Regulatory Capital Requirements

12 Months Ended

Dec. 31, 2017

Regulatory Capital Requirements [Abstract]

Regulatory Capital Requirements

4.Regulatory Capital Requirements

We require capital to fund loans, satisfy our obligations under the Bank’s letters of credit, meet the deposit withdrawal demands of the Bank’s customers, and satisfy our other monetary obligations.  To the extent that deposits are not adequate to fund our capital requirements, we can rely on a number of funding sources, including an unsecured Fed Funds lines of credit with upstream correspondent banks; secured advances with the FHLB of Atlanta, which are collateralized by eligible one to four family residential mortgage loans, home equity lines of credit, commercial real estate loans, and various securities.  Cash may also be pledged as collateral.  In addition, First United Corporation has a secured line of credit with the Fed Discount Window for use in borrowing funds up to 90 days, using municipal securities as collateral; brokered deposits, including CDs and money market funds; and One Way Buy CDARS/ ICS funding, which is a form of brokered deposits that has become a viable supplement to brokered deposits obtained directly. At December 31, 2017, the Bank had $75.0 million available through unsecured lines of credit with correspondent banks, $7.0 million through a secured line of credit with the Fed Discount Window and approximately $86.2 million at the FHLB.  Management is not aware of any demands, commitments, events or uncertainties that are likely to materially affect our ability to meet our future capital requirements.

		Actual			For Capital Adequacy Purposes			To Be Well Capitalized Under Prompt Corrective Action Provisions
(in thousands)		Amount	Ratio		Amount	Ratio		Amount	Ratio
December 31, 2017
Total Capital (to risk-weighted assets)
Consolidated	$	158,108	15.98%	$	78,954	8.00%	$	98,693	10.00%
First United Bank & Trust		145,921	15.58%		74,739	8.00%		93,424	10.00%
Tier 1 Capital (to risk-weighted assets)
Consolidated		148,072	14.97%		59,216	6.00%		78,954	8.00%
First United Bank & Trust		135,885	14.51%		56,054	6.00%		74,739	8.00%
Common Equity Tier 1 Capital (to risk-weighted assets)
Consolidated		124,064	12.54%		44,412	4.50%		64,150	6.50%
First United Bank & Trust		135,885	14.51%		42,041	4.50%		60,726	6.50%
Tier 1 Capital (to average assets)
Consolidated		148,072	11.00%		53,646	4.00%		67,058	5.00%
First United Bank & Trust		135,885	10.21%		52,801	4.00%		66,001	5.00%
		Actual			For Capital Adequacy Purposes			To Be Well Capitalized Under Prompt Corrective Action Provisions
(in thousands)		Amount	Ratio		Amount	Ratio		Amount	Ratio
December 31, 2016
Total Capital (to risk-weighted assets)
Consolidated	$	164,081	16.71%	$	78,577	8.00%	$	98,221	10.00%
First United Bank & Trust		155,992	16.70%		74,733	8.00%		93,416	10.00%
Tier 1 Capital (to risk-weighted assets)
Consolidated		145,008	14.76%		58,933	6.00%		78,577	8.00%
First United Bank & Trust		146,013	15.63%		56,050	6.00%		74,733	8.00%
Common Equity Tier 1 Capital (to risk-weighted assets)
Consolidated		105,523	10.74%		44,200	4.50%		63,844	6.50%
First United Bank & Trust		146,013	15.63%		42,037	4.50%		60,721	6.50%
Tier 1 Capital (to average assets)
Consolidated		145,008	10.95%		53,124	4.00%		66,404	5.00%
First United Bank & Trust		146,013	11.11%		52,321	4.00%		65,401	5.00%

As of December 31, 2017 and 2016, the most recent notifications from the regulators categorized First United Corporation and the Bank as “well capitalized” under the regulatory framework for prompt corrective action.  On a consolidated basis, there was a slight decline in the capital ratios when comparing December 31, 2017 to December 31, 2016, due primarily to the repayment of $20.0 million of its outstanding Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the “Series A Preferred Stock”) in 2017.  The consolidated total risk-based capital ratios include $30.9 million ofFirst United Corporation’s junior subordinated debentures (“TPS Debentures”)which qualified as Tier 1 capital at December 31, 2017 under guidance issued by the Board of Governors of the Federal Reserve System (the “Federal Reserve”).

At the Bank level, the ratios also decreased when comparing December 31, 2017 to December 31, 2016 due to the dividend of $20.0 million from the Bank to the Holding Company for the repayment of the $20.0 million of Series A Preferred Stock.  At December 31, 2017, we were in compliance with the requirements.

First United Corporation’s Board of Directors suspended the payment of dividends on the common stock in December 2010.