First · NASDAQ:FUNC
First — First United — Shareholder Meeting (May 2015)
77 slides from First's shareholder meeting presentation, May 14, 2015
Slide 1: First United Corporation Annual Shareholders' Meeting May 14, 2015
First United Corporation Annual Shareholders’ Meeting May 14, 2015
Slide 2: Bill Grant, Chief Executive Officer and Chairman of the Board
Bill Grant 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: Carissa Rodeheaver, President and Chief Financial Officer
Carissa Rodeheaver President and Chief Financial Officer
Slide 5: JIT
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Slide 6: 2014 Initiatives
2014 Initiatives » Improve Asset Quality » Strengthen Core Earnings » Execute Capital Strategy 6
Slide 7: 2014 Initiatives: Improve Asset Quality
2014 Initiatives: Improve Asset Quality Risk Higher Provision Expense Higher Losses Lower Earnings 7
Slide 8: Trends in Adversely Classified Assets
Trends in Adversely Classified Assets 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% $0 $50 $100 $150 $200 $250 $300 2010 2011 2012 2013 2014 Adversely Classified Assets (millions) Adv Classified Loans Other Real Estate Owned Adv Classified CDOs Corp Coverage Ratio 8
Slide 9: Providing for Loan Losses
$0 $5 $10 $15 $20 $25 2010 2011 2012 2013 2014 Millions Provision Net Charge-offs Allowance Providing for Loan Losses 9
Slide 10: 2014 Initiatives: Strengthen Core Earnings
2014 Initiatives: Strengthen Core Earnings 10
Slide 11: Net Income Available to Common Shareholders
Net Income Available to / Net (Loss) Attributable to Common Shareholders -$12 -$10 -$8 -$6 -$4 -$2 $0 $2 $4 $6 2010 2011 2012 2013 2014 - $11.8 $2.0 $3.0 $4.7 $3.0 Millions 11
Slide 12: Net Interest Margin
Net Interest Margin 2.71% 2.96% 3.30% 3.25% 3.00% 2.5% 2.8% 3.0% 3.3% 3.5% 2010 2011 2012 2013 2014 12
Slide 13: Trend in Total Assets
Trend in Total Assets $300 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 2010 2011 2012 2013 2014 $1,696 $1,391 $1,321 $1,334 $1,332 Millions 13
Slide 14: Balance Sheet - Asset Mix
5% 18% 66% 11% Balance Sheet - Asset Mix 3% 25% 62% 10% Cash and cash equivalents Investment securities and FHLB stock Loans Other assets 2011 2014 14
Slide 15: Trend in Loan Balances
Trend in Loan Balances $300 $400 $500 $600 $700 $800 $900 $1,000 $1,100 2010 2011 2012 2013 2014 $988 $919 $859 $797 $828 Millions 15
Slide 16: Trend in Deposits
Trend in Deposits $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2010 2011 2012 2013 2014 Millions Core Retail CDs Brokered 16 $977 $1,302 $1,028 $977 $981
Slide 17: Other Operating Income
Other Operating Income * $8 $10 $12 $14 $16 2010 2011 2012 2013 2014 $15.4 $15.0 $13.6 $13.0 $13.1 Millions * Excluding gains/(losses) Sale of Insurance Assets 17
Slide 18: Operating Expense
Operating Expense $8 $13 $18 $23 $28 $33 $38 $43 $48 2010 2011 2012 2013 2014 $45.0 $43.4 $39.5 $42.4 $40.2 Millions Sale of Insurance Assets 18
Slide 19: 2014 Initiatives: Execute Capital Strategy
2014 Initiatives: Execute Capital Strategy – Build capital ratios – Resume payment of interest and dividends on Trust Preferred Debt and CPP Series A Preferred Stock – Shift capital composition 19
Slide 20: Corporation Remains Well-Capitalized
Corporation Remains Well - Capitalized 0% 2% 4% 6% 8% 10% 12% 14% 16% 2010 2011 2012 2013 2014 Tangible Leverage Tier 1 Total Well - Capitalized 20
Slide 21: Resumption of Payments on TRUPs and CPP
Resumption of Payments on TRUPs and CPP Bank Corporation U. S. Treasury: Preferred Stock Dividends Third Party Investors: Trust Preferred Interest Expense Cash Dividend Cash Payments 21
Slide 22: Components of Capital
Components of Capital 47% 15% (11)% 19% 8% Tier 1: Common Equity, before AOCI Tier 1: Qualifying TRUPs Tier 1: Preferred Stock (CPP) Tier 1 Reductions: Goodwill, Disallowed Deferred Tax Asset Tier 2: Qualifying ALL, Sub Debt, excess TRUPs December 2014 22
Slide 23: 2015 Initiatives
2015 Initiatives » Profitably grow h igh quality assets » Strengthen core earnings and increase fee i ncome » Improve Tangible Common Equity ratio » Higher return to Shareholders 23
Slide 24: Beverly Sines, Senior Vice President and Chief Credit Officer
Beverly Sines Senior Vice President and Chief Credit Officer
Slide 25: Delinquency Ratio
Delinquency Ratio 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 2010 2011 2012 2013 2014 2.22% 2.56% 2.38% 1.77% 1.58% 25
Slide 26: Non-Performing Loans as % of Total Loans
Non - Performing Loans as % of Total Loans 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 2010 2011 2012 2013 2014 3.74% 4.26% 2.52% 2.30% 1.44% 26
Slide 27: Net Charge-Offs as % of Average Loans
Net Charge - Offs as % of Average Loans 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 2010 2011 2012 2013 2014 1.28% 1.24% 1.41% 0.34% 0.49% 27
Slide 28: Criticized Loans
Criticized Loans $8 $58 $108 $158 $208 $258 2010 2011 2012 2013 2014 $211 $181 $126 $109 $82 Millions 28
Slide 29: Other Real Estate Owned
Other R eal Estate Owned $8 $10 $12 $14 $16 $18 $20 2010 2011 2012 2013 2014 $18.1 $16.7 $17.5 $17.0 $12.9 Millions 29
Slide 30: 2015 Initiatives
2015 Initiatives » Continue to improve Asset Quality metrics » Reduce average loan delinquency » Reduce non - performing assets » Reduce net charge - offs 30
Slide 31: R.L. Fisher, Senior Vice President & Chief Lending Officer
R.L. Fisher Senior V ice President & Chief Lending Officer
Slide 32: 2014 Initiatives: Commercial Banking
32 2014 Initiatives: Commercial Banking » Increase loan balances » Improve credit quality » Build relationships » Provide multiple products and services » Create value to relationships 32
Slide 33: Loan Portfolio Composition
30% 12% 11% 44% 3% Commercial Real Estate Acquisition and Development Commercial and Industrial Residential Mortgage Consumer Installment December 2014 Loan Portfolio Composition 33% 13% 8% 43% 3% December 2013 33
Slide 34: Commercial Loan Balances
Commercial Loan Balances $0 $100 $200 $300 $400 $500 2012 2013 2014 $299 $268 $256 $128 $107 $99 $69 $60 $93 Millions Commercial and Industrial Acquistion and development Commercial real estate 34
Slide 35: Management of Commercial Loan Portfolio
Management of Commercial Loan Portfolio $- $50 $100 $150 $200 $250 $300 $350 Commercial Relationship Managers (CRMs) Credit Quality $269 $39 $294 $31 Millions Jan-14 Dec-14 35
Slide 36: Credit Quality of Portfolio Managed by CRMs
Credit Quality of Portfolio Managed by CRMs 0.00% 0.50% 1.00% 1.50% 2.00% % 15-89 Days Delinquent % Non-performing 1.60% 1.86% 0.39% 0.93% Jan-14 Dec-14 36
Slide 37: Commercial Loan Production
Commercial Loan Production $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 2010 2011 2012 2013 2014 Millions Commercial and Industrial Acquistion and development Commercial real estate 37
Slide 38: Commercial Banking – Building Relationships in 2014
Commercial Banking – Building Relationships in 2014 » Referred and closed: ▪ $2.9 million in business with First United Trust and Investments ▪ $5.7 million in residential and other consumer loans » Collected $473,000 in fee income 38
Slide 39: 2015 Initiatives: Commercial Banking
39 2015 Initiatives: Commercial Banking » Increase loan balances » Improve credit quality » D eepen relationships » Create value to relationships » Realize return on value and grow net interest margin
Slide 40: Jason Rush, Chief Risk Officer & Director of Operations
Jason Rush Senior V ice President, Chief Risk Officer & Director of Operations
Slide 41: Residential Mortgage Production
Residential Mortgage Production 41 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 2010 2011 2012 2013 2014 $41.6 $48.3 $69.3 $70.1 $68.4 Millions # of loans: 252 257 360 388 296 41
Slide 42: Residential Loan Portfolio
Residential Loan Portfolio $0 $100 $200 $300 $400 2010 2011 2012 2013 2014 $357 $347 $347 $351 $368 Millions 42
Slide 43: Residential Loan Servicing Portfolio
Residential Loan Servicing Portfolio $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 2010 2011 2012 2013 2014 $12.2 $21.9 $43.1 $60.8 $60.5 Millions 43
Slide 44: Delivery Channel Usage
Delivery Channel Usage ACH 19% Checks 12% ATM 4% Internet / Mobile 4% Point of Sale 37% Teller 24% 2014 44
Slide 45: Growth in Mobile Banking Customers
Growth in Mobile Banking Customers 1,106 2,396 3,830 5,278 5,773 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2011 2012 2013 2014 Q1 15 45
Slide 46: 2015 Initiatives
2015 Initiatives 46 TM
Slide 47: Key Elements of an ERM Program
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? 47
Slide 48: Robin Murray, Director of Retail Banking
Robin Murray Senior V ice President & Director of Retail Banking
Slide 49: Stable Funding Sources
Stable Funding Sources 49 10% growth $0 $100 $200 $300 $400 $500 $600 $700 $800 2010 2011 2012 2013 2014 $533 $573 $593 $651 $690 Millions Core Deposits 49
Slide 50: Impact of Deposit Interest Expense
Impact of Deposit Interest Expense 50 $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 2010 2011 2012 2013 2014 $18.1 $11.9 $6.6 $5.1 $4.6 Millions 24% Compound Annual Decline 50
Slide 51: Customer Engagement Strategy: Branch Built for Engagement
Customer Engagement Strategy Branch Built for Engagement! 51
Slide 52: Customer Care Center
Customer Care Center » Extremely efficient – 136,000 customer c alls a nnually » Highly responsive – 20 seconds on - hold t ime » Experienced staff with specialists » Providing uncommon service and solutions 52
Slide 53: Momentum for the Future
Momentum for the Future! » Successful execution of b ranch transformation » Stronger ties in local communities » Enriching trusted advisors commitment » Providing value to customers, associates and shareholders Living Our Story! 53
Slide 54: Keith Sanders, Senior Vice President & Senior Trust Officer
Keith Sanders Senior Vice President & Senior Trust Officer Bank & Trust
Slide 55: Assets Under Management
Assets Under Management “WHAT MATTERS MOST” Trust . $0 $100 $200 $300 $400 $500 $600 $700 $800 2010 2011 2012 2013 2014 $590 $595 $637 $675 $702 $190 $189 $215 $234 $237 Millions Trust Assets Investment Assets 55
Slide 56: 2014 Composition of Trust & Investments Revenue
Trust Management 80% Investment Services 18% Estate Settlements 2% 2014 Composition of Trust & Investments Revenue “WHAT MATTERS MOST” Trust . 56
Slide 57: Trust & Investments Revenue
Trust & Investments Revenue “WHAT MATTERS MOST” Trust . $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 2010 2011 2012 2013 2014 $4.8 $5.2 $5.4 $5.8 $6.1 Millions 57
Slide 58: 2015 Initiatives: Trust & Investments
Grow Depth of Teams Fiduciary Responsibility Identify Expansion Opportunities 2015 Initiatives: Trust & Investments “WHAT MATTERS MOST” Trust . 58
Slide 59: Jeannette Rudy Fitzwater, Director of Corporate Services
Jeannette Rudy Fitzwater Senior V ice President & Director of Corporate Services
Slide 60: 2015 Strategic Employee Development Goal
2015 Strategic Employee Development Goal “Be the employer of choice for a customer - oriented, cross - trained and multi - functional staff” 60
Slide 61: Growing Relationships
Growing Relationships » Expand the CARE program to include ongoing behavioral based ( DiSC ) assessment training 61 TM
Slide 62: Growing Future Leaders
Growing Future Leaders » Enhance Senior Leadership Development program and introduce Emerging Leader Certification program 62
Slide 63: Growing a Learning and Development Culture
Growing a Learning and Development Culture » Initiate an Individual Development Plan for each associate 63
Slide 64: Growing Your Investment
Growing Your Investment “A smart investment in associates yields a smart investment for the shareholders!” 64
Slide 65: Carissa Rodeheaver, President and Chief Financial Officer
Carissa Rodeheaver President and Chief Financial Officer
Slide 66: Long Term Strategic Initiatives: Community Visibility
Enhance visibility, engagement and support in our local communities Long Term Strategic Initiatives 66
Slide 67: Long Term Strategic Initiatives: Omni-Channel Experience
Provide a single, unified experience for the customer across all access channels using a seamless, omni - channel approach Long Term Strategic Initiatives 67
Slide 68: Long Term Strategic Initiatives: Employer of Choice
Be the employer of choice for a customer - oriented, cross - trained, multi - functional staff Long Term Strategic Initiatives 68
Slide 69: Long Term Strategic Initiatives: Shareholder Return
Deliver a market total return to shareholders through efficient and effective delivery channels Long Term Strategic Initiatives 69
Slide 70: Mission Statement
To enrich the lives of our customers, our employees and our shareholders through uncommon commitment to service and solution . Mission Statement 70
Slide 71: Bill Grant, Chief Executive Officer and Chairman of the Board
Bill Grant Chief Executive Officer and Chairman of the Board
Slide 72: Bill, we thank you and salute you!
Bill, we thank you and salute you!
Slide 73: Bill Grant, Chief Executive Officer and Chairman of the Board
Bill Grant Chief Executive Officer and Chairman of the Board
Slide 74: Retiring Directors: Donald E. Moran
Retiring Directors Donald E. Moran 74
Slide 75: Retiring Directors: Richard G. Stanton
Retiring Directors 75 Richard G. Stanton
Slide 76: JIT
JIT STC Glel Wee a sr i)
Slide 77: Thank you
Thank you m ybank4.com 888 - 692 - 2654