Regulatory Capital Requirements

12 Months Ended

Dec. 31, 2020

Regulatory Capital Requirements [Abstract]

Regulatory Capital Requirements

5. 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, 2020, the Bank had $130.0 million available through unsecured lines of credit with correspondent banks, $1.1 million through a secured line of credit with the Fed Discount Window and approximately $134.4 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.

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The following table presents our capital ratios for years ended December 31, 2020 and 2019:

	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)
Consolidated	$	193,391	16.08%	$	96,353	8.00%	$	120,442	10.00%
First United Bank & Trust		181,977	15.50%		94,084	8.00%		117,605	10.00%
Tier 1 Capital (to risk-weighted assets)
Consolidated		178,336	14.83%		72,265	6.00%		96,353	8.00%
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)
Consolidated		151,709	12.61%		54,199	4.50%		78,287	6.50%
First United Bank & Trust		167,276	14.25%		52,922	4.50%		76,443	6.50%
Tier 1 Capital (to average assets)
Consolidated		178,336	10.36%		68,384	4.00%		85,480	5.00%
First United Bank & Trust		167,276	9.81%		67,643	4.00%		84,554	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, 2019
Total Capital (to risk-weighted assets)
Consolidated	$	182,941	16.29%	$	89,837	8.00%	$	112,296	10.00%
First United Bank & Trust		169,943	15.60%		87,159	8.00%		108,948	10.00%
Tier 1 Capital (to risk-weighted assets)
Consolidated		170,326	15.17%		67,378	6.00%		89,837	8.00%
First United Bank & Trust		157,328	14.44%		65,369	6.00%		87,159	8.00%
Common Equity Tier 1 Capital ‎  (to risk-weighted assets)
Consolidated		143,614	12.79%		50,533	4.50%		72,992	6.50%
First United Bank & Trust		157,328	14.44%		49,027	4.50%		70,817	6.50%
Tier 1 Capital (to average assets)
Consolidated		170,326	11.77%		57,491	4.00%		71,864	5.00%
First United Bank & Trust		157,328	10.99%		56,729	4.00%		70,912	5.00%

As of December 31, 2020 and 2019, 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. The consolidated total risk-based capital ratios include $30.9 million of First United Corporation’s junior subordinated debentures (“TPS Debentures”) which qualified as Tier 1 capital at December 31, 2020 under guidance issued by the Federal Reserve. At the Bank and Consolidated level, the ratios decreased when comparing December 31, 2020 to December 31, 2019. At December 31, 2020, we were in compliance with the requirements.