First United Corporation (NASDAQ:FUNC) Files An 8-K Other Events
Item 8.01. Other Events.

On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the "Act"). The Act amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses. For businesses, the Act reduces the corporate tax rate from a maximum of 35% to a flat 21% rate. The rate reduction is effective on January 1, 2018.

At September 30, 2017, First United Corporation (the “Corporation”) had a net deferred tax asset totaling $17.7 million. Under generally accepted accounting principles, the Corporation uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Corporation’s net deferred tax asset of $17.7 million was determined based on the current enacted federal tax rate of 35% prior to the passage of the Act. As a result of the reduction in the corporate income tax rate from 35% to 21% under the Act, the Corporation will revalue its net deferred tax asset at December 31, 2017. The Corporation estimates that this will result in a reduction in the value of its net deferred tax asset of approximately $3.4 million, which reduction will be recorded as additional income tax expense in the Corporation’s consolidated statement of operations for the three months ended December 31, 2017. The impact to the Corporation’s earnings per common share is estimated to be a reduction of approximately $.49 per share. The Corporation’s revaluation of its deferred tax asset is subject to further clarification of the Act that cannot be estimated at this time. As a result, the actual impact on the net deferred tax asset may vary from the estimated amount due to uncertainties in the Corporation’s preliminary review.

This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” and “will” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are based on current expectations, estimates and projections, are not guarantees of future performance and involve risks, assumptions and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The Company expressly disclaims any current intention to update publicly any forward-looking statement after the filing of this report, whether as a result of new information, future events, changes in assumptions or otherwise.

About First United Corporation (NASDAQ:FUNC)

First United Corporation is a bank holding company. The Company’s primary business is serving as the parent company of First United Bank & Trust (the Bank), First United Statutory Trust I, First United Statutory Trust II and First United Statutory Trust III. It operates through community banking segment. The Bank is an independent community bank providing a range of retail and commercial banking services to businesses and individuals in its market areas. The Bank offers a range of services, such as checking, savings, money market deposit accounts, and certificates of deposit, business loans, personal loans, mortgage loans, lines of credit, and consumer-oriented retirement accounts including individual retirement accounts (IRAs) and employee benefit accounts. In addition, the Bank provides full brokerage services. The Bank also provides safe deposit and night depository facilities, insurance products and trust services.