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First United's shares have traded at a
significant discount to its regional banking peers, and the
company has fallen behind its competitors in making new loans,
according to a letter Driver sent to the bank's board of
directors.
Directors on the bank's board have also stuck around too long,
with an average tenure of nearly 15 years, Driver argued in the
letter.
"Some members have been on the board 25 years," Driver founder
Abbott Cooper said in an interview. "It's a fun club, there's a
lot of prestige being a director at a bank in a small community.
But, no one is (saying) 'Hey, what's going on with the stock?'
They have all the perks of being a public company without
responsibility."
First United Bank did not immediately respond to a request for
comment.
Ahead of the bank's annual meeting earlier this year, Driver had
also called for it to sell itself. Driver had a much smaller
stake in First United at that time. It is now the bank's third
largest shareholder with a more than 5% stake.
Driver has had meetings with First United's board over the past
several months but found it was not receptive to its
suggestions, according to the letter. The investor thinks the
bank's shares, now trading around $21, could fetch $26 to $33 in
a sale, according to the letter.
Cooper said in the interview that without significant changes to
its business, First United was unlikely to reach that valuation
absent a sale.
The activist is urging that First United hire financial advisers
to help the bank find a buyer.
(Reporting by Jessica DiNapoli in New York; Editing by Tom
Brown)
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