Unassociated Document
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): October 10, 2008
First
United Corporation
(Exact
name of registrant as specified in its charter)
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Maryland
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0-14237
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52-1380770
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(State
or other jurisdiction of
incorporation
or organization
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(Commission
file number)
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(IRS
Employer
Identification
No.)
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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)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligations of the registrant under any of the following
provisions:
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
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Item
2.02
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Results
of Operations and Financial
Condition.
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The
information required by this Item is contained in Item 7.01 of this report,
which is incorporated herein by reference.
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Item
5.02.
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Departure
of Directors or Principal Officers; Election of Directors;
Appointment
of Principal Officers.
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(b) Departure
of Director.
On
October 10, 2008, after 17 years of service, Karen F. Myers resigned as a
director of First United Corporation (the “Corporation”). The Board of Directors
intends to eliminate the vacancy created by Ms. Myers’ resignation by reducing
the number of directorships from 16 to 15 at its next meeting.
(c) Appointment
of Executive Officer.
Effective
October 15, 2008, the Corporation’s Board of Directors appointed Jason Rush as a
Senior Vice President and Director of Operations & Support of the
Corporation. Mr. Rush, who is 37 years old, has been employed by the First
United organization since October of 1993. Prior to this promotion, Mr. Rush
served as Vice President, Director of Operations & Support since March,
2006, and before that as V ice President and Regional Manager/Community Office
Manager from January, 2005 to February, 2006; V ice President and Community
Office Manager/Manager of Cash Management from May, 2004 to December, 2004;
Assistant Vice President and Community Office Manager from April, 2001 to April,
2004; Community Office Manager from August, 1998 to April, 2001; Customer
Service Officer from March, 1997 to July, 1998; Assistant Compliance Officer
from July, 1995 to February, 1997; and Management Trainee from October, 1993
to
July, 1995. Mr. Rush also serves as the Treasurer of Rush Services, Inc., a
family-owned business in which he has no ownership interest. He also
participates with his brother in farming and land investments.
Remuneration
paid to Mr. Rush in 2006 and 2007 for services rendered to the Corporation
was
$125,452 and $107,065, respectively. These amounts include salary, incentive
pay, bonus, imputed income related to premiums paid for group life insurance,
imputed income related to premiums paid for bank owned life insurance, and
matching contributions to the Corporation’s 401(k) plan. In connection with his
appointment, it is contemplated that Mr. Rush’s annual salary will be set at
$130,000 and that he will be eligible (subject to any eligibility and vesting
requirements) to participate in the Corporation’s Executive Pay for Performance
Plan (the “EPPP”), the Corporation’s Omnibus Equity Compensation Plan, including
the Long-Term Incentive Plan adopted thereunder (the “LTIP”), and the life
insurance and other benefit plans generally available to executive officers
of
the Corporation.
The
material provisions of the EPPP and the LTIP were discussed in Item 5.02 of
the
Corporation’s Current Report on Form 8-K filed with the Securities and Exchange
Commission on June 23, 2008 under, which discussion is incorporated herein
by
reference. The plan documents were attached as exhibits to that report. Mr.
Rush
will not be entitled to any restricted stock grant under the LTIP for 2008.
Mr.
Rush will, however, be eligible to receive an award under the EPPP that will
be
calculated based on the period remaining in plan year 2008 during which he
serves as Senior Vice President and Director of Operations & Support. The
following table provides information about the award that could be earned by
Mr.
Rush in 2008 and paid in 2009 under the EPPP:
GRANTS
OF PLAN-BASED AWARDS
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Name
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Date
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Estimated
Possible Annual Payouts Under the EPPP
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Threshold
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Target
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Maximum
(Stretch)
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Jason
Rush
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2008
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$
2,709
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$
5,417
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$
6,771
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Transactions
between the Corporation and its affiliates and Mr. Rush and his related
interests during the past two years other than the remuneration discussed above
have been limited to personal loans and loans to Rush Services, Inc., and
plumbing and related services provided to the Corporation and its affiliates
by
Rush Services, Inc.
The
Corporation’s bank subsidiary periodically engages in banking transactions in
the ordinary course of its business with executive officers of the Corporation
and its subsidiaries and their related interests on substantially the same
terms, including interest rates, collateral, and repayment terms, as those
prevailing at the same time for comparable transactions with non-affiliated
persons. The
bank
makes every attempt to structure these extensions of credit so that they do
not
involve more than the normal risk of collectability or present other unfavorable
features. The loans to Mr. Rush and his related interests described above were
made consistent with the foregoing.
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Item
7.01.
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Regulation
FD Disclosure.
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The
Corporation announces that it expects to record $3.0 million in the provision
for probable credit losses for the third quarter of 2008. This amount compares
to $.8 million recorded in the provision for probable credit losses for the
same
quarter of 2007 and $1.0 million recorded for the quarter ended June 30, 2008.
The $3.0 million expense is expected to reduce earnings for the third quarter
by
$.33 per share on an after-tax basis. However, the Corporation nevertheless
expects to post after-tax earnings of $.43 per share for the third quarter
of
2008 and $1.62 per share for the nine months ended September 30, 2008. These
results compare to $.58 per share and $1.43 per share for the same periods
in
2007, respectively. Year to date, the provision for probable credit losses
totals $5.4 million, compared to $1.3 million for the nine months ended
September 30, 2007. The allowance for loan losses represented 1.05% of
outstanding loans at September 30, 2008.
The
provision for probable credit losses reflects net charge-offs, loan growth,
the
results of our quarterly review of loan portfolio trends, the affects of the
continued deterioration of economic conditions on acquisition and development
loans, and specific allocations for impaired loans. The $2.0 million increase
from June 30, 2008 is the result of management’s recent review of the
Corporation’s loan portfolio and the collateral securing these loans (including,
where appropriate, new appraisals) and its application of a sensitivity analysis
to collateral values, all in an effort to measure potential future loan losses.
Specific allocations have been provided in all instances where we have
recognized probable losses. Approximately $1.8 million of the recorded expense
is attributable to an acquisition and development loan in Hardy County, West
Virginia and another loan relationship outside of the Corporation’s market
area.
Non-performing
assets totaled $31.8 million at September 30, 2008, compared to $8.7 million
at
December 31, 2007 and $12.5 at June 30, 2008. Management believes that the
allowance at September 30, 2008 is adequate to provide for probable losses
inherent in the loan portfolio. Amounts that will be recorded for the provision
for loan losses in future periods will depend upon trends in the loan balances,
including the composition of the loan portfolio, changes in loan quality and
loss experience trends, potential recoveries on previously charged-off loans
and
changes in other qualitative factors.
The
foregoing is intended to apprise investors only of the expected expense
discussed above. It is not, and should not be construed as, a full discussion
of
the Company’s financial condition at September 30, 2008 or results of operations
for the third quarter of 2008, which will be discussed in a subsequent earnings
release and/or the Corporation’s next Quarterly Report on Form
10-Q.
This
report on Form 8-K contains forward-looking statements as defined by the Private
Securities Litigation Reform Act of 1995. Forward-looking statements do not
represent historical facts, but rather statements about management’s beliefs,
plans and objectives about the future, as well as its assumptions and judgments
concerning such beliefs, plans and objectives. These statements are evidenced
by
terms such as “anticipate”, “estimate”, “should”, “expect”, “believe”, “intend”,
and similar expressions. Although these statements reflect management’s good
faith beliefs and projections, they are not guarantees of future performance
and
they may not prove true. These projections involve risk and uncertainties that
could cause actual results to differ materially from those addressed in the
forward-looking statements. These risks and uncertainties include, but are
not
limited to, changes in general economic, market, or business conditions; changes
in the quality or composition of the investment portfolio; changes in laws
or
regulations or policies of federal and state regulators and agencies; and other
circumstances beyond the control of the Corporation. Consequently, all of the
forward-looking statements made in this report are qualified by these cautionary
statements, and there can be no assurance that the actual results anticipated
will be realized, or if substantially realized, will have the expected
consequences on the Corporation’s business or operations. For a discussion of
the risks and uncertainties to which the Corporation is subject, see the section
of the periodic reports that the Corporation files with the Securities and
Exchange Commission entitled “Risk Factors”.
The
information contained in Item 2.02 and this Item 7.01 shall not be deemed
“filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or incorporated by reference in any filing under
the Securities Act of 1933, as amended, or the Exchange Act, except as shall
be
expressly set forth by specific reference in such a filing.
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.
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FIRST
UNITED CORPORATION
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Dated:
October 15, 2008
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By:
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/s/
Carissa L. Rodeheaver
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Carissa
L. Rodeheaver, Executive
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Vice
President and Chief
Financial Officer
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