-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I+3Rl5r3wqnt8DndM9ZkvEO24j+/D/8Y1w4CGf6/P6pmYBEKFhzc0JXUwPSuO/LD M4uYerlgA50G94N7vP48QQ== 0000763907-96-000004.txt : 19960515 0000763907-96-000004.hdr.sgml : 19960515 ACCESSION NUMBER: 0000763907-96-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST UNITED CORP/MD/ CENTRAL INDEX KEY: 0000763907 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 521380770 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14237 FILM NUMBER: 96562646 BUSINESS ADDRESS: STREET 1: 19 S SECOND ST CITY: OAKLAND STATE: MD ZIP: 21550 BUSINESS PHONE: 3013349471 MAIL ADDRESS: STREET 1: 19 S SECOND ST CITY: OAKLAND STATE: MD ZIP: 21550 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarter ended March 31, 1996 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 (I. R. S. Employer incorporation or organization) Identification no.) 19 South Second Street, Oakland, Maryland 21550-0009 (address of principal executive offices) (zip code) (301) 334-9471 Registrant's telephone number, including area code Not applicable Former name, address and former fiscal year, if changed since last report. 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. X Yes No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. Common stock, $.01 Par value--6,506,295 shares outstanding as of March 31, 1996 Preferred stock, No par value--No shares outstanding as of March 31, 1996. -01- INDEX FIRST UNITED CORPORATION PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets - March 31, 1996 (Unaudited), December 31, 1995, and March 31, 1995 (Unaudited). Consolidated Statements of Income (Unaudited) - Three months ended March 31, 1996 and 1995. Consolidated Statement of Cash Flows (Unaudited) - Three months ended March 31, 1996 and 1995. Notes to Unaudited Consolidated Financial Statements. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. PART II. OTHER INFORMATION Item 1. Legal Proceedings. Item 2. Changes in Securities. Item 3. Defaults upon Senior Securities. Item 4. Submission of Matters to a Vote of Security Holders. Item 5. Other Information. Item 6. Exhibits and Reports on Form 8-k. SIGNATURES -02- FIRST UNITED CORPORATION Consolidated Balance Sheet (In Thousands) Mar. 31, Dec. 31, Mar. 31, Assets 1996 1995 1995 (Unaudited) (*) (Unaudited) ----------------------------- Cash and due from banks $15,978 $16,011 $15,494 Investment securities: Available-for-sale: U.S. Treasury Securities 15,493 11,375 18,289 Obl. of other U S Gov. Agen. 37,343 36,424 30,360 Obl. of St. and Loc. Govt 5,508 4,023 3,566 Other investments 23,583 21,835 19,684 -------------------------- Total available-for-sale 81,927 73,657 71,899 Held-to-maturity: Obl. of other U S Govt Agen 1,528 800 3,800 Obl. of St. and Loc. Govt 4,748 4,546 5,239 Other investments 15,884 17,148 11,558 --------------------------- Total held-to-maturity 22,160 22,494 20,597 --------------------------- Total investment securities 104,087 96,151 92,496 Federal funds sold 0 0 500 Loans 356,417 360,584 344,590 Reserve for poss. credit losses (2,164) (2,120) (2,370) --------------------------- Net loans 354,253 358,464 342,220 Bank premises and equipment 9,392 9,605 9,510 Acc. int. Rec. and other assets 6,136 6,938 6,772 ---------------------------- Total Assets $489,846 $487,169 $466,992 ============================ * The balance sheet at December 31, 1995 has been derived from the audited financial statements at that date. See notes to unaudited consolidated financial statements. () Indicates Deduction -03- FIRST UNITED CORPORATION Consolidated Balance Sheet Mar. 31, Dec. 31, Mar. 31, 1996 1995 1995 (Unaudited) (*) (Unaudited) Liabiliities ------------------------------ Deposits Non-int. bearing deposits $ 46,830 $ 49,541 $ 44,155 Interest bearing deposits 380,462 374,753 362,352 --------------------------- Total deposits 427,292 424,294 406,507 Reserve for taxes, int., & Other liabilities 6,459 4,371 3,857 Fed funds purchased & other borrowed money 0 3,000 4,000 Dividends payable 846 0 743 ---------------------------- Total Liabitities 434,597 431,665 415,107 Shareholder's Equity Preferred stock -no par value Authorized and unissued; 2,000 Shares Capital Stock -par value $.01 per share: Authorized 12,000 shares; issued and outstanding 6,506 shares at March 31, 1996, 6,194 outstanding at December 31, 1995, and 6,192 outstanding at March 31, 1995 65 62 62 Surplus 27,314 23,184 23,141 Retained earnings 27,908 32,065 29,347 Unrealized (loss)gain on available-for-sale securities net of taxes (38) 193 (665) --------------------------- Total Shareholder's Equity 55,249 55,504 51,885 --------------------------- Total Liabilities and Shareholder's Equity $489,846 $487,169 $466,992 ============================ * The balance sheet at December 31, 1995 has been derived from the audited financial statements at that date. See Notes to unaudited consolidated financial statements. () Indicates Deduction -04- FIRST UNITED CORPORATION Consolidated Statement Of Income (In Thousands, except per share data) Three Months Ended March 31, 1996 1995 ------------------- (Unaudited) Interest income Interest and fees on loans $ 8,093 $ 7,471 Interest on investment securities: Taxable 1,310 1,236 Exempt from federal income tax 119 108 -------------------- 1,429 1,344 Interest on federal funds sold 63 32 -------------------- Total interest income 9,585 8,847 Interest expense Interest on deposits: Savings 462 527 Interest-bearing transaction acct. 694 583 Time, $100,000 or more 469 384 Other time 2,322 1,801 Interest on fed funds purchased & other borrowed money 25 69 -------------------- Total interest expense 3,972 3,364 -------------------- Net interest income 5,613 5,483 Provision for possible credit losses 99 30 -------------------- Net interest income after provision for possible credit losses 5,514 5,453 Other operating income Trust department income $300 $234 Service charges on deposit accts. 395 349 Insurance premium income 76 62 Other income 309 304 -------------------- Total other operating income 1,080 949 -05- Other operating expenses Salaries and employees benefits 2,218 2,329 Occupancy expense of premises 277 177 Equipment expense 336 293 Data processing expense 139 161 Deposit assess. and related fees 19 263 Other expense 1,187 1,082 --------------------- Total other operating expenses 4,176 4,305 --------------------- Income before income taxes 2,418 2,097 Applicable income taxes (819) (698) --------------------- Net income $1,599 $1,399 ===================== Earnings per share $0.25 $0.21 ===================== Per share data has been restated to reflect the 5% stock dividend paid on March 29, 1996. See Notes to Unaudited consolidated financial statements. -06- FIRST UNITED CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) Three Months Ended March 31, 1996 1995 -------------------- (Unaudited) Operating activities Net Income $ 1,599 $ 1,399 Adjustments to reconcile net income to net cash provided by operating activities: Provision for possible credit losses 99 30 Provision for depreciation 318 262 Net accretion & amortization of investment security discounts & premiums 118 128 Decrease(increase)decrease in acc. interest & other receivables. 802 (616) Increase(decrease)in accrued interest & other payables 2,934 (286) -------------------- Net cash provided by operating activities 5,870 917 -------------------- Investing activities Proceeds from maturities of available-for- sale securities 17,255 30,453 Purchases of available-for-sale securities (23,382) (25,715) Proceeds form maturities of held-to-maturity securities 462 1,713 Purchases of held-to-maturity securities (2,620) (2,614) Net decrease (increase)in loans 4,112 (8,875) Purchases of premises & equipment (105) (418) ------------------- Net cash used in investing activities (4,278) (5,456) ------------------- Financing activities (Decrease)in Fed Fund Purchased and Other Borrowed Money $ (3,000) (7,373) Net (decrease) increase in demand deposits, NOW accounts and savings accounts (2,693) 6,880 Net increase in certificates of deposits 5,691 7,977 Cash dividends paid or declared (1,651) (1,487) Proceeds from issuance of capital stock 28 0 ------------------- -07- Net cash (used) provided by -------------------- financing activities (1,625) 5,997 -------------------- Cash and cash equivalents at beg. of qtr. 16,011 14,536 (Decrease) increase in cash & cash equiv. (33) 1,458 -------------------- Cash & cash equivalents at end of period $ 15,978 $ 15,994 ==================== See Notes to unaudited consolidated financial statements. -08- FIRST UNITED CORPORATION Note to Unaudited Consolidated Financial Statements March 31, 1996 Note A -- Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required for complete 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 three month period ended March 31, 1996, are not necessarily indicative of the results that may be expected for the year ending December 31, 1996. The enclosed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1995. On January 17, 1996, the Board of Directors declared a 5% stock dividend to shareholders of record on March 15, 1996, payable March 29, 1996. Earnings and dividends per share for prior periods have been restated to reflect the stock dividend. Earnings per share are based on the weighted average number of shares outstanding of 6,505 and 6,502 for the three months ended March 31, 1996 and 1995, as restated for the 5% stock dividend discussed above. Note B -- Recently Issued Accounting Guidance In March 1995, the FASB issued Statements No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of". The Corporation was required to adopt Statement No. 121 on January 1, 1996. The Corporation has completed the analysis of Statement No. 121 and has determined that the effect of implementing this Statement was immaterial to the Corporation's financial position and results of operations. -09- Part I. Financial Information Item II. Management's Discussion and Analysis Consolidated net earnings for the quarter totaled $1.599 million, which is $.2 million more than was recorded for the first quarter of 1995. This translates into $.25 per share for the current period. For the same quarter of 1995, each share earned $.21. Return on average equity (ROAE) increased from 10.47 percent, at December 31, 1995, to 11.63 percent as of March 31, 1996. The increase in income was the result of our efforts to improve efficiencies through consolidation of duplicate functions and the results of our 1995 restructuring process, which was designed to position First United for continued profitable growth. The efficiency ratio is a key measuring tool for profitability and operating efficiency. The calculation for the efficiency ratio is noninterest expense divided by net operating revenue, excluding nonrecurring items and securities gains and losses. The Corporation's efficiency ratio was -60.98 percent for the period ended March 31, 1996. This represents a decrease from year end 1995 when the ratio was -67.33. The improvement in our efficiency ratio was the result of an increase in other operating income and a decrease in other operating expenses. Income from fiduciary services increased by $70,000 to $300,000 in the first quarter of 1996 compared to the first quarter of 1995. The reduction in salaries and employee benefits expense from $2.329 million in March, 1995 to $2.218 million in March, 1996 was the result of the benefits gained from an early retirement program offered to eleven employees during 1995. Noninterest income and noninterest expense in 1996 were $1.08 million and $4.176 million compared to $0.949 million and $4.305 million in 1995. Interest expense increased $.608 million from the same quarter last year. As interest rates continue to rise, it is of utmost importance that we take advantage of increasing our deposit base which is a less expensive source of funding to support loan growth versus other sources. The Corporation conducted a very successful deposit campaign during the first quarter of 1995 which raised $16 million dollars. In the first quarter of 1996, the Corporation strived to retain these deposits through a deposit campaign and pricing strategy. Since year end 1995, total deposits have increased $2.998 million to $427.292 million. Net interest income for the first three months of 1996 increased 2.37 percent from the same period in 1995, to $5.613 million. Although interest expense has increased, the Asset/Liability Management Committee has made a concerted effort to obtain an optimal return on average assets (ROAA), as a result -10- ROAA was 1.32 percent at March 31, 1996 compared to 1.22 percent March 31, 1995. The result was a Corporate net interest margin of 5.05 percent in comparison to the interest margin of 5.19 percent at the end of year 1995. The 5.05 percent net interest margin is within the expectations of the Corporation, as deposit costs increase and market conditions continue to cause us to revaluate our margin on loans. The provision for possible credit losses was $0.099 million for the first three months of 1996 compared to $0.03 million for the same period in 1995. Net charge-offs for the first quarter were $0.055 million, which equates to 0.02 percent of our net loan total of $354.253 million. First United Corporation continues to place strong emphasis on maintaining a top quality loan portfolio, achieved through stringent underwriting standards and a consistent loan review process. Another strong quality of First United is its capital position. Shareholders' equity increased to $55.249 million, a 6.48 percent increase from the first quarter of 1995, which was $51.885 million. Risk based capital, which is an expression of your Corporation's stability and security was 17.91 percent, which far surpasses the regulatory minimum of 8.00 percent. On January 17, 1996, the Board of Directors declared a five percent stock dividend payable on March 29, 1996, to shareholders on record at March 15, 1996. The Corporation paid a cash dividend of .13 on February 1, 1996, and on March 27, 1996, declared another dividend of equal amount, to be paid May 1, 1996, to shareholders on record at April 17, 1996. -11- Part II. OTHER INFORMATION Item 1. Legal Proceedings. None. Item 2. Changes in Securities. None. Item 3. Defaults upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. First United Corporation's annual meeting of shareholders was held on April 23, 1996. Items ratified by the 1996 proxy vote included the election of directors and the appointment of Ernst & Young LLP as the independent auditors of First United Corporation. Results of 1996 proxy vote were: For Against Abstain ----------------------------------- Directors 4,250,204 33,710 Ernst & Young 4,762,457 11,816 102,546 Item 5. Other Information. None. Item 6. Exhibits and Reports on Form 8-K. The Company did not file any reports on Form 8-K for the period ending March 31, 1996. -12- SIGNATURES Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FIRST UNITED CORPORATION Date 05/14/96 /s/ WILLIAM B. GRANT ---------- ---------------------------------------- William B. Gramt, Executive Vice President and Secretary Date 05/14/96 /s/ ROBERT W. KURTZ ---------- ---------------------------------------- Robert W. Kurtz, Executive Vice President and Treasurer -13- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FIRST UNITED CORPORATION Date 05/14/96 ---------- ---------------------------------------- William B. Gramt, Executive Vice President and Secretary Date 05/14/96 ---------- --------------------------------------- Robert W. Kurtz, Executive Vice President and Treasurer -14- EX-27 2
9 YEAR DEC-31-1996 MAR-31-1996 15978 380462 0 0 81927 22160 22234 356417 2164 489846 427292 0 6459 0 65 0 0 55184 489846 8093 1429 63 9585 3947 3972 5514 0 0 4176 2418 2418 0 0 1599 .25 0 5.05 1172 1466 0 0 0 107 52 2164 2164 0 0
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