FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                        For Quarter Ended March 31, 1997

                         Commission File Number 0-17565


                           FIRST UNITED BANCORPORATION
             (Exact name of registrant as specified in its charter)


      South Carolina                                          57-0850174
 (State or other jurisdiction                              (I. R. S. Employer
 of incorporation)                                         Identification No.)



                              304 North Main Street
                         Anderson, South Carolina 29621
                         (Address of principal executive
                          offices, including zip code)

                                 (864) 224-1112
              (Registrant's telephone number, including area code)


               --------------------------------------------------

  Indicate  by check  mark  whether  the  registrant  (1) has filed all  reports
  required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
  1934  during the  preceding  12 months (or for such  shorter  period  that the
  registrant  was  required to file such  reports),  and (2) has been subject to
  such filing requirements for the past ninety (90) days.

                                   YES [X] NO  [ ]

  The number of shares  outstanding  of each of  registrant's  classes of common
stock as of March 31, 1997:

                2,591,958 shares of common stock, $1.67 Par Value






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                                TABLE OF CONTENTS



                                                                           PAGE

PART I ITEM 1  FINANCIAL INFORMATION

         Consolidated Balance Sheets......................................   3
                  March 31, 1997 and December 31, 1996
                  (unaudited)

         Consolidated Statements of Income................................   4
                  Three months ended March 31, 1997
                  and 1996 (unaudited)


         Consolidated Statement of Changes in
         Shareholders' Equity.............................................   5
                  Year ended December 31, 1996 and three
                  months ended March 31, 1997 (unaudited)

         Consolidated Statement of Cash Flows
                  Three months ended March 31, 1997 and...................   6
                  1996(unaudited)

         Notes to Consolidated Financial Statements.......................   7
                  (unaudited)


PART I ITEM 2  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.............................   9


PART II  OTHER INFORMATION................................................  19


SIGNATURES................................................................  20



                                     Page 2

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<TABLE>
<CAPTION>



                                            FIRST UNITED BANCORPORATION
                                            CONSOLIDATED BALANCE SHEETS
                                                    (Unaudited)
                                                                                     March 31,          December 31,
                                                                                      1997                  1996 
                                                                                  ------------          ------------
                                                                                             (In thousands)
ASSETS:

<S>                                                                                 <C>                  <C>   
  Cash and due from banks                                                           $   9,087            $   8,128
  Federal funds sold                                                                   11,160               13,700
  Investment securities:
    Held to maturity (Market value of $7,120 and $8,006)                                6,990                7,843
    Available for sale (Cost of $26,939 and $26,218)                                   26,799               26,304
  Total loans                                                                         213,595              205,551
  Less: Allowance for loan losses                                                      (3,408)              (3,160)
                                                                                    ---------            ---------
                               Net loans                                              210,187              202,391


  Premises, furniture and equipment (net)                                               7,525                7,627
  Other real estate owned                                                                  74                   85
  Other assets                                                                          4,224                4,117
                                                                                    ---------            ---------
      TOTAL ASSETS                                                                  $ 276,046            $ 270,195
                                                                                    =========            =========
LIABILITIES:
Demand deposits                                                                     $  23,867            $  23,180
  NOW accounts                                                                         25,383               25,143
  Savings and money market deposits                                                    34,392               34,113
  Certificates of deposit greater than $100,000                                        45,856               41,073
  Certificates of deposit less than $100,00 and other time deposits                   100,548               94,710
                                                                                    ---------            ---------
      TOTAL DEPOSITS                                                                  230,046              218,219
                                                                                    =========            =========

  Securities sold under repurchase agreements                                           3,537                8,167
  Federal Home Loan Bank Borrowings                                                     9,790               10,830
  Other borrowed funds                                                                 10,300               11,900
  Other liabilities                                                                     3,402                2,794
                                                                                    ---------            ---------
      TOTAL LIABILITIES                                                               257,075              251,910
                                                                                    ---------            ---------

SHAREHOLDERS' EQUITY:

  Common stock ($1.67 par value, 15,000,000                                             4,322                4,315
    shares authorized; 2,591,958 and 2,587,895
    shares issued and outstanding, respectively)
  Paid-in capital                                                                      13,982               13,965
  Retained earnings                                                                       755                   14
  Unrealized gain (loss) on securities available for                                      (88)                  (9)
    sale, net of income taxes
                                                                                    ---------            ---------
TOTAL SHAREHOLDERS' EQUITY                                                             18,971               18,285
                                                                                    ---------            ---------
TOTAL LIABILITIES AND  SHAREHOLDER's EQUITY                                         $ 276,046            $ 270,195
                                                                                    =========            =========

</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                     Page 3

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<TABLE>
<CAPTION>

                                            FIRST UNITED BANCORPORATION
                                         CONSOLIDATED STATEMENTS OF INCOME
                                                    (Unaudited)

                                                                                        THREE MONTHS ENDED
                                                                              March 31,              March 31,
                                                                                 1997                  1996
                                                                            ------------           ------------
                                                                             (In thousands except per share data)
INTEREST INCOME:
<S>                                                                             <C>                  <C>   
  Loans                                                                         $6,353               $4,903
  Federal funds sold                                                               140                   75
  Taxable investment securities                                                    456                  352
  Non-taxable investment securities                                                 64                   64
                                                                                ------               ------
  Total interest income                                                          7,013                5,394
                                                                                ------               ------
INTEREST EXPENSE:
  Interest on deposits                                                           2,465                1,725
  Interest on securities sold under repurchase agreements                           37                   40
  Interest on other borrowed funds                                                 418                  263
                                                                                ------               ------
  Total interest expense                                                         2,920                2,028
                                                                                ------               ------
  Net interest income                                                            4,093                3,366
  Provision for loan losses                                                        270                  321
                                                                                ------               ------
  Net interest income after provision for loan losses                            3,823                3,045
                                                                                ------               ------
OTHER INCOME:
  Service fees                                                                     253                  208
  Other income                                                                     259                  293
                                                                                ------               ------
  Total other income                                                               512                  501
                                                                                ------               ------
OTHER EXPENSES:
  Salaries, wages and benefits                                                   1,820                1,734
  Occupancy expenses                                                               201                  173
  Furniture and equipment expenses                                                 193                  126
  Other operating expenses                                                         850                  746
                                                                                ------               ------
  Total other expenses                                                           3,064                2,779
                                                                                ------               ------

Income before income taxes                                                       1,271                  767
Provision for income taxes                                                         452                  257
                                                                                ------               ------
NET INCOME                                                                      $  819               $  510
                                                                                ======               ======

PER SHARE DATA:
  Primary                                                                       $ 0.30               $ 0.19
  Fully diluted                                                                 $ 0.30               $ 0.19

AVERAGE COMMON SHARES OUTSTANDING:
  Primary                                                                        2,713                2,728
  Fully diluted                                                                  2,731                2,728
  Cash dividends                                                                $ 0.03               $ 0.03

</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                     Page 4

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<TABLE>
<CAPTION>

                                            FIRST UNITED BANCORPORATION
                                   STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                               FOR YEAR ENDED DECEMBER 31, 1996 AND THE THREE MONTHS
                                                ENDED MARCH 31,1997

                                                    (Unaudited)
                                                  (In thousands)

                                                                                                         UNREALIZED
                                                                                                          NET GAIN
                                                                                                         (LOSS) ON
                                                 NUMBER OF                                               SECURITIES         SHARE-
                                                  SHARES         COMMON        PAID-IN        RETAINED    AVAILABLE        HOLDERS'
                                               OUTSTANDING       STOCK         CAPITAL        EARNINGS    FOR SALE          EQUITY
                                               -----------       -----         -------        --------    --------          ------

<S>                                                 <C>          <C>           <C>            <C>             <C>          <C>     
Balance at December 31, 1995                        2,315        $3,859        $11,269        $ 1,343         $(64)        $ 16,407

Issuance of 116,418 shares of                         116           195          1,260         (1,458)           -               (3)
common stock relating to 5%
stock dividend

Issuance of 122,959 shares of                         123           205          1,317         (1,525)           -               (3)
common stock relating to 5%
stock dividend

Cash dividends declared                                 -             -              -           (292)           -             (292)

Employee stock options                                 34            56            119              -            -              175
exercised

Net income                                              -             -              -          1,946            -            1,946

Change in unrealized net                                -             -              -              -           55               55
gain/loss on securities
available for sale
                                                    -----        ------        -------        -------         ----         --------

Balance at December 31, 1996                        2,588         4,315         13,965             14           (9)          18,285

Cash dividends declared                                 -             -              -            (78)           -              (78)

Employee stock options                                  4             7             17              -            -               24
exercised

Net income                                              -             -              -            819            -              819

Changed in unrealized net                               -             -              -              -          (79)             (79)
gain/loss on securities
available for sale
                                                    -----        ------        -------        -------         ----         --------
Balance at March 31, 1997                           2,592        $4,322        $13,982        $   755         $(88)        $ 18,971
                                                    =====        ======        =======        =======         ====         ========
</TABLE>


                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                     Page 5

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<TABLE>
<CAPTION>

                                            FIRST UNITED BANCORPORATION
                                       CONSOLIDATED STATEMENT OF CASH FLOWS
                                                    (Unaudited)

                                                                                                           THREE MONTHS ENDED  
                                                                                                         March 31,        March 31,
                                                                                                           1997             1996
                                                                                                      ------------      ------------
                                                                                                              (In thousands)
Cash flows from operating activities:
<S>                                                                                                    <C>               <C> 
  Net income                                                                                           $    819          $    510

  Adjustments  needed to  reconcile  net  income  to net
  cash used by  operating activities:
    Provision for loan losses                                                                               270               321
    Depreciation and amortization                                                                           230               157
    Net increase in other assets                                                                            (77)              (33)
    Net increase in other liabilities                                                                       608               107
                                                                                                       --------          --------
      Net cash provided by operating activities                                                           1,850             1,062
                                                                                                       --------          --------
Cash flows from investing activities :
  Purchases of investment securities held to maturity
                                                                                                           --                (100)
  Proceeds from maturities of investment securities held to maturity                                        853               780
  Purchase of investment securities available for sale                                                   (3,204)           (3,342)
  Proceeds from maturities of investment securities available for sale                                    2,583             2,234
  Net increase in loans                                                                                  (8,066)           (6,809)
  Net additions to premises and equipment                                                                  (100)             (584)

                                                                                                       --------          --------
      Net cash used by investing activities                                                              (7,934)           (7,821)
                                                                                                       --------          --------
Cash flows from financing activities:
  Net increase in deposits                                                                               11,827            10,704
  Proceeds from other borrowed funds                                                                     22,250               180
  Principal repayment of other borrowed funds                                                           (24,890)           (2,347)
  Net increase (decrease) in securities sold under repurchase agreements                                 (4,630)               51
  Proceeds from issuance of common stock                                                                     24                65
  Cash dividends                                                                                            (78)              (71)
                                                                                                       --------          --------
      Net cash provided by financing activities                                                           4,503             8,582
                                                                                                       --------          --------
Net increase in cash and cash equivalents                                                                (1,581)            1,823

Cash and cash equivalents, beginning of period                                                           21,828            11,453
                                                                                                       --------          --------
Cash and cash equivalents, end of period                                                               $ 20,247          $ 13,276
                                                                                                       ========          ========
</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                     Page 6

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                  FIRST UNITED BANCORPORATION AND SUBSIDIARIES

               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(1)  BASIS OF PRESENTATION

         The interim  consolidated  financial statements include the accounts of
         First  United  Bancorporation  (the  "Company")  and its  wholly  owned
         subsidiaries,  Anderson National Bank,  Spartanburg  National Bank, The
         Community Bank of Greenville, N. A., and Quick Credit Corporation.

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         A summary of the Company's significant  accounting policies is included
         in the 1996 Annual Report to Shareholders.

(3)      COMMON STOCK, EARNINGS PER SHARE, AND STOCK DIVIDENDS

         On July  15,  1996  and  December  13,  1996,  the  Company's  Board of
         Directors   declared   five  percent  stock   dividends.   Accordingly,
         outstanding  shares of  common  stock  were  increased  and a  transfer
         representing the fair market value of additional shares issued was made
         from retained  earnings to common stock at par value,  cash for payment
         of fractional  shares and the balance to additional  paid-in-  capital.
         Per share data for the 1996 period has been  restated to reflect  these
         dividends as if they had occurred prior to the 1996 period presented.

         During the period ended March 31, 1997, the Company issued 4,063 shares
         of its  common  stock  at an  average  price  of  $5.91  per  share  in
         connection  with the exercise of stock options under its employee stock
         option plans.

         The Company  calculates its earnings per share by dividing net earnings
         for the periods  presented by the weighted  average  equivalent  shares
         outstanding  using the treasury stock method.  Common stock equivalents
         include options issued under the Company's employee stock option plans.

(4)      MANAGEMENT's OPINION

         In the opinion of management,  the  accompanying  interim  consolidated
         financial  statements  reflect all  adjustments,  consisting  of normal
         recurring accruals,  necessary for a fair presentation of the financial
         position of the Company and its  subsidiaries  at March 31,  1997,  the
         results of their  operations  for the quarters ended March 31, 1997 and
         1996, and the statements of their cash flows for the three months ended
         March 31, 1997 and 1996.

(5)      FORWARD LOOKING STATEMENTS

         Statements   included  in  Management's   Discussion  and  Analysis  of
         Financial  Condition and Results of Operations which are not historical
         in nature are  intended  to be, and are hereby  identified  as "forward
         looking statements" for purposes of the safe harbor provided by Section
         21E of the  Securities  Exchange Act of 1934,  as amended.  The Company
         cautions  readers that forward looking  statements,  including  without
         limitation,  those relating to the Company's future business prospects,
         revenues,  working capital,  liquidity,  capital needs, interest costs,
         and income,  are subject to certain risks and uncertainties  that could
         cause actual results to differ  materially  from those indicated in the
         forward looking  statements,  due to several  important  factors herein
         identified,  among others,  and other risks and factors identified from
         time to time in the  Company's  reports filed with the  Securities  and
         Exchange Commission.

                                     Page 7

<PAGE>

                                     PART I
                                     ITEM 2


           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

DISCUSSION OF CHANGES IN FINANCIAL CONDITION

     Total assets increased $5,851,000, or 2.2%, from December 31, 1996 to March
31, 1997 as a result of an increase in the amount of outstanding loans at two of
the Company's banking subsidiaries.  Total loans, the largest single category of
assets, increased $8,044,000,  or 3.9%, to $213,595,000 at March 31, 1997. Total
loans  outstanding at March 31, 1997 for  Spartanburg  National Bank amounted to
$92,967,000, a 2.4% increase from the $90,833,000 reported at December 31, 1996.
Total outstanding  loans, net of inter-company  loans, at Anderson National Bank
at  March  31,  1997  amounted  to  $85,340,000,  a  slight  decrease  from  the
$85,610,000 in total outstanding loans, net of inter-company  loans, at December
31, 1996. At March 31, 1997,  total loans  outstanding for The Community Bank of
Greenville,  N.A. amounted to $26,479,000,  an increase of $7,443,000, or 39.1%,
from the  $19,036,000  in  outstanding  loans at December 31,  1996.  During the
quarter ended March 31, 1997 Quick Credit Corporation  experienced a decrease in
total outstanding loans of $1,263,000 largely as a result of seasonal pay downs.

     Premises, furniture and equipment decreased slightly during the period as a
result of depreciation associated with these assets.

     The  Company's  securities  portfolios,  collectively,  at amortized  cost,
decreased slightly from year-end 1996 levels primarily as a result of maturities
in the  portfolios.  Cash and due from banks  increased  $959,000,  or 11.8%, to
$9,087,000 at March 31, 1997 as a result of an increase in uncollected  funds in
correspondent  bank  accounts  at quarter  end.  Federal  funds  sold  decreased
$2,540,000, or 18.5%, during the quarter as the Company used these funds to help
fund its loan growth.

     During the quarter ended March 31, 1997, the Company  liquidated one parcel
of other real estate owned valued at $11,000,  thus reducing the amount of other
real estate owned to $74,000 at March 31, 1997.  Management  continues to pursue
liquidation of the one remaining piece of property currently owned.

     Other  assets,  comprised  largely of accrued  income  receivable,  prepaid
expenses and deferred taxes, increased slightly from the year-end 1996 level.

     Total  liabilities  increased  $5,165,000,  or  2.1%,  as  a  result  of  a
$11,827,000,  or 5.4%,  increase  in total  deposits  at the  Company's  banking
subsidiaries.  The largest dollar  increase in a single category of deposits was
in certificates of deposit of less than $100,000, which increased $5,383,000, or
6.2%. The largest  percentage  increase in a single  category of deposits was in
certificates  of  deposit  of more than  $100,000,  which  increased  11.7%,  or
$4,783,000, to $45,856,000 at March 31, 1997. During the period ending March 31,
1997,  the Company  also  experienced  a slight  amount of growth in the various
other categories of its deposits.

     Securities  sold  under  agreements  to  repurchase,  comprised  largely of
overnight  repurchase  agreements,  decreased  $4,630,000,  or  56.7%,  from the
year-end 1996 level.  This  significant  decrease is largely  attributable  to a
single customer of Spartanburg National Bank which reduced its level of invested
temporary  funds  during the quarter  from the  unusually  high levels it had at
year-end 1996.

     During the quarter ended March 31, 1997,  the Company  reduced its level of
Federal Home Loan Bank advances $1,040,000,  or 9.6%, to $9,790,000 at March 31,
1997.  Other borrowed  funds,  comprised of various types of borrowings by Quick
Credit Corporation and borrowings by the parent company,  decreased  $1,600,000,
or 13.4%,  during the period as a result of principal  reductions  made by Quick
Credit Corporation on its borrowings.

                                     Page 8

<PAGE>

     Other liabilities,  comprised largely of accrued expenses payable increased
$608,000,  or 21.8%,  to  $3,402,000  at March 31, 1997.  The increase  resulted
largely from an increase in interest payable on deposit accounts and an increase
in income taxes payable.

     Shareholders' equity increased $686,000 from December 31, 1996 to March 31,
1997 as a result of net  earnings for the period of $819,000 and the exercise of
stock options under the Company's  Employee  Stock Option Plans in the amount of
$24,000.  These  increases  were  partially  offset by the  declaration  of cash
dividends  in the amount of $78,000  during  the period and an  increase  in the
amount of net unrealized losses on the Company's "available for sale" securities
portfolio of $79,000.


RESULTS OF OPERATIONS

Year-to-date  and quarter  ending  March 31, 1997 vs.  Year-to-date  and quarter
ending March 31, 1997

Earnings Review

     The consolidated  Company's  operations during the three months ended March
31, 1997 resulted in net income of $819,000,  a 60.6% increase over the $510,000
in net income recorded for the comparable 1996 three month period.  The increase
in  consolidated  earnings  for the 1997  period is  largely  attributable  to a
$727,000,  or 21.6%,  increase in the Company's net interest  income,  resulting
largely from an increase in interest  and fee income  generated by a larger loan
portfolio in the 1997 period,  and from an increase in earnings  recorded by the
Company's consumer finance subsidiary, Quick Credit Corporation.

     Anderson  National  Bank  recorded net earnings of $437,000 for the quarter
ended March 31,  1997,  a 42.8%  increase  over 1996 first  quarter  earnings of
$306,000.  The increase in earnings for this subsidiary  resulted primarily from
an increase in net interest income of $317,000, or 28.8%, resulting largely from
an increase of $567,000,  or 34.6%,  in interest and fee income on a larger loan
portfolio in the 1997 period.

     Spartanburg National Bank recorded net earnings of $295,000 for the quarter
ended March 31,  1997,  a 22.9%  increase  over 1996 first  quarter  earnings of
$240,000.  The increase in earnings for this  subsidiary,  like that of Anderson
National  Bank's,  resulted from an increase in net interest income of $177,000,
or 17.2%, attributable to an increase of $355,000, or 19.6%, in interest and fee
income on a larger loan portfolio in the 1997 period.


     The Community Bank of Greenville,  N.A., which commenced banking operations
on April 17, 1996 recorded a net loss of $20,000 for the 1997 period.

     Quick Credit Corporation  recorded net earnings of $142,000 for the quarter
ended March 31, 1997, a 389.7% increase over the $29,000  recorded for the first
quarter of 1996.  The  significant  increase  in  earnings  for this  subsidiary
resulted  primarily  from a $186,000  reduction in the provision for loan losses
for the 1997 period when compared to the 1996 period.

Interest Income, Interest Expense and Net Interest Income

     Net interest income,  the major component of the Company's  income,  is the
amount  by which  interest  and fees on  interest  earning  assets  exceeds  the
interest paid on interest bearing deposits and other interest bearing funds. The
Company's net interest income  increased  $727,000,  or 21.6%, to $4,093,000 for
the period  ended March 31, 1997  compared to  $3,366,000  for the period  ended
March 31, 1996. The increase is largely  attributable to an increase in interest
and fee income on loans at the Company's banking subsidiaries  resulting from an
increase in the volume of  outstanding  loans for the 1997 quarter when compared
to the 1996 quarter.

     The Company's  total interest  income  increased  $1,619,000,  or 30.0%, to
$7,013,000 for the 1997 period  compared to $5,394,000  for the 1996 period.  Of
the $1,619,000 increase, $1,450,000 is attributable to an increase

                                     Page 9

<PAGE>

in loan interest and fee income resulting from a 38.7% increase in the volume of
outstanding  loans during the 1997 period.  The Company's  outstanding loans for
the 1997 period were $209,748,000  compared to $151,245,000 for the 1996 period.
The average yield on loans for the March 31, 1997 year-to-date period was 12.12%
compared to 12.97% for the March 31, 1996 year-to-date period.

     Primarily as a result of the impact of the  Community  Bank of  Greenville,
N.A. on the Company's consolidated balance sheet, average balances on securities
and federal funds sold, collectively, increased by $11,124,000, or 33.2%, in the
1997  period  when  compared  to the 1996  period.  Largely  as a result of this
increase,  interest income on these categories of earning assets,  collectively,
increased by $169,000, or 34.4%.

     Interest expense on deposits  increased  $740,000,  or 42.9%, to $2,465,000
for the period ended March 31, 1997 compared to $1,725,000  for the period ended
March 31, 1996. The increase is attributable to increases in the Company's costs
of  interest-bearing  deposits and an increase of $56,402,000,  or 39.2%, in the
volume of average interest-bearing deposits for the 1997 period when compared to
the 1996 period.  The weighted average cost of interest bearing deposits for the
first  three  months of 1997 was  4.93%  compared  to 4.79% for the first  three
months of 1996.

     Interest  expense on Securities Sold Under Repurchase  Agreements  declined
$3,000,  or 7.5% in the 1997  period  primarily  as a result of a decline in the
rates  paid on  these  short-term  funds in the 1997  period.  Interest  expense
incurred  by  the  Company's  banking  subsidiaries  on  average  borrowings  of
$11,570,000  from the  Federal  Home Loan Bank of Atlanta  for the 1997  quarter
amounted to $182,000,  a 313.6%  increase from the $44,000  incurred in the 1996
quarter.  The increase in interest  expense on Federal Home Loan Bank borrowings
resulted  from an  increase  in the  amount  borrowed  during  the 1997  period.
Interest   expense  on  the  various   categories   of  other   interest-bearing
liabilities, which includes Subordinated Debt, Federal Funds Purchased and Other
Borrowed Funds,  collectively,  increased $18,000,  or 8.3%, in the 1997 quarter
when compared to the 1996 quarter.  The increase in interest expense  associated
with these other  interest-bearing  liabilities  is largely  attributable  to an
increase in interest  expense  incurred by the parent company on a larger volume
of outstanding borrowings in the 1997 period.

Provision and Allowance for Loan Losses, Loan Loss Experience

     The purpose of the  Company's  allowance  for loan losses is to absorb loan
losses  that  occur  in the  loan  portfolio.  The  allowance  for  loan  losses
represents  management's  estimate of an amount adequate in relation to the risk
of  future  losses  inherent  in  the  loan  portfolio  and  also  reflects  the
consideration of the amount of high rate/higher risk loans held by the Company's
consumer finance subsidiary, Quick Credit Corporation.

     While it is the Company's  policy to charge off in the current period loans
in which a loss is considered  probable,  there are  additional  risks of future
losses which cannot be quantified precisely or attributed to particular loans or
classes of loans. Because these risks include the state of the economy, industry
trends and conditions affecting individual  borrowers,  management's judgment of
the allowance is  necessarily  approximate  and  imprecise.  The Company is also
subject to regulatory examinations and determinations as to adequacy,  which may
take  into  account  such  factors  as the  methodology  used to  calculate  the
allowance  for loan  losses  and the size of the  allowance  for loan  losses in
comparison to a group of peer companies identified by the regulatory agencies.

     Management determines the adequacy of the allowance quarterly and considers
a variety of factors in  establishing  the level of the allowance for losses and
the related provision, which is charged to expense. In assessing the adequacy of
the allowance, management relies predominantly on its ongoing review of the loan
portfolio,  which is  undertaken  both to ascertain  whether  there are probable
losses which must be charged off and to assess the risk  characteristics  of the
portfolio in the aggregate. The review considers the judgments of management and
also those of bank regulatory agencies that review the loan portfolio as part of
their regular examination process.  The Comptroller of the Currency,  as part of
its routine  examination  process of various national banks,  including Anderson
National Bank,  Spartanburg  National Bank and The Community Bank of Greenville,
N.A.,  may  require  additions  to the  allowance  for loan  losses  based  upon
information available to the Comptroller at the time of the examination.

                                     Page 10

<PAGE>

     Management  considers  the  allowance  for loan  losses  adequate to absorb
losses on loans  outstanding at March 31, 1997 and in the opinion of management,
there are no material risks or significant  loan  concentrations  in the present
portfolio.

     The allowance for loan losses was  $3,408,000 at March 31, 1997 compared to
$2,391,000  at March 31,  1996.  At March  31,  1997 and  March  31,  1996,  the
allowance  for loan losses as a percentage  of  outstanding  loans was 1.60% and
1.55%,  respectively.  During the period  ending  March 31,  1997,  the  Company
experienced net charge-offs of $21,000, or 0.01%, of average loans,  compared to
net charge offs of $250,000,  or 0.17% of average loans during the period ending
March 31, 1996. The Company made  provisions for loan losses of $270,000  during
the quarter  ending March 31, 1997  compared to $321,000 for the quarter  ending
March 31, 1996. The decrease in net  charge-offs  and resulting  decrease in the
provision  for loan  losses  for the 1997  period  is  largely  attributable  to
improved results at Quick Credit Corporation.

     Anderson  National  Bank recorded a provision for loan losses of $75,000 in
the 1997 period as a result of  increases  in the volume of  outstanding  loans.
Anderson  National  Bank made no provision  in the 1996 period.  For the quarter
ending March 31, 1997,  this  subsidiary  recorded  net  recoveries  of $167,000
compared to net recoveries of $9,000 for the 1996 quarter.

     The Community Bank of Greenville, N.A. recorded a provision for loan losses
of $55,000 in the 1997 period as it  continued to establish  its  allowance  for
loan losses.  Since this subsidiary did not commence operations until the second
quarter of 1996, no provision was made in the 1996 quarter.  This subsidiary has
not experienced any loan losses since commencing operations.


     Spartanburg  National  Bank recorded a provision for loan losses of $50,000
for the quarter  ending March 31, 1997 compared to $45,000 for the 1996 quarter.
The slight  increase in the provision  made by this  subsidiary  was a result of
loan growth  experienced  by this  subsidiary  during the 1997  period.  For the
quarter  ending March 31, 1997,  this  subsidiary  recorded net  charge-offs  of
$20,000 compared to net charge-offs of $12,000 for the 1996 quarter.

     Quick Credit  Corporation  recorded a provision  for loan losses of $90,000
for the quarter  ending March 31, 1997 compared to $276,000 for the 1996 quarter
and to $1,731,000 for fiscal 1996. The decrease in this  subsidiary's  provision
for the 1997 period  resulted  from a decrease in the number and volume of loans
charged  off, a  decrease  in the volume of  outstanding  loans  during the 1997
period and a moderate  decline in the volume of overdue  loans.  For the quarter
ending March 31, 1997, this subsidiary recorded net charge offs of $168,000,  or
1.80% of average outstanding loans,  compared to net charge offs of $247,000, or
2.40%, of average  outstanding loans for the 1996 quarter and to $1,144,000,  or
11.66%, of average outstanding loans for fiscal 1996. Quick Credit Corporation's
customers are generally in the low-to-moderate  income group of borrowers.  Over
the past several  years there has been a  proliferation  of small  consumer loan
companies and other consumer debt providers competing for pieces of this segment
of the  consumer  debt market.  It is not unusual for  customers of Quick Credit
Corporation  simultaneously  to have loans  outstanding  at  several  small loan
companies  which  results in some  customers  incurring  more debt than they can
service.  Quick Credit Corporation  increased its allowance for loan losses as a
percentage of outstanding loans, net of unearned income, from 6.68% at March 31,
1996 to 12.61%  at March 31,  1997 as a result  of an  increase  in charge  offs
experienced  during 1996.  The increase in charge offs  experienced  during 1996
resulted from an increase in customers' inability to make scheduled payments and
an increase in declarations of bankruptcy.

     At March 31, 1997 the Company had $347,000 in non-accrual  loans, which are
considered  impaired,  $410,000  in loans  past  due 90 days or more  and  still
accruing  interest  and $74,000 in OREO,  compared to  $223,000,  $296,000,  and
$74,000,  respectively at March 31, 1996 and to $437,000, $416,000, and $85,000,
respectively  at December 31, 1996. At March 31, 1997 and 1996, and December 31,
1996, the Company did not have a material amount of restructured loans.


                                     Page 11

<PAGE>

     In the cases of all  non-performing  loans,  management  of the Company has
reviewed the carrying value of any underlying  collateral.  In those cases where
the collateral value may be less than the carrying value of the loan the Company
has taken  specific  write downs to the  credits,  even though such  credits may
still be  performing.  Management  of the  Company  does not  believe it has any
non-accrual loan which, individually,  could materially impact the allowance for
loan losses or long term future operating results of the Company.

Other Income

     Total  consolidated  other income for the 1997 quarter  increased  slightly
over  consolidated  other income recorded for the 1996 quarter.  During the 1997
quarter the Company  experienced a $45,000, or 21.6% increase in service fees on
deposit  accounts as a result of a larger  deposit  base and  increases  in fees
levied on its existing  deposit base. The increase in service fees was more than
offset  by a decline  of  $72,000,  or  24.6%,  in other  income  items,  mainly
alternative investment sales fees and mortgage loan fees. During the 1997 period
the Company recorded a gain on the sale of equity  securities from its available
for sale securities portfolio of $38,000.

Other Expenses

     Total other expenses increased $285,000,  or 10.3%, in the 1997 period over
the 1996 comparable period.  Salaries, wages and benefits ("personnel expense"),
the largest category of other operating expenses, increased $86,000, or 5.0%, in
the 1997 period over the 1996  period.  The  increase  in  personnel  expense is
largely   attributable  to  additional   staffing  for  The  Community  Bank  of
Greenville, N.A., which commenced operations in the second quarter of 1996.

     Occupancy  expense and  furniture  and  equipment  expenses,  collectively,
increased $95,000,  or 31.8%, in the 1997 period largely as a result of expenses
associated with The Community Bank of Greenville, N.A. and a new branch facility
for Spartanburg National Bank which opened during the third quarter of 1996.

     Other operating  expenses,  the second largest  category of other expenses,
increased  $104,000,  or  13.9%,  largely  as a result  of  additional  expenses
associated with the operations of The Community Bank of Greenville, N.A..

Income Taxes

     As a result of increased  income before income taxes,  the Company incurred
income tax expense of $452,000 for the year-to-date  period ended March 31, 1997
compared to income tax expense of $257,000 for the period ended March 31, 1996.


LIQUIDITY

     Liquidity  management  involves  meeting the cash flow  requirements of the
Company.  The Company's  liquidity position is primarily dependent upon its need
to respond to  short-term  demand for funds caused by  withdrawals  from deposit
accounts and upon the liquidity of its assets.  The Company's  primary liquidity
sources  include  cash and due from banks,  federal  funds sold and  "securities
available for sale". In addition,  the Company (through  Anderson  National Bank
and Spartanburg National Bank) has the ability, on a short-term basis, to borrow
funds from the Federal  Reserve System and to purchase  federal funds from other
financial institutions. Spartanburg National Bank and Anderson National Bank are
also members of the Federal Home Loan Bank System and have the ability to borrow
both short and longer term funds on a secured basis.  At March 31, 1997 Anderson
National Bank had $240,000 in long-term advances from the Federal Home Loan Bank
of Atlanta and $4,000,000 in short term advances.  At March 31, 1997 Spartanburg
National  Bank had $550,000 in long-term  advances and  $5,000,000 in short-term
advances from the Federal Home Loan Bank of Atlanta. Both Anderson National Bank
and Spartanburg  National Bank have lines of credit established with the Federal
Home Loan Bank of  Atlanta  in excess of their  existing  advances  at March 31,
1997.
                                     Page 12

<PAGE>

     First  United  Bancorporation,  the parent  holding  company,  has  limited
liquidity  needs.  First  United  requires  liquidity  to pay limited  operating
expenses and dividends,  and to service its debt. In addition,  First United has
two lines of credit  with third  party  lenders  totaling  $6,100,000,  of which
$100,000 was  available  at March 31,  1997.  One of these lines is a $6,000,000
line of credit with an  unaffiliated  third party  lender to be used for general
corporate purposes and allows for interest to be paid on a quarterly basis for a
period of up to five (5) years if certain  criteria  are met. At the end of five
(5) years, or sooner if the Company desires, the line of credit can be converted
to a term loan with quarterly interest payments and annual principal  reductions
required over a period of five (5) years. The line of credit bears interest at a
variable rate.  Further sources of liquidity for First United include management
fees  which  are  paid  by  all of  its  subsidiaries  and  dividends  from  its
subsidiaries.

     At March 31, 1997, the Company's consumer finance subsidiary,  Quick Credit
Corporation,  had debt outstanding of $800,000 in the form of subordinated  debt
and $3,500,000  outstanding under an $18,000,000 line of credit secured by Quick
Credit Corporations's loans receivable with a third party lender.

     Management  believes  its  liquidity  sources  are  adequate  to  meet  its
operating  needs and does not know of any  trends,  other than those  previously
discussed,  that may result in the Company's liquidity materially  increasing or
decreasing.


CAPITAL ADEQUACY AND RESOURCES

     The capital  needs of the Company  have been met through the  retention  of
earnings and from the proceeds of a prior public stock offering in 1988.

     For bank holding  companies  with total  assets of more than $150  million,
such as the  Company,  capital  adequacy is generally  evaluated  based upon the
capital of its banking  subsidiaries.  Generally,  the Board of Governors of the
Federal  Reserve  System (the  "Federal  Reserve  Board")  expects  bank holding
companies to operate above minimum capital levels. The Office of the Comptroller
of the  Currency  ("Comptroller")  regulations  establish  the minimum  leverage
capital  ratio  requirement  for national  banks at 3% in the case of a national
bank that has the highest regulatory examination rating and is not contemplating
significant  growth or  expansion.  All other  national  banks are  expected  to
maintain a ratio of at least 1% to 2% above the stated minimum. Furthermore, the
Comptroller  reserves the right to require  higher  capital ratios in individual
banks on a case by case  basis  when,  in its  judgment,  additional  capital is
warranted by a deterioration of financial  condition or when high levels of risk
otherwise exist. The Company's subsidiary banks have not been notified that they
must maintain capital levels above regulatory  minimums.  The Company's leverage
capital  ratio was 6.86% and 6.72% at March  31,  1997 and  December  31,  1996,
respectively.   The  leverage   capital  ratios  for  Anderson   National  Bank,
Spartanburg  National  Bank and The  Community  Bank of  Greenville,  N.A.  were
7.43%,7.01% and 9.29%,  respectively at March 31, 1997, compared to 7.25%, 6.74%
and 10.45%,  respectively,  at December 31, 1996.  The decline in The  Community
Bank of  Greenville's  leverage  ratio is a result of asset  growth  experienced
during the period ended March 31, 1997.

     The Federal  Reserve  Board has  adopted a  risk-based  capital  rule which
requires  bank holding  companies to have  qualifying  capital to  risk-weighted
assets  of at least  8.00%,  with at least 4%  being  "Tier 1"  capital.  Tier 1
capital  consists  principally  of common  stockholders'  equity,  noncumulative
preferred stock, qualifying perpetual preferred stock, and minority interests in
equity  accounts of consolidated  subsidiaries,  less goodwill and certain other
intangible assets.  "Tier 2" (or supplementary)  capital consist of general loan
loss reserves (subject to certain limitations), certain types of preferred stock
and  subordinated  debt, and certain hybrid capital  instruments  and other debt
securities such as equity commitment notes. A bank holding company's  qualifying
capital base for purposes of its risk-based capital ratio consists of the sum of
its Tier 1 and Tier 2 capital  components,  provided that the maximum  amount of
Tier 2 capital that may be treated as  qualifying  capital is limited to 100% of
Tier 1 capital.  The Comptroller  imposes a similar  standard on national banks.
The regulatory  agencies  expect  national  banks and bank holding  companies to
operate above  minimum  risk-based  capital  levels.  The  Company's  risk-based
capital  ratio was 10.39% and its Tier 1 capital to risk  weighted  assets ratio
was 9.05% at March 31,  1997,  compared  to 10.30% and 8.92%,  respectively,  at
December 31, 1996.  The risk-based  capital  ratios for Anderson  National Bank,
Spartanburg  National  Bank and The  Community  Bank of  Greenville,  N.A.  were
10.99%, 10.18% and 14.92%, respectively, at March 31, 1997

                                     Page 13

<PAGE>

compared to 10.35%, 9.99% and 18.76%, respectively,  at December 31, 1996. Their
Tier 1 capital to risk  weighted  assets  ratios were  9.74%,  9.08% and 14.21%,
respectively,   at  March  31,  1997  compared  to  9.34%,   8.90%  and  17.88%,
respectively,  at  December  31,  1996.  The  decline in The  Community  Bank of
Greenville,  N.A.'s  risk-based  capital  ratio and its Tier 1  capital  to risk
weighted  assets  ratio was a result from asset  growth  experienced  during the
quarter ended March 31, 1997.

     The  Company  opened  its  new  bank  subsidiary,  The  Community  Bank  of
Greenville, N. A., in the city of Greenville,  South Carolina on April 17, 1996.
The Company  capitalized  this new bank  subsidiary with $4.5 million of capital
acquired from  proceeds  available to the Company under a line of credit with an
unaffiliated third-party lender which had committed to lend the Company up to $6
million.


EFFECT OF INFLATION AND CHANGING PRICES

     The consolidated financial statements have been prepared in accordance with
generally  accepted  accounting  principals  which  require the  measurement  of
financial  position and results of operations  in terms of  historical  dollars,
without  consideration of changes in the relative purchasing power over time due
to  inflation.  Unlike most other  industries,  virtually  all of the assets and
liabilities  of a financial  institution  are  monetary in nature.  As a result,
interest  rates  generally  have  a  more  significant  effect  on  a  financial
institution's  performance than does the effect of inflation.  Interest rates do
not  necessarily  change  in the same  magnitude  as the  prices  of  goods  and
services.

     While the effect of inflation on banks is normally not as significant as is
its  influence on those  businesses  which have large  investments  in plant and
inventories, it does have an effect. During periods of high inflation, there are
normally  corresponding  increases in the money supply,  and banks will normally
experience  above average growth in assets,  loans and deposits.  Also,  general
increases in the prices of goods and services will result in increased operating
expenses.


ACCOUNTING AND REPORTING MATTERS

     In February 1997, the FASB issued SFAS No. 128,  "Earnings Per Share." SFAS
No. 128 simplifies  the current  computation of earnings per share and makes the
United States standards for the computation  more compatible with  international
earnings per share  standards.  The  Statement  requires  dual  presentation  of
earnings per share for all entities  with complex  capital  structures.  It also
replaces the  presentation of primary  earnings per share with a presentation of
basic  earnings per share.  The  Statement is effective  for the Company for the
year ended December 31, 1997.  The Company does not anticipate  that adoption of
this Statement will have a material effect on its financial statements.

                                     Page 14

<PAGE>

                                    PART II
                                OTHER INFORMATION


Item 1. Legal Proceedings.

     The  Company is from time to time  involved  in various  Legal  proceedings
arising  out of the  ordinary  course  of  business,  primarily  related  to the
collection  of loans  receivable.  Based  upon  current  information  available,
management believes there are no legal proceedings threatened or pending against
the Company that could result in a materially  adverse change in the business or
financial condition of the Company.

Item 2.  Changes in Securities.

          None

Item 3.  Defaults Upon Senior Securities.

          None

Item 4.  Submission of Matters to a Vote of Security Holders.

          None

Item 5.   Other Information.

          None

Item 6.   Exhibits and Reports on Form 8-K.

          Exhibit 27 - Financial Data Schedule



                                     Page 15

<PAGE>


                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                        FIRST UNITED BANCORPORATION

                                        Mason Y. Garrett
Dated:  May 9, 1996                     ----------------------------
                                        Mason Y. Garrett, President
                                        and Chief Executive Officer

                                        William B. West
                                        ----------------------------
                                        William B. West, Sr. Vice
                                        President and Chief Financial
                                        and Accounting Officer


                                     Page 16