Virginia National Bankshares Corporation · NASDAQ:VABK
Virginia National Bankshares — Investor Presentation (December 2022)
31 slides from Virginia National Bankshares's investor presentation, December 2022
Slide 1: Investor Presentation
Investor Presentation December 2022
Slide 2: Disclosures
Disclosures Forward-Looking Statements Certain statements in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, statements with respect to the Company’s operations, performance,
Slide 3: Table of Contents
Table of Contents 1. Introduction to Virginia National 2. Financial Highlights 3. Why VABK? 4. Appendix
Slide 4: Introduction to Virginia National
Introduction to Virginia National
Slide 5: Overview of Virginia National Bankshares Corporation
Overview of Virginia National Bankshares Corporation Our Story Virginia’s Premier Community Bank • $1.7 billion in assets bank holding company headquartered in Charlottesville, VA $1.7B $0.9B $1.6B • Seasoned management team with over 220 years of Assets Loans Deposits collective banking experience
Slide 6: Experienced Management and Board of Directors
Experienced Management and Board of Directors Seasoned Executive Leadership Experienced and Balanced Board Age: 66 Board Glenn W. Rust Board Member (Age) Experience President, CEO & Director Banking Experience: 48 Years Tenure Virginia National Experience: 16 Years William D. Ditmar, Jr. (69) 24 Yea
Slide 7: Our Corporate Vision
Our Corporate Vision Customer Experience Empowered Employees Local Commitment Deliver caring and innovative financial Tag Line: “It’s all about people… and Exceptional service begins and ends with solutions to our communities always will be” people Commitment to customer journey Access to local deci
Slide 8: History of Our Growth
History of Our Growth Timeline of Major Events Footprint Through Time Virginia National Bank opened in Charlottesville after receiving OCC Charter, 2006 1998 Winchester with more than 900 local shareholders 8 Total Offices Orange Glenn Rust joined Virginia National as President and Director 2006 Cha
Slide 9: Overview of Virginia's Economy
Overview of Virginia’s Economy Virginia Market Highlights Top Counties in the US – 2022 Proj. Median HHI ($000) • Ranked the Top State for Business two years in a Virginia row CNBC 2021 • Ranked #7 Overall Best State to Live In US News – #5 for employment – #5 for opportunity equality – #12 for heal
Slide 10: Overview of Our Markets
Overview of Our Markets Charlottesville, VA MSA (2022 Population: 233,639) (1) ’22 – ’27E Proj. Population Growth (%) (1) − $11.9 billion GDP in 2020 2 − ~6 thousand businesses operating within the MSA, including 6 Fortune 500s in 2020 3 − Ranked 5th best place to live in 2021 by Livability Richmond
Slide 11: Dominant Market Share in Core Markets
Dominant Market Share in Core Markets Charlottesville, VA MSA * Historical Growth in Charlottesville Deposits ($B) VABK CAGR: 10.7% 11.0% Charlottesville MSA CAGR: 5.8% Rank: 5 9.8% Rank: 5 Fauquier County, VA 4.1% Rank: 7 VABK Deposit Market Share & Rank Source: S&P Global Market Intelligence * Dep
Slide 12: Overview of our Merger with Fauquier Bankshares Inc.
Overview of our Merger with Fauquier Bankshares Inc. Pro Forma Branch Footprint ‒ Creates a Top 10 largest Virginia-based community bank(1) ‒ Improves demographics ‒ ’22 - ’27 projected pop. growth: 4.07% ’22 - ’27 projected pop. growth: 4.21% ‒ $94,085 Median HHI $107,130 Median HH Scale ‒ $918
Slide 13: Organic Growth vs. M&A
Organic Growth vs. M&A • Continue our organic growth strategy in Northern Virginia and Richmond o Hired our bank president, Diane Corscadden-Weaver, who has spent her entire career as a banker in Northern Virginia o Hired 4 commercial / business lenders in Richmond and Northern Virginia in 2022 • Ma
Slide 14: Financial Highlights
Financial Highlights \Wr VIRGINIA NATIONAL BANKSHARES CORPORATION
Slide 15: Balance Sheet Trends
Balance Sheet Trends Total Assets ($M) Total Gross Loans ($M) Total Deposits ($M) Source: S&P Global Market Intelligence Data as of or for the twelve months ended each year end stated; Q3 ’22 data as of or for the three months ended 9/30/22 14
Slide 16: Core Funded Deposit Portfolio
Core Funded Deposit Portfolio Deposit Composition & Deposits by Geography (%) Historical Deposit Composition ($M) Cost of Deposits Over Time Last Cycle VABK Current Cycle VABK Deposit Beta(1): Deposit Beta(2): 23.6% (2.7%) (3) Source: S&P Global Market Intelligence Data as of or for the twelve month
Slide 17: Loan Composition
Loan Composition Highlights Loan Composition (%) • No Shared National Credit Exposure and limited exposure to purchased and participated loans • Funded $207.5 million Paycheck Protection Program loans over the program, with origination fees of 3.9% • 12 commercial bankers throughout our footprint •
Slide 18: Asset Quality
Asset Quality Cumulative losses from the Global Financial Crisis of 0.66%(1) Post-Global Financial Crisis Peak NPAs of $8.7mm, 1.98% of total assets, in 2009 NPAs / Loans + OREO (%) NCOs / Average Loans (%) 20-Year Average: 0.10% $2.6 $2.8 $2.5 $1.3 $2.1 $1.5 $48 $1,025 $2,056 $376 $485 $57 = No
Slide 19: Diversified Business Segments
Diversified Business Segments Differentiated Revenue Streams Total Revenue by Segment ($000) • Wealth & investment advisory services • Revenue generated primarily from investment advisory and financial planning fees; decreasing portion from brokerage commissions • Purchased this book of business in
Slide 20: Operating Expense
Operating Expense Noninterest Expense / Average Assets (%) Noninterest Expense ($M) Assets / Full Time Employee ($000) Noninterest Expense / Average Assets versus Peers $90 $115 $89 $104 $100 $99 $89 $89 = Deposits / Branch Source: S&P Global Market Intelligence Annual data as of or for the twelve m
Slide 21: Profitability Trends
Profitability Trends Core Return on Average Assets (%) Core Return on Average Tangible Common Equity (%) Net Interest Margin (%) Core Efficiency Ratio (%) Source: S&P Global Market Intelligence Annual data as of or for the twelve months ended each year end stated; Quarterly data as of or for the thr
Slide 22: Securities Book Overview
Securities Book Overview • $247 million of liquid assets, with a average yield as of 9/30/22 of 1.74%, are either held in cash or reprice within one year Investment Securities Average Balance and Yield Accumulated Other Comprehensive (Loss) Income Maturity Schedule Cash and Securities Portfolio Comp
Slide 23: Interest Rate Sensitivity
Interest Rate Sensitivity Variable vs. Fixed Rate Loans (As of 9/30/22) Static Shock / Rate Ramp Analysis (2-Year Immediate Shock) Net Interest Income % Change 48% GAP Summary ($M) • $493 million of total variable rate loans – $273 million ARMs will reprice in the next 5 years • $449 million of tota
Slide 24: Capital Ratios
Capital Ratios Tangible Common Equity / Tangible Assets (%) CET1 Ratio (%) Total Capital Ratio (%) Bank CRE / C&D Concentration Ratios Source: S&P Global Market Intelligence Data as of or for the twelve months ended each year end stated; Q3 ’22 data as of or for the three months ended 9/30/22 23
Slide 25: Why VABK?
Why VABK? \Wr VIRGINIA NATIONAL BANKSHARES CORPORATION
Slide 26: Consistent Credit Quality and Profitability…
Consistent Credit Quality and Profitability… Virginia National has been profitable since the first year post-inception Cumulative losses in Global Financial Crisis of 0.66% vs. aggregate banking industry losses of 8.56% (1) Net Charge-Offs / Average Loans (2) (2) ROAA: 0.93% 0.48% 0.03% 0.50% 0.
Slide 27: …Has Driven Top-Tier Shareholder Value Growth
…Has Driven Top-Tier Shareholder Value Growth 2006 – Q3 ’22: TBVPS CAGR of 4.00% vs. KRX Median of 3.30% vs. Peer Median of 3.66% (1) Source: S&P Global Market Intelligence Data as of or for the twelve months ended each year end stated; YTD data as of or for the nine months ended 9/30/22 Peers inc
Slide 28: Key Investment Highlights
Key Investment Highlights Experienced board of directors and management team Attractive markets driving future growth Attractive core deposit franchise Conservative credit culture Scalable and efficient operating model Committed to serving and developing local economies Shareholder alignment and per
Slide 29: Appendix
Appendix \Wr VIRGINIA NATIONAL BANKSHARES CORPORATION
Slide 30: Historical Financials
Historical Financials Historical Financials (Dollars in Thousands) At or for the year ended, ‘16 Q3 ’22 CAGR At or for the quarter ended, 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/21 03/31/22 06/30/22 09/30/22 Balance Sheet Total Assets 605,030 643,886 644,800 702,627 848,410 1,972
Slide 31: Core Profitability Non-GAAP Reconciliation
Core Profitability Non-GAAP Reconciliation 9 58 128 161 1 61 16 0 1 86 151 187 22 4 227 (Dollars in Thousa nds) As of or for the T welve Months Ended , As o f or f or the Quarter End ed, 2 016 20 17 201 8 201 9 2020 2021 3/31/22 6/30/22 9/30 /22 N et Inco me $5, 748 $ 6,554 $ 8,470 $6,689 $7,978 $10
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