8-K
F&M BANK CORP (FMBM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report (Date of earliest event reported): October 26, 2020
___________
F&M
BANK CORP
(Exact name of registrant as specified in its charter)
| Virginia<br><br><br>(State<br>or other jurisdiction<br><br><br>of<br>incorporation) | 000-13273<br><br><br>(Commission File<br>Number) | 54-1280811<br><br><br>(IRS<br>Employer<br><br><br>Identification<br>No.) |
|---|---|---|
| P.O. Box 1111<br>Timberville, Virginia<br><br><br>(Address of<br>principal executive offices) | 22853<br><br><br>(Zip<br>Code) | |
| --- | --- |
Registrant’s
telephone number, including area code: (540) 896-8941
Not
Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐. Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title<br>of each class | Trading<br><br><br>Symbol(s) | Name of<br>each exchange<br><br><br>on<br>which registered |
|---|---|---|
| None |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results
of Operations and Financial Condition.
On October 26, 2020, F & M Bank Corp. (the “Company”) issued a press release announcing results for the quarter ended September 30, 2020 and third quarter dividend. A copy of the press release is attached as Exhibit 99.1.
The information in this Form 8-K, and the exhibit hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01.
Financial Statements and Exhibits.
(d)
Exhibits.
| Exhibit<br>No. | Description |
|---|---|
| 99.1 | Press<br>Release dated October 26, 2020 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| F & M Bank Corp.<br><br><br>(Registrant) | ||
|---|---|---|
| Date:<br>October 26, 2020 | By: | /s/<br>Carrie A. Comer |
| Carrie A. Comer | ||
| Executive<br>Vice President and Chief Financial Officer |
EXHIBIT
INDEX
| Exhibit No. | Description |
|---|---|
| 99.1 | Press<br>Release dated October 26, 2020. |
fmbm_ex991
Exhibit 99.1
F & M Bank Corp.---News and Financials
F & M BANK CORP. ANNOUNCES THIRD QUARTER EARNINGS AND DIVIDEND
CONTACT:
Carrie Comer, EVP/Chief Financial Officer
540-896-8941 or ccomer@fmbankva.com
TIMBERVILLE, VA—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 | |||||||
|---|---|---|---|---|---|---|---|
| Q3 | Q2 | Q1 | YTD | Q2 | Q1 | YTD | |
| Net<br>Income (000's) | $2,207 | $2,626 | $1,189 | 6,022 | $1,634 | $1,287 | $2,735 |
| Net<br>Income available to Common | $2,142 | $2,560 | $1,123 | 5,825 | $1,556 | $1,208 | $2,499 |
| Earnings<br>per common share - basic | $0.67 | $0.80 | $0.35 | 1.82 | $0.48 | $0.38 | $0.78 |
| Earnings<br>per common share - diluted | $0.65 | $0.76 | $0.35 | 1.76 | |||
| Return<br>on Average Assets | 0.88% | 1.17% | 0.58% | 0.81% | 0.83% | 0.67% | 0.46% |
| Return<br>on Average Equity | 9.44% | 11.50% | 5.23% | 8.68% | 7.12% | 5.68% | 4.00% |
| Dividend<br>Payout Ratio | 38.81% | 32.50% | 74.29% | 42.86% | 52.08% | 65.79% | 97.44% |
| Net<br>Interest Margin | 3.33% | 3.55% | 3.97% | 3.60% | 4.47% | 4.67% | 4.52% |
| Yield<br>on Average Earning Assets | 3.94% | 4.20% | 4.88% | 4.31% | 5.42% | 5.54% | 5.46% |
| Yield<br>on Average Interest Bearing Liabilities | 0.87% | 0.92% | 1.27% | 1.00% | 1.33% | 1.21% | 1.29% |
| Net<br>Interest Spread | 3.07% | 3.28% | 3.61% | 3.31% | 4.09% | 4.33% | 4.17% |
| Provision<br>for Loan Losses (000's) | $1,000 | $800 | $1,500 | 3,300 | $1,600 | $1,450 | $6,800 |
| Net<br>Charge-offs | $208 | $203 | $453 | 864 | $483 | $1,757 | $3,057 |
| Net<br>Charge-offs as a % of Loans | 0.12% | 0.12% | 0.30% | 0.17% | 0.30% | 1.09% | 0.65% |
| Non-Performing<br>Loans (000's) | $4,254 | $4,465 | $4,168 | 4,254 | $11,688 | $10,587 | $7,978 |
| Non-Performing<br>Loans to Total Assets | 0.42% | 0.45% | 0.50% | 0.42% | 1.45% | 1.36% | 0.98% |
| Non-Performing<br>Assets (000's) | $4,420 | $5,625 | $5,504 | 4,420 | $13,657 | $12,761 | $9,649 |
| Non-Performing<br>Assets to Assets | 0.44% | 0.57% | 0.66% | 0.44% | 1.69% | 1.64% | 1.19% |
| Efficiency<br>Ratio | 65.35% | 65.33% | 70.51% | 66.94% | 65.32% | 67.15% | 66.70% |
All values are in US Dollars.
(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 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<br>Nine Months<br><br><br>Ended<br>September 30, | ||
|---|---|---|
| INCOME<br>STATEMENT | Unaudited<br><br><br>2020 | Unaudited<br><br><br>2019 |
| Interest and<br>Dividend Income | $27,280,319 | $29,279,627 |
| Interest<br>Expense | 4,515,221 | 5,025,175 |
| Non-Interest<br>Income | 9,016,182 | 6,909,369 |
| Provision for Loan<br>Losses | 3,300,000 | 6,800,000 |
| Impairment of long<br>lived assets | 19,193 | - |
| Net<br>Interest Income | 22,765,098 | 24,254,452 |
| Other Non-Interest<br>Expenses | 21,788,981 | 21,597,748 |
| Income<br>Before Income Taxes | 6,673,106 | 2,766,076 |
| Provision for<br>Income Taxes | 545,418 | (74,786) |
| Less Minority<br>Interest (income)/loss | (105,193) | (106,161) |
| Net<br>Income | $6,022,495 | $2,734,661 |
| Dividend on<br>preferred stock | 197,194 | 235,966 |
| Net Income<br>available to common shareholders | $5,825,301 | $2,498,695 |
| Average Common<br>Shares Outstanding | 3,197,718 | 3,175,192 |
| Net Income Per<br>Common Share | 1.82 | .78 |
| Dividends<br>Declared | .78 | .76 |
| BALANCE<br>SHEET | Unaudited<br><br><br>September<br>30,<br><br><br>2020 | Unaudited<br><br><br>September<br>30,<br><br><br>2019 |
| --- | --- | --- |
| Cash and Due from<br>Banks | $14,504,566 | $14,324,290 |
| Interest Bearing<br>Bank Deposits | 1,237,866 | 1,599,711 |
| Federal Funds<br>Sold | 73,407,000 | 12,963,000 |
| Loans Held for<br>Sale | 88,038,925 | 80,862,723 |
| Loans Held for<br>Investment | 672,524,536 | 631,828,822 |
| Less<br>Allowance for Loan Losses | (10,825,739) | (8,982,258) |
| Net<br>Loans Held for Investment | 661,698,797 | 622,846,564 |
| Securities | 118,888,764 | 20,084,814 |
| Other<br>Assets | 57,647,889 | 60,556,108 |
| Total<br>Assets | $1,015,423,807 | $813,237,210 |
| Deposits | $793,535,570 | $618,434,553 |
| Short Term<br>Debt | - | 20,000,000 |
| Long Term<br>Debt | 106,510,013 | 64,308,789 |
| Other<br>Liabilities | 21,698,045 | 19,600,307 |
| Total<br>Liabilities | 921,743,628 | 722,343,649 |
| Preferred<br>Stock | 4,591,623 | 5,591,623 |
| Common<br>Equity | 89,088,556 | 85,301,938 |
| Stockholders’<br>Equity | 93,680,179 | 90,893,561 |
| Total<br>Liabilities and Stockholders’ Equity | $1,015,423,807 | $813,237,210 |
| Book Value Per<br>Common Share | $27.85 | $26.86 |
| Tangible Book Value<br>Per Common Share | $27.84 | $26.89 |
SOURCE:
F & M Bank Corp.
CONTACT:
Carrie Comer EVP/Chief Financial Officer
540-896-8941 or ccomer@fmbankva.com