Gains

 

Gross
Unrealized
Losses

 

Fair
Value

 

OTTI
in AOCL

June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies

 

$

30,000 

 

$

 —

 

$

167 

 

$

29,833 

 

$

 —

Commercial mortgage-backed agencies

 

 

42,487 

 

 

143 

 

 

284 

 

 

42,346 

 

 

 —

Collateralized mortgage obligations

 

 

34,010 

 

 

179 

 

 

62 

 

 

34,127 

 

 

 —

Obligations of states and political subdivisions

 

 

14,379 

 

 

252 

 

 

 —

 

 

14,631 

 

 

 —

Collateralized debt obligations

 

 

18,387 

 

 

 —

 

 

3,515 

 

 

14,872 

 

 

(2,341)

Total available for sale

 

$

139,263 

 

$

574 

 

$

4,028 

 

$

135,809 

 

$

(2,341)

Held to Maturity:

 

&nb