First United Corp/Md/ (NASDAQ: FUNC)

Sector: Financial Services Industry: Banks - Regional CIK: 0000763907
Market Cap 263.40 Mn
P/B 2.01
P/E 19.03
P/S 4.27
ROIC (Qtr) 7.30
Div Yield % 2.07
Rev 1y % (Qtr) 11.05
Total Debt (Qtr) 117.29 Mn
Debt/Equity (Qtr) 0.59
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About

First United Corp/MD/ (First United), a Maryland-based bank holding company, operates as the parent company of First United Bank & Trust, a Maryland trust company. The company's primary business revolves around providing a range of financial services to individuals and businesses in its market areas. With a focus on lending activities, deposit services, and wealth management services, First United generates revenue through various loan products, deposit offerings, and financial planning solutions (First United Corp/MD/). First United's lending...

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Investment thesis

Bull case

  • Strong tangible asset base of 2.01B provides 17.16x coverage of total debt 117.29M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 18.72M provides strong 26.71x coverage of stock compensation 701000, indicating sustainable incentive practices.
  • Robust free cash flow of 16.45M exceeds capital expenditure of 2.27M by 7.26x, indicating strong organic growth funding capability.
  • Retained earnings of 203.20M represent substantial 1.02x of equity 199.10M, indicating strong internal capital generation.
  • Operating cash flow of 18.72M provides strong 17.42x coverage of operating expenses 1.07M, showing operational efficiency.

Bear case

  • Operating cash flow of 18.72M barely covers its investment activities of (64.05M), with a coverage ratio of -0.29, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 18.72M provides thin coverage of dividend payments of (5.70M) with a -3.28 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 16.45M represents just -0.30x of debt issuance (55M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 203.20M provide limited buffer against comprehensive income items of (25.45M), which is -7.98x, indicating elevated exposure to market risks.
  • R&D investment of 0 represents just 0x of SG&A expenses of 49.54M, indicating potential underinvestment in innovation relative to administrative overhead.

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Banks - Regional
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 PNC Pnc Financial Services Group, Inc. 99.49 Bn 13.81 5.85 62.34 Bn
2 USB Us Bancorp \De\ 87.84 Bn 19.01 4.52 77.98 Bn
3 NU Nu Holdings Ltd. 81.18 Bn 32.10 5.77 4.49 Bn
4 NWG NatWest Group plc 63.11 Bn 9.11 2.81 168.56 Bn
5 RF Regions Financial Corp 39.59 Bn 38.18 7.68 6.09 Bn
6 TFC Truist Financial Corp 39.02 Bn 20.15 4.25 71.11 Bn
7 FITB Fifth Third Bancorp 34.49 Bn -132.65 9.50 18.94 Bn
8 MTB M&T Bank Corp 33.34 Bn 20.67 5.83 14.99 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.13 0.13
EV to Cash from Ops. EV/CFO 16.35 13.53
EV to Debt EV to Debt 2.25 7.69
EV to EBIT EV/EBIT 14.86 24.25
EV to EBITDA EV/EBITDA 12.39 12.10
EV to Free Cash Flow [EV/FCF] EV/FCF 18.15 6.13
EV to Market Cap EV to Market Cap 1.00 1.08
EV to Revenue EV/Rev 4.28 6.13
Price to Book Value [P/B] P/B 2.01 1.91
Price to Earnings [P/E] P/E 19.03 10.51
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 4.37 276.83
Dividend Payout Ratio % Div Payout % (Qtr) 22.90 34.36
Dividend per Basic Share Div per Share (Qtr) 0.92 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 36.32 24.01
Interest Coverage Interest Coverage 0.00 -0.06
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -21.17 -73.37
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 52.54 18.43
Dividend Growth (1y) % Div 1y % (Qtr) 12.20 5.56
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 54.41 117.24
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 38.35 36.31
EBIT Growth (1y) % EBIT 1y % (Qtr) 56.17 61.65
EBT Growth (1y) % EBT 1y % (Qtr) 56.17 61.55
EPS Growth (1y) % EPS 1y % (Qtr) 56.10 65.85
FCF Growth (1y) % FCF 1y % (Qtr) -2.45 186.92
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 17.79 12.98
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.04 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.27 0.25
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 0.59 0.52
Interest Cover Ratio Interest Cover Ratio 0.00 -0.06
Times Interest Earned Times Interest Earned 0.00 -0.06
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 43.20 150.40
EBIT Margin % EBIT Margin % (Qtr) 39.50 157.97
EBT Margin % EBT Margin % (Qtr) 39.50 157.21
Gross Margin % Gross Margin % (Qtr) 100.00 97.97
Net Profit Margin % Net Margin % (Qtr) 29.80 117.48