UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 20, 2004
First United Corporation
(Exact name of registrant as specified in its charter)
Maryland 0-14237 52-1380770
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(State or other jurisdiction of (Commission file number) (IRS Employer
incorporation or organization) Identification No.)
19 South Second Street, Oakland, Maryland 21550
(Address of principal executive offices) (Zip Code)
(301) 334-9471
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off- Balance Sheet Arrangement of a Registrant
On December 20, 2004, First United Bank & Trust (the "Bank"), the
wholly-owned subsidiary of First United Corporation (the "Corporation"),
refinanced $21.5 million of long-term advances from the Federal Home Loan Bank
of Atlanta (the "FHLB") with a short-term advance in the amount of $23.3
million. In connection with this transaction, the Bank paid early payment fees
totaling $1,818,700, exclusive of tax benefits, which fees were included in the
new advance. The purposes of the refinancing are to provide the Bank with
greater flexibility to refinance its borrowings at lower rates from time to
time, reduce interest expense, and reduce reliance on long-term fixed rate
borrowings.
The refinanced FHLB advances had a weighted average interest rate of
5.91% at September 20, 2004 and were scheduled to mature between February 2008
and September 2009. The new advance has a fixed rate of 2.64%, has no conversion
features, and matures on March 21, 2005. The Bank is obligated to make monthly
interest payments and to repay the full principal amount at maturity. As with
the refinanced advances, the new advance is secured by a blanket lien on the
Bank's 1-4 family mortgage portfolio, a blanket lien on the Bank's commercial
real estate loan portfolio, and a lien on certain investment securities.
Management anticipates that the early payment fees will reduce earnings for the
quarter ending December 31, 2004 by approximately $0.20 per share on a
fully-diluted basis.
The new advance was otherwise made on terms generally available to
other FHLB member institutions and was not accompanied by covenants or other
restrictions that the Corporation believes materially affect its business or
operations, or the rights of its shareholders. As a financial institution, the
Corporation frequently adjusts financing sources and it also takes advantage of
availability of funds when the Corporation believes that it can employ them
profitably and/or advantageously replace other sources of financing.
This Item 2.03 contains forward-looking statements as defined by the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
present management's expectations, beliefs, plans and objectives regarding
future financial performance, and assumptions or judgments concerning such
performance. Discussions contained in this Item 2.03, except to the extent that
they contain historical facts, are forward-looking and accordingly involve
estimates, assumptions, judgments and uncertainties. There are a number of
factors that could cause actual results or outcomes to differ materially from
those addressed in the forward-looking statements. Such factors are detailed in
the "Risk Factors" filed as Exhibit 99.1 to the Annual Report of the Corporation
on Form 10-K for the year ended December 31, 2003. Except as required by
applicable laws, the Corporation does not intend to publish updates or revisions
of any forward-looking statements it makes to reflect new information, future
events or otherwise.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FIRST UNITED CORPORATION
Dated: December 21, 2004 By: /s/ Robert W. Kurtz
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Robert W. Kurtz
President and CFO
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