Exhibit 99.1
FIRST UNITED CORPORATION ANNOUNCES
SECOND QUARTER 2026 FINANCIAL RESULTS
OAKLAND, MARYLAND— July 20, 2026: First United Corporation (the “Corporation”, “we”, “us”, and “our”) (NASDAQ: FUNC), a bank holding company and the parent company of First United Bank & Trust (the “Bank”), today announced financial results for the three- and six-month periods ended June 30, 2026. Consolidated net income was $5.7 million on a Generally Accepted Accounting Principles (“GAAP”) basis for the second quarter of 2026, or $0.87 per diluted share, compared to $6.0 million, or $0.92 per diluted share, for the second quarter of 2025 and $6.7 million, or $1.03 per diluted share, for the first quarter of 2026. Net income for the first six months of 2026 was $12.3 million, or $1.90 per diluted share, compared to $11.8 million, or $1.81 per diluted share, for the same period of 2025. Non-GAAP net income was $7.3 million and $13.9 million for the three- and six-months ended June 30, 2026, respectively. Annualized Return on Average Assets and Return on Average Equity for the six-month period ended June 30, 2026 were 1.20% and 11.92%, respectively.
According to Jason Rush, President and CEO, “We delivered solid results this quarter. Earnings benefited from a stronger net interest margin and steady growth in income from our wealth franchise. While we recorded a one-time consulting expense of approximately $2.2 million, we believe the investment in technology and pricing initiatives will position us for improved efficiency in future years to come. Loan growth was steady in the second quarter and our loan pipelines remain robust going into the third quarter. Expense control will continue to be a focus across the organization.”
Second Quarter Financial Highlights:
- Net interest margin, on a non-GAAP, fully tax equivalent (“FTE”) basis, was 3.98% for the second quarter of 2026, reflecting increased loan yields and reduced funding costs.
- Strong loan production during the quarter, with $66.0 million in commercial loan originations and $33.9 million in residential mortgage originations.
- Provision expense was $0.8 million in the second quarter, as a result of continued economic and political uncertainty and modest loan growth, slightly offset by improved qualitative factors.
- Operating expenses increased by $2.1 million when compared to the linked quarter driven by a one-time, non-GAAP $1.7 million, net of tax, expense related to consulting fees incurred for contract negotiations with our core processor in the second quarter of 2026.
- A cash dividend of $0.26 per share was declared in the second quarter.
Income Statement Overview
On a GAAP basis, net income for the second quarter of 2026 was $5.7 million, inclusive of a $1.7 million, net of tax, third party consulting expense incurred for core contract negotiations. This compares to $6.7 million in the first quarter of 2026 and $6.0 million for the second quarter of 2025. Excluding this expense item, net income was $7.3 million on a non-GAAP basis.
| Net Income, GAAP (millions) | $5.7 | $6.7 | $6.0 |
| Net Income, non-GAAP (millions) | $7.3 | $6.6 | $6.0 |
| Diluted net income per share, GAAP | $0.87 | $1.03 | $0.92 |
| Diluted net income per share, non-GAAP | $1.13 | $1.02 | $0.92 |
Second Quarter 2026 Compared to Second Quarter 2025
Consolidated net income decreased by $0.3 million for the second quarter of 2026 when compared to the second quarter of 2025. The decrease was driven by an increase in other expense as a result of a one-time, non-GAAP $1.7 million, net of tax, consulting expense related to the core contract negotiations. This increase was partially offset by a $1.9 million increase in net interest income, an increase of $0.3 million in non-interest income, inclusive of gains, and a $0.1 million decrease in provision for credit losses. Comparing the second quarter of 2026 to the same period of 2025, interest and fees on loans increased by $1.5 million as a result of new loans booked at higher rates and the continued repricing of adjustable-rate loans. Interest expense decreased by $0.6 million when comparing year-over-year quarterly expense as a result of the repayment of a $25.0 million brokered certificate of deposit in January 2026 and $65.0 million in Federal Home Loan Bank (“FHLB”) borrowings in March 2026. Other operating income increased by $0.3 million driven by an increase in trust and brokerage income of $0.3 million as a result of increased production and favorable market values on assets under management. Other operating expenses increased by $2.8 million driven by the one-time, non-GAAP item discussed above, a $0.8 million increase in salaries and benefits as a result of filling open positions in late 2025 and 2026, normal merit increases in April 2026 and increased incentive payouts, partially offset by reduced life and health insurance expense due to reduced claims and an increase in the reduction of costs associated with loan originations related to increased loan production.
Second Quarter 2026 Compared to First Quarter 2026
Compared to the linked quarter, net income decreased by $1.0 million driven by the increased other expenses as a result of the one-time expense discussed above, partially offset by an increase in net interest income of $0.5 million and a $0.1 million decrease in provision expense. Non-interest income was stable when comparing the second quarter of 2026 to the first quarter of 2026.
Year to date 2026 compared to Year to date 2025
Net income for the six months ended June 30, 2026 was $12.3 million on a GAAP basis, inclusive of a $1.7 million, net of tax, consulting fee incurred on core contract negotiations completed in the second quarter, and $13.9 million on a non-GAAP basis compared to GAAP and non-GAAP basis income of $11.8 million for the six months ended June 30, 2025. The year-over-year increase of $0.5 million was attributable to a $3.9 million increase in net interest income an increase in other non-interest income of $0.7 million, inclusive of net gains, as a result of increased trust and brokerage income of $0.5 million, increased bank owned life insurance (“BOLI”) income of $0.2 million related to a one-time death benefit received in the first quarter of 2026, partially offset by an increase in other operating expenses of $3.9 million driven by the aforementioned consulting fee, increased salaries and benefits of $1.7 million and an increase in data processing expenses of $0.3 million. Salaries and benefits increased due to increased salaries as a result of new hires and annual merit increases in April 2026 and increased incentive payouts, partially offset by an increase in the reduction of costs associated with loan originations related to increased loan production.
Net Interest Income and Net Interest Margin
Second Quarter 2026 Compared to Second Quarter 2025
Net interest income, on a non-GAAP, FTE basis, increased by $1.9 million for the second quarter of 2026 when compared to the second quarter of 2025. This increase was driven by an increase of $1.3 million in interest income. Interest income on loans increased by $1.5 million due to the increase of 15 basis points in overall yield on the loan portfolio as new loans were booked at higher rates during 2025 and 2026 as well as the upward repricing of adjustable-rate loans. Investment income remained stable as management continued to reinvest cashflows back into the portfolio resulting in an increase in yield of 12 basis points. Interest income on federal funds sold decreased by $0.3 million due to a decrease of $22.2 million in average cash balances held at the Federal Reserve Bank as a result of loan growth in the second quarter of 2026. Interest expense decreased by $0.6 million in the second quarter of 2026 when compared to the second quarter of 2025. Interest on deposits increased slightly by $0.2 million despite an $84.4 million increase in average deposit balances, primarily in interest bearing demand and money market deposits. Long-term borrowing interest expense decreased $0.8 million due to a decrease of average balances of $90.0 million for the second quarter of 2026 when compared to the same period of 2025 primarily related to the repayment of $65.0 million and $25.0 million of FHLB advances at their maturities in March of 2026 and September of 2025, respectively.
Second Quarter 2026 Compared to First Quarter 2026
Comparing the second quarter of 2026 to the first quarter of 2026, net interest income, on a non-GAAP, FTE basis, increased by $0.5 million. Interest income increased by $0.5 million driven by an increase in average loan balances of $66.1 million in the second quarter of 2026. Interest expense was stable when comparing the second quarter of 2026 to the first quarter of 2026. Long-term borrowing expense decreased by $0.5 million due to the repayment of $65.0 million in maturing FHLB advances in March of 2026. Management’s strategic focus on margin management during the second quarter of 2026 resulted in a 15 basis point increase in the net interest margin to 3.98% compared to 3.83% for the first quarter of 2026.
Year to date 2026 compared to Year to date 2025
Comparing the six months ended June 30, 2026 to the six months ended June 30, 2025, net interest income, on a non-GAAP, FTE basis, increased by $4.0 million. Interest income increased by $3.0 million, primarily driven by an increase of $2.3 million on interest and fees on loans as average loan balances increased by $39.9 million and an increase in yield by 14 basis points. Interest expense on deposits increased slightly by $0.2 million despite an increase in average deposit balances of $89.7 million driven by increases of $26.5 million in demand deposit accounts, $86.2 million in retail money market balances, partially offset by decreases in savings balances of $10.8 million and $15.0 million in brokered time deposits. Interest expense on short-term borrowings remained stable and interest expense on long-term borrowings decreased by $1.2 million as a result of a decrease in average balances of $62.0 million, primarily due to the repayment of $65.0 million of FHLB advances at their maturities in March 2026. The net interest margin for the six months ended June 30, 2026 was 3.89% compared to 3.61% for the six months ended June 30, 2025.
Non-Interest Income
Second Quarter 2026 Compared to Second Quarter 2025
Other operating income increased by $0.4 million driven by an increase in trust and brokerage income of $0.3 million as a result of increased production of new accounts as well as favorable market values in assets under management. Net gains decreased by $0.1 million as new residential mortgage production was booked in house as compared to selling to secondary market outlets.
Second Quarter 2026 Compared to First Quarter 2026
On a linked quarter basis, other operating income, including net gains, remained flat. Net gains decreased by $0.1 million related to the gain on the sale of a branch office recognized in the first quarter of 2026. BOLI income decreased by $0.2 million and was attributable to the receipt of a one-time death benefit received in the first quarter of 2026. These decreases were offset by an increase in debit card income of $0.1 million due to normal fluctuations and an increase in trust and brokerage income of $0.1 million.
Year to date 2026 compared to Year to date 2025
Comparing the six months ended June 30, 2026 to the same period of 2025, other operating income, inclusive of net gains, increased by $0.7 million, driven by an increase in trust and brokerage income of $0.5 million as a result of increased production of new business as well as favorable market values in assets under management, as well as an increase in BOLI income of $0.2 million as previously mentioned.
Non-Interest Expense
Second Quarter 2026 Compared to Second Quarter 2025
Other operating expenses increased by $2.8 million driven by a $0.8 million increase in salaries and benefits as a result of filling open positions throughout 2025, normal merit increases in April 2026 and increased incentive payouts, partially offset by reduced life and health insurance expense due to reduced claims and increased reductions in costs associated with loan originations. Professional services expenses increased by $2.1 million due to the $1.7 million, net of tax, third party consulting fee discussed above. These increases were partially offset by reductions in check fraud-related expenses and OREO expenses.
Second Quarter 2026 Compared to First Quarter 2026
Other operating expenses increased by $2.1 million driven by the one-time, non-GAAP $1.7 million, net of tax, consulting fee incurred with core contract negotiations. All other expenses were stable when comparing the second quarter of 2026 to the first quarter of 2026 as we continue a strategic focus on expense control.
Year to date 2026 compared to Year to date 2025
Comparing the six months ended June 30, 2026 to the same period of 2025, other operating expenses increased by $3.9 million driven by the one-time, non-GAAP expense previously discussed, a $1.7 million increase in salaries and benefits as a result of new hires late in 2025 and early 2026, normal merit increases in April 2026 and increased incentive payouts, partially offset by reduced life and health insurance expense due to reduced claims and increased reductions in costs associated with loan originations and a $0.3 million increase in equipment, occupancy and data processing expenses as a result of new software implementation. These increases were partially offset by reductions in OREO expenses and other miscellaneous expenses such as check fraud expenses, employee benefits expenses and miscellaneous expense related to share repurchase tax recorded in the second quarter of 2025.
The effective income tax rates, as a percentage of income, for the six-month periods ended June 30, 2026 and 2025 were 24.1% and 24.7%, respectively.
Balance Sheet Overview
Total assets at June 30, 2026 were $2.1 billion, representing a $5.4 million decrease since December 31, 2025. During the six months of 2026, cash and interest-bearing deposits in other banks decreased by $46.4 million. The investment portfolio decreased by $0.2 million. The decreases were partially offset by increases in gross loans of $50.4 million as well as an increase in pension assets of $3.2 million due to increased market values.
Total liabilities at June 30, 2026 were $1.9 billion, representing a $14.1 million decrease since December 31, 2025. Total deposits increased by $0.4 million when compared to December 31, 2025. In January 2026, a $25.0 million brokered certificate of deposit with an interest rate of 4.23% matured and was repaid. Savings and money market accounts increased by $27.6 million due primarily to the expansion of current and new relationships throughout the first six months of 2026. Non-interest-bearing demand deposits decreased by $11.6 million and interest-bearing demand deposits increased by $13.3 million. Retail time deposits decreased by $3.9 million since December 31, 2025. Short-term borrowings increased by $50.0 million at June 30, 2026 compared to December 31, 2025 as a result of overnight borrowings in anticipation of loan funding. These borrowings were subsequently fully repaid in July.
Outstanding loans of $1.6 billion at June 30, 2026 reflected a $50.4 million increase since December 31, 2025.
| Loan Type (in millions) | ||
|---|---|---|
| Commercial | $16.6 | $31.9 |
| Residential Mortgages | $20.8 | $10.2 |
| Consumer | $9.3 | $8.3 |
| Gross Loans | $46.7 | $50.4 |
Since December 31, 2025, commercial real estate loans increased by $55.0 million as a result of new business relationships as well as additional growth in existing relationships; acquisition and development loans increased by $11.9 million; commercial and industrial loans decreased by $35.0 million as a result of payoffs related to approximately $15.0 million due to competitive pricing, approximately $5.3 million related to sales of businesses, approximately $8.0 million as a result of a refinance to another institution, and the payoff of a floorplan line of credit. Residential mortgage loans increased by $10.2 million as a result of robust mortgage production booked in house as opposed to the selling to the secondary market outlets, offset slightly by normal amortization; and consumer loans increased by $8.3 million related to the purchase of a consumer loan pool in the second quarter of 2026.
New commercial loan production for the second quarter of 2026 was approximately $66.0 million. The pipeline of commercial loans as of June 30, 2026 was robust, and unfunded committed commercial construction loans totaled approximately $42.0 million. Commercial amortization and payoffs were approximately $71.6 million through June 30, 2026, due primarily to pay-offs of short-term commercial loans as well as normal amortizations of the commercial loan portfolio.
New consumer mortgage loan production for the second quarter of 2026 was approximately $33.9 million, with most of this production comprised of in-house mortgages. The pipeline of in-house, portfolio loans as of June 30, 2026 was $20.0 million. Unfunded commitments related to residential construction loans totaled $20.7 million at June 30, 2026.
Total deposits of $1.7 billion at June 30, 2026 remained flat when compared to December 31, 2025.
| Deposit Type (in millions) | ||
|---|---|---|
| Non-Interest-Bearing | $(9.9) | $(11.6) |
| Interest-Bearing Demand | $14.6 | $13.3 |
| Savings and Money Market | $(16.8) | $27.6 |
| Time Deposits- Brokered | - | $(25.0) |
| Time Deposits- Retail | $(3.1) | $(3.9) |
| Total Deposits | $(15.2) | $0.4 |
In January 2026, a $25.0 million brokered certificate of deposit, with an interest rate of 4.23%, was repaid at its maturity. Savings and money market accounts increased by $27.6 million due primarily to the expansion of current and new relationships throughout the first six months of 2026. Non-interest-bearing demand deposits decreased by $11.6 million, offset by an increase in interest-bearing demand deposits of $13.3 million, primarily related to municipality accounts. Retail time deposits decreased by $3.9 million since December 31, 2025.
The book value of the Corporation’s common stock was $32.91 per share at June 30, 2026 compared to $31.33 per share at December 31, 2025. At June 30, 2026, there were 6,453,836 basic outstanding shares and 6,462,604 diluted outstanding shares of common stock. The increase in the book value at June 30, 2026 was due to the undistributed net income of $9.0 million for the first six months of 2026.
Asset Quality
The allowance for credit losses (“ACL”) was $20.6 million at June 30, 2026 compared to $19.0 million at June 30, 2025 and $19.5 million at December 31, 2025. The provision for credit losses was $0.8 million for the quarter ended June 30, 2026 compared to $0.9 million for both the quarters ended March 31, 2026 and June 30, 2025. Provision for credit losses was $1.7 million and $1.5 million for the first six months of 2026 and 2025, respectively. Asset quality remained strong during the first six months of 2026. Net charge-offs of $0.1 million were recorded for the quarter ended June 30, 2026 compared to net charge-offs of $0.2 million for both the quarter ended June 30, 2025 and the quarter ended March 31, 2026. The ratio of the ACL to loans outstanding was 1.31% at June 30, 2026 compared to 1.28% at December 31, 2025 and 1.27% at June 30, 2025.
The ratio of net charge offs to average loans was 0.04% and 0.07% for the six-month periods ended June 30, 2026 and 2025, respectively. The commercial and industrial portfolio had net charge offs of (0.10%) and (0.25%) for the six-month periods ended June 30, 2026 and 2025, respectively. Net charge offs in consumer loans decreased in the first six months of 2026 when compared to the first six months of 2025 from (0.96%) to (0.86%). The decrease was primarily driven by charge-offs in unsecured consumer loans in 2025. Details of the ratios, by loan type, are shown below. Our special assets team continues to actively collect on charged-off loans, resulting in overall low net charge-off ratios.
Ratio of Net (Charge Offs)/Recoveries to Average Loans
| Loan Type | ||
|---|---|---|
| Commercial Real Estate | 0.00% | 0.00% |
| Acquisition & Development | 0.03% | 0.13% |
| Commercial & Industrial | (0.10 | (0.25 |
| Residential Mortgage | 0.01% | 0.01% |
| Consumer | (0.86 | (0.96 |
| Total Net Charge Offs | (0.04 | (0.07 |
Non-accrual loans totaled $4.5 million at June 30, 2026 compared to $4.2 million at December 31, 2025. The slight increase in non-accrual balances at June 30, 2026 was related to one commercial loan moving to non-accrual status in the first quarter.
Non-accrual loans that have been subject to partial charge-offs totaled $0.1 million at June 30, 2026 and $0.2 million at December 31, 2025. Loans secured by 1-4 family residential real estate properties in the process of foreclosure totaled $1.2 million at June 30, 2026 and $0.5 million at December 31, 2025. The increase was due to one mortgage loan of approximately $1.1 million that moved in the second quarter. As a percentage of the loan portfolio, accruing loans past due 30 days or more increased to 0.50% at June 30, 2026 compared to 0.32% at December 31, 2025 and 0.27% as of June 30, 2025. This increase was attributable to one large commercial loan.
ABOUT FIRST UNITED CORPORATION
First United Corporation is a Maryland corporation chartered in 1985 and a financial holding company registered with the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956, as amended, that elected financial holding company status in 2021. The Corporation’s primary business is serving as the parent company of the Bank, First United Statutory Trust I (“Trust I”) and First United Statutory Trust II (“Trust II” and together with Trust I, “the Trusts”), both Connecticut statutory business trusts. The Trusts were formed for the purpose of selling trust-preferred securities that qualified as Tier 1 capital. The Bank has two consumer finance company subsidiaries- Oak First Loan Center, Inc., a West Virginia corporation, and OakFirst Loan Center, LLC, a Maryland limited liability company – and one subsidiary that it uses to hold real estate acquired through foreclosure or by deed in lieu of foreclosure – First OREO Trust, a Maryland statutory trust. In addition, the Bank owns 99.9% of the limited partnership interests in Liberty Mews Limited Partnership, a Maryland limited partnership formed for the purpose of acquiring, developing and operating low-income housing units in Garrett County, Maryland, and a 99.9% non-voting membership interest in MCC FUBT Fund, LLC, an Ohio limited liability company formed for the purpose of acquiring, developing and operating low-income housing units in Allegany County, Maryland and Mineral County, West Virginia. The Corporation’s website is www.mybank.com
FIRST UNITED CORPORATION
Oakland, MD
Stock Symbol : FUNC
Financial Highlights - Unaudited
| (Dollars in thousands, except per share data) | |||
|---|---|---|---|
| Results of Operations: | |||
| Interest income | $26,169 | $24,871 | $48,933 |
| Interest expense | 7,583 | 8,164 | 16,210 |
| Net interest income | 18,586 | 16,707 | 32,723 |
| Provision for credit losses | 781 | 860 | 1,516 |
| Other operating income | 5,319 | 4,940 | 9,762 |
| Net gains | 39 | 146 | 238 |
| Other operating expense | 15,765 | 12,974 | 25,550 |
| Income before taxes | $7,398 | $7,959 | $15,657 |
| Income tax expense | 1,731 | 1,975 | 3,867 |
| Net income | $5,667 | $5,984 | $11,790 |
| Per share data: | |||
| Basic net income per share | $0.88 | $0.92 | $1.82 |
| Diluted net income per share | $0.87 | $0.92 | $1.81 |
| Adjusted Basic net income (1) | $1.14 | $0.92 | $1.82 |
| Adjusted Diluted net income (1) | $1.13 | $0.92 | $1.81 |
| Dividends declared per share | $0.26 | $0.22 | $0.44 |
| Book value | $32.91 | $29.43 | |
| Diluted book value | $32.86 | $29.38 | |
| Tangible book value per share | $31.16 | $27.64 | |
| Diluted Tangible book value per share | $31.12 | $27.59 | |
| Closing market value | $44.11 | $31.01 | |
| Market Range: | |||
| High | $45.98 | $32.09 | |
| Low | $36.27 | $25.90 | |
| Shares outstanding at period end: Basic | 6,453,836 | 6,494,611 | |
| Shares outstanding at period end: Diluted | 6,462,604 | 6,506,493 | |
| Performance ratios: (Year to Date Period End, annualized) | |||
| Return on average assets | 1.20% | 1.20 | |
| Adjusted return on average assets (1) | 1.36% | 1.20 | |
| Return on average shareholders' equity | 11.92% | 12.78 | |
| Adjusted return on average shareholders' equity (1) | 13.49% | 12.78 | |
| Net interest margin (Non-GAAP), includes tax exempt income of $138 and $103 | 3.89% | 3.61 | |
| Net interest margin GAAP | 3.87% | 3.60 | |
| Efficiency ratio - non-GAAP (2) | 57.49% | 59.66 |
| (1) See reconciliation of this non-GAAP financial measure provided elsewhere herein. |
| (2) Efficiency ratio is a non-GAAP measure calculated by dividing total operating expenses by the sum of tax equivalent net interest income and other operating income, less gains/(losses) on sales of securities and/or fixed assets and costs incurred on core contract renewal. |
| Financial Condition at period end: | ||
| Assets | $2,082,092 | $2,087,453 |
| Earning assets | $1,854,045 | $1,807,780 |
| Gross loans | $1,572,131 | $1,521,704 |
| Commercial Real Estate | $625,821 | $570,808 |
| Acquisition and Development | $102,211 | $90,272 |
| Commercial and Industrial | $242,013 | $277,034 |
| Residential Mortgage | $547,118 | $536,912 |
| Consumer | $54,968 | $46,678 |
| Investment securities | $279,300 | $279,534 |
| Total deposits | $1,735,513 | $1,735,149 |
| Noninterest bearing | $441,365 | $453,036 |
| Interest bearing | $1,294,148 | $1,282,113 |
| Shareholders' equity | $212,374 | $203,634 |
| Capital ratios: | ||
| Tier 1 to risk weighted assets | 15.26% | 15.36% |
| Common Equity Tier 1 to risk weighted assets | 13.48% | 13.52% |
| Tier 1 Leverage | 12.70% | 12.21% |
| Total risk based capital | 16.51% | 16.61% |
| Asset quality: | ||
| Net charge-offs for the quarter | $(96) | $(99) |
| Nonperforming assets: (Period End) | ||
| Nonaccrual loans | $4,514 | $4,192 |
| Loans 90 days past due and accruing | 391 | 477 |
| Total nonperforming loans and 90 day past due | $4,905 | $4,669 |
| Other real estate owned | - | $1,083 |
| Other repossessed assets | $2,780 | $2,802 |
| Modified loans | $1,199 | $1,209 |
| Allowance for credit losses to gross loans | 1.31% | 1.28% |
| Allowance for credit losses to non-accrual loans | 456.16% | 464.46% |
| Allowance for credit losses to non-performing assets | 267.94% | 227.61% |
| Non-performing and 90 day past due loans to total loans | 0.31% | 0.31% |
| Non-performing loans and 90 day past due loans to total assets | 0.24% | 0.22% |
| Non-accrual loans to total loans | 0.29% | 0.28% |
| Non-performing assets to total assets | 0.37% | 0.41% |
FIRST UNITED CORPORATION
Oakland, MD
Stock Symbol : FUNC
Financial Highlights - Unaudited
| (Dollars in thousands, except per share data) | September 30, 2025 | ||||
|---|---|---|---|---|---|
| Results of Operations: | |||||
| Interest income | $26,169 | $25,711 | $26,153 | $25,762 | $24,062 |
| Interest expense | 7,583 | 7,637 | 8,166 | 8,359 | 8,046 |
| Net interest income | 18,586 | 18,074 | 17,987 | 17,403 | 16,016 |
| Provision for credit losses | 781 | 879 | 717 | 510 | 656 |
| Other operating income | 5,319 | 5,208 | 5,330 | 5,074 | 4,822 |
| Net gains | 39 | 132 | (97) | 261 | 92 |
| Other operating expense | 15,765 | 13,693 | 14,869 | 12,986 | 12,576 |
| Income before taxes | $7,398 | $8,842 | $7,634 | $9,242 | $7,698 |
| Income tax expense | 1,731 | 2,179 | 1,857 | 2,294 | 1,892 |
| Net income | $5,667 | $6,663 | $5,777 | $6,948 | $5,806 |
| Per share data: | |||||
| Basic net income per share | $0.88 | $1.03 | $0.89 | $1.07 | $0.90 |
| Diluted net income per share | $0.87 | $1.03 | $0.89 | $1.07 | $0.89 |
| Adjusted basic net income (1) | $1.14 | $1.02 | $1.10 | $1.07 | $0.90 |
| Adjusted diluted net income (1) | $1.13 | $1.02 | $1.10 | $1.07 | $0.89 |
| Dividends declared per share | $0.26 | $0.26 | $0.26 | $0.26 | $0.22 |
| Book value | $32.91 | $31.84 | $31.33 | $30.65 | $28.35 |
| Diluted book value | $32.86 | $31.78 | $31.27 | $30.59 | $28.27 |
| Tangible book value per share | $31.16 | $30.08 | $29.56 | $28.87 | $26.55 |
| Diluted Tangible book value per share | $31.12 | $30.02 | $29.50 | $28.82 | $26.47 |
| Closing market value | $44.11 | $36.64 | $37.19 | $36.77 | $30.02 |
| Market Range: | |||||
| High | $45.98 | $40.53 | $40.79 | $38.41 | $41.61 |
| Low | $36.27 | $35.02 | $33.63 | $32.02 | $29.38 |
| Shares outstanding at period end: Basic | 6,453,836 | 6,446,717 | 6,499,476 | 6,496,908 | 6,478,634 |
| Shares outstanding at period end: Diluted | 6,462,604 | 6,459,155 | 6,511,358 | 6,508,790 | 6,497,454 |
| Performance ratios: (Year to Date Period End, annualized) | |||||
| Return on average assets | 1.20% | 1.29 | 1.21% | 1.24% | 1.19%% |
| Adjusted return on average assets (1) | 1.36% | 1.28 | 1.28% | 1.24% | 1.19%% |
| Return on average shareholders' equity | 11.92% | 13.06 | 12.70% | 13.23% | 12.83%% |
| Adjusted return on average shareholders' equity (1) | 13.49% | 12.99 | 13.39% | 13.23% | 12.83%% |
| Net interest margin (Non-GAAP), includes tax exempt income of $138 and $103 | 3.89% | 3.83 | 3.67% | 3.64% | 3.56%% |
| Net interest margin GAAP | 3.87% | 3.82 | 3.66% | 3.63% | 3.55%% |
| Efficiency ratio - non-GAAP (2) | 57.49% | 58.45 | 58.19% | 58.73% | 59.95%% |
| (1) See reconciliation of this non-GAAP financial measure provided elsewhere herein. | |||||
| (2) Efficiency ratio is a non-GAAP measure calculated by dividing total operating expenses by the sum of tax equivalent net interest income and other operating income, less gains/(losses) on sales of securities and/or fixed assets and costs incurred on core contract renewal. |
| Line item | September 30, 2025 | ||||
|---|---|---|---|---|---|
| Financial Condition at period end: | |||||
| Assets | $2,082,092 | $2,039,010 | $2,087,453 | $2,023,974 | $1,979,753 |
| Earning assets | $1,854,045 | $1,810,557 | $1,807,780 | $1,784,056 | $1,762,891 |
| Gross loans | $1,572,131 | $1,525,466 | $1,521,704 | $1,496,762 | $1,479,869 |
| Commercial Real Estate | $625,821 | $609,491 | $570,808 | $554,418 | $532,764 |
| Acquisition and Development | $102,211 | $97,785 | $90,272 | $93,968 | $94,063 |
| Commercial and Industrial | $242,013 | $246,192 | $277,034 | $279,079 | $282,370 |
| Residential Mortgage | $547,118 | $526,314 | $536,912 | $521,317 | $520,072 |
| Consumer | $54,968 | $45,684 | $46,678 | $47,980 | $50,600 |
| Investment securities | $279,300 | $282,711 | $279,534 | $278,898 | $275,143 |
| Total deposits | $1,735,513 | $1,750,703 | $1,735,149 | $1,678,902 | $1,623,574 |
| Noninterest bearing | $441,365 | $451,303 | $453,036 | $429,986 | $422,415 |
| Interest bearing | $1,294,148 | $1,299,400 | $1,282,113 | $1,248,916 | $1,201,159 |
| Shareholders' equity | $212,374 | $205,262 | $203,634 | $199,099 | $183,694 |
| Capital ratios: | |||||
| Tier 1 to risk weighted assets | 15.26% | 15.82 | 15.36% | 15.59% | 14.87%% |
| Common Equity Tier 1 to risk weighted assets | 13.48% | 13.94 | 13.52% | 13.68% | 12.97%% |
| Tier 1 Leverage | 12.70% | 12.23 | 12.21% | 12.10% | 11.94%% |
| Total risk based capital | 16.51% | 17.07 | 16.61% | 16.84% | 16.10%% |
| Asset quality: | |||||
| Net (charge-offs)/recoveries for the quarter | $(96) | $(198 | $(99) | $(435) | $(360)) |
| Nonperforming assets: (Period End) | |||||
| Nonaccrual loans | $4,514 | $4,695 | $4,192 | $3,825 | $4,026 |
| Loans 90 days past due and accruing | 391 | 66 | 477 | 801 | 233 |
| Total nonperforming loans and 90 day past due | $4,905 | $4,761 | $4,669 | $4,626 | $4,259 |
| Other real estate owned | - | $1,083 | $1,083 | $2,718 | $3,062 |
| Other repossessed assets | $2,780 | $2,692 | $2,802 | $3,043 | $2,802 |
| Modified/restructured loans | $1,199 | $1,955 | $1,209 | $998 | $1,021 |
| Allowance for credit losses to gross loans | 1.31% | 1.31 | 1.28% | 1.28% | 1.25%% |
| Allowance for credit losses to non-accrual loans | 456.16% | 424.94 | 464.46% | 499.06% | 458.69%% |
| Allowance for credit losses to non-performing assets | 267.94% | 233.73 | 227.61% | 183.78% | 182.43%% |
| Non-performing and 90 day past due loans to total loans | 0.31% | 0.31 | 0.31% | 0.31% | 0.29%% |
| Non-performing loans and 90 day past due loans to total assets | 0.24% | 0.23 | 0.22% | 0.23% | 0.22%% |
| Non-accrual loans to total loans | 0.29% | 0.31 | 0.28% | 0.26% | 0.27%% |
| Non-performing assets to total assets | 0.37% | 0.42 | 0.41% | 0.51% | 0.51%% |
| (Dollars in thousands - Unaudited) | |||
|---|---|---|---|
| Assets | |||
| Cash and due from banks | $84,195 | $89,220 | $129,830 |
| Interest bearing deposits in banks | 993 | 627 | 1,782 |
| Cash and cash equivalents | 85,188 | 89,847 | 131,612 |
| Investment securities – available for sale (at fair value) | 107,997 | 109,004 | 107,144 |
| Investment securities – held to maturity (at cost) | 170,259 | 172,672 | 171,361 |
| Equity investments with readily determinable fair market values | 1,044 | 1,035 | 1,029 |
| Restricted investment in bank stock, at cost | 1,621 | 1,621 | 4,630 |
| Loans held for sale | — | 132 | 130 |
| Loans | 1,572,131 | 1,525,466 | 1,521,704 |
| Unearned fees | (592) | (512 | (476)) |
| Allowance for credit losses | (20,591) | (19,951 | (19,470)) |
| Net loans | 1,550,948 | 1,505,003 | 1,501,758 |
| Premises and equipment, net | 29,550 | 30,020 | 29,665 |
| Goodwill and other intangible assets | 11,279 | 11,361 | 11,444 |
| Bank owned life insurance | 50,501 | 50,125 | 50,360 |
| Deferred tax assets | 8,072 | 9,141 | 8,730 |
| Other real estate owned, net | — | 1,083 | 1,083 |
| Operating lease asset | 862 | 939 | 1,015 |
| Pension asset | 24,044 | 20,036 | 20,798 |
| Accrued interest receivable and other assets | 40,727 | 36,991 | 46,694 |
| Total Assets | $2,082,092 | $2,039,010 | $2,087,453 |
| Liabilities and Shareholders’ Equity | |||
| Liabilities: | |||
| Non-interest bearing deposits | $441,365 | $451,303 | $453,036 |
| Interest bearing deposits | 1,294,148 | 1,299,400 | 1,282,113 |
| Total deposits | 1,735,513 | 1,750,703 | 1,735,149 |
| Short-term borrowings | 69,233 | 19,588 | 17,661 |
| Long-term borrowings | 30,929 | 30,929 | 95,929 |
| Operating lease liability | 1,009 | 1,095 | 1,180 |
| Allowance for credit loss on off balance sheet exposures | 1,463 | 1,418 | 1,218 |
| Accrued interest payable and other liabilities | 29,893 | 28,323 | 30,992 |
| Dividends payable | 1,678 | 1,692 | 1,690 |
| Total Liabilities | 1,869,718 | 1,833,748 | 1,883,819 |
| Shareholders’ Equity: | |||
| Common Stock – par value $0.01 per share; Authorized 25,000,000 shares; issued and outstanding 6,453,836 shares at June 30, 2026; 6,494,611 at June 30, 2025; and 6,499,476 at December 31, 2025 | 64 | 64 | 65 |
| Surplus | 19,514 | 19,360 | 21,551 |
| Retained earnings | 216,262 | 212,255 | 207,284 |
| Accumulated other comprehensive loss | (23,466) | (26,417 | (25,266)) |
| Total Shareholders’ Equity | 212,374 | 205,262 | 203,634 |
| Total Liabilities and Shareholders’ Equity | $2,082,092 | $2,039,010 | $2,087,453 |
| In thousands | Q4 | |||||
|---|---|---|---|---|---|---|
| Interest income | ||||||
| Interest and fees on loans | $23,779 | $22,502 | $90,328 | $23,219 | $23,060 | $21,755 |
| Interest on investment securities | ||||||
| Taxable | 1,907 | 1,880 | 7,210 | 1,845 | 1,826 | 1,763 |
| Exempt from federal income tax | 59 | 59 | 218 | 59 | 57 | 45 |
| Total investment income | 1,966 | 1,939 | 7,428 | 1,904 | 1,883 | 1,808 |
| Other | 424 | 1,270 | 3,092 | 1,030 | 819 | 499 |
| Total interest income | 26,169 | 25,711 | 100,848 | 26,153 | 25,762 | 24,062 |
| Interest expense | ||||||
| Interest on deposits | 7,033 | 6,631 | 27,524 | 7,044 | 7,009 | 6,683 |
| Interest on short-term borrowings | 26 | 11 | 75 | 17 | 17 | 20 |
| Interest on long-term borrowings | 524 | 995 | 5,136 | 1,105 | 1,333 | 1,343 |
| Total interest expense | 7,583 | 7,637 | 32,735 | 8,166 | 8,359 | 8,046 |
| Net interest income | 18,586 | 18,074 | 68,113 | 17,987 | 17,403 | 16,016 |
| Credit loss expense/(credit) | ||||||
| Loans | 736 | 679 | 2,345 | 480 | 480 | 657 |
| Debt securities held to maturity | — | — | 43 | — | 43 | — |
| Off balance sheet credit exposures | 45 | 200 | 355 | 237 | (13 | (1)) |
| Provision for credit losses | 781 | 879 | 2,743 | 717 | 510 | 656 |
| Net interest income after provision for credit losses | 17,805 | 17,195 | 65,370 | 17,270 | 16,893 | 15,360 |
| Other operating income | ||||||
| Net gains on investments, available for sale | — | — | 97 | — | 97 | — |
| Gains on sale of residential mortgage loans | 39 | 86 | 533 | 132 | 163 | 92 |
| Gains/(Losses) on disposal of fixed assets | — | 46 | (228) | (229) | 1 | — |
| Net gains/(losses) | 39 | 132 | 402 | (97) | 261 | 92 |
| Other Income | ||||||
| Service charges on deposit accounts | 568 | 547 | 2,255 | 568 | 563 | 547 |
| Other service charges | 204 | 189 | 845 | 207 | 218 | 206 |
| Trust department | 2,684 | 2,554 | 9,824 | 2,667 | 2,448 | 2,323 |
| Debit card income | 1,046 | 931 | 4,057 | 1,173 | 980 | 921 |
| Bank owned life insurance | 376 | 539 | 1,408 | 364 | 355 | 341 |
| Brokerage commissions | 388 | 382 | 1,445 | 308 | 346 | 421 |
| Other | 53 | 66 | 332 | 43 | 164 | 63 |
| Total other income | 5,319 | 5,208 | 20,166 | 5,330 | 5,074 | 4,822 |
| Total other operating income | 5,358 | 5,340 | 20,568 | 5,233 | 5,335 | 4,914 |
| Other operating expenses | ||||||
| Salaries and employee benefits | 8,157 | 8,201 | 29,347 | 7,108 | 7,589 | 7,331 |
| FDIC premiums | 274 | 279 | 1,051 | 273 | 266 | 245 |
| Equipment | 525 | 521 | 2,217 | 559 | 515 | 578 |
| Occupancy | 690 | 725 | 2,860 | 817 | 679 | 689 |
| Data processing | 1,739 | 1,664 | 6,243 | 1,623 | 1,517 | 1,503 |
| Marketing | 193 | 234 | 904 | 288 | 182 | 238 |
| Professional services | 2,702 | 570 | 2,449 | 745 | 639 | 476 |
| Contract labor | 189 | 166 | 634 | 178 | 127 | 163 |
| Telephone | 93 | 96 | 380 | 97 | 89 | 98 |
| Other real estate owned | 59 | 123 | 2,235 | 1,866 | 69 | 92 |
| Investor relations | 85 | 60 | 306 | 55 | 57 | 62 |
| Contributions | 81 | 65 | 344 | 120 | 90 | 56 |
| Other | 978 | 989 | 4,435 | 1,140 | 1,167 | 1,045 |
| Total other operating expenses | 15,765 | 13,693 | 53,405 | 14,869 | 12,986 | 12,576 |
| Income before income tax expense | 7,398 | 8,842 | 32,533 | 7,634 | 9,242 | 7,698 |
| Provision for income tax expense | 1,731 | 2,179 | 8,018 | 1,857 | 2,294 | 1,892 |
| Net Income | $5,667 | $6,663 | $24,515 | $5,777 | $6,948 | $5,806 |
| Basic net income per common share | $0.88 | $1.03 | $3.78 | $0.89 | $1.07 | $0.90 |
| Diluted net income per common share | $0.87 | $1.03 | $3.77 | $0.89 | $1.07 | $0.89 |
| Weighted average number of basic shares outstanding | 6,451 | 6,483 | 6,490 | 6,499 | 6,496 | 6,474 |
| Weighted average number of diluted shares outstanding | 6,461 | 6,494 | 6,504 | 6,510 | 6,508 | 6,490 |
| Dividends declared per common share | $0.26 | $0.26 | $0.96 | $0.26 | $0.26 | $0.22 |
Non-GAAP Financial Measures (unaudited)
Reconciliation of as reported (GAAP) and non-GAAP financial measures
The following tables below provide a reconciliation of certain financial measures calculated under generally accepted accounting principles ("GAAP") (as reported) and non-GAAP. A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with GAAP in the United States. The Company’s management believes the presentation of non-GAAP financial measures provide investors with a greater understanding of the Company’s operating results in addition to the results measured in accordance with GAAP. While management uses these non-GAAP measures in its analysis of the Company’s performance, this information should not be viewed as a substitute for financial results determined in accordance with GAAP or considered to be more important than financial results determined in accordance with GAAP.
The following non-GAAP financial measures exclude gains on disposal of fixed assets and consulting fees incurred with core processing contract in 2026.
| (in thousands, except for per share amount) | |||
|---|---|---|---|
| Net income - as reported | $5,667 | $5,984 | $11,790 |
| Adjustments: | |||
| Gain on disposal of fixed assets | — | — | — |
| Consulting fee on core processing contract | 2,179 | — | — |
| Income tax effect of adjustments | (527) | — | — |
| Adjusted net income (non-GAAP) | $7,319 | $5,984 | $11,790 |
| Basic earnings per share - as reported | $0.88 | $0.92 | $1.82 |
| Adjustments: | |||
| Gain on disposal of fixed assets | — | — | — |
| Consulting fee on core processing contract | 0.26 | — | — |
| Adjusted basic earnings per share (non-GAAP) | $1.14 | $0.92 | $1.82 |
| Diluted earnings per share - as reported | $0.87 | $0.92 | $1.81 |
| Adjustments: | |||
| Gain on disposal of fixed assets | — | — | — |
| Consulting fee on core processing contract | 0.26 | — | — |
| Adjusted diluted earnings per share (non-GAAP) | $1.13 | $0.92 | $1.81 |
| (in thousands, except per share data) | |||
|---|---|---|---|
| Per Share Data | |||
| Basic net income per share - as reported | $0.88 | $0.92 | $1.82 |
| Basic net income per share - non-GAAP | 1.14 | 0.92 | 1.82 |
| Diluted net income per share - as reported | $0.87 | $0.92 | $1.81 |
| Diluted net income per share - non-GAAP | 1.13 | 0.92 | 1.81 |
| Basic book value per share | $32.91 | $29.43 | |
| Diluted book value per share | $32.86 | $29.38 |
Significant Ratios:
| Return on Average Assets - as reported | 1.20% | 1.20% |
| Adjustments: | ||
| Gain on disposal of fixed assets | (0.01 | — |
| Consulting fee on core processing contract | 0.17% | — |
| Adjusted Return on Average Assets (non-GAAP) | 1.36% | 1.20% |
| Return on Average Equity - as reported | 11.92% | 12.78% |
| Gain on disposal of fixed assets | (0.03 | — |
| Consulting fee on core processing contract | 1.60% | — |
| Adjusted Return on Average Equity (non-GAAP) | 13.49% | 12.78% |
| (dollars in thousands) | Average Balance | ||||
|---|---|---|---|---|---|
| Assets | |||||
| Loans | $1,549,332 | 23,812 | 6.16% | $1,489,485 | 6.01% |
| Investment Securities: | |||||
| Taxable | 291,217 | 1,907 | 2.63% | 283,914 | 2.51% |
| Non taxable | 7,488 | 106 | 5.68% | 7,424 | 5.46% |
| Total | 298,705 | 2,013 | 2.70% | 291,338 | 2.58% |
| Federal funds sold | 28,424 | 344 | 4.85% | 50,675 | 4.97% |
| Interest-bearing deposits with other banks | 861 | 6 | 2.80% | 3,799 | 2.11% |
| Other interest earning assets | 2,656 | 74 | 11.18% | 5,815 | 6.62% |
| Total earning assets | 1,879,978 | 26,249 | 5.60% | 1,841,112 | 5.43% |
| Allowance for credit losses | (20,249) | (18,685) | |||
| Non-earning assets | 179,343 | 175,323 | |||
| Total Assets | $2,039,072 | $1,997,750 | |||
| Liabilities and Shareholders’ Equity | |||||
| Deposits | |||||
| Interest-bearing demand deposits | $389,083 | $1,600 | 1.65% | $357,725 | $1.70% |
| Interest-bearing money markets- retail | 560,943 | 3,753 | 2.68% | 473,262 | 3.03% |
| Interest-bearing money markets- brokered | 1 | — | — | 496 | 4.04% |
| Savings deposits | 159,161 | 43 | 0.11% | 168,854 | 0.11% |
| Time deposits - retail | 148,020 | 1,370 | 3.71% | 147,433 | 3.05% |
| Time deposits - brokered | 25,000 | 267 | 4.28% | 50,000 | 4.16% |
| Total deposits | 1,282,208 | 7,033 | 2.20% | 1,197,770 | 2.27% |
| Short-term borrowings | 19,922 | 26 | 0.52% | 19,811 | 0.43% |
| Long-term borrowings | 30,929 | 524 | 6.80% | 120,929 | 4.49% |
| Total interest-bearing liabilities | 1,333,059 | 7,583 | 2.28% | 1,338,510 | 2.45% |
| Non-interest-bearing deposits | 463,149 | 440,779 | |||
| Other liabilities | 32,586 | 29,889 | |||
| Shareholders’ Equity | 210,278 | 188,572 | |||
| Total Liabilities and Shareholders’ Equity | $2,039,072 | $1,997,750 | |||
| Net interest income and spread | $18,666 | 3.32% | $2.98% | ||
| Net interest margin | 3.98% | 3.65% |
| (dollars in thousands) | Average Balance | ||||
|---|---|---|---|---|---|
| Assets | |||||
| Loans | $1,526,255 | $46,326 | 6.12% | $1,486,334 | $5.98% |
| Investment Securities: | |||||
| Taxable | 291,027 | 3,787 | 2.62% | 284,612 | 2.51% |
| Non taxable | 7,493 | 211 | 5.68% | 6,977 | 5.26% |
| Total | 298,520 | 3,998 | 2.70% | 291,589 | 2.57% |
| Federal funds sold | 78,697 | 1,513 | 3.88% | 46,213 | 4.42% |
| Interest-bearing deposits with other banks | 1,602 | 29 | 3.65% | 3,174 | 2.22% |
| Other interest earning assets | 3,946 | 152 | 7.77% | 5,795 | 6.82% |
| Total earning assets | 1,909,020 | 52,018 | 5.49% | 1,833,105 | 5.39% |
| Allowance for credit losses | (19,990) | (18,550) | |||
| Non-earning assets | 178,742 | 174,298 | |||
| Total Assets | $2,067,772 | $1,988,853 | |||
| Liabilities and Shareholders’ Equity | |||||
| Deposits | |||||
| Interest-bearing demand deposits | $392,655 | $3,268 | 1.68% | $366,170 | $1.75% |
| Interest-bearing money markets- retail | 554,931 | 7,428 | 2.70% | 468,732 | 3.07% |
| Interest-bearing money markets- brokered | 84 | 1 | 2.40% | 316 | 3.83% |
| Savings deposits | 159,415 | 81 | 0.10% | 170,178 | 0.10% |
| Time deposits - retail | 149,015 | 2,294 | 3.10% | 145,984 | 3.01% |
| Time deposits - brokered | 28,039 | 592 | 4.26% | 43,059 | 4.23% |
| Total deposits | 1,284,139 | 13,664 | 2.15% | 1,194,439 | 2.27% |
| Short-term borrowings | 19,259 | 37 | 0.39% | 21,423 | 0.39% |
| Long-term borrowings | 58,940 | 1,519 | 5.20% | 120,929 | 4.50% |
| Total interest-bearing liabilities | 1,362,338 | 15,220 | 2.25% | 1,336,791 | 2.45% |
| Non-interest-bearing deposits | 463,856 | 435,362 | |||
| Other liabilities | 32,985 | 30,682 | |||
| Shareholders’ Equity | 208,593 | 186,018 | |||
| Total Liabilities and Shareholders’ Equity | $2,067,772 | $1,988,853 | |||
| Net interest income and spread | $36,798 | 3.24% | $2.94% | ||
| Net interest margin | 3.89% | 3.61% |