First · NASDAQ:FUNC
First — First United — Shareholder Meeting (May 2012)
66 slides from First's shareholder meeting presentation, May 10, 2012
Slide 1: First United Corporation Annual Shareholders' Meeting May 10, 2012
First United Corporation Annual Shareholders’ Meeting May 10, 2012 First United Corporation Annual Shareholders’ Meeting May 10, 2012
Slide 2: Bill Grant, President, CEO and Chairman
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Bill Grant President, Chief Executive Officer and Chairman of the Board
Slide 3: Forward-Looking Statements
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 of
Slide 4: Bill Grant, President, CEO and Chairman
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Bill Grant President, Chief Executive Officer and Chairman of the Board
Slide 5: Carissa Rodeheaver, EVP & Chief Financial Officer
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Carissa Rodeheaver Executive Vice President & Chief Financial Officer
Slide 6: Rebuilding and Restructuring
“Progress lies not in enhancing what is, but in advancing toward what will be.” Khalil Gibran 6 Rebuilding and Restructuring
Slide 7: Economic Environment
• Continuation of: • low interest rates • global uncertainty • real estate value decline • Businesses reluctant to make changes • Businesses and consumers experiencing weaker cash flow 7 Economic Environment
Slide 8: 2011 Areas of Focus
2011 Areas of Focus • Credit Quality • Reduce Adversely Classified Assets • Substandard Loans • Other Real Estate Owned 8 • Liquidity • Right - size balance sheet • Invest excess liquidity levels • Structure investment portfolio for cash flow and short duration • Earnings / Capital Adequacy
Slide 9: 2011 Areas of Focus
2011 Areas of Focus • Credit Quality • Reduce Adversely Classified Assets • Substandard Loans • Other Real Estate Owned 9 • Liquidity • Right - size balance sheet • Invest excess liquidity levels • Structure investment portfolio for cash flow and short duration • Earnings / Capital Adequacy
Slide 10: Trend in Total Assets
Trend in Total Assets Millions $1,900 $4,744 $1,700 sae — $1,500 $1,391 $1,386 $1,300 $1,100 $900 $700 $500 $300 2007 = 2008 «= 2009S 2010 2011. ALdRay ‘ 7
Slide 11: Balance Sheet - Asset Mix
| Balance Sheet - Asset Mix 18% 2011 14% 5% 18% 58% 66% = Cash and cash equivalents “Investment securities and FHLB stock = Loans ™ Other assets wyseat!
Slide 12: Trend in Loan Balances
Trend in Loan Balances Millions $1,200 $1,100 $1,000 $900 $800 $700 $600 | $500 $400 $300 $1,120 $4,402 2007 2008 2009 2010 2011 Qi 1 (Dnaudited) ‘ 7
Slide 13: Trend in Deposits
Trend in Deposits $1,304 $1,302 $1,223 $1,127 $1,028 $1,030 2007 2008 2009 2010 2011 Q1 12 (Unaudited)
Slide 14: 2011 Areas of Focus
2011 Areas of Focus • Credit Quality • Reduce Adversely Classified Assets • Substandard Loans • Other Real Estate Owned 14 • Liquidity • Right - size balance sheet • Invest excess liquidity levels • Structure investment portfolio for cash flow and short duration • Earnings / Capital Adequacy
Slide 15: Providing for Loan Losses
Providing for Loan Losses 15 Recession
Slide 16: Net Charge-Offs as % of Average Loans
Net Charge - Offs as % of Average Loans 16 Recession
Slide 17: Reserves vs. Non-Performing Loans
Reserves vs. Non - Performing Loans 17 Recession
Slide 18: 2011 Areas of Focus
2011 Areas of Focus • Credit Quality • Reduce Adversely Classified Assets • Substandard Loans • Other Real Estate Owned 18 • Liquidity • Right - size balance sheet • Invest excess liquidity levels • Structure investment portfolio for cash flow and short duration • Earnings / Capital Adequacy
Slide 19: Net Income Available to Common Shareholders
Net Income Available to / Net Loss Attributable to Common Shareholders 19
Slide 20: Net Interest Margin
Net Interest Margin 4.0% 3.5% 3.0% 2.5% 2.71% 2006 2007 2008 2009 2010 2011 Q112 (Unaudited)
Slide 21: Other Operating Income
21 Other Operating Income * * Excluding gains/losses
Slide 22: Diversified Fee Income
Diversified Fee Income (excluding gains/losses) 22
Slide 23: Operating Expense
Operating Expense Millions $48 $43 $38 $33 $28 $23 $18 $13 $8 $46.6 2006 2007 2008 2009 2010 2011
Slide 24: Corporation Remains Well-Capitalized
Corporation Remains Well - Capitalized 0% 2% 4% 6% 8% 10% 12% 14% Q4 08 Q4 09 Q4 10 Q4 11 Q1 12 Tangible Leverage Tier 1 Total (Unaudited) Well - Capitalized 24
Slide 25: 2011 – A Year of Progress
“Progress lies not in enhancing what is, but in advancing toward what will be.” Khalil Gibran 25 2011 – A Year of Progress
Slide 26: Tracy Bemiller, Senior Lending Officer
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Tracy B emiller Senior Vice President & Senior Lending Officer
Slide 27: Commercial Loan Production
27 Commercial Loan Production Production defined as new loans and modifications and renewals of existing loans.
Slide 28: Loan Portfolio Composition
Loan Portfolio Composition 28
Slide 29: First United Market Area
29 First United Market Area 29
Slide 30: Jason Rush, SVP, Chief Risk Officer & Director of Operations
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Jason Rush Senior Vice President, Chief Risk Officer & Director of Operations
Slide 31: Residential Mortgage Production
31 Residential Mortgage Production 31
Slide 32: Application of LEAN Principles
32 Application of LEAN Principles DEFINE MEASURE ANALYZE IMPROVE CONTROL Process resulted in 20% decrease in loan processing times.
Slide 33: Robin Murray, SVP & Director of Retail Banking
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Robin Murray Senior Vice President & Director of Retail Banking
Slide 34: First United Market Area
34 First United Market Area 34
Slide 35: Stable Funding Sources
Stable Funding Sources 2010 2011 35% 23% 34% = Retail core deposits =Retail CDs < $100,000 = Retail CDs > $100,000 m™ Wholesale deposits and borrowings
Slide 36: Retail Deposit Composition
Retail Deposit Composition 36
Slide 37: Small Business Loan Production
37 Small Business Loan Production 37 10% growth 10% growth 45% growth
Slide 38: What Our COBO Customers are Saying
38 What Our COBO Customers are Saying 38
Slide 39: What Our COBO Customers are Saying
39 What Our COBO Customers are Saying 39 “You can tell this type of service comes from the heart, not a book or script!” “It’s a true partnership.”
Slide 40: Be the BEST in all markets
Be the BEST in all markets by leveraging TEAMWORK PASSION for helping People achieve goals and dreams Economic Driver: NET INCOME per Associate Uncommon Commitment to Service and Solutions! 40
Slide 41: Keith Sanders, Senior Trust Officer
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Keith Sanders First Vice President & Senior Trust Officer
Slide 42: Trust & Investments Assets Under Management
Trust & Investments Assets Under Management 42 “WHAT MATTERS MOST” Trust .
Slide 43: Trust & Investments Income
Trust & Investments Income 43 “WHAT MATTERS MOST” Trust .
Slide 44: Trust & Investments – Asset Class Returns
44 Trust & Investments – Asset Class Returns 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 10-Year Cum Fixed Income 10.3% Sm Cap 47.3% Int’l 20.2% Int’l 13.5% Int’l 26.3% Lg Cap Growth 11.8% Fixed Income 5.2% Lg Cap Growth 37.2% Sm Cap 26.85% Fixed Income 7.84% Fixed Income 75.18% Cash 1.8% Int’
Slide 45: Trust & Investments – Balanced MAP Objective
“WHAT MATTERS MOST” Trust. 45 Trust & Investments – Balanced MAP Objective $500,000 $1,000,000 $1,500,000 $2,000,000 2001 2003 2005 2007 2009 2011 10 Years Ending 12/31/11 Balanced Map Objective Growth of $1,000,000 Balanced MAP S&P 500 Not a deposit - Not FDIC Insured - Not guaranteed by the bank -
Slide 46: Trust & Investments – 2011 Noteworthy Points
• Our people in Trust & Investments make the difference 46 “WHAT MATTERS MOST” Trust. Trust & Investments – 2011 Noteworthy Points • Focus on applying fiduciary standards • New business development continues to grow by word of mouth
Slide 47: Jeannette Rudy Fitzwater, Director of Corporate Services
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Jeannette Rudy Fitzwater Senior Vice President & Director of Corporate Services
Slide 48: Year-end Bank FTEs
48 Currently at 2004 levels! Year - end Bank FTEs
Slide 49: Community Oriented Business Owners
The community oriented business owner lives, works and plays here in our various communities. They are invested in their own financial well - being, and in the success of the community as a whole. We believe that we can help them achieve that success. 49 Community Oriented Business Owners
Slide 50: COBO Checking Account Balances
COBO Checking Account Balances 50 8.6% Growth in Balances 12% Growth in New COBO Relationships
Slide 51: In-Branch Video
In-Branch Video ifyouhave a Smartphone, iwehave a smart way to manage your money,
Slide 52: My Bank on Facebook
52 - Over 2,000 Fans - Weekly Updates - Frequent Interaction - Fan Contests My Bank on Facebook
Slide 53: The My Bank Blog
53 - Business Articles - Audio Podcasts - Webinars - Updates Daily The My Bank Blog
Slide 54: Jason Rush, SVP, Chief Risk Officer & Director of Operations
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Jason Rush Senior Vice President, Chief Risk Officer & Director of Operations
Slide 55: Key Elements of an ERM Program
55 Key Elements of an ERM Program Governance Structure and Policies Risk Management Risk Assessment and Quantification Dashboard Reporting and Monitoring Enterprise Risk Management How? How? What? Who?
Slide 56: Delivery Channel Usage
Delivery Channel Usage REMOTE ‘CAPTURE ACHE WIRES wee ONLINE Ry) v IN-BRANCH VIDEO DEBIT & CREDIT CARDS D
Slide 57: Bill Grant, President, CEO and Chairman
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Bill Grant President, Chief Executive Officer and Chairman of the Board
Slide 58: Frequently Asked Questions
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Frequently Asked Questions
Slide 59: Question 1: Loss in the first quarter
Can you provide more information on the loss incurred in the first quarter of this year? 59 Question 1:
Slide 60: Question 2: Growth in core earnings
How is the Company progressing with its growth in core earnings? 60 Question 2:
Slide 61: Question 3: Capital Purchase Program status
What is the current status of the Bank’s participation in the Capital Purchase Program? 61 Question 3:
Slide 62: Question 4: Dividends to common shareholders
What are the thoughts concerning dividends to the shareholders of the common stock? 62 Question 4:
Slide 63: Question 5: Preparing for social media changes
What is First United doing to prepare itself for the changes brought about by social media? 63 Question 5:
Slide 64: Question 6: Meeting loan demand
There has been a lot in the news about community banks meeting the loan demand of their customers. How is First United coming along on this? 64 Question 6:
Slide 65: Question 7: Movement in stock price
There has been a lot of movement in the price of the stock. What is causing this? 65 Question 7:
Slide 66: Thank you!
First United Corporation Annual Shareholders’ Meeting May 10, 2012 Thank you!