F&M Bank Corp. Announces Third Quarter Earnings and Dividend

TIMBERVILLE, VA / ACCESSWIRE / October 26, 2020 / F & M Bank Corp. (OTCQX:FMBM), parent company of Farmers & Merchants Bank, announces its financial results for the third quarter ending September 30, 2020 and third quarter dividend to shareholders.

As the global pandemic continues, the company continually assesses our procedures to maintain the safety of our customers, employees and community while serving their financial needs. Farmers & Merchants Bank continues to operate our branches in a drive-thru only capacity daily, with courier pick up and by appointment lobby transactions.

As of September 30, 2020, we had processed 717 Paycheck Protection Program (PPP) loans for a balance of $62.6 million. These loans are funded by participation in the Federal Reserve Paycheck Protection Program Lending Facility. In addition, we have processed 922 individual loan deferrals. As of September 30, 2020, 99 loans remain in deferral with a balance of $19.1 million which represents 3.1% of loans outstanding exclusive of PPP balances.

Selected financial highlights for the quarter include:

Net income of $2.21 million.
Net interest margin of 3.60%.
Total deposits increased $26.9 million and $175.1 million, respectively for the quarter and for the trailing 12 months.
Nonperforming loans decreased to 0.42% of total assets at the end of the quarter from 0.45% on 6/30/20 and 0.98% on 9/30/2019.
Allowance for loan losses totaled 1.57% of loans held for investment (1.72% excluding PPP loans).

Mark Hanna, President, commented "Our second quarter earnings of $2.21 million is a slight improvement over second quarter for core earnings ($2.06 million), second quarter total earnings ($2.63 million) included recognition of $567,000 for implementation of a mortgage rate lock derivative associated with our mortgage company pipeline. Our net interest margin of 3.60% shows a historical decline but remains strong especially given the changes in our balance sheet. F&M's liquidity has increased significantly over the last four quarters and we are implementing strategic solutions to leverage these assets including deploying $102.7 million into the investment portfolio since year end 2019. Despite the current low-rate environment, these strategies should augment our net interest margin in the future."

Mr. Hanna continued, "Nonperforming loans have improved dramatically over prior year, decreasing $3.7 million since third quarter of 2019, and $1.5 million since year end 2019. We feel these efforts put F&M in a strong position to manage the current economic uncertainty while seeking opportunities for continued growth in the communities we serve."

On October 23, 2020 our Board of Directors declared a third quarter dividend of $.26 per share to common shareholders. Based on our most recent trade price of $19.21 per share this constitutes a 5.41% yield on an annualized basis. The dividend will be paid on November 30, 2020, to shareholders of record as of November 14, 2020."

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 eleven 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, F&M Mortgage and VSTitle, both of which are 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

 
 
 
 
 
 
 
2020
 
 
 
 
 
2019
 

 
 
Q3
 
 
 
Q2
 
 
 
Q1
 
 
YTD
 
 
 
Q3
 
 
 
Q2
 
 
 
Q1
 
 
YTD
 

Net Income (000's)

 
$
2,207
 
 
$
2,626
 
 
$
1,189
 
 
$
6,022
 
 
$
(186
)
 
$
1,634
 
 
$
1,287
 
 
$
2,735
 

Net Income available to Common

 
$
2,142
 
 
$
2,560
 
 
$
1,123
 
 
$
5,825
 
 
$
(265
)
 
$
1,556
 
 
$
1,208
 
 
$
2,499
 

Earnings per common share – basic

 
$
0.67
 
 
$
0.80
 
 
$
0.35
 
 
$
1.82
 
 
$
(0.08
)
 
$
0.48
 
 
$
0.38
 
 
$
0.78
 

Earnings per common share – diluted

 
$
0.65
 
 
$
0.76
 
 
$
0.35
 
 
$
1.76
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Return on Average Assets

 
 
0.88
%
 
 
1.17
%
 
 
0.58
%
 
 
0.81
%
 
 
-0.09
%
 
 
0.83
%
 
 
0.67
%
 
 
0.46
%

Return on Average Equity

 
 
9.44
%
 
 
11.50
%
 
 
5.23
%
 
 
8.68
%
 
 
-0.81
%
 
 
7.12
%
 
 
5.68
%
 
 
4.00
%

Dividend Payout Ratio

 
 
38.81
%
 
 
32.50
%
 
 
74.29
%
 
 
42.86
%
 
 
-325.00
%
 
 
52.08
%
 
 
65.79
%
 
 
97.44
%

Net Interest Margin

 
 
3.33
%
 
 
3.55
%
 
 
3.97
%
 
 
3.60
%
 
 
4.39
%
 
 
4.47
%
 
 
4.67
%
 
 
4.52
%

Yield on Average Earning Assets

 
 
3.94
%
 
 
4.20
%
 
 
4.88
%
 
 
4.31
%
 
 
5.35
%
 
 
5.42
%
 
 
5.54
%
 
 
5.46
%

Yield on Average Interest Bearing Liabilities

 
 
0.87
%
 
 
0.92
%
 
 
1.27
%
 
 
1.00
%
 
 
1.34
%
 
 
1.33
%
 
 
1.21
%
 
 
1.29
%

Net Interest Spread

 
 
3.07
%
 
 
3.28
%
 
 
3.61
%
 
 
3.31
%
 
 
4.01
%
 
 
4.09
%
 
 
4.33
%
 
 
4.17
%

Provision for Loan Losses (000's)

 
$
1,000
 
 
$
800
 
 
$
1,500
 
 
$
3,300
 
 
$
3,750
 
 
$
1,600
 
 
$
1,450
 
 
$
6,800
 

Net Charge-offs

 
$
208
 
 
$
203
 
 
$
453
 
 
$
864
 
 
$
817
 
 
$
483
 
 
$
1,757
 
 
$
3,057
 

Net Charge-offs as a % of Loans

 
 
0.12
%
 
 
0.12
%
 
 
0.30
%
 
 
0.17
%
 
 
0.52
%
 
 
0.30
%
 
 
1.09
%
 
 
0.65
%

Non-Performing Loans (000's)

 
$
4,254
 
 
$
4,465
 
 
$
4,168
 
 
$
4,254
 
 
$
7,978
 
 
$
11,688
 
 
$
10,587
 
 
$
7,978
 

Non-Performing Loans to Total Assets

 
 
0.42
%
 
 
0.45
%
 
 
0.50
%
 
 
0.42
%
 
 
0.98
%
 
 
1.45
%
 
 
1.36
%
 
 
0.98
%

Non-Performing Assets (000's)

 
$
4,420
 
 
$
5,625
 
 
$
5,504
 
 
$
4,420
 
 
$
9,649
 
 
$
13,657
 
 
$
12,761
 
 
$
9,649
 

Non-Performing Assets to Assets

 
 
0.44
%
 
 
0.57
%
 
 
0.66
%
 
 
0.44
%
 
 
1.19
%
 
 
1.69
%
 
 
1.64
%
 
 
1.19
%

Efficiency Ratio

 
 
65.35
%
 
 
65.33
%
 
 
70.51
%
 
 
66.94
%
 
 
67.63
%
 
 
65.32
%
 
 
67.15
%
 
 
66.70
%

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.
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 investments portfolio and Other Real Estate Owned. 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 Nine Months

Ended September 30,

INCOME STATEMENT

Unaudited

2020

Unaudited

2019

Interest and Dividend Income

 
$ 
27,280,319
 
 
$ 
29,279,627
 

Interest Expense

 
 
4,515,221
 
 
 
5,025,175
 

Net Interest Income

 
 
22,765,098
 
 
 
24,254,452
 

Non-Interest Income

 
 
9,016,182
 
 
 
6,909,369
 

Provision for Loan Losses

 
 
3,300,000
 
 
 
6,800,000
 

Impairment of long lived assets

 
 
19,193
 
 
 
–
 

Other Non-Interest Expenses

 
 
21,788,981
 
 
 
21,597,748
 

Income Before Income Taxes

 
 
6,673,106
 
 
 
2,766,076
 

Provision for Income Taxes

 
 
545,418
 
 
 
(74,786)
 

Less Minority Interest (income)/loss

 
 
(105,193)
 
 
 
(106,161)
 

Net Income

 
$ 
6,022,495
 
 
$ 
2,734,661
 

Dividend on preferred stock

 
 
197,194
 
 
 
235,966
 

Net Income available to common shareholders

 
$ 
5,825,301
 
 
$ 
2,498,695
 

Average Common Shares Outstanding

 
 
3,197,718
 
 
 
3,175,192
 

Net Income Per Common Share

Dividends Declared

 
 
1.82.78
 
 
 
.78.76
 

BALANCE SHEET

Unaudited

September 30, 2020

Unaudited

September 30, 2019

Cash and Due from Banks

 
$ 
14,504,566
 
 
$ 
14,324,290
 

Interest Bearing Bank Deposits

 
 
1,237,866
 
 
 
1,599,711
 

Federal Funds Sold

 
 
73,407,000
 
 
 
12,963,000
 

Loans Held for Sale

 
 
88,038,925
 
 
 
80,862,723
 

Loans Held for Investment
 
 
672,524,536
 
 
 
631,828,822
 

Less Allowance for Loan Losses

 
 
(10,825,739)
 
 
 
(8,982,258)
 

Net Loans Held for Investment

 
 
661,698,797
 
 
 
622,846,564
 

Securities

 
 
118,888,764
 
 
 
20,084,814
 

Other Assets

 
 
57,647,889
 
 
 
60,556,108
 

Total Assets

 
$ 
1,015,423,807
 
 
$ 
813,237,210
 

Deposits

 
$ 
793,535,570
 
 
$ 
618,434,553
 

Short Term Debt

 
 
–
 
 
 
20,000,000
 

Long Term Debt

 
 
106,510,013
 
 
 
64,308,789
 

Other Liabilities

 
 
21,698,045
 
 
 
19,600,307
 

Total Liabilities

 
 
921,743,628
 
 
 
722,343,649
 

Preferred Stock

 
 
4,591,623
 
 
 
5,591,623
 

Common Equity

 
 
89,088,556
 
 
 
85,301,938
 

Stockholders' Equity

 
 
93,680,179
 
 
 
90,893,561
 

Total Liabilities and Stockholders' Equity

 
$ 
1,015,423,807
 
 
$ 
813,237,210
 

Book Value Per Common Share

 
$ 
27.85
 
 
$ 
26.86
 

Tangible Book Value Per Common Share

 
$ 
27.84
 
 
$ 
26.89
 

CONTACT:

Carrie Comer
EVP/Chief Financial Officer
540-896-8941 or ccomer@fmbankva.com

SOURCE: F & M Bank Corp.

ReleaseID: 612270