First · NASDAQ:FUNC
First — First United — Investor Presentation (January 2020)
25 slides from First's investor presentation, Jan 29, 2020
Slide 1: Investor Presentation January 29, 2020
Investor Presentation January 29, 2020
Slide 2: Forward looking statements
2 2 Forward looking statements This presentation contains “forward - looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995 relating to, among other things, First United Corporation’s plans, strategies, objectives, expectations, intentions and adequacy of reso
Slide 3: Mission Statement and Company Overview
3 3 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 4: FUNC Total Shareholder Returns Relative to Peers
4 4 FUNC Total Shareholder Returns Relative to Peers (1) (40.0%) 0.0% 40.0% 80.0% 120.0% 160.0% 12/16/2015 12/16/2016 12/16/2017 12/16/2018 12/16/2019 FUNC S&P 500 Index SNL U.S. Bank $1B-$5B We have outperformed our peers and the broader market under Carissa Rodeheaver’s leadership Source: FactSet
Slide 5: Company History
5 5 Company History 1900 Founded as First National Bank of Oakland (MD) 1960 Acquired First National Bank of Friendsville (Garrett County, MD) 1963 Trust and Wealth Management Services first offered Late ‘60s Entered Allegany County, MD through acquisition of Cumberland Savings Bank 1988 Entered Min
Slide 6: Our Core Markets
6 6 Our Core Markets As of December 31, 2019 Note: Out of market loans, brokered deposits and trust deposits represent $ 62 million, $10 million and $52 million, respectively, and are not reflected in the above table (1) Deposit market share for each region includes the following counties listed bel
Slide 7: Key Initiatives and Strategic Priorities
7 7 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 • Levera
Slide 8: Branding & Customer Experience
8 8 Branding & Customer Experience Branding Examples Sabraton Lobby Before and After Riverside Lobby Before and After
Slide 9: Our Dedicated Management Team
9 9 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, finan
Slide 10: Board of Directors
10 10 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 11: Core Strengths
11 11 Core Strengths Engaged and experienced board and management team with significant ties to our communities served Attractive core deposit franchise producing stable low - cost funding Diversified revenue stream driven by trust and brokerage fee income Innovative and forward thinking approach to
Slide 12: Key Accomplishments Under Current Management
12 12 Key Accomplishments Under Current Management Improved capital mix by paying off high cost preferred stock and Trust Preferred debt in 2016 and 2017 Increased emphasis on low or no cost core deposit relationships, consequentially reducing funding costs Reinstated dividends in May 2018; announce
Slide 13: Financial Highlights
13 13 $839 $1,052 12/31/14 12/31/19 Financial Highlights Loans (MMs) 3.01% 3.68% 12/31/14 12/31/19 NIM (LTM) 5.15% 8.03% 12/31/14 12/31/19 TCE/TA $981 $1,142 12/31/14 12/31/19 Deposits (MMs) 74.2% 68.4% 12/31/14 12/31/19 Efficiency Ratio (LTM) 3.07% 1.09% 12/31/14 12/31/19 NPAs/Assets $10.92 $16.17
Slide 14: Efficiency Initiatives
14 14 Efficiency Initiatives • Head - count reduction opportunities identified and enacted for projected annual cost savings of approximately $1.4 million, net of additional compensation expense • Restructuring and consolidation of regional operating structure • Leverage technology to improve proces
Slide 15: 2019 Highlights
15 15 2019 Highlights Highlights • Increased net interest income over 2018 through continued additions of a diversified mix of product and rate characteristics • Net interest margin remains stable despite declining rate environment • First United remains neutral to slightly asset sensitive • Slightl
Slide 16: Net Interest Margin Remains Strong
16 16 Net Interest Margin Remains Strong • Disciplined loan and deposit pricing has produced a strong and stable margin • At December 31, 2019 we were neutral to slightly asset sensitive • No purchase accounting adjustments impacting results • Margin has expanded nearly 70 basis points since 2014 pr
Slide 17: Well Diversified Loan Portfolio
17 17 Well Diversified Loan Portfolio • Balanced portfolio with growing focus on commercial credits, including small business loans • Geographically diverse construction and development portfolio with decreased concentration (down from over 20% in 2009) • Robust pipeline of $ 84 million as of 12/31/
Slide 18: Asset Quality
18 18 Asset Quality • Management has diligently worked to improve asset quality while maintaining strong reserve levels • Underwriting guidelines and risk management framework have been enhanced • Focus on risk mitigation and managing of concentrations – CRE / Total Capital: 206% – ADC / Total Capit
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 • Our branch rebranding initiatives have led to recent growth in deposits • Non - interest bearing deposits have grown
Slide 20: Diversified Revenue Stream
20 20 Diversified Revenue Stream • Approximately 27% of revenues are derived from non - interest income • Brokerage and trust represent 48% of fee income • Implemented regional team approach and relationship advisor model to further focus on diversifying revenues and engaging our clients with our fu
Slide 21: Prudential Capital Management
21 21 Prudential Capital Management $12.75 $13.19 $13.78 $14.97 $16.17 2015 2016 2017 2018 2019 Growing Tangible Book – TBV/Share 6.08% 6.33% 7.35% 7.72% 8.03% 2015 2016 2017 2018 2019 Historical Capital Trends – TCE/TA 17.21% 16.71% 15.98% 15.91% 16.29% 2015 2016 2017 2018 2019 Historical Capital T
Slide 22: Strategic Targets (2020 – 2022)
22 22 Strategic Targets (2020 – 2022) Metric Actual 12/31/2018 Actual 12/31/2019 3 Year 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% 8.03% 8%
Slide 23: Pathway to EPS Growth
23 23 Pathway to EPS Growth Efficiency Initiatives Leveraging Technology Customer Penetration via Relationship Advisor Model Balance Sheet Growth through new product offering and talent acquisition
Slide 24: Investment Highlights
24 24 Investment Highlights Diversified revenue stream in challenging rate environment Modernized branch network augmenting an industry - leading core deposit franchise Differentiated model focused on uncommon commitment to service and customized solutions Ability to enhance and grow earnings per sh
Slide 25: Non-GAAP Reconciliation
25 25 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