First United Reports $7.2 Million Q3 Net Income

First United Corporation reported GAAP net income of $7.2 million for the third quarter of 2026, representing $1.11 per diluted share. This compares to $6.9 million, or $1.07 per diluted share, in the same period of 2025 and $5.7 million, or $0.88 per diluted share, in the second quarter of 2026. For the nine months ended September 30, 2026, the bank holding company recorded GAAP net income of $19.5 million, or $3.01 per diluted share, up from $18.7 million, or $2.88 per diluted share, in the prior year period.

Jason Rush, Chairman of the Board, President and CEO of First United Corporation, attributed the results to an improved net interest margin and continued growth in wealth management income. Rush noted that loan pipelines remain robust heading into the fourth quarter. He stated that the company is maintaining a disciplined approach to reserves due to continued inflationary pressures and uncertainty surrounding interest rates, while focusing on expense management and efficiency improvements.

The company’s non-GAAP net interest margin was 4.05% for the third quarter of 2026 on a fully tax equivalent basis. This increase reflected higher loan yields and reduced funding costs. Loan production in the quarter included $115.0 million in commercial loan originations and $34.7 million in residential mortgage originations. A cash dividend of $0.28 per share was declared during the period.

Provision expense for the third quarter was $1.9 million. The company cited solid growth in loans and unfunded commitments, along with continued economic and political uncertainty, as primary drivers for this expense. Operating expenses decreased by $2.0 million compared to the second quarter of 2026. This decline was largely due to a one-time, $1.7 million, net of tax, expense related to consulting fees for core processor contract negotiations that was recorded in the second quarter.

On a year-over-year basis, consolidated net income increased by $0.2 million in the third quarter. This change was driven by a $2.2 million increase in net interest income and a $0.3 million increase in non-interest income. These gains were offset by a $1.4 million increase in provision for credit losses and a $0.8 million rise in other operating expenses. Interest and fees on loans increased by $1.8 million compared to the third quarter of 2025, driven by loan growth and repricing of adjustable-rate loans.

Interest expense decreased by $1.0 million year-over-year. The company attributed this reduction to the repayment of $50.0 million in brokered certificates of deposit in January and July 2026 at maturity and $65.0 million in Federal Home Loan Bank borrowings in March 2026. Other operating income rose by $0.3 million, primarily due to increased trust and brokerage income from higher production and favorable market values on assets under management.

Other operating expenses increased by $0.8 million compared to the third quarter of 2025. Salaries and benefits rose by $0.5 million due to new hires in the West and East regions, merit increases implemented in April 2026, and higher life and health insurance costs from increased claims. Equipment, occupancy, and data processing expenses increased by $0.3 million following the implementation of new loan origination software in late 2025.