investments would be funded with borrowings from the Federal Home Loan Bank of Atlanta and other sources. As the financial markets collapsed in 2008 and 2009, the investments in our trust preferred securities collapsed as well. This led to significant charges to earnings in 2009 and 2010. The elevated levels of loan participations, which were also adversely impacted by the recession, exacerbated our credit issues. These two factors contributed greatly towards the losses we have encountered over the past quarters and the decrease in our capital. Throughout it all, however, your Company has remained well capitalized, as defined by our regulators, and is not on the list of problem banks in the country. First United is essentially in the middle of the pack. Some of our peers fared far better; others have failed, or are under strident regulatory scrutiny.

As a result of these events, the markets pummeled the stock price to historically low levels and the dividend was discontinued. This has impacted everyone, including all our shareholders, public, institutional and associates alike. While regrettable, it is hoped and anticipated that the difficult steps taken by the Company will restore the strength of the Company, and that this will be recognized by the markets.

As the Company moves forward, steps are being taken to restore its strength and viability. To accommodate the diminishment of capital, the Company intends to decrease its size through balance sheet restructurings. We intend to use excess cash which the Company accumulated through 2009 and 2010 to pay down borrowings while still maintaining an appropriate level of liquidity. As discussed earlier, steps will be taken to decrease the volume of adversely classified assets as well. This right sizing of the Company should bring greater congruity between its asset base and its capital level. As earnings come back on line, capital should begin to grow through retained earnings. While regrettable, the Board of Directors’ decisions to reduce and then eliminate the cash dividends should accelerate this increase in capital. Sharp focus will be maintained on expense control. Notably, the number of full time equivalent employees has dropped from 436 in 2008 to 400 today, even though two additional community offices were opened during that time.

Despite all this, the Board and associates are excited about the future. Our focus on community and community oriented business owners plays to the strength of First United as a community bank. Throughout the difficult times, we have continued to see growth in the number of customers – consumer and businesses – that we serve. Our strategically located offices in our growth markets position us well to capture new business. Our size should continue to serve us well as we are small enough to tailor solutions for our customers, yet large enough to provide them with the array of services and delivery channels they expect. We are hopeful that our strategies for increasing earnings and improving asset quality will propel the Company to strength and profitability, which I expect will be noted by the market.

In closing, the Company is emerging from its most difficult period in nearly a century. It has impacted all of us – customers, associates and shareholders. We are strongly encouraged by what we see as a bright future that should, over time, translate into community service, financial strength and profitability. In speaking for all associates, I can say we have been heartened by the ongoing support of our communities and shareholders. While some have understandably been harsh in their comments to us, we have received many more comments encouraging and supporting us in our efforts. We thank you for your support, and look forward to continued service to you.