Message To the Shareholders
                       Of First United Corporation:

Dear Fellow Shareholder:
      The increased cost of compliance and the repositioning of the Company's balance sheet contributed to a slide in earnings for 2004. The replacement of our Trust Preferred Security and the early redemption of Federal Home Loan Borrowing had a combined impact of $.30 per share. While costly, these two moves position the Company for future growth, while at the same time substantially reducing our interest costs. The onerous requirements of compliance, with an increasing regulatory burden cost approximately $.08 per share last year.
      These elements, combined with ongoing pressure on our net interest margin resulted in earnings per share

of $1.25. Our Return on Equity finished at 8.91%. Further details on this can be found in the 10-K which is included with your Annual Report.
      Loan growth continued to be strong in 2004. It was well balanced with $66 million in growth in the Commercial Loan Portfolio and $54 million in growth in the Mortgage Portfolio. We continued to be challenged in growing deposits last year, as competition for consumer and business funds was at a fevered pitch.
      As we move forward, we are excited about our expansion plans into our dynamic growth areas. By the time you receive this report, our first full service office in Morgantown, West