 June 2010 Waccamaw Bankshares, Inc. (NASDAQ: WBNK) Whiteville, NC Filed pursuant to Rule 433 Registration No. 333-160436 Dated June 17, 2010 |
 2 This presentation may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: conditions imposed on the Company by federal or state banking regulators; adverse developments in borrower industries; the Company’s ability to manage growth; changes in the interest rates affecting deposits and loans; economic, market, or business conditions; recent negative developments in the financial industry and credit markets; an insufficient allowance for loan losses as a result of inaccurate assumptions; changes in laws, regulations, and the policies of federal or state regulators and agencies; the Company’s ability to raise capital; the Company’s ability to maintain internal control over financial reporting; and other risks detailed from time to time in the Company’s Securities and Exchange Commission reports, including but not limited to the Annual Report on Form 10- K for the most recent fiscal year ended and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, and the Company’s prospectus described below. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements contained within this presentation. Waccamaw Bankshares, Inc. has filed a registration statement (including a prospectus) with the SEC for the offering to which this presentation relates. Prospective investors should read the prospectus in that registration statement and other documents that Waccamaw Bankshares, Inc. has filed with the SEC for more complete information about the Company and the offering. Investors may obtain these documents without charge by visiting EDGAR on the SEC website at www.sec.gov. |
 3 Issuer: Waccamaw Bankshares, Inc. (NASDAQ: WBNK) Type of Offering: Follow-On Public Offering Type of Security: Common Stock Transaction Size: 30,000,000 Common Shares Company Option to Increase Deal Size: 15% Use of Proceeds: Enhance Capital Ratios, Redeem Outstanding Indebtedness, General Corporate Purposes Book-Running Manager: McKinnon & Company, Inc. |
 4 Significantly strengthen capital position Allows Bank to comfortably exceed minimum ratios for “Well Capitalized” status Position Waccamaw to capitalize upon recent dislocations in market FDIC seizures provide market opportunity in WBNK’s coastal markets Enable WBNK to actively pursue its business strategy: Enhance Earnings Increase Market Share Leverage Platform Provide flexibility to eventually pursue shareholder enhancement strategies, subject to regulatory approval and market conditions Strategic acquisitions Dividend policy Stock buyback The Company Anticipates This Offering Will: |
 5 Founded 1997 in Whiteville, North Carolina $586MM assets at 3/31/2010 NASDAQ: WBNK Whiteville has strong history in banking Former headquarters of UCB, $4B in assets when sold in 1996 to BB&T 17 branch locations, 11 opened in past 5 years Strong record of historical growth Experienced management team with recent addition in special assets area 3 former bank CEOs Established franchise in several attractive markets North Carolina: Columbus, Brunswick, Bladen, and New Hanover Counties South Carolina: Lancaster and Horry Counties Working through credit issues Entered into a written agreement with Federal Reserve and North Carolina Commissioner of Banks in June 2010 |
 6 Recent 11 branch additions represent only 25% of deposits but cover the largest markets Dislocations of key coastal institutions creates market opportunity : Beach First $600MM (FDIC closure/subsequent takeover) Cape Fear $500MM (FDIC closure/subsequent takeover) Cooperative $1B (FDIC closure/subsequent takeover) Carolina First $12B (Pending acquisition by TD Bank) Growing core deposits & lending relationships in new markets Long-term outlook for market (particularly coastal regions) is favorable Current branch network will support significant growth without major incremental fixed costs Lack of TARP funding provides greater flexibility New shares will increase liquidity of market for common stock |
 7 Footprint includes several prominent coastal communities that are likely to rebound as the economy recovers. Long-term demographics remain attractive for these areas given historical migration patterns, the effects of tourism and the broad based appeal of the Carolinas. |
 8 Years at WBNK Years in Banking James G. Graham 11 38 President & CEO, Director David A. Godwin 9 9 CFO J. Daniel Hardy, Jr. 3 39 Chief Lending Officer Kim T. Hutchens 5 21 Chief Administrative Officer Richard C. Norris 7 20 Chief Credit Officer Freda H. Gore 13 29 Chief Operations Officer Geoffrey R. Hopkins 7 14 Senior Commercial Lender Brian Webb 1 15 Commercial Loan Officer & Supervisor of the Special Assets Division |
 9 James G. Graham, 60, a Director of the Company since 1999, is President and Chief Executive Officer of Waccamaw Bank and Waccamaw Bankshares, Inc. As a banker for 38 years, he has served as a community bank CEO for 25 of those years having served as President and Chief Executive Officer of Commonwealth Community Bank Corp. from 1984 until 1998. In addition, he serves as Chairman of the Columbus County Economic Development Commission, on the Board of Directors of the International Logistics Park of North Carolina, the Board of Trustees of Southeastern Community College, the Columbus County Committee of 100, and the Cape Fear Council Boy Scouts of America. David A. Godwin, 53, Senior Vice President and Chief Financial Officer of Waccamaw Bank and Waccamaw Bankshares, Inc. since 2001. Prior to that, Comptroller of Four Seasons Screen Printing Co. in Conway, South Carolina from February 2001 to July 2001. Prior to that Mr. Godwin was Chief Financial Officer/Comptroller of Jones Stores, Inc. in Tabor City, North Carolina (23 variety stores) from 1995 to 2001. Prior to that Controller of Ellis Meares & Sons, Inc. in Fair Bluff, North Carolina from 1987 to 1995, Assistant Controller of Stephenson, Inc. in Alexandria, Virginia from 1983 to 1987, and Accountant I & II of County of Fairfax, Fairfax, Virginia from 1980 to 1983. J. Daniel Hardy, Jr., 61, Senior Vice President and Chief Lending Officer of Waccamaw Bank and Waccamaw Bankshares, Inc. since 2007. Prior to that, Executive Vice President of First Community Bank and President of North Carolina Region, First Community Bancshares, Inc. of Bluefield, Virginia, President and Chief Executive Officer, FNB Corp of Virginia and First National Bank in Christiansburg, VA with approximately $920MM in assets. FNB merged with Bank of Orange County and Second National Bank of Culpepper to form StellarOne Corp. During his tenure with FNB Corp, he led his company through two bank acquisitions and was instrumental in a third acquisition. Kim T. Hutchens, 54, Senior Vice President and Chief Administrative Officer of Waccamaw Bank and Waccamaw Bankshares, Inc. since 2005. Prior to that, Campaign Director/Advisor for various congressional and senatorial campaigns. Prior to that, Senior Vice President of Human Resources of Bank of Granite in Granite Falls, North Carolina from 1987 to 2003. |
 10 Richard C. Norris, 44, Senior Vice President and Chief Credit Officer of Waccamaw Bank and Waccamaw Bankshares, Inc. since 2003. Prior to that Senior Business Underwriter, Business Central Underwriting, and Commercial Banking Manager of First Citizens Bank in Raleigh, North Carolina from 1996 to 2003. He served earlier as a Credit Analyst, Raleigh, North Carolina, Business Banker, High Point, North Carolina, Commercial Lender, Winston-Salem, North Carolina, and Commercial Lender, Chapel Hill, North Carolina with NCNB/NationsBank from 1988 to 1993. Freda H. Gore, 48, Senior Vice President and Chief Operations Officer of Waccamaw Bank since 1997 to present and Waccamaw Bankshares since 2001 to present. Prior to that Vice President Area Operations Officer of First Citizens Bank from 1995 to 1996 in Raleigh, North Carolina and Treasurer, Operations Officer of First Investors Savings Bank in Whiteville, North Carolina from 1981 to 1995. Geoffrey R. Hopkins, 36, Senior Vice President and Senior Commercial Lender of Waccamaw Bank and Waccamaw Bankshares, Inc. since May of 2008. Prior to that Vice President and Area Executive for Columbus and Bladen Counties supervising the commercial lending function for that area; joined Waccamaw Bank in January 2003. Prior to joining Waccamaw, he served as Commercial Banker for BB&T from March 2000 to January 2003. Prior to that Market Manager, Anchor Bank, Little River, South Carolina from June 1996 to March 2000. Brian Webb, 40, Vice President and Commercial Loan Officer and Supervisor of the Special Assets Division since January 2010. Prior to that, Kingdom Financial, Richlands, Virginia, Owner of Mortgage Brokerage Firm from 2009 to January 2010. President and Chief Executive Officer of First Sentinel Bank, Richlands, Virginia, with $140MM in assets from 2007 to August 2008; Vice President, Senior Lender First Sentinel Bank, Richlands, Virginia, from November 2001 to March 2007. He earlier served as Vice President for First Union National Bank, Charlotte, North Carolina from August 1995 to November 2001 supervised 4 offices with approximately $165MM in assets. |
 DEPOSIT GROWTH ($MMS, YEARS AS OF JUNE 30) COUNTY DEPOSIT COMPOSITION IN 2009 11 Source: 10-Ks, 10-Q Source: Company reports |
  12 Source: FDIC Total Market Market Deposits % of MSA Rank Branches (000s) Franchise Wilmington 12 8 6,077,532 27% Myrtle Beach/Conway/N. Myrtle 20 4 5,582,140 6% Counties/Cities Not in any MSA Columbus County (Whiteville areas) 2 3 785,117 60% Bladen County (Elizabethtown) 5 1 251,978 5% Lancaster County (SC) 6 1 387,648 2% Total 17 13,084,415 100% |
  13 Household Projected Total Market Projected Approximate Income Population Deposits Population Household Change Growth New Markets (000s) 2010 Income ($) 1999-2008 2010-2019 Brunswick County (NC Coastal) 1,612,014 110,292 35,888 29% 26% New Hanover County (Wilmington) 4,110,629 196,191 40,172 28% 10% Horry County (Myrtle Beach) 5,582,140 251,390 36,470 17% 17% Legacy Markets Columbus County (Whiteville areas) 785,117 56,569 26,805 19% 4% Bladen County (Elizabethtown) 251,978 31,872 26,877 19% -2% Lancaster County (SC) 387,648 65,250 34,688 10% 6% Total 12,729,526 Source: Household Income from www.city-data.com; population from SC Budget and Control Board and from NC Office of State Management and Budget |
 14 Source: FDIC |
 15 Source: FDIC |
 16 Source: 10-Ks, 10-Q |
 17 Source: Company reports |
 18 Focus has expanded from slow growth rural markets to coastal regions with larger deposit bases & favorable long- term growth prospects Strategic investment in new coastal branches (11 in the past 5 years) has established a solid foothold in these high growth markets Dislocations of large community banks in these new markets have created a unique opportunity for WBNK Emphasizing attracting core deposits from displaced community bank customers, reducing brokered deposit balances and capturing market share |
 Positive Earnings $288,000, $0.05 per share Pre-tax, pre-provision income before security gains was $938,000, vs $368,000 in Q1 ‘09 +15% Noninterest income excluding security gains, $1.3MM Containing Expenses Noninterest expense down 11% vs Q1 ‘09 Increased Reserves Allowance for loan losses 3.05% of loans vs 2.10% Managing Loan Portfolio Size and Mix Loans contracted 11% over the past year from $385 mm to $343 mm, while deposits increased 11% Total NPA/Assets 6.88% Tangible Equity/Assets 3.06% Bank exceeded well capitalized minimums 19 |
 20 Newest branches include: Shallotte (NC) , Oak Island (NC), Conway Medical (SC), Socastee (SC) Little River (SC) Source: Company reports Source: Company reports |
 21 10-Qs, Company Calculations 10-Qs, Company Calculations * Post preferred dividends when applicable |
 AS OF MARCH 31, 2010 CORE DEPOSITS $187.7 MM AVG COST OF FUNDS 2.10% VS 2.80% Q1 ‘09 INCREASING CORE DEPOSITS WILL FURTHER REDUCE FUNDING COSTS 22 Source: Call Report Source: Call Report |
 23 Credit Administration Experienced Credit Review Officer with 20 years experience, ten at WBNK; ten at UCB Internal Credit Review Dedicated Loan Review Specialist Semiannual external loan review Centralized Underwriting and Approval Process all consumer and small business lending effective 12/31/09 Annual Review of all Loans and Relationships >$500,000. Overseen by Senior Credit Officer with 30+ years of banking experience. Special Assets Chief Lending Officer (former bank President and CEO) with 35+ years of experience placed in charge of Special Assets Added two full-time employees for Special Assets, one of whom is also a former bank President and CEO Transferred approximately $50 million in problem loans into the Special Assets portfolio Weekly conference call on classified assets Monthly reporting to Loan Committee and Board of Directors on all watch list credits over $250,000 Increased oversight of foreclosure and OREO process |
 Loan Type Outstanding Loan Balance ($mm) % of Total Nonaccrual Loans ($mm) Nonaccrual/ Outstanding Loan Balance Accruing Loans > 90 Delinquent OREO ($mm) Total NPAs ($mm) 30 – 90 Day Delinquent ($mm) Construction & Development 113 33% 20.7 18.4% 0.6 5.2 26.5 7.7 1 – 4 Family Mortgages 81 24% 2.6 3.2% 0.4 0.5 3.5 0.4 Multifamily Real Estate 12 3% 2.9 25.0% 0.0 0.8 3.7 3.6 Commercial Real Estate 91 27% 3.7 4.0% 0.2 1.6 5.5 1.0 Agricultural 4 1% 0.0 0.0% 0.0 0.0 0.0 0.0 Consumer 14 4% 0.2 1.5% 0.0 0.0 0.2 0.1 Commercial 28 8% 1.0 3.6% 0.0 0.0 1.0 0.9 Total 343 100% 31.1 9.1% 1.2 8.1 40.4 13.7 24 As of March 31, 2010 Source: Call Report |
 Date 30 - 89 Days Past Due ($mm) Accruing Loans > 90 Delinquent Delinquent Loans ($mm) Nonaccrual Loans ($mm) OREO ($mm) Total NPAs ($mm) September 30, 2009 9.9 2.4 12.3 22.8 5.5 30.7 December 31, 2009 26.3 1.4 27.7 21.5 5.0 27.9 March 31, 2010 13.7 1.2 14.9 31.1 8.1 40.4 25 Source: Call Report |
 26 30 – 89 Days Past Due > 90 Days Past Due Nonaccrual Loans Loan Type 9/30/2009 12/31/2009 3/31/2010 9/30/2009 12/31/2009 3/31/2010 9/30/2009 12/31/2009 3/31/2010 Construction & Development 1.5 16.2 7.7 1.3 0.6 0.6 13.5 14.0 20.7 1 – 4 Family Mortgages 2.4 2.5 0.4 0.6 0.7 0.4 2.4 2.4 2.6 Multifamily Real Estate 3.6 2.9 3.6 - - - 1.3 0.7 2.9 Commercial Real Estate 0.5 3.1 0.9 0.4 - 0.2 4.1 3.4 3.7 Agricultural 0.4 0.3 0.0 - - - 0.0 0.0 0.0 Consumer 0.3 0.3 0.1 0.0 0.0 - 0.2 0.1 0.2 Commercial 1.2 1.0 1.0 0.1 0.1 - 1.3 0.9 1.0 Total 9.9 26.3 13.7 2.4 1.4 1.2 22.8 21.5 31.1 Source: Call Report |
 27 ($Millions, Based on location of collateral) Source: Company Reports |
 BY GEOGRAPHY (COUNTY) BY TYPE (TOTAL $343 MM) 28 Source: Call Report Source: Company Reports |
 BY GEOGRAPHY (COUNTY) BY TYPE ($112MM) 29 Source: Company Reports Source: Company Reports |
 30 Source: 10-Q, Company Calculations |
 31 Recent 11 branch additions represent only 25% of deposits but cover the largest markets Dislocations of key coastal institutions creates market opportunity : Beach First $600MM (FDIC closure/subsequent takeover) Cape Fear $500MM (FDIC closure/subsequent takeover) Cooperative $1B (FDIC closure/subsequent takeover) Carolina First $12B (Pending acquisition by TD Bank) Growing core deposits & lending relationships in new markets Long-term outlook for market (particularly coastal regions) is favorable Current branch network will support significant growth without major incremental fixed costs Lack of TARP funding provides greater flexibility New shares will increase liquidity of market for common stock |
 32 Source: 10-Ks, 10-Q Assets 2006 2007 2008 2009 3/31/2010 Cash and Due from Banks $9,183 $11,809 $8,948 $13,973 $9,081 Interest Bearing Deposits 790 912 2,685 7,695 79,283 Federal Funds Sold 2,598 - 4,281 21,315 6,565 Total Cash and Equivalents 12,572 12,721 15,913 42,984 94,929 Investment Securities 50,529 99,302 87,403 87,769 93,320 Restricted Equity Securities 2,457 3,342 4,132 4,041 4,041 Loans 317,139 360,524 386,071 350,170 342,517 Allowance for Loan Losses 4,886 5,386 7,188 10,149 10,442 Net Loans 312,253 355,138 378,883 340,021 332,075 Premises and Equipment, net 6,672 14,538 17,598 17,036 16,868 Goodwill 2,666 2,727 2,727 - Foreclosed Assets - - - 4,994 8,086 Accrued Income 2,627 2,939 2,448 2,449 2,040 Intangible Assets, net 931 673 416 237 194 Bank Owned Life Insurance 5,419 11,777 17,835 18,576 18,764 Other Assets 3,456 5,209 10,095 15,113 15,817 Total Assets $399,581 $508,368 $537,450 $533,221 $586,134 Liabilities and Shareholders' Equity Total Deposits 327,352 378,179 418,580 433,538 488,202 Securities sold under agreements to repurchase 5,410 29,222 23,830 20,615 20,557 Federal Funds Purchased - 15,429 - - Other short-term borrowings - 13,000 10,000 3,500 1,000 Long-term debt 23,500 25,500 42,500 43,000 43,000 Junior subordinated debentures 8,248 8,248 12,372 12,372 12,372 Accrued interest payable 1,412 2,126 1,329 943 996 Other liabilities 1,957 1,640 995 2,099 1,900 Total liabilities $367,879 $473,345 $509,606 $516,067 $568,028 Shareholders' Equity Preferred stock, Series A, convertible, non-cumulative, non-voting, no par value; 1,000,000 shares authorized * 993 794 464 9 9 Common stock, no par value; 25,000,000 shares authorized ** 17,338 23,785 24,592 25,100 24,893 Retained Earnings / Deficit 13,217 11,125 8,908 (5,129) (5,452) Accumulated other comprehensive loss 154 (681) (6,120) (2,825) (1,343) Total stockholders’ equity 31,703 35,023 27,844 17,154 18,107 Total liabilities and stockholders’ equity $399,581 $508,368 $537,450 $533,221 $586,134 - - |
 33 Source: 10-Ks, 10-Q Twelve Months Ended: 3 Months Ended: 2006 2007 2008 2009 3/31/2010 (In $000s, except per share data) Interest Income 25,379 31,637 30,485 25,889 5,601 Interest Expense (11,226) (16,296) (16,934) (12,536) (2,526) Net Interest Income 14,153 15,341 13,551 13,353 3,074 Provision for Loan Losses (1,450) (386) (2,990) (16,580) (1,016) Net Interest Income (Loss) after Provision 15,603 15,727 16,541 29,933 2,058 Noninterest Income Before Securities Gains/Losses 2,582 3,197 868 4,795 1,279 Securities Gains/Losses (1) 246 98 (887) 386 Total Noninterest Income 2,581 3,443 966 3,908 1,665 Total Noninterest Expense (9,422) (12,440) (15,397) (18,515) (3,416) Pre-Tax Income (Loss) 8,762 6,730 2,110 15,326 308 Net Income (Loss) 3,652 3,909 (2,043) (14,206) 288 Diluted Earnings (Loss) Per Share 0.69 0.72 (0.37) (2.57) 0.05 Book Value ($) 5.77 6.44 5.04 3.09 3.26 Profitability (%) Return on Average Assets 1.02 0.89 (0.38) (2.54) 0.21 Return on Average Common Equity 14.07 11.67 (6.11) (49.18) 6.53 Net Interest Margin 4.27 3.79 2.76 2.77 2.59 Capital (%) Tangible Equity / Tangible Assets 7.10 6.26 4.62 3.17 3.06 Tangible Common Equity / Tangible Assets 6.85 6.11 4.54 3.17 3.06 Tier 1 Ratio 10.57 9.63 9.76 7.93 8.18 Total Risk Based Capital Ratio 11.82 10.88 11.68 8.95 9.14 Credit Quality (%) NPAs / Assets 0.39 0.88 3.36 5.23 6.88 Allowance for Loan Losses / Gross Loans 1.54 1.49 1.86 2.90 3.05 Allowance for Loan Losses / NPAs 314.62 120.17 39.83 36.42 25.89 NCOs / Avg. Loans 0.20 (0.03) 0.32 3.70 0.82 Note: Profitability ratios are annualized |
 June 2010 Waccamaw Bankshares, Inc. (NASDAQ: WBNK) Whiteville, NC |