First Community Bankshares, Inc. · NASDAQ:FCBC
First Community Bankshares — First Community Bancshares — Keefe, Bruyette & Woods Community Bank Investor Conference July 2013
31 slides from First Community Bankshares's conference presentation, Jul 30, 2013
Slide 1: KBW Community Bank Investor Conference July 2013
1 Keefe, Bruyette & Woods Community Bank Investor Conference July 2013 www.fcbinc.com
Slide 2: First Community Bancshares
First Community Bancshares 2 Nasdaq : FCBC
Slide 3: Company Overview
Company Overview 3 a Source : SNL Financial b Source: SNL Financial and Company data Bluefield, Virginia Loans Deposits West Virginia 683,878$ 899,827$ Virginia 337,965$ 504,019$ North Carolina 590,339$ 492,660$ South Carolina 260$ 32,086$ Tennessee 79,056$ 60,104$ Assets: $2.7 billion Loans: $1.7 b
Slide 4: Deposit Composition: Retail Franchise with Core, Low Cost Deposits
Deposit Composition June 30, 2013 Key Franchise Differentiator Retail Franchise with Core, Low Cost Deposits ▪ Over 135,000 deposit accounts ▪ 61% demand deposit ▪ No brokered deposits ▪ Significantly lower cost of funding Account Balances as of June 30, 2013 Accounts Balance Period End W.A.R. Deman
Slide 5: Stable Geographies for Loans and Deposits
Key Franchise Differentiator Stable Geographies for Loans and Deposits 5 June 30, 2013 WV $899,827 VA $504,019 SC $32,086 NC $492,660 TN $60,104 Deposits by State (in thousands) WV $683,878 VA $337,965 SC $260 NC $590,465 TN $79,056 Total Loans by State (in thousands)
Slide 6: Loan Portfolio: Stable Portfolio with Strong Quality
Loan Portfolio Stable Portfolio with Strong Quality • Strong loan quality • Non - covered NPLs / Loans at June 30, 2013, of 1.95% • Geographically diversified portfolio across the region • Highly Granular: • Avg Comm Loan $198 thousand • Avg Retail Loan $39 thousand • Top 10 loans in portfolio repre
Slide 7: 2Q13 Summary
2Q13 Summary • Assets: $2.7 billion • Net interest margin: 4.07% vs. 3.93% year over year • E fficiency: 60% • $0.25 DEPS – 20% increase over the same quarter last year • includes $0.05 of after - tax negative accretion on indemnification asset • YTD diluted EPS of $0.59, up 13.5% versus last year •
Slide 8: Summary of 2Q13 Earnings
Summary of 2Q13 Earnings Three Months Ended Six Months Ended June 30, June 30, 2013 2012 Change 2013 2012 Change Net Interest Income 22,862$ 19,484$ 17.3% 46,224$ 37,461$ 23.4% Provision for Loan Losses 3,205 1,620 97.8% 4,347 2,542 71.0% Net Interest Income (after provision) 19,657 17,864 10.0% 41,
Slide 9: Challenges and Opportunities Ahead
Challenges and Opportunities Ahead • Environmental/Macro: (Interest Rates, Regulatory, Political): Chiefly, a prolonged flat interest rate environment projected to continue to pressure NIM output as well as loss of purchase accounting income • Low growth, highly competitive environment expected to c
Slide 10: Investment Highlights
Investment Highlights • 139 years of success ….. since 1874 • Diverse geographic footprint includes stable legacy markets and attractive growth markets • Attractive deposit share : Top 2 market share in six counties. • Strong NIM driven by s table , low - cost deposit base • Strong asset quality thr
Slide 11: Investment Highlights: Diverse Geographic Franchise
▪ 70 branches in WV, VA, NC, SC, and TN ▪ Mix of urban growth markets and stable legacy markets ▪ Growth targets in NC, Richmond, VA and East TN ▪ Deposit breakout : - West Virginia $900 million - North Carolina $493 million - Virginia $504 million - Tennessee $ 60 million - South Carolina $ 32 mill
Slide 12: Investment Highlights: Attractive Deposit Share Positioning
Investment Highlights: Attractive Deposit Share Positioning 12 Source: 2012 FDIC Summary of Deposits County Share Position Taylor, WV 48.2% 2 Mercer, WV 36.6% 1 Columbus, NC 22.9% 2 Wyoming, WV 34.0% 2 Upshur, WV 31.7% 2 Webster, WV 24.8% 2 Top 2 market share position in six counties.
Slide 13: Investment Highlights: Strong NIM
Investment Highlights: Strong NIM Peers include publicly traded banks with assets between $1 and $4 billion in NC, SC, VA, and WV (AMNB, BNCN, BTC, CFNL, CHCO, EVBS , FBNC, FFCH, FNBN, FRNK, HMPR, HTBI, MBRG, NBBC, NKSH, PEBK, PFBI, PLMT, PSTB, SMMF , STEL, UBSH, VCBI, YDKN). Source: SNL Financial a
Slide 14: Investment Highlights: Interest Rate Risk Analysis
Investment Highlights: Interest Rate Risk Analysis 14 The above table summarizes the impact of immediate and sustained rate shocks in the interest rate environment on net interest income . The model simulates plus 300 to minus 100 basis point changes from the base case rate simulation and illustrate
Slide 15: Investment Points: Quality Ratios
0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 2009 2010 2011 2012 Q1 13 Q2 13 1.50% 2.27% 2.42% 2.38% 2.12% 1.95% 3.22% 4.80% 4.62% 3.27% 3.10% 2.88% FCBC Peer Investment Points: Quality Ratios Non - Performing Loans / Total Loans Peers include publicly traded banks with assets between
Slide 16: Reserves / Non-Performing Loans and Reserves / Total Loans
Reserves / Non - Performing Loans Reserves / Total Loans Peers include publicly traded banks with assets between $1 and $4 billion in NC, SC, VA, and WV (AMNB, BNCN, BTC, CFNL, CHCO, EVBS , FBNC, FFCH, FNBN, FRNK, HMPR, HTBI, MBRG, NBBC, NKSH, PEBK, PFBI, PLMT, PSTB , SMMF, STEL, UBSH, VCBI, YDKN).
Slide 17: Investment Highlights: Nonperforming Asset Detail
Investment Highlights: Nonperforming Asset Detail 17 June 30, March 31, December 31, September 30, June 30, 2013 2013 2012 2012 2012 Non-Covered Nonaccrual loans 29,125$ 30,076$ 23,931$ 26,514$ 27,947$ Accruing loans past due 90 days or more - - - - - Unseasoned troubled debt restructurings 276 1,59
Slide 18: Nonperforming Asset Detail - Continued
Investment Highlights: Nonperforming Asset Detail - Continued 18 June 30, March 31, December 31, September 30, June 30, 2013 2013 2012 2012 2012 Asset Quality Ratios Excluding Covered Assets Nonperforming loans to total loans 1.95% 2.12% 1.97% 1.73% 1.81% Nonperforming assets to total assets 1.39% 1
Slide 19: Investment Highlights: Superior Efficiency Ratio
50% 55% 60% 65% 70% 2009 2010 2011 2012 Q1 13 Q2 13 59.40% 59.10% 59.56% 55.96% 59.55% 60.60% 63.49% 64.88% 66.65% 66.59% 67.59% 67.00% FCBC Peer Peers include publicly traded banks with assets between $1 and $4 billion in NC, SC, VA, and WV (AMNB, BNCN, BTC, CFNL, CHCO, EVBS , FBNC, FFCH, FNBN, FRN
Slide 20: Positioned and Strategically Focused on Consolidation
Investment Highlights: Positioned and Strategically Focused on Consolidation Substantial growth opportunity – Targeted strategic bank acquisitions • Fill in primary markets • Attractive price levels through the cycle • M&A pipeline in targeted growth markets remains attractive – FDIC - assisted tran
Slide 21: Peoples Bank of Virginia Transaction Rationale
Peoples Bank of Virginia Transaction Rationale □ In - market acquisition consistent with FCBC’s Merger & Acquisition strategy □ Created 10 th largest Virginia - based bank by deposits in the Richmond market □ Strong cultural fit 21 Strategic Rationale Financially Attractive Low Risk Profile □ Exceed
Slide 22: Peoples Bank of Virginia Financial Impact of the Transaction
Peoples Bank of Virginia Financial Impact of the Transaction 22 Transaction Assumptions/ Update Financial Impact □ EPS accretive in the first full year of combined operations □ Modest tangible book value dilution of 3.6% □ Ability to leverage insurance business line and other product offerings incre
Slide 23: Peoples Bank of Virginia Summary
Peoples Bank of Virginia Summary 23 □ 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 □ O rganic growth opportunities in the Richmond market remain attractive □
Slide 24: Waccamaw Bank Summary
Waccamaw Bank Summary 24 □ 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 $318 million in loans at close (before mark) □ M
Slide 25: Waccamaw Bank Strategically and Financially Compelling
25 □ Consistent with our acquisition strategy □ Extends footprint to a target growth market □ Significantly accretive to core earnings per share □ Deployed excess capital – No raise necessary □ Reasonable tangible book value dilution (4.8%) – Earnback dilution in approximately 2 years □ Strong IRR i
Slide 26: Background and Accounting Update
Background ▪ Acquired Waccamaw Bank with FDIC Loss - Share Coverage which closed June 8, 2012. At deal close loans totaled approximately $318 million (pre - mark) of which most were covered by loss share (80%). ▪ Recorded No Pre - tax Bargain Purchase Gain and did not pay a deposit premium. ▪ Establ
Slide 27: Balance Sheet Summary
Balance Sheet Summary ▪ Levering capital through the latest acquisitions 27 June 30, March 31, December 31, September 30, June 30, 2013 2013 2012 2012 2012 Cash & Securities 632,904$ 705,364$ 680,021$ 683,206$ 684,067$ Total Loans 1,696,119 1,692,086 1,731,685 1,768,056 1,807,326 Allowance for Loan
Slide 28: Attractively Valued Versus Peers
Attractively Valued Versus Peers 28 ▪ Using a comparable peer group of high - performing regional banks, 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 better than peer asset
Slide 29: Why buy FCBC?
▪ Strong pre - tax, pre - provision core income ▪ Favorable NIM ▪ Solid Credit ▪ Capital Strength ▪ Non - margin , fee - based revenue diversification ▪ Strong dividend yield of nearly 3% ▪ Positioned and capable to emerge as one of the strongest players in the region and build one of the best franc
Slide 30: 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 31: 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 31