Slide 1: What Driver Got Wrong
What Driver Got Wrong May 2020
Slide 2: Important additional information
Important additional information First 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 proxy s
Slide 3: Driver's Constantly Flip Flopping Campaign Strategy
Driver’s Constantly Flip Flopping Campaign Strategy 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
Slide 4: Driver's Thesis for First United: A Sale "Or Else"
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 obj
Slide 5: One Trick Pony: Driver Has One Idea, A Sale At All Costs
One Trick Pony: Driver Has One Idea, A Sale At All Costs 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 interv
Slide 6: One Trick Pony: Driver Has One Idea, A Sale At All Costs
One Trick Pony: Driver Has One Idea, A Sale At All Costs • Since Driver’s 13D filing, eight banks similar in size to First United have announced a sale • Even with the control premium generated by the sale, every single one of those banks has underperformed First United on a 1-year basis • Where is
Slide 7: Recent Market Conditions: Impact on Pricing
Recent Market Conditions: Impact on Pricing • The market downturn has negatively affected bank stocks as investors grow wary of a prolonged recession • Current market environment is penalizing buyers that have pending M&A transactions • Buyers’ abilities to pay a premium has in essence evaporated –
Slide 8: Driver's Thesis for First United: Recipe for Disaster
Driver’s Thesis for First United: Recipe for Disaster • Bank buyers are focusing on matters other than M&A due to the complexity, uncertainty and unique challenges caused by COVID-19 • As a result, deal volumes, valuations and premiums are at a trough. Multiple pending deals have been terminated or
Slide 9: Where Else Driver is Wrong: Impartial Candidates
Where Else Driver is Wrong: Impartial Candidates Driver’s self-serving Q&A to its candidates about a sale of First United: § Driscoll: “It is premature for me to have a view…” § Elzen: “I have no preconceived view…” § Narrell-Mead: “It would be completely inappropriate for me to have a pre-set view…
Slide 10: Where Else Driver is Wrong: Board Ownership
Where Else Driver is Wrong: Board Ownership § 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 Unite
Slide 11: Where Else Driver is Wrong: Executive Compensation
Where Else Driver is Wrong: Executive Compensation Even vs Driver’s “New and Improved” peers, our CEO pay is among the lowest and TSR is best in class § Having said that, as a part of our efforts to respond to shareholder input, we have made several changes to executive and director compensation to
Slide 12: Where Else Driver is Wrong: Financial Crisis
Where Else Driver is Wrong: Financial Crisis 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 h
Slide 13: Where Else Driver is Wrong: Our Superior TSR
Where Else Driver is Wrong: Our Superior TSR(1) First United TSR vs. Peers Through the COVID-19 Environment CEO Post 1-Year 3-Year 5-Year Tenure(2) Crisis(3) First United (19.6%) 6.8% 50.8% 68.8% 163.3% SNL Bank Index(4) (32.1%) (29.8%) (2.1%) 11.0% 110.1% Proxy Peers(5) (37.9%) (25.2%) (0.7%) 7.1%
Slide 14: Where Else Driver is Wrong: Impact of COVID-19
Where Else Driver is Wrong: Impact of COVID-19 • Since we publicly announced the conclusion of our latest strategic review on February 11, 2020, we have performed in line with the industry and our peers • This is contrary to Driver’s highly misleading implications that: – Our announcement resulted i
Slide 15: Where Else Driver is Wrong: Board Refreshment
Where Else Driver is Wrong: Board Refreshment • In 2014-15, our current Board refreshment efforts began with the addition Refreshment of three new directors: John Barr, Brian Boal and Marisa Shockley: to Date: – Driver’s proxy fight would replace at least two-thirds of these Four directors recently
Slide 16: Where Else Driver is Wrong: Board Refreshment
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 Board
Slide 17: Where Else Driver is Wrong: Shareholder List
Where Else Driver is Wrong: Shareholder List § 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
Slide 18: Where Else Driver is Wrong: Shareholder List
Where Else Driver is Wrong: Shareholder List § 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 h
Slide 19: Where Else Driver is Wrong: Regulatory Investigation
Where Else Driver is Wrong: Regulatory Investigation Driver is insinuating that the Maryland regulator is investigating it due to an abuse of power by our CEO Ms. Rodeheaver: § First United has no control over the Office of the Maryland Commissioner of Financial Regulation’s investigation of Driver
Slide 20: Where Else Driver is Wrong: Conflicts of Interest
Where Else Driver is Wrong: Conflicts of Interest § 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
Slide 21: Where Else Driver is Wrong: Declassification Proposal
Where Else Driver is Wrong: Declassification Proposal 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 2
Slide 22: Support First United - Vote on the BLUE Proxy Card!
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! 22
Slide 23: Selected Peer Groups
Selected Peer Groups Proxy ISS Driver’s Driver’s New Proxy ISS Driver’s Driver’s New Peers(1) Peers(2) Peers(3) Peers(4) Peers(1) Peers(2) Peers(3) Peers(4) ACNB X X X X FRAF X X X AMNB X X FRBK X ASRV X X MPB X X CBFV X X MVBF X X X CFFI X X NKSH X X X X CHMG X X X X NWFL X X X CVLY X X X X OPOF X