🔍 What This Document Is

This is a Post-Effective Amendment to a registration statement. In simple terms, it's an update to an old, approved filing that allows First United Corporation to sell shares under its Dividend Reinvestment and Stock Purchase Plan (DRIP).

👉 Why it matters: Companies must keep these registrations current. This filing updates the plan details for shareholders and ensures everything is compliant with SEC rules so the plan can continue operating. It's not a new offering but a refresh of an existing program.

🏢 What The Company Does

First United Corporation is a bank holding company. Its main business is owning First United Bank & Trust.

👉 In simple terms: Think of it as a local community bank serving parts of Maryland and West Virginia. It offers standard banking services: checking/savings accounts, loans, mortgages, and trust services. It's not a big national bank but a regional player with 23 branches.

Key Stats (as of Dec 31, 2025):

• Total Assets: $2.1 billion
• Net Loans: $1.5 billion
• Deposits: $1.7 billion
• Shareholders' Equity: $203.6 million

🤝 The Plan: Dividend Reinvestment & Stock Purchase

This is the core of the filing. It outlines a program for shareholders to automatically reinvest their cash dividends into more shares of First United stock.

Key Features:

• Dividend Reinvestment: Cash dividends are used to buy more shares (including fractional ones).
• Optional Cash Purchases: Shareholders can invest extra money, from $50 to $100,000 per quarter, to buy more shares.
• Selling Shares: Participants can sell shares held in their plan account through the plan administrator.

👉 Why it matters: It's a convenient, automatic way for loyal shareholders to grow their ownership over time without paying brokerage commissions on purchases. The company gets funds when it sells new shares directly to the plan.

🔍 The Mechanics: How Shares Are Bought & Priced

The plan administrator (Computershare) buys shares for participants. The price depends on where the shares come from.

For Newly Issued Shares (from the company):

• Price = "Fair Market Value" = Average of the high and low stock price over the 20 trading days before the purchase date.
• The company gets the proceeds from these sales.

For Open Market Purchases (from other investors):

• The administrator batches orders from all participants and buys shares on the market.
• Price = Weighted Average Price paid for that batch.
• The company does not get these proceeds.

👉 Why it matters: The price you pay isn't the market price on a single day but an average. This smooths out volatility but means you might not get the best possible price.

⚖️ Big Picture: Strengths & Risks

👍 Strengths of the Plan:

• Convenience: Automates investing and compounding.
• Cost-Effective: No service charges or commissions on purchases (the company pays them).
• Flexibility: You can reinvest dividends, make extra cash purchases, or sell shares.

⚠️ Risks & Considerations:

• Market Risk: The value of the stock can go down. You could lose money.
• No Control: You can't pick the exact purchase price or date.
• Low Liquidity: First United's stock is "not heavily-traded." Large plan purchases could temporarily affect the market price.
• Fees for Selling: While buying is commission-free, selling through the plan has fees (e.g., $15 service charge + $0.12 per share).
• Tax Complexity: Reinvested dividends are still taxable income in the year they're paid, even though you don't get the cash.

💼 Financial Snapshot & Use of Proceeds

The company may receive cash only when it sells newly issued shares directly through the plan.

How the company might use this cash:

• General working capital
• Investments in its subsidiaries
• Potential acquisitions of other banks or businesses
• Paying down debt
• Buying back its own stock

👉 Why it matters: This plan is a minor, ongoing source of capital for the company. There's no specific large project tied to it—it's for general corporate purposes, providing financial flexibility.

🧠 The Analogy

Participating in this DRIP is like setting up a subscription service for your own investment account. Instead of getting a cash dividend "payout," you automatically get a small, regular "top-up" of more shares, like a drip irrigation system slowly watering a plant. You can also choose to "subscribe" with extra cash each month to buy more, building your stake over time without actively placing trades each time.

🧩 Final Takeaway

First United Corporation is updating the rulebook for its shareholder-friendly Dividend Reinvestment Plan. It allows investors to automatically grow their holdings through dividend reinvestment and optional cash purchases, offering convenience but requiring comfort with market risks and the company's long-term prospects. The plan is a tool for committed shareholders, not a get-rich-quick scheme.