First · NASDAQ:FUNC
First — First United — Proxy Contest (May 2020)
88 slides from First's proxy contest presentation, May 15, 2020
Slide 1: Investor Presentation May 2020
Investor Presentation May 2020
Slide 2: Forward looking statements
2 2 Forward looking statements This presentation contains forward - looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward - looking statements do not represent historical facts, but are statements about management's beliefs, plans and objectives about the fut
Slide 3: Important additional information
3 3 Important additional information F irst United, its directors and certain of its executive officers will be deemed to be participants in the solicitation of proxies from First United's shareholders in connection with the 2020 annual meeting of shareholders. First United has filed a definitive pr
Slide 4: Executive Summary
4 4 Executive Summary First United is delivering superior shareholder returns Our strategy is producing steady profitable growth We have the right Board to maximize long - term shareholder value Driver’s campaign is contrary to the long - term best interests of our shareholders – An investment in Fi
Slide 5: Q1 2020 Highlights
5 5 Q1 2020 Highlights Highlights • Increased pre - tax, pre - provision income to $4.9 million in 1Q20 from $4.4 million in 1Q19 • Significant increase in provision due to uncertainty from the COVID - 19 pandemic (1.42% reserves); delinquencies and net charge - offs remain low • Net interest margin
Slide 6: COVID-19 response: customers and employees
6 6 Customers • 96% of employees with VPN access are logging in remotely each week • Pandemic Pay Policy for associates who are unable to work, such as those who need to care for family members during the crisis • Comprehensive protocols including suspension of travel, daily updates and enhanced bra
Slide 7: Table of Contents
7 7 Table of Contents I. Introduction to First United II. Strategic Plan, Operating Performance and Outlook III. Driver’s Flawed Sale Thesis IV. Our Commitment To Strong Governance V. Driver’s Costly and Distracting Proxy Contest VI. Appendix
Slide 8: I. Introduction to First United
8 8 I. Introduction to First United
Slide 9: Mission Statement and Company Overview
9 9 Mission Statement To enrich the lives of our customers, our employees and our shareholders through uncommon commitment to service and effective financial solutions Company Overview Founded: 1900 Headquarters: Oakland, Maryland Branches: 25 Business Lines: Commercial & Retail Banking, Trust Servi
Slide 10: Our Core Strengths
10 10 Our Core Strengths Engaged and Diverse Board & Management • Our diverse and experienced Board challenges management and has been conducting a robust refreshment plan, which has been in place since 2014 Core Deposit Franchise Diversified Revenue Stream Forward - Thinking Approach Robust Enterpr
Slide 11: Key Accomplishments Under Current Management
11 11 Key Accomplishments Under Current Management STRATEGIC OPERATIONAL FINANCIAL Improved yield on assets by focusing on developing higher - yielding loan relationships Full modernization of branch network and technology Improved capital mix by paying off high cost preferred stock and Trust Prefer
Slide 12: Recognition of Our Diversity Leadership
12 12 Recognition of Our Diversity Leadership A “Winning” Company Recognized as a “Winning (W)” company by 2020 Women on Boards , the premier global education and advocacy campaign committed to increasing the number of women on corporate boards A “Winning” company is selected from companies in the R
Slide 13: Recent Awards & Accolades
13 13 Recent Awards & Accolades A “5 Star” Bank Since 2018, First United has been awarded a 5 - Star (Superior) rating from BauerFinancial , an independent ratings agency that has been rating banks and credit unions since 1983 A 5 - Star rating indicates that First United shines in capital adequacy,
Slide 14: First United TSR vs. Peers Prior to Driver's Campaign
14 14 (20.0%) 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0% FUNC SNL U.S. Bank $1B-$5B First United TSR vs. Peers Prior to Driver’s Campaign Under Carissa Rodeheaver’s leadership, we were substantially outperforming our peers well before Driver announced its campaign to force a sale TSR O
Slide 15: II. Strategic Plan, Operating Performance and Outlook
15 15 II. Strategic Plan, Operating Performance and Outlook
Slide 16: Key Initiatives and Strategic Priorities
16 16 Key Initiatives and Strategic Priorities Focus on increasing core earnings through regionalized plans to enhance efficiency and grow revenue Enhance Efficiency • Head - count reduction opportunities identified and enacted • Restructuring and consolidation of regional operating structure • Leve
Slide 17: Our Strategic Plan is Generating Reliable Growth
17 17 $4.8 $6.9 $8.5 $10.6 $12.3 2015 2016 2017 2018 2019 $999 $1,014 $1,039 $1,068 $1,142 2015 2016 2017 2018 2019 $867 $882 $882 $996 $1,039 2015 2016 2017 2018 2019 Our Strategic Plan is Generating Reliable Growth… Core Net Income ($ in millions) Tangible Book Value per Share Total Deposits ($ in
Slide 18: …As Well As Improved Profitability
18 18 0.37% 0.52% 0.65% 0.81% 0.86% 1.06% 1.12% 1.21% 2015 2016 2017 2018 2019 FUNC Driver Median ISS Median Proxy Median …As Well As Improved Profitability • First United has consistently improved return on assets and return on tangible common equity despite the difficult operating environment for
Slide 19: Industry Leading Deposit Franchise
19 19 Industry Leading Deposit Franchise • The strength of our deposit franchise is driven by both our stable legacy markets and our growing portfolio of commercial deposit accounts • Branch rebranding and technology initiatives have led to increase in low - cost deposits; 2019 cost of deposits of 0
Slide 20: Diversified Fee Income an Advantage to First United
20 20 Diversified Fee Income an Advantage to First United • Recent Federal Reserve actions are leading to industry - wide decrease in net interest margins – Fee - based business, however, provides stable growth through higher margins and diversified revenue not directly tied to interest rates, as we
Slide 21: Branch Modernization
21 21 Branch Modernization Key Improvements Sabraton Lobby Before and After Riverside Lobby Before and After • New ATMs and cash recyclers at all of our branches • Upgraded lobbies featuring a full complement of digital/ mobile banking offerings • Installing energy efficient lighting systems that re
Slide 22: Significant Net Interest Margin Improvement
22 22 Significant Net Interest Margin Improvement • Disciplined loan and deposit pricing has produced a strong and stable margin that is in line with our peers • Margin has expanded more than 60 basis points since 2015, primarily as a result of increased loan volume and rates, reduced long - term bo
Slide 23: Expense Discipline
23 23 Expense Discipline • Significant portion of earnings improvement can be attributed to steps taken to reduce expenses • First United’s investment in its wealth management business line generates additional expenses; even so, e fficiency ratio has decreased ~9 points since 2015 and is approachin
Slide 24: Marked Asset Quality Improvement
24 24 2.32% 2.44% 1.67% 1.17% 1.09% 0.59% 0.90% 0.67% 2015 2016 2017 2018 2019 FUNC Driver Median ISS Median Proxy Median Marked Asset Quality Improvement • Management has diligently worked to improve asset quality while maintaining strong reserve levels • Underwriting guidelines and risk management
Slide 25: Proactive Loan Portfolio Management
25 25 Total 1 - 4 Family CRE - OO CRE - NOO Multi - family C&D C&I Consumer Total 1 - 4 Family CRE - OO CRE - NOO Multi - family C&D C&I Consumer Proactive Loan Portfolio Management • Geographically diverse construction and development portfolio mitigates risk to portfolio • Construction portfolio h
Slide 26: Superior TSR Prior to Driver's Campaign
26 26 (20.0%) 30.0% 80.0% 130.0% 180.0% 230.0% FUNC SNL U.S. Bank $1B-$5B Superior TSR Prior to Driver’s Campaign… (1 ) Source: FactSet , S&P Global Market Intelligence ; includes price change and reinvested cash dividends (1) From March 25, 2014 to March 25, 2019 (day before the announcement of Dri
Slide 27: …And Superior TSR to Present Date
27 27 …And Superior TSR to Present Date (1 ) Source: FactSet , S&P Global Market Intelligence ; includes price change and reinvested cash dividends (1) Ending May 12, 2020 (2) Starting December 16, 2015 (announcement of Ms. Rodeheaver’s appointment to CEO) (3) Starting January 1, 2010 (4) SNL U.S. $
Slide 28: Strategic Targets
28 28 Strategic Targets Post - COVID - 19 Metric Actual 12/31/2018 Actual 12/31/2019 Long Term Strategic Target Range Strong Shareholder Return EPS Growth (YoY) 156% 23% 10% - 15% Dividend Payout Ratio 17.9% 21.7% 20% - 25% ROAA 0.81% 0.93% 1.00% - 1.20% ROAE 9.39% 10.44% 10% - 13% TCE Ratio 7.72% 8
Slide 29: Our Relationships with Businesses in the Communities We Serve
29 29 Our Relationships with Businesses in the Communities We Serve are Critical to Our Success "First United and its employees are integral for Garrett County and its communities. Not only are they one of the largest private employers in the county , but they are financially supportive of every maj
Slide 30: III. Driver's Flawed Sale Thesis
30 30 III. Driver’s Flawed Sale Thesis
Slide 31: Situation Overview
31 31 Situation Overview ▪ Driver has only advanced one idea to maximize shareholder value: a sale of First United as soon as possible, at all costs – Driver’s self - serving agenda is to achieve a short - term control - premium by force, without any real consideration of what is in the best long -
Slide 32: Current Conditions
32 32 Current Conditions Banking Environment • Record - setting jobless claims and dire economic forecasts continue to impact markets, and credit metrics will march higher for the time being • Regulatory relief (eased asset quality standards, option to delay CECL implementation, lowered leverage rat
Slide 33: First United Well-Positioned for Next Recession
33 33 First United Well - Positioned for Next Recession • First United’s improvements under its current management leave it well - positioned in the event of a significant market downturn – Significant resources dedicated to Enterprise Risk Management, increased emphasis on low - cost core deposit r
Slide 34: Driver Has Only One Idea to Create Value
34 34 Driver Has Only One Idea to Create Value In a multitude of tweets, newspaper ads, media interviews, letters, emails, calls, presentations and regulatory filings spanning over a year, Driver has proposed one narrow plan: “We have never attempted to hide the fact that we have one primary objecti
Slide 35: Short-Term vs. Long-Term Perspective
35 35 (40.0%) 0.0% 40.0% 80.0% 120.0% 160.0% FUNC DNBF Short - Term vs. Long - Term Perspective We believe that our current strategy will continue delivering superior shareholder returns, both relative to our peers and versus a sale Source: FactSet , S&P Global Market Intelligence ; includes price c
Slide 36: Recent Market Conditions: Impact on Pricing
36 36 17.8x 8.4x At Announcement Today 15.4x 7.1x At Announcement Today 187% 94% At Announcement Today 214% 100% At Announcement Today Recent Market Conditions: Impact on Pricing Source: S&P Global Market Intelligence; market data as of May 12, 2020 Note: Includes all transactions with stock conside
Slide 37: Driver's Thesis: Recipe for Disaster
37 37 Driver’s Thesis for First United: Recipe for Disaster Source: Public filings, news releases (1) S&P Data Dispatch article “COVID - 19 Will Continue to Drive Delays in Bank Deals” posted on April 14, 2020 Capitulating to Driver’s threats over previous months to pursue a sale “or else” would hav
Slide 38: Characteristics of Selling Banks and Comparison to FUNC
38 38 Characteristics of Selling Banks and Comparison to FUNC • Smaller banks are more susceptible to a sale given lack of size and scale to navigate the current environment – The median bank seller was approximately 20% of the size of First United – A k ey value proposition for potential buyers is
Slide 39: Board regularly reviewed strategic alternatives with independent advisor
39 39 Our Board has regularly reviewed strategic alternatives with an independent financial advisor, well before Driver’s campaign: ▪ Since 2013 , the Board has annually worked with FinPro Capital Advisors to assess alternatives to improve shareholder value, including a sale ▪ July 2019 : the Board
Slide 40: IV. Our Commitment to Strong Corporate Governance
40 40 IV. Our Commitment to Strong Corporate Governance
Slide 41: Our Board's Skills and Experience Tie to Strategic Goals
41 41 Our Board’s Skills and Experience Tie Directly to the Strategic Goals of First United Strategy & Business Operations • Understand how to strategically plan for multiple scenarios, near - and long - term • Able to oversee and advise management in evaluating and developing strategy • Positioned
Slide 42: Our Board Has the Right Mix of Skills and Experience
42 42 Our Board Has the Right Mix of Skills and Experience to Continue Driving Value for All Shareholders Name Title Tenure Age Strategy & Business Ops. Finance, M&A, & Banking Regulatory Risk Mgmt. Executive Leadership & Governance Customer Relationship Mgmt. Community Ties (1) Carissa Rodeheaver C
Slide 43: Driver's Nominees Are Not Additive to the Board
43 43 Driver’s Nominees Are Not Additive to the Board, and Do Not Relate to the Strategy of a Community Bank Name Title Tenure Age Strategy & Business Ops. Finance, M&A, & Banking Regulatory Risk Mgmt. Executive Leadership & Governance Customer Relationship Mgmt. Community Ties Michael J. Driscoll,
Slide 44: Ongoing Board Refreshment Program
44 44 Ongoing Board Refreshment Program Our ongoing Board evolution will result in the strategic refreshment of a majority of our independent directors, decrease our Board size, maintain our commitment to diversity and continuously update the skill set of our Board • This June , Robert Kurtz, our lo
Slide 45: Strong Independent Lead Director
45 45 Strong Independent Lead Director • Mr. McCullough is a retired partner of Ernst & Young, LLP and is a Certified Public Accountant • H olds significant accounting, auditing, public company and M&A advisory experience, particularly with financial institutions • As Independent Lead Director, has
Slide 46: Recent Board Additions – Our Other Nominees
46 46 Recent Board Additions – Our Other Nominees • President of Ellsworth Electric, bringing significant business operations, strategic planning, and risk management expertise • Previously served three terms as Commissioner in Washington County and on the Maryland Association of Counties, developin
Slide 47: Strong Investor Relations and Shareholder Engagement
47 47 Strong Investor Relations and Shareholder Communications and Engagement Clear long - term strategic plan with performance targets x Dedicated Investor Relations contact x Investor non - deal roadshows x Members of the Board and senior management routinely engage with shareholders and other sta
Slide 48: Responsiveness to Shareholders is in Our DNA
48 48 Responsiveness to Shareholders is in Our DNA Feedback from Shareholders FUNC Response 2010 Consider declassification Board proposed and unanimously supported 2013 Market focus on continued M&A review Initiated annual reviews with FinPro 2014 Board refreshment program began Succession plan form
Slide 49: V. Driver's Proxy Contest
49 49 V . Driver’s Proxy Contest
Slide 50: Driver's Board Candidates Lack Knowledge and Experience
50 50 Driver’s Board Candidates Lack the Knowledge and Experience to Lead in These Tumultuous Times Michael J. Driscoll (age 58 ) • Graduate School Dean: <2 years • Visiting / Clinical Professor: 8 years • Options Trader/Hedge Fund Manager: ~30 years Mr . Driscoll’s professional background is primar
Slide 51: This Year Is Not A "Risk-Free Vote"!
51 51 This Year Is Not A “Risk - Free Vote”! FORMER President of Colorado Federal Savings Bank (“CFSB”): • Despite Elzen’s biography in Driver’s proxy statement indicating he is the President of CFSB, it has been subsequently disclosed that Elzen no longer is employed by CFSB, with no explanation •
Slide 52: Which Group of Nominees Possesses the Right Skills
52 52 It is Clear Which Group of Nominees Possesses the Right Set of Skills and Experience for Our Board Strategic Vision for First United? Alignment with First United Shareholders? Track Record of Public Company Value Creation? Community - Oriented Business Leadership? Public Co Financial / M&A Tra
Slide 53: Driver Has Thwarted Every Attempt to Reach a Compromise
53 53 Driver Has Thwarted Every Attempt We’ve Made to Reach a Compromise and Avoid a Costly Proxy Fight Oct. 2019 – Our FIRST attempt to settle : Our Independent Lead D irector John McCullough sent Abbott Cooper a letter to suggest exploring a cooperation framework Nov. 2019 – Our SECOND attempt to
Slide 54: Driver Has Thwarted Every Attempt to Reach a Compromise (cont'd)
54 54 Driver Has Thwarted Every Attempt We’ve Made to Reach a Compromise and Avoid a Costly Proxy Fight (cont’d) In our latest attempt to engage constructively and in good faith with Driver, Mr. Cooper employed unethical tactics, refused to consider a reasonable compromise and ultimately broke off d
Slide 55: Setting the record straight on Driver's claims
55 55 In its campaign to force an immediate sale of First United at all costs, Driver has resorted to making several misleading and inaccurate claims about First United, some of which need to be corrected. In order to set the record straight: ▪ First United has consistently been delivering superior
Slide 56: Clearly articulated strategic objectives and plan
56 56 ▪ First United has clearly articulated its strategic objectives and plan, under which it has already been delivering years of steady, profitable growth – Under Ms. Rodeheaver’s leadership, our plan has been steadily growing the business and lowering costs every year, driving consistently impro
Slide 57: Board made the right decision to approve share buyback program
57 57 ▪ First United’s Board made the right decision to approve the share buyback program last year, and doing so enabled us to respond quickly and prudently to our shareholders’ concerns following the downturn in financial markets due to COVID - 19 – The Board approved a buyback program in April of
Slide 58: First United is not to blame for Driver's failures to comply with Maryland law
58 58 ▪ First United is not to blame for any of Driver’s failures to comply with the clear requirements of Maryland law, the same as everyone else – We gave Driver a roadmap in 2019 of what steps to take to obtain different types of shareholder records under state and federal law. We have cooperated
Slide 59: Support First United - Vote on the BLUE Proxy Card!
59 59 Support First United - Vote on the BLUE Proxy Card! 1. First United’s management team and Board have delivered over a decade of superior shareholder returns and are continuing to do so in the current environment 2. The strategic plan has produced several years of consistent, profitable growth,
Slide 60: VI. Appendix
60 60 VI. Appendix
Slide 61: Historical Financial Highlights
61 61 Historical Financial Highlights Annual Quarterly 2015Y 2016Y 2017Y 2018Y 2019Y 2019Q1 2019Q2 2019Q3 2019Q4 Total Assets 1,322,988$ 1,317,675$ 1,335,867$ 1,383,760$ 1,442,027$ 1,416,901$ 1,405,629$ 1,440,964$ 1,442,027$ Total Loans & Leases 878,723 891,588 892,089 1,007,150 1,051,431 1,004,618
Slide 62: Selected Peer Groups
62 62 Selected Peer Groups Proxy Peers (1) ISS Peers (2) Driver’s Peers (3) ACNB X X X AMNB X ASRV X X CBFV X CFFI X X CHMG X X X CVLY X X X CZFS X X CZNC X X X ESSA X ESXB X EVBN X X FBSS X FCBC X FCCY X FDBC X FMNB X FNCB X FNLC X Proxy Peers (1) ISS Peers (2) Driver’s Peers (3) FRAF X X FRBK X MP
Slide 63: Our Dedicated Management Team
63 63 Our Dedicated Management Team Our management team has the right set of skills and experience to effectively execute on our strategy and continue driving shareholder returns Carissa Rodeheaver CEO & Chair • 27 - year career with First United with in depth industry, sales, wealth management, fin
Slide 64: Board of Directors
64 64 Board of Directors Our directors know our markets and customers and are leaders in the communities we serve Name / Affiliation Unique Expertise Carissa Rodeheaver CEO & Chair • Certified Public Accountant, ABA and MBA with 27 - year career at First United and in - depth industry, company, and
Slide 65: Non-GAAP Reconciliation
65 65 Non - GAAP Reconciliation ($000s, except where otherwise noted) Annual Quarterly 2014 2015 2016 2017 2018 2019 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Tangible common equity to tangible assets Total common stockholders' equity 78,999$ 90,771$ 93,698$ 108,390$ 117,066$ 125,940$ 117,066$ 122,399
Slide 66: What Driver Got Wrong May 2020
What Driver Got Wrong May 2020
Slide 67: Important additional information
2 2 Important additional information F irst United, its directors and certain of its executive officers will be deemed to be participants in the solicitation of proxies from First United's shareholders in connection with the 2020 annual meeting of shareholders. First United has filed a definitive pr
Slide 68: Driver continues to be proven wrong and changes narrative
3 3 As Driver continues to be proven wrong, instead of admitting it, Driver is once again trying to change to yet another misleading narrative: 1. Backpedaling on its flawed demand for a sale of First United at all costs – Driver is trying to downplay the fact that its continued, irresponsible call
Slide 69: Driver's Thesis for First United: A Sale "Or Else"
4 4 Driver’s Thesis for First United: A Sale “Or Else” In a multitude of tweets, newspaper ads, media interviews, letters, emails, calls, presentations and regulatory filings spanning over a year, Driver has proposed one narrow plan: “We have never attempted to hide the fact that we have one primary
Slide 70: Driver raised a bank activist fund predicated on a sale
5 5 Driver has raised a bank activist fund predicated on one concept: a sale, no matter what the costs or market conditions. Just before filing its 13D on First United last year, Driver principal Abbott Cooper made this position clear in an interview with Bloomberg TV (1) : Interviewer : Regional ba
Slide 71: One Trick Pony: Driver Has One Idea, A Sale At All Costs
6 6 (41.8%) (32.1%) (31.5%) (26.3%) (25.4%) (24.4%) (22.4%) (21.9%) (21.4%) (19.6%) UCFC SNL Bank Index SBBX TSHR EMPK REVB CARO FSB MFSF FUNC Source: S&P Global Market Intelligence, FactSet (1) For the period ended May 12, 2020. Includes companies $1 - $5B in assets which announced a sale since Aug
Slide 72: Recent Market Conditions: Impact on Pricing
7 7 17.8x 8.4x At Announcement Today 15.4x 7.1x At Announcement Today 187% 94% At Announcement Today 214% 100% At Announcement Today Recent Market Conditions: Impact on Pricing Source: S&P Global Market Intelligence; market data as of May 12, 2020 Note: Includes all transactions with stock considera
Slide 73: Driver's Thesis: Recipe for Disaster
8 8 Driver’s Thesis for First United: Recipe for Disaster Source: Public filings, news releases (1) S&P Data Dispatch article “COVID - 19 Will Continue to Drive Delays in Bank Deals” posted on April 14, 2020 Capitulating to Driver’s threats over previous months to pursue a sale “or else” would have
Slide 74: Where Else Driver is Wrong: Impartial Candidates
9 9 Where Else Driver is Wrong: Impartial Candidates Driver’s self - serving Q&A to its candidates about a sale of First United: They apparently never read Driver’s letter nominating them to the Board? (1) Source: Driver’s investor presentation filed May 12, 2020 (2) Source: Driver’s letter to share
Slide 75: Where Else Driver is Wrong: Board Ownership
10 10 ▪ Our Board is a top five shareholder of First United, holding 4.3% of FUNC shares – Each of our directors elects to receive the majority of their Board fees in the form of shares ▪ Each of our directors individually has meaningful ownership in First United and is aligned with shareholders – O
Slide 76: Where Else Driver is Wrong: Executive Compensation
11 11 (23%) (20%) (19%) (13%) (13%) (11%) (7%) (5%) (1%) (1%) 0% 3% 12% 13% 17% 18% 20% 21% 35% 42% 48% 51% ORRF CVLY NKSH PFIS MVBF PWOD SHBI OPOF AMNB CHMG ESSA CZNC FRAF ACNB FCBC FNCB CBFV MPB NWFL FMNB SMMF FUNC Where Else Driver is Wrong: Executive Compensation $0.4 $0.4 $0.4 $0.4 $0.5 $0.6 $0
Slide 77: Driver relies on events of 10 or more years ago
12 12 We find it telling in an attempt to identify something to criticize about the bank, Driver primarily has to rely on events of 10 or more years ago relating to a different management team and Board of which the majority have since left First United: ▪ We have a new CEO, CFO, COO and CRO (both l
Slide 78: Where Else Driver is Wrong: Our Superior TSR
13 13 Where Else Driver is Wrong: Our Superior TSR (1 ) Source: FactSet, S&P Global Market Intelligence ; includes price change and reinvested cash dividends (1) Ending May 12, 2020 (2) Starting December 16, 2015 (announcement of Ms. Rodeheaver’s appointment to CEO) (3) Starting January 1, 2010 (4)
Slide 79: Where Else Driver is Wrong: Impact of COVID
14 14 Where Else Driver is Wrong: Impact of COVID - 19 Source: FactSet, S&P Global Market Intelligence; includes price change and reinvested cash dividends (1) Press release issued the morning of February 11, 2020; returns start from February 10, 2020 (2) SNL U.S. $1B - $5B Bank Index (3) As of May
Slide 80: Where Else Driver is Wrong: Board Refreshment
15 15 Where Else Driver is Wrong: Board Refreshment Our ongoing Board evolution will result in the strategic refreshment of a majority of our independent directors, decrease our Board size, maintain our commitment to diversity and continuously update the skill set of our Board • This June , Robert K
Slide 81: Where Else Driver is Wrong: Board Refreshment
16 16 Where Else Driver is Wrong: Board Refreshment ▪ Our Board refreshment program has included a combination of replacing directors and contracting the size of the Board – So far, we’ve added three new directors to the Board – With the additional departure of Robert Stuck last year, we reduced our
Slide 82: Cooperating with Driver's requests under Maryland and federal law
17 17 ▪ We’ve been cooperating with Driver’s requests under Maryland and federal law – We have spelled out for Driver in October 2019 and January 2020 the steps it needs to take to receive shareholder records under state and federal law ▪ Under Maryland law, to obtain the shareholder list, the reque
Slide 83: Where Else Driver is Wrong: Shareholder List
18 18 ▪ Driver falsely portrays First United’s response to the shareholder list demand made by Cede & Co. on Driver’s behalf ▪ We responded to the demand, agreed to give the registered list to Cede so long as it could confirm the number of shares it currently holds and so long as a confidentiality a
Slide 84: Where Else Driver is Wrong: Regulatory Investigation
19 19 ▪ First United has no control over the Office of the Maryland Commissioner of Financial Regulation’s investigation of Driver – Driver’s claim that Ms. Rodeheaver used her position as Chairman of the Board of the Maryland Bankers Association to influence the Maryland regulator’s investigation i
Slide 85: Where Else Driver is Wrong: Conflicts of Interest
20 20 ▪ Some of our Board members have ongoing or previous business relationships with the bank, as employees, customers or in some cases service providers – In each case, these business relationships are not a significant part of any director’s individual business (1) – These relationships are alwa
Slide 86: Driver's claims of voting irregularities
21 21 In a desperate attempt to try to make a case for change, Driver has repeatedly made incorrect statements of purported “voting irregularities” from over a decade ago. In order to set the record straight: ▪ The proposal to declassify the Board in 2010 was unanimously supported and recommended by
Slide 87: Support First United - Vote on the BLUE Proxy Card!
22 22 Support First United - Vote on the BLUE Proxy Card! YOUR VOTE COUNTS! SUPPORT ALL FOUR OF YOUR BOARD’S NOMINEES ON THE BLUE PROXY CARD!
Slide 88: Selected Peer Groups
23 23 Selected Peer Groups Proxy Peers (1) ISS Peers (2) Driver’s Peers (3) Driver’s New Peers (4) ACNB X X X X AMNB X X ASRV X X CBFV X X CFFI X X CHMG X X X X CVLY X X X X CZFS X X CZNC X X X X ESSA X X ESXB X EVBN X X FBSS X FCBC X X FCCY X FDBC X FMNB X X FNCB X X FNLC X Proxy Peers (1) ISS Peer