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Relative valuation derived from Financials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 58.9GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
12.0%
Sector: 8.5%
Dividend Analysis audit
INCOME
2.41%
Trailing Yield
$2.41
Per $100 Invested
Solid dividend yield for income-focused strategies.
Est. Payout Ratio
24%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, FIRST UNITED CORP/MD/ (FUNC) receives a "Hold" rating with a composite score of 52.1/100, ranked #668 out of 4446 stocks. Key factor scores: Quality 59/100, Value 72/100, Momentum 46/100. This is quantitative analysis only — not investment advice.
FIRST UNITED CORP/MD/ (FUNC) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does FIRST UNITED CORP/MD/ Do?
First United Corporation operates as the bank holding company for First United Bank & Trust that provides various retail and commercial banking services to businesses and individuals. The company offers various deposit products, including checking accounts, savings and money market accounts, regular and individual retirement accounts (IRA) certificates of deposit, Christmas savings accounts, college savings accounts, and health savings accounts; Certificate of Deposit Account Registry Service program and Insured Cash Sweep program to municipalities, businesses, and consumers; and commercial customers packages, which include treasury management, cash sweep, and various checking opportunities. It also provides loans, such as commercial loans secured by real estate, commercial equipment, vehicles, or other assets of the borrower; commercial real estate loans for residential and commercial development, agricultural purpose properties, and service industry buildings; residential mortgage loans; home equity lines of credit; residential real estate construction loans; and indirect and direct auto loans, student loans, term loans, and other secured and unsecured lines of credit and term loans. In addition, the company offers various trust services, including personal trust, investment agency accounts, charitable trusts, retirement accounts that consist of IRA roll-overs, 401(k) accounts and defined benefit plans, estate administration, and estate planning services; insurance products; brokerage services; and safe deposit and night depository facilities. It operates 26 banking offices, one customer care center, and 34 automated teller machines in Allegany, Frederick, Garrett, and Washington counties in Maryland; and in Mineral, Berkeley, Monongalia, and Harrison counties in West Virginia. First United Corporation was founded in 1900 and is headquartered in Oakland, Maryland. FIRST UNITED CORP/MD/ (FUNC) is classified as a micro-cap stock in the Financials sector, specifically within the Banking industry. The company is led by CEO Carissa L. Rodeheaver and employs approximately 300 people, headquartered in OAKLAND, Maryland. With a market capitalization of $239M, FUNC is one of the notable companies in the Financials sector.
FIRST UNITED CORP/MD/ (FUNC) Stock Rating — Hold (April 2026)
As of April 2026, FIRST UNITED CORP/MD/ receives a Hold rating with a composite score of 52.1/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.FUNC ranks #668 out of 4,446 stocks in our coverage universe. Within the Financials sector, FIRST UNITED CORP/MD/ ranks #198 of 891 stocks, placing it in the top quartile of its Financials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
FUNC Stock Price and 52-Week Range
FIRST UNITED CORP/MD/ (FUNC) currently trades at $38.24. The stock lost $0.87 (2.2%) in the most recent trading session. The 52-week high for FUNC is $41.95, which means the stock is currently trading -8.8% from its annual peak. The 52-week low is $24.66, putting the stock 55.1% above its annual trough. Recent trading volume was 1K shares, suggesting relatively thin trading activity.
Is FUNC Overvalued or Undervalued? — Valuation Analysis
FIRST UNITED CORP/MD/ (FUNC) carries a value factor score of 72/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 9.89x, compared to the Financials sector average of 14.88x — a discount of 34%. The price-to-book ratio stands at 1.19x, versus the sector average of 1.22x. The price-to-sales ratio is 2.56x, compared to 0.90x for the average Financials stock. On an enterprise value basis, FUNC trades at 10.08x EV/EBITDA, versus 3.26x for the sector.
Based on these multiples, FIRST UNITED CORP/MD/ appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
FIRST UNITED CORP/MD/ Profitability — ROE, Margins, and Quality Score
FIRST UNITED CORP/MD/ (FUNC) earns a quality factor score of 59/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 12.0%, compared to the Financials sector average of 8.5%, which is within a healthy range. Return on assets (ROA) comes in at 1.2% versus the sector average of 1.2%.
On a margin basis, FIRST UNITED CORP/MD/ reports gross margins of 0.0%. The operating margin is 33.7% (sector: 21.8%). Net profit margin stands at 25.8%, versus 17.7% for the average Financials stock. Revenue growth is running at 11.5% on a trailing basis, compared to 9.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
FUNC Debt, Balance Sheet, and Financial Health
FIRST UNITED CORP/MD/ has a debt-to-equity ratio of 47.0%, compared to the Financials sector average of 121.0%. The low leverage indicates a conservative balance sheet with significant financial flexibility. The current ratio is 1.11x, suggesting adequate working capital coverage. Total debt on the balance sheet is $96M. Cash and equivalents stand at $92M.
FUNC has a beta of 0.85, meaning it is roughly in line with the broader market in terms of price volatility. The stability factor score for FIRST UNITED CORP/MD/ is 76/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
FIRST UNITED CORP/MD/ Revenue and Earnings History — Quarterly Trend
In TTM 2026, FIRST UNITED CORP/MD/ reported revenue of $95M and earnings per share (EPS) of $3.78. Net income for the quarter was $25M. Gross margin was 0.0%. Operating income came in at $30M.
In FY 2025, FIRST UNITED CORP/MD/ reported revenue of $18M and earnings per share (EPS) of $3.78. Net income for the quarter was $25M. Revenue grew 4.0% year-over-year compared to FY 2024. Operating income came in at $33M.
In Q3 2025, FIRST UNITED CORP/MD/ reported revenue of $26M and earnings per share (EPS) of $1.07. Net income for the quarter was $7M. Revenue grew 10.8% year-over-year compared to Q3 2024. Operating income came in at $9M.
In Q2 2025, FIRST UNITED CORP/MD/ reported revenue of $22M and earnings per share (EPS) of $0.92. Net income for the quarter was $6M. Gross margin was 76.7%. Revenue grew -5.7% year-over-year compared to Q2 2024. Operating income came in at $5M.
Over the past 8 quarters, FIRST UNITED CORP/MD/ has demonstrated a growth trajectory, with revenue expanding from $23M to $95M. Investors analyzing FUNC stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
FUNC Dividend Yield and Income Analysis
FIRST UNITED CORP/MD/ (FUNC) currently pays a dividend yield of 2.4%. At this yield, a $10,000 investment in FUNC stock would generate approximately $$241.00 in annual dividend income. This compares to the Financials sector average dividend yield of 2.5%, meaning FUNC yields less than the typical sector peer. With a net margin of 25.8%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
FUNC Momentum and Technical Analysis Profile
FIRST UNITED CORP/MD/ (FUNC) has a momentum factor score of 46/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 28/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 17/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
FUNC vs Competitors — Financials Sector Ranking and Peer Comparison
Comparing FUNC against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full FUNC vs S&P 500 (SPY) comparison to assess how FIRST UNITED CORP/MD/ stacks up against the broader market across all factor dimensions.
FUNC Next Earnings Date
No upcoming earnings date has been announced for FIRST UNITED CORP/MD/ (FUNC) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy FUNC? — Investment Thesis Summary
FIRST UNITED CORP/MD/ presents a balanced picture with arguments on both sides. The value score of 72/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 76/100) reduces downside risk.
In summary, FIRST UNITED CORP/MD/ (FUNC) earns a Hold rating with a composite score of 52.1/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on FUNC stock.
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Institutional Research Dossier
FIRST UNITED CORP/MD/ (FUNC) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain our Hold rating on First United Corporation (FUNC). While the company exhibits attractive valuation metrics relative to its peers, particularly in P/E and EV/EBITDA, and demonstrates superior profitability with higher ROE, operating margin, and net margin, its relatively low Investment score and short interest suggest limited growth prospects and investor enthusiasm. The bank's geographic concentration and reliance on traditional banking services present challenges in a rapidly evolving financial landscape.
The primary concern revolves around FUNC's ability to sustain its current profitability levels given its modest investment in future growth and the increasing competition from larger, more technologically advanced financial institutions. While the current valuation offers some downside protection, the lack of a clear catalyst for significant outperformance warrants a neutral stance. Investors should monitor the company's strategic initiatives to adapt to changing market dynamics and its ability to generate sustainable growth in the long term.
Business Strategy & Overview
First United Corporation operates as a community bank, primarily serving individuals and businesses in Maryland and West Virginia. Its core business revolves around traditional banking activities, including deposit taking and loan origination. The company offers a range of deposit products, such as checking, savings, and money market accounts, as well as certificates of deposit. On the lending side, it provides commercial loans, commercial real estate loans, residential mortgages, and consumer loans. A significant portion of its loan portfolio is secured by real estate, reflecting its focus on serving local communities.
In addition to traditional banking services, First United offers trust and wealth management services, including personal trust, investment agency accounts, and estate planning. These services provide a source of fee income and help to diversify its revenue streams. The company also offers insurance and brokerage services, further expanding its product offerings and customer relationships. However, these non-interest income sources likely represent a smaller portion of overall revenue compared to net interest income.
First United's strategic positioning is centered on providing personalized service and building long-term relationships with its customers. As a community bank, it emphasizes local decision-making and responsiveness to the needs of its communities. This approach differentiates it from larger, national banks that may have a more standardized and impersonal approach. However, this strategy also limits its geographic reach and potential for economies of scale.
The company operates 26 banking offices and 34 ATMs, primarily concentrated in its core markets. This branch network provides a physical presence and allows it to serve customers who prefer in-person banking services. However, it also represents a significant fixed cost and may become less efficient as customers increasingly adopt digital banking channels. First United faces the challenge of balancing its traditional branch network with the need to invest in digital technologies to remain competitive.
The banking industry is undergoing rapid transformation, driven by technological innovation, changing customer preferences, and increased regulatory scrutiny. First United must adapt to these changes by investing in digital banking platforms, enhancing its cybersecurity defenses, and complying with evolving regulations. Its ability to successfully navigate these challenges will be critical to its long-term success.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
11.5%
Sector: 9.4%
+22% VS SCTR
Economic Moat Analysis
First United's economic moat is likely Narrow. Community banks typically struggle to establish wide moats due to the commoditized nature of their services and the intense competition from larger, more diversified financial institutions. While First United benefits from established relationships within its local communities, these relationships are not necessarily exclusive or difficult for competitors to replicate.
One potential source of competitive advantage is switching costs. Customers who have long-standing relationships with First United and rely on its personalized service may be reluctant to switch to a different bank, even if it offers slightly better rates or fees. However, these switching costs are relatively low compared to other industries, and customers can easily transfer their accounts and loans to other institutions.
Another potential source of competitive advantage is its local market presence. First United has a strong understanding of the local economies and the needs of its customers. This allows it to make informed lending decisions and provide tailored financial solutions. However, this advantage is limited by its geographic concentration and the increasing availability of information and data analytics.
First United does not appear to possess significant cost advantages. As a smaller bank, it likely lacks the economies of scale of larger institutions, which can spread their fixed costs over a larger asset base. This may result in higher operating expenses and lower profitability compared to its larger competitors. The data shows a Gross Margin of 0.0%, which is not indicative of a cost advantage.
The company's intangible assets, such as its brand reputation and customer relationships, may provide a modest competitive advantage. However, these assets are difficult to quantify and are subject to erosion over time. Furthermore, the banking industry is highly regulated, which limits the ability of banks to differentiate themselves through product innovation or marketing.
Overall, First United's narrow moat is primarily based on its established relationships within its local communities and the modest switching costs associated with its services. However, its lack of scale, limited geographic reach, and the increasing competition from larger, more technologically advanced institutions pose significant challenges to its long-term competitive position.
Financial Health & Profitability
First United's financial health appears relatively sound based on the available data. The company has demonstrated consistent profitability, with a net income of $24.52 million on revenue of $18.43 million for the trailing twelve months (TTM). This translates to a net margin of 25.8%, which is significantly higher than the sector average of 17.8%. The operating margin of 33.7% also exceeds the sector average of 22.0%, indicating efficient cost management.
The company's return on equity (ROE) of 12.0% is also higher than the sector average of 8.5%, suggesting that it is effectively utilizing shareholder equity to generate profits. However, it's important to note that the revenue figure seems unusually low compared to the net income, potentially indicating a significant one-time gain or accounting anomaly. Further investigation into the revenue recognition policies and non-interest income sources is warranted.
First United's balance sheet appears to be reasonably leveraged, with a debt-to-equity ratio of 47.00, which is significantly lower than the sector average of 115.00. This suggests that the company is not overly reliant on debt financing and has a healthy capital structure. The current ratio of 1.11 indicates that it has sufficient liquid assets to cover its short-term liabilities.
The company's cash flow generation is also strong, with a free cash flow (FCF) of $36.83 million for the TTM period. This provides it with ample financial flexibility to invest in growth initiatives, pay dividends, or repurchase shares. However, the quarterly financial history reveals some volatility in FCF, with a negative FCF of $-59.38 million reported in Q2 FY2025. This warrants further investigation to understand the underlying drivers of this fluctuation.
Analyzing the quarterly financial history, we observe that revenue has been relatively stable over the past few years, with some fluctuations from quarter to quarter. Net income has also been consistent, although there have been some variations due to changes in operating expenses and other factors. The operating margin has shown some volatility, ranging from 22.2% to 176.6%, indicating potential inconsistencies or one-time events affecting profitability.
Overall, First United's financial health appears to be relatively strong, with consistent profitability, a healthy balance sheet, and strong cash flow generation. However, the unusually low revenue figure relative to net income and the volatility in FCF and operating margin warrant further investigation to ensure the sustainability of its financial performance.
Valuation Assessment
First United's valuation appears attractive relative to its peers based on several key metrics. The company's price-to-earnings (P/E) ratio of 9.5x is significantly lower than the sector average of 15.5x, suggesting that it is undervalued by the market. Similarly, its enterprise value-to-EBITDA (EV/EBITDA) ratio of 2.5x is also lower than the sector average of 3.5x, further supporting the undervaluation thesis.
However, it's important to consider the company's growth prospects when assessing its valuation. While First United has demonstrated revenue growth of 11.5% in the TTM period, which is higher than the sector average of 9.3%, its Investment score of 28/100 suggests that it is not investing heavily in future growth. This may limit its ability to sustain its current growth rate in the long term.
The company's free cash flow yield, calculated as FCF divided by market capitalization, is approximately 15.7%, which is relatively high. This indicates that the company is generating a significant amount of cash relative to its market value, which could be used to pay dividends, repurchase shares, or invest in growth opportunities. However, the negative FCF in Q2 FY2025 raises concerns about the consistency of its cash flow generation.
Comparing First United's valuation to its historical averages is challenging due to the limited historical data provided. However, based on the available information, it appears that the company is currently trading at a discount to its historical earnings and cash flow multiples. This may be due to concerns about its growth prospects, its geographic concentration, or the overall economic outlook.
While the company's valuation appears attractive on a relative basis, it's important to consider the risks and uncertainties associated with its business. The banking industry is highly competitive and subject to regulatory changes, which could impact First United's profitability and growth. Furthermore, its geographic concentration makes it vulnerable to economic downturns in its core markets.
Overall, First United's valuation appears to be a mixed bag. While its P/E and EV/EBITDA ratios suggest that it is undervalued, its limited investment in growth and the risks associated with its business warrant caution. The Hold rating reflects this balanced view, suggesting that the stock is neither a compelling buy nor a clear sell.
Risk & Uncertainty
First United faces several specific risks that could negatively impact its business and financial performance. One of the most significant risks is its geographic concentration. The company operates primarily in Maryland and West Virginia, making it vulnerable to economic downturns or adverse regulatory changes in these states. A decline in the local economies or increased competition from other banks in these markets could significantly reduce its profitability.
Another risk is the increasing competition from larger, more technologically advanced financial institutions. These institutions have the resources to invest in digital banking platforms and offer a wider range of products and services, which could attract customers away from First United. The company must invest in its own digital capabilities to remain competitive, but this may require significant capital expenditures and may not be successful.
Regulatory risk is also a concern. The banking industry is heavily regulated, and changes in regulations could increase First United's compliance costs or restrict its ability to generate revenue. For example, changes in capital requirements or lending regulations could negatively impact its profitability. Furthermore, the company is subject to cybersecurity risks, and a data breach could damage its reputation and result in financial losses.
Credit risk is another important consideration. First United's loan portfolio is primarily secured by real estate, which makes it vulnerable to declines in real estate values. A significant drop in real estate prices could lead to increased loan losses and reduced profitability. Furthermore, the company is exposed to credit risk from its commercial and consumer loans, which could also increase during an economic downturn.
Bulls Say / Bears Say
The Bull Case
BULL VIEWFirst United's low P/E and EV/EBITDA ratios indicate significant undervaluation, offering substantial upside potential as the market recognizes its true worth.
BULL VIEWThe company's high ROE and net margin demonstrate superior profitability and efficient management, suggesting it can continue to generate strong returns for shareholders.
The Bear Case
BEAR VIEWFirst United's limited investment in growth and geographic concentration pose significant risks, hindering its ability to compete with larger, more diversified banks.
BEAR VIEWThe unusually low revenue figure relative to net income raises concerns about the sustainability of its financial performance, potentially masking underlying weaknesses.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score FUNC and 4,400+ other equities.
FIRST UNITED CORP/MD/ exhibits a 89% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
1.2%
Sector: 1.2%
Gross Margin
Pricing power and cost efficiency
0.0%
Sector: 0.0%
Operating Margin
Core business profitability
33.7%
Sector: 21.8%
Net Margin
Bottom-line profitability
25.8%
Sector: 17.7%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield2.48%
Yield Delta-3%
Income Projection audit
A $10,000 investment would generate approximately $241 annually in dividends at the current trailing rate.
