Borrowed Funds

12 Months Ended

Dec. 31, 2023

Borrowed Funds [Abstract]

Borrowed Funds

10. Borrowed Funds

The following is a summary of short-term borrowings at December 31, 2023 and 2022 with original maturities of less than one year:

(in thousands)	2023		2022
Securities sold under agreements to repurchase:
Outstanding at end of year	$	45,418	$	64,565
Weighted average interest rate at year end		0.27%		0.12%
Maximum amount outstanding as of any month end	$	59,777	$	75,912
Average amount outstanding	$	50,498	$	63,182
Approximate weighted average rate during the year		0.24%		0.12%

Repurchase agreements were secured by $61.6 million in investment securities at December 31, 2023 and $74.6 million at December 31, 2022.

The following is a summary of long-term borrowings at December 31, 2023 and 2022 with original maturities exceeding one year:

(in thousands)	2023		2022
FHLB advances bearing fixed interest rates ranging from 4.53% to 4.69% at December 31, 2023	$	80,000	$	—
Junior subordinated debt	$	30,929	$	30,929
Total long-term debt	$	110,929	$	30,929

In March 2004, Trust I and Trust II issued preferred securities with an aggregate liquidation amount of $30.0 million to third-party investors and issued common equity with an aggregate liquidation amount of $0.9 million to First United Corporation. These Trusts used the proceeds of these offerings to purchase an equal amount of TPS Debentures, as follows:

$20.6 million—floating rate payable quarterly based on three-month Secured Overnight Financing Rate (“SOFR”) plus 275 basis points (8.39% at December 31, 2023), maturing in 2034, became redeemable five years after issuance at First United Corporation’s option.

$10.3 million--floating rate payable quarterly based on three-month SOFR plus 275 basis points (8.39% at December 31, 2023) maturing in 2034, became redeemable five years after issuance at First United Corporation’s option.

The TPS Debentures issued to each of the Trusts represent the sole assets of that Trust, and payments of the TPS Debentures by First United Corporation are the only sources of cash flow for the Trust. First United Corporation has the right, without triggering a default, to defer interest on all of the TPS Debentures for up to 20 quarterly periods, in which case distributions on the preferred securities will also be deferred. Should this occur, the Corporation may not pay dividends or distributions on, or repurchase, redeem or acquire any shares of its capital stock.

The contractual maturities of the FHLB advances outstanding at December 31, 2023 are March 15, 2024 and September 13, 2024.  The contractual maturities of the junior subordinated debt outstanding at December 31, 2023 is 2034.

The Bank has a borrowing capacity agreement with the FHLB in an amount equal to 30% of the Bank’s assets. The available line of credit equaled $571.4  million at December 31, 2023 and $544.1 million at December 31, 2022. This line of credit, which can be used for both short and long-term funding, can only be utilized to the extent of available collateral. The line is secured by certain qualified mortgage, commercial and home equity loans as follows (in thousands):

1-4 family mortgage loans	$	144,572
Commercial loans		52,753
Multi-family loans		11,453
Home equity loans		19,160
Total available borrowing capacity		227,938
Less: borrowings and letters of credit outstanding		(82,500)
	$	145,438

The Bank also has various unsecured lines of credit totaling $140.0 million with various financial institutions and a $12.2 million secured line with the Federal Reserve to meet daily liquidity requirements.Additionally, the Bank had $69.5 million in available in a secured line of credit with the FRB through the BTFP.  At December 31, 2023 and 2022, there were no borrowings under these credit facilities.