First Community Bankshares, Inc. · NASDAQ:FCBC
First Community Bankshares — First Community Bancshares — Investor Presentation (August 2009)
36 slides from First Community Bankshares's investor presentation, Aug 13, 2009
Slide 1: First Community Bancshares, Inc.
CoRR ny Bancshares, Inc.
Slide 2: Forward-Looking Disclosures
Ceti 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 Overview
Se Fist, i First Community Bancshares Overview
Slide 4: Investment Highlights
Investment Highlights Bancshares, Inc, * A $2.2 billion VA, WV, NC and TN branch franchise — 135 y — Strong history of core earnings and dividend payments ars of continuous operation — Robust market share in legacy markets and attractive expansion into growth markets — Positioned as regional consoli
Slide 5: Investment Highlights
Investment Highlights Bancshares, Inc, * True retail franchise generating low cost core deposits — Over 115,000 customer accounts with 1.85% average cost of deposits, below peer average of 2.28% for the three months ended June 30, 2009 * Strong loan quality — NPLs / Loans of 0.92% versus peers of 3.
Slide 6: Experienced, Executive Management Team
Experienced, Executive Management Team Strong culture of management and employee ownership — Established and experienced management team with average tenure > 18 years; total insider ownership of 7.23% Years in Banking Years with FCB John M. Mendez 24 24 President and CEO Robert L. Buzzo 36 36 Presi
Slide 7: Current Franchise Overview: Branch Map
Current Franchise Overview: Branch Map Bancshares, Inc. = 71 locations across five-states (Virginia, West Virginia, North Carolina, — Tennessee and South Carolina ) Markets * Attractive urban and suburban markets in the Carolinas, Virginia, West Virginia, and Tennessee + Full array of services creat
Slide 8: Current Franchise Overview: Market Demographics and Position
Current Franchise Overview: Commu Market Demographics and Position MMsA/commy Tome ‘Weigtved Average: MSA/Coune sooet Baste TVA ‘MSA/Cousey Totals ‘Deposit Weighted Average: MSA/Couny 598 ENE FET]
Slide 9: Strategic Direction
Strategic Direction Batanced Growth and Profitability Strategy Position as Regional Consolidator Pursue Growth Markets around Key MSA’s Develop Legacy Markets/Earnings Driver Diversify Revenues into Associated Financial Service Lines (Wealth and Insurance)
Slide 10: Three Pillars
Three Pillars CREDIT QUALITY — EARNINGS LEADERSHIP GROWTH THROUGH CONSOLIDATION — — 10
Slide 11: Credit Quality
Credit Quality Bancshares, = Protect the culture/defend underwriting = Defensive posture on real estate = Cutting all exposures to A&D through remainder of the eycle = Outstandings have fallen us. wy VA FCB 3.39% 2.50% 2.42% 0.30% = Carry excess liquidity = Early detection of emerging problem loans
Slide 12: Earnings Leadership
Earnings Leadership Efficiency — Low cost structure in headquarters region Core Deposits — Strong market share protection |_Mr 1 sariaw Suen om 2089% Upshur 2 see wae Cost of Funds Wyoming 2 2 s78aM s7a0M — Strong DDA base Favor 2 2 Mem eevee SAT Conservative business approach Lower cost workforce B
Slide 13: Efficiency
Efficiency Bancshares, Inc, = Low cost structure = Consistently outperformed peer group 719 70.0% 1 rcoc mpeers A 65.0% Ga. ozs oun 60.0% seg 5a 59, @ % 55.0% 53.4) 5 5 50.0% vo 2004 2005 2006 2007 2008 Qi09 Q209 ‘ees shade sb ead bats nih at een an 3 io NC, SC, PV an VA (STE, SCB, VBE FENG, UBS, CH
Slide 14: Key Franchise Differentiator: Core, Low Cost Deposits
Key Franchise Differentiator: Commut Retail Franchise with Core, Low Cost Deposits Baneshares,’ Inc, Deposit Composition as of June 30, 2009 ofJune 30, 2009 Accounts Balance Demand 31458. $202, Interest-Beasing Demand 33,110 195,903__0.177% ‘Total DDA_ 64,568 398,445 0.087% Savings 25,069 311,435 0.
Slide 15: Cost of Funds
Cost of Funds Bancshares, Inc, 3.56 MFCBC @Peers 314g 3.0% 4 2.81 2 2.5% 4 2.23 2 “ i a | 5% T ‘s 2004 2005 2006 2007 2008 Q109 Q209
Slide 16: Net Interest Margin
Net Interest Margin Bancshares, Inc, 4.5% 7° ‘ad 4 4.13 4.22 4.13 HFCBC 8 @Peers 4.00 4.0% seam te ass | 3. 3.5% 325 bat 3.0% 2.5% 2.0% 7 2004 2005 2006 2007 2008 Qi09 Q209 Pec itd ob ade bak de ts been Sand Sina NC, SC, TV and VA STEL, SCBT, VCEE,FBNC, UBSH, CHICO, FNBN, NEBC, CFNE,SCMF, CHEN, SLO,
Slide 17: Key Franchise Differentiator: Rapid Growth in Non-Interest Income
Key Franchise Differentiator: Cant " Rapid Growth in Non-Interest Income Bancshares, Inc, = Since 2004, the Company has grown non-interest income sources to reduce interest rate cycle exposure — Increased wealth management line of business — Grown insurance line of business — Re-engineered retail pr
Slide 18: Acquisition Opportunity
Ceti 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 19: Recent Acquisitions: Bank & Thrift Transactions
Recent Acquisitions: Bank & Thrift Transactions Xe Fist Cony = November 2008: Acquired Coddle Creek Financial Corp. (Mooresville, NC) + Transaction: = $33 million deal value, 158% Price to TBV- = 24.0% Paice to Deposits, 138% Fran. Prem. to Coce Deposits = 59% Stock and 41% Cath + Pro Forama Financi
Slide 20: Recent Acquisition: Insurance Agency Transactions
Recent Acquisition: f Insurance Agency Transactions Bancshares, Inc. "Acquired GreenPoint Insurance (High Point, NC) in September 2007 — Full service insurance agency headquartered in High Point, NC — Provider of commercial and personal insurance lines, employee benefits and life and health insuranc
Slide 21: Loan Portfolio: Diversified Portfolio with Strong Loan Quality
Loan Portfolio: Diversified Portfolio with Strong Loan Quality Strong loan quality — NPLs / Net Loans at June 30, 2009 of 0.92% — Loan / Deposit Ratio of 82% Geographically diversified portfolio across the region Highly Granular: — Majority of loans in $30,000 to $300,000 range Top 10 loans in portf
Slide 22: Loan Portfolio: Strong Loan Quality
Loan Portfolio: Communi Strong Loan Quality Bancshares,’ Inc, Non-Performing Loans / Total Loans A 2 3.50% coc meas Ki td 3.00% 2.50% 2.00% 150% z 3 1.00% 0.50% . 0.00% Zi 2004 2005-2006 «2007-2008 Q109 209 Reserves / Nonperforming Loans Net Charge-Offs / Average Loans a a 3 120% ial ‘aC Foos micocm
Slide 23: Loan Portfolio: Residential Real Estate Portfolio
Loan Portfolio: Residential Real Estate Portfolio = The residential real estate portfolio is made up of 10,478 loans with an average balance of $56,571 = Second quarter 2009 consumer credit scoring shows weighted average FICO of 693 * Majority of loans are fixed rate 3-5 year balloons * Total FCBC m
Slide 24: Loan Portfolio: CRE Non-Owner Occupied
Loan Portfolio: Coan: i CRE Non-Owner Occupied Bancshares, Inc, = The Company holds 1,276 CRE Loans with an average balance of $246,543; the average term of the portfolio is 95 months and 24% of the loans are floating sate = 52% of CRE Loans are owner-occupied and the composition of non-owner occupi
Slide 25: Loan Portfolio: A&D and Construction
Loan Portfolio: Coty A&D and Construction Bancshares, Inc, = The Company holds 641 A&D and Construction Loans with an average balance of $174,120 * The A&D and Construction loan book is geographically diversified with the three largest market areas being: NC 41%, WV 33% and VA 22% = A&D and Construc
Slide 26: Second Quarter 2009 Update
Cerri Second Quarter 2009 Update = Second quarter GAAP net income of $2.41 million and diluted EPS of $0.14 per share. — Includes securities impairment charges of $3.78 million and FDIC special assessment of $1.0 million = Core earnings remained strong at $4.36 million, or $0.34 per share " Tangible
Slide 27: Current Franchise Overview: Financial Results
Current Franchise Overviev Financial Results Ceti, 1Q 2Q 2005 2006 2007 2008" 2009 2009 Net Income $263 mil $289 mil $29.6 mil 3mi $46 mil «= $2.4 mil Diluted EPS $2. $2.62 $2.00 $0.40 $0.14 Dividend $1.04 $1.08 $1.42 $0.00 $0.20 ROAA 137% 1.46% 1.39% 1.06% 0.87% 0.34% ROAE 13.79% 14.32% 13.54% 10.2
Slide 28: June 2009 Capital Raise
June 2009 Capital Rai * Additional capital enhanced First Community’s already strong balance sheet and capital position = Increase tangible common equity ratio «Drive additional increases in non-interest income through business line expansion and growth * Enable opportunistic acquisitions such as Tr
Slide 29: TARP Repayment
TARP Repayment Bancshares, Inc, " Redeemed $41.50 million " 7% tax-effective cost elimination preferred investment on = Leaving warrant position open July 8, 2009 — Favorable strike price = Allows First Community — Anti-dilutive operational flexibility Thagible Common / Tangible ‘Tee t Capi ‘Toul Re
Slide 30: Investment Portfolio: Composition
Investment Portfolio: Composition Available-fo as of June 30, Fair Market Value of ‘Maturity Schedule for AFS Securities Lessthant = Within t-5 Year ‘Years 05%. 1% pmhing- 10 ‘After 10° Years: 887% ems P% 30
Slide 31: Investment Portfolio: Mortgage Backed Securities
Investment Portfolio: Communit Mortgage Backed Securities Bancshares, Inc, $505,705 427 $6506 1338) iat.638) = The Company made a cumulative effect adjustment of $10.2 million pre-tax, as of January 1, 2009, to recognize the portion of noncredit losses associated with a non- agency mortgage-backed s
Slide 32: Investment Portfolio: Trust Preferred Securities
Investment Portfolio Cabs it Trust Preferred Securities Bancshares, Inc. = Single-Issue — $32.51 million market value at June 30% representing 57% of par value = Pooled Trust Preferred holdings — $28.15 million market value at June 30% representing 26% of par value Jane 30, Single Issue Total Pooled
Slide 33: Upside Opportunities to TBV
Upside Opportunities to TBV = Earnings Potential Single Issue TRUPS TriStone Bargain Purchase = All Accretive to TBV
Slide 34: Why buy FCBC?
Cerri Why buy FCBC? A $2.2 billion VA, WV, NC and TN branch franchise — Robust market share in legacy markets and attractive expansion into growth markets Positioned as regional consolidator = True retail franchise generating low cost core deposits — Over 115,000 customer accounts Strong loan qualit
Slide 35: Why buy FCBC?
Why buy FCBC? Bancshares, Inc, Resilient net interest margin of 3.62% for Q2 2009 Strong non-margin, fee-based revenue diversification Strong dividend yield at 3% Strong upside potential for TBV Positioned to emerge as one of the strongest players in the region and build one of the best franchises i
Slide 36: First Community Bancshares, Inc.
2 First . Community Bancshares, Inc. YOUR FIRST FINANCIAL RESOURCE
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