First Community Bankshares, Inc. · NASDAQ:FCBC
First Community Bankshares — First Community Bancshares — KBW Community Bank Investors Conference 2012
28 slides from First Community Bankshares's conference presentation, Jul 30, 2012
Slide 1: KBW Community Bank Investors Conference
KBW Community Bank Investors Conference July 31, 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
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
▪ Substantial growth opportunity ▪ Targeted strategic bank acquisitions ▪ Fill in primary markets ▪ Attractive price levels ▪ FDIC - assisted transactions ▪ Possible larger transactions ▪ Primary and secondary markets ▪ Build presence in mid - Atlantic region ▪ Capitalize on in - market transactions
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 1,807,373 1,390,047 1,401,887 Allowance for Loan Losses 26,171 25,800 26,205 Total Loans (net) 1,781,202 1,364,247 1,375,682 Other 345,052 248,184 255,893 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% 0.35% 1.07% 1.75% 1.31% 1.22% 0.67% 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% 2.42% 2.47% 2.43
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, East TN, VA, and WV (AMNB, BNCN , CFNL , CHCO, EVBS , FBNC, FFCH, FNBN, FSGI, HMPR , MBRG, NBBC , PEBK, PFBI , SCMF, SMMF, STEL, UBSH , V
Slide 24: 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% 66.42% 64.88% 65.47% 65.56% 66.48% FCBC Peer Financial Performance Highlights Efficiency Peers include publicly traded banks with assets between $1 and $4 billion in NC, SC, East TN, VA, and WV (AMNB
Slide 25: Financial Performance Highlights: Cost of Funds and Net Interest Margin
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% 2.79% 2.05% 1.57% 1.23% 0.93% 0.87% FCBC Peer Financial Performance Highlights Cost of Funds and Net Interest Margin Peers include publicly traded banks with assets between
Slide 26: 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 27: 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 28: 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 28
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