Message To the Shareholders
                       Of First United Corporation:

Dear Fellow Shareholder:
      I am pleased to report to you on the success your Company enjoyed in 2003 and our plans for the year ahead. Last year, I wrote of our plans to purchase four offices in Martinsburg, West Virginia. The acquisition occurred in July and went very smoothly. First United now has five offices and a number two market position in this very dynamic, growing market. Once again, our financial performance in 2003 established new records for your Company. Our earnings for 2003 were $10.7 million, or $1.77 per share. This represents an 11.3% increase over 2002's record year of $1.59 per share. First United's balance sheet eclipsed the $1 billion mark, ending the year with $1,108,241,000 in assets.

      Loan activity was balanced throughout the Company last year. We again saw strong growth in our commercial area, with $65 million in growth last year. The mortgage area had a record year in 2003 with $140.8 million in production. All of this did not, however, translate to growth in the mortgage ledger, since we experienced significant paybacks, and many of our loans were placed in the secondary market.
      Deposit growth continues to be a challenge for your Company. As you review the report, you will note deposit growth of nearly 23%. Much of this, however, occurred as a result of the branch acquisition, and some growth in core deposits. Certificates of Deposit balances actually declined as the Bank continues to reposition its deposit portfolio in order to improve its cost of funds.