First Community Bankshares, Inc. · NASDAQ:FCBC
First Community Bankshares — First Community Bancshares — KBW Virginia/Carolina Bank Conference September 2012
30 slides from First Community Bankshares's conference presentation, Sep 13, 2012
Slide 1: KBW Virginia/Carolina Bank Conference September 2012
KBW Virginia/Carolina Bank Conference September 2012 www.fcbinc.com
Slide 2: Forward-Looking Disclosures
Forward - Looking Disclosures 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 underlying assump
Slide 3: First Community Bancshares
First Community Bancshares 3
Slide 4: Overview
Overview □ A $2.8 billion VA, WV, NC and TN branch franchise □ $883 million Wealth Management Division - $455 million Trust Operation - $428 million RIA □ Five - state franchise with solid market share in legacy markets □ True retail franchise generating low - cost core deposits - Over 117,000 custo
Slide 5: Investment Highlights
Investment Highlights □ 138 years of success….. since 1874 □ Consolidator □ Attractive growth markets and stable legacy markets □ Superior Efficiency (57.6% in Q2 2012) □ Strong asset quality □ Strong non - margin, fee - based revenue diversification – 25% of revenues from non - spread sources 5
Slide 6: Top Market Share
Top Market Share 6 Source: 2011 FDIC Summary of Deposits County Share Position Taylor, NC 45.9% 2 Mercer, WV 36.3% 1 Columbus, NC 35.7% 2 Wyoming, WV 34.5% 2 Upshur, WV 31.7% 2 Webster, WV 23.8% 2 Alleghany, NC 15.9% 2 Top 2 market share in seven counties.
Slide 7: Investment Highlights
Investment Highlights Stable, Low - Cost funding Strong Net Interest Margin No TARP or capital raise overhang Good legacy loan portfolio performance – Highly granular – average legacy loan balance of $75,587 – Virtually no A&D exposure – Well diversified – Total Delinquency of 2.64% – NPA’s/Total As
Slide 8: Franchise Branch Map
▪ 74 branches in WV, VA, NC, SC, and TN ▪ Mix of urban growth and stable legacy markets ▪ Growth targets in NC, Richmond VA and East TN ▪ Deposit breakout : - West Virginia $895 million - North Carolina $558 million - Virginia $541 million - Tennessee $ 57 million - South Carolina $ 54 million Franc
Slide 9: Strategic Priorities
Strategic Priorities Substantial growth opportunity – Targeted strategic bank acquisitions • Fill in primary markets • Attractive price levels – FDIC - assisted transactions • Potentially large deals • Primary and secondary markets Continue diversification of revenues – Build wealth management – Acq
Slide 10: Peoples Bank of Virginia Transaction Rationale
Peoples Bank of Virginia Transaction Rationale □ In market acquisition consistent with FCBC’s Merger & Acquisition strategy □ Creates 10 th largest Virginia - based bank by deposits in the Richmond market □ Strong cultural fit 10 Strategic Rationale Financially Attractive Low Risk Profile □ Exceeds
Slide 11: Peoples Bank of Virginia Pro Forma Branch Map
Peoples Bank of Virginia Pro Forma Branch Map 11 Peoples Market VA- based Rank Institution Branches Deposits ($mm) Market Share (%) 1 Union First Market Bkshs Corp. 44 1,516 4.98 2 Franklin Financial Corp. 8 667 2.19 3 Village Bank & Trust Finl Corp 15 508 1.67 4 First Capital Bancorp Inc. 7 419 1.3
Slide 12: Peoples Bank of Virginia Financial Impact of the Transaction
Peoples Bank of Virginia Financial Impact of the Transaction 12 Transaction Assumptions Financial Impact □ EPS accretive in the first full year of combined operations □ Limited tangible book value dilution at closing □ Ability to leverage insurance business line and other product offerings increasin
Slide 13: Peoples Bank of Virginia Summary
Peoples Bank of Virginia Summary 13 □ Transaction drives EPS growth and shareholder value for both FCBC and Peoples shareholders □ Manageable transaction size and strong pro forma capital ratios allow for future opportunities □ M&A pipeline and organic growth opportunities in targeted growth markets
Slide 14: Waccamaw Bank Summary
Waccamaw Bank Summary 14 □ Acquired 16 branches in FDIC - assisted deal • Added 12 branches to existing North Carolina franchise and expands presence into South Carolina with 4 branches □ Purchased approximately $500 million in total assets, including $338 million in loans • Most loan and REO covere
Slide 15: Waccamaw Bank Market Share by County
County WB Branches WB Deposits in Market ($000) Market Rank Deposit Market Share (%) Total Deposits in Market ($000) Horry, SC 3 43,649 18 0.8 5,432,128 Bladen, NC 1 27,305 4 11.7 233,729 New Hanover, NC 1 22,658 17 0.6 3,859,990 Lancaster, SC 1 18,694 5 4.1 458,956 • Establishes top 3 market share
Slide 16: Waccamaw Bank Strategically and Financially Compelling
16 • Consistent with our acquisition strategy – Extends footprint to a target growth market – Significantly accretive to core earnings per share – Deploys excess capital – No raise necessary – Minimal tangible book value dilution – Earnback dilution in approximately 2 years – Strong IRR in excess of
Slide 17: Deposit Composition
Deposit Composition June 30, 2012 Key Franchise Differentiator Retail Franchise with Core, Low Cost Deposits ▪ Over 144,300 retail and business accounts ▪ No brokered deposits ▪ Significantly lower cost of funding Account Balances as of June 30, 2012 Accounts Balance Period End W.A.R. Demand 44,139
Slide 18: Stable Geographies for Loans and Deposits
Key Franchise Differentiator Stable Geographies for Loans and Deposits 18 June 30, 2012 NC $558,322 TN $56,714 SC $53,667 VA $541,223 WV $895,281 Deposits by State (in thousands) NC $404,090 SC $252,433 TN $37,737 VA $386,656 WV $698,795 Loans by State (in thousands)
Slide 19: 2Q 2012 Update
2Q 2012 Update Pre - Tax, Pre - Credit and Core Earnings Increasing Three Months Ended June 30, March 31, December 31, September 30, June 30, 2012 2012 2011 2011 2011 Pre-Tax, Pre-Credit Core Earnings 11,393$ 10,708$ 11,273$ 11,273$ 9,898$ Core Net Income 6,210 6,071 4,957 5,375 3,713 Core EPS (dilu
Slide 20: Summary of 2Q 2012 Earnings
Summary of 2Q 2012 Earnings Three Months Ended Six Months Ended June 30, June 30, 2012 2011 Change 2012 2011 Change Net Interest Income 19,484$ 17,754$ 9.7% 37,461$ 36,029$ 4.0% Provision for Loan Losses 1,620 3,079 -47.4% 2,542 4,691 -45.8% Net Interest Income (after provision) 17,864 14,675 21.7%
Slide 21: Balance Sheet Summary
Balance Sheet Summary June 30, March 31, December 31, 2012 2012 2011 Cash & Securities 684,067$ 590,838$ 533,214$ Total Loans 1,807,326 1,390,047 1,401,887 Allowance for Loan Losses 26,171 25,800 26,205 Total Loans (net) 1,781,155 1,364,247 1,375,682 Other 345,099 248,184 255,893 Total Assets 2,810,
Slide 22: Asset Quality Ratios
0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80% 2008 2009 2010 2011 Q1 12 Q2 12 0.45% 0.70% 0.90% 0.67% 0.38% 0.36% 0.25% 0.90% 1.80% 1.32% 1.12% 0.82% FCBC Peer 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 2008 2009 2010 2011 Q1 12 Q2 12 0.99% 1.49% 2.06% 2.38% 2.47% 2.23
Slide 23: Asset Quality Ratios: Reserves
Asset Quality Ratios Reserves / Non - Performing Loans Reserves / Total Loans Peers include publicly traded banks with assets between $1 and $4 billion in NC, SC, VA, and WV (AMNB, BNCN, BTC, CFNL, CHCO, CS BC, EVBS, FBNC, FFCH, FNBN, FRNK, HMPR, HTBI, MBRG, NBBC, NKSH, PEBK, PFBI, PLMT, PSTB, SCMF,
Slide 24: Nonperforming Asset Detail
Nonperforming Asset Detail June 30, March 31, December 31, 2012 2012 2011 Non-Covered Nonaccrual loans 27,947$ 24,617$ 24,487$ Accruing loans past due 90 days or more - - - Unseasoned troubled debt restructurings 6,995 9,720 8,854 Nonperforming loans 34,942 34,337 33,341 Other real estate owned 4,93
Slide 25: Financial Performance Highlights: Efficiency
50% 55% 60% 65% 70% 2008 2009 2010 2011 Q1 12 Q2 12 59.23% 59.40% 59.10% 59.56% 57.18% 57.58% 65.22% 64.94% 65.77% 67.53% 65.34% 67.53% FCBC Peer Financial Performance Highlights Efficiency Peers include publicly traded banks with assets between $1 and $4 billion in NC, SC, VA, and WV (AMNB, BNCN, B
Slide 26: Financial Performance Highlights: Cost of Funds and Net Interest Margin
0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% 2.25% 2.50% 2.75% 3.00% 2008 2009 2010 2011 Q1 12 Q2 12 2.46% 1.97% 1.50% 1.17% 1.02% 0.93% 2.80% 2.09% 1.57% 1.13% 0.91% 0.86% FCBC Peer Financial Performance Highlights Cost of Funds and Net Interest Margin Peers include publicly traded banks with assets b
Slide 27: Attractive Valuations
Attractive Valuations 27 ▪ Using a comparable peer group of high - performing banks based in the Virginias, FCBC is an attractively priced name ▪ Peer group consists of $1 - $10 billion banks in W.Va. and Virginia with TCE >= 7% and NPA’s < 3% ▪ FCBC shows comparable returns and asset quality measur
Slide 28: Why buy FCBC?
▪ A $ 2.81 billion VA, WV, NC and TN branch franchise – Robust market share in legacy markets and attractive expansion into growth markets ▪ Positioned as regional consolidator – Continued growth via strategic and opportunistic FDIC - assisted deals ▪ True retail franchise generating low cost core d
Slide 29: Why buy FCBC?
▪ Strong pre - tax, pre - provision core income ▪ Resilient net interest margin of 3.93% for 2Q 2012 ▪ Strong non - margin, fee - based revenue diversification ▪ Strong dividend yield of over 3% ▪ Positioned to emerge as one of the strongest players in the region and build one of the best franchises
Slide 30: Contact Information
Contact Information First Community Bancshares, Inc. NASDAQ: FCBC One Community Place Bluefield, VA 24605 For More Information Contact: David D. Brown Chief Financial Officer First Community Bancshares, Inc. (276) 326 - 9000 30
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