First United (FUNC) risk factors, FY2024 10-K

Risks Relating to First United Corporation and its Affiliates

1. 01First United Corporation’s future success depends on the successful growth of its subsidiaries
2. 02The Bank’s funding sources may prove insufficient to replace deposits and support our future growth
3. 03We may need to raise capital in the future, and such capital may not be available when needed or at all
4. 04Our inability to generate liquidity in a timely manner may adversely impact our ability to satisfy obligations associated with our financing, our operations and other components of our business
5. 05Our inability to access sources of financing at terms that are favorable to us may result in an adverse effect on our business, financial condition, and results of operations
6. 06The value of real estate collateral may fluctuate significantly resulting in an under-collateralized loan portfolio
7. 07The Corporation is subject to lending risk, and the impacts of interest rate changes could adversely impact the Corporation
8. 08Interest rates and other economic conditions will impact our results of operations
9. 09The majority of our business is concentrated in Maryland and West Virginia, much of which involves real estate lending, so a decline in the real estate and credit markets could materially and adversely impact our financial condition and results of operations
10. 10The Bank’s concentrations of commercial real estate loans could subject it to increased regulatory scrutiny and directives, which could force us to preserve or raise capital and/or limit future commercial lending activities
11. 11The Bank may experience loan losses in excess of its allowance for credit losses, which would reduce our earnings
12. 12We depend on the accuracy and completeness of information about customers and counterparties, and inaccurate, incomplete or misleading information provided to us by these persons could cause us to suffer losses
13. 13Our accounting estimates and risk management processes rely on analytical and forecasting models, the inadequacy of which could have a material adverse effect on our financial condition and/or results of operations
14. 14The Bank’s lending activities subject the Bank to the risk of environmental liabilities
15. 15Our investment securities are subject to market risk and credit risk that may have an adverse impact on our financial condition and results of operation
16. 16Impairment of goodwill and other intangible assets or deferred tax assets could require charges to earnings, which could result in a negative impact on our results of operations
17. 17Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our financial condition and results of operations
18. 18Increases in FDIC insurance premiums may have a material adverse effect on our results of operations
19. 19We operate in a competitive environment, and our inability to effectively compete could adversely and materially impact our financial condition and results of operations
20. 20The banking industry is heavily regulated; significant regulatory changes could adversely affect our operations
21. 21The Consumer Financial Protection Bureau may continue to reshape the consumer financial laws through rulemaking and enforcement of the prohibitions against unfair, deceptive and abusive business practices. Compliance with any such change may impact our business operations
22. 22Bank regulators and other regulations, including the Basel III Capital Rules, may require higher capital levels, impacting our ability to pay dividends or repurchase our stock
23. 23A material weakness in our disclosure or internal controls could have an adverse effect on us
24. 24We may not be able to keep pace with developments in technology
25. 25Our operational or communications systems or infrastructure may fail or may be the subject of a breach or cyber-attack that, if successful, could adversely affect our business or disrupt business continuity
26. 26A disruption, breach, or failure in the operational systems or infrastructure of our third-party vendors or other service providers, including as a result of cyber-attacks, could adversely affect our business
27. 27We may be subject to claims and the costs of defensive actions, and such claims and costs could materially and adversely impact our financial condition and results of operations
28. 28The loss of key personnel could disrupt our operations and result in reduced earnings
29. 29We are a community banking organization and our ability to maintain our reputation is critical to the success of our business
30. 30We could be adversely affected by risks associated with future acquisitions and expansions
31. 31New lines of business, products or services may subject us to additional risks
32. 32Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our sustainability practices may impose additional costs on us or expose us to new or additional risks

Risks Relating to First United Corporation’s Securities

1. 33The shares of Common Stock are not heavily traded
2. 34Significant sales of shares of Common Stock, or the perception that significant sales may occur in the future, could adversely affect the market price of shares of Common Stock
3. 35The Corporation’s ability to pay dividends on the common stock is subject to the terms of the outstanding TPS Debentures, which prohibit the Corporation from paying dividends during an interest deferral period
4. 36Applicable banking and Maryland laws impose additional restrictions on the ability of the Corporation and the Bank to pay dividends and make other distributions on their capital securities, and, in any event, the payment of dividends is at the discretion of the boards of directors of the Corporation and the Bank
5. 37The Corporation’s charter and bylaws and Maryland law may discourage a corporate takeover