FUNC · First United Corporation

First United Corporation delivered solid Q1 2026 financial results, with GAAP net income rising 15.5% year-over-year to $6.7 million ($1.03 per diluted share), supported by a $2.1 million increase in net interest income—driven by higher loan yields (up 21 bps), reinvestment gains in the securities portfolio, and $0.8 million higher interest income on federal funds sold due to elevated reserve balances at the Federal Reserve. Net interest margin improved 8 bps to 3.83% (FTE, non-GAAP), reflecting disciplined margin management amid falling funding costs—including a $0.4 million reduction in deposit interest expense despite $95.9 million in higher average deposit balances, and a $0.3 million decline in long-term borrowing expense following the repayment of $65.0 million in FHLB advances. However, loan growth remained muted: gross loans rose only $3.8 million sequentially, as $43.0 million in commercial payoffs and amortization outweighed $98.0 million in new commercial originations. Provision expense increased to $0.9 million, citing economic and political uncertainty and higher unfunded commitments—though asset quality held firm, with the ACL ratio rising to 1.31% and net charge-offs remaining low. Non-interest income grew $0.4 million year-over-year, aided by a $0.2 million BOLI death benefit and higher trust/brokerage fees, while non-interest expenses rose $1.1 million year-over-year due to salary increases and incentive payouts, partially offset by lower OREO write-downs versus Q4 2025. Management emphasized continued operational efficiency, prudent risk management, and balance sheet positioning, noting positive momentum entering 2026—though no forward guidance was provided in the press release or investor presentation.