First Community Bankshares, Inc. · NASDAQ:FCBC
First Community Bankshares — First Community Bancshares — Investor Presentation (November 2009)
34 slides from First Community Bankshares's investor presentation, Nov 10, 2009
Slide 1: First Community Bancshares, Inc. November 2009
coats Community Bancshares, Inc. NASDAQ: FCBC November 2009
Slide 2: Forward-Looking Disclosures
Fs First . ; Community Forward-Looking Disclosures Bancshares, Inc. This presentation may include forward-looking statements. These forward- looking statements are based on current expectations that involve risks, uncertainties and assumptions. Should one or more of these risks or uncertainties mate
Slide 3: First Community Bancshares Overview
CHEE iy First Community Bancshares Overview
Slide 4: Investment Highlights
Investment Highlights Bancshares, A $2.3 billion VA, WV, NC and TN branch franchise Strong culture of management and employee ownership 135 years of continuous operation Strong history of core earnings and dividend payments Robust market share in legacy markets and attractive expansion into growth m
Slide 5: Investment Highlights
Investment Highlights Bancshares, Inc. True retail franchise generating low cost core deposits — Over 122,000 customer accounts with 1.93% average cost of funds, below peer average of 2.05% for the three months ended September 30, 2009 = Strong loan quality — NPLs / Loans of 0.88% versus peers of 3.
Slide 6: Experienced, Executive Management Team
Experienced, Executive Management Team Strong culture of management and employee ownership — Established and experienced management team with average tenure > 18 years; total insider ownership of 6.88% Years in Banking Years with FCB John M. Mendez 24 24 President and CEO Robert L. Buzzo 36 36 Presi
Slide 7: Current Franchise Overview: Branch Map
Current Franchise Overview: Branch Map Bancshares, Inc. 71 locations across five-states (Virginia, West Virginia, North Carolina, uegaey k Tennessee and South Carolina ) Markets Attractive urban and suburban markets in the Carolinas, Virginia, West Virginia, and Tennessee Full array of services crea
Slide 8: Current Franchise Overview: Market Demographics and Position
Current Franchise Overview: Community Market Demographics and Position Bancshares, Inc. Legacy Markets Pasceton-Bhadeld, WV-VA, ‘Nichole, WV pang, WY ‘Wyoming, WY Beckley, WY Cladabneg, WT Lega, WV MSA/Couny Tord Weighted Average: MSA/County Growth Marlcets Staterile-Moocerile, NC Jobason Cig, TN Ri
Slide 9: Strategic Direction
Strategic Direction Balanced Growth and Profitability Strategy Alternative Solution vs. Large Banks Position as Regional Consolidator Pursue Growth Markets around Key MSA's Develop Legacy Markets/Earnings Driver Diversify Revenues into Associated Financial Service Lines (Wealth and Insurance)
Slide 10: Three Pillars
Three Pillars CREDIT QUALITY —_ EARNINGS LEADERSHIP GROWTH THROUGH CONSOLIDATION fii 10
Slide 11: Credit Quality
Credit Quality " Protect the culture/defend underwriting " Defensive posture on real estate C Se First . oe tne. = Cutting all exposures to A&D through remainder of the cycle US. WV VA Mortgage Delinquencies (% 90+ Days Delinquent 2Q 2009) FCB = Outstandings have fallen 3.39% 2.50% 242% 0.36% = Carr
Slide 12: Earnings Leadership
Earnings Leadership = Efficiency — Conservative business approach — Low cost structure in headquarters region a3 2008 Sate See 2008 58.23% 54.33% — Lower cost workforce = Core Deposits Top Market Share — Built over years of operation oe ‘ . i ¥ Market — Value of the franchise Deposits — Strong marke
Slide 13: Efficiency
Couns Communi Efficiency Bancshares, Inc, = Low cost structure = Consistently outperformed peer group 74.9 70.0% MFCBC MPeers 68.3 66.0 65.0% 64.3 624 611 | 53.338 so. 59.2 * saa 59.4) 55.0% + ssa 51.3] sil 50.0% 4 7 2004 2005 2006 2007 2008 Q109 Q209 Q309 esc: inchade pbcly taded banks with aes ber
Slide 14: Key Franchise Differentiator: Retail Franchise with Core, Low Cost Deposits
Key Franchise Differentiator: CREE ay Retail Franchise with Core, Low Cost Deposits Bancshares; Inc. Deposit Composition Account Balances as of September 30, 2009 as of September 30, 2009 Period End Accounts Balance WAR. Demand 36,190 $198,107 Interest-Beasing Demand 34,651 216,184 Savings 25,321 35
Slide 15: Cost of Funds
Cost of Funds Bancshares, Inc. 3.56 3.5% 4 mFCaC_mPeers 3.58: 3.14) 3.0% + 281 275 2.46) 2.5% + aos 2.23 = 2.16 2.12 2.09 aos 2.05 1.93) 2.0% + i | 1.5% : : a 2004 2005 2006 2007 2008 Q109 =.Q209 =Q309 ‘Pers inciode pubcly tad banks with aset berseen 51 and § 3 ion in NC, SC, VA, and WV (ENC, CBN, C
Slide 16: Net Interest Margin
Net Interest Margin Bancshares, Inc. 4.5% 7 “gi 4 433 422 433 mrcaC mPeers 4.00 387 4.0% 4 za x 3.55 768 3.62 eas 331 3.5% = aut 3.0% + 2.5% 2.0% 4 7 2004 2005 2006 2007 2008 Q109 =Q209 §=Q309 ‘Peer inate publicly uaded banks wah artetsbermsen $1 and $ 3 nlioa ui NC, SC, VA. and WV BNCN, CBEGN, CFNL
Slide 17: Key Franchise Differentiator: Rapid Growth in Non-Interest Income
Key Franchise Differentiator: COE ty Rapid Growth in Non-Interest Income Bancshares, Inc, = Since 2004, the Company has grown non-interest income sources to reduce interest rate cycle exposure — Increased wealth management line of business — Grown insurance line of business — Re-engineered retail pr
Slide 18: Opportunity: M&A
M&A Opportunity: FCB is a strong partner FCB provides exit strategy for institutions under pressure Look to augment existing franchise Opportunistic Assisted transactions Strong currency Predominately stock Growing opportunity throughout credit cycle Filters: Like minded community bank organizations
Slide 19: Recent Acquisitions: Bank & Thrift Transactions
Recent Acquisitions: CoE iy Bank & Thrift Transactions Bancshares, Inc. Coddle Creek Financial Corp Acquisition TriStone Community Bank Acquisition = Expanded our franchise into the dynamic Iredell and = Expands our franchise in the Winston-Salem market ‘Mecklenburg County Markets and retain strong
Slide 20: Recent Acquisitions: Insurance Agency Transactions
Recent Acquisitions: Comtraes Insurance Agency Transactions Bancshares, Inc, = Acquired GreenPoint Insurance (High Point, NC) in September 2007 — Full service insurance agency headquartered in High Point, NC — Provider of commercial and personal insurance lines, employee benefits and life and health
Slide 21: Loan Portfolio: Diversified Portfolio with Strong Loan Quality
Loan Portfolio: Diversified Portfolio with Strong Loan Quality Strong loan quality — NPLs / Net Loans at September 30, 2009 of 0.88% — Total delinquency a low 1.62% Geographically diversified portfolio across the region Highly Granular: — Majority of loans in $30,000 to $300,000 range Top 10 loans i
Slide 22: Loan Portfolio: Strong Loan Quality
Loan Portfolio: Strong Loan Quality Non-Performing Loans / Total Loans 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% MFCEC. mPeers. 3.00 O88 92 I 2004 2005 2006 ©2007 Reserves / Nonperforming Loans 1.40% 1.20 400% wren soo, 350% pile 300% 0.80% 250% 0.60% 200% 0.40% 150% 0.20% 100% 50% 0.00% 2007
Slide 23: Loan Portfolio: Residential Real Estate Portfolio
Loan Portfolio: CoS iy Residential Real Estate Portfolio Bancshares, Inc. = The residential real estate portfolio is Residential Real Estate — made up of 10,997 loans with an Total Portfolio of $652.1 million average balance of $59,301 Geographic Dispersion = Third quarter 2009 consumer credit South
Slide 24: Loan Portfolio: CRE Non-Owner Occupied
Xe First Loan Portfolio: Community CRE Non-Owner Occupied Bancshares, Inc. The Company holds 1,299 CRE Loans with an average balance of $260,680; the average term of the portfolio is 93 months and 25% of the loans are floating rate 48% of CRE Loans are owner-occupied and the composition of non-owner
Slide 25: Loan Portfolio: A&D and Construction
Loan Portfolio: CORE ity A&D and Construction Bancshares, Inc. =" The Company holds 774 A&D and Construction Loans with an average balance of $179,528 = The A&D and Construction loan book is geographically diversified with the three largest market areas being: NC 51%, WV 30% and VA 17% = A&D and Con
Slide 26: Third Quarter 2009 Update
COREE try Third Quarter 2009 Update Bancshares, Inc. = Third quarter GAAP net loss of $11.30 million and diluted EPS of $(0.71) per share. — Includes pre-tax securities impairment charges of $30.81 million, acquisition gain $4.49 million, and merger-related expenses of $1.51 million = Core earnings
Slide 27: Current Franchise Overview: Financial Results
Current Franchise Overview Financial Results Bancshares, Inc. 2005, 2006 2007, 2008 Qi 09 Q209 Q3 09 Net income available to common shareholders (as-reported) $ 26,303 § 28,948 $ 29632 $ 2826 $ 4,659 $ 1,827 §$ (12,312) Diluted EPS $ 232 $ 257 §¢ 262 § 025 $ 040 §$ O14 $ (071) Core net income * $ 26
Slide 28: Investment Portfolio: Composition
Investment Portfolio: Composition ble-for-Sale Securities (“AFS’ as of September 30, 2009 Fair Market Value of $575.80 million Munis 12850 24.05%
Slide 29: Investment Portfolio: Mortgage Backed Securities
Investment Portfolio: CREE iy Mortgage Backed Securities Bancshares, Inc. ‘Mortgage Backed Secuci jnrealized Cumulative Cost Gain/ (Loss) 3 290,606 $ 284,092 § 6.514 cece S$ 31196 $ 27134 $ (looses) § 4,252 Pummcmo PredgieMac The Company made a cumulative effect adjustment of $10.2 million pre-tax,
Slide 30: Investment Portfolio: Trust Preferred Securities
Contin Commtiity Investment Portfolio Trust Preferred Securities " Single-Issue — $37.45 million market value at September 30* representing 66% of par value * Pooled Trust Preferred holdings — $23.10 million market value at September 30" representing 21% of par value September 30, 2009 Fair Amortize
Slide 31: Why buy FCBC?
Why buy FCBC? Bancshares’ = A $2.3 billion VA, WV, NC and TN branch franchise — Robust market share in legacy markets and attractive expansion into growth markets = Positioned as regional consolidator = True retail franchise generating low cost core deposits — Over 120,000 customer accounts = Strong
Slide 32: Why buy FCBC?
Why buy FCBC? Bancshares; Inc. = Resilient net interest margin of 3.68% for Q3 2009 = Strong non-margin, fee-based revenue diversification = Strong dividend yield at over 3% = Strong upside potential for TBV = Positioned to emerge as one of the strongest players in the region and build one of the be
Slide 33: First Community Bancshares, Inc.
ee First . Community Bancshares, Inc. YOUR FIRST FINANCIAL RESOURCE
Slide 34: Non-GAAP Reconciliation of Core Earnings
Non-GAAP Reconciliation of Core Appendix A Earnings nos 3006 2007 008g ——_—gnon ga Netincom avaible to comm shareholders (4 epored) $ 16303 $ w08e $ mer 5 30 $ sq § 2405 § CaO) sect gat o @ a Dy as 6 Other han temporary impsiments : : : pa x 37630811 ch sak gs 36 amy) : : : : : Kogence a . : : : a A
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