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

TIMBERVILLE, VA / ACCESSWIRE / October 20, 2017 / F & M Bank Corp. (OTCQX: FMBM), parent company of Farmers & Merchants Bank, announces its financial results for the quarter ending September 30, 2017.

Selected highlights for the quarter include:

Net income of $2.55;
Net interest margin of 4.48%;
Net interest income increased $413,000;
Return on Average Assets of 1.34%;

Dean Withers, President and CEO, commented, “We are pleased to announce third quarter earnings of $2.55 million, which is in line with the same period last year. Growth in loans held for investment totaled $16.6 million for the third quarter of 2017 and $41.9 million compared to the same period last year. Our net interest margin at 4.48% continues to be driven by our strong loan to asset ratio. Non-performing assets are relatively stable versus second quarter and have decreased $560,000 versus the same period in 2016.”

Withers stated,”On October 19, 2017 our Board of Directors declared a third quarter dividend of $.24 per share to common shareholders. This is an increase of $.01 over the prior quarter and $.02 over the same period last year. Based on our most recent trade price of $30.45 per share this constitutes a 3.15% yield on an annualized basis. The dividend will be paid on November 16, 2017, to shareholders of record as of November 2, 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)

2,550

2,328

2,345

7,223

2,601

2,358

2,090

7,049

Net Income available to Common

2,447

2,223

2,241

6,911

2,474

2,231

1,962

6,667

Earnings per common share

0.75

0.68

2.11

0.75

0.68

0.60

2.03

Return on Average Assets

1.34
%

1.28
%

1.29
%

1.30
%

1.43
%

1.35
%

1.27
%

1.35
%

Return on Average Equity

11.28
%

10.48
%

10.84
%

10.83
%

11.99
%

11.08
%

10.07
%

11.03
%

Dividend Payout Ratio

31.91
%

34.07
%

32.12
%

32.67
%

29.22
%

29.46
%

31.81
%

30.07
%

Net Interest Margin

4.48
%

4.51
%

4.39
%

4.47
%

4.23
%

4.37
%

4.39
%

4.33
%

Yield on Average Earning Assets

5.08
%

4.93
%

5.05
%

4.80
%

4.90
%

4.91
%

4.87
%

Cost of Average Interest Bearing Liabilities

0.85
%

0.78
%

0.77
%

0.82
%

0.79
%

0.75
%

0.74
%

0.76
%

Net Interest Spread

4.23
%

4.30
%

4.16
%

4.23
%

4.01
%

4.15
%

4.17
%

4.11
%

Provision for Loan Losses (000’s)

$
–

Net Charge-offs

$
274

$
100

$
227

$
601

$
497

$
671

$
42

$
1,210

Net Charge-offs as a % of Loans

0.18
%

0.07
%

0.15
%

0.13
%

0.34
%

0.47
%

0.03
%

0.28
%

Non-Performing Loans (000’s)

$
5,662

$
5,677

$
5,091

$
5,662

$
6,196

$
5,545

$
6,709

$
6,196

Non-Performing Loans to Total Assets

0.74
%

0.76
%

0.71
%

0.74
%

0.83
%

0.76
%

0.98
%

0.83
%

Non-Performing Assets (000’s)

$
7,810

$
7,685

$
7,184

$
7,810

$
8,370

$
8,331

$
9,486

$
8,370

Non-Performing Assets to Assets

1.02
%

1.03
%

1.00
%

1.02
%

1.12
%

1.14
%

1.38
%

1.12
%

Efficiency Ratio (NOTE: reflects change in subsidiary presentation)

62.12
%

63.67
%

63.27
%

63.01
%

60.70
%

59.64
%

63.59
%

61.26
%

(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 Nine Months

Ended September 30,

INCOME STATEMENT

Unaudited

2017

Unaudited

2016

Interest and Dividend Income

$
24,954,457

$
23,792,877

Interest Expense

2,861,460

2,645,378

Net Interest Income

22,092,997

21,147,499

Non-Interest Income

5,939,934

4,115,586

Provision for Loan Losses

–

Other Non-Interest Expenses

18,125,666

15,872,275

Income Before Income Taxes

9,907,265

9,390,810

Provision for Income Taxes

2,632,971

2,187,368

Less Minority Interest income

51,643

154,200

Net Income

$
7,222,651

$
7,049,242

Dividend on preferred stock

312,009

382,500

Net Income available to common shareholders

$
6,910,642

$
6,666,742

Average Common Shares Outstanding

3,271,863

3,286,165

Net Income Per Common Share

2.11

2.03

Dividends Declared

.69

.61

BALANCE SHEET

Unaudited

September 30, 2017

Unaudited

September 30, 2016

Cash and Due from Banks

$
8,800,422

$
7,718,975

Interest Bearing Bank Deposits

945,395

285,630

Federal Funds Sold

–

4,151,000

Loans Held for Sale

58,177,450

83,164,093

Loans Held for Investment

619,959,738

578,088,508

Less Allowance for Loan Losses

(6,941,982
)

(7,570,826
)

Net Loans Held for Investment

613,017,756

570,517,682

Securities

36,407,258

38,705,043

Other Assets

46,336,325

40,749,655

Total Assets

$
763,684,606

$
745,292,078

Deposits

$
562,379,965

$
527,823,741

Short Term Debt

42,128,000

51,228,742

Long Term Debt

50,840,363

65,089,286

Other Liabilities

17,180,327

13,624,827

Total Liabilities

672,528,655

657,766,596

Preferred Stock

7,528,873

9,425,123

Common Equity

83,627,078

78,100,359

Stockholders’ Equity

91,155,951

87,525,482

Total Liabilities and Stockholders’ Equity

$
763,684,606

$
745,292,078

Book Value Per Common Share

$
25.58

$
23.77

Tangible Book Value Per Common Share

$
25.42

$
23.56

CONTACT:

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

SOURCE: F & M Bank Corp.

ReleaseID: 478384

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