Slide 1: MyBank.com Investor Presentation First Quarter 2023
MyBank.com INVESTOR PRESENTATION First Quarter 2023
Slide 2: Forward looking statements
2 Forward looking statements This presentation contains forward - looking statements as defined by the Private Securities Litigation Reform Act of 1995 . Forward - looking statements do not represent historical facts, but are statements about management's beliefs, plans and objectives about the futu
Slide 3: Table of Contents
3 I. II. II. Corporate Overview Financial Performance Appendices Pg. 4 Pg. 9 Pg. 28 Table of Contents
Slide 4: Our Mission / Corporate Overview
Our Mission To enrich the lives of our associates, customers, communities and shareholders through uncommon commitment to service and customized financial solutions. Corporate Overview Founded: 1900 Headquarters: Oakland, MD Locations: 26 branches Business Lines: ▪ Commercial & Retail Banking ▪ Trus
Slide 5: Core Markets
5 West Region Central Region East Region Loans (000s) $294,236 $383,701 $503,138 Deposits (000s) $125,148 $814,295 $490,652 Deposit Market Share (1) (at June 30, 2022) 2% 42% 4% Branches 5 10 11 Note: Out of market loans represent $106 million and are not reflected in this table (1) Source: FDIC Mar
Slide 6: Core Strengths
6 Core Strengths ▪ Diversified revenue stream driven by trust and brokerage fee income provides protection during times of low interest rates Diversified Revenue Stream ▪ Stable legacy markets produce steady low - cost funding ▪ Technology and business relationships drive growth Core Deposit Franchi
Slide 7: Risk Management, Monitoring & Mitigation Underlies all Strategic Priorities
7 Risk Management, Monitoring & Mitigation Underlies all Strategic Priorities ▪ Low net charge - offs and strong asset quality as a result of conservative and proactive credit culture ▪ ACL level of 1.31%; future provisioning based on loan growth, economic environment and asset quality changes ▪ Div
Slide 8: Strategic Pillars & Key Objectives
Strategic Pillars & Key Objectives Culture & Human Capital ▪ Employ more robust recruitment methods to capitalize on talent in new and existing markets ▪ Attract and hire passionate, diverse talent to engage with clients and prospects across broader geographics ▪ Promote associate retention and care
Slide 9: Financial Highlights
Financial Highlights $4.4 Million Net Income (1) $0.65 Diluted EPS (1) 0.94% * ROAA (1) 12.95 * ROATCE (1) 3.53% NIM ▪ Total assets increased $89.3 million compared to December 31, 2022 ▪ Consolidated net income (1) of $4.4 million in 1Q23 compared to $5.7 million in 1Q22 and $7.0 million in linked
Slide 10: Long-Term Growth
10 Long - Term Growth Pre - Provision Net Revenue ($ in millions) (1) $17.8 $23.2 $30.8 $32.5 $6.3 2019 2020 2021 2022 1Q2023 +5.5% YoY (1) See Appendix for a reconciliation of these non - GAAP financial measures $1.85 $1.97 $3.54 $3.76 $0.65 2019 2020 2021 2022 1Q2023 +6.2% YoY Diluted Earnings per
Slide 11: Solid Profitability
11 Solid Profitability (1) See Appendix for a reconciliation of these non - GAAP financial measures 11.44% 11.92% 19.78% 19.94% 12.95% 2019 2020 2021 2022 1Q2023 Strategic Target 13% - 15% 0.93% 0.86% 1.35% 1.39% 0.94% 2019 2020 2021 2022 1Q2023 Strategic Target 1.35% - 1.65% Core ROAA (non - GAAP (
Slide 12: Loan Diversification
12 Total 1 - 4 Family 35% CRE - NOO 21% C&I 19% CRE - OO 11% C&D 6% Consumer 5% Multi - family 3% Loan Diversification Commercial Loan Mix (3/31/2023) Loan Portfolio Mix (3/31/2023) RE/Rental/Leasing NOO 24% RE/Rental/ Leasing OO, C&I 20% All Other 11% Accommodations 11% Services 8% RE/Rental/Leasin
Slide 13: Commercial Real Estate
13 Commercial Real Estate Focus on risk mitigation and managing of concentrations ▪ CRE / Total Capital: 227% ▪ ADC / Total Capital: 39% OFFICE Geography Note Book Balance Number of loans Avg Loan Balance Note Book Balance Number of loans Avg Loan Balance Note Book Balance Number of loans Avg Loan B
Slide 14: Credit Quality
14 Credit Quality ALL / ACL Trends (Net Charge - Offs)/Average Loans - 0.02% 0.13% - 0.02% - 0.02% - 0.08% 2019 2020 2021 2022 1Q2023 Nonaccrual Loans / Total Loans 1.40% 0.35% 0.21% 0.27% 0.25% 2019 2020 2021 2022 1Q 2023 NPAs / Total Assets 1.30% 0.99% 0.60% 0.46% 0.41% 2019 2020 2021 2022 1Q 2023
Slide 15: Investment Portfolio
15 Investment Portfolio Sector Par (000s) Portfolio % Book Yield Duration Treasury/Agency 119,888 32% 1.79% 5.51 Fixed MBS 70,140 19% 1.95% 5.47 CMO 84,965 23% 1.82% 6.56 Municipal 33,791 9% 4.94% 8.55 Corporate 1,000 0.3% 5.33% 3.46 Other 59,617 16% 1.99% 4.78 TOTAL 369,400 100.0 2.16% 5.94 Ratings
Slide 16: Shocked Investment Portfolio Unrealized Gains / Losses
16 Shocked Investment Portfolio Unrealized Gains / Losses Capital Impact Intent Dn200 Dn100 BaseCase Up100 Up200 Up300 Up400 AFS - 8,640 - 14,119 - 19,711 - 25,240 - 30,793 - 36,014 - 40,572 HTM 370 - 13,421 - 28,542 - 39,646 - 51,589 - 62,595 - 72,082 Total - 8,270 - 27,540 - 48,253 - 64,885 - 82,3
Slide 17: Deposits
17 Deposits 26% 30% 34% 32% 30% 14% 14% 16% 23% 21% 38% 40% 39% 36% 39% 21% 16% 11% 8% 7% 1% 0% 0% 0% 4% 2019 2020 2021 2022 1Q 2023 NIB Demand IB Demand MMA & Savings CDs - Retail CDs - Brokered $1.57 $1.14 $1.59 $1.42 $1.57 Deposit Composition ($ in billions as of 3/31/2023) 92% 82% 79% 81% 81% Lo
Slide 18: Funding
18 Funding $40 $40 $31 $30 18 Months 12 Months 9 Months 6 Months Dollars (in millions) Brokered CD Brokered CD FHLB Advance FHLB Advance 45% 48% 7% Commercial Deposits Retail Deposits Borrowings Funding Mix Brokered/Wholesale Maturities As part of our liquidity contingency funding plan, management c
Slide 19: Net Interest Margin
19 Net Interest Margin (1) See Appendix for a reconciliation of these non - GAAP financial measures 4.57% 3.99% 3.63% 3.85% 4.33% 1.18% 0.91% 0.51% 0.44% 1.15% 3.68% 3.34% 3.28% 3.56% 3.53% 0.70% 0.49% 0.24% 0.21% 0.67% -0.5% 0.5% 1.5% 2.5% 3.5% 4.5% 2019 2020 2021 2022 2023 Yield on Earning Assets
Slide 20: Diversified Fee Income
20 Diversified Fee Income (1) See Appendix for a reconciliation of these non - GAAP financial measures Composition Trust and Brokerage 52% Service Charges 16% Net Gain on Loan Sales 0% Debit Card Income 22% Bank - owned Life Insurance 7% Other Noninterest Income 3% Non - Interest Income Mix 1Q 2023
Slide 21: Committed to Efficiency & Innovation
21 Committed to Efficiency & Innovation 70.9% 64.6% 57.5% 56.4% 66.0% 2019 2020 2021 2022 1Q 2023 (1) See Appendix for a reconciliation of these non - GAAP financial measures Efficient operational platforms and fraud protection ▪ Mortgage Bot ▪ SecureLOCK Premium Debit Card Fraud ▪ ProfitStars forec
Slide 22: Liquidity Position
22 Liquidity Position Liquidity Sources (3/31/2023) Amount Used ($ in thousands) Amount Used ($ in thousands) Net Availability ($ in thousands) Internal Sources Excess Cash $132,928 $132,928 Unpledged Securities $146,508 $146,508 External Sources Federal Reserve (Discount Window) $9,788 $9,788 Corre
Slide 23: Interest Rate Risk
23 Interest Rate Risk (1) Standard Model Assumptions Interest Rate Risk Sensitivity ▪ The Bank’s interest rate risk position is stress tested under three interest rate ramp scenarios to determine the impact on net interest income, net income and capital under dynamic and static balance sheet conditi
Slide 24: Capital Management
24 Capital Management 16.29% 16.08% 15.89% 16.12% 16.15% 2019 2020 2021 2022 1Q 2023 11.77% 10.36% 10.80% 11.46% 11.47% 2019 2020 2021 2022 1Q 2023 12.79% 12.61% 12.50% 12.96% 12.82% 2019 2020 2021 2022 1Q 2023 15.17% 14.83% 14.64% 15.06% 14.90% 2019 2020 2021 2022 1Q 2023 CET1 Ratio Leverage Ratio
Slide 25: Capital Management
25 Capital Management $16.17 $17.17 $19.61 $20.90 $21.01 2019 2020 2021 2022 1Q 2023 8.03% 6.97% 7.56% 7.59% 7.30% 2019 2020 2021 2022 1Q 2023 Tangible Book Value / Share TCE Ratio
Slide 26: Strategic Targets
26 Strategic Targets Metric Actual 12/31/2021 Non - GAAP 12/31/2021 Actual 12/31/2022 Long Term Strategic Target Range (*) Strong Shareholder Return EPS Growth (YoY) 49% 79% (1) 27% 8% - 12% Dividend Payout Ratio 19.7% 16.3% 15.9% 20% - 25% ROAA 1.12% 1.35% (1) 1.39% 1.35% - 1.60% ROATCE 16.27% 19.6
Slide 27: Strong Investor Relations & Shareholder Engagement
Strong Investor Relations & Shareholder Engagement Members of the Board and senior management routinely engage with shareholders and other stakeholders, and management regularly updates the Board in the context of ongoing investor discussions. These engagements help the Board and management gather f
Slide 28: Appendices
28 I. II. III. IV. Management Team Board of Directors ESG Journey & Statistics Non - GAAP Reconciliation Pg. 29 Pg. 30 Pg. 33 Pg. 35 Appendices
Slide 29: Our Dedicated Management Team
29 Our Dedicated Management Team Carissa L. Rodeheaver Chairman of the Board, President & CEO 30+ year career with First United with in - depth industry, wealth management, financial and operational experience Jason B. Rush SVP & Chief Operating Officer 29 years with in - depth industry, retail, ris
Slide 30: Board of Directors
30 30 John F. Barr Independent Director Owner, Ellsworth Electric, Inc. Brian Boal Independent Director , Audit Chair Boal & Associates, PC Sanu Chadha Independent Director Managing Partner, M&S Consulting Christy DiPietro Independent Director Chartered Financial Analyst, Hidden Cove Advisory Patric
Slide 31: Board of Directors: Thoughtful Evaluation and Evolution
31 Board of Directors Thoughtful Evaluation and Evolution Our Board is comprised of a diverse group of directors who bring a variety of perspectives, experience, and characteristics to First United. Director Diversity 50% 90% of our directors are gender and/or racially diverse of our directors are i
Slide 32: Board of Directors Skills Matrix
32 Board of Directors The First United board of directors brings a diverse range of skills, experiences, and backgrounds to the work of overseeing ris k and strategy. With experience in fields such as banking, government, accounting, investing, project management, technology, and a ra nge of local e
Slide 33: Continuous Progress
33 Continuous Progress We continue to advance our ESG profile over time, recognizing the importance of our key stakeholders – including our customers and our communities – to our business. Over the past few years, we have implemented several important enhancements to align our ESG profile with our l
Slide 34: ESG at First United
34 ESG at First United ▪ LED lighting installed throughout branch network and operations center ▪ Recycling, focus on reduced printing (65% reduction since pre - COVID) ▪ Leveraging virtual meeting opportunities to reduce travel footprint ▪ 46% of deposit customers and 11% of loan customers enrolled
Slide 35: Non-GAAP financial measures
35 This presentation includes certain non - GAAP financial measures, including pre - provision net revenue, net income, earnings per share (basic and diluted), return on average assets, return on average tangible common equity, tangible common equity, tangible assets, the ratio of tangible common eq
Slide 36: Non-GAAP Reconciliation, continued
36 Non - GAAP Reconciliation , continued ($000s, except where otherwise noted) YTD 2019 2020 2021 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 3/31/2023 Weighted Average Common shares - basic (actual) (d) 7,110,022 7,003,955 6,710,463 6,649,740 6,627,564 6,650,256 6,658,392 6,662,751 6,675,181 6,675
Slide 37: Non-GAAP Reconciliation, continued
37 Non - GAAP Reconciliation , continued ($000s, except where otherwise noted) YTD 2019 2020 2021 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 3/31/2023 Return on Average Assets (quarter and YTD annualized) Average Assets ( c) 1,418,928$ 1,613,669$ 1,765,148$ 1,801,711$ 1,769,234$ 1,770,601$ 1,819,7
Slide 38: Non-GAAP Reconciliation, continued
38 Non - GAAP Reconciliation , continued ($000s, except where otherwise noted) YTD 2019 2020 2021 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 3/31/2023 Tangible Book Value per Common Share Total common equity, as reported (h) 125,940$ 131,047$ 141,900$ 151,793$ 137,078$ 132,892$ 132,044$ 151,793$ 1