Financial Performance - Net income for the year ended December 31, 2024, was $20.6 million, up from $15.1 million in 2023, representing a 36.8% increase [189]. - Adjusted net income on a non-GAAP basis for 2024 was $21.0 million, compared to $18.8 million in 2023, reflecting a 11.7% increase [190]. - Basic net income per common share increased to $3.15 in 2024 from $2.25 in 2023, representing a 40% growth [232]. - Comprehensive income for 2024 was $26,148,000, up from $18,259,000 in 2023, reflecting an increase of 43.4% [334]. - Net interest income for 2024 was $60.207 million, up from $57.497 million in 2023, reflecting a net interest margin of 3.38% compared to 3.26% in the previous year [219]. - Net interest income after provision for credit losses was $57,045,000 in 2024, up from $55,250,000 in 2023, reflecting a growth of 3.2% [332]. Loan and Credit Quality - Outstanding loans grew by $74.1 million to $1.5 billion as of December 31, 2024, with notable increases in commercial real estate loans by $32.7 million and residential mortgage loans by $18.9 million [194]. - The provision for credit losses increased to $2.9 million in 2024 from $1.7 million in 2023, with net charge-offs rising to $2.2 million from $0.9 million [191]. - The allowance for credit losses (ACL) ratio to loans outstanding was 1.23% at December 31, 2024, slightly down from 1.24% at December 31, 2023 [191]. - Non-accrual loans increased to $4.931 million in 2024 from $3.956 million in 2023, representing a rise in the non-accrual loans to total loans ratio to 0.33% [255]. - The total non-performing assets rose to $11.713 million in 2024 from $9.047 million in 2023, with non-performing loans to total loans ratio at 0.39% [255]. - The average balance of non-accrual loans increased to $8.471 million in 2024 from $3.171 million in 2023 [214]. Deposits and Funding - Total deposits increased by $23.9 million in 2024, with interest-bearing demand deposits rising by $35.9 million [196]. - Total deposits increased to $1,574,829,000 in 2024, compared to $1,550,977,000 in 2023, marking a growth of approximately 1.54% [330]. - Interest-bearing demand deposits rose by $35.9 million, including a shift of approximately $22.0 million to FDIC insured accounts [290]. - Money market accounts increased by $61.5 million, driven by the expansion of relationships and a shift from certificates of deposit [290]. - Total short-term borrowings increased by $20.0 million to $65,409 thousand in 2024, driven by a $50.0 million increase in overnight borrowings [294]. Asset Management - Total assets reached $2.0 billion at December 31, 2024, an increase of $67.2 million compared to the previous year [234]. - The investment portfolio decreased by $41.5 million primarily due to the maturities of $37.5 million of U.S. Treasury bonds [234]. - The fair value of available-for-sale securities decreased to $94.5 million from $97.2 million in 2023, a decline of $2.7 million [282]. - The total fair value of held-to-maturity securities decreased by $38.8 million to $175.6 million as of December 31, 2024 [282]. Operating Expenses - Other operating income increased by approximately $5.4 million compared to 2023, primarily due to improved wealth management income [192]. - Other operating expenses decreased by $0.6 million, mainly due to reduced occupancy and equipment expenses related to branch closures [193]. - Total other operating expenses decreased slightly to $49,640,000 in 2024 from $50,243,000 in 2023, a reduction of 1.2% [332]. Tax and Regulatory - The effective income tax rate increased to 24.5% in 2024 from 22.7% in 2023, attributed to changes in state income tax expense allocations [227]. - The Corporation's total risk-based capital ratio was 15.92% in 2024, up from 15.64% in 2023, exceeding the regulatory minimum of 8% [302]. Credit Loss Management - The allowance for credit losses (ACL) was $18.2 million at December 31, 2024, compared to $17.5 million at December 31, 2023, with a provision for credit losses of $2.9 million in 2024 [268]. - The allocation of the allowance for credit losses by major loan category showed that residential mortgage accounted for 39% of the total [279]. - Management uses a 10-point internal risk rating system to monitor the credit quality of the overall loan portfolio, with loans greater than 90 days past due classified as Substandard [354]. - The Corporation records an ACL on unfunded commitments through a charge to provision for credit loss expense, estimated by loan segment under the CECL model [379].
First United (FUNC) - 2024 Q4 - Annual Report