First Community Bankshares, Inc. · NASDAQ:FCBC
First Community Bankshares — First Community Bancshares — Sandler O'Neill East Coast Financial Services Conference November 2012
29 slides from First Community Bankshares's conference presentation, Nov 15, 2012
Slide 1: Sandler O'Neill East Coast Financial Services Conference November 2012
Sandler O’Neill East Coast Financial Services Conference November 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 □ $884 million Wealth Management Division - $455 million Trust Operation - $429 million RIA □ Five - state franchise with solid market share in legacy markets □ True retail franchise generating low - cost core deposits - Third quarter 2012
Slide 5: Third Quarter Highlights
Third Quarter Highlights • Record third quarter results • Completed 2 transactions late in second quarter • 28% balance sheet growth year - to - date • 30% loan growth year - to - date • Net interest margin improved to 4.48% • Q3 2012 GAAP earnings up 67% over last year • Core EPS up 42% linked - qu
Slide 6: Investment Highlights
Investment Highlights □ 138 years of success….. since 1874 □ Consolidator □ Attractive growth markets and stable legacy markets □ Superior Efficiency (52.4% in Q3 2012) □ Strong asset quality □ Strong non - margin, fee - based revenue diversification – nearly 30% of revenues from non - spread source
Slide 7: Top Market Share
Top Market Share 7 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 8: 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 – Virtually no A&D exposure – Well diversified – Total Delinquency of 2.55% – NPA’s/Total Assets of 1.28% 8
Slide 9: 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 $913 million - North Carolina $520 million - Virginia $525 million - Tennessee $ 58 million - South Carolina $ 47 million Franc
Slide 10: 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 11: 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 11 Strategic Rationale Financially Attractive Low Risk Profile □ Exceeds
Slide 12: Peoples Bank of Virginia Pro Forma Branch Map
Peoples Bank of Virginia Pro Forma Branch Map 12 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 13: Peoples Bank of Virginia Financial Impact of the Transaction
Peoples Bank of Virginia Financial Impact of the Transaction 13 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 14: Peoples Bank of Virginia Summary
Peoples Bank of Virginia Summary 14 □ 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 15: Waccamaw Bank Summary
Waccamaw Bank Summary 15 □ 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 16: Waccamaw Bank Deposit Market Share
County WB Branches WB Deposits in Market ($000) Market Rank Deposit Market Share (%) Total Deposits in Market ($000) Horry, SC 3 43,649 18 0.8 5,432,128 Bladen, NC 1 27,305 4 11.7 233,729 New Hanover, NC 1 22,658 17 0.6 3,859,990 Lancaster, SC 1 18,694 5 4.1 458,956 • Establishes top 3 market share
Slide 17: Waccamaw Bank Strategically and Financially Compelling
17 Consistent with our acquisition strategy – Extends footprint to a target growth market – Significantly accretive to core earnings per share – Deploys excess capital – No raise necessary – Minimal tangible book value dilution – Earnback dilution in approximately 2 years – Strong IRR in excess of 1
Slide 18: 3Q 2012 Update
3Q 2012 Update Pre - Tax, Pre - Credit and Core Earnings Increasing Three Months Ended September 30, June 30, March 31, December 31, September 30, 2012 2012 2012 2011 2011 Pre-Tax, Pre-Credit Core Earnings 16,106$ 11,393$ 10,708$ 11,273$ 11,273$ Core Net Income 9,415 6,210 6,071 4,957 5,375 Core EPS
Slide 19: Summary of 3Q 2012 Earnings
Summary of 3Q 2012 Earnings Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 Change 2012 2011 Change Net Interest Income 26,459$ 17,734$ 49.2% 63,920$ 53,763$ 18.9% Provision for Loan Losses 1,916 1,920 -0.2% 4,458 6,611 -32.6% Net Interest Income (after provision) 24,543 1
Slide 20: Balance Sheet Summary
Balance Sheet Summary September 30, June 30, March 31, December 31, 2012 2012 2012 2011 Cash & Securities 683,206$ 684,067$ 590,838$ 533,214$ Total Loans 1,768,056 1,807,326 1,390,047 1,401,887 Allowance for Loan Losses 25,835 26,171 25,800 26,205 Total Loans (net) 1,742,221 1,781,155 1,364,247 1,37
Slide 21: 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 Q3 12 0.45% 0.70% 0.90% 0.67% 0.38% 0.33% 0.58% 0.25% 0.77% 1.66% 1.31% 1.12% 0.75% 0.53% 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 Q3 12 0.99% 1.49
Slide 22: Asset Quality Ratios: Reserves
Asset Quality Ratios Reserves / Non - Performing Loans Reserves / Total Loans Peers include publicly traded banks with assets between $1 and $4 billion in NC, SC, VA, and WV (AMNB, BNCN, BTC, CFNL, CHCO, EVBS , FBNC, FFCH, FNBN, FRNK, HMPR, HTBI, MBRG, NBBC, NKSH, PEBK, PFBI, PLMT, PSTB , SMMF, STEL
Slide 23: Nonperforming Asset Detail
Nonperforming Asset Detail September 30, June 30, March 31, December 31, 2012 2012 2012 2011 Non-Covered Nonaccrual loans 26,514$ 27,947$ 24,617$ 24,487$ Accruing loans past due 90 days or more - - - - Unseasoned troubled debt restructurings 6,742 6,995 9,720 8,854 Nonperforming loans 33,256 34,942
Slide 24: Financial Performance Highlights: Efficiency
50% 55% 60% 65% 70% 2008 2009 2010 2011 Q1 12 Q2 12 Q3 12 59.23% 59.40% 59.10% 59.56% 57.18% 57.58% 52.40% 64.47% 65.00% 64.88% 66.73% 65.68% 68.46% 69.50% FCBC Peer Financial Performance Highlights Efficiency Peers include publicly traded banks with assets between $1 and $4 billion in NC, SC, VA, a
Slide 25: 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% 2008 2009 2010 2011 Q1 12 Q2 12 Q3 12 2.46% 1.97% 1.50% 1.17% 1.02% 0.93% 0.86% 2.75% 2.01% 1.50% 1.13% 0.91% 0.86% 0.81% FCBC Peer Financial Performance Highlights Cost of Funds and Net Interest Margin Peers include publicly traded banks w
Slide 26: Attractive Valuations
Attractive Valuations 26 ▪ 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 27: Why buy FCBC?
▪ A $ 2.77 billion VA, WV, NC, SC 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 co
Slide 28: Why buy FCBC?
▪ Strong pre - tax, pre - provision core income ▪ Net interest margin of 4.48% for 3Q 2012 ▪ Non - margin , fee - based revenue diversification ▪ Strong dividend yield of nearly 3 % ▪ Positioned to emerge as one of the strongest players in the region and build one of the best franchises in the Mid -
Slide 29: 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 29