First · NASDAQ:FUNC
First — First United — Shareholder Meeting (May 2019)
51 slides from First's shareholder meeting presentation, May 16, 2019
Slide 1: First United Corporation Annual Shareholders' Meeting
First United Corporation Annual Shareholders’ Meeting May 16, 2019
Slide 2: John W. McCullough, Chairman of the Shareholders' Meeting
John W. McCullough 2 Director and Chairman of the Shareholders’ Meeting
Slide 3: Election of Directors
3 ELECTION OF DIRECTORS Kathy Burkey Bob Rudy Andy Walls
Slide 4: Carissa Rodeheaver, Chief Executive Officer and Chairman
Carissa Rodeheaver 4 Chief Executive Officer and Chairman of the Board
Slide 5: Forward Looking Statements
5 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 resour
Slide 6: nited
nited ro =| - LL fe) ~ q fo.
Slide 7: Emerald Pointe – Opened November 2018
7 EMERALD POINTE – OPENED NOVEMBER 2018
Slide 8: We're Open To: Innovation and Technology
8 WE’RE OPEN TO: INNOVATION AND TECHNOLOGY
Slide 9: Corporate History
CORPORATE HISTORY ▪ Founded in November 1900 ▪ Have grown over the 118 years both organically and through acquisition ▪ Began offering wealth management services (trust and investment brokerage) in 1963 ▪ Expanded into West Virginia in 1988 as result of changes to interstate banking regulations ▪ In
Slide 10: Corporate Franchise Highlights
10 CORPORATE FRANCHISE HIGHLIGHTS ▪ 8th largest bank headquartered in Maryland, only bank headquartered west of Frederick, and only bank headquartered in Garrett County ▪ Stock publicly traded on the NASDAQ Stock Market, (Ticker = FUNC), only publicly traded company with headquarters in Garrett Coun
Slide 11: Where We Are
11 WHERE WE ARE Total Offices 25 • Maryland 16 64% • West Virginia 9 36%
Slide 12: 2018 Strategic Initiatives
2018 STRATEGIC INITIATIVES 12 1. Provide a seamless, frictionless customer experience – people and process 2. Increase core earnings through regionalized plans 3. Plan for future growth and expansion (capital) 4. Continue our branch transformation, branding initiatives and technology penetration
Slide 13: 2018 Associate Focus
13 2018 ASSOCIATE FOCUS
Slide 14: We're Open To: Innovation and Technology
14 WE’RE OPEN TO: INNOVATION AND TECHNOLOGY
Slide 15: YouFirst Checking
15 YouFirst Checking SIMPLIFY YOUR BANKING EXPERIENCE. SHOP LOCAL. SAVE LOCAL. TRIPLE THREAT PROTECTION, AND MORE WE’RE OPEN TO: INNOVATION AND TECHNOLOGY
Slide 16: We're Open To: Community
16 We believe our communities flourish when we work together. We don’t just work here, we live here and we serve here. WE’RE OPEN TO: COMMUNITY
Slide 17: 6,500 Dollars raised for the charity Ronald McDonald House0 15,500 Pounds of food donated
17 6,500 Dollars raised for the charity Ronald McDonald House0 15,500 Pounds of food donated to the MBA Embrace Life, Nurture Success Food Drive 200,000 dollars in contributions to our local communities 650 Combined hours of community education outreach 243 community involved associates 9,600 Cases
Slide 18: Corporate Financial Highlights
18 CORPORATE FINANCIAL HIGHLIGHTS (at March 31, 2019) Total Assets $ 1.4 billion Total Loans $ 1.0 billion Total Deposits $ 1.1 billion Loan / Deposit Ratio 89% Total Trust Assets under Management $ 887 million Total Brokerage Assets under Management $ 296 million Q1 19 Unaudited
Slide 19: Capital Ratio Trends at Corporation
19 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 2014 2015 2016 2017 2018 CET1 Leverage Tier 1 Total Regulatory Well - Capitalized Regulatory Minimum plus fully phased - in Capital Conservation Buffer CET1 7.0% Tier 1 RB 8.5% Leverage 5.0% Total 10.5% CAPITAL RATIO TRENDS AT CORPORATION
Slide 20: Components of Capital
20 45% 15% 13% (18)% 9% Tier 1: Common Equity, before AOCI Tier 1: Qualifying TRUPs Tier 1: Series A Preferred Stock Tier 1 Reductions: Goodwill, Disallowed DTA, AOCI (2014) Tier 2: Qualifying ALL, excess TRUPs December 2014 74% 16% (8)% 6% December 2018 COMPONENTS OF CAPITAL
Slide 21: Shareholder Value - Market Share
21 SHAREHOLDER VALUE - MARKET SHARE Market # Offices FUNC Deposits ($000) Total Deposits in Market ($000) Market Share Rank Western Maryland HQ (Region 1) Garrett MD 5 333,061 560,430 59.43% 1 Greater Cumberland (Region 2) Allegany MD 3 148,226 727,946 20.36% 3 Mineral WV 2 89,648 255,217 35.13% 1 W
Slide 22: Shareholder Value - Diversified Revenue Stream
22 74% 14% 10% 3% Net interest margin, after provision Wealth management Service charges and debit card income Other 2018 SHAREHOLDER VALUE - DIVERSIFIED REVENUE STREAM
Slide 23: Shareholder Value – EPS and TBV/Share
SHAREHOLDER VALUE – EPS AND TBV/SHARE 23 $0.48 $0.87 $0.84 $0.58 $1.51 $10.92 $12.75 $13.19 $13.78 $15.92 $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 $0.00 $0.40 $0.80 $1.20 $1.60 2014 2015 2016 2017 2018 Tangible Book Value per Share Earnings Per Share $ 0.49 $ 0.78 * 2015 incl
Slide 24: Shareholder Value - Dividend Yield and Payout Ratio
24 SHAREHOLDER VALUE - DIVIDEND YIELD AND PAYOUT RATIO » Resumed quarterly dividend payments in Q2 2018 » Dividend Yield: Current Dividend (annualized) / Current Share Price March 2019 Dividend Yield: 2.09% » Dividend Payout Ratio: Current Dividend / Net Income March 2019 Dividend Payout Ratio: 26.5
Slide 25: Shareholder Value - Stock Price Change: FUNC vs. KBW
25 SHAREHOLDER VALUE - MOST RECENT 5 - YEAR STOCK PRICE CHANGE %: FUNC VS. KBW NASDAQ BANK INDEX FUNC Compound Annual Growth Rate December 2013 – December 31, 2018: 15.73% 12/31/13 12/31/18 % Change First United Corporation $7.67 $15.92 107.56% KBW NASDAQ Bank Index $69.26 $85.79 23.87%
Slide 26: Shareholder Value - Total Return
26 SHAREHOLDER VALUE - % TOTAL RETURN - 5 YEARS ENDING APRIL 30, 2019 NASDAQ: FUNC 119.31% SNL U.S. BANK INDEX: 64.17%
Slide 27: Shareholder Value - Stock Repurchase
27 » Announced April 30, 2019 » 354,449 shares authorized » Market or private transactions at fair market value » Enhanced ROE and EPS » Increased ownership for remaining shareholders SHAREHOLDER VALUE - STOCK REPURCHASE
Slide 28: Shareholder Value
28 SHAREHOLDER VALUE
Slide 29: Tonya Sturm, Chief Financial Officer
Tonya Sturm 29 Senior Vice President and Chief Financial Officer
Slide 30: Balance Sheet Trends - Total Assets
30 Trend in Total Assets $500 $800 $1,100 $1,400 2014 2015 2016 2017 2018 Q1 19 Millions 2% 17% 73% 8% Cash and cash equivalents Investment securities and FHLB stock Loans Other assets Asset Mix – December 2018 BALANCE SHEET TRENDS Q1 19 Unaudited
Slide 31: Balance Sheet Trends - Loans
31 $400 $500 $600 $700 $800 $900 $1,000 $1,100 2014 2015 2016 2017 2018 Q1 19 Loans in Millions Total Loans 53% 47% CRE / A&D / C&I Consumer mortgage / installment Composition at December 2018 BALANCE SHEET TRENDS Q1 19 Unaudited
Slide 32: Balance Sheet Trends - Deposits
32 $0 $200 $400 $600 $800 $1,000 $1,200 2014 2015 2016 2017 2018 Q1 19 Millions Core Retail CDs Brokered Total Deposits 25% 15% 36% 24% NIB Demand NOW Money market / savings CDs Composition at December 2018 Money market includes ICS deposits held for Wealth Management customers; CDs include reciproc
Slide 33: Asset Quality Trends
33 103.80% 60.91% 34.76% 20.67% 12.69% 17.76% 0% 20% 40% 60% 80% 100% 120% $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 2012 2014 2015 2017 2018 Q1 19 Adversely Classified Assets (millions) Adv Classified Loans Other Real Estate Owned Adv Classified CDOs Corp Coverage Ratio Trends in Adversely Classi
Slide 34: Components of Capital
34 45% 15% 13% (18)% 9% Tier 1: Common Equity, before AOCI Tier 1: Qualifying TRUPs Tier 1: Series A Preferred Stock Tier 1 Reductions: Goodwill, Disallowed DTA, AOCI (2014) Tier 2: Qualifying ALL, excess TRUPs December 2014 74% 16% (8)% 6% December 2018 COMPONENTS OF CAPITAL
Slide 35: Net Interest Margin
35 3.90% 3.83% 3.88% 3.99% 4.41% 4.60% 1.07% 0.97% 0.84% 0.78% 0.86% 1.13% 3.00% 3.04% 3.19% 3.37% 3.74% 3.72% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 2014 2015 2016 2017 2018 Q1 19 Yield on Earning Assets Cost of Interest-bearing Liabilities Net Interest Margin NET I
Slide 36: Other Operating Income and Expense
36 $8 $10 $12 $14 2014 2015 2016 2017 2018 Millions * Excluding gains/(losses), securities impairment, arbitration recovery Other Operating Income* $8 $18 $28 $38 $48 2014 2015 2016 2017 2018 Millions Operating Expense OTHER OPERATING INCOME AND EXPENSE
Slide 37: Wealth Management
37 $0 $200 $400 $600 $800 $1,000 2014 2015 2016 2017 2018 Millions Trust Assets Investment Assets Assets Under Management $0.0 $2.0 $4.0 $6.0 $8.0 2014 2015 2016 2017 2018 Millions Revenue WEALTH MANAGEMENT
Slide 38: Net Income Available to Common Shareholders
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS 38 $3.0 $10.3 $5.3 $4.1 $10.7 $3.2 $0 $2 $4 $6 $8 $10 $12 2014 2015 2016 2017 2018 Millions Impact of one - time arbitration award, securities activity $ 4.9 $5.4 Impact of one - time deferred tax asset revaluation
Slide 39: Earnings per Common Share
EARNINGS PER COMMON SHARE 39 $0.48 $1.65 $0.84 $0.58 $1.51 $0.49 $0.00 $0.40 $0.80 $1.20 $1.60 $2.00 2014 2015 2016 2017 2018 $ 1.07 Impact of one - time arbitration award, securities activity Impact of one - time deferred tax asset revaluation $ 0.78 $0.87
Slide 40: Carissa Rodeheaver, Chief Executive Officer and Chairman
Carissa Rodeheaver 40 Chief Executive Officer and Chairman of the Board
Slide 41: 2019 High Level Strategies
2019 HIGH LEVEL STRATEGIES 41 » Human Resources » Customer Experience » Productivity and Efficiencies » Customer and Product Profitability » Growth and Expansion
Slide 42: 2019 High Level Strategies: Human Resources
2019 HIGH LEVEL STRATEGIES 42 Human Resources: » Strategic recruiting plans » Enhanced training programs » Individual associate development » Deeper level succession planning
Slide 43: 2019 High Level Strategies: Customer Experience
2019 HIGH LEVEL STRATEGIES 43 Customer Experience: » Customized marketing plans » Customer segmentation and needs identification » Enhance collaboration between operational and customer facing departments » Customer surveys
Slide 44: 2019 High Level Strategies: Productivity and Efficiencies
2019 HIGH LEVEL STRATEGIES 44 Productivity and Efficiencies: » Improve branch profitability » Improve staff efficiencies » Leverage technology to improve process efficiencies
Slide 45: 2019 High Level Strategies: Customer and Product Profitability
2019 HIGH LEVEL STRATEGIES 45 Customer and Product Profitability: » Optimize customer profitability through multiple service channels » Optimize product mix » Build fee income to lessen dependence on margin
Slide 46: 2019 High Level Strategies: Profitable Growth and Expansion
2019 HIGH LEVEL STRATEGIES 46 Profitable Growth and Expansion: » Organic balance sheet growth » Opportunistic acquisitions of banking or wealth companies » Market expansion through satellite offices
Slide 47: Experienced Leadership Team
47 Robert L. Fisher II 27 Years in Banking Senior Vice President Joined in 2013 Chief Revenue Officer Experience: Commercial, Retail and Mortgage, Credit EXPERIENCED LEADERSHIP TEAM Carissa L. Rodeheaver 27 Years in Banking Chairman of the Board, Joined in 1992 CEO & President Experience: Commercial
Slide 48: Board of Directors
48 BOARD OF DIRECTORS John F. Barr Brian R. Boal M. Kathryn Burkey Robert W. Kurtz Elaine McDonald Gary R. Ruddell I. Robert Rudy Marisa A. Shockley Robert G. Stuck H. Andrew Walls, III Carissa L. Rodeheaver, Chairman of the Board John W. McCullough, Lead Director
Slide 49: Thank You For Your Service!
THANK YOU FOR YOUR SERVICE! 49 Robert Stuck Director Beverly Sines Senior Vice President and Chief Credit Officer
Slide 50: "My bank is First United!"
“My bank is First United!” 50
Slide 51: Thank You!
51 Thank You! u