First National Corporation · NASDAQ:FXNC
First National — Investor Presentation (May 2018)
26 slides from First National's investor presentation, May 8, 2018
Slide 1: Investor Presentation May 2018
Investor Presentation May 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements The Company makes forward-looking statements in this presentation that are subject to risks and uncertainties. These forward-looking statements may include statements regarding profitability, liquidity, adequacy of capital, the allowance for loan losses, interest rate sens
Slide 3: First National Corporation Customer Map
First National Corporation Customer Map Ticker “FXNC” quoted on OTC Markets Group exchangeCommunity banking since 190715 branches across 6 counties and 3 MSAs in VirginiaWealth management division $220 million AUMLow-cost deposit portfolio at 0.35% Providing solutions to small businessesManagement t
Slide 4: First National Outperformed Major Indices
First National Outperformed Major Indices Source: SNL Financial, as of April 16, 2018Peers include banking companies headquartered in Virginia with total assets between $500 million and $1 billion. 4
Slide 5: Q1 2018 and Full Year 2017 Highlights
Q1 2018 and Full Year 2017 Highlights Q1 2018 compared to Q1 2017Profitability ratios improved with ROE of 18.47%, ROA of 1.45% and efficiency ratio of 62.39%Net interest income increased 9% and wealth management increased 17%Noninterest expenses increased 2%, including the recent expansion into Ric
Slide 6: Net Interest Income and Margin
Net Interest Income and Margin Dollars in thousands. Quarterly financial information is unaudited. Net interest income increased $555 thousand, or 9%, to $6.5 million in the first quarter of 2018 compared to the first quarter of 2017.Net interest margin increased 9 basis points to 3.79% for the quar
Slide 7: Noninterest Income
Noninterest Income Dollars in thousands. Quarterly financial information is unaudited. Wealth management fees increased $60 thousand, or 17%, for the quarter ended March 31, 2018 compared to the same period of 2017.Service charges on deposit accounts and ATM and check card fees remained stable. 7
Slide 8: Noninterest Expense
Noninterest Expense Dollars in thousands. Quarterly financial information is unaudited. Noninterest expense decreased to 3.17% of average assets for the first quarter of 2018 compared to 3.26% for the same period of 2017.The increase in salaries and benefits and occupancy expense resulted primarily
Slide 9: Improved Efficiency
Improved Efficiency Total revenue is comprised of net interest income and noninterest income.Dollars in millions. Quarterly financial information is unaudited. The efficiency ratio improved to 62.4% for Q1 2018 compared to 69.5% for Q1 2017 due to continued revenue growth and expense management. 9
Slide 10: Earnings and Profitability
Earnings and Profitability Basic and diluted earnings per share. Quarterly financial information is unaudited. During the fourth quarter of 2017, the company recorded a $752 thousand, or $0.16 per diluted share, charge to income tax expense for the re-measurement of net deferred tax assets, which re
Slide 11: Loan Portfolio and Improved Yield
Loan Portfolio and Improved Yield Dollars in millions. Quarterly financial information is unaudited. Loans increased $23M, or 5%, to $521 million at March 31, 2018 compared to the prior year, while the yield on loans improved 24 basis points to 4.92%. 11
Slide 12: Deposits Provided a Source of Strength
Deposits Provided a Source of Strength Dollars in millions. Quarterly financial information is unaudited. Deposits increased $38M, or 6%, to $693 million at March 31, 2018 compared to the prior year and provide low cost funding of 0.35%Non-maturity deposits are 82% of total deposit and deposit total
Slide 13: Asset Quality
Asset Quality Nonperforming assets comprised of nonaccrual loans and other real estate owned. Peers median ratio was based on banks in Virginia with assets between $500 million to $1 billion. Dollars in thousands. Quarterly financial information is unaudited. Nonperforming assets remained low at 0.0
Slide 14: Capital Position
Capital Position Tangible Book Value per Share Total Risk Based Capital “| 15.1% “ 1017 2Q17 3Q17 4Q17 Tangible Common Equity 1018 1017 2Q17 3Q17 4Q17 1018 Leverage 9.1% 9.2% % 78% 72% 1017 2Q17 3Q17 4Q17 1018 14 2Q17 3017 4Q17 1018
Slide 15: Strategies to Build Shareholder Value
Strategies to Build Shareholder Value Grow Assets Without Adding Significant Overhead Deploy Cash and Securities into Loans Deposit Growth in Vibrant Virginia Markets Diversify Noninterest Income Experienced Board & Management Team Track Record of Value-Creating Acquisitions 15
Slide 16: Deploy Cash and Securities Into Loans
Deploy Cash and Securities Into Loans Source: SNL Financial. Peer median based on banks in Virginia with assets between $500 million to $1 billion as of December 31, 2017. Quarterly financial information is unaudited. 16
Slide 17: Grow Deposits in Vibrant Virginia Markets
Grow Deposits in Vibrant Virginia Markets Virginia’s unemployment rate is lower than the nation at 3.5% 1: Source: Virginia Employment Commission, April 20182: Source: Virginia Economic Development Partnership3: Source: SNL Financial includes City of Winchester, Frederick, Shenandoah and Warren Coun
Slide 18: Track Record of Value-Creating Acquisitions
Track Record of Value-Creating Acquisitions Acquisition Opportunities in Virginia Branch Acquisition Success Six branches acquired in 2015 including $186 million in deposits Hired Regional President and a market executive to deploy deposits into loans in the Staunton-Waynesboro MSA Opened Loan Produ
Slide 19: We Have Methodically Added Talent in Key Areas
We Have Methodically Added Talent in Key Areas 19
Slide 20: Stock Profile
Stock Profile Source: SNL Financial, data as of April 16, 20181 Most recent cash dividend paid on March 16, 20182 At March 31, 2018 Ticker symbol FXNC Exchange OTC Market price $18.70 Common shares outstanding 4,952,575 Market capitalization $92.6 million Insider ownership 16.9% Institutional owners
Slide 21: Appendix
Appendix 21
Slide 22: Selected Financial Data 2013-2017
(dollars in thousands) At or for the year ended, except per share data 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Balance Sheet Assets $522,890 $518,165 $692,321 $716,000 $739,110 Loans, net 346,449 371,692 433,475 480,746 516,875 Deposits 450,711 444,338 627,116 645,570 664,980 Tangible
Slide 23: Peer Comparison
Peer Comparison Source: SNL Financial. Peers defined as banks in Virginia with assets between $500 million and $1 billion as of 12/31/17. Capital ratios are for bank subsidiaries at 12/31/17. Return on Assets Return on Equity Efficiency Ratio Net Interest Margin Loans / Deposits Cash & Securities /
Slide 24: Diversified Loan Portfolio
Diversified Loan Portfolio Loan Composition Financial information at March 31, 2018 is unaudited. 24
Slide 25: Low Cost Deposits
Low Cost Deposits Deposit Composition Non-maturity deposits 82% of total depositsLow cost funding of 0.35%Comprised of 61% personal, 39% business$15 thousand average balance of non-maturity deposits Financial information at March 31, 2018 is unaudited. 25
Slide 26: Contact
Scott Harvard, President and CEO(540) 465-6121sharvard@fbvirginia.comShane Bell, Executive VP and CFO(540) 465-6130sbell@fbvirginia.com 26