EX-99.2 4 d822956dex992.htm EX-99.2

EX-99.2

Investor Presentation

First National Corporation

November 2014

Exhibit 99.2

Forward-Looking Statement

Certain information contained in this discussion may include “forward-

looking statements”

within the meaning of Section 27A of the Securities Act

of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,

as amended. These forward-looking statements relate to the Company’s

future operations and are generally identified by phrases such as “the

Company expects,”

“the Company believes”

or words of similar import.

Although

the

Company

believes

that

its

expectations

with

respect

to

the

forward-looking statements are based upon reliable assumptions within the

bounds of its knowledge of its business and operations, there can be no

assurance that actual results, performance or achievements of the Company

will not differ materially from any future results, performance or

achievements expressed or implied by such forward-looking statements. For

details on factors that could affect expectations, see the risk factors and

other cautionary language included in the Company’s Annual Report on Form

10-K for the year ended December 31, 2013, and other filings with the

Securities and Exchange Commission.

Transaction Summary

First National Corporation (OTCQB:FXNC), the

holding company for First Bank has agreed to

purchase six branches from Bank of America in the

Shenandoah Valley and central Virginia

Average acquired branch size $51 million

$308 million in deposits at a deposit premium of

2.25%

No loans acquired in transaction

Branch staff will be retained by First Bank

Expected to close in second quarter of 2015

Transaction Rationale

Strategic

Rationale

Expands physical presence in the Shenandoah Valley and central Virginia

Ensures core funding for future loan growth

Core deposit base with 42%  DDAs and 29% MMA and savings

Complements new mortgage initiative in Staunton, Virginia and LPO

initiative in Harrisonburg, Virginia

Fits with retail relationship banking strategy

Total assets will exceed $800 million post transaction

Leverages excess capital, effective use of preferred stock

Tangible book value dilution earned back in under 2 years

More attractive expansion than de novo branching

Creates scale and improves efficiencies

Purchased deposits only, no credit risk

Positive impact in down 100 and up 400  rate scenarios

Ensures reliable core funding for loan growth

Financial

Impact

Risk

Profile

Strong Core Deposit Base

IRAs

9%

Checking

22%

Interest

Checking

20%

Savings

7%

MMA

22%

CDs

20%

Total Deposits -

$308 million

Close to 80% seasoned > 60 months

Weighted Average cost of funds 0.21%

Branch Map

Conclusion

Expands commercial banking presence in the

Shenandoah Valley and central Virginia

Quicker path to profitability than de novo branch

strategy

Complements two loan production offices in

Staunton and Harrisonburg

Excellent deposit franchise

Attractive franchise for recruiting commercial

bankers

Expect to close early second quarter 2015

Investor Contact

M. Shane Bell

EVP/Chief Financial Officer

540-465-6130

sbell@fbvirginia.com

OTCQB: FXNC