F & M Bank Corp. Announces Second Quarter Earnings and Dividend Increase

TIMBERVILLE, VA / ACCESSWIRE / July 25, 2017 / F & M Bank Corp. (OTCQX: FMBM), parent company of Farmers & Merchants Bank, announces its financial results for the quarter ending June 30, 2017.

Selected highlights for the quarter include:

Net income of $2.3;
Net interest margin of 4.51%;
Net interest income increased $533,000;
Return on Average Assets of 1.28% YTD;

Dean Withers, President and CEO, commented, “We are pleased to announce second quarter earnings of $2.3 million, which is in line with the same period last year. Growth in loans held for investment totaled $12.4 million for the second quarter of 2017 and $38.3 million compared to the same period last year. Our net interest margin at 4.51% has been increasing due to a lessening reliance on lower yielding loans held for sale and continues to drive our results. Non-performing assets ticked slightly higher compared to year end 2016, but are below second quarter 2016.”

Withers stated, “On July 20, 2017, our Board of Directors declared a second quarter dividend of $.23 per share to common shareholders. This is an increase of $.01 over the prior quarter and $.03 over the prior year. Based on our most recent trade price of $29.45 per share, this constitutes a 3.12% yield on an annualized basis. The dividend will be paid on August 17, 2017, to shareholders of record as of August 3, 2017.” Highlights of our financial performance are included below.

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 and VS Title, 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

2017

2016

YTD

Net Income (000’s)

2,328

2,345

$
4,673

$
2,358

$
2,090

$
4,448

Net Income available to Common

2,223

2,241

$
4,464

$
2,231

$
1,962

$
4,193

Earnings per common share

0.68

$
1.36

$
0.68

$
0.60

$
1.28

Return on Average Assets

1.28
%

1.29
%

1.28
%

1.35
%

1.27
%

1.30
%

Return on Average Equity

10.48
%

10.84
%

10.60
%

11.08
%

10.07
%

10.53
%

Dividend Payout Ratio

34.07
%

32.12
%

32.98
%

29.46
%

31.81
%

30.47
%

Net Interest Margin

4.51
%

4.39
%

4.45
%

4.37
%

4.39
%

Yield on Average Earning Assets

5.08
%

4.93
%

5.01
%

4.90
%

4.91
%

4.92
%

Cost of Average Interest Bearing Liabilities

0.78
%

0.77
%

0.78
%

0.75
%

0.74
%

0.75
%

Net Interest Spread

4.30
%

4.16
%

4.23
%

4.15
%

4.17
%

Provision for Loan Losses (000’s)

$
–

Net Charge-offs

$
100

$
227

$
327

$
671

$
42

$
713

Net Charge-offs as a % of Loans

0.07
%

0.15
%

0.11
%

0.47
%

0.03
%

0.24
%

Non-Performing Loans (000’s)

$
5,677

$
5,091

$
5,677

$
5,545

$
6,709

$
5,545

Non-Performing Loans to Total Assets

0.76
%

0.71
%

0.76
%

0.98
%

0.76
%

Non-Performing Assets (000’s)

$
7,685

$
7,184

$
7,685

$
8,331

$
9,486

$
8,331

Non-Performing Assets to Assets

1.03
%

1.00
%

1.03
%

1.14
%

1.38
%

1.14
%

Efficiency Ratio (NOTE: reflects change in subsidiary presentation)

63.65
%

63.29
%

63.47
%

59.64
%

63.59
%

61.56
%

(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 34%. 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 Six Months

Ended June 30,

INCOME STATEMENT

Unaudited

2017

Unaudited

2016

Interest and Dividend Income

$
16,265,977

$
15,577,974

Interest Expense

1,830,777

1,675,312

Net Interest Income

14,435,200

13,902,662

Non-Interest Income

3,927,500

2,581,020

Provision for Loan Losses

–

Other Non-Interest Expenses

11,971,269

10,413,184

Income Before Income Taxes

6,391,431

6,070,498

Provision for Income Taxes

1,686,480

1,532,648

Less Minority Interest income

31,786

90,173

Net Income

$
4,673,165

$
4,447,677

Dividend on preferred stock

208,686

255,000

Net Income available to common shareholders

$
4,464,479

$
4,192,677

Average Common Shares Outstanding

3,272,318

3,285,916

Net Income Per Common Share

1.36

1.28

Dividends Declared

.45

.39

BALANCE SHEET

Unaudited

June 30,

2017

Unaudited

June 30,

2016

Cash and Due from Banks

$
7,875,821

$
7,316,135

Interest Bearing Bank Deposits

614,644

1,275,061

Federal Funds Sold

3,174,000

–

Loans Held for Sale

51,766,953

98,074,001

Loans Held for Investment

603,434,882

565,135,623

Less Allowance for Loan Losses

(7,216,176
)

(8,067,818
)

Net Loans Held for Investment

596,218,706

557,067,805

Securities

39,106,847

25,014,203

Other Assets

45,505,787

41,290,701

Total Assets

$
744,262,758

$
730,037,906

Deposits

$
536,486,237

$
504,710,581

Short Term Debt

50,000,000

59,417,530

Long Term Debt

51,937,857

66,196,429

Other Liabilities

16,165,865

13,731,263

Total Liabilities

654,589,959

644,055,803

Preferred Stock

7,588,873

9,425,123

Common Equity

82,083,926

76,556,980

Stockholders’ Equity

89,672,799

85,982,103

Total Liabilities and Stockholders’ Equity

$
744,262,758

$
730,037,906

Book Value Per Common Share

$
25.07

$
23.20

Tangible Book Value Per Common Share

$
24.95

$
23.11

CONTACT:

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

SOURCE: F & M Bank Corp.

ReleaseID: 469535

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