First National Corporation · NASDAQ:FXNC
First National — Investor Presentation (May 2017)
33 slides from First National's investor presentation, May 9, 2017
Slide 1: Investor Presentation May 2017
Investor PresentationMay 2017
Slide 2: Forward-Looking Statements
Forward-Looking Statements The Company makes forward-looking statements that are subject to risks and uncertainties. These forward-looking statements include statements regarding profitability, liquidity, adequacy of capital, the allowance for loan losses, interest rate sensitivity, market risk, gro
Slide 3: Corporate Profile
Corporate Profile 3 Branch Map Overview Shares of common stock quoted under “FXNC” on OTC Markets Group exchangeCommunity banking since 190714 branches across 6 counties and 3 MSAs throughout VirginiaWealth management division $196 million AUM Financial Highlights Total assets $727.3Total loans held
Slide 4: Strengths
Strengths Low-cost deposit portfolio at 0.24%Non-interest income at 1.10% of average assetsSuperior asset quality with NPAs/Assets of 0.25%Management team with track record of successWealth management with full trust powersDeep relationships in growing Virginia marketsDemonstrated ability to execute
Slide 5: Customers Market penetration
Customers Market penetration 5
Slide 6: Experienced Team
Experienced Team Executive Role Industry Experience Years in Market Scott Harvard President/CEO 40 years 7 years Dennis Dysart Sr. EVP/COO 24 years 24 years Shane Bell EVP/CFO 23 years 15 years Samuel Crow, Jr. EVP/CCO 26 years 3 years Butch Smiley Regional President 35 years 35 years Christopher Ma
Slide 7: Strategy
Strategy Grow assets without adding significant overhead Deploy cash and securities into loans Increase market share in vibrant markets Leverage seasoned bankers in new markets, banker lift-outs, LPOs Enter new markets, gain scale and efficiencies Assume deposits for loan growth Diversify revenue wi
Slide 8: Strategy Execution
Strategy Execution Successful integration of branch acquisitionRemix of assets post acquisition requiring only moderate organic growthSuccessful team lift out in south region marketWell-executed drive to improve efficiencyGrowth of non-interest bearing depositsReinvigorated loan production with supe
Slide 9: Financial Performance
Financial Performance 9 (dollars in thousands) At or for the year ended, except per share data 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 CAGR Balance Sheet Assets $532,697 $522,890 $518,165 $692,321 $716,000 7.7% Loans, net 370,519 346,449 371,692 433,475 480,746 6.7% Deposits 466,917 4
Slide 10: Peer Comparison
Peer Comparison Source: SNL Financial. Peers defined as banks in Virginia with assets between $500 million and $1 billion as of 12/31/16. Capital ratios are for bank subsidiaries at 12/31/16. 10 Return on Assets Return on Equity Efficiency Ratio Net Interest Margin Loans / Deposits Cash & Securities
Slide 11: Asset Quality
Asset Quality Improved risk management Nonperforming assets comprised of non-accrual loans and other real estate owned. Peers defined as banks in Virginia with assets between $500 million to $1 billion as of 12/31/16. Dollars in millions. Financial information at March 31, 2017 is unaudited. NPAs /
Slide 12: Earnings Per Share
Earnings Per Share 5 consecutive quarters of earnings improvement Basic and diluted earnings per share. Financial information at March 31, 2017 is unaudited. 12
Slide 13: FXNC Stock Performance: 1-year
FXNC Stock Performance +43% 1-year price change 13 $12.85 Source: SNL Financial, as of December 30, 2016
Slide 14: FXNC Stock Performance: 3-year
FXNC Stock Performance +127% 3-year price change 14 Source: SNL Financial, as of December 30, 2016 $12.85
Slide 15: FXNC Stock Performance: year-to-date 2017
FXNC Stock Performance +18% year-to-date 2017 15 Source: SNL Financial, as of April 28, 2017 $15.20
Slide 16: Drivers of Value: Efficiency Ratio and Total Assets
Efficiency Ratio Total Assets Drivers of Value 16 Source: SNL Financial. U.S. banks with assets less than $10 billion
Slide 17: Improving Efficiency: Expense reduction
Improving Efficiency Expense reduction Dollars in millions. Financial information at March 31, 2017 is unaudited. 17
Slide 18: Improved Efficiency: Revenue growth
Improved Efficiency Revenue growth 18 Dollars in millions. Financial information at March 31, 2017 is unaudited.
Slide 19: Improved Efficiency: Net income growth
Improved Efficiency Net income growth 19 Dollars in millions. Financial information at March 31, 2017 is unaudited.
Slide 20: Opportunity for Efficiency
Opportunity for Efficiency Drive revenue with loan growth Loans / Assets 20 Source: SNL Financial. Peers defined as banks in Virginia with assets between $500 million to $1 billion as of 12/31/16. Financial information at March 31, 2017 is unaudited.
Slide 21: Asset Growth
Asset Growth Total Assets 21 $532.7 $522.9 $518.2 $692.3 $716.0 $727.3 Dollars in millions. Financial information at March 31, 2017 is unaudited.
Slide 22: Growth Opportunities: Organic
Growth Opportunities Organic Communities with large regional medical centers, federal government and higher education, which includes Shenandoah University, James Madison University and Mary Baldwin University. Low unemployment rates. Projected population 22 Source: Virginia Employment Commission, M
Slide 23: Growth Opportunities: Organic market share
23 Growth Opportunities Organic Increase market share by leveraging seasoned bankers in vibrant markets Source: SNL Financial 6/30/16
Slide 24: Growth Opportunities: Expansion
Branch/deposit purchasesTeam lift outsLoan production officesPotential MarketsCharlottesvilleRoanokeFauquier County, Northern VirginiaRichmondHarrisonburgMartinsburg 24 Growth Opportunities Expansion
Slide 25: Growth Opportunities: Total Number of Virginia Banks
25 Growth Opportunities Total Number of Virginia Banks Source: FDIC
Slide 26: Growth Opportunities: Whole bank acquisitions
Growth Opportunities Whole bank acquisitions Source: SNL Financial Number of Virginia Banks by Asset Size 26
Slide 27: Stock Profile
Stock Profile Source: SNL Financial, data as of April 28, 2017Closing price as of April 28, 2017Most recent cash dividend paid on March 17, 2017At March 31, 2017 Ticker symbol FXNC Exchange OTC Current market price (1) $15.20 Common shares outstanding 4,940,766 Market capitalization $75.1 million In
Slide 28: Value Proposition
Value Proposition Proven management teamLow-cost deposit funding available for loan growthHigh level of non-interest incomeDeep relationships in robust growing marketsFocus on efficiency as a driver of valueDisciplined loan growth with low levels of NPAs 28
Slide 29: Appendix
Appendix 29
Slide 30: Diversified Loan Portfolio
Diversified Loan Portfolio Loan Composition 30 At 12/31/16
Slide 31: Loan Composition: Commercial Real Estate Detail
Loan Composition Commercial Real Estate (CRE) Detail CRE Owner-Occupied CRE Non Owner-Occupied ($000) Office/Retail Buildings 6.9% 33,320 Other 2.4% 11,609 Industrial/Warehouse 2.0% 9,832 Auto (Sales/R&M) 1.8% 8,742 Office/Retail Condo 1.8% 8,642 Golf Courses 1.1% 5,487 Restaurants 0.9% 4,412 Religi
Slide 32: Low Cost Deposits
Low Cost Deposits Deposit Composition Non-maturity deposits 80% of total depositsLow cost funding of 0.22%Comprised of 62% personal, 38% business$14 thousand average balance of non-maturity deposits 32 At 12/31/16
Slide 33: Contact
Scott Harvard, President and CEO(540) 465-6121sharvard@fbvirginia.comShane Bell, Executive VP and CFO(540) 465-6130sbell@fbvirginia.com 33