Trust.
Integrity.
Community.
Together.
FIRST UNITED CORPORATION
2021 ANNUAL REPORT
2021
Trust. Integrity. Community. Together.
First United Bank and Trust is committed to being the bank
of the future. We believe that companies can and should
be doing better. Our commitment to the future, serving our
clients and communities, has been unwavering for more
than 120 years. We are a progressive team of thinkers
doing business with integrity. We know each financial
journey is unique and we welcome the opportunity to
design solutions to reach everyone’s personal and financial
goals. Our reputation is built on the idea that cultivating
trust and inclusion creates relationships that last a lifetime.
Table of Contents
02 Shareholder Letter
05 Summary of Selected
Financial Data
06 Talent, Culture and Inclusion
08 Community and Customer Commitment
10 Business Ethics and Governance
12 Our ESG Journey
Carissa L. Rodeheaver
Chairman of the Board,
President and Chief Executive Officer
Shareholder Letter
Dear Shareholders, Associates, Customers and Communities,
First United is creating relationships that last a lifetime.
The last few years have been challenging for all of us as
we navigated the COVID-19 pandemic. Through this time,
our associates have focused on serving our clients and
communities and we have done so by crafting solutions
that were customized to each individual need. Whether it
was a business challenged due to mandated closures, an
individual coping with the loss of a job, or a business owner
needing access to a Paycheck Protection Program (“PPP”)
loan and assistance with its subsequent forgiveness, First
United was there, serving as a trusted advisor to provide
the financial relief needed. Over the past couple of years,
we have received many positive emails,
letters, and
comments from our clients, community leaders and other
business professionals praising our associates for their
integrity, level of knowledge and steadfast communication,
and thanking the Bank for our professional response
during this unprecedented time. Our associates worked
together tirelessly with an unwavering passion to provide
an uncommon commitment to service and solutions for our
clients and communities, the response everyone has come to
expect and value from First United Bank & Trust. On behalf of
the board, the management team and you, our shareholders,
we thank this dedicated and caring group of individuals.
Trust. Integrity. Community. Together.
Despite the continued health and economic challenges
across the world, 2021 was a record earnings year for
First United driven by reduced interest expense, release
of provision, strong production in mortgage and wealth
management and our ability to manage our core operating
expenses. During the year, we worked to realign the balance
sheet which should provide future expense savings. The
Bank is well-positioned for the anticipated rising interest
John W. McCullough
rates and remains well-capitalized
for
future growth.
Lead Director
2
Net income available to common shareholders in 2021 was $19.8 million. Basic and diluted net income per share
for 2021 were both $2.95, a 49.0% increase when compared to basic and diluted net income per share of $1.98
and $1.97, respectively, for 2020. Our balance sheet remained stable with assets at $1.7 billion at year-end.
We experienced strong loan production in both our consumer and commercial portfolios. The production was
offset by the decline of $172.6 million associated with 1,631 PPP loans as we assisted our community business
owners through the Small Business Administration forgiveness process. Deposit growth in 2021 was strong,
allowing us to fully prepay a portfolio of Federal Home Loan Bank (“FHLB”) advances as well as to increase our
investment portfolio. Net interest income, the difference between the income earned on our loans and investments
and the expenses attributable to our deposits and borrowings, improved as compared to 2020, driven by a
reduction in our interest expense and the collection of fees attributable to the PPP loan forgiveness process.
Our associates
worked together
tirelessly with
an unwavering
passion to
provide an
uncommon
commitment
to service and
solutions.
Our allowance for loan losses remains strong following higher provision
expense in 2020 that reflected the uncertainty of the economic environment
related to the COVID-19 pandemic. As asset quality remained strong in
2021 and our business owners showed strength in operations, we reported
net recoveries of previously charged off loans and were able to release
a portion of our allowance, resulting in a credit in provision expense for
the year. This credit was a contributor to our strong earnings in 2021.
Our wealth department had a stellar year, growing assets under
management to approximately $1.5 billion. Fee income earned from the
wealth department as well as gains on the sale of mortgage loans to the
secondary market, strong debit card income and a reimbursement from
our insurance company resulted in strong other income. Other operating
expenses, exclusive of a settlement of litigation, the penalty associated
with the prepayment of the FHLB advances and the funding of the First
United Community Dreams Foundation, were stable as management
continued to be focused on cost efficiencies. We are particularly excited
about the creation of the Foundation, as it will allow us to provide
additional resources to our communities so that they can increase
the availability of financial literacy programs, enhance arts and culture programming, support affordable
housing options and promote the health and well-being of our neighbors. The board and management
were also appreciative that our profitability allowed us to pay a special performance bonus to every
associate, recognizing their outstanding efforts and contribution to the financial success achieved in 2021.
Above all, we are pleased that the market reacted favorably following the release of our 2021 earnings. As of
February 28, 2022, our total shareholder returns exceeded market indices and our peer group, at 36% for one-
year, 51% for three-years and 82% for five-years. The dividend was increased from $.13 per share in the first
quarter to $.15 per share for the remaining three quarters. For 2021, based on the year-end closing price of
$18.76 per share, this resulted in a dividend yield of 3.09%.
3
Strategically, in 2022 we are focused on two important initiatives:
1. Utilizing data analytics to assist us in targeted marketing and growing profitable customer
relationships.
2. Increasing our partnerships with Fintech firms to continually improve technology offerings to our
clients and to improve efficiencies in our day-to-day operations.
Additionally, we will opportunistically increase market penetration and expand our footprint via
our Financial Center model, Wealth Management acquisitions, and strategic bank partnerships.
Understanding the importance of a knowledgeable and community oriented associate base, we will
continue to hire and retain passionate, diverse talent. This will allow us to engage with clients and
prospects across broader demographics, to provide customized financial solutions and personal
service, thereby expanding our client relationships and enhancing loyalty and trust. As we execute
our plan, we are committed to being dedicated stewards
of our clients’ well-being and our environment and
continuing to manage risk through our well-developed
and monitored enterprise
risk management program.
First United Bank & Trust’s passionate people and
We are committed
to being dedicated
unrivaled culture will continue to be a driving force for
our success. Together, we are devoted to becoming
stewards of our
trusted advisors for our clients and creating relationships
that will last a lifetime. We are dedicated to improving
the lives of those in our local communities. We will
do all of this with the highest level of integrity and with
the end goal of delivering a strong shareholder return.
clients’ well-being
and our
environment.
Trust. Integrity. Community. Together.
Thank you for your support and confidence in First United
Corporation and First United Bank & Trust!
Carissa L. Rodeheaver
Chairman of the Board,
President and Chief Executive Officer
John W. McCullough
Lead Director
4
Summary of Selected Financial Data
(Dollars in thousands, except per share data)
Results of Operations:
Tax-equivalent interest income
Interest expense
Tax-equivalent net interest income
Tax-equivalent adjustment
Provision/(credit) for loan losses
Net interest income after provision for loan losses
Non-interest income
Operating non-interest income
Non-operating non-interest income:
Net gains-other
2021
2020
% Change
$
59,195
5,714
53,481
939
(817)
53,359
20,714
19,519
$
59,118
9,655
49,463
917
5,401
43,145
18,577
15,789
0.13%
40.82%
8.12%
2.40%
15.13%
23.67%
11.50%
23.62%
$
1,195
$
2,788
-57.14%
Non-interest expenses
Operating non-interest expenses
47,764
47,764
43,934
43,934
8.72%
8.72%
Income before income taxes
Income tax expense
Net Income
Common Dividends paid
Net Income per FTE (Pre-tax)
Per Share Data:
Basic net income per share
Diluted net income per share
Common Dividends paid
Book value (at year end)
Tangible book value (at year end)
Financial Condition (at year end):
Assets
Deposits
Net loans
Investment Securities
Shareholders’ equity
Performance Ratios (for the year):
Return on average equity
Return on average assets
Yield on average interest-earning assets
Rate on average interest-bearing liabilities
Net interest spread
Net interest margin
Efficiency ratio
Capital and Credit Quality Ratios:
Average equity to average assets
Total risk-based capital ratio
Tier 1 to Risk Weighted Assets
Tier 1 to Average Assets (leverage)
Common Equity Tier 1 to Risk Weighted Assets
Allowance for loan losses to total loans (as %)
Nonperforming and 90 days past due loans to total assets (as %)
Net recoveries/(charge-offs) to average loans (as %)
$
$
$
$
$
$
$
26,309
6,539
19,770
3,891
40,575
2.95
2.95
0.58
21.41
19.61
$
$
$
$
$
$
$
17,788
3,947
13,841
3,646
37,011
1.98
1.97
0.52
18.73
16.25
$ 1,729,838
1,469,374
1,137,440
343,030
141,900
$ 1,733,414
1,422,366
1,149,596
295,148
131,047
47.90%
65.67%
42.84%
6.72%
9.63%
48.99%
49.75%
11.54%
14.31%
20.68%
0.21%
.30%
1.06%
6.22%
8.28%
14.92%
1.12%
3.63%
0.51%
3.12%
3.28%
64.71%
7.51%
15.89%
14.64%
10.80%
12.50%
1.38%
0.42%
0.02%
10.89%
0.86%
3.99%
0.91%
3.08%
3.34%
70.26%
7.88%
16.08%
14.83%
10.36%
12.61%
1.41%
0.78%
(0.13)%
5
Talent, Culture
& Inclusion
Our passionate people and unrivaled
culture is a driving force for success.
Our associates strongly
believe in our core values
and are dedicated to helping
customers, community, and
each other. Attracting and
fostering talent with various
backgrounds, ensures that we
have the people in place to
execute our values.
6
7
We support our communities,
friends and neighbors in a variety
of ways. We volunteer. We
financially support local non-profits.
We bank at home and on the
road. We teach children about the
value of money and how to save
for the future. By pairing valuable
financial education with secure and
affordable product options, we can
enrich the lives of those we serve.
8
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Community
& Customer
Commitment
Our devotion is to serving our clients and improving
the lives of those in our local communities.
9
Business Ethics
& Governance
We are dedicated to doing business with integrity.
Executive Officers
Carissa L. Rodeheaver
Chairman of the Board, President &
Chief Executive Officer
R.L. Fisher
Senior Vice President &
Chief Revenue Officer
Jason B. Rush
Senior Vice President &
Chief Operating Officer
Keith R. Sanders
Senior Vice President &
Senior Trust Officer
Tonya K. Sturm
Senior Vice President &
Chief Financial Officer,
Corporate Secretary & Treasurer
Our leadership team, including
our Board and Executive
team, reflect the diversity of
thought from the communities
we serve and are committed
to upholding the high ethics,
governance, and environmental
stewardship standards our
stakeholders expect of us.
10
Board of Directors
John F. Barr
Owner,
Ellsworth Electric, Inc.
Patricia Milon
Senior Regulatory Expert,
Macro Financial Solutions
Brian R. Boal
Principal,
Boal & Associates, PC
Carissa L. Rodeheaver
Chairman of the Board,
President & CEO,
First United Corporation and
First United Bank & Trust
Sanu Chadha
Managing Partner,
M&S Consulting
I. Robert Rudy
President,
I.R. Rudy’s, Inc.
Christy DiPietro
Chartered Financial Analyst,
Hidden Code Advisory
Marisa A. Shockley
Owner,
Shockley, Inc.
John W. McCullough
Lead Director, CPA
Retired as Partner of Ernst &
Young, LLP
H. Andrew Walls, III
President, MPB Print & Sign
Superstore; Member,
MEGBA, LLC
11
Our ESG Journey
Our service to our communities is not limited to delivering
innovative banking products and services. Rather, we believe
our service extends to nurturing, helping and partnering with the
people and organizations that strive to make our communities a
better, safer place to live, work and play.
My Financial Steps
Program
Diversity Engagement
Employee Group
First United Community
Dreams Foundation
Associate Wellness
Program
Environmental stewards
Unconscious
Bias Training
12
Please contact our transfer agent, Computershare, if you need assistance in any of the following areas:
• Change in registration
• Reporting lost certificates
• Non-receipt or loss of dividend checks
•
Information on dividend reinvestment plan
Computershare
Phone
1-781-575-2622 or Toll Free 1-866-298-7858
Computershare
P.O. Box 505000
Louisville, KY 40233-5000
Overnight correspondence should be sent to:
Computershare
462 South 4th Street, Suite 1600
Louisville, KY 40202
Return envelopes for the proxy:
PO Box 505008, Louisville, KY 40233-9814
Questions & Inquiries via our website
http://www.computershare.com/investor
Hearing Impaired #: TDD: 1-800-952-9245
1-866-298-7858
First United-Direct Line:
TDD for Hearing Impaired: 1-800-952-9245
Foreign Shareowners:
1-781-575-2622
TDD for Hearing Impaired: 1-781-575-2692
Shareholders’ Meeting
The Annual Shareholders’ Meeting will be held virtually on:
Thursday, May 12, 2022, 10:00 a.m.
SEC Form 10-K
The Corporation files an annual report on Form 10-K with the Securities and Exchange Commission.
This statement can be found on our investor relations website at http://investors.MyBank.com
or you may request to receive a copy by calling us at 1-888-692-2654. A statement may also be
requested by mail, without charge, to any shareholder who requests it in writing to:
Tonya K. Sturm
Corporate Secretary
First United Corporation
c/o First United Bank & Trust
19 South Second Street
Oakland, MD 21550
Want to stay up-to-date? Sign up for shareholder communications at www.MyBank.com/shareholder.
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