Key Takeaways
📈 First United Corporation offers a forward dividend yield of 2.87% with a low payout ratio of 24.14%, suggesting a well-covered and potentially growing dividend, although its dividend growth is typically slow and steady.
✅ Analyst ratings for First United Corporation have recently improved to a consensus “Buy,” with an upgraded price target of $42.00, reflecting confidence in the company’s fundamentals and recent earnings beat.
💰 First United reported a strong first quarter of 2025 with a net income increase of 57% year-over-year to $5.8 million ($0.89 per share), driven by revenue growth and an improved net interest margin, indicating positive financial momentum.
Last Updated 5/5/25
First United Corporation, trading under the ticker FUNC, might not pop up on most investors’ radars—but for those with a long view and an appetite for stable dividend income, this small regional bank is worth a closer look. Based in Oakland, Maryland, FUNC runs a traditional community banking operation through its subsidiary, First United Bank & Trust, with a focus on personal and small business banking.
Its approach is refreshingly straightforward: build relationships, manage risk carefully, and return profits to shareholders. That philosophy has quietly rewarded investors, especially those in it for the dividend.
Recent Events
FUNC has had a strong run over the past year, gaining more than 35%. That’s quite the return for a regional bank operating in a challenging interest rate environment. While the big names in finance were busy making headlines with volatility, FUNC was growing earnings and expanding its margins.
Revenue climbed 14% year over year, hitting $79.4 million. Net income followed suit, up 57% from the same time last year. These aren’t splashy numbers, but they’re solid, dependable—qualities income investors tend to respect. The bank’s profit margin sits at a healthy 28.6%, and its return on equity is just under 13%. Those metrics speak to efficient management and a business model that’s working.
It’s not just about the numbers either. FUNC’s price-to-book ratio stands at 1.08, a fair reflection of investor confidence. It’s not in deep value territory anymore, but also far from overvalued. Beta is a low 0.59, meaning FUNC doesn’t move much with the broader market. For dividend investors who don’t like surprises, that’s comforting.
Key Dividend Metrics
📈 Forward Yield: 2.87%
💵 Forward Annual Dividend Rate: $0.88
📆 Most Recent Dividend Date: May 1, 2025
🔁 Ex-Dividend Date: April 17, 2025
📊 Payout Ratio: 24.14%
📉 5-Year Average Dividend Yield: 3.40%
💡 Trailing Annual Yield: 2.80%
Dividend Overview
First United isn’t chasing headlines with its dividend. Instead, it does what longtime income investors hope for—it pays consistently and conservatively. At a current forward yield of 2.87%, it may not lead the pack, but the payout is well-covered and has room to grow.
A payout ratio of just 24% shows that FUNC is playing it safe. That leaves plenty of earnings on the table for reinvestment or future increases. It’s the kind of cautious, long-term thinking that builds trust over time.
Over the past five years, the average yield has come in at 3.4%. The slightly lower current yield reflects the stock’s recent run-up in price, not any decline in commitment to shareholders. This is a case where yield compression is actually a sign of strength, not weakness.
With fewer than 6.5 million shares outstanding and earnings per share of $3.48, FUNC is more than capable of supporting its dividend, even in a downturn. The small size of the company gives it flexibility and focus, especially in how it allocates capital.
Dividend Growth and Safety
FUNC doesn’t raise its dividend often, but it doesn’t need to. The company takes a slow, steady approach—raising only when earnings support it and never overextending itself. That restraint is part of what makes the dividend feel dependable.
Cash levels are strong, sitting at over $84 million. Debt is manageable at $142 million. That balance between cash and liabilities tells you this is a bank that keeps an eye on risk. It’s not chasing rapid expansion or high-yield gimmicks. It’s staying focused on long-term strength.
One detail that shouldn’t go unnoticed: insiders own nearly 8% of the company. That’s enough to suggest alignment with shareholders without dominating the vote. Institutional ownership is around 46%, which means the remaining investors are likely individuals looking for consistent returns.
FUNC’s dividend isn’t the kind you chase for immediate yield. It’s the kind you count on for years, the kind that sticks around through cycles and quietly compounds in your portfolio. It’s not fancy, but it works—and that’s often what matters most.
Cash Flow Statement
First United Corporation’s cash flow profile over the trailing twelve months reflects a steady hand in operations and a disciplined approach to capital allocation. Operating cash flow came in at $22.3 million TTM, consistent with the prior year and showing the company’s core banking operations are reliably generating cash. Free cash flow, after accounting for capital expenditures of $1.9 million, landed at $20.4 million. That kind of consistency helps support the bank’s dividend and leaves room for strategic flexibility.
On the investing side, FUNC reported a cash outflow of $38.4 million, largely reflecting activity in securities and loan portfolios typical for a bank of this size. Financing activities contributed a net inflow of $44.7 million, which helped push the ending cash balance to $78.3 million—well above last year’s $49.8 million. While capital stock repurchases amounted to just over $4 million, the bank still finished the period with a stronger cash position. Overall, the company continues to manage its cash flows in a way that supports both shareholder returns and financial resilience.
Analyst Ratings
📈 First United Corporation (FUNC) has recently drawn more attention from the analyst community, resulting in an upgrade from “Market Perform” to “Outperform.” 🔼 The updated rating came with a 12-month price target of $42.00, suggesting a solid upside from its recent trading levels. Analysts appear to be recognizing the quiet strength of FUNC’s fundamentals and its steady performance in a volatile sector.
💹 The primary driver behind this upgrade was FUNC’s latest earnings beat, where it posted $0.89 earnings per share—slightly above expectations. This minor but meaningful outperformance helped confirm that the bank’s profitability remains intact despite macro headwinds. It’s also a signal that management is executing well, especially in maintaining margins and controlling costs.
🔍 Analysts now hold a consensus “Buy” rating on the stock. With shares recently trading around $29.32, the $42.00 price target implies a potential upside of roughly 43%. That kind of target isn’t based on hype or speculation—it’s grounded in the company’s demonstrated ability to generate earnings and manage its balance sheet with discipline.
✅ FUNC may not be in the spotlight often, but this recent upgrade underscores growing institutional confidence in its outlook. As small-cap regional banks go, it’s beginning to stand out for the right reasons.
Earning Report Summary
How the First Three Months Went
So, First United Corporation had a pretty good start to 2025, reporting a net income of $5.8 million for the first quarter. That works out to $0.89 per share for those holding stock. This is quite a jump from the $3.7 million, or $0.56 per share, they reported during the same period last year. It seems their performance got a boost from a 14% increase in their revenue compared to last year, bringing in a total of $20.3 million. This increase was driven by them earning more from interest and also having better quality assets.
Digging into the Numbers
Their net interest margin, which is a key measure of how profitable their lending is, also improved, going up to 3.38% from 3.26% last year. This suggests they’re managing their finances effectively and benefiting from the current interest rate environment. They also seem to be keeping a close eye on their expenses, as their operating margin was a healthy 31.1%, showing they’re controlling costs well. The amount they set aside for potential loan losses was also relatively low at $656,000, which could mean their borrowers are in good shape and they’re being careful with risk.
What the Leaders Had to Say
The folks in charge emphasized how important it is for them to keep a strong financial base and really focus on their main banking business. They also announced a quarterly dividend of $0.22 per share, which is consistent with what they’ve been doing to give value back to their shareholders. Management also mentioned they’re continuing to invest in things like technology and their infrastructure to make things better for customers and to run more efficiently.
Looking Towards the Future
Going forward, First United seems to be planning to stick to a strategy of steady growth, focusing on growing in the markets they already serve and looking for opportunities to expand organically. They believe their solid financial footing puts them in a good position to handle any potential economic challenges and take advantage of new opportunities in the regional banking world.
Final Thoughts
First United Corporation (FUNC) increasingly appears to be a compelling choice for dividend investors seeking a stable, well-managed regional bank with a strong track record. The company’s impressive earnings growth, expanding net interest margin, and conservative payout ratio underscore its financial health. The recent analyst upgrade and positive price target revisions signal growing confidence in FUNC’s ability to navigate the current economic landscape. For investors prioritizing consistent income and a measured approach to growth within the financial sector, FUNC warrants serious consideration.