First National Corporation · NASDAQ:FXNC
First National — Merger or Acquisition (February 2021)
17 slides from First National's merger presentation, Feb 18, 2021
Slide 1: First National Corporation Acquisition of The Bank of Fincastle
First’) National Corporation First National Corporation Acquisition of The Bank of Fincastle February 18, 2021 Bank of Fincastle Since 1875
Slide 2: Disclaimer: Cautionary Note Regarding Forward-Looking Statements
Disclaimer CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Ceti information cortained in this communication may include Yorwardooking statements within the meaning of Section 27A ofthe Secures Act of 1833, as amended. and Section 2IE ofthe Secuttes Exchange Act of 193, as amended, Examples offo
Slide 3: Disclaimer: Additional Information About the Acquisition
Disclaimer ADDITIONAL INFORMATION ABOUT THE ACQUISITION AND WHERE TO FIND IT In connection vith the proposed merger, FAC wil fle with the SEC a registration statement on Form S-, which wil inclade a ont pony statement of FINC and BFTL and 9 ‘ospectus of FANC. ae wel 36 other eelevant documents regar
Slide 4: Transaction Rationale
Transaction Rationale Strategically Compelling + Expands FXNC's presence south on the I-81 corridor into Roanoke MSA * Culturally aligned business model in profitable mid-sized Virginia markets = Enhances position to continue organic growth and be opportunistically acquisitive YA Stronger Together =
Slide 5: First National & The Bank of Fincastle: Stronger Together
First National & The Bank of Fincastle: Stronger Together Enhancing First National’s Virginia Presence into Roanoke MSA Summary Pro Forma Financial Metrics FXNC (14) @ Assets | $1.2B crn @ ee . fp ae Loans| $868 M o e ' Saunioa Frdebisig Deposits | $1.0B ce ° Virginia @ _ | +8100 M ejand ‘ap QO ° Br
Slide 6: Aligned Mission and Values to Drive Success in the Combined Company
Aligned Mission and Values to Drive Success in the Combined Company FIRST BANK First’ Customers value the Bank as an indispensable partner in achieving their financial goals Employees are diverse, equitably included, and achieve personal and professional success Shareholders benefit from the rewards
Slide 7: Transaction Overview
Transaction Overview ‘Stock Consideration at a Fixed Exchange Ratio of 0.1649 Shares Cash Consideration of $3.30 per Share Implied per share Consideration of $3.09 per share Per Share Consideration Consideration Mix 80% Stock! 20% Cash Price/ Tangible Book Value: 105% Price/ LTMEPS: 23.8x Valuation
Slide 8: Key Merger Assumptions
Key Merger Assumptions Estimated Net cost Savings ‘Merger & Integration Costs Credit Assumptions. Other Purchase Accounting Marks. Core Deposit intangible Revenue Synergies. $2.9 million of Identified Cost Savings 50% realization of net cost savings in '21, 100% thereafter $4.2million pre-tax Loan c
Slide 9: Summary Financial Impact
Summary Financial Impact EPS Accretion | TBV per Share Impact Pro Forma Capital TBV Earnback Period | ~10% ~ (7%) <5 Years Tier 1 Leverage Ratio > 9.0%
Slide 10: Advancing FXNC's Market Share in Virginia
Advancing FXNC’s Market Share in Virginia Pro Forma Market Demographics Top 45 Virginia Market Share ($B)' Projected('21-'26) Household income Growth 1.) i ] 10.1% 98% 9.0% SSS : | | a B 7 . SS ProFoma — Natona | oS Current Median Household income ($000s) SS $79,066 setisae $61 $67,781 es Cc] [I ||
Slide 11: Summary of Transaction: Stronger Together
Summary of Transaction: Stronger Together @ Combined company provides scale, operating leverage, efficiency é) Diversified loan portfolio in attractive mid-sized Virginia markets Combined company delivers best-in-breed deposit franchise Expanded opportunities for non-interest income growth Positions
Slide 12: Appendix
Appendix
Slide 13: Overview of The Bank of Fincastle (OTCPK: BTFL)
Overview of The Bank of Fincastle (OTCPK: BTFL) Company Snapshot Branch Footprint Corporate Data inva Headquarters Fincastle, VA Date Estabished 1875 Balance Sheet ($000) o ‘Assds $255,042 e Net Loans $199,267 Fincastle Deposits $224,263 Tangible Common Equity $29,997 Daleville @ Asset Quality @/ Tr
Slide 14: Pro Forma Loan & Deposit Composition
Pro Forma Loan & Deposit Composition BFTL PRO FORMA ] aneure 45% 3) cn | ora g 1-4 Famity Fa Fl a5" e Hl | x i — nr seaam 38} Total 1 Total ay Junto Tne i ] ins | ates Deposit Composition 40°20 Cost: 0.20% Source: S&P Global Market inteligence Bening 40°20 Cost: 0.39% 40720 Cost: 0.24% “
Slide 15: Credit Quality Highlights
Credit Quality Highlights Current management has led a substantial turnaround from historical credit issues = Experienced credit review team of internal FXNC bankers including FXNC senior management = Performed thorough due diligence obtaining significant coverage of loan portfolio - Detailed review
Slide 16: Targeted Strategies to Build Shareholder Value
Targeted Strategies to Build Shareholder Value i) Attract and retain (il) Accelerate growth with talented employees acquisitions and team lifts Maintain low-cost deposit portfolio Deliver exceptional service to small businesses and consumers Serve vibrant Grow assets without adding Virginia markets
Slide 17: First National Corporation contact details
First’? National Corporation Scott Harvard, President and CEO (640) 465-6121 sharvard@fbvirginia.com Shane Bell, Executive VP and CFO (540) 465-6130 sbell@fbvirgina.com 7
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