Filed by Virginia Financial Group, Inc.
Pursuant to Rule 425 under the
Securities Act of 1933 and deemed filed
pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934
Subject Company: FNB Corporation
Commission File No.: 0-24141
Virginia Financial Group, Inc.’s website, which is available atwww.vfgi.net and has information about VFGI’s proposed merger of equals with FNB Corporation, has been updated to include the following investor presentation, dated August 13, 2007, which was prepared jointly by Virginia Financial Group, Inc. and FNB Corporation.
![]() Virginia Financial Group, Inc. (VFGI) and FNB Corporation (FNBP) are Combining in a Merger-of-Equals Transaction August 13, 2007 |
![]() Caution Regarding Forward-Looking Statements Statements made in this presentation, other than those concerning historical financial information, may be considered forward-looking statements, which speak only as of the date of this presentation and are based on current expectations and involve a number of assumptions. These include statements as to the anticipated benefits of the merger, including future financial and operating results, cost savings, enhanced revenues and the accretion to earnings that may be realized from the merger as well as other statements of expectations regarding the merger and any other statements regarding future results or expectations. Each of VFGI and FNBP intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. The companies’ respective abilities to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors which could have a material effect on the operations and future prospects of each of VFGI and FNBP and the resulting company, include but are not limited to: (1) the businesses of VFGI and/or FNBP may not be integrated successfully or such integration may be more difficult, time- consuming or costly than expected; (2) expected revenue synergies and cost savings from the merger may not be fully realized or realized within the expected time frame; (3) revenues following the merger may be lower than expected; (4) customer and employee relationships and business operations may be disrupted by the merger; (5) the ability to obtain required regulatory and shareholder approvals, and the ability to complete the merger on the expected timeframe may be more difficult, time-consuming or costly than expected; (6) changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality and composition of the loan and securities portfolios; demand for loan products; deposit flows; competition; demand for financial services in the companies’ respective market areas; their implementation of new technologies; their ability to develop and maintain secure and reliable electronic systems; and accounting principles, policies, and guidelines; and (7) other risk factors detailed from time to time in filings made by VFGI or FNBP with the SEC. VFGI and FNBP undertake no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise. |
![]() Transaction Summary Transaction Structure: 100% Stock Swap, Merger-of-Equals Name of New Company: To be determined prior to close Fixed Exchange Ratio: 1.5850 VFGI Shares for each FNBP share Pro Forma Ownership: 48% VFGI; 52% FNBP Board of Directors: Equal representation Headquarters: Charlottesville, Virginia Bank/Operations Center: Christiansburg, Virginia Pro Forma Market Cap.: Approx. $414 Million as of August 13, 2007 Annual Dividend: $0.64 per share ($1.014 per FNBP equiv. share) Expected Closing: Late 4Q2007 Required Approvals: Shareholder and regulatory approvals Due Diligence: Completed Other: Dual 19.9% Lock-up Option |
![]() Company Comparison Notes: Financial Data as of June 30, 2007. Market Data as of August 13, 2007. Dollars in Thousands VFGI FNBP Balance Sheet Assets $1,583,629 $1,553,111 Net Loans 1,180,352 1,121,981 Total Deposits 1,236,342 1,296,379 Total Equity 155,016 177,043 Last Twelve Months Profitability ROAA 1.15% 1.14% ROAE 12.25 10.08 Efficiency Ratio 61.9 58.8 Net Interest Margin 4.14 3.93 Non-Int. Income / Avg. Assets 1.00 0.95 Non-Int. Expense / Avg. Assets 3.04 2.73 Market Capitalization ($mm) $202.3 $212.0 Branches: Deposit Branches 35 27 Loan Production Offices 2 2 |
![]() Senior Management Team Chairman of the Board: Bill Heath (FNBP) President and CEO: Ed Barham (VFGI) Chief Financial Officer: Jeff Farrar (VFGI) Chief Operating Officer: Litz Van Dyke (VFGI) Bank President: Greg Feldmann (FNBP) Chairman of Bank Board: Ray Smoot (FNBP) |
![]() Transaction Rationale Creates the largest commercial bank headquartered in Virginia Combines the best banking talent from both VFGI and FNBP Creates a Wealth Management division with nearly $1 billion of assets under management Expands presence in the highly attractive Virginia marketplace Enhances competitive position Expected to be accretive to Earnings Per Share for both VFGI and FNBP in first full year following close Increases stock trading liquidity and market capitalization Significantly improves the possibility that combined company could be included in the Russell 3000 Index in 2008 |
![]() Pro Forma Franchise #1 - Largest Bank Holding Company Headquartered in Virginia Ranked by Assets #1 - Largest Bank Holding Company Headquartered in Virginia Ranked by Loans #1 - Largest Bank Holding Company Headquartered in Virginia Ranked by Deposits* #2 – Second Most Branches of Any Virginia-Based Bank Holding Company NOTE: Excludes Capital One Financial Corp, E*Trade Financial Corp, Countrywide Financial Corp., and UNIFI Mutual Holding Co. * Deposit Data at June 30, 2006 Adjusted for all Pending and Completed Mergers as of 7/19/2007. Dollars in thousands. Source: SNL Securities |
![]() Branch Map Charlottesville Culpeper Staunton Harrisonburg Roanoke Christiansburg Fredericksburg VFGI LPO FNBP LPO |
![]() Virginia Deposit Market Share # of Virginia Rank Ticker Company Name City State Branches Deposits * Share 1 WB Wachovia Corp. Charlotte NC 649 $25,465,221 19.97 % 2 BBT BB&T Corp. Winston-Salem NC 686 19,411,042 15.22 3 BAC Bank of America Corp. Charlotte NC 254 16,900,970 13.25 4 STI SunTrust Banks Inc. Atlanta GA 355 14,083,510 11.05 5 C Citigroup Inc. New York NY 9 6,906,541 5.42 6 Pro Forma Combined Company Charlottesville VA 62 2,595,278 2.04 6 PNC PNC Financial Services Group Pittsburgh PA 73 2,346,076 1.84 7 B.F. Saul Company Chevy Chase MD 109 2,287,460 1.79 8 CARE Carter Bank & Trust Martinsville VA 95 2,099,405 1.65 9 UBSI United Bankshares Inc. Charleston WV 61 1,996,530 1.57 10 UBSH Union Bankshares Corp. Bowling Green VA 60 1,663,505 1.30 11 TOWN TowneBank Portsmouth VA 22 1,619,993 1.27 12 VCBI Virginia Commerce Bancorp Inc. Arlington VA 21 1,432,267 1.12 13 VFGI Virginia Financial Group Culpeper VA 35 1,303,200 1.02 14 FNBP FNB Corp. Christiansburg VA 27 1,292,078 1.01 15 BHRB Burke & Herbert Bank & Trust Alexandria VA 16 1,155,366 0.91 16 CFNL Cardinal Financial Corp. McLean VA 26 1,127,857 0.88 17 FCNCA First Citizens BancShares Inc. Raleigh NC 54 1,103,768 0.87 18 Ukrop's Super Markets Inc. Richmond VA 39 1,004,389 0.79 19 FULT Fulton Financial Corp. Lancaster PA 9 905,814 0.71 20 NKSH National Bankshares Inc. Blacksburg VA 31 746,787 0.59 NOTE: Excludes Capital One Financial Corp, E*Trade Financial Corp, Countrywide Financial Corp., and UNIFI Mutual Holding Co. * Deposit Data at June 30, 2006 Adjusted for all Pending and Completed Mergers as of 8/8/2007. Dollars in thousands. Source: SNL Securities Market |
![]() VFGI/FNBP Home Markets Deposit Market Share # of Virginia Rank Ticker Company Name City State Branches Deposits * Share 1 WB Wachovia Corp. Charlotte NC 112 4,142,628 19.83 % 2 BBT BB&T Corp. Winston-Salem NC 156 3,495,023 16.73 3 STI SunTrust Banks Inc. Atlanta GA 90 2,613,592 12.51 4 Pro Forma Combined Company Charlottesville VA 62 2,595,278 12.43 5 BAC Bank of America Corp. Charlotte NC 44 1,924,322 9.21 6 VFGI Virginia Financial Group Culpeper VA 35 1,303,200 6.24 6 FNBP FNB Corp. Christiansburg VA 27 1,292,078 6.19 7 CARE Carter Bank & Trust Martinsville VA 44 819,149 3.92 8 UBSH Union Bankshares Corp. Bowling Green VA 19 663,163 3.17 9 NKSH National Bankshares Inc. Blacksburg VA 16 487,304 2.33 10 UBSI United Bankshares Inc. Charleston WV 15 406,429 1.95 11 FCNCA First Citizens BancShares Inc. Raleigh NC 24 397,779 1.90 12 VYFC Valley Financial Corp. Roanoke VA 8 395,042 1.89 13 PNC PNC Financial Services Group Pittsburgh PA 9 383,241 1.83 14 FMBM F & M Bank Corp. Timberville VA 9 277,422 1.33 15 CFFC Community Financial Corp. Staunton VA 6 226,106 1.08 * Deposit Data at June 30, 2006 Adjusted for all Pending and Completed Mergers as of 8/8/2007. Dollars in thousands. Data includes all counties where FNBP or VFGI have a branch office. Source: SNL Securities Market |
![]() Overview of Virginia Financial Group, Inc. Headquartered in Charlottesville, Virginia Operates two banking subsidiaries, Second Bank & Trust and Planters Bank, with a total of 35 branches Assets of nearly $1.6 billion, deposits of $1.2 billion and equity of $155 million #1 Deposit Market Share in four Virginia Counties 5 year EPS Compound Annual Growth Rate of 11.3% Middle-market commercial banking tradition with three lines of business: Retail Banking Retail Banking Commercial Banking Commercial Banking Wealth Management Wealth Management Market Capitalization: $202 million (as of 8/13/07) |
![]() Overview of FNB Corporation Headquartered in Christiansburg, Virginia Assets of $1.6 billion, deposits of $1.3 billion and equity of $177 million Through its subsidiary, First National Bank, the Corporation operates 27 full-service branches and 2 loan production offices #1 Deposit Market Share in four Virginia Counties Community Bank model with four lines of business: : Retail Banking Retail Banking Commercial Banking Commercial Banking Private Banking Private Banking Wealth Management Wealth Management Growing financial services niche Market Capitalization: $212 million (as of 8/13/07) |
![]() Overview of Combined Company Creates a Virginia financial services holding company with over $3 billion in assets with strong growth profile Commercial banking foundation Strong core deposits Significant Virginia market presence - #1 deposit market share in 3 of 7 MSAs, top five in 5 of 7 - Top five deposit market share in 22 of 32 counties Geographic diversification of loan portfolio and increased legal lending limit Growing fee income businesses Strong capital base Pro Forma $414 Million Market Capitalization (as of 8/13/07) Enhances strategic position in the merger market arena Increased opportunity for growth through de novo branching and/or acquisitions |
![]() Expected Source of Cost Savings Personnel $5,761,633 Occupancy / Equipment 326,004 Operations / Technology Reductions 859,679 Corporate / Other 2,501,430 Total (Pre-Tax) $9,448,746 |
![]() Loan Portfolio Commercial R/E 37.3% Consumer 2.6% C&I 9.1% Multifamily 4.4% Const & Dev 18.4% Other 2.1% 1-4 Family 26.2% Commercial R/E 20.5% Consumer 7.5% C&I 8.1% Multifamily 4.5% Const & Dev 21.4% Other 1.1% 1-4 Family 36.8% Commercial R/E 30.3% Consumer 5.2% C&I 8.9% Multifamily 0.5% Const & Dev 20.7% Other 1.7% 1-4 Family 32.7% VFGI VFGI FNBP FNBP Pro Forma Pro Forma Net Loans: Net Loans: $1.18 billion $1.18 billion Net Loans: Net Loans: $1.12 billion $1.12 billion Net Loans: Net Loans: $2.30 billion $2.30 billion Loan/Deposit Ratio: Loan/Deposit Ratio: 96.6% 96.6% Loan/Deposit Ratio: Loan/Deposit Ratio: 87.6% 87.6% Loan/Deposit Ratio: Loan/Deposit Ratio: 90.6% 90.6% Note: Loan composition as of March 31, 2007 |
![]() Deposit Base Retail CDs 31.8% Jumbo CDs 16.6% MMDA & Savings 43.2% Transaction 1.5% Demand 6.8% Retail CDs 37.4% Jumbo CDs 15.2% MMDA & Savings 38.3% Transaction 7.2% Demand 2.0% Retail CDs 34.6% Jumbo CDs 15.9% MMDA & Savings 40.7% Transaction 4.3% Demand 4.4% Total Deposits: Total Deposits: $1.24 billion $1.24 billion Total Deposits: Total Deposits: $1.30 billion $1.30 billion Total Deposits: Total Deposits: $2.54 billion $2.54 billion VFGI VFGI FNBP FNBP Pro Forma Pro Forma Note: Deposit composition as of March 31, 2007 |
![]() Virginia Financial Group, Inc. Financial Information 2003 2004 2005 2006 LTM Total Assets $1,387,211 $1,449,608 $1,505,184 $1,625,989 $1,583,629 Total Investment Securities 360,041 286,856 241,032 264,141 262,851 Total Net Loans 918,120 1,055,584 1,138,718 1,210,772 1,180,352 Total Deposits 1,210,774 1,257,164 1,255,509 1,318,281 1,236,342 Total Equity 119,830 127,089 136,105 150,652 155,016 Net Income 13,492 15,203 18,216 19,497 18,353 Earnings Per Share 1.25 1.41 1.68 1.80 1.70 Ratio Analysis ROAA 1.13 1.07 1.23 1.24 1.15 ROAE 11.47 12.40 13.86 13.57 12.25 Efficiency Ratio 63.02 60.08 59.09 59.58 61.88 Total Equity / Total Assets 8.64 8.77 9.04 9.27 9.79 Loans / Deposits 76.21 84.44 91.04 92.37 96.64 Note: Dollars in Thousands |
![]() FNB Corporation Financial Information 2003 2004 2005 2006 LTM Total Assets $1,326,811 $1,396,116 $1,481,482 $1,518,715 $1,553,111 Total Investment Securities 193,237 156,732 171,340 189,479 211,411 Total Net Loans 994,108 1,101,210 1,157,102 1,174,642 1,121,981 Total Deposits 1,048,802 1,124,267 1,217,006 1,262,982 1,296,379 Total Equity 141,108 150,001 160,476 173,417 177,043 Net Income 12,932 14,247 17,533 17,912 17,377 Earnings Per Share 2.01 1.95 2.39 2.41 2.33 Ratio Analysis ROAA 1.14 1.04 1.22 1.19 1.14 ROAE 11.26 9.82 11.35 10.81 10.08 Efficiency Ratio 58.85 56.49 54.89 56.81 58.81 Total Equity / Total Assets 10.64 10.74 10.83 11.42 11.40 Loans / Deposits 95.34 98.15 95.59 92.64 87.62 Note: Dollars in Thousands |
![]() Analyst Commentary Stifel Nicolaus “We believe the deal represents an opportunity for both companies to build scale and market share across complementary markets in southwest and northwest Virginia. Moreover, the transaction will provide both companies with the economics to expand through a combination of more aggressive de novo activity as well as acquisitions into higher growth markets across Virginia, and possibly into North Carolina.” |
![]() Analyst Commentary Janney Montgomery “We like the combination of Virginia Financial and FNB Corporation structured as a merger of equals for the cost savings and accretion to earnings.” |
![]() Analyst Commentary Scott & Stringfellow “An interesting sidelight to the transaction is that more than likely the combined company’s market cap would be at a level that would position it for re-entry into the Russell 3000 in 2008.” |
![]() Additional Information about the Merger and Where to Find It This presentation is being made in respect of the proposed merger of FNBP and VFGI. In connection with the proposed merger, VFGI plans to file with the SEC a registration statement on Form S-4 to register the shares of VFGI common stock to be issued to the shareholders of FNBP in the transaction. The registration statement will include a joint proxy statement/prospectus which will be mailed to the shareholders of VFGI and FNBP seeking their approval of the merger. In addition, each of VFGI and FNBP may file other relevant documents concerning the proposed merger with the SEC. INVESTORS AND SECURITY HOLDERS OF FNBP AND VFGI ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4 AND THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT VFGI, FNBP AND THE PROPOSED TRANSACTION. Investors and security holders may obtain free copies of these documents (when available) through the website maintained by the SEC at http://www.sec.gov. Free copies of the joint proxy statement/prospectus (when available) also may be obtained by directing a request by telephone or mail to Virginia Financial Group, Inc., 1807 Seminole Trail, Suite 104, Charlottesville, Virginia 22901, Attention: Investor Relations (telephone: (434) 964- 2217) or FNB Corporation, 105 Arbor Drive, P.O. Box 600, Christiansburg, Virginia 24068, Attention: Investor Relations (telephone: (540) 382-6042) or by accessing VFGI’s website at http://www.vfgi.net under “SEC Filings and Other Documents” or FNBP’s website at http://www.fnbonline.com under “Investor Relations/SEC Filings.” VFGI and FNBP and their respective directors, executive officers and members of management may be deemed to be participants in the solicitation of proxies from the shareholders of VFGI and/or FNBP in connection with the merger. Information about the directors and executive officers of VFGI is set forth in the proxy statement for VFGI’s 2007 annual meeting of shareholders filed with the SEC on March 28, 2007. Information about the directors and executive officers of FNBP is set forth in the proxy statement for FNBP’s 2007 annual meeting of shareholders filed with the SEC on March 30, 2007. Additional information regarding these participants in the proxy solicitation and their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. The information on VFGI’s and FNBP’s websites is not, and shall not be deemed to be, a part of this presentation or incorporated into the filings either company makes with the SEC. |