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First United Bancshares Inc.


Reports Year End Results

EL DORADO, Year end 1990 -- It is our pleasure to report to you that in 1990, our tenth year of operation, record results were achieved in many areas of operation.

Our net income was $7.4 million, a new high for First United and an increase of 20 percent over 1989. This amounted to earnings of $3.48 per share also a new high. Return on assets was .98 percent and return on equity was 11.68 percent.

At year-end our assets amounted to $797 million; an increase from the $765 million reported at the end of 1989. Primary capital to assets and equity capital to assets were 9 percent and 8.3 percent respectively.

Although loans showed only slight growth in 1990, we managed to maintain our loan loss reserve of 1.65 percent of outstanding loans while enhancing the credit quality of our portfolio. Non-performing loans decreased from $7.2 million in 1989 to $6.1 million in 1990. Loan loss reserve coverage equaled 100 percent of non-performing loans at year-end.

This improved performance was based on fine earnings and growth at the subsidiary bank level. All four of our banking companies, guided by professional staffs and loyal directors, exceeded the 1 percent benchmark for return on assets.

Disappointingly, our stock price did not respond to our good earnings and ended the year at $25.50. This was substantially below our book value per share of $31.05. It is our intention to continue to improve the underlying value of our stock with good earnings and a conservative balance sheet in hopes that the market will take note and respond with an increased price per share.

We enter 1991 with hopes for another very successful year, but clouded by the firm realization that the recapitalization of the Federal Deposit Insurance Corp. and governmental impetus to change the laws and regulations surrounding our industry, is likely to have a negative effect on our 1991 performance. It is our desire that such legislation will strengthen our industry as a whole. Regardless of what actions are taken, First United, with a strong capital position and earnings stream, is well prepared for whatever eventuality.
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Title Annotation:Public Company Corporate Reports
Publication:Arkansas Business
Date:May 6, 1991
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