First National Corporation · NASDAQ:FXNC
First National — Merger or Acquisition (March 2024)
19 slides from First National's merger presentation, Mar 26, 2024
Slide 1: Acquisition of Touchstone Bankshares, Inc.
First National Corporation “ Acquisition of Touchstone Bankshares, Inc. 4 Touchstone Bank Community Banking with Purpose. FirstBank® March 26, 2024
Slide 2: Disclaimer: Cautionary Note Regarding Forward-Looking Statements
Disclaimer CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Cenain tration cortaind in is communication ay inde Yorwatocking statements” win the mearng of Seton Z7A ofthe Secures Act 183, as amended, and Section 2IE ofthe Secures Exchange Acol 153s amended. Exames ol rearslokg_ Saeed lee. bt a e
Slide 3: Disclaimer: Additional Information About the Acquisition
Disclaimer ADDITIONAL INFORMATION ABOUT THE ACQUISITION AND WHERE TO FIND IT bn conection wah the proposed mater, FAC wil le with the SEC a eisatin statement on Fem S-, which line 2 pony statement of FNC and TSBA and 3 Hoapacus eFC se wel a te leat acumen lgardng the popered ancien SHAREHOLDERS OF F
Slide 4: Strategic Rationale
Strategic Rationale { ‘Strategically Compelling: Creates a $21 blion bank inthe Commenweath wih 32 branch jrccooe- iocatons and $157 milon market cap Einancially Compelling: Atvactvely priced at 108.0% of TBV, yielding EPS accretion of ~26% and earnback of30 years First’? National Corporation aa -{s
Slide 5: First National & Touchstone: Stronger Together
First National & Touchstone: Stronger Together Enhancing First National’s Virginia Presence in the Richmond MSA Summary Pro Forma Financial Metrics FXNC (20) @ TSBA(12) assets | $2.18 TSBA Headquarters (1) @ ead Loans| $1.58 Deposits | $1.88 Market Lr! . Cap | “897M A 2 - < Branches 32 is e Communit
Slide 6: Aligned Cultures to Drive Success in the Combined Company
Aligned Cultures to Drive Success in the Combined Company FirstBank*® § Touchstone Bank oe Commun anking wih Prove Excellence, honesty and integrity Community involvement and investment Customers value the bank as an indispensable partner Service driven employees cultivating meaningful customer rela
Slide 7: Transaction Overview
Transaction Overview ‘Stock Consideration at a Fixed Exchange Ratio of 0.8122 Shares; Implied price per share $14.25' ‘Aggregate transaction value of $47.0 million? ‘Structure & Exchange Ratio Consideration 100% Stock Price/ Tangible Book Value: 106.0% Price/2024E EPS + CostSavings: 5.40x a rum 2788
Slide 8: Key Merger Assumptions
Key Merger Assumptions ee | Loan Crecit Marks! Note: Fania dt a8 of Docombn 31,2023 FXNC’s earnings perinternal company estimates ‘TSBA’s earnings per internal company estimates $12.3 million pre-tax ‘$7.2million of Identified Cost Savings (~35% of projected non-interest expense) 0% realizationof ne
Slide 9: Key Merger Assumptions, Cont.
Key Merger Assumptions, Cont. Loan portfolio write-down of $10.0 million accretedstraight-line over4 years ie Pedacanoeme Favorable fixed assetwrite-up of $1.2million accretedstraight-ine over30 years Marks (pre-tax)! Deposit portfolio time deposits) write-down of $0.7 million accretedstraight-line
Slide 10: Summary Financial Impact
Summary Financial Impact Key Transaction impacts to FXNCt Wah interestRate Without interest With interest Rate Marks Rate Mark i 2025E EPS Accretion | ~36% ~27% Tang. Common Equity | ~6.8% IRR | ~38% ~34% CET! Ratio | ~10.5% ~10.8% TBV Earnback Period? | 3.0Years 3.0 Years Tier 4 Ratio | ~11.1% ~11.
Slide 11: Summary of Transaction: Stronger Together
Summary of Transaction: Stronger Together @ Combined company provides scale, operating leverage, efficiency | Diversified loan portfolio in attractive mid-sized Virginia markets Combined company delivers best-in-breed deposit franchise Expanded opportunities for non-interest income growth ® Position
Slide 12: Appendix
Appendix
Slide 13: First National Corporation's Pro Forma Footprint
First National Corporation’s Pro Forma Footprint State of Vegnia Deposit Market Share commen Bans ess hon $108 Tot Ase) rp "Shore _0)_s) anos 61% 2369081 400% 19187 309% IP Natenal risacsine (A N62agea 37% {0 Comrmmatomennet ib fauozes 2m 2 OlgFoetFnancal Ca. (A) rT spas 19 05927 2328 tt forCommonty
Slide 14: Overview of Touchstone Bankshares, Inc.
Overview of Touchstone Bankshares, Inc. Corporate Data 2a maw) Tot we sor sen) as S87 Teta Goes Lars S30 $4029 Star? on Depots buss S174 Sees 2 Loan Depots bas Tre em aN Tce/TA S27 62m 67M Gu trons rr a rT) ROME tom 82% Bom Te ae rere Mage dee 35% 36m 8 Boers Rate um 7608 Toe tom Reeves Leane 1am $0
Slide 15: Pro Forma Loan & Deposit Composition
Pro Forma Loan & Deposit Composition PRO FORMA Loan Composition i 40°29 Vila: 49% Depositomposition 4
Slide 16: Pro Forma Net Income Reconciliation
Pro Forma Net Income Reconciliation Pro Forma Earnings Reconciliation Dats amen exit pe she ate Protos Comino Net con to Comma! sus Temas a Earnings Buildup (oa) 7 (sar) “oO
Slide 17: Targeted Strategies to Build Shareholder Value
Targeted Strategies to Build Shareholder Value ® o i] Attract and retain talented employees Deliver exceptional service to ‘small businesses and consumers Serve vibrant Virginia markets © @ © Accelerate growth with acquisitions and team lifts Maintain low-cost deposit portfolio Grow assets without a
Slide 18: Focused on Delivering Superior Shareholder Returns
Focused on Delivering Superior Shareholder Returns r Return — FXNC vs, Peers! Dividends Pees a ee 8 | $07 suze 5038 sass ‘siTat $1747 $1730 s16:79 a seas. sue 11088 yo | i i I I * oD
Slide 19: First National Corporation
First’? National Corporation Scott Harvard, President and CEO (640) 465-6121 sharvard@fbvirginia.com Shane Bell, Executive VP and CFO (640) 465-6130 sbell@fbvirginia.com