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| 8-K - CURRENT REPORT - FAUQUIER BANKSHARES, INC. | form8k121410.htm |
Deeply rooted in our community.
December 2010
Ticker: FBSS
Safe Harbor Statement
In addition to the historical information contained herein, this report contains forward-looking statements.
Forward-looking statements are based on certain assumptions and describe future plans, strategies,
and expectations of the Company, and are generally identifiable by use of the words “believe,” “expect,”
“intend,” “anticipate,” “estimate,” “project,” “may,” “will,” or similar expressions. Although we believe our
plans, intentions, and expectations reflected in these forward-looking statements are reasonable, we
can give no assurance that these plans, intentions, or expectations will be achieved. Our ability to
predict results or the actual effect of future plans or strategies is inherently uncertain, and actual results
could differ materially from those contemplated. Factors that could have a material adverse effect on our
operations and future prospects include, but are not limited to, changes in: interest rates, general
economic conditions, the legislative/regulatory climate, monetary and fiscal policies of the U.S.
Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve
System, the quality or composition of the Bank’s loan or investment portfolios, demand for loan
products, deposit flows, competition, demand for financial services in our market area, and accounting
principles, policies, and guidelines. These risks and uncertainties should be considered in evaluating
forward-looking statements in this report, and you should not place undue reliance on such statements,
which reflect our position as of the date of this report. For additional discussion of risk factors that may
cause our actual future results to differ materially from the results indicated within forward-looking
statements, please refer to "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the year
ended December 31, 2009.
Forward-looking statements are based on certain assumptions and describe future plans, strategies,
and expectations of the Company, and are generally identifiable by use of the words “believe,” “expect,”
“intend,” “anticipate,” “estimate,” “project,” “may,” “will,” or similar expressions. Although we believe our
plans, intentions, and expectations reflected in these forward-looking statements are reasonable, we
can give no assurance that these plans, intentions, or expectations will be achieved. Our ability to
predict results or the actual effect of future plans or strategies is inherently uncertain, and actual results
could differ materially from those contemplated. Factors that could have a material adverse effect on our
operations and future prospects include, but are not limited to, changes in: interest rates, general
economic conditions, the legislative/regulatory climate, monetary and fiscal policies of the U.S.
Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve
System, the quality or composition of the Bank’s loan or investment portfolios, demand for loan
products, deposit flows, competition, demand for financial services in our market area, and accounting
principles, policies, and guidelines. These risks and uncertainties should be considered in evaluating
forward-looking statements in this report, and you should not place undue reliance on such statements,
which reflect our position as of the date of this report. For additional discussion of risk factors that may
cause our actual future results to differ materially from the results indicated within forward-looking
statements, please refer to "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the year
ended December 31, 2009.
2
FAUQUIER BANKSHARES, INC.
Table of Contents
— Who We Are
— Market Area
— Financial Condition
— Financial Performance and Goals
— Building Shareholder Value
3
FAUQUIER BANKSHARES, INC.
Who We Are
4
FAUQUIER BANKSHARES, INC.
Summary Statistics
Founded 1902
Headquarters Warrenton, Virginia (50 miles west of Washington, D.C.)
(10 branch locations)
(10 branch locations)
Total Assets $624.4 million
Total Loans, net $459.8 million
Shares Outstanding 3,636,758
Insider Ownership 5.69%
Institutional Ownership 11.50% 1 (8.3% held by Royce & Associates, LLC2)
Shareholders Approx. 500 + “street” (Over 80% in VA)
All data provided as of September 30, 2010, unless otherwise noted.
(1) Source: NASDAQ as of December 2, 2010
(2) A subsidiary of Legg Mason
5
FAUQUIER BANKSHARES, INC.
Industry Recognition
— Named #134 of “Top 200 Publicly-Traded Community Banks” in the
June 2010 issue of U.S. Banker magazine, based on previous 3-year
average ROE of 1,075 public institutions. This marks the fourth
consecutive year that FBSS was on the “Top 200” listing.
June 2010 issue of U.S. Banker magazine, based on previous 3-year
average ROE of 1,075 public institutions. This marks the fourth
consecutive year that FBSS was on the “Top 200” listing.
— Ranked #2 in 2009 for Top Community Bank IT projects by Bank
Technology News in their March 2010 issue. In the summer of 2009,
the Bank negotiated and successfully implemented a core conversion
with Fiserv improving efficiency and decreasing expenses.
Technology News in their March 2010 issue. In the summer of 2009,
the Bank negotiated and successfully implemented a core conversion
with Fiserv improving efficiency and decreasing expenses.
6
FAUQUIER BANKSHARES, INC.
Our Success Is a Result of Our Culture
7
— Strategic Planning
— Teamwork
— Disciplined Execution (aka “Blocking and Tackling”)
— Consistently Strong Credit Culture
— Disciplined Loan and Deposit Pricing Strategy
FAUQUIER BANKSHARES, INC.
Management Focus On Growth
8
FAUQUIER BANKSHARES, INC.
l Quality Growth
l Loan Portfolio
l Core Transaction Deposits
l Non-Interest Fee Income
l Wealth Management and Financial Planning
Our Customer Focus
9
To deliver a superior experience for our retail and
commercial customers by enabling them to make the
right choices when selecting financial products and
services that best fit their needs and lifestyles,
thereby empowering our customers to achieve their
financial goals.
commercial customers by enabling them to make the
right choices when selecting financial products and
services that best fit their needs and lifestyles,
thereby empowering our customers to achieve their
financial goals.
FAUQUIER BANKSHARES, INC.
Market Area
10
FAUQUIER BANKSHARES, INC.
Northern Virginia Marketplace
*Including City of Manassas data
Source: Weldon Cooper Center for Public Service
11
FAUQUIER BANKSHARES, INC.
Fauquier County
11,822
41.89%
Fairfax County
5,499
19.48%
Prince William County*
4,295
15.22%
Loudoun County
1,595
5.65%
District of Columbia
1,139
4.04%
Other Places of Work
3,874
13.73%
Total Out-Commuters
16,402
58.11%
Total County Workforce
28,224
100.00%
Places to Which Fauquier County
Residents Commute (2000)
Primary Market Area
12
FAUQUIER BANKSHARES, INC.
Northern Virginia Marketplace
— Virginia voted “No. 1 Most Business-Friendly State” by Forbes
Magazine for the fourth straight year. (2006 - 2009)
Magazine for the fourth straight year. (2006 - 2009)
— Comparably stronger population, economic and employment growth
— Stable federal government presence
— Exceptional higher education
— Diverse industry employment, mostly “clean” industries
— High household income
13
FAUQUIER BANKSHARES, INC.
14
Source: MRIS
FAUQUIER BANKSHARES, INC.
15
Unemployment Rates
FAUQUIER BANKSHARES, INC.
Current Market with Sustainable Growth
16
FAUQUIER BANKSHARES, INC.
|
Market
|
Total
Population 2010 (actual) |
Population
Change 2000 - 2010 (%) |
Projected
Change 2010 - 2015 (%) |
Total
Households 2010 (actual) |
Median
HH Income 2010 ($) |
HH Income
Change 2000 - 2010 (%) |
Projected
HH Income Change 2010 - 2015 (%) |
|
Fauquier, VA
|
68,698
|
24.59
|
5.40
|
24,708
|
81,769
|
31.29
|
14.36
|
|
Manassas, VA
(City) |
36,476
|
3.82
|
(0.77)
|
12,114
|
79,048
|
31.00
|
16.51
|
|
Manassas Park,
VA (City) |
13,364
|
29.87
|
1.26
|
4,217
|
80,759
|
32.65
|
14.56
|
|
Prince William, VA
|
387,988
|
38.17
|
7.32
|
132,702
|
86,208
|
31.59
|
16.48
|
Source: SNL Financial
Financial Condition
FAUQUIER BANKSHARES, INC.
17
18
FAUQUIER BANKSHARES, INC.
Source: Fauquier Bankshares Financials
As of December 31 or last day of quarter.
19
Loans, Net
FAUQUIER BANKSHARES, INC.
Source: Fauquier Bankshares Financials
As of December 31 or last day of quarter.
20
At September 30, 2010
FAUQUIER BANKSHARES, INC.
21
Nonperforming Loans to Period End Loans
Peer Group - Bank Holding Companies with Consolidated Assets of $500MM - $1B (2010/2009/2008)
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Sources: BHC Performance Report and Fauquier Bankshares Financials
FAUQUIER BANKSHARES, INC.
22
Loan Losses (Net of Recoveries)
As a Percentage of Average Total Loans
FAUQUIER BANKSHARES, INC.
Peer Group - Bank Holding Companies with Consolidated Assets of $500MM - $1B (2010/2009/2008)
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Sources: BHC Performance Report and Fauquier Bankshares Financials
*Annualized
23
FAUQUIER BANKSHARES, INC.
Allowance for Loan Loss
As a Percentage of Total Loans
Peer Group - Bank Holding Companies with Consolidated Assets of $500MM - $1B (2010/2009/2008)
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Sources: BHC Performance Report and Fauquier Bankshares Financials
Year Percentile
Q310 14
2009 15
2008 28
2007 27
2006 35
24
FAUQUIER BANKSHARES, INC.
Allowance for Loan Loss
As a Percentage of 90 Days Past Due & Nonaccrual Loans
Peer Group - Bank Holding Companies with Consolidated Assets of $500MM - $1B (2010/2009/2008)
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Sources: BHC Performance Report and Fauquier Bankshares Financials
25
FAUQUIER BANKSHARES, INC.
Source: Fauquier Bankshares Financials
As of December 31 or last day of quarter.
26
Total Deposits
FAUQUIER BANKSHARES, INC.
Source: Fauquier Bankshares Financials
As of December 31 or last day of quarter.
27
FAUQUIER BANKSHARES, INC.
Tangible Equity to Assets Ratio
Source: Fauquier Bankshares Financials
As of December 31 or last day of quarter.
28
FAUQUIER BANKSHARES, INC.
Leverage Ratio
Year Percentile
Q310 41
2009 53
2008 67
2007 49
2006 58
Peer Group - Bank Holding Companies with Consolidated Assets of $500MM - $1B (2010/2009/2008/2006)
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Source: BHC Performance Report
29
FAUQUIER BANKSHARES, INC.
“Well Capitalized” Threshold 6%
Year Percentile
Q310 33
2009 43
2008 57
2007 46
2006 54
Peer Group - Bank Holding Companies with Consolidated Assets of $500MM - $1B (2010/2009/2008/2006)
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Source: BHC Performance Report
30
FAUQUIER BANKSHARES, INC.
Peer Group - Bank Holding Companies with Consolidated Assets of $500MM - $1B (2010/2009/2008/2006)
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Source: BHC Performance Report
Year Percentile
Q310 28
2009 38
2008 56
2007 42
2006 52
FAUQUIER BANKSHARES, INC.
Average Daily Balances for Three Months Ended September 30, 2010
31
$501MM
Fauquier County, Western Prince William County and
Manassas City Deposit Market Share
Manassas City Deposit Market Share
32
|
|
Financial Institution
|
Current
Number of Branches |
Total Deposits
2010 ($000) |
Total Deposits
2009 ($000)
|
Year to Year
Deposit Change 2010
(%)
|
Market
Share 2010
|
Market
Share 2009
|
|
|
BB&T Corp.
|
17
|
$ 1,022,857
|
$ 1,023,104
|
(0.02)
|
29.13%
|
30.75%
|
|
|
Fauquier Bankshares
|
10
|
493,053
|
412,892
|
19.41
|
14.04%
|
12.41%
|
|
|
Suntrust Bank
|
7
|
428,557
|
417,666
|
2.61
|
12.20%
|
12.55%
|
|
|
Wells Fargo Co. (Wachovia)
|
5
|
312,878
|
308,020
|
1.58
|
8.91%
|
9.26%
|
|
|
Bank of America Corp.
|
4
|
192,607
|
184,549
|
4.37
|
5.48%
|
5.55%
|
|
|
Capital One Financial Corp (Chevy)
|
8
|
139,108
|
154,882
|
(10.18)
|
3.96%
|
4.66%
|
|
|
PNC Financial Services Group
|
7
|
129,330
|
151,671
|
(14.73)
|
3.68%
|
4.56%
|
|
|
Cardinal Bank
|
1
|
123,996
|
117,343
|
5.67
|
3.53%
|
3.53%
|
|
|
Virginia Commerce Bank
|
2
|
118,727
|
102,985
|
15.29
|
3.38%
|
3.10%
|
|
|
Other 16 Institutions
|
25
|
550,609
|
454,023
|
21.27
|
15.69%
|
13.63%
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
86
|
$3,511,722
|
$3,327,135
|
|
100%
|
100%
|
|
|
Source: FDIC - Deposit Market Share Report
Data as of June 30, 2010 |
|
|||||
FAUQUIER BANKSHARES, INC.
Financial Performance
and Goals
and Goals
FAUQUIER BANKSHARES, INC.
33
34
Return on Average Equity (ROAE)
FAUQUIER BANKSHARES, INC.
Peer Group - Bank Holding Companies with Consolidated Assets of $500MM - $1B (2010/2009/2008/2006)
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Sources: BHC Performance Report and Fauquier Bankshares Financials
Earnings Per Share, Diluted
FAUQUIER BANKSHARES, INC.
35
Net Income
$3.7MM
Net Income
$5.0MM
Net Income
$3.4MM
Source: Fauquier Bankshares Financials
As of December 31, unless otherwise noted.
Q3 2010 (9 mo.) data is annualized based on $0.77 per share and net income of $2.8 MM as of September 30, 2010.
36
Net Income (ROAA)
(As a Percent of Average Assets)
(As a Percent of Average Assets)
FAUQUIER BANKSHARES, INC.
Year Percentile
Q310 61
2009 69
2008 65
2007 59
2006 62
Peer Group - Bank Holding Companies with Consolidated Assets of $500MM - $1B (2010/2009/2008/2006)
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Sources: BHC Performance Report and Fauquier Bankshares Financials
Net Margin Interest*
37
FAUQUIER BANKSHARES, INC.
*Net interest income on a taxable equivalent basis divided by average earning assets - four point average.
Peer Group - Bank Holding Companies with Consolidated Assets of $500MM - $1B (2010/2009/2008/2006)
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Source: BHC Performance Report and Fauquier Bankshares Financials
Cost of Funds
38
FAUQUIER BANKSHARES, INC.
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Sources: BHC Performance Report and Fauquier Bankshares Financials
Total Non-Interest Income
As a Percent of Adjusted Operating Income (TE)
As a Percent of Adjusted Operating Income (TE)
FAUQUIER BANKSHARES, INC.
39
Peer Group - Bank Holding Companies with Consolidated Assets of $500MM - $1B (2010/2009/2008)
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Source: BHC Performance Report and Fauquier Bankshares Financials
40
Assets Under Management
(At Market Value)
(At Market Value)
FAUQUIER BANKSHARES, INC.
Source: Wealth Management Services Statement of Condition and SNL - As of December 31 or last day in quarter
S&P 500 Index
Keys to Building Shareholder Value
— Maintain strong credit quality
- Past due loans as a percent of total loans consistently under 2%
- Past due loans as a percent of total loans consistently under 2%
— Build transaction account deposit base
— Disciplined loan and deposit pricing
— Continue to improve and implement technology
FAUQUIER BANKSHARES, INC.
41
Stock Total Return Performance
Source: SNL Financial as of 11/17/2010
FAUQUIER BANKSHARES, INC.
42
|
Index
|
Over Last
Year |
Over Last Two
Years |
Over Last
Three Years |
Since Going
Public (1997) |
|
FBSS
|
2.99%
|
11.08%
|
(14.56%)
|
201.58%
|
|
|
|
|
|
|
|
SNL Banks
|
(2.16%)
|
(6.13%)
|
(45.41%)
|
(0.63%)
|
|
|
|
|
|
|
|
SNL $250M - $500M
|
7.47%
|
(12.56%)
|
(44.80%)
|
47.61%
|
|
|
|
|
|
|
|
SNL $500M - $1B
|
3.56%
|
(10.60%)
|
(40.76%)
|
61.73%
|
43
Stock Total Return Performance
(November 30, 2000 - November 30, 2010)
(November 30, 2000 - November 30, 2010)
FAUQUIER BANKSHARES, INC.
Source: SNL Financial
44
FAUQUIER BANKSHARES, INC.
Source: SNL Financial - December 2, 2010
Stock Chart - Price/Tangible Book Value
(November 30, 2000- November 30, 2010)
(November 30, 2000- November 30, 2010)
45
FAUQUIER BANKSHARES, INC.
Source: SNL Financial - December 3, 2010
Stock Chart - Price/Tangible Book Value
(January 2, 2009- December 2, 2010)
(January 2, 2009- December 2, 2010)
Buybacks and Dividends
as a Percentage of Net Income
as a Percentage of Net Income
46
FAUQUIER BANKSHARES, INC.
Contact Information
Investor Relation Contacts
Randy K. Ferrell
President & Chief Executive Officer
randy.ferrell@fauquierbank.com
randy.ferrell@fauquierbank.com
Eric P. Graap
Executive Vice President
& Chief Financial Officer
eric.graap@fauquierbank.com
Valerie Barlowe
Investor Relations Coordinator
valerie.barlowe@fauquierbank.com
www.fauquierbank.com
MAIN OFFICE
THE PLAINS
VIEW TREE
BEALETON
OLD TOWN MANASSAS
SUDLEY ROAD
NEW BALTIMORE
CATLETT
FAUQUIER BANKSHARES, INC.
BRISTOW
47
HAYMARKET