First National Corporation · NASDAQ:FXNC
First National — FIG Partners Bank CEO Forum 2015
25 slides from First National's conference presentation, Oct 2, 2015
Slide 1: First National Corporation Investor Presentation
First’? National Corporation Investor Presentation FIG Partners Bank CEO Forum September 28-29, 2015
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT The Company makes forward-looking statements that are subject to risks and uncertainties. These forward-looking statements include statements regarding profitability, liquidity, adequacy of capital, the allowance for loan losses, interest rate sensitivity, market risk, grow
Slide 3: Operating Philosophy
OPERATING PHILOSOPHY BANKING IS A PEOPLE BUSINESS “Large enough to deliver, small enough to care” First‘?
Slide 4: Strategic Vision
EGIC VISION = Build a profitable banking company across markets in Virginia where community engagement and relationship focus are valued = Deliver consistent reliable return to shareholders through both organic growth and acquisitions = Core funding is the building block for valuable banking franchi
Slide 5: Business Profile
BUSINESS PROFILE First National Corporation Business Personal Banking Banking i Investment Retail Residential Branches Mortgage iterate set = $696 million total assets = $316 million assets under management = Bank founded in NW Virginia in 1907 = Investment services began in 1996 = 16 banking office
Slide 6: Experienced Management Team
XPERIENCED MANAGEMENT TEAM Industry Experience Years in Market Scott Harvard President & CEO 30 years 4 years Dennis Dysart Sr. EVP, COO 22 years 22 years M. Shane Bell EVP, CFO 21 years 13 years Samuel Crow, Jr. EvP, CCO 25 years tyear First?
Slide 7: Strengths
STRENGTHS Decision makers are leaders in and have deep knowledge of our communities Located in growing Virginia markets on the I-81, I-64 and 1-66 corridors Market demographics are strong, economies are diverse Demonstrated ability to execute acquisition Effective interest rate risk management Exper
Slide 8: Total Assets
TOTAL ASSETS $695.8 $700.0 Gea $600.0, $500.0, $400.0, $300.0, $200.0, $100.0 s 2010 2011 2012 2013 201502 ‘Loans, net s-Securities, cash, fed funds Other mo First‘?
Slide 9: Loan and Deposit Mix
LOAN AND DEPOSIT MIX Loans 8% ‘Land Dev. mRRE CRE other > Balanced portfolio between CRE and RRE > Opportunity to diversify with C&I lending (atune 30, 2015) vVVVVV Deposits ‘= Noninterest bearing lemand ‘= Savings and interest. bearing demand Time Non-maturity deposits 76% of deposits Low cost fund
Slide 10: Net Income
NET INCOME $100 S76 . | s + 2012 2014 2015 92 (10.0) $45.0) First? (in mitions, sic months ended 2015 02),
Slide 11: Earnings Per Share
ARNINGS PER SHARE (BASIC AND DILUTED) $200 $122 $100 ~ s 2012 2013, 201502 $(4.00) $12.00) $(8.00) $(4.00) $(6.00) First? (six months ended 2015 a2),
Slide 12: Focus on Revenue Growth
FOCUS ON REVENUE GROWTH $30.0 5.0% $27.5 $25.0 40% $200 3.0% $15.0 20% $10.0 10% $5.0 s - 0.0% 2010 2014 2012 2013 2014 2015.92 ‘MEENet Interest Income sEmNoninterest Income ==Net Interest Margin ome First‘?
Slide 13: Opportunity in Efficiency
OPPORTUNITY IN EFFICIENCY $30,000 100.0% $24,889 $25,000 20.0% $20,000 80.0% $15,000 70.0% $10,000 60.0% $5,000, 50.0% s 40.0% 2010 2011 2012 2013 2014 2015.02 me Noninterest Expense —Etticency ratio.
Slide 14: Improved Asset Quality
IMPROVED ASSET QUALITY Nonperforming assets (1) 406 a8 308 29 206 198 19 ton oss oon 2010 2011 2012 2013 2014 201592 percentage of total ausets and comeried of nan accrue! tens Classified assets 2010 2011 $20,000 2012 20132014 201502
Slide 15: Well Capitalized
WELL CAPITALIZED Total Risk-Based Capital Ratio 19.9% 19.2% 20.0% 7 Ao 15.3% 14.2% 15.0% 125% Well capitalized 10.0% 5.0% | 0.0% + - 2010 2011 2012 2013 2014 201502 First?
Slide 16: First
First
Slide 17: Winchester, VA MSA
WINCHESTER, VA MSA Major Employers Include: > Valley Health System > Navy Federal Credit Union > U.S. Department of Defense > Shenandoah University > U.S. Department of Homeland Defense > Wal Mart » Rubbermaid Commercial Prod LLC Other Information: > Current unemployment rate of 4.1% 180,000 160,000
Slide 18: Harrisonburg, VA MSA
HARRISONBURG, VA MSA Major Employers Include: Population change 180,000 + > James Madison University 470,000 > The Rockingham Memorial Hospital 160,000 > Cargill Meat Solutions 150,000 > Wal Mart 440,000 > Aramark Campus, LLC 430,000 > R.R. Donnelley and Sons Company 420,000 > Great Eastern Resort M
Slide 19: Staunton-Waynesboro, VA MSA
STAUNTON-WAYNESBORO, VA MSA Major Employers Include: > Augusta Medical Center > Mckee Foods Corporation > Target Corp > Hollister, Inc > Blue Ridge Community College > AAF McQuay, Inc. > J.B. Hunt Transport Other Information: > Current unemployment rate of 4.5% > Majority of out-commuters to Rocking
Slide 20: Our Ownership
OUR OWNERSHIP ‘insiders = Institutional Other = Ownership commitment from insiders * High level of local ownership = Banc Funds represents institutional ownership {common shareholders, as of June 2015) IL BVA WV Other First?
Slide 21: Stock Profile: FXNC
STOCK PROFILE: FXNC Shai ice (9/25/15) $8.30 52 Week Range $7.85 to $10.00 Shares Outstanding 4,911,648 Market Capitalization $40.8 million Average Daily Volume 1,002 Price/Book 90.9% Price/Tangible Book 96.9% Source: SNL Financial First?
Slide 22: Total Return
TOTAL RETURN First National Corporation - Total Return (%) neoanse 3 Year = 68.94% Poem RECO First‘?
Slide 23: Branch Acquisition Success
BRANCH ACQUISITION SUCCESS Natural extension of footprint in the Shenandoah Valley and central Virginia Quicker path to scale and profitability than de novo branch strategy Complemented loan production offices in Staunton and Harrisonburg Low cost core funding for loan growth Regional President hire
Slide 24: Virginia Financial Institutions
VIRGINIA FINANCIAL INSTITUTIONS 20 15 inl $1810 $58 S500M to $18 '$250M to $500M < $250 en First?
Slide 25: Opportunities
OPPORTUNITIES = Focus on improving efficiency ratio = Continue to build scale through opportunistic expansion = Deploy acquired deposits into loans by leveraging leadership team in new regions = Increase market share through improved service and delivery = Growth from expanding population across mar