Driver Management Co. LLC, an investment firm in New York City that specializes in banks, has gone public with its demand that First United Corp.’s board of directors publicly explore the sale of the Oakland, Md., financial institution, which has several branches in the Morgantown area.
Driver holds 5% of First United stock and believes the stock is undervalued and the board is overly focused on keeping the trust company independent.
“A lot of investment banks have reached out to First United to host meetings for them with institutional investors to make the case for remaining independent, but as far as we know, despite their claims that they want to communicate with shareholders, they are not taking advantage of opportunities to do so,” Abbott Cooper, founder and managing member of Driver, said in a statement to The Dominion Post.
Locally, First United has locations under the name First United Bank & Trust in Suncrest Towne Centre, Star City and Sabraton, as well as Bridgeport, Keyser, Martinsburg, Piedmont, Keyser, Inwood and Falling Waters.
“As indicated in our recent filings, we will continue to focus our time and attention on executing our strategy to maximize value for all shareholders, which is of paramount concern to First United’s Board of Directors,” Carissa Rodeheaver, chairman, president and CEO of First United said in a statement to The Dominion Post. “We appreciate the support from the local community, including our valued customers and shareholders, and look forward to continuing to serve the financial needs of our community.”
On Thursday, First United’s board announced a 13-cents a share cash dividend for shareholders payable Nov. 1. Its stock closed at $22.28 a share at the end of trading Thursday.
In an 18-page memorandum to shareholders dated Sept. 26, Driver said the financial institution is under-performing and its stock should be selling between $26 to $33 a share. But, a Wall Street investment firm, New Constructs recommended buying First United stock in a Sept. 26 report.
“Driver believes First United is worth significantly more than its current trading price in a sale,” Cooper said in his email. “We’ve provided the board with a detailed analysis supporting this conclusion while also repeatedly inviting the disclosure of any credible plan that suggests First United can deliver sale-level value to shareholders as a standalone bank.”
First United has $1.4 billion in assets and 25 locations in West Virginia and Maryland.
Abbott said if the First United board does not explore a sale, or take action to improve shareholder value, then Driver will nominate its own shareholders at the trust company’s 2020 annual meeting.
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