First National Corporation · NASDAQ:FXNC
First National — Investor Presentation (September 2024)
41 slides from First National's investor presentation, Sep 16, 2024
Slide 1: Investor Presentation September 2024
Investor Presentation First’ - 1. September 2024 National Corporation
Slide 2: Disclaimer
Disclaimer Wore teh a “bloes" eon oes as wale ‘Peaie aon aes he obra sate stay ay aha consonstoha Uaneacion on erly tab os ‘Toukavbusness or ae hes ober unepece corso tes { e'aacame of ay opt rocaadigs thal ay bette ant FNC o TSA,
Slide 3: Overview of First National Corporation
Overview of First National Corporation 2 2024 YTD Finan Total Assets Gross Loans Total Deposits MER eens Deposits 78.2 Not interest Margin Adjusted ROAA' Adjusted ROAE! ME eticiencyraio 88.00% TCE/ TA Ter 4 Leverage? es ee at ME erarcapitr ratios 10% NCOs Average Loans (anualizes) NPAs / Asset dwar
Slide 4: Attractive Markets of Operation
Attractive Markets of Operation chester 59 2 ‘ man ose 208 0980 0 tout 2 . mst sor ans 70205 ow Frese 5 2 sos on ms vaso 9 ‘sturon (9) ® 1 0001 a0 sos ono 18 Woyesbowiemy 7 ‘ woe se sos sara 1160 enon 2) a 1 2007 oxo oes sases 1100 vaingnam Fy : 25408 aio an 0760 1079 Ponce Coward ° : aise ase oer a
Slide 5: Products Offerings and Capabilities
Products Offerings and Capabilities x fit Su” Lae Commercia Banking Reta Banking Mortgage Weatth Management « Seasoned bankers + zi ranches + Deccaedresidentel MLOs | » Expeenced ist offers + Regional deposit specialists + Call center + Diverse and flexible and operations specialists. : : z invesime
Slide 6: Balance Sheet Growth
Balance Sheet Growth teat avon Loon, en i en sas ee ent a : an ost seep 852 ‘aoiey 20 —saoaty «aoa «meaty 20402 wiry aty mY «mezYmoDa2 Total Deposits ($) ‘Tangible Common Equity (8) sy cna 30% sx cnoR 1 aw wate size zm 1.286 a a eu a
Slide 7: Earnings & Profitability
Earnings & Profitability S169 coe sos se carte Net ntrest Margin) 350% say, Maas aa soiny ROY ety aay SRY at pod 220 Etficoncy Ratio) eK oa, may 20a aay cero cue 7020 - Remand pottbie urog tn recuting wo business 2022 Eamigs st mar expansion as market rates Began ore
Slide 8: Earnings & Profitability (cont.)
Earnings & Profitability (cont.) aie ae
Slide 9: Improving Operating Leverage
Improving Operating Leverage FTEs (a) ‘Adjusted PPNR.! Operating Expense Avg. we Employee ($)"* ‘asvets (4) 166 20% ser > Thenumbor of FTES Increased rom 155 9 2014 to 22m 2024 > Adjusted PPNR per employee impeoved trom $47k 0 S80K in 2008 > Asset growth outpaced xpanse rato of 2 6% for oea402 71D
Slide 10: Diversified Revenue
Diversified Revenue ee ge ‘Comparing 2023 G2 YTD to 2024 Q2 YTD > Wieath management revenue nroased 16% ome for bank-owned fe insurance increased 6% > Other operating income higher in 2024 due to recovery of a charged ‘off loan aoqured in a business combination oD
Slide 11: Loan and Deposit Composition
Loan and Deposit Composition Loan Yield Cost of Deposits
Slide 12: Non-Owner Occupied CRE Portfolio
Non-Owner Occupied CRE Portfolio Mised:Use: Residential Commercial
Slide 13: Asset Quality Trends
Asset Quality Trends [Nonperorming Assets Assets (6)
Slide 14: Capital Ratios and Trends
Capital Ratios and Trends ‘Tangible Common Equly/ Tangible Assets (%)" Bank Ter 1 Leverage Ratio 24 959% bans 01% saan ee son 882% ieee erences saaiediastsca seaaneae rasm__ 1857 t400% saan saan tare
Slide 15: Creating Shareholder Value
Creating Shareholder Value Tangible Book Value per Share) ‘Adjusted Diluted EPS ()° Common Dividends Declared per Share (8) sy. CAGROZ aa ss028 sinos 1889 sa zoey zeY 202402 YTD poiey —moaay aay zoey BY aoMGRYTD
Slide 16: First National Growth History
First National Growth History Aegulced and merged The Bank of Fincasto no Fst Announced acquisition of Bank ‘ouchtone Bak kde 6 branch offess in + Expand presence to 12 Expanded branch Usted FXNC Botetoun ‘00tonal Branches Frtoan coos ‘ower toe mon tockon + Success retention and Soutrcontal Vege and
Slide 17: Investment Highlights
Investment Highlights ganically Strong credit quality and disciplined underwriting with communities Diversified business lines in attractive Virginia markets Meaningful inside ownership of 18% D
Slide 18: The First National Difference
The First National Difference m 23 * Operating in growth Loyal customer base with Strong enough to be markets across Virginia low-cost deposits opportunistic, disciplined enough to say no Low-risk balance sheet Li Community it with consistent and reliable with track record of and corporate citizensh
Slide 19: First National Corporation Acquisition of Touchstone Bankshares, Inc.
First National Corporation Acquisition of Touchstone Bankshares, Inc.
Slide 20: Strategic Rationale
Strategic Rationale J ‘Atractvely priced at 106 0% of TB iting EPS accreton of } 30 years
Slide 21: First National & Touchstone: Stronger Together
First National & Touchstone: Stronger Together Enhancing First National’s Virginia Presence in the Richmond MSA Summary Pro Forma Financial Metrics Assets] $2.1B Loans} $1.5B Deposits | $1.88 Market Cap | ~S155M Branches 33 Community and Relationship Focus to Build on Combined Bank Strengths land Pr
Slide 22: Aligned Cultures to Drive Success in the Combined Company
Aligned Cultures to Drive Success in the Combined Company FirstBank‘® = 4s Touchstone Bank oo CemerrityBorking wih Popov. Excellence, honesty and integrity Community involvement and investment Customers value the bank as an indispensable partner Service driven employees cultivating meaningful custom
Slide 23: Transaction Overview
Transaction Overview Structure & Exchange Ratio Consideration ‘Valuation Multiples Pro Forma Ownership Board Representation Stock Consi ined share $14.25' ‘Aggregate transaction value of $47.0 million? 100% Stock Price / Tangible Book Value: 108.0% Price / 2024€ EPS + Cost Savings: 5.40x 70% FXNC /
Slide 24: Key Merger Assumptions
Key Merger Assumptions Earnings Assumptions. FXNC’s earnings per internal company estimates TSBA's earnings per internal company estimates Estimated Net Cost Savings Loan Croat Marks! 87. (-35% of | 0% realization of net cost savings in '24; 100% thereafter Gross credit mark: $6.3 million 4 years (s
Slide 25: Key Merger Assumptions (cont.)
Key Merger Assumptions (cont.) ue years st 30 years ‘other Purchase Accounting Marks (pre-tax)! Deposit 7 7.8 years 4.00%: basis over 10 years. Pre-tax cost of cash of 4.50% ‘Other Assumptions ‘Assumes marginal tax rate of 21.0%
Slide 26: Summary Financial Impact
Summary Financial Impact Koy Tanscioninpacs oF" fro Forma Capt lang an intrest Rate Wun itorestRate Without rerest 2025 EPS Accretion ~36% ~27% Tang. Common Equity ~6.8% ~7.0% ~38% ~34% — CET1 Ratio ~10.5% ~10.8% TBV Dilution <16% <13% Total RBC Ratio ~13.5% ~13.9% TBV Earnback Period? | 3.0Years 3.
Slide 27: Summary of Transaction: Stronger Together
Summary of Transaction: Stronger Together @ Combined company provides scale, operating leverage, efficiency Diversified ioan portfolio in attractive mid-sized Virginia markets Combined company delivers best breed deposit franchise Expanded opportunities for non-interest income growth Positions the c
Slide 28: First National Corporation's Pro Forma Footprint
First National Corporation’s Pro Forma Footprint State of Vina Deposit
Slide 29: Overview of Touchstone Bankshares, Inc.
Overview of Touchstone Bankahareai Inc. ____________Corporate Data____ James R Black ___ Veginia : chmond MSA Notable Employers wnasineiscnic = —— CDUPQNTY QQ caviar Allianz @ ‘a pa Altria
Slide 30: Pro Forma Loan & Deposit Composition
Pro Forma Loan & Deposit Composition FXNC — TSBA PRO FORMA Loan Composition 20°24 Vel: 545% Deposit Composition
Slide 31: Pro Forma Net Income Reconciliation
Pro Forma Net Income Reconciliation Pro Forma Earning: i Earnings Buildup
Slide 32: Targeted Strategies to Build Shareholder Value
Targeted Strategies to Build Shareholder Value Attract and retain Accelerate growth with talented employees acquisitions and team lifts Maintain low-cost Deliver exceptional service to small businesses and consumers deposit portfolio Serve vibrant Grow assets without adding Virginia markets signific
Slide 33: Focused on Delivering Superior Shareholder Returns
Focused on Delivering Superior Shareholder Returns __10 Year Shareholder Return ~ FXNC vs. Peers' _ ieee EE FANE Dividends Book Value and Tangible Book Value per Share 81070 gs020 $1056 3000
Slide 34: Appendix
Appendix
Slide 35: Financial Highlights
Financial Highlights Toul Assets $783 800 ~—«SH8«=« SEDGE] Sai | SiaTA Sass —SaIOSiaa7 81488 Gross Loans seis $575 Sa00 25 saz1 seco Ses2 $809 =$573 $580 Deposas sort $708 Saaz n.249 sizer shame | size s1238 S12 $1259 $1288 Gross Loans / Depots 8095% 81.90% TATTH 68.08% 7416 78.50% TA TOS THT TB2I%
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation “Tangible Comenon Equity Tangible Assets 0008 019 72020 221 ma 2000: Tota Common E 7241S HHTaNe— W860 5271 THGaoT 70 so ane 35 aa * 7 r__$113855 105.108 __stra8 $116,753, ogc osona 1300497 136080 149.208 1487 20 sremre_—s0s0013 _94306.263__SIaeB2I7 states siasaset ‘TTanaibie
Slide 37: Non-GAAP Reconciliation (cont.)
Non-GAAP Reconciliation (cont.) {Gan (L055) on Disposal of Premises & Eau, “9 2» “)
Slide 38: Non-GAAP Reconciliation (cont.)
Non-GAAP Reconciliation (cont.) erases $6603 S1NGAT 9128705 _shaoose _S138207
Slide 39: Non-GAAP Reconciliation (cont.)
Non-GAAP Reconciliation (cont.) usted Net incor 2010 is 202402 Netincome (GHA) 986 oem S85 ‘As Merge Related Expances ‘sr ‘Suberact Tax fet OF Austnert ° ‘Average Assets Ce ne ed eum On Average Assets (GAAP) 12% 09% OK HOTT ‘usted Retr On Average Aes 12% ORR OCT OBO see Soe ty vas 8003 tc0se8 = sosg
Slide 40: Non-GAAP Financial Measures
Non-GAAP Financial Measures us. GAAP’), the pa ‘and ope’ making, ‘The non-GAAP cy share, share, and Non for, oF financial institutions. A ‘None y ‘GAAP financial measures is included at the end of this release,
Slide 41: First National Corporation
First’? National Corporation NASDAQCM: FXNC 112 W. King Street Strasburg, VA 22657 Investor Relations Contact (640) 465-6130 fbvirginia.com
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