First United Sets The Record Straight Regarding Driver’s False Narratives And Mischaracterizations - WIRE.RealEstate

First United Sets The Record Straight Regarding Driver’s False Narratives And Mischaracterizations

May 23, 2020 11:05 AM ET

 First United Corporation, a bank holding company and the parent company of First United Bank & Trust (the “Bank”), today announced that it mailed a letter to shareholders in connection with the Company’s upcoming Annual Meeting of Shareholders (the “Annual Meeting”) to be held on June 11, 2020 to address certain misleading statements advanced by Driver Management Company LLC (“Driver”).

The full text of the letter is as follows.


May 12, 2020

Dear Fellow Shareholders,

We believe Driver has advanced specific false narratives in an attempt to mislead shareholders and in furtherance of its singular objective: a sale of First United. We urge you to not be fooled by Driver, and to consider the actual facts of the matter:



False Narrative: First United’s Board of Directors (the “Board”) and management team haven’t delivered results for shareholders.


Reality: First United has consistently delivered superior returns for its shareholders.

Since the 2008 financial crisis, and for nearly a decade before Driver’s campaign, First United has outperformed its peers1, Driver’s own peer group as well as the SNL Bank Index.2

This is true for all relevant short- and long-term holding periods prior to Driver’s campaign, and is particularly true under the strategy that has been formulated and executed during Ms. Rodeheaver’s tenure as CEO.

This has also held true in the current environment, from the time Driver announced its campaign until today.



False Narrative: A sale of First United would be in the best interests of shareholders. 


Reality: Driver is attempting to force the sale of First United for its own short-term financial gain with no consideration for other shareholders.

First United, under the leadership of Ms. Rodeheaver and the Board, has been executing a strategy to steadily grow the business and lower costs every year, which in turn drives consistently improved profits, tangible book value per share, total net loans, and total deposits. Delivery on these objectives has resulted in compounding returns for   shareholders. 

Our board and management team routinely evaluate multiple strategic options ranging from a sale to a change in strategy, and with the help of independent financial advisors in 2019 reviewed Driver’s thesis, determining that a sale of First United would not be in the best interest of the Company’s shareholders. Selling the bank was not in shareholders’ best interests six months ago, and it certainly isn’t now.

In fact, pursuing Driver’s “strategy” now, in the current economic environment, would put the Company at serious risk, as the recent market downturn has negatively affected most bank stocks and investors, and any potential buyers have grown wary of a potential recession.

Further, any claim by Driver that pursuing a sale process earlier would have benefitted shareholders ignores the fact that running a proper sale process that maximizes value for shareholders is a time-consuming process, and being in the middle of such a process when the current crisis struck could have meaningfully harmed First United and its investors. Given that Driver’s principals frequently tout their investment banking backgrounds they surely know this to be the case.



False Narrative: Presenting Driver’s nominees as qualified, while claiming First United’s directors are unqualified and misaligned with shareholders.


Reality: First United’s nominees have a diverse mix of skills and experience that tie directly to our strategy, whereas Driver’s nominees lack relevant expertise and in some situations Driver has mischaracterized their experience.

First United’s nominees remain focused on overseeing management’s execution of a successful business strategy that hinges on continuing to fortify the Company’s excellent relationships with its customers and the community.  This strategy has, in fact, delivered – and we are confident that it will continue to deliver – strong results and maximized long-term value for shareholders. First United’s nominees, John W. McCulloughJohn F. BarrBrian R. Boal and Marisa A. Shockley, are all additive to the Board and have strong ties to the different communities the Bank serves.

On the contrary, Driver’s nominees – Michael J. DriscollLisa Narrell Mead and Ethan C. Elzen – have no experience serving on the Board of a company listed on a major exchange, minimal community-oriented business leadership experience, no knowledge of our markets, and own altogether less than 0.1% of First United shares. As nominees of Driver, but owners of almost no shares, will these individuals look out for all shareholders’ interests or just Driver’s?

Further, Mr. Elzen, whose banking sector experience Driver emphasizes, is president of a billionaire’s privately-controlled online bank that has a radically different business model than that of First United, while also notably underperforming First United in any comparable and meaningful way.

Driver’s unqualified candidates would potentially replace not only our Independent Lead Director, but also some of the newest additions to our Board, disrupting the Board’s ongoing and strategic refreshment process, and creating untimely distractions within the Company and the business when strategic focus and delivery for shareholders and stakeholders is mission critical..



False Narrative: Claiming unspecified “irregularities” in annual meetings from 10 or more years ago.


Reality: Driver is grasping at straws, trying to create issues from a decade ago, regarding shareholder votes that have never been questioned by a regulator, a shareholder or any other party.

Driver claims to have discovered “irregularities” in connection with the Company’s proposal to declassify the Board at the 2010 Annual Meeting of Shareholders, but appears to simply be unfamiliar with the concept of fractional shares, which many of our shareholders who participate in our dividend reinvestment program understand well, even if Driver’s former investment banker principals do not. Additionally, the Board unanimously supported the declassification proposal. This is yet another reckless effort by Driver to mislead shareholders and distract them from the present-day key issues at hand, particularly Driver’s one-track agenda and lack of qualified nominees.



False Narrative: Accusing the Company and Ms. Rodeheaver of influencing an ongoing Maryland regulatory investigation into possible violations of Maryland by Driver.


Reality: First United is not to blame if Driver failed to comply with Maryland law that applies equally to all shareholders.

In an effort to distract shareholders, Driver continues to mislead shareholders by making materially false and unsubstantiated allegations that Ms. Rodeheaver has used her position as Chairman of the Maryland Bankers Association and its access to the Maryland Commissioner of Financial Regulation to impact the outcome of Driver’s proxy fight.  This is simply not true.  The fact is that Driver is under investigation by the Office of the Maryland Commissioner of Financial Regulation with respect to Driver’s acquisitions of shares of First United in violation of Maryland law.  This may result in Driver being unable to vote its shares of First United for five years, including at the upcoming Annual Meeting. We have cooperated fully as we would with any regulatory matter and we have not sought to unduly influence or control the outcome of this investigation.



False Narrative: The combined role of Chairman and CEO wields excessive power.


Reality: First United has a strong Lead Independent Director, John W. McCullough, who provides valuable and necessary oversight.

As Lead Independent Director, Mr. McCullough provides leadership for the directors on the Board, and provides counsel and oversight to the Chair, Ms. Rodeheaver.  Mr. McCollough also regularly holds executive sessions of the Board without management present in order to ensure that the non-executive directors of the Board independently review First United’s strategy.  This promotes an ecosystem in the boardroom where the Board can (and in many cases does) challenge management. Additionally, in keeping with leading standards for an independent lead director, Mr. McCullough plays a central role in the Board’s shareholder engagement efforts.

Since the time Mr. McCullough became Lead Independent Director, he has spearheaded and overseen a Board and management transition program under which Mr. Barr, Mr. Boal and Ms. Shockley were appointed to the Board, five directors will have retired and First United’s CEO, CFO, CRO and COO have been refreshed.  As these initiatives have taken place during Mr. McCollough’s tenure as Lead Independent Director, First United shares have generated over twice the returns of the SNL U.S. $1B$5B Bank Index, outperforming it by over 50%.3

With the Annual Meeting quickly approaching, we urge shareholders to see through Driver’s false and misleading statements, and to support your Board’s highly-qualified and independent candidates —- John W. McCulloughJohn F. BarrBrian R. Boal and Marisa A. Shockley — who have overseen substantial outperformance and been the architects of meaningful improvements across the business.

If you have any questions or require any assistance with respect to voting your shares, please contact the Company’s proxy solicitor, Morrow Sodali LLC:

509 Madison Avenue, Suite 1206
New York, NY 10022
Toll Free: (800) 662-5200

Shareholder Contact
Morrow Sodali LLC
Mike Verrechia/Bill Dooley
(800) 662-5200

Media Contact
Prosek Partners
Brian Schaffer / Josh Clarkson / Kristen Duarte
(646) 818-9229 / (646) 818-9259 / (646) 818-9074 / /


First United Corporation is the parent company of First United Bank & Trust, a Maryland trust company with commercial banking powers, and two statutory trusts that were used as financing vehicles.  The Bank has four wholly-owned subsidiaries: OakFirst Loan Center, Inc., a West Virginia finance company; OakFirst Loan Center, LLC, a Maryland finance company; First OREO Trust, a Maryland statutory trust that holds and services real estate acquired by the Bank through foreclosure or by deed in lieu of foreclosure; and FUBT OREO I, LLC, a Maryland company that likewise holds and services real estate acquired by the Bank through foreclosure or by deed in lieu of foreclosure.  The Bank also owns 99.9% of the limited partnership interests in Liberty Mews Limited Partnership; a Maryland limited partnership formed for the purpose of acquiring, developing and operating low-income housing units in Garrett County, Maryland.  The Corporation’s website is

See Campaign:
Contact Information:
Morrow Sodali LLC
Mike Verrechia/Bill Dooley
(800) 662-5200

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