F & M Bank Corp. Announces Earnings & Dividend

TIMBERVILLE, VA / ACCESSWIRE / January 31, 2019 / F & M Bank Corp. (OTCQX: FMBM), parent company of Farmers & Merchants Bank, announces its financial results for the fourth quarter and year ending December 31, 2018.

Selected highlights for the quarter and year to date include:

Net income of $2.9 million and $9.1 million, respectively;

Non-performing assets dropped $4.65 million or 26.90% during the fourth quarter;

Net interest margin rose to 4.68%;

Loans held for investment increased $21.8 million YTD;

Return on Average Assets of 1.48% and 1.19%, respectively.

Mark Hanna, President, commented “We are pleased to announce fourth quarter and year to date earnings of $2.9 million and $9.1 million, respectively. The fourth quarter results represent a record for quarterly earnings which was driven by an increasing net interest margin. Our margin increased due to our asset sensitive balance sheet which resulted in a $2.6 million increase in interest income and a $935 thousand increase in interest expense. Loans held for investment increased $21.8 million or 3.54% versus the prior year. Deposit growth also accelerated in the second half of the year to $22.1 million or 3.89%.”

Hanna continued, “During the fourth quarter we made significant progress in addressing our problem assets. Previously we had announced that two large loans were placed on non-accrual during the second quarter, resulting in our significant allowance for loan loss funding in the first half of the year. During the fourth quarter we were successful in collecting on one of these loans and we recognized a partial write-down on the other based on the appraised value and continued payment delinquency. As a result of these and other collection efforts our problem assets decreased from $17.3 million to $12.6 million.” Highlights of our financial performance are included below.

Hanna stated, “On January 23rd our Board of Directors declared a fourth quarter dividend of $.25 per share to common shareholders. Based on our most recent trade price of $30.30 per share this constitutes a 3.30% yield on an annualized basis. The dividend will be paid on February 15, 2019, to shareholders of record as of February 1, 2019.”

F & M Bank Corp. is an independent, locally-owned, financial holding company, offering a full range of financial services, through its subsidiary, Farmers & Merchants Bank’s thirteen banking offices in Rockingham, Shenandoah, Page and Augusta Counties, Virginia. The Bank also provides additional services through a loan production office located in Penn Laird, VA and through its subsidiaries, VBS Mortgage, LLC (DBA F&M Mortgage) and VSTitle, LLC located in Harrisonburg, VA. Additional information may be found by contacting us on the internet at www.fmbankva.com or by calling (540) 896-8941.

This press release may contain “forward-looking statements” as defined by federal securities laws, which may involve significant risks and uncertainties. These statements address issues that involve risks, uncertainties, estimates and assumptions made by management, and actual results could differ materially from the results contemplated by these forward-looking statements. 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, legislative and regulatory policies, and a variety of other matters. Other risk factors are detailed from time to time in our Securities and Exchange Commission filings. Readers should consider these risks and uncertainties in evaluating forward-looking statements and should not place undue reliance on such statements. We undertake no obligation to update these statements following the date of this press release.

F&M Bank Corp.
Key Statistics

2018

2017

YTD

Net
Income (000’s)

$
2,910

$
2,515

$
1,687

$
1,973

$
9,085

$
9,010

Net
Income available to Common

$
2,807

$
2,412

$
1,583

$
1,870

$
8,672

$
8,595

Earnings per common share

$
0.87

$
0.75

$
0.49

$
0.57

$
2.68

$
2.63

Return on Average Assets

1.48
%

1.29
%

0.91
%

1.11
%

1.19
%

1.62
%

Return on Average Equity

12.51
%

10.82
%

7.38
%

8.75
%

9.89
%

13.34
%

Dividend Payout Ratio exclude Special Dividend

28.83
%

33.33
%

51.37
%

43.53
%

37.34
%

26.25
%

Dividend Payout Ratio with Special Dividend

78.35
%

44.81
%

Net
Interest Margin

4.68
%

4.56
%

4.64
%

4.78
%

4.65
%

4.47
%

Yield
on Average Earning Assets

5.50
%

5.30
%

5.29
%

5.38
%

5.35
%

5.05
%

Yield
on Average Interest Bearing Liabilities

1.14
%

1.04
%

0.94
%

0.87
%

1.00
%

0.82
%

Net
Interest Spread

4.36
%

4.26
%

4.35
%

4.51
%

4.35
%

4.23
%

Provision for Loan Losses (000’s)

$
450

$
1,350

$
680

$
2,930

$
–

Net
Charge-offs

$
2,483

$
283

$
660

$
309

$
3,735

$
1,499

Net
Charge-offs as a % of Loans

1.55
%

0.18
%

0.42
%

0.20
%

0.58
%

0.24
%

Non-Performing Loans (000’s)

$
10,205

$
15,240

$
14,977

$
7,730

$
10,205

$
4,870

Non-Performing Loans to Total Assets

1.31
%

1.96
%

1.94
%

1.06
%

1.31
%

0.65
%

Non-Performing Assets (000’s)

$
12,648

$
17,303

$
17,011

$
9,758

$
12,648

$
7,004

Non-Performing Assets to Assets

1.62
%

2.23
%

2.21
%

1.34
%

1.62
%

0.94
%

Efficiency Ratio

65.06
%

66.71
%

65.80
%

66.52
%

65.50
%

63.01
%

(1)

The net interest margin is calculated by dividing tax equivalent net interest income by total average earning assets. Tax equivalent interest income is calculated by grossing up interest income for the amounts that are nontaxable (i.e. municipal securities and loan income) then subtracting interest expense. The tax rate utilized is 21%. The Company’s net interest margin is a common measure used by the financial service industry to determine how profitable earning assets are funded. Because the Company earns nontaxable interest income from municipal loans and securities, net interest income for the ratio is calculated on a tax equivalent basis as described above.

(2)

The efficiency ratio is not a measurement under accounting principles generally accepted in the United States. The efficiency ratio is a common measure used by the financial service industry to determine operating efficiency. It is calculated by dividing non-interest expense by the sum of tax equivalent net interest income and non-interest income excluding gains and losses on the investment portfolio. The Company calculates this ratio in order to evaluate how efficiently it utilizes its operating structure to create income. An increase in the ratio from period to period indicates the Company is losing a greater percentage of its income to expenses.

F & M Bank Corp.
Financial Highlights

For Twelve Months Ended December 31,

INCOME STATEMENT

Unaudited
2018

Audited
2017

Interest and Dividend Income

$
36,707,958

$
34,095,349

Interest Expense

4,832,063

3,896,889

Net
Interest Income

31,875,895

30,198,460

Gross
Security Gains (Losses)

–

(41,914
)

Non-Interest Income

8,003,003

7,934,620

Provision for Loan Losses

2,930,000

–

Other
Non-Interest Expenses

26,743,762

24,719,017

Income Before Income Taxes

10,205,136

13,372,149

Provision for Income Taxes

1,110,169

4,330,404

Less
Minority Interest income

10,050

31,461

Net
Income

$
9,084,917

$
9,010,284

Dividend on preferred stock

413,191

415,331

Net
Income available to common shareholders

$
8,671,726

$
8,594,953

Average Common Shares Outstanding

3,238,177

3,269,713

Net
Income Per Common Share

2.68

2.63

Dividends Declared

1.20

.94

BALANCE SHEET

Unaudited
December 31,
2018

Audited
December 31,
2017

Cash
and Due from Banks

$
9,521,741

$
10,622,352

Interest Bearing Bank Deposits

1,390,181

1,284,351

Federal Funds Sold

–

Loans
Held for Sale

55,909,812

39,774,515

Loans
Held for Investment

638,798,885

616,974,067

Less
Allowance for Loan Losses

(5,239,699
)

(6,044,365
)

Net
Loans Held for Investment

633,559,186

610,929,702

Securities

21,843,918

41,242,965

Other
Assets

58,028,442

49,416,495

Total
Assets

$
780,253,280

$
753,270,380

Deposits

$
591,325,319

$
569,176,519

Short
Term Debt

40,116,000

25,296,000

Long
Term Debt

40,218,073

49,732,532

Other
Liabilities

16,682,537

17,790,459

Total
Liabilities

688,341,929

661,995,510

Stockholders’ Equity

91,911,351

91,274,870

Total
Liabilities and Stockholders’ Equity

$
780,253,280

$
753,270,380

Book
Value Per Common Share

$
26.84

$
25.73

Tangible Book Value Per Common Share

$
26.91

$
25.64

CONTACT:

Neil Hayslett, EVP/Chief Operating Officer
540-896-8941
NHayslett@FMBankVA.com

SOURCE: F&M Bank Corp

ReleaseID: 534051

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