Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - FAUQUIER BANKSHARES, INC. | form8k04072011.htm |
Deeply rooted in our community.
March 2011
NASDAQ: 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, 2010.
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, 2010.
2
FAUQUIER BANKSHARES, INC.
Table of Contents
Ø Who We Are
Ø Market Area
Ø Financial Condition
Ø Financial Performance and Goals
Ø Building Shareholder Value
3
FAUQUIER BANKSHARES, INC.
Who We Are
4
FAUQUIER BANKSHARES, INC.
Purpose
Vision
Core
Values
Making your financial life easier.
Fauquier Bankshares, Inc. is an independent, customer focused,
community resource led by a high performance team. We provide an
above-market return for our shareholders balancing profitability and
prudent growth. Our performance is driven by professional financial
advisors delivering customized investment, credit, fiduciary, insurance,
and banking services in Fauquier County, western Prince William
County, and neighboring markets.
community resource led by a high performance team. We provide an
above-market return for our shareholders balancing profitability and
prudent growth. Our performance is driven by professional financial
advisors delivering customized investment, credit, fiduciary, insurance,
and banking services in Fauquier County, western Prince William
County, and neighboring markets.
Integrity - we do what we say in a respectful and honest manner.
Transparency - we communicate openly and authentically.
Accountability - we own our actions and take responsibility of our results.
Excellence - we continually strive to exceed expectations.
TFB’s Guiding Principles
FAUQUIER BANKSHARES, INC.
5
Summary Statistics
Founded 1902
Headquarters Warrenton, Virginia (50 miles west of Washington, D.C.)
(10 branch locations)
(10 branch locations)
Total Assets $598.0 million
Total Loans, net $460.4 million
Shares Outstanding 3,669,758*
Insider Ownership 5.90%
Institutional Ownership 11.62% 1 (8.3% held by Royce & Associates, LLC2)
Shareholders Approx. 500 + “street” (Over 80% in VA)
All data provided as of December 31, 2010, unless otherwise noted.
* As of March 24, 2011
(1) Source: NASDAQ as of March 24, 2011
(2) A subsidiary of Legg Mason
6
FAUQUIER BANKSHARES, INC.
Industry Recognition
Ø In November 2010, The Fauquier Bank was named the 2010 Large
Business of the Year by the Fauquier County Chamber of Commerce.
Business of the Year by the Fauquier County Chamber of Commerce.
Ø 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.
Ø 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.
7
FAUQUIER BANKSHARES, INC.
Our Success Is a Result of Our Culture
8
Ø Strategic Planning
Ø Teamwork
Ø Disciplined Execution (aka “Blocking and Tackling”)
Ø Consistently Strong Credit Culture
Ø Disciplined Loan and Deposit Pricing Strategy
FAUQUIER BANKSHARES, INC.
Management Focus On Growth
9
FAUQUIER BANKSHARES, INC.
Ø Quality Growth
Ø Loan Portfolio
Ø Core Transaction Deposits
Ø Non-Interest Fee Income
Ø Wealth Management and Financial Planning
Our Customer Focus
10
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
11
FAUQUIER BANKSHARES, INC.
Northern Virginia Marketplace
*Including City of Manassas data
Source: Weldon Cooper Center for Public Service
12
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
13
FAUQUIER BANKSHARES, INC.
Northern Virginia Marketplace
Ø Stronger population, economic and employment growth
Ø Stable federal government presence
Ø Exceptional higher education
Ø Diverse industry employment, mostly “clean” industries
Ø High household income
Ø Virginia - “Best State for Business” Forbes (2006 - 2009)
14
FAUQUIER BANKSHARES, INC.
15
Source: MRIS
FAUQUIER BANKSHARES, INC.
Percent Change (2010 - 2009)
Fauquier 4.40%
Manassas City 20.00%
Prince William County 20.29%
Unemployment Rates
16
FAUQUIER BANKSHARES, INC.
Current Market with Sustainable Growth
17
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.
18
18
19
FAUQUIER BANKSHARES, INC.
Source: Fauquier Bankshares Financials - as of December 31
20
Loans, Net
FAUQUIER BANKSHARES, INC.
Source: Fauquier Bankshares Financials - as of December 31
21
At December 31, 2010
FAUQUIER BANKSHARES, INC.
22
Nonperforming Loans to Period End Loans
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 - as of December 31
FAUQUIER BANKSHARES, INC.
23
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 (2010/2009/2008/2006)
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Sources: BHC Performance Report and Fauquier Bankshares Financials - as of December 31
24
FAUQUIER BANKSHARES, INC.
Allowance for Loan Loss
As a Percentage of Total Loans
Peer Group - Bank Holding Companies with Consolidated Assets of $500MM - $1B (2010/2009/2008/2006)
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Sources: BHC Performance Report and Fauquier Bankshares Financials - as of December 31
Year Percentile
2010 23
2009 16
2008 28
2007 27
2006 35
25
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 (2010/2009/2008/2006)
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Sources: BHC Performance Report and Fauquier Bankshares Financials - as of December 31
26
FAUQUIER BANKSHARES, INC.
Source: Fauquier Bankshares Financials - as of December 31
27
Total Deposits
FAUQUIER BANKSHARES, INC.
Source: Fauquier Bankshares Financials - as of December 31
28
Pooled Trust Preferred Securities
FAUQUIER BANKSHARES, INC.
|
Issue
|
X
|
XI
|
XIV
|
XV
|
Total
|
|
Date of purchase
|
6/26/2003
|
9/17/2003
|
6/17/2004
|
9/20/2004
|
|
|
Issue size ($M)
|
$ 581
|
$ 670
|
$ 504
|
$ 625
|
$ 2,380
|
|
Financial institutions (No.)
|
61
|
69
|
65
|
60
|
228*
|
|
States (No.)
|
29
|
28
|
34
|
30
|
30**
|
|
TFB's share of the pool
|
0.17%
|
0.30%
|
0.40%
|
0.16%
|
.029%***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TFB’s Investment
|
$ 1,000,000
|
$ 2,000,000
|
$ 2,000,000
|
$ 1,000,000
|
$ 6,000,000
|
|
As of December 31, 2010:
Cumulative amount of OTTI loss
|
640,706 |
317,680 |
649,074 |
445,407
|
2,052,867
|
|
Cost, net of OTTI loss
|
$ 359,294
|
$ 1,682,320
|
$ 1,350,926
|
$ 554,593
|
$ 3,947,133
|
|
|
|
|
|
|
|
|
Cumulative other comprehensive
loss, net of tax benefit |
$ 228,146
|
$ 894,292
|
762,002
|
$ 356,451
|
$ 2,240,890
|
|
|
|
|
|
|
|
|
Fair Value
|
$ 13,619
|
$ 327,332
|
$ 196,378
|
$ 14,515
|
$ 551,844
|
*Unique institutions in each pool.
**Average
***Weighted average
29
Pooled Trust Preferred Securities
Depository Institutions Financials
(Average and Median Totals)
Depository Institutions Financials
(Average and Median Totals)
FAUQUIER BANKSHARES, INC.
Issue X
Issue XI
12/31/10
2003Q2
12/31/10
2003Q3
Avg
Mdn
Avg
Mdn
NPLs to total loans
4.55%
3.54%
5.01%
3.63%
Loan loss reserves to loans
2.13%
1.96%
1.25%
1.21%
2.40%
1.76%
1.31%
1.27%
Tier 1 risk based ratio
12.25%
12.11%
11.48%
10.72%
12.92%
12.65%
12.18%
11.26%
Return on average assets
-0.51%
0.43%
1.09%
1.01%
0.05%
0.31%
1.19%
1.14%
Net interest margin
3.53%
3.65%
4.12%
4.01%
3.73%
3.76%
4.10%
4.13%
Texas Ratio*
69.10
29.58
56.52
31.78
No. of banks with Texas Ratio above 100
6
0
6
0
Issue XIV
Issue XV
12/31/10
2004Q2
12/31/10
2004Q3
Avg
Mdn
Avg
Mdn
Avg
Mdn
Avg
Mdn
NPLs to total loans
5.07%
4.66%
0.57%
0.39%
4.16%
2.99%
0.50%
0.32%
Loan loss reserves to loans
2.39%
2.11%
1.85%
1.67%
Tier 1 risk based ratio
11.89%
11.92%
12.16%
11.46%
12.49%
11.98%
12.79%
11.94%
Return on average assets
-0.50%
0.60%
-0.10%
0.37%
Net interest margin
3.87%
3.82%
4.11%
3.86%
3.81%
3.85%
4.08%
3.92%
Texas Ratio*
55.83
48.27
7.53
5.72
60.80
29.79
6.28
4.95
No. of banks with Texas Ratio above 100
5
0
5
0
|
* Texas Ratio - Nonperforming assets plus 90 day past due loans divided by tangible equity plus loan loss reserve.
|
30
FAUQUIER BANKSHARES, INC.
Source: Fauquier Bankshares Financials - as of December 31
31
FAUQUIER BANKSHARES, INC.
Year Percentile
2010 40
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 & Fauquier Bankshares Financials - as of December 31
32
FAUQUIER BANKSHARES, INC.
“Well Capitalized” Threshold 6%
Year Percentile
2010 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 & Fauquier Bankshares Financials - as of December 31
33
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 & Fauquier Bankshares Financials - as of December 31
Year Percentile
2010 29
2009 38
2008 56
2007 42
2006 52
FAUQUIER BANKSHARES, INC.
Average Daily Balances for Twelve Months Ended December 31, 2010
|
Transaction Account Growth
Average Daily Balances for Twelve Months Ended
December 31 |
|||
|
|
2010
|
2009
|
%
Change |
|
DDA
|
$67,386 |
$64,098 |
5.13%
|
|
NOW
|
$120,212 |
$78,547 |
53.04%
|
|
Totals
|
$187,598 |
$142,645 |
31.51%
|
Source: Fauquier Bankshares Financials
ØCDARS are large-dollar investments of local depositors
in FDIC insured CDs.
in FDIC insured CDs.
ØBrokered CDs are used to offset interest rate risk.
34
Fauquier County, Western Prince William County and
Manassas City Deposit Market Share
Manassas City Deposit Market Share
35
|
|
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
|
|
|
|||||||
|
|
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%
|
|
|
|||||||
|
|
Bank of America Corp.
|
4
|
192,607
|
184,549
|
4.37
|
5.48%
|
5.55%
|
|
|
Capital One Financial Corp
|
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%
|
|
|
|||||||
|
|
Virginia Commerce Bank
|
2
|
118,727
|
102,985
|
15.29
|
3.38%
|
3.10%
|
|
|
|||||||
|
|
|
||||||
|
|
Total
|
86
|
$3,511,722
|
$3,327,135
|
5.55%
|
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.
36
37
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 - as of December 31
Earnings Per Share, Diluted
FAUQUIER BANKSHARES, INC.
38
Net Income
$3.7MM
Net Income
$5.0MM
Net Income
$3.4MM
Source: Fauquier Bankshares Financials - as of December 31
38
39
Net Income (ROAA)
(As a Percent of Average Assets)
(As a Percent of Average Assets)
FAUQUIER BANKSHARES, INC.
Year Percentile
2010 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 - as of December 31
Net Interest Margin*
40
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 and Fauquier Bankshares Financials - as of December 31
Cost of Funds
41
FAUQUIER BANKSHARES, INC.
Peer Group - Bank Holding Companies with Consolidated Assets less than $500MM (2007)
Sources: BHC Performance Report and Fauquier Bankshares Financials - as of December 31
Total Non-Interest Income
As a Percent of Adjusted Operating Income (TE)
As a Percent of Adjusted Operating Income (TE)
FAUQUIER BANKSHARES, INC.
42
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 - as of December 31
43
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
S&P 500 Index
Keys to Building Shareholder Value
Ø 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%
Ø Build transaction account deposit base
Ø Disciplined loan and deposit pricing
Ø Continue to improve and implement technology
FAUQUIER BANKSHARES, INC.
44
Stock Total Return Performance
Source: SNL Financial as of 3/11/2011 - SNL indices are weighted by the market capitalization of the company.
FAUQUIER BANKSHARES, INC.
45
|
Index
|
Over Last
Year |
Over Last Two
Years |
Over Last
Three Years |
Since Going
Public (1997) |
|
FBSS
|
(6.46%)
|
65.33%
|
(8.09%)
|
214.51%
|
|
SNL $500M - $1B
|
4.25%
|
29.34%
|
(29.68%)
|
100.27%
|
|
SNL $250M - $500M
|
5.78%
|
33.15%
|
(34.97%)
|
87.65%
|
|
SNL Banks
|
2.63%
|
126.29%
|
(23.87%)
|
25.27%
|
46
Stock Total Return Performance
(February 14, 2001 - February 14, 2011)
(February 14, 2001 - February 14, 2011)
FAUQUIER BANKSHARES, INC.
Source: SNL Financial
47
FAUQUIER BANKSHARES, INC.
Source: SNL Financial
Stock Chart - Price/Tangible Book Value
(February 14, 2001- February 14, 2011)
(February 14, 2001- February 14, 2011)
48
FAUQUIER BANKSHARES, INC.
Source: SNL Financial
Stock Chart - Price/Tangible Book Value
(February 14, 2009- February 14, 2011)
(February 14, 2009- February 14, 2011)
FAUQUIER BANKSHARES, INC.
Source: SNL Financial
Stock Chart - Price/Tangible Book Value
(July 2, 1997- February 28, 2011)
(July 2, 1997- February 28, 2011)
49
FAUQUIER BANKSHARES, INC.
Source: SNL Financial
Stock Chart - Price/Tangible Book Value
(January 4, 1993- February 28, 2011)
(January 4, 1993- February 28, 2011)
50
Buybacks and Dividends
as a Percentage of Net Income
as a Percentage of Net Income
51
FAUQUIER BANKSHARES, INC.
Contact Information
Investor Relations 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
52
HAYMARKET