ANNUAL
REPORT 2022
Purpose at Work Our purpose is to enrich the lives of our
associates, customers, communities, and
shareholders through our vision of providing
uncommon service and customized financial
solutions. Every day, we embrace our My Bank
values to help build vibrant communities where
people can lead healthier and happier lives in a
better, safer place to live, work and play.
2022
Table of Contents
02 Shareholder Letter
05 Summary of Selected Financial Data
06 My Bank Values
12 First United Community Dreams Foundation
14 Community Commitment
Dear Associates, Customers and Communities, and Shareholders,
At First United, we are celebrating our success and a record earnings year in 2022, all
of which is supported by our continued commitment to our core values and culture. We are
devoted to giving our associates an uncommon experience, delivering customized service to our
customers, and helping our communities create initiatives that promote health, contentment, and security.
Our shareholders benefit from this commitment and all stakeholders may be assured that we are dedicated
to delivering value.
We are proud to say that our financial performance was the
result of our purpose-driven and knowledgeable associates.
We are passionate about our purpose, and we invest in our
team members by offering the resources they need to succeed.
We value their expertise and commitment to our customers,
and we aim to help them reach their potential. This culture of
support and trust is essential to our continued success and has
allowed us to remain competitive in the market.
We are passionate
about giving back
and serving as a
partner in each of the
communities we serve.
In 2022, we saw strong growth in our loan, deposit, and wealth management portfolios. Our commercial
group led our lending production, and our steady deposit growth was fostered by additional local municipal
and non-profit account balances. This led to an increase in the balance sheet as our total assets grew to
$1.8 billion at December 31, 2022. We achieved $125.8 million in loan growth, and we added $101.4 million
in deposits during the year as we continued our focus on growing our customer relationships. Net income
in 2022 was $25.0 million, another milestone for our First United! Basic and diluted net income per share for
2022 were $3.77 and $3.76, respectively, representing a 27.5% increase when compared to basic and diluted
net income per share of $2.95 for 2021. The increase in net income was the result of the manner in which
we positioned our balance sheet in anticipation of rising interest rates, our intense margin management
throughout the year and our keen expense control. Margin and net interest income increased due to our
ability to manage deposit rates early in the year when rates were on the rise. We ended 2022 with a 3.56%
margin, a significant increase from the 3.28% margin in 2021.
While we expect the coming year to present pricing challenges and require continued expense discipline, our
associates are working proactively to protect our margin. Wealth income was impacted by the negative stock
and bond markets as our fees are based on the market value of assets under management. Despite strong
production adding fee revenue of $2.2 million, we experienced a decline in assets under management from
approximately $1.5 billion at December 31, 2021 to $1.4 billion at December 31, 2022, directly attributable to
the markets. We were able to offset the decline in other income through expense control contributing to a
continued positive trend in our efficiency ratio, which ended the year at 56.4%.
Strong asset quality in 2022, driven by low delinquencies, low charge-off activity and stable non-performing
loans, allowed us to release a portion of the allowance for loan losses to bring it in line with pre-pandemic
levels. This resulted in a credit in provision expense for the year, contributing to our strong annual earnings.
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ShareholderLetter We believe that the level of the allowance remains adequate as we monitor our loan portfolio closely during
these volatile times. Economic data is showing that consumers and businesses are feeling the impact of high
inflation, rising rates and the continued stress in the supply chain. In this uncertain economic environment,
our customers are turning to us as their trusted advisor. We strive to provide them with the highest level of
service and guidance, and our strong asset quality, financial stability and capital give us the capacity to
continue our long history of providing reliable financial solutions. We can offer our customers the security and
peace of mind that comes with knowing they have knowledgeable financial advisors ready to help them when
needed. We value the trust they have placed in us, and we are committed to providing innovative solutions
that meet their financial goals.
We recognize the importance of taking a long-term approach to our financial performance. When we make
decisions, we make sure to thoughtfully consider the implications of our actions for the future. We do not
take unnecessary risks and we focus on sustainable growth. This approach has led to us surpassing our
financial goals. While the markets have been challenging recently, First United has fared well over the long-
term, compared with peers. As of February 28, 2023, our total shareholder return, including price changes
We also recognize
the importance of
investing in our most
important asset, our
associates, who are
key drivers of our
financial performance.
and reinvested cash dividends, was 52% for three-years and
18% over five-years. The dividend was increased from $0.15 per
share to $0.18 per share in the final quarter of 2022. Based on
a closing price of $19.52 per share on February 28, 2023, the
current dividend annualized results in a dividend yield of 3.69%.
As part of our long-term approach to performance, we believe
it is essential to continuously invest in the stakeholders that
drive our business forward. We are passionate about giving
back and serving as a partner in each of the communities
we serve. This is not limited to delivering innovative financial
products and services but extends to meaningful financial
partnerships and volunteerism. As we announced last year,
we created the First United Community Dreams Foundation
and we are delighted to inform you that, in 2022, the Foundation and the Bank, collectively, provided financial
grants and donations that exceeded $343,000. These funds supported financial literacy programs, affordable
housing, healthy and active families, the arts, and cultural programs as well as fostering vibrant and
equitable neighborhoods. We are proud to help make a lasting difference and are committed to helping our
communities strive for a healthier, happier, and safer tomorrow.
We also recognize the importance of investing in our most important asset, our associates, who are key
drivers of our financial performance. During 2022, we focused on expressing our gratitude to our associates
in several ways, including the opportunity for our associates to travel with their families to a local amusement
park for a day of fun and camaraderie, special home deliveries during the year-end holiday season, and
bonuses to recognize performance. Importantly, we offer every associate the opportunity to join you as
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Shareholder shareholders of First United through the gift of stock to all who choose to participate. We believe
this strengthens our alignment with you, our shareholders, and encourages a long-term approach to
outstanding financial performance.
As we move into 2023, we understand the importance of a knowledgeable and community-oriented
workforce. We will continue to hire and retain passionate, diverse talent and are working to create an
inclusive and engaging environment that encourages growth and individual development. This will
enable us to engage with existing and prospective customers across broader demographics, and to
provide customized financial solutions and personalized service, thereby expanding our customer
relationships to enhance loyalty and trust. We will use technology and data analytics to boost the
efficiency and profitability of our business lines, products, and customer base. We will also optimize
our operating network through additional market penetration, making better use of physical space,
and capitalizing on opportunities for growth and acquisition. As we carry out this plan, we pledge to
be responsible stewards and remain mindful of our customers’ wellbeing and our environment by
continually assessing and monitoring our established enterprise risk management program.
We thank you, our investors, for the unwavering confidence that you have shown in First United. We
understand that the loyalty of our shareholders is invaluable to our company, and we are dedicated to
expressing our gratitude by delivering a strong shareholder return.
Carissa L. Rodeheaver
Chairman of the Board, President
and Chief Executive Officer
John W. McCullough
Lead Director
Patricia Milon
Hoye Andrew Walls III
Board of Directors
Brian R. Boal
Beth E. Moran
I. Robert Rudy
Christy DiPietro
John F. Barr
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Marisa A. Shockley
Sanu Chadha
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
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
2022
2021
% Change
$
63,362
4,789
58,573
940
(643)
58,276
18,050
17,878
$
59,195
5,714
53,481
939
(817)
53,359
20,749
19,519
7.04%
-16.19%
9.52%
0.11%
-21.30%
9.21%
-13.01%
-8.41%
$
172
$
1,230
-86.02%
Non-interest expenses
Operating non-interest expenses
43,145
43,145
47,799
47,799
-9.74%
-9.74%
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
Net loans
Investment securities
Deposits
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 (charge-offs)/recoveries to average loans (as %)
$
33,181
8,133
25,048
3,986
$ 104,343
$
$
$
$
$
3.77
3.76
0.60
22.77
20.90
$
$
$
$
$
$
$
26,309
6,539
19,770
3,891
91,990
2.95
2.95
0.58
21.41
19.61
$ 1,848,169
1,264,684
361,548
1,570,733
151,793
$ 1,729,838
1,137,440
343,030
1,469,374
141,900
26.12%
24.38%
26.70%
2.44%
13.43%
27.80%
27.46%
3.45%
6.35%
6.63%
6.84%
11.19%
5.40%
6.90%
6.97%
18.19%
1.39%
3.85%
0.44%
3.41%
3.56%
56.40%
7.64%
16.12%
15.06%
11.46%
12.96%
1.14%
0.46%
(0.06)%
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%
5
model helpfulness
Our approach to personalized service
is centered around building valuable
connections that are timeless. Our
mission is to enhance the lives of both
our customers and team members by
providing exceptional service, innovative
solutions, and a combination of modern
values and traditional friendliness. We
firmly believe in hard work and dedication,
and just like the people we serve, we
actively participate in and support local
communities. We take pride in being
helpful and strive to build long-lasting
relationships within our community.
My bank is mindful.
6
M model helpfulness
yield to the customer
At First United, we prioritize the needs of others. We believe in going
above and beyond to provide exceptional service; listening and being
curious to understand each person’s unique situation. We take the
time to pause a moment to truly understand each individual and
situation, to find effective solutions and offer valuable guidance that
suits your needs. Our goal is to create a meaningful experience that
exceeds expectations and leaves our customers feeling satisfied and
create a meaningful experience by doing more than what is anticipated.
My bank is accommodating.
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Y be passionate
Being of service to others is truly inspiring. Our focus is on helping
others realize their aspirations and enhance their quality of life. We
work towards aiding people in achieving their goals that may be
difficult to achieve alone. We are dedicated to nurturing businesses,
improving the community, and fostering lasting relationships. We
make the community a better place. We are proud to carry on
the tradition of a community bank that is an important part of our
customers’ lives. We are truly passionate about our purpose, the work
we do and the people we help.
My bank is dynamic.
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B be passionate
adapt solutions
We are attentive listeners and customize
our services to your individual needs.
We respect each customer’s unique
preferences, and our flexibility allows us
to deliver an uncommon experience. We
believe in ourselves and our bank, and
our passion for helping others drives
us to seek out solutions that enhance
your quality of life and contribute to the
growth of our community.
My bank is innovative.
9
A nuture trust
As trusted advisors, we value the importance of trust and work hard
to maintain it. Our team consists of knowledgeable professionals
who continuously strive to enhance their skills, both intellectually and
emotionally. We strive for excellence in everything we do and understand
the importance of personalized service and individual development. We
value teamwork, mutual respect, and above all, earning your trust. It is a
responsibility we hold dear, and one that we take very seriously.
My bank is unwavering.
10
NK nuture trust
keep it personal
Our approach to banking is all about the personal touch Our team
is genuinely interested in getting to know you and your financial
and personal goals. Our family-oriented culture encourages us to
build strong relationships and our passion lies in finding solutions
to even the most complex situations. At our core, we hold dear the
timeless ideals of trust, friendship, and empathy, and our unwavering
commitment to prioritize your purpose.
My bank is adaptive.
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K Dreams
Foundation
First United Corporation has been guided by our mission to enrich the
lives of others. Our service to our communities is not limited to delivering
innovative banking products and services. Rather, we believe it nurtures,
helps and partners with the people and organizations striving to make our
communities a better, safer place to live, work and play.
Knowing our communities look to us for help, we created the First United
Community Dreams Foundation as another way for us to be their financial
partner.
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12
Foundation
The Dreams Foundation provides support to local nonprofits, institutions,
schools and other 501(c)(3) organizations who offer essential services
and programs that make people healthier, happier, and safer in the
communities that we serve.
We believe that a vibrant community is the cornerstone of a high quality of
life. In 2022, in addition to the over $288,000 funded by First United Bank
& Trust, the Dreams Foundation funded over $61,000 to organizations in
our footprint.
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Community
We love to see our communities thrive.
Our team is dedicated to our shared
purpose and committed to a common
goal. Our zeal to serve others, contribute
towards the progress of our community
and lend a hand in every possible way
is what fuels our passion. Carefully
cultivated relationships, uncommon
service and a dedication to customize
solutions set us apart.
14
Community
My Bank inspires others.
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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 43078
Providence, RI 02940-3078
Courier Delivery:
Computershare
150 Royall St., Suite 101
Canton, MA 02021
Return envelopes for the proxy:
P.O. Box 43101, Providence, RI 02940-5067
Questions & Inquiries via our website
http://www.computershare.com/investor
Hearing Impaired #: TDD: 1-800-952-9245
First United-Direct Line:
1-866-298-7858
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 at Wisp Resort on:
Thursday, May 11, 2023, 9:00 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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FIRST UNITED
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