<SEC-DOCUMENT>0001104659-20-072278.txt : 20200611
<SEC-HEADER>0001104659-20-072278.hdr.sgml : 20200611
<ACCEPTANCE-DATETIME>20200611112039
ACCESSION NUMBER:		0001104659-20-072278
CONFORMED SUBMISSION TYPE:	DEFA14A
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20200611
DATE AS OF CHANGE:		20200611
EFFECTIVENESS DATE:		20200611

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FIRST UNITED CORP/MD/
		CENTRAL INDEX KEY:			0000763907
		STANDARD INDUSTRIAL CLASSIFICATION:	NATIONAL COMMERCIAL BANKS [6021]
		IRS NUMBER:				521380770
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEFA14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-14237
		FILM NUMBER:		20956575

	BUSINESS ADDRESS:	
		STREET 1:		19 S SECOND ST
		CITY:			OAKLAND
		STATE:			MD
		ZIP:			21550
		BUSINESS PHONE:		3013349471

	MAIL ADDRESS:	
		STREET 1:		19 S SECOND ST
		CITY:			OAKLAND
		STATE:			MD
		ZIP:			21550
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEFA14A
<SEQUENCE>1
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<DESCRIPTION>DEFA14A
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SCHEDULE 14A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Rule 14a-101)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INFORMATION REQUIRED IN PROXY STATEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SCHEDULE 14A INFORMATION</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Amendment No. )</B></P>

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<FONT STYLE="font-family: Wingdings">&#168;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Check the appropriate box:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.5in; text-align: justify; text-indent: -3.5in"><FONT STYLE="font-family: Wingdings">&#168;</FONT>
Preliminary Proxy Statement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.5in; text-align: justify; text-indent: -3.5in"><FONT STYLE="font-family: Wingdings">&#168;</FONT>
Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Wingdings">&#168;</FONT>
Definitive Proxy Statement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Wingdings">&#120;</FONT>
Definitive Additional Materials</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Wingdings">&#168;</FONT>
Soliciting Material Pursuant to Rule 14a-12</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 14pt"><U>First
United Corporation</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name of Registrant as Specified in Its
Charter)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>N/A</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name of Person(s) Filing Proxy Statement,
if Other Than the Registrant)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Payment of Filing Fee (Check the appropriate
box):</P>

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    <TD STYLE="text-align: justify">&nbsp;</TD>
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    <TD STYLE="text-align: justify; width: 5%">&nbsp;</TD>
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    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-family: Wingdings">&#168;</FONT> Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.</TD></TR>
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    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): N/A</FONT></TD></TR>
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    <TD STYLE="text-align: justify">&nbsp;</TD>
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    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(5)</FONT></TD>
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    Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the
    offsetting fee was paid previously.&nbsp;&nbsp;Identify the previous filing by registration statement number, or the form or
    schedule and the date of its filing.</FONT></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="color: Blue"><B>BANKING &amp; FINANCIAL SERVICES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 18pt"><B>&lsquo;The proof is in the results&rsquo;:
First United CEO defends bank ahead of shareholders meeting</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 12pt"><B>By <FONT STYLE="color: Blue">Holden
Wilen</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 12pt"><B>&ndash; Reporter, Baltimore
Business Journal</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 12pt"><B>Jun 10, 2020, 3:19pm EDT</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The CEO of First United Corp. defended her management
team's track record and said she remains focused on making the &ldquo;right business decisions&rdquo; for driving profitability
ahead of the bank's annual shareholders meeting Thursday.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A hotly contested proxy fight with an activist investor who
has been pushing the bank to sell for more than a year will finally come to a head. On the ballot: three individuals nominated
by Driver Management Co. to serve on First United's board of directors. First United is the parent of First United Bank and Trust.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="color: Blue">Abbott Cooper</FONT>, a former
bank industry analyst who heads New York-based Driver, has not shied away from expressing his distrust and displeasure of
First United's management and board. He has characterized the Oakland-based bank's board as &ldquo;entrenched&rdquo; with
little regard for the interest of shareholders. He said First United's best strategy for maximizing its value and providing
returns to shareholders is to sell.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If First United, which has $1.17 billion in deposits as of
March 31, had sold last year, Abbott said the bank could have gotten valuation for shareholders of $26-$30 per share. Driver
has a 5% stake in the bank.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">First United CEO <FONT STYLE="color: Blue">Carissa Rodeheaver
</FONT>disputed Abbott's claims in an interview with the Baltimore Business Journal ahead of the Thursday shareholders meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Rodeheaver argues that First United has provided &ldquo;outsized&rdquo;
total shareholder returns while also playing a critical role as a major employer and the lone bank headquartered in Western Maryland.
Total shareholder return, or TSR, measures a stock's performance, including stock price appreciation and dividends paid over a
given time period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The bank's TSR has taken a hit because of Covid-19, but has
outpaced peers who have also been affected, according to a federal filing. Over one year as of June 1, First United's TSR was
-18.9%. That's better than the SNL Bank Index (-22.9%) and peer groups the bank uses for comparisons.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Similarly, over three years and five years, First United (NASDAQ:
FUNC) calculates its TSR to be ahead of peers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">First United's TSR over three years is 0.5%, compared
to -22.2% for the SNL Bank Index. Proxy peers had a -21.1% return and Institutional Shareholder Services peers had a -19.2% return.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Over five years, First United TSR is 73.4%. The bank
index had a 22% TSR. Proxy peers returned 10.9% and ISS peers returned 8.4%.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&ldquo;We just continue to execute on our strategic plan to
continue to drive profitability which in turn continues to drive shareholder value,&rdquo; Rodeheaver said.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Prior to the Covid-19 pandemic, Rodeheaver said First United
 &ldquo;was really performing well&rdquo; with earnings per share up 23% in 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">After the pandemic hit, like most banks, First United
quickly shifted gears to processing loan applications for the federal government's Paycheck Protection Program. The bank
processed more than 1,000 PPP loans for $146 million supporting 17,000 jobs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Rodeheaver, who grew up in Garrett County and has worked
for First United since 1992, said shareholders should vote against Driver's board nominees because the bank has outperformed
under the supervision of the current leadership.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&ldquo;The total shareholder return for those shareholders
indicates that the board nominees we have up this year have been overseeing that performance and have been helping to provide
direction for the company to lead us on a path that has been profitable for our shareholders,&rdquo; Rodeheaver said. &ldquo;They've
got a proven record and I believe the proof is in the results.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As for why the bank won't pursue a sale, Rodeheaver said First
United's board has had three independent analyses conducted within the last 12 months that have all come back showing the bank
can provide greater long-term returns independently. She also said a sale would have potentially negative consequences for Western
Maryland because consolidation often leads to job losses and less investment in the community.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&ldquo;When you run the process you are looking at your ability
to provide a long-term shareholder return that will be as attractive as a short-term return,&rdquo; Rodeheaver said. &ldquo;Really,
our process has been designed around our long-term value shareholders.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Cooper said TSR is a &ldquo;silly&rdquo; figure because it
is based on past results and not on the company's future prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&ldquo;I'm an actual shareholder, I don't really care what
the stock did in the past,&rdquo; Cooper said. &ldquo;I want to know what it's going to do in the future and what's going to provide
the greatest return for me in the future.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Cooper is more focused on another metric, tangible book
value, which measures how much a company's assets are worth. He said the metric shows First United has struggled to regain
the value it lost in the Great Recession. He also said the path forward for First United is murky because Western Maryland is
a shrinking market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&ldquo;Bottom line, I think [the TSR] is a red herring for
people because it doesn't really tell the story that investors want to know, which is how are you going to make my stock
worth more in the future,&rdquo; Cooper said. &ldquo;They've destroyed values in the past and there's no real plan to
increase value in the future.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Cooper also criticized the bank's argument against
pursuing a sale. If the company doesn't want to sell because of a commitment to Garrett County, then he said First United
should not be trading publicly and instead be taken private.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&ldquo;If First United's primary objective, which I think it
is, is to be there for Garrett County, Western Maryland, then they should not be a public company,&rdquo; he said. &ldquo;They
shouldn't have public shareholders and they should tell everybody.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">An investigation by Maryland's bank regulator and a pending
lawsuit have also cast a shadow on the proxy fight.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">First United claims Driver violated Maryland securities law
by acquiring shares of the company's stock without providing prior notice to the state's Office of the Commissioner of Financial
Regulation. Such a violation could have resulted in Driver being prohibited from voting its shares for five years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Maryland's financial regulatory agency began an investigation,
according to a letter made public by Cooper. Cooper maintains he did not violate any law. A May 22 Settlement and Consent Order
between the commissioner's office and Cooper resolved the matter without making any &ldquo;conclusive findings or determination
as to whether a violation...occurred.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Under the May 22 Consent Order, Cooper agreed to conduct future
business in compliance with Maryland law.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">First United is allowing Driver to vote its shares at the
upcoming meeting but has also filed a lawsuit against the firm in the Circuit Court for Garrett County seeking a a judgment
on whether Driver's votes should be counted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If Driver wins the lawsuit, then the annual meeting vote
as certified will stand. If the court determines that Driver&rsquo;s shares were not eligible to be voted, then First United
said it intends &ldquo;to take the appropriate actions to honor the court&rsquo;s determination.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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