First United Corp DEFA14A, filed Jan 12, 2021
First United Corp/Md/ (FUNC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 8, 2021
First United Corporation
(Exact name of registrant as specified in its charter)
| Maryland | 0-14237 | 52-1380770 | ||
| (State or other jurisdiction of | (Commission file number) | (IRS Employer | ||
| incorporation or organization) | Identification No.) |
19 South Second Street, Oakland, Maryland 21550
(Address of principal executive offices) (Zip Code)
(301) 334-9471
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| x | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common stock | FUNC | Nasdaq Stock Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
INFORMATION TO BE INCLUDED IN THE REPORT
Item 8.01 Other Events.
Letter to Shareholders
On January 12, 2021, First United Corporation (“First United”) mailed a letter to its shareholders, a copy of which is filed herewith as Exhibit 99.1.
Driver Opportunity Partners I LP
On January 8, 2021, First United received a notice from Driver Opportunity Partners I LP (“Driver”) of its intent to submit business proposals and to nominate J. Abbott Cooper for election as a director at First United’s 2021 annual meeting of shareholders. First United's Board of Directors is reviewing the notice. No action by shareholders is required at this time.
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 First United’s
2021 annual meeting of shareholders. First United intends to file a definitive proxy statement and a BLUE proxy card with the
SEC in connection with any such solicitation of proxies from First United shareholders. SHAREHOLDERS OF FIRST UNITED ARE STRONGLY
ENCOURAGED TO READ SUCH PROXY STATEMENT, ACCOMPANYING BLUE PROXY CARD AND ALL OTHER DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") CAREFULLY AND
IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Exhibit 99.2 to this report contains
information regarding the direct and indirect interests, by securities holdings or otherwise, of First United’s directors
and executive officers in First United’s securities. If the holdings of First United’s securities change from the
amounts provided in Exhibit 99.2 hereto, then such changes will be set forth in SEC filings on Form 3, 4, and 5, which can be
found through First United’s website at http://investors.mybank.com/ or through the SEC’s website at www.sec.gov.
Information can also be found in First United’s other SEC filings, including its Annual Report on Form 10-K for the year
ended December 31, 2019. Updated information regarding the identity of potential participants, and their direct or indirect interests,
by security holdings or otherwise, will be set forth in the definitive proxy statement and other materials to be filed with the
SEC in connection with the 2021 annual meeting of shareholders. Shareholders will be able to obtain the definitive proxy statement,
any amendments or supplements to the proxy statement and other documents filed by First United with the SEC at no charge at the
SEC’s website at www.sec.gov. Copies will also be available at no charge at First United’s website at http://investors.mybank.com/.
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Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
The exhibits filed or furnished with this report are listed in the following Exhibit Index:
| Exhibit No. | Description |
| 99.1 | Letter to shareholders (filed herewith) |
| 99.2 | Security holdings of directors and executive officers (filed herewith) |
| 104 | Cover page interactive data file (embedded within the iXBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FIRST UNITED CORPORATION | |||
| Dated: January 12, 2021 | By: | /s/ Tonya K. Sturm | |
| Tonya K. Sturm | |||
| Senior Vice President & CFO | |||
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Exhibit 99.1
January 11, 2021 A Letter from our CEO and Lead Independent Director Dear Valued Shareholder, Happy New Year! With 2020 now in the rear-view mirror, it seems like an appropriate time to reflect on the past year and to look forward to 2021. During the past year, our nation faced unprecedented challenges including a pandemic, racial and political unrest, and economic turmoil. Through it all, your board of directors, the management team, and all First United Bank & Trust associates demonstrated resilience, adaptability, and above all compassion for each other, our clients, and our communities. SUPPORTING OUR STAKEHOLDERS THROUGH COVID-19 Our pandemic response has been led by our management team, with active and ongoing support from our Board. Protecting the health, safety, and financial well-being of our associates and customers was, and continues to be, our goal as we continue to deal with COVID-19 in 2021. Included in this letter is a detailed section describing how we have assisted our stakeholders, clients, and associates. We strongly believe that supporting the recovery of the communities we serve is paramount to the financial strength of our Company. For example, our participation in the Paycheck Protection Program (PPP) resulted in protecting over 17,600 local jobs, and during 2020 we modified the terms of approximately 650 loans totaling over $260 million for both businesses and individuals. We have heard from numerous business owners, accountants, and individuals that the expertise and knowledge our associates provided and the compassion and care that our associates offered during these challenging times was unparalleled. With the government recently announcing the Consolidated Appropriations Act, 2021, we will continue to support our stakeholders on these many fronts so that we can all emerge from this time stronger than before. DELIVERING SOLID FINANCIAL RESULTS Even amidst a healthcare crisis, we have continued to deliver strong financial results while conservatively providing for the uncertainties of the impact on our economy and clients. Our bank assets topped $1.7 billion, fueled by our PPP participation; trust assets exceeded $1.3 billion; and our pre-tax, pre-provision net income through the third quarter of 2020 topped $16.9 million. We conservatively added $5.7 million to our allowance for loan losses through September 30, 2020, and exercised strong liquidity and capital management. As a result of this strong financial performance, we have maintained our dividend, resulting in a dividend yield of 3.35% based on our December 31, 2020 closing price of $15.50 per share. While the share price has been volatile throughout 2020, consistent with the banking industry, our long-term total shareholder return has continued to outperform the market, and our peer group, as can be seen in the chart which is included in this letter.
STRENGTHENING OUR BOARD AND GOVERNANCE Led by our Board of Directors, we made several enhancements to strengthen our governance last year. During 2020, long-term directors, Robert W. Kurtz and Elaine L. McDonald retired from the Board with our gratitude and best wishes. We then continued to bring additional talent and perspectives to the Board through our ongoing “board refreshment” program. In July of 2020, we welcomed Patricia Milon to our Board. Patricia brings regulatory and risk management expertise, and currently serves on our Nominating and Corporate Governance Committee, Compensation Committee, as well as the Risk and Compliance Committee. Additionally, last week, we announced the appointments of Sanu Chadha and Christy DiPietro to the Board. Sanu will contribute expertise in strategic process and technology solutions, project management, process improvement, data analytics, and cloud solutions. As the Managing Partner of a consulting company she co-founded, which serves private and government clients both domestically and internationally, she also possesses in-depth small business knowledge, an area of specific focus for First United. Christy, a Chartered Financial Analyst, brings past investment experience managing a $2.3 billion institutional fund and participating in fixed income research and analysis. Her experience and expertise in wealth management will complement the financial expertise of our Board. Over the next few years, we expect our Board refreshment program will result in the strategic evolution of our Board, and we are actively and regularly reviewing potential future candidates. Our Board formalized two important policies last year. Our Nominating and Governance Committee introduced a Board Diversity policy under which the Board will seek to review candidates from a diverse set of backgrounds. This policy ensures director candidates are diverse across a number of dimensions, including race, ethnicity, and gender. Our Board also formalized the Lead Independent Director role, in which John McCullough currently serves. Finally, as previously announced, the Board intends to ask shareholders at the 2021 annual meeting to approve a proposal to declassify the Board of Directors over a period of three years. Currently, the Company’s directors are divided into three classes. Directors of each class serve three-year terms, and the terms of one class expire at the conclusion of each annual meeting of shareholders. This decision to advance this proposal was based on the Board’s evaluation of the Company’s corporate governance practices, feedback from our investors, market views on best-in-class governance practices, and the preferences of leading proxy advisors. The Board believes that declassifying our Board (so that each director stands for election annually, rather than every three years) will underscore the Board’s deep commitment to be accountable to our shareholders, and the Board will strongly encourage shareholders to support this change at the 2021 annual meeting. LOOKING FORWARD The world around us has changed significantly over the past year. However, through the dedication and perseverance of our associates as well as the leadership of our management team and Board of Directors, we have not only adapted but we have learned, grown, and in some cases, embraced new and more e.cient ways to provide financial solutions to our clients. Above all, we believe that 2020 has proven the essential role that our bank plays in our community and for our customers. As we strategically plan for and reimagine the future of community banking, we remain confident in our leadership, our strategy, and the direction of our Company. As we enter 2021, we thank you for your strong support in 2020 and want you to know that we will continue to invest in serving our customers and our communities, which we believe will provide compelling returns for you, our shareholders. Very truly yours, Carissa L. Rodeheaver Chairman, CEO and President, First United Corporation Lead Independent Director, First United Corporation
2021 Key Initiatives and Strategic Priorities Grow Strategically Amplify consumer and small business relationships utilizing community relationship managers and universal relationship advisors Opportunistically identify and hire banking talent to capitalize on market disruption and client acquisition Expand into new markets utilizing Financial Center model and mortgage originations Pursue wealth management M&A and strategic bank partnerships Optimize Profi tability and Enhance Effi ciency Fine tune regional/line of busin Utilize pro Capitalize on existing infrastructure to build stronger revenue streams Implement next stages of operational restructure and consolidation initiative Leverage technology to streamline processes and procedures Create Exceptional Client Experience Provide seamless client experience across all business lines using integrated relationship teams Educate clients on digital banking and technology utilizing high-tech branch network Customiz Develop focused marketing plans utilizing data analytics to increase relationship and product pro Reimagine the Future Develop hybrid working environment to capture effi ciencies and attract/ retain talent Explore real estate partnerships and physical space alternatives Further promote diversity, equity and inclusion in workforce and client base Establish Fintech partnerships to capitalize on digi Optimize shareholder return through a keen focus on future growth, profi tability, effi ciencies, the client experience, and a reimagined future First United Total Shareholder Returns Relative to Peers 1-Year 3-Year CEO Tenure(2) 5-Year First United (33.3%) (4.4%) 62.5% 42.2% SNL Bank Index(1) (15.0%) (9.5%) 38.2% 38.8% 2020 Proxy Peers (20.2%) (12.2%) 39.2% 37.5% (1) SNL U.S. $1B-$5B Bank Index (2) From December 16, 2015 (announcement of Mrs. Rodeheaver’s appointment to CEO) Source: S&P Global as of December 31, 2020, and includes price change and reinvested cash dividends
COVID-19 Response for Stakeholders Quickly responded to COVID-19 through our well-designed and tested Business Continuity Plan, focusing on the health, safety, an Proactive communication and outreach with shareholders, clients and associates regarding enhanced measures and procedures Assisted our associates through work-at-home accommodations, pandemic pay policies, Financial First Responder bonuses, an Excellent delivery for new and existing clients on the Paycheck Protection Program origination and forgiveness, protecting over 17,620 local jobs and funding over $149 million in loans to local businesses (1) Provided COVID-19 loan mo Utilized recent branch enhancements to deliver updated technology to our clients and to properly social distance clients and associates Relieve Supported our communities through continued support of non-pro As of September 30, 2020(2) As of October 30, 2020 IMPORTANT ADDITIONAL INFORMATION First United, its directors and certain of its executive offi cers will be deemed to be participants in the solicitation of proxies from First United’s shareholders in connection with First United’s 2021 annual meeting of shareholders. First United intends t 1-888-692-2654 Member FDIC MyBank.com Our business ties to our clients and communities will withstand the crisis, support our market presence and enhance our competitive positioning long term. Our clients and communities are not just “stakeholders,” but also a key value driver for our shareholders. Enduring associate engagement will strengthen our culture and organization well beyond the crisis. First United understands the long-term impact of our stewardship of human capital.
Exhibit 99.2
The following table sets forth information as of January 11, 2021 relating to the beneficial ownership of the common stock, par value $.01 per share, of First United Corporation (the “Corporation”) by each of its directors, director nominees and executive officers and each other person who may be deemed to be a “participant” in the solicitation of proxies by or on behalf of the Corporation’s Board of Directors.
| Name of Beneficial Owner | Shares Beneficially Owned(1) | Percentage of Shares Beneficially Owned | |||||||
| John F. Barr, Director | 19,781 | * | |||||||
| Brian R. Boal, Director | 11,062 | * | |||||||
| M. Kathryn Burkey, Director | 46,297 | * | |||||||
| Sanu Chadha, Director | 536 | * | |||||||
| Christy DiPietro, Director | 666 | * | |||||||
| Robert L. Fisher, II, Senior Vice President & Chief Revenue Officer | 10,940 | (2) | * | ||||||
| John W. McCullough, Director | 47,658 | * | |||||||
| Patricia Milon, Director | 916 | * | |||||||
| Carissa L. Rodeheaver, Chairman of the Board, President & CEO | 26,782 | (3) | * | ||||||
| Gary R. Ruddell, Director | 20,769 | (4) | * | ||||||
| I. Robert Rudy, Director | 41,731 | (5) | * | ||||||
| Jason B. Rush, Senior Vice President & Chief Operating Officer | 15,397 | (6) | * | ||||||
| Keith R. Sanders, Senior Vice President & Senior Trust Officer of First United Bank & Trust | 12,137 | (7) | * | ||||||
| Marisa A. Shockley, Director | 18,951 | * | |||||||
| Tonya K. Sturm, Senior Vice President, CFO, Treasurer & Secretary | 7,580 | (8) | * | ||||||
| H. Andrew Walls, Director | 57,310 | (9) | * | ||||||
| Notes: |
| * | Less than 1.0%. |
| (1) | Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission. In computing the number and percentage of shares of the Corporation’s common stock beneficially owned by a person, shares of the Corporation’s common stock subject to outstanding options, warrants, rights or conversion privileges held by that person that are currently exercisable or exercisable within 60 days of January 11, 2021 are deemed outstanding for computing the percentage ownership of the person holding such options, warrants, rights or conversion privileges but are not deemed to be outstanding for purposes of computing the percentage for any other person. As of January 11, 2021, a total of 7,110,022 shares of the Corporation’s common stock were issued and outstanding. The inclusion of any shares as deemed beneficially owned does not constitute an admission of beneficial ownership by the named shareholder. |
| (2) | Includes 2,393 shares of Phantom Stock. Phantom stock held in a deferred compensation plan account (“Phantom Stock”). Each share of Phantom Stock represents a deemed investment of deferred compensation funds in one share of Common Stock and gives the officer the right to receive one share of Common Stock or the cash value thereof following the officer’s separation from service with the Corporation. The officer may transfer the funds held in the plan account into an alternative deemed investment option at any time and 5,377 restricted stock units. |
| (3) | Includes 17,995 shares held jointly with spouse, 72 shares held by spouse for benefit of a minor child, 790 shares held in a 401(k) plan account and 7,778 of restricted stock units. |
| (4) | Includes 520 shares owned by Ruddell, LLC of which Mr. Ruddell is owner. |
| (5) | Includes 1,500 shares owned by I. R Rudy Business Trust, and 4,500 shares of Phantom Stock in a deferred compensation plan account. |
| (6) | Includes 135 shares owned jointly with spouse, and 3,973 restricted stock units. |
| (7) | Includes 3,945 restricted stock units |
| (8) | Includes 545 shares owned jointly with spouse, 2,850 shares of Phantom Stock, and 3,835 of restricted stock units. |
| (9) | Includes 14,854 shares owned by Morgantown Printing and Binding, Inc. of which Mr. Walls is owner. |