First Community Bankshares, Inc. · NASDAQ:FCBC
First Community Bankshares — First Community Bancshares — Keefe, Bruyette & Woods Community Bank Investor Conference 2010
32 slides from First Community Bankshares's conference presentation, Jul 27, 2010
Slide 1: First Community Bancshares, Inc. KBW Community Bank Investor Conference
Contin, Community Bancshares, Inc. NASDAQ: FCBC Keefe, Bruyette & Woods Community Bank Investor Conference July 28, 2010
Slide 2: Forward-Looking Disclosures
Com 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 materialize or should u
Slide 3: First Community Bancshares Overview
First Community Bancshares Overview
Slide 4: Investment Highlights
Investment Highlights Serine Community inc, = A $2.2 billion VA, WV, NC and TN branch franchise 135 years of continuous operation Strong history of core earnings and dividend payments Robust market share in legacy markets and attractive expansion into growth markets Positioned as regional consolidat
Slide 5: Investment Highlights
Investment Highlights 3 Fist Com munity linc. Exceptional balance sheet profile Strong loan quality — NPLs/Loans of 1.46% June 30, 2010 * — NPAs/Assets of 1.23% June 30, 2010 * — NCOs/Avg Loans of 0.89% Q2 2010 Strong pre-tax, pre-provision core income Resilient net interest margin of 3.92% for Q2 2
Slide 6: Experienced Executive Management Team
Com Experienced, Executive Management Team Bancshares, Inc. = Strong culture of management and employee ownership — Established and experienced management team with average tenuse > 19 years; total insider ownership of 7 Years in Banking ‘Years with FCB John M. Mendez 25 25 President and CEO Robert
Slide 7: Current Franchise Overview: Branch Map
Current Franchise Overview: Branch Map Bancshares, Inc. = 69 locations across five-states (Virginia, West Virginia, North Carolina, Legacy Tennessee and South Carolina ) Markets = Attractive urban and suburban markets in the Carolinas, Virginia, West Virginia, and Tennessee = Full array of services
Slide 8: Current Franchise Overview: Growth Markets
Current Franchise Overview: Growth Markets * MSA population of 480,000 * Unemployment declined to 9.4% * Large employers include Wake Forest University and Baptist Hospital, Novant Health, RJ Reynolds, and Hanes Johnson City, Tennessee = Recently installed local management team = MSA population of 4
Slide 9: Current Franchise Overview: Market Demographics and Position
Current Franchise Overview: Market Demographics and Position
Slide 10: Key Franchise Differentiator: Retail Franchise with Core, Low Cost Deposits
Key Franchise Differentiator: Retail Franchise with Core, Low Cost Deposits Deposit Composition as of June 30, 2010 Majunto ma 3 Th = Over 118,800 customer accounts «No brokered deposits Account Balances as of June 30, 2010 Accounts Demand 34131 $206,514 0.00% Intesest-Beasing Demand 36449 245,699 0
Slide 11: Allowance for Loan Loss Revisions
Allowance for Loan Loss Revisions Quarterly ‘Reported provision Revised provision Reported DEPS Revised DEPS Reported allowance Revised allowance ‘Year-To-Date Reported provision Revised provision Reported DEPS Revised DEPS March 31, September 30,
Slide 12: Financial Reform Regulation Impact
Serine Community Financial Reform Regulation Impact " Increased regulatory burden — Over 500 new regulations expected — Over 90 new reports " Debit card interchange fee regulation — Expect lower levels of interchange revenue despite falling within the $10 billion exemption — Annualized interchange r
Slide 13: Reg E Effect
serist Commu Reg E Effect omim my = Response opt-in campaigns has been overwhelmingly positive Overdraft Priviledge Income At Risk To Reg E Changes 2B
Slide 14: Financial Reform Regulation Impact
Serine Community Financial Reform Regulation Impact = FDIC assessment base — Change to total assets less tangible capital — Should lower premium expense — Likely to increase competition for deposits = FDIC reserve ratio increased to 1.35% — Banks under $10 billion not required to fund difference thr
Slide 15: Strategic Direction
Strategic Direction cane Bancshares; linc. = Transformational growth to $5 billion — Targeted strategic bank acquisitions + Fill in primary markets + Attractive price levels — FDIC-assisted transactions + Possible larger transactions + Primary and secondary markets = Continue diversification of reve
Slide 16: M&A
M&A Serine Community 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 b
Slide 17: FDIC Opportunities
3 Fist FDIC Opportunities = The primary focus of M&A activity today = Objectives — One or more transactions within our primary or secondary markets — Lead transformational growth — Expect material accretion to TBV and EPS = Planning and Process — Developed integration plan using internal and externa
Slide 18: FDIC Opportunities
FDIC Opportunities ee First Community Baneares, linc. = Why will we be successful? Strong partner Well-suited geographically History as an integrator Converted 25 deals in 26 years Two healthy bank deals in the last 22 months High number of emerging opportunities 18
Slide 19: FDIC Opportunities
FDIC Opportunities = Banks under $1.15 billion with Texas Ratios greater than 100 or under regulatory directive to raise capital = Represents $10.50 billion in opportunities 1°
Slide 20: Loan Portfolio: Diversified Portfolio with Strong Loan Quality
Loan Portfolio: Diversified Portfolio with Community Strong Loan Quality = Strong loan quality — NPLs / Net Loans at June 30, 2010 of 1.46% (Includes TDR’s) — Total delinquency of 1.70% "Geographically diversified portfolio across the region "Highly Granular: — Majority of loans in $30,000 to $300,0
Slide 21: Commercial Real Estate Portfolio
Commercial Real Estate Portfolio Lager Retz $ 22 $ ss $s $$ GT $m RelEsne- Oras: Ome 3455 owe 378 Stopping Caer ass. pa) Ren Sona Alooe sae 40st Of Medal To ase 5308 (fia —Penfeiona aos aac Halo - : S570 Ho es 2395 coos a Teal z 20 5s ES The Company holds 1,263 CRE Loans with an average balance of $
Slide 22: Asset Quality Ratios
Asset Quality Ratios Non-Performing Loans / Total Loans Reserves / Non-Pesforming Loans “Gy ‘Net Charge-Offs / Average Loans Reserves / Total Loans ‘Pee inh psy eat bat ih ere sn illon a NC, SC, Eas TN Vad TV NEN, CHEN, CFNL, CHO, CHEN CUBS, VBS, FENG, FFCH,FNBN, GRAN, (GAN, FRU, NBEG FEB PPE, SBT,
Slide 23: Summary of 2Q10 Earnings
3 Fist Summary of 2Q10 Earnings Commu linc. ‘Three Monthe Ended Sit Monthe Ended June 3, June 3, 2010 2009 Change 20102009" Change steert Income 1850 § 163213 S STAG § 32758 Provision for Loan Lozeet 209% FDIC coste (Othas Nouiateert Expense ain ass 359% 509 wo% Er Ps (aes 02 $ 014 tor «$057 5 05 I
Slide 24: Balance Sheet Summary
Balance Sheet Summary Cath & Seoustie Toul nuice for Laan Lovtet Othe ‘Total Assete Interest Benang Deporte Te Deposit Show team Bosrowings “2g! ‘Long-temm 3 Othe nity ‘Total Liabilities & Equity «Short and long term borrowings have decreased 2. June 30, 2010 December 31, 253966 2,246,546 2,246,546
Slide 25: Financial Performance Highlights: Efficiency, Cost of Funds, Net Interest Margin
Financial Performance Highlights: Community Efficiency, Cost of Funds, Net Interest Margin Bancshares, Inc. Efficiency 20 ge 300TH LD QD Pee inh psy eat bat ith eee sn illon a NC, SC, Eas TN, Van TV NEN, CHEN, CFNL, CHO, CHEN CUBS, VBS, FENG, FFCH,FABN, GRAN, (GAN, FRU, NBEG FEB PPE, SBT, SCAT, SURE
Slide 26: Investment Portfolio: Composition
Investment Portfolio: Composition Bancshares, Inc. = Total investment portfolio is $509.33 million Suagle ese TRUPS inca BAC, JPM STL, WEC, and NIRS Pooled TRUPS adjusted book value af 51.51 mln
Slide 27: Why buy FCBC?
CM Why buy FCBC? Bancshares, Inc. = A $2.25 billion VA, WV, NC and TN branch franchise — Robust market share in legacy markets and attractive expansion into growth markets = Positioned as regional consolidator — Looking to grow via strategic and opportunistic FDIC-assisted deals = True retail franch
Slide 28: Why buy FCBC?
CM Why buy FCBC? Bancshares, Inc. = Strong pre-tax, pre-provision core income = Resilient net interest margin of 3.97% for 1H 2010 and 3.74% for 2009 = Strong non-margin, fee-based revenue diversification = Strong dividend yield at over 2.6% = Positioned to emerge as one of the strongest players in
Slide 29: Supplemental Information
ee First Community Baneares, linc. Supplemental Information
Slide 30: Non-GAAP Reconciliation of Core Earnings
Non-GAAP Reconciliation of canis Core Earnings Bancshares, Inc. Appendix A 2005 2006 2007 2008 2000 2010 _g2 2010 \Netincome avaiable to common areholers (as-reported) 5 S woe s m6 s 1600 $s GOs) s cert Securities gains ey ae) ss 209 (Othershas-temporaryimpainments mers T8868 : 6s Bre quisition game
Slide 31: Nonaccrual Loans by State
Nonaccrual Loans by State Commu Real Estate Construction RealEstate Real Estate $669,351 1,207,453, Commercial Residential _Consumer Total (da chousancs) 284963 -§ 727,386 $= 6,075 1,238. 662,835 53,602 3.727, 6,353,921 36,710 1,754,501 291,400 = 2,206,917 ‘Commercial, Financial, Agriculeural & Orhe
Slide 32: Contact Information
Contact Information Bancshares; Inc. co First , First Community Bancshares, Inc. Comm n NASDAQ: FCBC u ity One Community Place Bancshares | nc Bluefield, VA 24605 ° For More Information Contact: David D. Brown Chief Financial Officer First Community Bancshares, Inc. Your First Financial Resource (27
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