Regulatory Capital Requirements

12 Months Ended

Dec. 31, 2021

Regulatory Capital Requirements [Abstract]

Regulatory Capital Requirements

6. 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, and commercial real estate loans. Cash and securities 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 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, 2021, the Bank had $130.0 million available through unsecured lines of credit with correspondent banks, $1.0 million through a secured line of credit with the Fed Discount Window and approximately $188.2 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.

The following table presents our capital ratios for years ended December 31, 2021 and 2020:

	Actual			For Capital Adequacy Purposes			To Be Well Capitalized Under Prompt Corrective Action Provisions
(in thousands)	Amount		Ratio	Amount		Ratio	Amount		Ratio
December 31, 2021
Total Capital (to risk-weighted assets)
First United Bank & Trust		187,029	14.97%		99,986	8.00%		124,983	10.00%
Tier 1 Capital (to risk-weighted assets)
First United Bank & Trust		171,404	13.72%		74,990	6.00%		99,986	8.00%
Common Equity Tier 1 Capital (to risk-weighted assets)
First United Bank & Trust		171,404	13.72%		56,242	4.50%		81,239	6.50%
Tier 1 Capital (to average assets)
First United Bank & Trust		171,404	10.00%		68,167	4.00%		85,209	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, 2020
Total Capital (to risk-weighted assets)
First United Bank & Trust		181,977	15.50%		94,084	8.00%		117,605	10.00%
Tier 1 Capital (to risk-weighted assets)
First United Bank & Trust		167,276	14.25%		70,563	6.00%		94,084	8.00%
Common Equity Tier 1 Capital (to risk-weighted assets)
First United Bank & Trust		167,276	14.25%		52,922	4.50%		76,443	6.50%
Tier 1 Capital (to average assets)
First United Bank & Trust		167,276	9.81%		67,643	4.00%		84,554	5.00%

As of December 31, 2021 and 2020, 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.

Federal and state banking regulations place certain restrictions on the amount of dividends paid and loans or advances made by the Bank to First United Corporation. The total amount of dividends that may be paid at any date is generally limited to the retained earnings of the Bank, and loans or advances are limited to 10% of the Bank’s capital stock and surplus on a secured basis. In addition, dividends paid by the Bank to First United Corporation would be prohibited if the effect thereof would cause the Bank’s capital to be reduced below applicable minimum capital requirements.