Virginia National Bankshares Corporation · NASDAQ:VABK
Virginia National Bankshares — Investor Presentation (June 2022)
32 slides from Virginia National Bankshares's investor presentation, June 2022
Slide 1: Investor Presentation
Exhibit 99.1 Investor Presentation June 2022
Slide 2: Disclosures
Disclosures Forward-Looking Statements Certain statements in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, statements with respect to the Company’s operations, performance,
Slide 3: Today's Presenters
Today’s Presenters William D. Dittmar, Jr. Glenn W. Rust Tara Y. Harrison Diane E. Chairman of the Board President, CEO & Director Chief Financial Officer & Corscadden-Weaver Executive Vice President President and Director of Virginia National Bank • Served as a Director of • Joined the Company in •
Slide 4: Table of Contents
Table of Contents 1. Introduction to Virginia National 2. Financial Highlights 3. Why VABK? 4. Appendix
Slide 5: Introduction to Virginia National
Introduction to Virginia National
Slide 6: Overview of Virginia National Bankshares Corporation
Overview of Virginia National Bankshares Corporation Our Story Virginia’s Premier Community Bank • $1.9 billion in assets bank holding company headquartered in Charlottesville, VA $1.9B $1.0B $1.8B Assets Loans Deposits • Seasoned management team with over 220 years of collective banking experience
Slide 7: Experienced Management and Board of Directors
Experienced Management and Board of Directors Seasoned Executive Leadership Experienced and Balanced Board Age: 66 Board Glenn W. Rust Board Member (Age) Experience President, CEO & Director Banking Experience: 48 Years Tenure Virginia National Experience: 16 Years William D. Ditmar, Jr. (69) 24 Yea
Slide 8: Our Corporate Vision
Our Corporate Vision Customer Experience Empowered Employees Local Commitment Deliver caring and innovative Tag Line: “It’s all about people… Exceptional service begins and financial solutions to our and always will be” ends with people communities Access to local decision makers Embrace diversity,
Slide 9: History of Our Growth
History of Our Growth Timeline of Major Events Footprint Through Time 2006 Virginia National Bank opened in Charlottesville after Winchester 1998 8 Total Offices receiving OCC Charter, with more than 900 local shareholders Orange Glenn Rust joined Virginia National as President and Charlottesville 2
Slide 10: Overview of Virginia's Economy
Overview of Virginia’s Economy Virginia Market Highlights Top Counties in the US – 2022 Proj. Median HHI ($000) • Ranked the Top State for Business two years in a Virginia $162.4 row CNBC 2021 $148.7 $146.5 $142.0 $137.0 $137.0 $136.2 $131.8 $129.0 $128.9 • Ranked #7 Overall Best State to Live In US
Slide 11: Overview of Our Markets
Overview of Our Markets Charlottesville, VA MSA (2022 Population: 233,639) (1) ’22 – ’27E Proj. Population Growth (%) (1) − $11.9 billion GDP in 2020 2 5.3% − ~6 thousand businesses operating within 4.1% 4.2% 4.5% the MSA, including 6 Fortune 500s in 3.4% 3.2% 2020 3 − Ranked 5th best place to live
Slide 12: Dominant Market Share in Core Markets
Dominant Market Share in Core Markets Charlottesville, VA MSA * Historical Growth in Charlottesville Deposits ($B) Deposits Market VABK CAGR: 14.2% 11.5% Rank Institution ($mm) Share Branches Charlottesville MSA CAGR: 5.8% Rank: 4 1 Bank of America Corp. $1,596 24.23 % 7 2 Truist Financial Corp. 1,4
Slide 13: Overview of our Merger with Fauquier Bankshares Inc.
Overview of our Merger with Fauquier Bankshares Inc. Pro Forma Branch Footprint ‒ Creates a Top 10 largest Virginia-based community bank(1) ‒ Improves demographics ‒ ’22 - ’27 projected pop. growth: 4.07% ’22 - ’27 projected pop. growth: 4.26% ‒ $94,085 Median HHI $108,285 Median HH Scale ‒ $918
Slide 14: Organic Growth vs. M&A
Organic Growth vs. M&A • Continue our organic growth strategy in Northern Virginia and Richmond o Hired our bank president, Diane Corscadden-Weaver, who has spent her entire career as a banker in Northern Virginia o Hired 4 commercial / business lenders in Richmond and Northern Virginia in 2022 • Ma
Slide 15: Financial Highlights
Financial Highlights \vr VIRGINIA NATIONAL BANKSHARES CORPORATION
Slide 16: Balance Sheet Trends
Balance Sheet Trends Total Assets ($M) Total Gross Loans ($M) ’16 – Q1 ’22 CAGR: 24.8% ’16 – Q1 ’22 CAGR: 15.1% ’16 – ’20 CAGR: 8.8% ’16 – ’20 CAGR: 6.0% $1,061 $1,007 $1,972 $1,935 $609 $529 $537 $540 $482 $848 $644 $645 $703 $605 2016 2017 2018 2019 2020 2021 Q1 '22 2016 2017 2018 2019 2020 2021 Q
Slide 17: Core Funded Deposit Portfolio
Core Funded Deposit Portfolio Deposit Composition & Deposits by Geography (%) Historical Deposit Composition ($M) Retail Time Jumbo Time Northern $1,796 $1,774 Deposits Deposits Virginia 6% 2% 12% $162 $155 Money Market & Demand Savings Deposits 36% 30% Central Virginia 43% $1,111 $1,094 Fauquier NO
Slide 18: Loan Composition
Loan Composition Highlights Loan Composition (%) Consumer PPP C&I & Other 1% 9% 4% C&D • No Shared National Credit Exposure and limited exposure to 6% purchased and participated loans (as of 6/15/22) Non Owner- Occupied CRE • Funded $207.5 million Paycheck Protection Program loans 24% over the progr
Slide 19: Asset Quality
Asset Quality Cumulative losses from the Global Financial Crisis of 0.66%(1) Post-Global Financial Crisis Peak NPAs of $8.7mm, 1.98% of total assets, in 2009 NPAs / Loans + OREO (%) NCOs / Average Loans (%) 0.39% 20-Year Average: 0.12% 0.53% 0.49% 0.46% 0.19% 0.21% 0.20% 0.20% 0.12% 0.06% 0.05%
Slide 20: Diversified Business Segments
Diversified Business Segments Differentiated Revenue Streams Total Revenue by Segment ($000) $4,761 • Wealth & investment advisory services • Revenue generated primarily from investment advisory and $1,579 financial planning fees; decreasing portion from brokerage $3,253 commissions $3,153 • Purchas
Slide 21: Operating Expense
Operating Expense Noninterest Expense / Average Assets (%) Noninterest Expense ($M) 2.73% Noninterest Expense Detail 2.54% 2.58% 2.51% 2017 2018 2019 2020 2021 Q1 '22 2.35% Compensation & Benefits $8.3 $8.0 $9.2 $9.5 $16.1 $4.7 Occupancy & Equipment 2.4 2.3 2.3 2.4 4.5 1.5 2.08% Marketing and Promot
Slide 22: Profitability Trends
Profitability Trends Core Return on Average Assets (%) Core Return on Average Tangible Common Equity (%) 13.2% 12.7% 1.34% 10.7% 10.6% 11.0% 1.06% 1.04% 1.05% 1.04% 9.2% 0.81% 2017 2018 2019 2020 2021 Q1 '22 2017 2018 2019 2020 2021 Q1 '22 Net Interest Margin (%) Core Efficiency Ratio (%) 3.80% 3.63
Slide 23: Securities Book Overview
Securities Book Overview Investment Securities Average Balance and Yield Accumulated Other Comprehensive (Loss) Income $313 $1.5 2.5% 2.4% 2.2% $252 1.9% 1.9% ($0.9) ($0.0) ($1.3) ($2.2) 1.7% $121 $75 $66 $68 ($21.6) 2017 2018 2019 2020 2021 Q1 '22 2017 2018 2019 2020 2021 Q1 '22 Average Securities
Slide 24: Interest Rate Sensitivity
Interest Rate Sensitivity Variable vs. Fixed Rate Loans (As of 12/31/21) Static Shock / Rate Ramp Analysis (2-Year Immediate Shock) $36,918, 29.0% Net Interest Income % Change $29,043, 24.3% 24% 52% $20,123, 18.2% 48% 27% $10,143, 10.1% Shock +100 bps Shock +200 bps Shock +300 bps Shock +400 bps Fix
Slide 25: Capital Ratios
Capital Ratios Tangible Common Equity / Tangible Assets (%) CET1 Ratio (%) 15.09% 10.85% 10.73% 14.18% 14.24% 14.15% 9.98% 13.47% 9.66% 12.23% 7.37% 6.76% 2017 2018 2019 2020 2021 Q1 '22 2017 2018 2019 2020 2021 Q1 '22 Total Capital Ratio (%) Bank CRE / C&D Concentration Ratios 15.22% 15.66% 260% 14
Slide 26: Why VABK?
Why VABK? \vr VIRGINIA NATIONAL BANKSHARES CORPORATION
Slide 27: Consistent Credit Quality and Profitability…
Consistent Credit Quality and Profitability… Virginia National has been profitable since the first year post-inception Cumulative losses in Global Financial Crisis of 0.66% vs. aggregate banking industry losses of 8.56% (1) Net Charge-Offs / Average Loans VABK 2.5% 2.5% Banking Industry 1.6% 1.3
Slide 28: …Has Driven Top-Tier Shareholder Value Growth
…Has Driven Top-Tier Shareholder Value Growth 2006 – Q1 ’22: TBVPS CAGR of 5.00% vs. KRX Median of 4.25% vs. Peer Median of 3.80% $34.84 $35.14 $34.20 $32.01 $5.21 $6.71 $29.47 $6.41 $4.01 $26.27 $2.83 $23.72 $1.80 $21.98 $1.22 $20.87 $20.23 $0.77 $17.82 $0.43 $0.18 $15.91 $15.04 $13.57 $12.54 $12
Slide 29: Key Investment Highlights
Key Investment Highlights Experienced board of directors and management team Attractive markets driving future growth Attractive core deposit franchise Conservative credit culture Scalable and efficient operating model Committed to serving and developing local economies Shareholder alignment and per
Slide 30: Appendix
Appendix \vr VIRGINIA NATIONAL BANKSHARES CORPORATION
Slide 31: Historical Financials
Historical Financials (Dollars in Thousands) At or for the year ended, '16 - Q1 '22 At or for the quarter ended, 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 CAGR 06/30/21 09/30/21 12/31/21 03/31/22 Balance Sheet Total Assets 605,030 643,886 644,800 702,627 848,410 1,972,184 24.8% 1,847,122
Slide 32: Core Profitability Non-GAAP Reconciliation
Core Profitability Non-GAAP Reconciliation (Dollars in Thousands) As of or for the Twelve Months Ended, Three Months Ended 2016 2017 2018 2019 2020 2021 3/31/22 Net Income $5,748 $6,554 $8,470 $6,689 $7,978 $10,071 $4,924 Net Income Attributable to NCI 0 0 0 0 0 0 0 Add: Amort of Goodwill & Intang I
Virginia National Bankshares — Investor Presentation (June 2022) on 6ix