8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 5, 2024

First United Corporation

(Exact name of registrant as specified in its charter)

Maryland	0-14237	52-1380770
(State or other jurisdiction of	(Commission file number)	(IRS Employer
incorporation or organization)		Identification No.)

19 South Second Street, Oakland, Maryland 21550

(Address of principal executive offices) (Zip Code)

(301) 334-9471

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbols	Name of each exchange on which registered
Common Stock	FUNC	Nasdaq Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

INFORMATION TO BE INCLUDED IN THE REPORT

Item 2.02. Results of Operation and Financial Condition.

On February 5, 2024, First United Corporation (the “Corporation”) issued a press release describing its financial results for the three- and twelve-month periods ended December 31, 2023. A copy of the press release is furnished herewith as Exhibit 99.1.

The information contained in this Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01. Regulation FD Disclosure.

On February 5, 2024, the Corporation published an investor presentation that discusses certain aspects of its financial results for the three- and twelve- month periods ended December 31, 2023. A copy of the presentation is furnished herewith as Exhibit 99.2.

The information contained in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

The exhibits filed or furnished with this report are listed in the following Exhibit Index:

Exhibit No.	Description
99.1	Press release dated February 5, 2024 (furnished herewith)
99.2	Investor presentation dated February 5, 2024 (furnished herewith)
104	Cover page interactive data file (embedded within the iXBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FIRST UNITED CORPORATION
Dated:  February 5, 2024	By:	/s/ Tonya K. Sturm
		Tonya K. Sturm
		Senior Vice President & CFO

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EX-99.1

Exhibit 99.1

FIRST UNITED CORPORATION ANNOUNCES

FOURTH QUARTER 2023 EARNINGS

OAKLAND, MARYLAND—February 5, 2024: First United Corporation (NASDAQ: FUNC), a bank holding company and the parent company of First United Bank & Trust (the “Bank”), today announced earnings results for the three- and twelve-month periods ended December 31, 2023. For the year ended December 31, 2023, consolidated net income was $15.1 million, or $2.25 per basic share and $2.24 per diluted share, compared to $25.0 million, or $3.77 per basic share and $3.76 per diluted share, for the year ended December 31, 2022.

According to Carissa Rodeheaver, Chairman, President and CEO, “2023 was a challenging year as we experienced industry turmoil, the impact of the rapidly increased rate environment and strong deposit competition. Despite these challenges, we were able to limit the impact to our margin, achieve strong loan growth, maintain strong asset quality and execute several strategic items. In the fourth quarter, we accomplished a balance sheet restructuring and announced the consolidation of our branch network. While these strategies had a short-term impact on our fourth quarter and year-to-date earnings, they position us well for greater efficiency and more positive ongoing future earnings. I am proud of our associates and their continued commitment to providing customized financial solutions to our clients resulting in a strong 2023 total shareholder return of 23.6%.” Our team has successfully assisted our customers in navigating this volatile and unpredictable financial environment.”

Fourth Quarter Financial Highlights:

· Total assets at December 31, 2023 decreased by $22.3 million, or 1.2%, when compared to September 30, 2023 and increased by $57.7 million, or 3.1%, when compared to December 31, 2022. Significant changes during the fourth quarter included:

o Cash balances decreased by $30.9 million when compared to September 30, 2023 and by $24.6 million when compared to December 31, 2022.

o Investment securities decreased by $18.6 million when compared to September 30, 2023, and by $50.1 million when compared to December 31, 2022. During the fourth quarter of 2023, the Bank made a strategic decision to restructure its balance sheet and sold available-for-sale (“AFS”) investment securities totaling $20.4 million with a book value of $24.6 million, resulting in pretax loss of $4.2 million and an after-tax loss of $3.2 million.

o Gross loans increased by $26.6 million when compared to September 30, 2023 and by $127.2 million when compared to December 31, 2022, as:

§ commercial balances increased by $19.6 million during the fourth quarter and by $70.5 million when compared to December 31, 2022;

§ residential mortgage balances increased by $8.2 million during the fourth quarter and by $55.5 million when compared to December 31, 2022; and

§ consumer loans decreased by $1.2 million during the fourth quarter and increased by $1.2 million when compared to December 31, 2022.

o Deposits decreased by $24.1 million when compared to September 30, 2023 and by $19.8 million when compared to December 31, 2022. The Corporation had brokered deposits of $30.0 million as of December 31, 2023 compared to $60.7 million as of September 30, 2023. There were no brokered deposits at December 31, 2022.

o Short-term borrowings decreased by $7.9 million when compared to September 30, 2023 and by $19.1 million when compared to December 31, 2022. The decrease in quarterly balances was due primarily to seasonal fluctuations of municipal customer balances in overnight investment sweep products. The decrease from December 31, 2022 was primarily related to one large municipal customer moving approximately $12.0 million in funds from an overnight investment sweep product to a non-interest-bearing deposit product as well as regular fluctuations in other municipal customer balances.

· For the fourth quarter of 2023, consolidated net income, on a non-GAAP basis was $1.8 million, inclusive of a $3.3 million, net of tax, securities loss and $0.5 million, net of tax, of accelerated depreciation and lease termination expenses related to the announcement of the closure of four branches in February 2024.

o Net interest margin, on a non-GAAP, fully tax equivalent (“FTE”) basis, was 3.26% for the year ended December 31, 2023, compared to 3.56% for year ended December 31, 2022.

o Net interest margin, on a non-GAAP, FTE basis, was 3.13% for the fourth quarter of 2023 compared to 3.12% for the third quarter of 2023 and 3.63% for the fourth quarter of 2022.

o Non-interest income, excluding net gains and losses, remained stable in the fourth quarter of 2023 when compared to the third quarter of 2023 and increased by $0.3 million when compared to the fourth quarter of 2022 due to increases in wealth management income and debit card proceeds.

o Non-interest expense decreased by $0.5 million when compared to the third quarter of 2023. This decrease was a result of a decrease of $0.5 million in net other real estate owned (“OREO”) expenses due to gains on sales of properties during the quarter, and a decrease of $0.6 million in salaries and benefits, related to reduced health insurance costs and reversal of accrued executive performance-based incentives. These reductions were offset by a $0.6 million increase in occupancy and equipment costs related to the acceleration of depreciation expense and lease termination expenses associated with the branch closures. When compared to the fourth quarter of 2022, non-interest expenses increased by $0.7 million. This increase was primarily due to the $0.6 million increase in occupancy and equipment costs related to the branch closures, a $0.2 million increase in salaries and benefits as a result of increased salary expense related to new hires during 2023, increased health insurance costs offset by reductions in executive incentives, a $0.3 million increase in employee benefit plan expense, and a $0.2 million increase in marketing expenses. These increases were partially offset by a decrease of $0.6 million in net OREO expenses due to the recognition of gains on sales of properties during the fourth quarter of 2023.

Income Statement Overview

On a GAAP basis, net income was $1.8 million, inclusive of a $3.3 million, net of tax, loss on the sale of securities and $0.5 million, net of tax, accelerated depreciation and lease termination expenses related to the branch closures, for the fourth quarter of 2023 compared to $7.0 million for the fourth quarter of 2022 and $4.5 million for the third quarter of 2023. Basic and diluted net income was $0.82 per share, non-GAAP, and $0.26 per share, GAAP, for the fourth quarter of 2023, compared to basic net income of $1.05 per share and diluted net income of $1.04 per share for the fourth quarter of 2022 and $0.67 per share for the third quarter of 2023. Exclusive of these items, net income was $5.5 million on a non-GAAP basis.

The decrease in quarterly net income, year-over-year, was primarily driven by a restructuring of the investment portfolio leading to the recognition of a $3.3 million, net of tax, loss in the fourth quarter of 2023 and $0.5 million, net of tax, accelerated depreciation and lease termination expenses related to the branch closures. Additionally, net interest income decreased by $1.0 million year-over-year as a result of the lower net interest margin. Interest expense increased by $5.8 million year-over-year, which was partially offset by an increase in interest income of $4.8 million. The provision for credit losses was $0.4 million for the fourth quarter of 2023 compared to a credit to the provision of $0.7 million for the fourth quarter of 2022. Salaries and employee benefits increased by $0.2 million due to an increase of $0.1 million in health insurance costs, as well as increased salary expense for new hires, merit increases effective April 1, 2023, partially offset by decreases in executive incentives and stock compensation. Occupancy and equipment expenses increased by $0.6 million primarily related to the increased expenses recognized in conjunction with the announced branch closures. Data processing expenses increased by $0.1 million, FDIC premiums increased by $0.1 million and miscellaneous expenses increased by $0.2 million primarily attributable to increased employee benefit plan expense.

When compared to the third quarter of 2023, net income decreased by $2.8 million due primarily to $3.3 million, net of tax, in recognized losses from the restructuring of the investment portfolio during the fourth quarter, as previously discussed. Net interest income for the three months ended December 31, 2023 increased by $0.2 million driven by an increase in interest income of $1.0 million, partially offset by an increase of $0.8 million in interest expense. Provision for credit losses increased by $0.2 million due to the continued strong loan growth, which was partially offset by the continued strong credit quality of our loan portfolio and decreased historical loss factors. Gains on the sale of residential mortgages decreased by $0.1 million in the fourth quarter as we experienced a seasonal decline in the mortgage pipeline. Other operating income, including debit card income and trust and brokerage fees, increased by $0.1 million quarter-over-quarter. Operating expenses decreased by $0.5 million. Net OREO expenses decreased by $0.5 million due to gains on sales of OREO properties recognized in the fourth quarter of 2023. Salaries and employee benefits decreased by $0.6 million primarily due to decreases in incentive compensation and health insurance costs during the quarter. These decreases were partially offset by an increase in occupancy and equipment expenses of $0.6 million due to increased expenses recognized in conjunction with the announced branch closures as discussed earlier.

For the year ended December 31, 2023, net income was $15.1 million on a GAAP basis, inclusive of a $3.3 million, net of tax, loss on the sale of securities and $0.5 million, net of tax, in increased expenses related to the branch closures, and $18.8 million on a non-GAAP basis compared to GAAP and non-GAAP basis income of $25.0 million in 2022. The year-over-year $9.9 million decrease in GAAP net income was driven by an increase in total operating expenses of $7.1 million. Salaries and employee benefits increased by $3.4 due primarily to increased salary expense of $2.0 million related to new hires, the competitive environment for labor and merit increases effective April 1, 2023, increased health insurance costs of $1.0 million associated with unusually high claims and decreases of $0.4 in deferred loan costs. Occupancy and equipment expense increased by $0.7 million due primarily to accelerated depreciation and lease termination expenses associated with the announced branch closures, data processing expense increased by $0.5 million due to the implementation of new technology, and FDIC assessments increased by $0.4 million. Other miscellaneous expenses, such as loan service fees, dues and licenses, check fraud expenses, employee benefit plan expense, and miscellaneous expenses increased by $2.0 million and professional fees increased by $0.6 million due to the $0.8 million cash receipt related to reimbursement of litigation expenses that was credited to expenses in 2022. Provision for credit losses increased by $2.2 million when compared to prior year due to increased loan growth during 2023 and qualitative factors with the implementation of Accounting Standards Update 2016-13: Financial Instruments- Credit Losses (“CECL”). Net losses on AFS securities increased by $4.2 million when compared to prior year due to the sale of securities in the fourth quarter of 2023. Net interest income decreased by $0.8 million due to compression of the net interest margin as experienced industry-wide during 2023. These increases were partially offset by increases in gains on sales of mortgages of $0.3 million, service charges on deposit accounts of $0.2 million, and $0.1 million increase in debit card income. Income taxes were down by $3.7 million when comparing the two periods due primarily to reductions in pre-tax income.

Net Interest Income and Net Interest Margin

Net interest income, on a non-GAAP, FTE basis, decreased by $1.2 million for the fourth quarter of 2023 when compared to the fourth quarter of 2022. This decrease was driven by an increase of $5.8 million in interest expense due to an increase of 160 basis points on interest paid on deposit accounts as well as an increase of $85.6 million in average balances of interest-bearing deposit accounts when compared to the same period of 2022. Increased deposit pricing resulted from the continued pressure on deposits as well as a shift in the deposit portfolio mix from non-interest-bearing deposits to interest-bearing accounts including the Insured Cash Sweep (“ICS”) product to ensure full FDIC insurance coverage. Interest income increased by $4.7 million. Interest income on loans increased by $4.2 million due to the increase of 80 basis points in overall yield on the loan portfolio as new loans were booked at higher rates as well as adjustable-rate loans repricing in correlation to the rising rate environment and an increase in average balances of $116.4 million. Investment income decreased by $0.3 million primarily due to a decrease of $22.5 million in average balances as the Corporation made the strategic decision to reinvest cash proceeds from the investment restructure and other principal paydowns of its investments in higher yielding loans. The net interest margin for the three months ended December 31, 2023 was 3.13% compared to 3.63% for the three months ended December 31, 2022.

Comparing the fourth quarter of 2023 to the third quarter of 2023, net interest income, on a non-GAAP, FTE basis, increased by $0.2 million This increase was driven by an increase of $1.0 million in interest income offset by a $0.8 million increase in interest expense. Interest income on loans increased by $1.2 million related to an overall increase of 22 basis points in yield as well as an increase of $34.6 million in average loan balances. Interest expense on deposits increased by $0.8 million due to an increase of 21 basis points in the average rate paid and an increase in average deposit balances of $39.3 million during the quarter. The increase in deposits was primarily driven by the increase of $47.9 million in money market accounts, which was partially offset by a $12.3 million decrease in savings accounts as customers moved deposit balances into a higher-yielding money market products. Additionally, brokered deposits decreased by an average balance of $12.8 million quarter-over-quarter, as $30.1 million of brokered deposits matured in December 2023.

Comparing the year ended December 31, 2023 to the year ended December 31, 2022, net interest income, on a non-GAAP, FTE basis, decreased by $1.1 million. Interest expense on deposits increased by $16.0 million due to an increase in balances of $120.3 million and an increase in yield of 141 basis points. Interest expense on long-term borrowings increased $3.5 million related to $80.0 million in Federal Home Loan Bank (“FHLB”) borrowings obtained during the first quarter of 2023 and an increase in interest rates on variable rate trust preferred borrowings. The increased interest expense resulted in an overall increase of 151 basis points on interest bearing liabilities. This increase was partially offset by an increase of $18.4 million in interest income. The yield on earning assets increased 78 basis points to 4.63% in 2023 compared to 3.85% in 2022 in correlation with the rising interest rate environment, new loans booked at higher rates as well as adjustable rate loans repricing. The net margin was 3.26% in 2023 compared to 3.56% in 2022.

Non-Interest Income

Other operating income, including net (losses)/gains, for the fourth quarter of 2023 decreased by $3.9 million when compared to the same period of 2022. The Corporation recognized $4.2 million in losses related to the sale of AFS securities in the fourth quarter of 2023. Management executed the balance sheet restructuring to reinvest lower-yielding securities to fund its strong loan demand which is expected to increase the yield on earning assets in future quarters. These losses were partially offset by increases in service charges, wealth management income, and gains on sales of mortgages.

On a linked quarter basis, other operating income, including net (losses)/gains, decreased by $4.3 million due primarily to the $4.2 million in losses related to the sale of AFS securities as discussed above. In addition, gains on sales of residential mortgages decreased $0.1 million compared to the prior quarter. These decreases were partially offset by an increase of $0.1 million in wealth management income and an increase of $0.1 million in debit card income.

Other operating income for the year ended December 31, 2023 decreased by $3.6 million when compared to 2022. The $4.2 million loss related to the sale of AFS securities in 2023 was partially offset by a $0.2 million increase in service charges on deposit accounts, $0.1 million increase in wealth management income, and $0.3 million increase in gains on sales of residential mortgages.

Non-Interest Expense

Operating expenses increased by $0.7 million when comparing the fourth quarter of 2023 to the fourth quarter of 2022. Occupancy and equipment expenses increased by $0.6 million related to depreciation and lease termination expenses recognized in conjunction with announced branch closures. Salaries and employee benefits increased by $0.2 million, marketing expenses increased by $0.2 million, FDIC premiums increased by $0.1 million, data processing expenses increased by $0.1 million, and miscellaneous expenses increased by $0.2 million. These increases were partially offset by a $0.6 million decrease in net OREO expenses due to gains from sales of OREO recognized during 2023.

Comparing the fourth quarter of 2023 to the third quarter of 2023, operating expenses decreased by $0.5 million. This decrease was primarily attributable to a $0.5 million decrease in net OREO expenses due to gains recognized in the sale of OREO properties during the fourth quarter of 2023 and a $0.6 million decrease in salaries and employee benefits due to decreased incentive compensation and health insurance costs. These decreases were partially offset by a $0.5 million increase in occupancy and equipment expense primarily related to depreciation and lease termination expenses recognized in conjunction with the announced branch closures.

For the year ended December 31, 2023, non-interest expenses increased by $7.1 million when compared to the year ended December 31, 2022. Salaries and employee benefits increased by $3.4 due primarily to increased salary expense of $2.0 million related to new hires, the competitive environment for labor and merit increases effective April 1, 2023, increased health insurance costs of $1.0 million associated with unusually high claims and decreases of $0.4 in deferred loan costs. Occupancy and equipment expense increased by $0.7 million due to the expenses related to the branch closures, data processing expense increased by $0.5 million as a result of the implementation of a new sales management system, and FDIC assessments increased by $0.4 million. Professional fees increased by $0.6 million related to increased audit expenses in correlation to the new CECL implementation and increased legal and professional expenses due to the receipt of an $0.8 million in proceeds credited to expense in 2022. Other miscellaneous expenses increased by $2.0 million primarily driven by increased check fraud related expenses of $0.5 million, increased employee benefit costs of $1.1 million, increased escrow account fees due to the rising rate environment, miscellaneous loan fees and an increase of $0.2 million in fees associated with the ICS product.

The effective income tax rates as a percentage of income for the years ended December 31, 2023 and December 31, 2022 were 22.7% and 24.5%, respectively. The decrease in the tax rate for the 2023 period was primarily related to a new low-income housing tax credit investment in 2022 that began generating tax credits during the fourth quarter of 2022. This tax credit will continue through 2032.

Balance Sheet Overview

Total assets at December 31, 2023 were $1.9 billion, representing a $57.7 million increase since December 31, 2022. During 2023, cash and interest-bearing deposits in other banks decreased by $24.6 million. In the first quarter of 2023, management made the strategic decision to obtain $61.1 million in brokered certificates of deposit and $80.0 million in FHLB borrowings to strengthen on-balance sheet liquidity in light of the disruption in the banking industry. $30.0 million of the brokered deposits were repaid in September 2023 and during the third quarter, in anticipation of increasing rates, management pre-funded the $30.7 million of brokered deposits set to mature and be repaid in the fourth quarter of 2023 at the same rate in order to maintain cash balances and control interest expense. Total brokered deposits outstanding at December 31, 2023 were $30.0 million.

The investment portfolio decreased by $50.1 million since December 31, 2022 driven by management’s strategic decision to restructure the balance sheet in the fourth quarter by selling $20.4 million of AFS securities and investing the proceeds into higher yielding loans for future earnings growth. Also in the third quarter of 2023, management opted to redeem a $17.8 million tax increment bond (“TIF”) at par to boost liquidity. Loans increased by $127.2 million since December 31, 2022 due primarily to growth in the commercial and residential mortgage portfolios. Premises and equipment decreased by $3.5 million primarily due to accelerated depreciation related to announced branch closures. Other assets, including bank owned life insurance (“BOLI”) and deferred tax assets, increased by $7.0 million during 2023, as pension assets increased by $3.2 million, deferred tax assets increased by $1.3 million, and BOLI increased by $1.3 million.

Total liabilities at December 31, 2023 were $1.7 billion, representing a $47.6 million increase since December 31, 2022. Total deposits decreased by $19.8 million since December 31, 2022. Interest-bearing demand deposits and money market accounts increased by $23.2 million and $20.5 million, respectively, due to a shift in the deposit portfolio mix from non-interest-bearing deposits to interest-bearing accounts including the ICS product to ensure full FDIC insurance coverage, where balances grew by approximately $104.0 million. These increases were offset by decreases in non-interest-bearing deposits of $78.9 million and savings accounts of $59.5 million as we saw businesses and consumers utilizing cash due to the rising rate and inflationary environment. Total certificates of deposit increased by $75.0 million primarily due to an increase of $30.0 million in brokered certificates of deposits and $45.0 million in retail certificates of deposit. Short-term borrowings decreased by $19.1 million since December 31, 2022 primarily due to one municipal customer moving funds from an overnight investment product to a non-interest bearing deposit product in 2023 as well as regular fluctuations in municipal deposit balances. Long-term borrowings increased by $80.0 million in 2023 when compared to December 31, 2022 due to the acquisition of $80.0 million in FHLB borrowings in the first quarter of 2023.

Total AFS and held-to-maturity (“HTM”) securities totaled $311.5 million at December 31, 2023, representing a $50.1 million decrease compared to December 31, 2022. In the third quarter of 2023, management elected to redeem $17.8 million from a non-rated municipal TIF bond at par. During December of 2023, management made a strategic decision to restructure the balance sheet by selling sold available-for-sale (“AFS”) investment securities totaling $20.4 million with a book value of $24.6 million, resulting in an after-tax loss of $3.2 million. The securities had a weighted average book yield of approximately 1.3% and a weighted average life of approximately 6.65 years. The proceeds from the sale will be used to fund loans with a conservative approximate average rate of 7.85%. The Bank projects that the earn-back period will be approximately 3.3 years. Additional decreases in the investment portfolio were primarily related to normal principal amortization. Proceeds from sales and principal amortization during 2023 were used primarily to enhance on-balance sheet liquidity and to fund loan growth throughout the year.

Outstanding loans of $1.4 billion at December 31, 2023 reflected growth of $127.2 million in 2023. Since December 31, 2022, commercial real estate loans increased by $34.9 million, acquisition and development loans increased by $6.5 million and commercial and industrial loans increased by $29.2 million. Growth in the commercial portfolios was driven by increased activity with existing clients as well as cultivating new business relationships. Residential mortgage loans increased $55.5 million related to management’s strategic decision to book new mortgage loans at higher rates to our in-house portfolio. The consumer loan portfolio increased slightly by $1.2 million.

New commercial loan production for the three months ended December 31, 2023 was approximately $36.3 million.  The pipeline of commercial loans as of December 31, 2023 was approximately $22.0 million. At December 31, 2023, unfunded, committed commercial construction loans totaled approximately $29.6 million. Commercial amortization and payoffs were approximately $151.6 million through December 31, 2023 due primarily to pay-offs of short-term commercial loans as well as normal amortizations of the commercial loan portfolio.

New residential mortgage loan production for the fourth quarter of 2023 was approximately $17.8 million, with most of this production comprised of in-house loans.  The pipeline of in-house, portfolio loans as of December 31, 2023 was $7.0 million. The residential mortgage production level declined in the fourth quarter of 2023 due to the increasing interest rates and seasonality of this line of business. Unfunded commitments related to residential construction loans totaled $17.6 million on December 31, 2023. Beginning in the second quarter of 2023, management began shifting more activity towards the secondary market.

Total deposits at December 31, 2023 decreased by $19.8 million when compared to December 31, 2022. In March 2023, the Corporation obtained $61.1 million in new brokered deposits. In August 2023, the Corporation obtained $30.0 million of brokered deposits to pre-fund the maturity of a $30.4 million brokered certificate of deposit that matured in September 2023. In December 2023, $30.6 million in brokered deposits matured and were repaid. In addition, retail certificates of deposit increased by $45.0 million due primarily to a promotional nine-month certificate of deposit product offered in 2023. Interest-bearing demand deposits increased by $23.2 million and money market accounts increased by $20.5 million due to a shift in the deposit portfolio mix from non-interest-bearing accounts to interest-bearing accounts including the ICS product to ensure full FDIC insurance. These increases were offset by decreases in non-interest-bearing deposits of $78.9 million and savings accounts of $59.5 million due to the shift to interest-bearing demand deposit accounts, two relationships having large, planned deposit withdrawals totaling $39.5 million during 2023 to fund business activity, the effects of consumer and commercial spending and the competitive market for deposits.

The book value of the Corporation’s common stock was $24.38 per share at December 31, 2023 compared to $22.77 per share at December 31, 2022. At December 31, 2023, there were 6,639,888 of basic outstanding shares and 6,653,200 of diluted outstanding shares of common stock. The increase in the book value at December 31, 2023 was due to the undistributed net income of $9.6 million during 2023, which was partially offset by a decrease in shareholders’ equity of $2.2 million, net of tax, due to the adoption of CECL (Accounting Standards Codification Topic 326). Accumulated other comprehensive income increased by $3.2 million due primarily to changes in the increased fair values of the Corporation’s available for sale investment securities, the reduction of the Corporation’s investment portfolio from the sale of investments in the fourth quarter and pension assets during the year. In 2023, the Corporation purchased and retired 82,098 shares of the Corporation’s common stock at an average price of $16.79 per share pursuant to the previously announced stock repurchase program. The program, the term of which expires on August 18, 2024 unless sooner terminated or extended by the Corporation’s Board of Directors, may be further utilized as the Board and management deem appropriate.

Asset Quality

On January 1, 2023, the Corporation adopted CECL, which replaced the incurred loss impairment model with an expected loss model. As a result of the CECL adoption, the Corporation recorded a transition adjustment of $2.2 million, net of $0.7 million in tax, to retained earnings as of January 1, 2023 for the cumulative effect of the adoption of CECL. The Corporation recorded a $2.0 million increase to the ACL related to loans and a $0.9 million increase to the allowance for credit losses (the “ACL”) on off balance sheet exposures.

For periods prior to the adoption of CECL, the Corporation recognized credit losses for loans that were collectively evaluated for impairment based on an incurred loss approach, which limited our measurement of credit losses to credit events that were estimated to have already occurred. The allowance for loan losses (the “ALL”) under the incurred model was a valuation allowance for probable incurred losses inherent in the loan portfolio. Management made the determination by taking into consideration historical loan loss experience, diversification of the loan portfolio, amount of secured and unsecured loans, banking industry standards and averages, and general economic conditions. Credit losses were charged against the ALL when the loan balance was confirmed uncollectible. Subsequent recoveries, if any, were credited to the ALL. Ultimate losses varied from current estimates. The estimates were reviewed periodically and as adjustments became necessary, they were reported in earnings in the periods in which they become reasonably estimable.

The ACL was $17.5 million at December 31, 2023 compared to an ALL of $14.6 million at December 31, 2022. The provision for credit losses was $0.4 million for the quarter ended December 31, 2023, compared to a credit to provision of $0.7 million for the quarter ended December 31, 2022. The provision expense recorded in the fourth quarter of 2023 was primarily related to strong loan growth and increases in qualitative risk factors related to the uncertainty of the economy, inflation levels, and rising interest rates, which was partially offset by the reduction of historical loss factors related to the strength of our overall portfolio. Net charge-offs of $0.2 million were recorded for the quarters ended December 31, 2023 and 2022. The ratio of the ACL to loans outstanding was 1.24% at December 30, 2023 and September 30, 2023 and 1.14% at December 31, 2022.

The ratio of year-to-date net charge offs to average loans for the year ending December 31, 2023 was an annualized 0.07%, compared to net charge offs to average loans of 0.06% for 2022. Details of the ratio, by loan type, are shown below. Our special assets team continues to effectively collect on charged-off loans, resulting in ongoing overall low net charge-off ratios.

Ratio of Net (Charge Offs)/Recoveries to Average Loans

	12/31/2023			12/31/2022
Loan Type	(Charge Off) / Recovery			(Charge Off) / Recovery
Commercial Real Estate		(0.02	)%		0.00	%
Acquisition & Development		0.01	%		0.00	%
Commercial & Industrial		(0.09	)%		(0.02	)%
Residential Mortgage		0.00	%		0.03	%
Consumer		(1.04	)%		(1.23	)%
Total Net (Charge Offs)/Recoveries		(0.07	)%		(0.06	)%

Non-accrual loans totaled $4.0 million at December 31, 2023 and $3.5 million at December 31, 2022. OREO balances decreased by $0.2 million to $4.5 million since December 31, 2022 due to sales of OREO properties in the fourth quarter of 2023, which was partially offset by the addition of a new OREO property during the second quarter of 2023. OREO is comprised primarily of $4.0 for one property which has been marked to market and is currently under contract with a targeted settlement in the second quarter of 2024.

Non-accrual loans that have been subject to partial charge-offs totaled $0.1 million at December 31, 2023 and $0.2 million at December 31, 2022.  Loans secured by 1-4 family residential real estate properties in the process of foreclosure totaled $1.8 million at December 31, 2023. There were no loans subject to foreclosure at December 31, 2022.   As a percentage of the loan portfolio, accruing loans past due 30 days or more were 0.24% at December 31, 2023 compared to 0.27% at September 30, 2023 and 0.16% at December 31, 2022. 

ABOUT FIRST UNITED CORPORATION

First United Corporation is a Maryland corporation chartered in 1985 and a financial holding company registered with the Board of Governors of the Federal Reserve System (the “FRB”) under the Bank Holding Company Act of 1956, as amended, that elected financial holding company status in 2021. The Corporation’s primary business is serving as the parent company of First United Bank & Trust, a Maryland trust company (the “Bank”), First United Statutory Trust I (“Trust I”) and First United Statutory Trust II (“Trust II” and together with Trust I, “the Trusts”), both Connecticut statutory business trusts. The Trusts were formed for the purpose of selling trust preferred securities that qualified as Tier 1 capital. The Bank has two consumer finance company subsidiaries- Oak First Loan Center, Inc., a West Virginia corporation, and OakFirst Loan Center, LLC, a Maryland limited liability company – and two subsidiaries that it uses to hold real estate acquired through foreclosure or by deed in lieu of foreclosure – First OREO Trust, a Maryland statutory trust, and FUBT OREO I, LLC, a Maryland limited liability company. In addition, the Bank owns 99.9% of the limited partnership interests in Liberty Mews Limited Partnership, a Maryland limited partnership formed for the purpose of acquiring, developing and operating low-income housing units in Garrett County, Maryland (“Limited Mews”), and a 99.9% non-voting membership interest in MCC FUBT Fund, LLC, an Ohio limited liability company formed for the purpose of acquiring, developing and operating low-income housing units in Allegany County, Maryland (the “MCC Fund”). The Corporation’s website is www.mybank.com.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995.  Forward-looking statements do not represent historical facts, but are statements about management's beliefs, plans and objectives about the future, as well as its assumptions and judgments concerning such beliefs, plans and objectives.  These statements are evidenced by terms such as "anticipate," "estimate," "should," "expect," "believe," "intend," and similar expressions.  Although these statements reflect management's good faith beliefs and projections, they are not guarantees of future performance and they may not prove true.  The beliefs, plans and objectives on which forward-looking statements are based involve risks and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements.  For a discussion of these risks and uncertainties, see the section of the periodic reports that First United Corporation files with the Securities and Exchange Commission entitled "Risk Factors". In addition, investors should understand that the Corporation is required under generally accepted accounting principles to evaluate subsequent events through the filing of the consolidated financial statements included in its Annual Report on Form 10-K for the quarter ended December 31, 2023 and the impact that any such events have on our critical accounting assumptions and estimates made as of December 31, 2023, which could require us to make adjustments to the amounts reflected in this press release.

FIRST UNITED CORPORATION

Oakland, MD

Stock Symbol :  FUNC

Financial Highlights - Unaudited

(Dollars in thousands, except per share data)

	Three Months Ended						Twelve Months Ended
	December 31,			December 31,			December 31,			December 31,
	2023			2022			2023			2022
Results of Operations:
Interest income	$	22,191		$	17,359		$	81,156		$	62,422
Interest expense		7,997			2,179			24,286			4,789
Net interest income		14,194			15,180			56,870			57,633
Provision/(credit) for credit/loan losses		419			(736	)		1,620			(627	)
Other operating income		4,793			4,479			18,331			17,878
Net (losses)/gains		(4,184	)		11			(3,862	)		172
Other operating expense		12,309			11,590			50,243			43,129
Income before taxes	$	2,075		$	8,816		$	19,476		$	33,181
Income tax expense		317			1,847			4,416			8,133
Net income	$	1,758		$	6,969		$	15,060		$	25,048
Per share data:
Basic net income per share	$	0.26		$	1.05		$	2.25		$	3.77
Diluted net income per share	$	0.26		$	1.04		$	2.24		$	3.76
Dividends declared per share	$	0.20		$	0.18		$	0.80		$	0.63
Book value	$	24.38		$	22.77
Diluted book value	$	24.33		$	22.68
Tangible book value per share	$	22.56		$	20.91
Diluted Tangible book value per share	$	22.51		$	20.87
Closing market value	$	23.51		$	19.65
Market Range:
High	$	23.51		$	20.56
Low	$	16.12		$	16.74
Shares outstanding at period end: Basic		6,639,888			6,666,428
Shares outstanding at period end: Diluted		6,653,200			6,692,039
Performance ratios: (Year to Date Period End, annualized)
Return on average assets		0.78	%		1.39	%
Return on average shareholders' equity		9.68	%		18.19	%
Net interest margin (Non-GAAP), includes tax exempt income of $792 and $942		3.26	%		3.56	%
Net interest margin GAAP		3.22	%		3.50	%
Efficiency ratio - non-GAAP (1)		65.12	%		56.27	%

(1) Efficiency ratio is a non-GAAP measure calculated by dividing total operating expenses by the sum of tax equivalent net interest income and other operating income, less gains/(losses) on sales of securities and/or fixed assets.

	December 31,			December 31
	2023			2022
Financial Condition at period end:
Assets	$	1,905,860		$	1,848,169
Earning assets	$	1,725,236		$	1,643,964
Gross loans	$	1,406,667		$	1,279,494
Commercial Real Estate	$	493,703		$	458,831
Acquisition and Development	$	77,060		$	70,596
Commercial and Industrial	$	274,604		$	245,396
Residential Mortgage	$	499,871		$	444,411
Consumer	$	61,429		$	60,260
Investment securities	$	311,466		$	361,548
Total deposits	$	1,550,977		$	1,570,733
Noninterest bearing	$	427,670		$	506,613
Interest bearing	$	1,123,307		$	1,064,120
Shareholders' equity	$	161,873		$	151,793
		.
Capital ratios:
Tier 1 to risk weighted assets		14.42	%		15.06	%
Common Equity Tier 1 to risk weighted assets		12.44	%		12.95	%
Tier 1 Leverage		11.30	%		11.46	%
Total risk based capital		15.64	%		16.12	%
Asset quality:
Net charge-offs for the quarter	$	(195	)	$	(164	)
Nonperforming assets: (Period End)
Nonaccrual loans	$	3,956		$	3,495
Loans 90 days past due and accruing		543			307
Total nonperforming loans and 90 day past due	$	4,499		$	3,802
Modified/Restructured loans	$	-		$	3,028
Other real estate owned	$	4,493		$	4,733
Allowance for credit losses to gross loans		1.24	%		1.14	%
Allowance for credit losses to non-accrual loans		441.86	%		418.77	%
Allowance for credit losses to non-performing assets		194.40	%		171.48	%
Non-performing and 90 day past due loans to total loans		0.32	%		0.30	%
Non-performing loans and 90 day past due loans to total assets		0.24	%		0.21	%
Non-accrual loans to total loans		0.28	%		0.27	%
Non-performing assets to total assets		0.47	%		0.46	%

FIRST UNITED CORPORATION

Oakland, MD

Stock Symbol :  FUNC

Financial Highlights - Unaudited

	December 31,			September 30,			June 30,			March 31,			December 31,			September 30,			June 30,			March 31,
(Dollars in thousands, except per share data)	2023			2023			2023			2023			2022			2022			2022			2022
Results of Operations:
Interest income	$	22,191		$	21,164		$	19,972		$	17,829		$	17,359		$	16,185		$	14,731		$	14,147
Interest expense		7,997			7,180			5,798			3,311			2,179			1,044			760			806
Net interest income		14,194			13,984			14,174			14,518			15,180			15,141			13,971			13,341
Provision/(credit) for credit/loan losses		419			263			395			543			(736	)		(101	)		631			(421	)
Other operating income		4,793			4,716			4,483			4,339			4,479			4,604			4,413			4,382
Net gains		(4,184	)		182			86			54			11			96			13			52
Other operating expense		12,309			12,785			12,511			12,638			11,590			10,329			10,630			10,580
Income before taxes	$	2,075		$	5,834		$	5,837		$	5,730		$	8,816		$	9,613		$	7,136		$	7,616
Income tax expense		317			1,321			1,423			1,355			1,847			2,677			1,708			1,901
Net income	$	1,758		$	4,513		$	4,414		$	4,375		$	6,969		$	6,936		$	5,428		$	5,715
Per share data:
Basic net income per share	$	0.26		$	0.67		$	0.66		$	0.66		$	1.05		$	1.04		$	0.82		$	0.86
Diluted net income per share	$	0.26		$	0.67		$	0.66		$	0.65		$	1.04		$	1.04		$	0.82		$	0.86
Dividends declared per share	$	0.20		$	0.20		$	0.20		$	0.20		$	0.18		$	0.15		$	0.15		$	0.15
Book value	$	24.38		$	23.08		$	23.12		$	22.85		$	22.77		$	19.83		$	19.97		$	20.65
Diluted book value	$	24.33		$	23.03		$	23.07		$	22.81		$	22.68		$	19.80		$	19.93		$	20.63
Tangible book value per share	$	22.56		$	21.27		$	21.29		$	21.01		$	20.91		$	18.03		$	18.17		$	18.83
Diluted Tangible book value per share	$	22.51		$	21.22		$	21.25		$	20.96		$	20.87		$	18.00		$	18.14		$	18.82
Closing market value	$	23.51		$	16.23		$	14.26		$	16.89		$	19.65		$	16.55		$	18.76		$	22.53
Market Range:
High	$	23.51		$	17.34		$	17.01		$	20.41		$	20.56		$	19.27		$	23.80		$	24.50
Low	$	16.12		$	13.70		$	12.56		$	16.75		$	16.74		$	16.18		$	17.50		$	18.81
Shares outstanding at period end: Basic		6,639,888			6,715,170			6,711,422			6,688,710			6,666,428			6,659,390			6,656,395			6,637,979
Shares outstanding at period end: Diluted		6,653,200			6,728,482			6,724,734			6,703,252			6,692,039			6,669,785			6,666,790			6,649,604
Performance ratios: (Year to Date Period End, annualized)
Return on average assets		0.78	%		0.93	%		0.95	%		0.94	%		1.39	%		1.35	%		1.26	%		1.31	%
Return on average shareholders' equity		9.68	%		11.44	%		11.43	%		11.87	%		18.19	%		17.66	%		16.25	%		16.49	%
Net interest margin (Non-GAAP), includes tax exempt income of $76 and $241		3.26	%		3.30	%		3.39	%		3.53	%		3.56	%		3.53	%		3.46	%		3.40	%
Net interest margin GAAP		3.22	%		3.25	%		3.34	%		3.48	%		3.50	%		3.47	%		3.40	%		3.34	%
Efficiency ratio - non-GAAP (1)		65.12	%		66.41	%		66.00	%		67.02	%		56.27	%		51.49	%		57.11	%		58.81	%

(1) Efficiency ratio is a non-GAAP measure calculated by dividing total operating expenses by the sum of tax equivalent net interest income and other operating income, less gains/(losses) on sales of securities and/or fixed assets.

	December 31,			September 30,			June 30,			March 31,			December 31,			September 30,			June 30,			March 31,
	2023			2023			2023			2023			2022			2022			2022			2022
Financial Condition at period end:
Assets	$	1,905,860		$	1,928,201		$	1,928,393		$	1,937,442		$	1,848,169		$	1,803,642		$	1,752,455		$	1,760,325
Earning assets	$	1,725,236		$	1,717,244		$	1,707,522		$	1,652,688		$	1,643,964		$	1,647,303		$	1,608,094		$	1,572,737
Gross loans	$	1,406,667		$	1,380,019		$	1,350,038		$	1,289,080		$	1,279,494		$	1,277,924		$	1,233,613		$	1,181,401
Commercial Real Estate	$	493,703		$	491,284		$	483,485		$	453,356		$	458,831		$	437,973		$	421,942		$	391,136
Acquisition and Development	$	77,060		$	79,796		$	79,003		$	76,980		$	70,596		$	83,107		$	116,115		$	133,031
Commercial and Industrial	$	274,604		$	254,650		$	249,683		$	241,959		$	245,396		$	269,004		$	225,640		$	194,914
Residential Mortgage	$	499,871		$	491,686		$	475,540		$	456,198		$	444,411		$	427,093		$	406,293		$	399,704
Consumer	$	61,429		$	62,603		$	62,327		$	60,587		$	60,260		$	60,747		$	63,623		$	62,616
Investment securities	$	311,466		$	330,053		$	350,844		$	357,061		$	361,548		$	366,484		$	373,455		$	385,265
Total deposits	$	1,550,977		$	1,575,069		$	1,579,959		$	1,591,285		$	1,570,733		$	1,511,118		$	1,484,354		$	1,507,555
Noninterest bearing	$	427,670		$	429,691		$	466,628		$	468,554		$	506,613		$	474,444		$	527,761		$	530,901
Interest bearing	$	1,123,307		$	1,145,378		$	1,113,331		$	1,122,731		$	1,064,120		$	1,036,674		$	956,593		$	976,654
Shareholders' equity	$	161,873		$	154,990		$	155,156		$	152,868		$	151,793		$	132,044		$	132,892		$	137,038
Capital ratios:
Tier 1 to risk weighted assets		14.42	%		14.60	%		14.40	%		14.90	%		15.06	%		14.40	%		14.31	%		14.55	%
Common Equity Tier 1 to risk weighted assets		12.44	%		12.60	%		12.40	%		12.82	%		12.95	%		12.36	%		12.27	%		12.45	%
Tier 1 Leverage		11.30	%		11.25	%		11.25	%		11.47	%		11.46	%		11.23	%		11.23	%		10.94	%
Total risk based capital		15.64	%		15.81	%		15.60	%		16.15	%		16.12	%		15.50	%		15.46	%		15.71	%
Asset quality:
Net (charge-offs)/recoveries for the quarter	$	(195	)	$	(83	)	$	(398	)	$	(245	)	$	(164	)	$	(89	)	$	(179	)	$	(244	)
Nonperforming assets: (Period End)
Nonaccrual loans	$	3,956		$	3,479		$	2,972		$	3,258		$	3,495		$	1,943		$	2,149		$	2,332
Loans 90 days past due and accruing		543			145			160			87			307			569		$	325			37
														0
Total nonperforming loans and 90 day past due	$	4,499		$	3,624		$	3,132		$	3,345		$	3,802		$	2,512		$	2,474		$	2,369
Modified/restructured loans	$	-		$	-		$	-		$	-		$	3,028		$	3,354		$	3,226		$	3,228
Other real estate owned	$	4,493		$	4,878		$	4,482		$	4,598		$	4,733		$	4,733		$	4,517		$	4,477
Allowance for credit losses to gross loans		1.24	%		1.24	%		1.25	%		1.31	%		1.14	%		1.22	%		1.28	%		1.29	%
Allowance for credit losses to non-accrual loans		441.86	%		492.84	%		568.81	%		517.83	%		418.77	%		799.85	%		732.29	%		655.75	%
Allowance for credit losses to non-performing assets		194.40	%		473.12	%		539.79	%		212.40	%		171.48	%		214.51	%		225.10	%		223.37	%
Non-performing and 90 day past due loans to total loans		0.32	%		0.26	%		0.23	%		0.26	%		0.30	%		0.20	%		0.20	%		0.20	%
Non-performing loans and 90 day past due loans to total assets		0.24	%		0.19	%		0.16	%		0.17	%		0.21	%		0.14	%		0.14	%		0.13	%
Non-accrual loans to total loans		0.28	%		0.25	%		0.22	%		0.25	%		0.27	%		0.15	%		0.17	%		0.20	%
Non-performing assets to total assets		0.47	%		0.44	%		0.39	%		0.41	%		0.46	%		0.40	%		0.40	%		0.39	%

(Dollars in thousands - Unaudited)	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Assets
Cash and due from banks	$	48,343		$	78,939		$	86,901		$	154,022		$	72,420
Interest bearing deposits in banks		1,410			1,713			1,650			1,873			1,895
Cash and cash equivalents		49,753			80,652			88,551			155,895			74,315
Investment securities – available for sale (at fair value)		97,169			114,370			120,085			123,978			125,889
Investment securities – held to maturity (at cost)		214,297			215,683			230,759			233,083			235,659
Restricted investment in bank stock, at cost		5,250			5,251			4,490			4,490			1,027
Loans held for sale		443			208			500			184			—
Loans		1,406,667			1,380,019			1,350,038			1,289,080			1,279,494
Unearned fees		(340	)		(371	)		(327	)		(257	)		(174	)
Allowance for credit losses		(17,480	)		(17,146	)		(16,905	)		(16,871	)		(14,636	)
Net loans		1,388,847			1,362,502			1,332,806			1,271,952			1,264,684
Premises and equipment, net		31,459			32,766			33,532			34,207			34,948
Goodwill and other intangible assets		12,103			12,185			12,268			12,350			12,433
Bank owned life insurance		47,607			47,282			46,963			46,652			46,346
Deferred tax assets		11,948			13,020			11,771			11,356			10,605
Other real estate owned, net		4,493			4,878			4,842			4,598			4,733
Operating lease asset		1,367			1,905			1,990			2,072			1,898
Accrued interest receivable and other assets		41,124			37,499			39,836			36,625			35,632
Total Assets	$	1,905,860		$	1,928,201		$	1,928,393		$	1,937,442		$	1,848,169
Liabilities and Shareholders’ Equity
Liabilities:
Non-interest bearing deposits	$	427,670		$	429,691		$	466,628		$	468,554		$	506,613
Interest bearing deposits		1,123,307			1,145,378			1,113,331			1,122,731			1,064,120
Total deposits		1,550,977			1,575,069			1,579,959			1,591,285			1,570,733
Short-term borrowings		45,418			53,330			50,078			52,030			64,565
Long-term borrowings		110,929			110,929			110,929			110,929			30,929
Operating lease liability		1,556			2,347			2,443			2,536			2,373
Allowance for credit loss on off balance sheet exposures		873			985			1,089			1,128			133
Accrued interest payable and other liabilities		32,904			29,207			27,397			25,332			26,444
Dividends payable		1,330			1,344			1,342			1,334			1,199
Total Liabilities		1,743,987			1,773,211			1,773,237			1,784,574			1,696,376
Shareholders’ Equity:
Common Stock – par value $0.01 per share; Authorized 25,000,000 shares; issued and outstanding 6,715,170 shares at September 30, 2023 and 6,666,428 at December 31, 2022		66			67			67			67			67
Surplus		23,734			25,029			24,901			24,529			24,409
Retained earnings		173,900			173,467			170,298			167,229			166,343
Accumulated other comprehensive loss		(35,827	)		(43,573	)		(40,110	)		(38,957	)		(39,026	)
Total Shareholders’ Equity		161,873			154,990			155,156			152,868			151,793
Total Liabilities and Shareholders’ Equity	$	1,905,860		$	1,928,201		$	1,928,393		$	1,937,442		$	1,848,169

	2023														2022
	Year to Date			Q4			Q3			Q2			Q1		Year to Date			Q4			Q3			Q2		Q1
In thousands	(Unaudited)
Interest income
Interest and fees on loans	$	69,569		$	19,290		$	18,055		$	16,780		$	15,444	$	54,448		$	15,097		$	14,058		$	12,861	$	12,432
Interest on investment securities
Taxable		7,173			1,834			1,792			1,779			1,768		6,252			1,719			1,587			1,540		1,406
Exempt from federal income tax		714			53			123			268			270		1,106			272			273			279		282
Total investment income		7,887			1,887			1,915			2,047			2,038		7,358			1,991			1,860			1,819		1,688
Other		3,700			1,014			1,194			1,145			347		616			271			267			51		27
Total interest income		81,156			22,191			21,164			19,972			17,829		62,422			17,359			16,185			14,731		14,147
Interest expense
Interest on deposits		19,198			6,498			5,672			4,350			2,678		3,226			1,729			621			401		475
Interest on short-term borrowings		147			54			33			29			31		112			26			47			21		18
Interest on long-term borrowings		4,941			1,445			1,475			1,419			602		1,451			424			376			338		313
Total interest expense		24,286			7,997			7,180			5,798			3,311		4,789			2,179			1,044			760		806
Net interest income		56,870			14,194			13,984			14,174			14,518		57,633			15,180			15,141			13,971		13,341
Credit loss expense
Loans		1,700			530			322			434			414		(643	)		(740	)		(108	)		624		(419	)
Debt securities held to maturity		45			—			45			—			—		—			—			—			—		—
Off balance sheet credit exposures		(125	)		(111	)		(104	)		(39	)		129		16			4			7			7		(2	)
Provision/(credit) for credit/loan losses		1,620			419			263			395			543		(627	)		(736	)		(101	)		631		(421	)
Net interest income after provision for loan losses		55,250			13,775			13,721			13,779			13,975		58,260			15,916			15,242			13,340		13,762
Other operating income
Net (losses)/gains on investments, available for sale		(4,214	)		(4,214	)		—			—			—		3			—			—			—		3
Net (losses)/gains on investments, held to maturity		—			—			—			—			—		91			(2	)		93			—		—
Gains on sale of residential mortgage loans		381			59			182			86			54		45			14			3			7		21
Gains/(losses) on disposal of fixed assets		(29	)		(29	)		—			—			—		33			(1	)		—			6		28
Net gains		(3,862	)		(4,184	)		182			86			54		172			11			96			13		52
Other Income
Service charges on deposit accounts		2,198			567			569			546			516		1,981			530			523			463		465
Other service charges		929			223			230			244			232		925			239			241			232		213
Trust department		8,282			2,148			2,139			2,025			1,970		8,244			2,006			2,005			2,044		2,189
Debit card income		4,101			1,120			995			1,031			955		3,958			1,036			1,053			983		886
Bank owned life insurance		1,261			325			320			311			305		1,196			305			302			297		292
Brokerage commissions		1,160			360			245			258			297		1,049			244			272			313		220
Other		400			50			218			68			64		525			119			208			81		117
Total other income		18,331			4,793			4,716			4,483			4,339		17,878			4,479			4,604			4,413		4,382
Total other operating income		14,469			609			4,898			4,569			4,393		18,050			4,490			4,700			4,426		4,434
Other operating expenses
Salaries and employee benefits		27,503			6,391			6,957			6,865			7,290		24,130			6,239			6,130			5,793		5,968
FDIC premiums		992			268			254			277			193		636			157			150			155		174
Equipment		4,356			1,188			1,029			1,047			1,092		4,163			1,053			1,037			1,029		1,044
Occupancy		3,445			1,171			747			743			784		2,906			734			734			711		727
Data processing		3,980			1,054			1,011			946			969		3,444			928			890			805		821
Marketing		762			288			220			137			117		543			134			152			151		106
Professional services		2,160			630			490			522			518		1,538			665			(211	)		564		520
Contract labor		643			172			173			159			139		618			136			159			158		165
Telephone		466			125			115			116			110		482			117			112			139		114
Other real estate owned		(89	)		(370	)		139			18			124		590			215			128			152		95
Investor relations		345			73			83			132			57		300			42			39			123		96
Contributions		229			12			74			79			64		288			104			121			42		21
Other		5,451			1,307			1,493			1,470			1,181		3,491			1,066			888			808		729
Total other operating expenses		50,243			12,309			12,785			12,511			12,638		43,129			11,590			10,329			10,630		10,580
Income before income tax expense		19,476			2,075			5,834			5,837			5,730		33,181			8,816			9,613			7,136		7,616
Provision for income tax expense		4,416			317			1,321			1,423			1,355		8,133			1,847			2,677			1,708		1,901
Net Income	$	15,060		$	1,758		$	4,513		$	4,414		$	4,375	$	25,048		$	6,969		$	6,936		$	5,428	$	5,715
Basic net income per common share	$	2.25		$	0.26		$	0.67		$	0.66		$	0.66	$	3.77		$	1.05		$	1.04		$	0.82	$	0.86
Diluted net income per common share	$	2.24		$	0.26		$	0.67		$	0.66		$	0.65	$	3.76		$	1.04		$	1.04		$	0.82	$	0.86
Weighted average number of basic shares outstanding		6,649			6,649			6,714			6,704			6,675		6,666			6,666			6,658			6,650		6,628
Weighted average number of diluted shares outstanding		6,663			6,663			6,728			6,718			6,697		6,692			6,692			6,669			6,661		6,636
Dividends declared per common share	$	0.80		$	0.20		$	0.20		$	0.20		$	0.20	$	0.63		$	0.18		$	0.15		$	0.15	$	0.15

Non-GAAP Financial Measures (unaudited)

Reconciliation of as reported (GAAP) and non-GAAP financial measures

The following tables below provide a reconciliation of certain financial measures calculated under generally accepted accounting principles ("GAAP") (as reported) and non-GAAP. A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with GAAP in the United States. The Company’s management believes the presentation of non-GAAP financial measures provide investors with a greater understanding of the Company’s operating results in addition to the results measured in accordance with GAAP. While management uses these non-GAAP measures in its analysis of the Company’s performance, this information should not be viewed as a substitute for financial results determined in accordance with GAAP or considered to be more important than financial results determined in accordance with GAAP.

The following non-GAAP financial measures exclude losses on the sale of Available for Sale securities and accelerated depreciation and lease termination expenses related to the branch closures.

	Twelve months ended December 31,					Three months ended December 31,
(in thousands, except for per share amount)	2023			2022		2023			2022
Net income - as reported	$	15,060		$	25,048	$	1,758		$	6,969
Adjustments:
Loss on sale of securities		4,214			—		4,214			—
Accelerated depreciation and lease termination expenses		623			—		623			—
Income tax effect of adjustments		(1,097	)		—		(1,097	)		—
Adjusted net income (non-GAAP)	$	18,800		$	25,048	$	5,498		$	6,969
Diluted earnings per share - as reported	$	2.24		$	3.76	$	0.26		$	1.04
Adjustments:
Loss on sale of securities		0.63			—		0.63			—
Accelerated depreciation and lease termination expenses		0.09			—		0.09			—
Income tax effect of adjustments		(0.16	)		—		(0.16	)		—
Adjusted basic and diluted earnings per share (non-GAAP)	$	2.80		$	3.76	$	0.82		$	1.04

	As of or for the twelve months ended
	December 31,
(in thousands, except per share data)	2023			2022
Per Share Data
Basic net income per share (1) - as reported	$	2.25		$	3.77
Basic net income per share (1) - non-GAAP		2.81			3.77
Diluted net income per share (1) - as reported	$	2.24		$	3.76
Diluted net income per share (1) - non-GAAP		2.80			3.76
Basic book value per share	$	24.38		$	22.77
Diluted book value per share	$	24.33		$	22.68
Significant Ratios:
Return on Average Assets (1) - as reported		0.78	%		1.39	%
Loss on sale of securities		0.22	%		—
Accelerated depreciation and lease termination expenses		0.03	%		—
Income tax effect of adjustments		(0.06	%)		—
Adjusted Return on Average Assets (1) (non-GAAP)		0.97	%		1.39	%
Return on Average Equity (1) - as reported		9.68	%		18.19	%
Loss on sale of securities		2.71	%		—
Accelerated depreciation and lease termination expenses		0.40	%		—
Income tax effect of adjustments		(0.71	%)		—
Adjusted Return on Average Equity (1) (non-GAAP)		12.08	%		18.19	%

(1) See reconcilation of this non-GAAP financial measure provided elsewhere herein.

	Three Months Ended
	December 31,
	2023								2022
(dollars in thousands)	Average Balance			Interest		Average Yield/Rate			Average Balance			Interest		Average Yield/Rate
Assets
Loans	$	1,398,393		$	19,308		5.48	%	$	1,281,958		$	15,114		4.68	%
Investment Securities:
Taxable		332,545			1,834		2.19	%		336,727			1,719		2.03	%
Non taxable		8,107			96		4.70	%		26,457			487		7.30	%
Total		340,652			1,930		2.25	%		363,184			2,206		2.41	%
Federal funds sold		60,400			907		5.96	%		35,403			247		2.77	%
Interest-bearing deposits with other banks		1,867			22		4.68	%		1,568			12		3.04	%
Other interest earning assets		5,251			85		6.42	%		1,027			12		4.64	%
Total earning assets		1,806,563			22,252		4.89	%		1,683,140			17,591		4.15	%
Allowance for loan losses		(17,304	)							(15,446	)
Non-earning assets		194,309								177,581
Total Assets	$	1,983,568							$	1,845,275
Liabilities and Shareholders’ Equity
Interest-bearing demand deposits	$	366,450		$	1,440		1.56	%	$	316,361		$	486		0.61	%
Interest-bearing money markets		365,439			3,135		3.40	%		367,866			909		0.98	%
Savings deposits		196,777			51		0.10	%		253,674			84		0.13	%
Time deposits - retail		163,253			1,122		2.73	%		124,417			250		0.80	%
Time deposits - brokered		56,006			751		5.32	%		—			—		—	%
Short-term borrowings		43,693			55		0.50	%		66,399			26		0.16	%
Long-term borrowings		110,929			1,445		5.17	%		30,929			424		5.44	%
Total interest-bearing liabilities		1,302,547			7,999		2.44	%		1,159,646			2,179		0.75	%
Non-interest-bearing deposits		487,012								508,906
Other liabilities		35,957								36,499
Shareholders’ Equity		158,052								140,224
Total Liabilities and Shareholders’ Equity	$	1,983,568							$	1,845,275
Net interest income and spread				$	14,253		2.44	%				$	15,412		3.40	%
Net interest margin							3.13	%							3.63	%

	Twelve Months Ended
	December 31,
	2023								2022
(dollars in thousands)	Average Balance			Interest		Average Yield/ Rate			Average Balance			Interest		Average Yield/ Rate
Assets
Loans	$	1,340,118		$	69,631		5.20	%	$	1,223,388		$	54,513		4.46	%
Investment Securities:
Taxable		335,888			7,173		2.14	%		348,516			6,252		1.79	%
Non taxable		18,471			1,279		6.92	%		26,952			1,981		7.35	%
Total		354,359			8,452		2.39	%		375,468			8,233		2.19	%
Federal funds sold		65,131			3,409		5.23	%		44,207			555		1.26	%
Interest-bearing deposits with other banks		2,585			92		3.56	%		3,061			24		0.78	%
Other interest earning assets		4,048			198		4.89	%		1,027			37		3.60	%
Total earning assets		1,766,241			81,782		4.63	%		1,647,151			63,362		3.85	%
Allowance for loan losses		(16,561	)							(15,568	)
Non-earning assets		199,474								170,128
Total Assets	$	1,949,154							$	1,801,711
Liabilities and Shareholders’ Equity
Interest-bearing demand deposits	$	362,070		$	4,815		1.30	%	$	301,183		$	855		0.28	%
Interest-bearing money markets		333,274			8,672		2.60	%		312,978			1,256		0.40	%
Savings deposits		219,516			240		0.11	%		250,624			154		0.06	%
Time deposits - retail		141,921			2,872		2.02	%		138,865			961		0.69	%
Time deposits - brokered		49,209			2,600		5.28	%		—			—		—	%
Short-term borrowings		47,968			147		0.31	%		63,182			112		0.18	%
Long-term borrowings		94,271			4,941		5.24	%		30,929			1,451		4.69	%
Total interest-bearing liabilities		1,248,229			24,287		1.95	%		1,097,761			4,789		0.44	%
Non-interest-bearing deposits		512,496								533,096
Other liabilities		32,320								33,169
Shareholders’ Equity		156,109								137,685
Total Liabilities and Shareholders’ Equity	$	1,949,154							$	1,801,711
Net interest income and spread				$	57,495		2.68	%				$	58,573		3.41	%
Net interest margin							3.26	%							3.56	%

EX-99.2

Exhibit 99.2

MyBank.com INVESTOR PRESENTATION Fourth Quarter 2023

2 Forward looking statements This presentation contains forward - looking statements as defined by the Private Securities Litigation Reform Act of 1995 . Forward - looking statements do not represent historical facts, but are statements about management's beliefs, plans and objectives about the future, as well as its assumptions and judgments concerning such beliefs, plans and objectives . These statements are evidenced by terms such as "anticipate," "estimate," "should," "expect," "believe," "intend," and similar expressions . Although these statements reflect management's good faith beliefs and projections, they are not guarantees of future performance and they may not prove true . The beliefs, plans and objectives on which forward - looking statements are based involve risks and uncertainties that could cause actual results to differ materially from those addressed in the forward - looking statements . For a discussion of these risks and uncertainties, see the section of the periodic reports that First United Corporation files with the Securities and Exchange Commission entitled "Risk Factors . Whether actual results will conform to expectations and predictions is subject to known and unknown risks and uncertainties . Actual results could be materially different from management’s expectations . This presentation should be read in conjunction with our Annual Report on Form 10 - K, as amended, for the year ended December 31 , 2022 , including the sections of the report entitled “Risk Factors”, as well as the reports and other documents that we subsequently file with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www . sec . gov or at our website at www . mybank . com . Except as required by law, we do not intend to publish updates or revisions of any forward - looking statements we make to reflect new information, future events or otherwise .

3 I. II. II. Corporate Overview Financial Performance Appendices Pg. 4 Pg. 9 Pg. 31 Table of Contents

Our Mission To enrich the lives of our associates, customers, communities and shareholders through uncommon commitment to service and customized financial solutions. Corporate Overview Founded: 1900 Headquarters: Oakland, MD Locations: 26 branches Business Lines: ▪ Commercial & Retail Banking ▪ Trust Services ▪ Wealth Management Ticker: FUNC (Nasdaq) Website: www.MyBank.com Overview West Virginia Maryland • Pittsburgh, PA • Washington, DC • Columbus, OH • Baltimore, MD • Richmond, VA Morgantown, WV භ • Philadelphia, PA • Harrisburg, PA Winchester, VA භ Star denotes Oakland, Maryland Headquarters 4

5 West Region Central Region East Region Loans (000s) $324,828 $421,333 $543,336 Deposits (000s) $134,408 $797,479 $477,038 Deposit Market Share (1) (at June 30, 2023) 2% 47% 4% Branches 5 10 11 Note: Out of market loans represent $118 million and are not reflected in this table; Brokered CDs represent $30 million and are not reflected in this table (1) Source: FDIC Market Share Data, most current. Deposit market share for each region includes the following counties: West : Harrison, WV; Monongalia, WV Central: Garrett, MD; Allegany, MD; Mineral, WV East: Washington, MD; Frederick, MD; Berkeley, WV Core Markets

6 Core Strengths ▪ Diversified revenue stream driven by trust and brokerage fee income provides protection during times of low interest rates Diversified Revenue Stream ▪ Stable legacy markets produce steady low - cost funding ▪ Technology and business relationships drive growth Core Deposit Franchise ▪ Diverse and experienced Board with the skills to oversee risks, strategic initiatives and governance best practices ▪ Ongoing Board succession strategy Engaged & Diverse Leadership ▪ Supporting local causes with financial education, consultation and robust products and services ▪ Knowledgeable associates committed to helping clients & the communities we serve Culture of Engagement ▪ Well - established operational infrastructure will support future growth ▪ Expense management focus, hybrid work environment and technology drive cost savings Expense Structure ▪ Strong underwriting guidelines and risk management framework ▪ Focus on risk mitigation, loan concentration management and information security Robust Enterprise Risk Management ▪ Innovative and dynamic approach to attracting and retaining clients ▪ Investment in FinTech funds provides early exposure to new technology Forward - Thinking Approach ▪ Regulatory capital ratios significantly above regulatory requirements ▪ Significant access to liquidity sources Financial Strength

7 Risk Management, Monitoring & Mitigation Underlies all Strategic Priorities ▪ Low net charge - offs and strong asset quality resulting from conservative and proactive credit culture ▪ ACL level of 1.24%; future provisioning based on loan growth, economic environment and asset quality changes ▪ Diversified commercial loan portfolio and geographic footprint ▪ Disciplined loan growth strategy, concentration management, stress testing and exception tracking and monitoring ▪ Well - defined loan approval levels ▪ Centralized risk rating and monitoring of risk rating migration and delinquency trends ▪ Robust annual third - party loan review ▪ Maintaining a slightly asset sensitive balance sheet and positioning for down rate environment ▪ Limiting longer - term investment exposure and actively managing loan and deposit terms ▪ Focused on capturing core, low - cost deposits ▪ Monitoring dynamic and static rate ramp scenarios ▪ Board regularly briefed on cyber - security matters ▪ Robust information security training programs for associates and Board ▪ Regular third - party review and testing of information security, compliance processes and cybersecurity controls ▪ No security breaches to - date ▪ Adaptive fraud detection and management ▪ Strong capital levels well above regulatory “well - capitalized” definition ▪ Conservative dividend payout policy to improve TCE and maintain capital during this turbulent economic environment ▪ Capital stress tests indicate Bank is well positioned to absorb potential losses ▪ Loan to deposit ratio of 91% ▪ Liquidity contingency plan in place and funds position monitored daily given recent market stress ▪ Liquidity stress testing performed quarterly with strong liquidity under various scenarios ▪ Available borrowing capacity of $367 million through correspondent lines of credit, FHLB and the Federal Reserve ▪ Strong, stable low - cost core deposit franchise of 88% of total deposit portfolio Cyber - Security & Fraud Monitoring Asset Quality Capital Liquidity Management Interest Rate Sensitivity

Strategic Pillars & Key Objectives Culture & Human Capital ▪ Employ more robust recruitment methods to capitalize on talent in new and existing markets ▪ Attract and hire passionate, diverse talent to engage with clients and prospects across broader geographics ▪ Promote associate retention and career development through mentoring programs, leadership, and educational opportunities ▪ Build on succession plan by fostering innovative, longer - term strategic thinking Digital & Data Analytics ▪ Provide holistic, seamless client experience across all business lines using integrated relationship teams, customized financial solutions, and personal service ▪ Prioritize and implement line of business profitability models ▪ Monitor asset quality to protect capital during period of economic uncertainty ▪ Improve efficiency through execution of technology plan ▪ Increase education , internally and externally, on sophisticated cyber and fraud scams and methods to prevent financial loss Market Awareness, Expansion & Opportunities ▪ Deepen customer engagement to expand our market penetration and increase customer profitability ▪ Seek opportunistic acquisitions in banking and wealth management ▪ Optimize retail network and utilization of real estate ▪ Expand investor relations and attract new investors to diversify shareholder mix Effective use of technology, marketing and communications, and an environmental focus underlies all strategic priorities. 8

Fourth Quarter Financial Highlights $5.5 Million Net Income (1) $0.82 Diluted EPS (1) 0.97% * ROAA (1) 12.92 * ROATCE (1) 3.13% NIM ▪ Total assets declined $22.3 million compared to September 30, 2023 ▪ Consolidated net income (1) of $5.5 million in 4Q23 compared to $7.0 million in 4Q22 and $4.5 million in linked quarter; pre - provision net revenue of $7.3 million compared to $8.1 million and $6.1, respectively ▪ Net interest income, on a non - GAAP, FTE basis* increased by 1.11% in 4Q23 compared to 3Q23, driven by a 4.59% increase in interest income partially offset by a 11.41% increase in interest expense, driven by the competitive deposit landscape ▪ Asset quality remains strong with the ratio of the allowance for credit losses (“ACL”) to loans outstanding at 1.24% in 4Q23 and the linked quarter ▪ Efficiency ratio of 61.25% (1) for the fourth quarter of 2023 compared to 67.28% for the linked quarter; decrease related to gains on sales of OREO properties and reduced check fraud expense (1) See Appendix for a reconciliation of these non - GAAP financial measure * 4Q2023 Annualized 9

Year to Date Financial Highlights $18.8 Million Net Income (1) $2.80 Diluted EPS (1) 0.97% ROAA (1) 12.92 ROATCE (1) 3.26% NIM ▪ Total assets increased $57.7 million compared to December 31, 2022 ▪ Consolidated net income (1) of $18.8 million for the twelve months ended December 31, 2023, compared to $25.0 million for the twelve months ended December 31, 2022; pre - provision net revenue of $25.9 million compared to $32.5 million, respectively ▪ Net interest income, on a non - GAAP, FTE basis* decreased by $1.0 million for the twelve months ended December 31, 2023, compared to the twelve months ended December 31, 2022, driven by increased interest expense related to competitive deposit pricing and obtaining wholesale funds to provide on balance sheet liquidity ▪ Net interest margin of 3.26% for twelve months ended December 31, 2023, compared to 3.56% for the twelve months ended December 31, 2022; the yield on earning assets increase of 78 basis points was offset by 148 basis points increase in cost of interest - bearing liabilities ▪ The ratio of the allowance for credit losses (“ACL”) to loans outstanding was 1.24% in 4Q23 compared to 1.14% at December 31, 2022 and 1.24% in the linked quarter ▪ Efficiency ratio of 65.12% (1) year to date, impacted by unusually high employee insurance costs and increased check fraud expense. (1) See Appendix for a reconciliation of these non - GAAP financial measure 10

11 Long - Term Growth Pre - Provision Net Revenue ($ in millions) (1) $17.8 $23.2 $30.8 $32.5 $25.9 2019 2020 2021 2022 2023 +5.5% YoY (1) See Appendix for a reconciliation of these non - GAAP financial measures $1.85 $1.97 $3.54 $3.76 $2.80 2019 2020 2021 2022 2023 +6.2% YoY Diluted Earnings per Share (1) Total Deposits ($ in millions) $1,142 $1,422 $1,469 $1,571 $1,551 2019 2020 2021 2022 2023 +6.9% YoY Total Gross Loans, including PPP ($ in millions) $1,039 $1,168 $1,154 $1,279 $1,407 2019 2020 2021 2022 2023 +10.8% YoY $114 PPP $8 PPP

12 Solid Profitability (1) See Appendix for a reconciliation of these non - GAAP financial measures 11.44% 11.92% 19.78% 19.94% 12.92% 2019 2020 2021 2022 2023 Long - term Strategic Target 13% - 15% 0.93% 0.86% 1.35% 1.39% 0.97% 2019 2020 2021 2022 2023 Long - term Strategic Target 1.25% - 1.60% Core ROAA (non - GAAP (1) ) Core ROATCE (non - GAAP (1) )

13 Total 1 - 4 Family 36% CRE - NOO 21% C&I 19% CRE - OO 11% C&D 6% Consumer 4% Multi - family 3% Loan Diversification Loan Portfolio Mix (12/31/2023) RE/Rental/Leasing NOO 23% RE/Rental/ Leasing OO, C&I 20% All Other 17% Accommodations 12% Services 8% RE/Rental/Leasing Multifamily 6% Trade 2% Construction - Developers 1% Health Care / Social Assistance 4% RE/Rental/Leasing - Developers 4% Construction - All Other 3% Commercial Loan Mix (12/31/2023)

14 Commercial Industry Mix by Origination Year Commercial Industry Mix by Origination Prior to 2000 2000 - 2005 2006 - 2010 2011 - 2015 2016 - 2020 2021 - Current Total RE / Rental / Leasing - NOO -$ 4,511,380$ 3,142,786$ 12,499,197$ 87,691,678$ 99,922,663$ 207,767,704$ RE / Rental / Leasing - OO, C&I 20,857 38,421 1,344,051 8,274,131 51,348,998 111,423,903 172,450,361 RE / Rental / Leasing - Multifamily - 81,443 2,273,832 9,833,888 16,426,668 21,741,781 50,357,612 RE / Rental / Leasing - Developers - 85,479 79,729 - 3,171,671 30,787,987 34,124,866 Construction - All Other 37,250 79,353 120,111 3,095,104 8,722,609 18,256,532 30,310,959 Construction - Developers - - 2,324,260 84,334 - 8,615,261 11,023,855 Accommodations - 1,479,762 4,044,586 10,850,913 48,571,947 21,955,204 86,902,412 Services - 2,266,924 550,133 9,311,449 17,088,184 41,551,827 70,768,517 Health Care / Social Assistance - 424,252 2,024,903 5,106,929 8,797,142 16,759,032 33,112,258 Trade - 127,587 232,442 1,355,794 11,672,017 7,941,918 21,329,758 All Other 38,774 326,278 1,307,059 938,171 27,884,712 122,231,454 152,726,448 Totals 96,881$ 9,420,879$ 17,443,892$ 61,349,910$ 281,375,626$ 501,187,562$ 870,874,750$

15 Commercial Real Estate Focus on risk mitigation and managing of concentrations ▪ CRE / Total Capital: 238% ▪ ADC / Total Capital: 37% * There are no office buildings located in metropolitan markets or over four stories. ** There are no major/big box retail tenants. OFFICE* Geography Note Book Balance Number of loans Avg Loan Balance Note Book Balance Number of loans Avg Loan Balance Note Book Balance Number of loans Avg Loan Balance Central 7,264,103$ 27 269,041$ 8,073,434$ 10 807,343$ 15,337,537$ 37 414,528$ East 5,929,216$ 14 423,515$ 24,214,519$ 11 2,201,320$ 30,143,735$ 25 1,205,749$ OOM 86,899$ 1 86,899$ 760,569$ 1 760,569$ 847,468$ 2 423,734$ West 7,680,878$ 16 480,055$ 47,310,504$ 19 2,490,027$ 54,991,382$ 35 1,571,182$ Grand Total 20,961,096$ 58 361,398$ 80,359,026$ 41 1,959,976$ 101,320,122$ 99 1,023,436$ % of Gross Loans 1.49% 5.71% 7.20% % of CRE 4.25% 16.28% 20.52% RETAIL** Geography Note Book Balance Number of loans Avg Loan Balance Note Book Balance Number of loans Avg Loan Balance Note Book Balance Number of loans Avg Loan Balance Central 8,842,334$ 18 491,241$ 665,113$ 6 110,852$ 9,507,447$ 24 148,763$ East 10,192,358$ 13 784,028$ 41,081,109$ 8 5,135,139$ 51,273,467$ 21 2,511,626$ OOM 2,847,370$ 2 1,423,685$ 15,834,620$ 4 3,958,655$ 18,681,990$ 6 3,651,356$ West 2,722,417$ 6 453,736$ 13,361,730$ 10 1,336,173$ 16,084,147$ 16 1,145,259$ Grand Total 24,604,479$ 39 630,884$ 70,942,572$ 28 2,533,663$ 95,547,051$ 67 1,426,075$ % of Gross Loans 1.75% 5.04% 6.79% % of CRE 4.98% 14.37% 19.35% CRE - Owner Occupied CRE - Non-Owner Occupied Total CRE - Owner Occupied CRE - Non-Owner Occupied Total

16 Variable Rate Loans and Repricing * Includes personal lines of credit and home equity lines

17 Credit Quality ALL / ACL Trends (Net Charge - Offs)/Average Loans - 0.02% 0.13% - 0.02% - 0.02% - 0.07% 2019 2020 2021 2022 2023 Nonaccrual Loans / Total Loans 1.40% 0.35% 0.21% 0.27% 0.28% 2019 2020 2021 2022 2023 NPAs / Total Assets 1.30% 0.99% 0.60% 0.46% 0.48% 2019 2020 2021 2022 2023 1.19% 1.41% 1.38% 1.14% 1.24% 2019 2020 2021 2022 2023

18 Investment Portfolio Sector Par (000s) Portfoli o % Book Yield Duration Treasury/Agency 115,888 36% 1.81% 4.76 Fixed MBS 52,908 16% 2.36% 5.28 CMO 76,257 24% 1.86% 6.51 Municipal 15,420 5% 4.72% 5.79 Corporate 1,000 1% 5.78% 2.71 Other 58,458 18% 1.99% 4.49 TOTAL $319,931 100.0 2.06% 5.25 Ratings: 100% of municipal holdings are rated A or better* $319.9 Million Year 2024 2025 2026 2027 2028 Thereafter Annual Cashflow ($000’s) $67,997 $23,721 $27,728 $30,825 $16,533 $138,576 Base Case Portfolio Total Cashflow Treasury/ Agency CMO Fixed MBS Other Municipal Corporate

19 Shocked Investment Portfolio Unrealized Gains / Losses Capital Impact Intent Dn200 Dn100 BaseCase Up100 Up200 Up300 Up400 AFS - 8,850 - 12,792 - 16,789 - 20,751 - 24,707 - 28,445 - 31,627 HTM - 7,782 - 18,553 - 29,927 - 38,611 - 47,851 - 56,569 - 63,948 Total - 16,632 - 31,345 - 46,716 - 59,362 - 72,559 - 85,013 - 95,576 Corp As Reported Corp Pro - Forma AFS + HTM Sale Corp Difference Bank As Reported Bank Pro - Forma AFS + HTM Sale Bank Difference Federal Reserve Minimum RBC Thresholds Regulatory Well - Capitalized Thresholds Corp Excess Above Well - Capitalized (After Proforma Sale) Tier 1 Capital 218,264 182,002 (36,262) 189,370 153,108 (36,262) Total Risk Based Capital (RBC) 236,661 200,361 (36,301) 207,767 171,031 (36,736) CET 1 Ratio 12.44% 10.35% (2.09%) 12.81% 10.68% (2.13%) 4.50% 6.50% 3.85% Tier 1 Ratio 14.42% 12.39% (2.03%) 12.81% 10.68% (2.13%) 6.00% 8.00% 4.39% Total RBC Ratio 15.64% 13.64% (1.99%) 14.05% 11.93% (2.12%) 8.00% 10.00% 3.64% Leverage Ratio 11.30% 9.42% (1.88%) 9.92% 8.02% (1.90%) 4.00% 5.00% 4.42% Locally held TIF bonds of $1.8 million and Trust Preferred securities of $18.7 million have been excluded from the sale impac t

20 Deposits 26% 30% 34% 32% 28% 14% 14% 16% 23% 23% 38% 40% 39% 36% 37% 21% 16% 11% 8% 10% 1% 0% 0% 0% 2% 2019 2020 2021 2022 2023 NIB Demand IB Demand MMA & Savings CDs - Retail CDs - Brokered $1.57 $1.14 $1.58 $1.42 $1.57 Deposit Composition ($ in billions as of 12/31/2023) 92% 82% 79% 81% 91% Loan to Deposit Ratio 2019 2020 2021 2022 2023 Deposit levels reduced due to industry disruption early in 2023, fierce competition for deposits and inflationary spending by consumers, businesses and municipalities. Deposit Type Balance % Insured Deposits $1,183,183,830 76% Uninsured – Uncollateralized Deposits $221,319,910 14% Uninsured - Collateralized Deposits $146,473,166 10% Deposit Type Balance (MMs) % Retail Deposits $820,953,593 53% Business Deposits $730,023,313 47%

21 Funding 47% 48% 5% Commercial Deposits Retail Deposits Borrowings Funding Mix Brokered/Wholesale Maturities As part of our liquidity contingency funding plan, management conservatively raised on - balance sheet cash levels in March 2023 by $140 million utilizing wholesale funding. $30 million was repaid in the fourth quarter of 2023. A total of $30.0 million in brokered CDs and $80 million in FHLB advances remained in our portfolio at December 31, 2023. These will be repaid as cash levels permit. $40 $15 $15 $40 September 2024 August 2024 May 2024 March 2024 Dollars (in millions) FHLB Advance Brokered CD FHLB Advance 4.53% 5.33% 5.31% 4.70% Brokered CD

22 Net Interest Margin (1) See Appendix for a reconciliation of these non - GAAP financial measures 4.41% 4.57% 3.99% 3.63% 3.85% 4.63% 0.86% 1.18% 0.91% 0.51% 0.44% 1.92% 3.74% 3.68% 3.34% 3.28% 3.56% 3.26% 0.42% 0.70% 0.49% 0.24% 0.21% 1.16% -0.5% 0.5% 1.5% 2.5% 3.5% 4.5% 2018 2019 2020 2021 2022 2023 Yield on Earning Assets Cost of Interest-bearing Liabilities Net Interest Margin Cost of Deposits

23 Diversified Fee Income (1) See Appendix for a reconciliation of these non - GAAP financial measures Composition Trust and Brokerage 50% Service Charges 17% Net Gain on Loan Sales 2% Debit Card Income 22% Bank - owned Life Insurance 7% Other Noninterest Income 2% Non - Interest Income Mix 4Q2023 $1,084 $1,212 $1,377 $1,482 $1,359 $1,532 2018 2019 2020 2021 2022 2023 Trust & Brokerage Assets Under Management (MMs) ▪ First United’s non - interest income (1) comprised 25% of operating revenue for 2023 ▪ Fee - based business provides stable growth and a diversified revenue stream not directly tied to interest rates, as well as opportunities to build client relationships ▪ First United’s diverse array of products provides opportunities to fully engage with customers and produce stable increases to earnings

24 Committed to Efficiency & Innovation 70.9% 64.6% 57.5% 56.4% 65.1% 2019 2020 2021 2022 2023 (1) See Appendix for a reconciliation of these non - GAAP financial measures Efficient operational platforms and fraud protection ▪ Mortgage Bot ▪ SecureLOCK Premium Debit Card Fraud ▪ Credit Insights/ Savvy Money Cross Marketing Tool ▪ ProfitStars forecasting model ▪ Automated Loan Booking ▪ Vericast Consumer Loan Lead Generator ▪ Customer Service Center Enhancements ▪ U1 - Connect Customer Relationship Management Software Efficiency Ratio (1) Strategic Target 53% - 58% FinTech Investments ▪ Provision IAM ▪ FinTech Funds Planned solutions for a seamless and secure client experience: ▪ Zelle for Business ▪ Online Banking External Transfer ▪ New Customer Relationship Management Tool ▪ Consumer Online and Mobile Banking Digital Platform Upgrade ▪ Business Online and Mobile Banking Digital Platform Upgrade ▪ Check Fraud Prevention Solution Increase in 2023 due to increased salaries, life and health insurance costs, FDIC premiums, data processing and increased check fraud expenses

25 Liquidity Position Liquidity Sources (12/31/2023) Amount Available ($ in thousands) Amount Used ($ in thousands) Net Availability ($ in thousands) Internal Sources Excess Cash $28,513 $28,513 Unpledged Securities (BV) $62,036 $62,036 External Sources Federal Reserve (Discount Window) $12,223 $12,223 Correspondent Unsecured Lines of Credit FHLB Bank Term Funding Program* $140,000 $227,938 $69,476 $82,500 $140,000 $145,438 $69,476 Total Funding Sources $540,186 $82,500 $457,686 * Obtained $40.0 million of bank term funding in January 2024 at a rate of 4.87% to enhance on - balance sheet liquidity.

26 Interest Rate Risk (1) Standard Model Assumptions Interest Rate Risk Sensitivity ▪ The Bank’s interest rate risk position is stress tested under three interest rate ramp scenarios to determine the impact on net interest income, net income and capital under dynamic and static balance sheet conditions. ▪ The Bank’s net interest income position at a slightly asset sensitive position. ▪ The Bank’s largest risk from an interest rate risk perspective is falling rate scenarios but has improved from prior quarter. ▪ Assumptions regarding offering rates, loan and investment prepayment speeds, beta and decay rates are reviewed and adjusted on a quarterly basis. Management Outlook & Strategy ▪ Disciplined loan pricing ▪ Manage deposit pricing on relationship and exception basis ▪ Deposit acquisition through short - term CD promotions and adjustable - rate money market products for businesses, municipalities and consumers ▪ $30 million brokered CD in two $15 million brokered CDs with maturities in second and third quarters ▪ $80 million in FHLB advances with $40 million maturing in March and $40 million in August - 400 - 300 - 200 - 100 Flat +100 +200 +300 +400 Net Interest Income (12/31/23) (13.2%) (8.6%) (5.1%) (2.12%) 1.9% 3.7% 5.5% 7.3% Net Interest Income (9/30/23) (15.2%) (9.8%) (5.7%) (2.3%) 2.3% 4.7% 7.0% 9.4% EVE (9/30/23) (7.4%) (0.2%) 3.5% 3.8% (1.2%) (6.1%) (9.1%) (12.7%) 12 Month Sensitivity Shock (1) Standard Model Assumptions

27 Capital Management 16.29% 16.08% 15.89% 16.12% 15.64% 2019 2020 2021 2022 2023 11.77% 10.36% 10.80% 11.46% 11.30% 2019 2020 2021 2022 2023 12.79% 12.61% 12.50% 12.96% 12.44% 2019 2020 2021 2022 2023 15.17% 14.83% 14.64% 15.06% 14.42% 2019 2020 2021 2022 2023 CET1 Ratio Leverage Ratio Tier 1 Ratio Total Risk - Based Capital Ratio Regulatory Well - Capitalized 10% 5% 8% 6.5%

28 Capital Management $16.17 $17.17 $19.61 $20.90 $22.56 2019 2020 2021 2022 2023 8.03% 6.97% 7.56% 7.59% 7.91% 2019 2020 2021 2022 2023 Tangible Book Value / Share TCE Ratio

29 Strategic Targets Metric Actual 12/31/2022 Actual 12/31/2023 Non - GAAP 12/31/2023 Long Term Strategic Target Range (*) Strong Shareholder Return EPS Growth (YoY) 27% - 40% - 26% (1) 8% - 12% Dividend Payout Ratio 15.9% 34.6% 34.6% 20% - 25% ROAA 1.39% 0.78% 0.97% (1) 1.25% - 1.60% ROATCE 19.94% 10.51% 12.92% (1) 13% - 15% TCE Ratio 7.59% 7.91% 7.91% 8% - 10% High Quality, Diversified Revenue Stream Revenue Growth (YoY) 3.3% 0.0% 0.0% 6% - 8% Non - Int Inc / Revenue 23.7% 24.8% 24.8% 21% - 23% N IM 3.56% 3.26% 3.26% 3.5% - 3.8% Balance Sheet Growth % Loan Growth 10.9% 9.9% 9.9% 7% - 10% Loans / Assets 69% 74% 74% 70% - 76% Loans / Deposits 81% 91% 91% 85% - 90% Highly Efficient Operations Efficiency Ratio (adjusted for non - core items) 56.4% 65.1% (1) 65.1% (1) 53% - 58% Robust Risk Enterprise Management NPLs / Loans 0.30% 0.32% 0.32% 0.50% - 1.00% Net Charge Offs / Avg. Total Loans - 0.06% - 0.07% - 0.07% 0.10% - 0.50% (*) Targets reviewed on an annual basis – Revised June 2023 (1) See Appendix for a reconciliation of these non - GAAP financial measures (1) See Appendix for a reconciliation of these non - GAAP financial measure

Strong Investor Relations & Shareholder Engagement Members of the Board and senior management routinely engage with shareholders and other stakeholders, and management regularly updates the Board in the context of ongoing investor discussions. These engagements help the Board and management gather feedback on a variety of topics, including strategic and financial performance, ESG disclosure, executive compensation, Board composition, and leadership structure. Clear long - term strategic plan with performance targets x Dedicated Investor Relations contact x Investor conferences and prospective investor engagement x Investor presentations and periodic outreach to institutional and retail shareholders x 30 How to contact your Board: Shareholders and interested parties wishing to contact our Board may send a letter to First United Co rporation Board of Directors, c/o Tonya K. Sturm, Secretary, First United Corporation, 19 South Second Street, Oakland, Maryland, 21550 - 00 09 or by e - mail at tsturm@mybank.com. The Secretary will deliver all shareholder communications directly to the Board for consideratio n.

31 I. II. III. IV. Management Team Board of Directors ESG Journey & Statistics Non - GAAP Reconciliation Pg. 32 Pg. 33 Pg. 36 Pg. 38 Appendices

32 Our Dedicated Management Team Carissa L. Rodeheaver Chairman of the Board, President & CEO 31+ year career with First United with in - depth industry, wealth management, financial and operational experience Jason B. Rush SVP & Chief Operating Officer 29 years with in - depth industry, retail, risk and compliance and operations experience Tonya K. Sturm SVP & Chief Financial Officer, Corp. Secretary & Treasurer 35+ years of banking, audit, credit, retail, risk and compliance and financial experience R.L. Fisher SVP & Chief Revenue Officer 25+years with in - depth industry, retail, commercial and mortgage banking experience Keith R. Sanders SVP & Chief Wealth Officer 30+ years specializing in wealth management, estate planning, trust administration and financial planning Our leadership team reflects the diversity of thought from the communities we serve, executes on our strategy and drives shareholder returns.

33 33 John F. Barr Independent Director Owner, Ellsworth Electric, Inc. Sanu Chadha Independent Director Managing Partner, M&S Consulting Christy DiPietro Independent Director, Audit Chair Chartered Financial Analyst, Hidden Cove Advisory Patricia Milon Independent Director Principal, Milford Advisory Group, LLC I. Robert Rudy Independent Director President, I.R. Rudy’s, Inc. Marisa Shockley Independent Director , Compensation Chair Owner, Shockley, Inc. H. Andrew Walls, III Independent Director President, MPB Print & Sign Superstore Member, MEGBA, LLC Beth E. Moran Independent Director, The Law Offices of Beth E. Moran Brian Boal Lead Independent Director, Nomination & Governance Chair Boal & Associates, PC Carissa L. Rodeheaver Chairman of the Board, President & CEO First United Corporation and First United Bank & Trust Board of Directors Kevin Hessler Independent Director , Principal, LSWG, Inc.

34 Board of Directors Thoughtful Evaluation and Evolution Our Board is comprised of a diverse group of directors who bring a variety of perspectives, experience, and characteristics to First United. Director Diversity 55% 91% of our directors are gender and/or racially diverse of our directors are independent 0 - 5 5 - 10 10+ TENURE >60 50 - 60 <50 AGE Our Nominating and Governance Committee is responsible for determining directorship criteria, identifying and evaluating candidates for the Board, and regularly assessing the Board’s governance practices. x Annual Committee and Self - Evaluations x Balanced Tenure, with four directors added in the past four years x Retirement policy, at the age of 75 x Routine shareholder & stakeholder engagement x Policy to interview a diverse slate of candidates x 100% Independent Board Committees x Majority Voting Standard for Director Elections

35 Board of Directors The First United board of directors brings a diverse range of skills, experiences, and backgrounds to the work of overseeing ris k and strategy. With experience in fields such as banking, government, accounting, investing, project management, technology, and a range of local en trepreneurial businesses, they apply these diverse backgrounds to their work on behalf of our shareholders. Director Skills Matrix Barr Boal 1 Chadha DiPietro 1 Hessler 1 Milon Moran Rodeheaver Rudy Shockley 1 Walls Executive Leadership x x x x x x x x Public Company Board Experience x x x Information Technology x x Financial Services/ Banking x x x x x x Asset Management x x x x Brokerage/ Investment Banking x x x Strategic Planning x x x x x x x x x x x Accounting/Finance x x x x x Regulatory x x x x Risk Management x x x x x x x x Legal Expertise x x Governance x x x x x x x Board Tenure and Age Tenure 9 9 2 2 .4 3 1 10 30 9 17 Age 69 50 46 62 67 60 59 57 70 58 62 1 Qualifies as a Financial Expert for proxy purposes. Brokered CD

36 Continuous Progress We continue to advance our ESG profile over time, recognizing the importance of our key stakeholders – including our customers and our communities – to our business. Over the past few years, we have implemented several important enhancements to align our ESG profile with our long - term investors’ expectations for best - in - class corporate governance. x Enhanced structure to more strongly align pay and performance Compensation x Enhanced Board oversight of Environment & Social issues x Enhanced Disclosure on Environment & Social issues x Continued progress on FUNC ESG strategy ESG Governance x Revised stock ownership guidelines for Directors and Executives x Declassified the Board of Directors (phased - in by 2024) x Adopted Proxy Access x Shareholder access to change By - laws x Management majority vote proposal received strong shareholder support (albeit short of super - majority threshold needed) x Ongoing Board refreshment x Adopted right to call a special meeting. x Adopted mandatory director retirement policy x Adopted plurality voting standard for contested director elections x Enhanced shareholder engagement program x Modernized NGC Charter x Adopted a diversity policy for director refreshment x Formalized LID role & responsibilities

37 ESG at First United ▪ LED lighting installed throughout branch network and operations center ▪ Recycling, focus on reduced printing (65% reduction since pre - COVID) ▪ Leveraging virtual meeting opportunities to reduce travel footprint ▪ 46% of deposit customers and 11% of loan customers enrolled in electronic statements ▪ 15 tons of paper securely shredded and recycled, 1,800 pounds of electronics and computers and 500 pounds of toner cartridges recycled Environmental ▪ Created Diversity Engagement team, led by our newly appointed Director of Diversity and Engagement ▪ Developed a formal workforce Diversity and Inclusion Policy ▪ Formalized a policy requiring a diverse slate of candidates for each future open board seat ▪ First United Community Dreams Foundation supporting financial literacy, education, affordable housing and neighborhoods ▪ Formed a Veteran Employee Resource Group and hold an annual Veterans Day Celebration ▪ Formalized a paid time off policy for community volunteerism Social ▪ Adopting best - in - class governance practices and shareholder rights ▪ Recent Enhancements – Board refreshment, Board declassification, Proxy access and Shareholder access to change By - laws ▪ Future Enhancements under consideration - Majority Voting Standard Governance

38 This presentation includes certain non - GAAP financial measures, including pre - provision net revenue, net income, earnings per share (basic and diluted), return on average assets, return on average tangible common equity, tangible common equity, tangible assets, the ratio of tangible common equity to tangible assets, tangible book value per share, net interest margin, and efficiency ratio . These non - GAAP financial measures and any other non - GAAP financial measures that are discussed in this presentation should not be considered in isolation, and should be considered as additions to, and not substitutes for or superior to, measures of financial performance prepared in accordance with GAAP . There are a number of limitations related to the use of these non - GAAP financial measures versus their nearest GAAP equivalents . For example, other companies may calculate non - GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of the Company’s non - GAAP financial measures as tools for comparison . The following is a reconciliation of the non - GAAP financial measures used in (or conveyed orally during) this presentation to their most directly comparable GAAP financial measures . Non - GAAP Reconciliation ($000s, except where otherwise noted) YTD 2019 2020 2021 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 12/31/2023 Pre-Provision Net Revenue ("PPNR") Pre-tax income, as reported 16,465$ 17,788$ 26,309$ 33,181$ 7,616$ 7,136$ 9,613$ 8,816$ 5,730$ 5,837$ 5,834$ 2,075$ 19,476$ Add back: Provision expense 1,320 5,401 (817) (643) (419) 624 (108) (740) 543 394 263 419 1,619 Add back: FHLB penalty, gross - - 2,368 - - - - - - - - - - Add back: Contribution 1,000 - - - - - - - - - - Add back: Insurance reimbursement (1,375) - - - - - - - - - - Add back: Settlement expense, gross - - 3,300 - - - - - - - - - - Add back: Securities loss 4,214 4,214 Add back: Branch closure expenses 623 623 Pre-Provision Net Revenue, as adjusted 17,785$ 23,189$ 30,785$ 32,538$ 7,197$ 7,760$ 9,505$ 8,076$ 6,273$ 6,231$ 6,097$ 7,331$ 25,932$ Net Income Net income, as reported 13,129$ 13,841$ 19,770$ 25,048$ 5,715$ 5,428$ 6,936$ 6,969$ 4,375$ 4,414$ 4,513$ 1,758$ 15,060$ Less: Preferred stock dividends - - - - - - - Net income, available to common shareholders,as reported (a) 13,129$ 13,841$ 19,770$ 25,048$ 5,715$ 5,428$ 6,936$ 6,969$ 4,375$ 4,414$ 4,513$ 1,758$ 15,060$ Add Back: Impact of Tax Reform Act Add back: FHLB penalty, net of tax - - 1,790 - - - - - - - - - - Add back: Contribution, net of tax 770 - - - - - - - - - - Add back: Insurance reimbursement, net of tax (1,059) - - - - - - - - - - Add back: Settlement expense, net of tax - - 2,565 - - - - - - - - - - Add back: Securities loss 3,259 3,259 Add back: Branch closure expenses 482 482 Net income, as adjusted (b) 13,129$ 13,841$ 23,836$ 25,048$ 5,715$ 5,428$ 6,936$ 6,969$ 4,375$ 4,414$ 4,513$ 5,499$ 18,801$

39 Non - GAAP Reconciliation , continued ($000s, except where otherwise noted) YTD 2019 2020 2021 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 12/31/2023 Weighted Average Common shares - basic (actual) (d) 7,110,022 7,003,955 6,710,463 6,649,740 6,627,564 6,650,256 6,658,392 6,662,751 6,675,181 6,703,805 6,714,267 6,649,493 6,685,676 Weighted Average Common shares - diluted (actual) (e) 7,110,022 7,013,164 6,716,587 6,661,055 6,636,156 6,661,061 6,668,787 6,678,218 6,697,102 6,717,527 6,727,579 6,662,765 6,701,243 Earnings Per Share - Basic Earnings Per Share - Basic, as reported (a)/(d) 1.85$ 1.98$ 2.95$ 3.77$ 0.86$ 0.82$ 1.04$ 1.05$ 0.66$ 0.66$ 0.67$ 0.26$ 2.25$ Add Back: Impact of Tax Reform Act Add back: FHLB penalty, net of tax - - 0.27 - - - - - - - - - - Add back: Contribution, net of tax 0.12 - - - - - - - - - - Add back: Insurance reimbursement, net of tax (0.16) - - - - - - - - - - Add back: Settlement expense, net of tax - - 0.37 - - - - - - - - - - Add back: Securities loss 0.49 0.49 Add back: Branch closure expenses 0.07 0.07 Earnings Per Share - Basic, as adjusted (b)/(d) 1.85$ 1.98$ 3.54$ 3.77$ 0.86$ 0.82$ 1.04$ 1.05$ 0.66$ 0.66$ 0.67$ 0.82$ 2.81$ Earnings Per Share - Diluted Earnings Per Share - Diluted, as reported (a)/(e) 1.85$ 1.97$ 2.95$ 3.76$ 0.86$ 0.82$ 1.04$ 1.04$ 0.65$ 0.66$ 0.67$ 0.26$ 2.24$ Add Back: Impact of Tax Reform Act Add back: FHLB penalty, net of tax - - 0.27 - - - - - - - - - Add back: Contribution, net of tax 0.12 - - - - - - - - - Add back: Insurance reimbursement, net of tax (0.16) - - - - - - - - - Add back: Settlement expense, net of tax - - 0.37 - - - - - - - - - Add back: Securities loss 0.49 0.49 Add back: Branch closure expenses 0.07 0.07 Earnings Per Share - Diluted, as adjusted (b)/(e) 1.85$ 1.97$ 3.54$ 3.76$ 0.86$ 0.82$ 1.04$ 1.04$ 0.65$ 0.66$ 0.67$ 0.82$ 2.80$

40 Non - GAAP Reconciliation , continued ($000s, except where otherwise noted) YTD 2019 2020 2021 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 12/31/2023 Return on Average Assets (quarter and YTD annualized) Average Assets ( c) 1,418,928$ 1,613,669$ 1,765,148$ 1,801,711$ 1,769,234$ 1,770,601$ 1,819,732$ 1,845,275$ 1,892,111$ 1,930,093$ 1,954,107$ 1,963,840$ 1,924,119$ Return on Average Assets, as reported (a)/(c) 0.93% 0.86% 1.12% 1.39% 1.31% 1.23% 1.51% 1.50% 0.94% 0.92% 0.92% 0.36% 0.78% Add Back: Impact of Tax Reform Act Add back: FHLB penalty, net of tax - - 0.10% 0.00% - - - - - - - Add back: Contribution, net of tax 0.04% 0.00% - - - - - - - Add back: Insurance reimbursement, net of tax -0.06% 0.00% - - - - - - - Add back: Settlement expense, net of tax - - 0.15% 0.00% - - - - - - - Add back: Securities loss 0.17% 0.17% Add back: Branch closure expenses 0.02% 0.02% Return on Average Assets, as adjusted (b)/(c) 0.93% 0.86% 1.35% 1.39% 1.31% 1.23% 1.51% 1.50% 0.94% 0.92% 0.92% 0.55% 0.97% Return on Average Common Stockholders' Equity Return on Average Tangible Common Stockholders' Equity Average common stockholders' equity (f) 125,774$ 127,101$ 132,550$ 137,685$ 140,517$ 136,039$ 135,186$ 140,224$ 149,416$ 155,358$ 156,346$ 156,141$ 155,631$ Average common stockholders' equity, as adjusted 125,774 127,101 132,550 137,685 140,517 136,039 135,186 140,224 149,416 155,358 156,346 156,141 155,631 Less: Average goodwill and intangibles 11,004 11,004 11,004 12,043 12,034 11,965 11,913 12,225 12,405 12,320 12,236 12,156 12,279 Average tangible common equity (g) 114,770$ 116,097$ 121,546$ 125,642$ 128,483$ 124,074$ 123,273$ 127,999$ 137,011$ 143,038$ 144,110$ 143,985$ 143,352$ Return on average common stockholders' equity, as reported (a)/(f) 10.44% 10.89% 14.92% 18.19% 16.27% 15.96% 20.52% 19.88% 11.87% 11.40% 11.45% 4.47% 9.68% Add back: FHLB penalty, net of tax - - 1.47% 0.00% - - - - - - - - - Add back: Contribution 0.63% 0.00% - - - - - - - - Add back: Insurance reimbursement -1.15% 0.00% - - - - - - - - Add back: Settlement expense, net of tax 2.11% 0.00% - - - - - - - - Add back: Securities loss 2.10% 2.10% Add back: Branch closure expenses 0.31% 0.31% Return on average common stockholders' equity, as adjusted (b)/(f) 10.44% 10.89% 17.98% 18.19% 16.27% 15.96% 20.52% 19.88% 11.87% 11.40% 11.45% 6.88% 12.09% Return on average tangible common equity, as reported (a)/(g) 11.44% 11.92% 16.27% 19.94% 17.79% 17.55% 22.32% 21.60% 12.95% 12.38% 12.42% 4.84% 10.51% Add Back: Impact of Tax Reform Act 0.00% - - - - - - - - Add back: FHLB penalty, net of tax - - 1.47% 0.00% - - - - - - - - Add back: Contribution 0.63% 0.00% - - - - - - - - Add back: Insurance reimbursement -0.87% 0.00% - - - - - - - - Add back: Settlement expense, net of tax - - 2.11% 0.00% - - - - - - - - Add back: Securities loss 2.10% 2.10% Add back: Branch closure expenses 0.31% 0.31% Return on average tangible common equity, as adj (b)/(g) 11.44% 11.92% 19.61% 19.94% 17.79% 17.55% 22.32% 21.60% 12.95% 12.38% 12.42% 7.25% 12.92%

41 Non - GAAP Reconciliation , continued ($000s, except where otherwise noted) YTD 2019 2020 2021 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 12/31/2023 Tangible Book Value per Common Share Total common equity, as reported (h) 125,940$ 131,047$ 141,900$ 151,793$ 137,078$ 132,892$ 132,044$ 151,793$ 152,868$ 155,156$ 154,990$ 161,873$ 161,873$ Less: Goodwill and intangibles 11,004 11,004 12,052 12,433 12,000 11,947 11,895 12,433 12,350 12,268 12,185 12,103 12,103 Total tangible common equity (i) 114,936$ 120,043$ 129,848$ 139,360$ 125,078$ 120,945$ 120,149$ 139,360$ 140,518$ 142,888$ 142,805$ 149,770$ 149,770$ Common shares outstanding - basic (actual) (j) 7,110,022 6,992,911 6,620,955 6,666,428 6,637,979 6,656,395 6,659,390 6,666,428 6,688,710 6,711,422 6,715,170 6,639,888 6,639,888 Tangible book value per basic common share (i)/(j) 16.17$ 17.17$ 19.61$ 20.90$ 18.84$ 18.17$ 18.04$ 20.90$ 21.01$ 21.29$ 21.27$ 22.56$ 22.56$ Tangible common equity to tangible assets ("TCE Ratio") Total assets, as reported (k) 1,442,966 1,733,414 1,729,838 1,848,169 1,760,325 1,752,455 1,803,642 1,848,169 1,937,442 1,928,346 1,928,201 1,905,860 1,905,860 Less: Goodwill 11,004 11,004 12,052 12,433 12,000 11,947 11,895 12,433 12,350 12,268 12,185 12,103 12,103 Total tangible assets (l) 1,431,962$ 1,722,410$ 1,717,786$ 1,835,736$ 1,748,325$ 1,740,508$ 1,791,747$ 1,835,736$ 1,925,092$ 1,916,078$ 1,916,016$ 1,893,757$ 1,893,757$ Tangible common equity to tangible assets (k)/(l) 8.03% 6.97% 7.56% 7.59% 7.15% 6.95% 6.71% 7.59% 7.30% 7.46% 7.45% 7.91% 7.91% Net interest margin (tax equivalent) Net interest income 46,391$ 48,546$ 52,542$ 57,631$ 13,341$ 13,971$ 15,139$ 15,180$ 14,516$ 14,175$ 13,984$ 14,194$ 56,869$ Tax equivalent adjustment 868 917 939 940 241 236 232 231 227 226 117 59 629 Tax equivalent net interest income (m) 47,259$ 49,463$ 53,481$ 58,571$ 13,582$ 14,207$ 15,371$ 15,411$ 14,743$ 14,401$ 14,101$ 14,253$ 57,498$ Average earning assets (n) 1,285,019$ 1,480,165$ 1,629,299$ 1,647,151$ 1,619,585$ 1,619,037$ 1,665,355$ 1,683,139$ 1,692,998$ 1,771,707$ 1,793,102$ 1,806,562$ 1,766,240$ Net interest margin (tax equivalent) (m)/(n) 3.68% 3.34% 3.28% 3.56% 3.40% 3.52% 3.66% 3.63% 3.53% 3.26% 3.12% 3.13% 3.26% Efficiency Ratio Noninterest expense, as reported 45,389$ 43,934$ 47,764$ 43,145$ 10,578$ 10,637$ 10,336$ 11,594$ 12,638$ 12,511$ 12,785$ 12,310$ 50,244$ Less: FHLB penalty, gross (2,368) - - - - - - - - - - Less: Contribution (1,000) - - - - - - - - - - Less: Settlement expense - - (3,300) - - - - - - - - - - Less: Branch closure expenses 623 623 Noninterest expense, adjusted (o) 45,389$ 43,934$ 41,096$ 43,145$ 10,578$ 10,637$ 10,336$ 11,594$ 12,638$ 12,511$ 12,785$ 11,687$ 49,621$ Net interest income 46,391$ 48,546$ 52,542$ 57,631$ 13,341$ 13,971$ 15,139$ 15,180$ 14,516$ 14,174$ 13,984$ 14,194$ 56,868$ Noninterest income 16,783 18,577 20,714 17,906 4,403 4,420 4,604 4,479 4,394 4,569 4,898 610 14,471 Less: Insurance reimbursement - - (1,375) - - - - Less: Securities loss (4,214) (4,214) Tax equivalent adjustment 868 917 939 940 241 236 232 231 227 226 117 59 629 Total tax equivalent revenue (p) 64,042$ 68,040$ 72,820$ 76,477$ 17,985$ 18,627$ 19,975$ 19,890$ 19,137$ 18,969$ 18,999$ 19,077$ 76,182$ Efficiency ratio, as adjusted (o)/(p) 70.87% 64.57% 56.44% 56.41% 58.81% 57.10% 51.73% 58.28% 66.03% 65.94% 67.28% 61.25% 65.12%

XML

Cover	Feb. 05, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 05, 2024
Entity File Number	0-14237
Entity Registrant Name	First United Corporation
Entity Central Index Key	0000763907
Entity Tax Identification Number	52-1380770
Entity Incorporation, State or Country Code	MD
Entity Address, Address Line One	19 South Second Street
Entity Address, City or Town	Oakland
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	21550
City Area Code	301
Local Phone Number	334-9471
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	FUNC
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false