First · NASDAQ:FUNC
First — First United — Shareholder Meeting (May 2013)
78 slides from First's shareholder meeting presentation, May 9, 2013
Slide 1: Annual Shareholders' Meeting May 9, 2013
First United Corporation Annual Shareholders’ Meeting May 10, 2012 First United Corporation Annual Shareholders’ Meeting May 9, 2013
Slide 2: Bill Grant, Chief Executive Officer and Chairman
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Bill Grant Chief Executive Officer and Chairman of the Board
Slide 3: Forward-Looking Statements
3 Forward - Looking Statements Forward - looking statements in this presentation relating to First United Corporation’s plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act o
Slide 4: Bill Grant, Chief Executive Officer and Chairman
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Bill Grant Chief Executive Officer and Chairman of the Board
Slide 5: Carissa Rodeheaver, President and Chief Financial Officer
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Carissa Rodeheaver President and Chief Financial Officer
Slide 6: Stabilize Solidify Strengthen Sustain
6 Stabilize Solidify Strengthen Sustain
Slide 7: Economic Environment
Economic Environment • Continuation of: • low interest rates • weak business and consumer cash flow • Stabilizing real estate valuations • Stiff competition for qualified borrowers • Loan demand driven by refinances due to low interest rate environment 7
Slide 8: 2012 Area of Focus
2012 Area of Focus • Stabilize Credit Quality • Solidify the Balance Sheet Mix • Strengthen Core Earnings 8
Slide 9: Finance Team
Finance Team 9
Slide 10: 2012 Areas of Focus: Stabilize Credit Quality
2012 Areas of Focus • Stabilize Credit Quality – Reduce Adversely Classified Assets – Convert non - performing assets – Book high quality loans/investments 10
Slide 11: Chief Credit Officer and Chief Risk Officer
Chief Credit Officer and Chief Risk Officer 11
Slide 12: Loan Portfolio Composition – December 2012
34% 15% 8% 40% 3% By Loan Type Commercial Real Estate Acquisition and Development Commercial and Industrial Residential Mortgage Consumer Installment Loan Portfolio Composition – December 2012 12 27% 14% 7% 13% 9% 15% 15% By Location MD: Garrett MD: Washington, Frederick MD: Allegany WV: Hardy, Hamp
Slide 13: Providing for Loan Losses
$0 $5 $10 $15 $20 $25 2007 2008 2009 2010 2011 2012 Q1 13 Millions Provision Net Charge-offs Allowance (Unaudited) 13 Recession Providing for Loan Losses
Slide 14: Reserves vs. Non-Performing Loans
14 0% 1% 2% 3% 4% 5% 6% 0.0% 0.5% 1.0% 1.5% 2.0% 2008 2009 2010 2011 2012 Q1 13 ALL as % of Gross Loans Non - performing loans as % of total loans Recession Reserves vs. Non - Performing Loans (Unaudited)
Slide 15: 2012 Areas of Focus: Solidify the Balance Sheet Mix
2012 Areas of Focus • Solidify the Balance Sheet Mix – Book high quality, short duration loans and investments – Lower the cost of funds by changing the deposit mix – Build capital through profits 15
Slide 16: Trend in Total Assets
16 $300 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 2008 2009 2010 2011 2012 Q1 13 $1,639 $1,744 $1,696 $1,391 $1,321 $1,323 Millions Trend in Total Assets (Unaudited)
Slide 17: Trend in Loan Balances
Trend in Loan Balances 17 $300 $400 $500 $600 $700 $800 $900 $1,000 $1,100 $1,200 2008 2009 2010 2011 2012 Q1 13 $1,120 $1,102 $988 $919 $859 $844 Millions (Unaudited)
Slide 18: Balance Sheet - Asset Mix
1% 22% 68% 8% Balance Sheet - Asset Mix 18 6% 18% 65% 11% Cash and cash equivalents Investment securities and FHLB stock Loans Other assets 2008 2012
Slide 19: Trend in Deposits
$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2008 2009 2010 2011 2012 Q1 13 Millions (Unaudited) 19 Trend in Deposits 25% increase
Slide 20: Corporation Remains Well-Capitalized
0% 2% 4% 6% 8% 10% 12% 14% 16% Q4 09 Q4 10 Q4 11 Q4 12 Q1 13 Tangible Leverage Tier 1 Total Well - Capitalized 20 Corporation Remains Well - Capitalized (Unaudited)
Slide 21: 2012 Areas of Focus: Strengthen Core Earnings
2012 Areas of Focus • Strengthen Core Earnings – Increase and sustain net interest margin – Focus on non - interest income – Enhance efficiency and reduce operating expenses 21
Slide 22: Net Income Available to Common Shareholders
-$15 -$10 -$5 $0 $5 $10 $15 2007 2008 2009 2010 2011 2012 Q1 13 $12.8 $8.9 - $12.8 - $11.8 $2.0 $3.0 $1.5 Millions (Unaudited) 22 Net Income Available to / Net (Loss) Attributable to Common Shareholders
Slide 23: Net Interest Margin
23 3.51% 3.68% 3.56% 2.71% 2.96% 3.30% 3.26% 2.5% 3.0% 3.5% 4.0% 2007 2008 2009 2010 2011 2012 Q1 13 Net Interest Margin (Unaudited)
Slide 24: Other Operating Income
Other Operating Income * 24 $8 $10 $12 $14 $16 $18 2006 2007 2008 2009 2010 2011 2012 $14.0 $16.7 $15.8 $15.4 $15.4 $15.0 $13.6 Millions * Excluding gains/losses Sale of Insurance Assets
Slide 25: Diversified Fee Income
31% 45% 7% 17% 2012 Service charges Trust and investment Insurance Other Electronic banking fees 26% 37% 17% 5% 15% 2011 25 Diversified Fee Income (excluding gains/losses)
Slide 26: Operating Expense
Operating Expense 26 $8 $13 $18 $23 $28 $33 $38 $43 $48 2006 2007 2008 2009 2010 2011 2012 $35.5 $38.5 $40.6 $46.6 $45.0 $43.4 $39.5 Millions Sale of Insurance Assets
Slide 27: Sustain
Sustain 27
Slide 28: Jason Rush, Chief Risk Officer & Director of Operations
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Jason Rush Senior V ice President, Chief Risk Officer & Director of Operations
Slide 29: Risk & Operations Management Team
Risk & Operations Mgmt. Team 29 10% growth
Slide 30: Residential Loan Servicing Portfolio
Residential Loan Servicing Portfolio 30 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 2009 2010 2011 2012 $ - $12.2 $21.9 $43.1 Millions
Slide 31: Residential Mortgage Production
Residential Mortgage Production 31 31 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 2008 2009 2010 2011 2012 $85.1 $60.6 $41.6 $48.3 $71.9 Millions Recession # of loans: 456 353 252 257 373
Slide 32: Residential Mortgage Management Team
Residential Mortgage Mgmt. Team 32 10% growth
Slide 33: Robin Murray, Director of Retail Banking
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Robin Murray Senior V ice President & Director of Retail Banking
Slide 34: Stable Funding Sources
31% 18% 9% 42% 49% 16% 14% 21% Retail core deposits Retail CDs < $100,000 Retail CDs > $100,000 Wholesale deposits and borrowings 2008 2012 Stable Funding Sources 34 34
Slide 35: Retail Deposit Composition
30% 30% 40% December 2012 Demand Money market, savings Certificates of deposit 25% 26% 49% December 2008 35 Retail Deposit Composition
Slide 36: Morgantown Team Sales
Morgantown Team Sales 36 Congratulation s on your core growth performance!! Dave Kelley, Market President
Slide 37: Business Relationship Bankers and Underwriting Teams
Business Relationship Bankers and Underwriting Teams 37
Slide 38: Small Business Loan Production
Small Business Loan Production 38 38 10% growth $0 $1 $2 $3 $4 $5 $6 $7 $8 2009 2010 2011 2012 Millions 27% growth
Slide 39: Treasury Management Team
Treasury Management Team 39 Treasury Management Specialists in the Call Center Treasury Management Sales & Operations Specialists
Slide 40: COBO Core Deposit Balances
$116.9 $166.8 $- $20 $40 $60 $80 $100 $120 $140 $160 2009 2012 Millions 40 43% Growth in Balances COBO Core Deposit Balances
Slide 41: Treasury Management: 2013 Initiatives
Treasury Management: 2013 Initiatives • Realign staff • Redesign Merchant Services • Introduce new COBO services – Fraud prevention tools • Positive Pay • Identity Theft – Check collection – Mobile check capture and alerts – Mobile merchant device – Prepaid payroll cards • Enhanced web appointments
Slide 42: Managers in Training
Managers in Training 42 42
Slide 43: Garrett, Allegany, Mineral and Hardy County Team Sales
43 43 Phil Rodeheaver, Market President Garrett, Allegany, Mineral and Hardy County Team Sales “First United is more than just a bank to The Salvation Army. We are greeted with a warm hello and a smile every visit we make. We feel welcome and like we are part of a family.” - Lt. James Dillingham “Cu
Slide 44: Washington County Team Sales
Washington County Team Sales 44 44 ” I’m grateful for a bank like First United because you are always looking out for my best interest .” – Joann Wolfe Patti Young, Market President
Slide 45: Frederick & Berkeley County Team Sales
Frederick & Berkeley County Team Sales 45 45 “I recently transferred all of my banking/investment business from a national chain to First United and I couldn’t be happier. The attentive, friendly service is fantastic (and the fact that they all know my name is a super - nice touch as well!) I also l
Slide 46: Keith Sanders, Senior Trust Officer
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Keith Sanders First V ice President & Senior Trust Officer
Slide 47: Trust & Investments Anniversary
Trust & Investments 50 th Anniversary 47 47
Slide 48: Trust Assets and Assets Under Management
48 “WHAT MATTERS MOST” Trust . $0 $100 $200 $300 $400 $500 $600 2005 2006 2007 2008 2009 2010 2011 2012 $637 $215 Millions Trust Assets Investment Assets Assets Under Management
Slide 49: Trust & Investments Revenue
Trust & Investments Revenue 49 “WHAT MATTERS MOST” Trust . $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 $5.5 2005 2006 2007 2008 2009 2010 2011 2012 Millions $5.4 million
Slide 50: Trust & Investments: 2013 Initiatives
50 Trust & Investments: 2013 Initiatives • Implement team leader positions • Expand sales teams in opportunistic markets • Accelerate revenue and income growth
Slide 51: Trust & Investments Reorganization
Trust & Investments Reorganization Oakland, Lake, WV Frederick, Hagerstown, Martinsburg Cumberland, Morgantown 51
Slide 52: Expansion Opportunities
Expansion Opportunities Anticipated Hires Competitor Offices My Bank high growth locations My Bank medium growth locations My Bank slow growth locations 52
Slide 53: Jeannette Rudy Fitzwater, Director of Corporate Services
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Jeannette Rudy Fitzwater Senior V ice President & Director of Corporate Services
Slide 54: Year-end Corporation FTEs
Year - end Corporation FTEs 54 Currently at 2003 levels! 300 320 340 360 380 400 420 440 2007 2008 2009 2010 2011 2012 424 423 418 403 381 353
Slide 55: Wellness Initiatives
Wellness Initiatives • Encouraging Health & Wellness • Health Screenings • Flu Shots • Health Education • Wellness Contests 55 55
Slide 56: Live Well. Pay Less. Rewarding Positive Choices
• Good drivers pay less for car insurance because they have reduced their chances of causing an expensive claim • Non - smokers pay less for life insurance because they will live longer than smokers • Home owners pay less for insurance if they have smoke detectors in their home It’s time to reward p
Slide 57: Human Resources Leadership Team
Human Resources Leadership Team 57 “ … his talents and many years of banking have led to his success…”
Slide 58: Human Resources Leadership Team
Human Resources Leadership Team 58
Slide 59: Marketing Efforts
Marketing Efforts 59 59 Eric Nutter recognized by Maryland Bankers Association
Slide 60: Marketing Efforts
Marketing Efforts 60
Slide 61: Training
Training 61 “Our t raining department always has a lead role with any of these new efforts…”
Slide 62: Leadership Development
Leadership Development 62 62 2013 Leadership Development Class
Slide 63: It's About Relationships
It’s About Relationships … 63 10% growth Employees, Customers and Shareholders!
Slide 64: Jason Rush, Chief Risk Officer & Director of Operations
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Jason Rush Senior V ice President, Chief Risk Officer & Director of Operations
Slide 65: Key Elements of an ERM Program
Key Elements of an ERM Program 65 Governance Structure and Policies Risk Management Risk Assessment and Quantification Dashboard Reporting and Monitoring Enterprise Risk Management How? How? What? Who?
Slide 66: Risk Management Team
Risk Management Team 66 10% growth
Slide 67: Technology Team
Technology Team 67 10% growth
Slide 68: Delivery Channel Usage
Delivery Channel Usage IERANCH
Slide 69: Bill Grant, Chief Executive Officer and Chairman
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Bill Grant Chief Executive Officer and Chairman of the Board
Slide 70: Frequently Asked Questions
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Frequently Asked Questions
Slide 71: Status of Capital Purchase Program participation
Question 1 : What is the current status of the Company's participation in the U.S. Treasury's Capital Purchase Program? 71
Slide 72: Progress with growth in core earnings
Question 2 : How is the Company progressing with its growth in core earnings? 72
Slide 73: Efforts in attracting and booking commercial loans
Question 3: Will you comment on First United's efforts in attracting and booking commercial loans? 73
Slide 74: 74 74
74 74
Slide 75: 75
75
Slide 76: The Road Not Taken
“…I shall be telling this with a sigh Somewhere ages and ages hence : Two roads diverged in a wood, and I , I took the one less traveled by,… 76 76 ...and that has made all the difference .” From: The Road Not Taken, by Robert Frost
Slide 77: Thank you!
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Thank you!
Slide 78: Expansion Opportunities
Expansion Opportunities Anticipated Hires Competitor Offices My Bank high growth locations My Bank medium growth locations My Bank slow growth locations 78