F&M Bank Corp. Reports Second Quarter 2025 Earnings And Quarterly Dividend

F&M Bank Corp. Reports Second Quarter 2025 Earnings And Quarterly Dividend Continued positive trends in key categories bring strong results. See associated, unaudited summary consolidated financial data for additional information. F&M Bank Corp. (the "Company" or "F&M"), (OTCQX:FMBM), the parent company of Farmers & Merchants Bank ("F&M Bank" or the "Bank") today reported results for the quarter and six months ended June 30, 2025. Net income was $3.0 million or $0.84 per share for second quarter 2025, a 21% increase over net income of $2.5 million, or $0.70 per share reported for first quarter 2025. For the six months ended June 30, 2025, net income was $5.4 million or $1.53 per share, which exceeds net income of $4.2 million, or $1.21 per share, for the same period in 2024. At June 30, 2025, the Company had total assets of $1.31 billion, total loans of $848.8 million, and total deposits of $1.20 billion. This reflects growth of $9.9 million or 0.76% in total assets, $8.8 million or 1.07% in total loans, and $1.3 million or 0.11% in total deposits since December 31, 2024. During the second quarter 2025, total loans grew $21.8 million or 2.63% and total deposits declined by $3.6 million or (0.30%) since March 31, 2025. "For the first half of 2025, F&M has continued to achieve consistent and improved financial results on a quarter-to-quarter basis, as well as year over year," said CEO Mike Wilkerson. "Most significant are the past four quarters of positive trends in the key categories of net income, net interest margin, yield on earning assets, cost of funds, return on average equity, return on average assets, and all capital ratios. During second quarter, loans grew by $21.8 million. We are currently projecting sustained loan demand into the third quarter. This reflects the strength of our market, as well as the hard work of our lenders. "As a result of our efforts and a strong focus on fundamentals, tangible book value of F&M shares increased for the third consecutive quarter, and, as of June 30, 2025, stands at $25.681, an increase of 9.1%, or $2.15 per share year-to-date. "Overall, the F&M team remains focused on our highest priority, which is to generate sufficient and sustainable profit. Doing so gives us the financial strength and liquidity to make loans that support both businesses and individuals in the Shenandoah Valley.We are committed to serving this special and vibrant place we call home." SECOND QUARTER INCOME STATEMENT REVIEW Overview Net income for second quarter 2025 was $3.0 million or $0.84 per share. This is an increase of $508,000 or $0.14 per share over first quarter 2025 and is attributed to higher net interest income and lower noninterest expenses. Return on average assets was 0.91% and return on average equity was 12.81%. Net Interest Income For second quarter 2025, net interest income totaled $10.5 million, an increase of $1.1 million from first quarter 2025, as interest income increased by $548,000 and interest expense declined by $535,000. The increase in interest income resulted from growth of $21.8 million in loans held for investment. In addition, second quarter 2025 interest income included the recovery of nonaccrual interest and fees totaling $601,000 from the resolution of two nonperforming loan relationships. The decrease in interest expense was due to lower average balances in time deposits. The Bank's net interest margin increased by 33 basis points to 3.48% on a linked-quarter basis as the earning asset yield grew by 13 basis points to 5.56%, while the cost of funds declined 19 basis points to 2.11%. Provision for Credit Losses During second quarter 2025, the Bank recorded a provision for credit losses of $1.2 million, an increase from the net recovery of credit losses of $104,000 recorded in first quarter 2025. The portion of the provision related to loans outstanding was $1.1 million and resulted from loan growth of $21.8 million, the addition of $610,000 in reserves on individually analyzed loans, net charge-offs of $532,000, and adjustments to the Allowance for Credit Losses on Loans ("ACLL") model. During the quarter, the portion of the provision related to unfunded commitments was $105,000. Noninterest Income Noninterest income totaled $2.8 million for second quarter 2025, a decrease of $55,000 from first quarter 2025. The decrease resulted from declines of $244,000 in mortgage banking income and $116,000 in wealth management income that were partially offset by increases of $228,000 in title insurance income and $111,000 in card service and interchange income. Combined, remaining noninterest income categories declined $35,000. Noninterest Expenses Noninterest expenses totaled $8.7 million for second quarter 2025, compared to $9.5 million in first quarter 2025, a decrease of $812,000. Salary expense decreased by $423,000, largely due to higher commissions paid in the first quarter 2025 related to wealth management and mortgage income and increased bonus accruals. Employee benefits expense declined by $193,000 corresponding with the decline in salary expense. There was a combined decrease of $196,000 in the remaining noninterest expense categories. BALANCE SHEET REVIEW On June 30, 2025, assets totaled $1.31 billion, an increase of $9.9 million from December 31, 2024. Total loans increased by $8.8 million to $848.8 million. There was a shift from other construction and land development loans to loans secured by farmland, residential mortgage loans, owner-occupied and non-owner-occupied loans resulting from the completion of projects. Since the end of 2024, other construction and land development loans have decreased $19.4 million, automobile loans have declined by $14.3 million and commercial and industrial loans have decreased by $7.3 million. Loans secured by farmland increased by $19.2 million, residential mortgage loans increased by $15.7 million, owner-occupied commercial real estate loans grew by $7.8 million, and non-owner-occupied commercial real estate loans grew by $6.2 million. Remaining loan categories increased by a combined $812,000. Investment securities increased by $12.4 million during the first half of 2025, the result of purchases of $40.9 million that were partially offset by $34.1 million in bond maturities and paydowns on U.S. Agency mortgage-backed securities. Other changes included net premium amortization of $348,000, and a $5.9 million improvement in unrealized loss on the bond portfolio. Since December 31, 2024, unrealized loss in the securities portfolio declined from $35.2 million to $29.3 million. Total deposits on June 30, 2025, were $1.20 billion, an increase of $1.3 million due to growth of $18.0 million in noninterest bearing deposits and a decrease of $16.7 million in interest bearing deposits, specifically time deposits. Shareholders' equity increased by $8.6 million to $94.7 million due to $5.4 million in net income, $4.7 million in other comprehensive income, $202,000 in shares issued, and $117,000 in stock-based compensation. These increases were offset by $1.8 million in dividends paid. Tangible book value per share increased from $25.531 at December 31, 2024, to $25.68 at June 30, 2025. LIQUIDITY The Company's on-balance sheet asset liquidity includes cash and cash equivalents, unpledged investment securities, and loans held for sale, which totaled $211.6 million at June 30, 2025, a decrease from $243.0 million at December 31, 2024. As of June 30, 2025, the Bank had access to off-balance sheet liquidity through unsecured Federal funds lines totaling $90.0 million. The Bank also had a secured line of credit with the Federal Home Loan Bank (FHLB) with available credit of $179.8 million as of June 30, 2025. The FHLB line of credit is secured by a blanket lien on qualifying loans. The Bank also pledged securities with a collateral value of $116.7 million to the Federal Reserve Bank discount window which may be used for overnight borrowings. It is anticipated that the Bank will receive $26.4 million from bond paydowns and maturities during the remainder of 2025, which can be used to fund future loan growth and for other purposes. LOAN PORTFOLIO The Company's loan portfolio is diversified, with its largest segment being residential mortgage loans which totaled $234.9 million, representing 27.67% of total loans at June 30, 2025. Total commercial real estate loans, both owner-occupied and non-owner-occupied, constituted $198.4 million or 23.38% of total loans at June 30, 2025. Automobile loans originated by the dealer finance division totaled $90.0 million or 10.61% of the portfolio. A breakdown of the loan portfolio segments as of June 30, 2025, and for the preceding four quarters can be found under the heading "Performance Summary" in the table accompanying this release. ASSET QUALITY AND ALLOWANCE FOR CREDIT LOSSES Nonperforming loans (NPLs) as a percentage of total loans were 0.90% at June 30, 2025, compared to 0.84% at December 31, 2024. Net charge-offs as a percentage of average loans were 0.25% for second quarter 2025 compared to 0.09% for first quarter 2025. The ACLL was $8.3 million at June 30, 2025, an increase of $183,000 from December 31, 2025. The ACLL as a percentage of total loans was 0.98% at June 30, 2025, compared to 0.97% at December 31, 2024. The increase in ACLL percentage resulted from the addition of $610,000 in reserves on individually analyzed loans, year-to-date net charge-offs of $719,000, and adjustments to the ACLL model. The reserve for unfunded commitments was $829,000 at June 30, 2025, compared to $649,000 at December 31, 2024. DIVIDEND DECLARATION On July 24, 2025, our Board of Directors declared a dividend of $0.26 per share to common shareholders. Based on our most recent trade price of $22.00 per share, this constitutes a 4.3% yield on an annualized basis. The dividend will be paid on August 29, 2025, to shareholders of record as of August 14, 2025. 1 Tangible book value per share is a non-GAAP financial measure. Further information can be found under the heading "Non-GAAP Financial Measures" and in the non-GAAP reconciliation table accompanying this release. ### ABOUT US F&M Bank Corp. is an independent, locally owned, financial holding company offering a full range of financial services through our subsidiary, Farmers & Merchants Bank's (F&M Bank), fourteen banking offices in Rockingham, Shenandoah, and Augusta counties, Virginia, and the cities of Winchester and Waynesboro, Virginia. The Company also owns F&M Mortgage, a mortgage lending subsidiary, and VSTitle, a title company subsidiary. Founded in 1908 as a community venture to serve the farmers and merchants of the Shenandoah Valley, where both the Company and the Bank are headquartered, F&M Bank remains more committed than ever to the success of the agricultural industry, small business ventures, and the nonprofit sector.F&M's values, which are gregarious, resolute, original, and wholehearted (G.R.O.W.), combined with our brand pillars of sustenance, security, and enrichment, shape the Company's decision-making, philanthropy, and volunteerism. The only publicly traded organization based in Rockingham County, we offer a diverse suite of financial products and services, and a strong team dedicated to living our mission of being the financial partner of choice in the Shenandoah Valley, both today and tomorrow, as we have been since 1908. Additional information may be found by visiting our website, fmbankva.com. NON-GAAP FINANCIAL MEASURES The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles ("GAAP") and prevailing practices in the banking industry. However, management uses certain non-GAAP measures, including tangible book value per share, to supplement the evaluation of the Company's financial condition and performance. Management believes presentation of these non-GAAP financial measures provides useful supplemental information that is essential to a proper understanding of the Company's operating results. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. A definition of tangible book value per share is included in the footnotes to the table accompanying this release. FORWARD-LOOKING STATEMENTS This press release may contain "forward-looking statements" as defined by federal securities laws, which are subject to significant risks and uncertainties. These include statements regarding future plans, strategies, results, or expectations that are not historical facts, and are generally identified by the use of words such as "believe," "expect," "intend," "anticipate," "will," "estimate," "project" or similar expressions. These statements are based on estimates and assumptions, and our ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Our actual results could differ materially from those 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 local and national economies or market conditions; changes in interest rates; regulations and accounting principles; changes in policies or guidelines; loan demand and asset quality, including values of real estate and other collateral; deposit flow; the impact of competition from traditional or new sources; changes in tariffs and trade barriers, including potential changes in U.S. and international trade policies and the resulting impact on the Company and the Bank's borrowers; and other factors. 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. FOR MORE INFORMATION, CONTACT Lisa F. Campbell | EVP | Chief Financial Officer 540-896-1705 fmbankva.com F&M BANK CORP. Performance Summary (in thousands, except share and per share data) (unaudited) At and for the Three Months Ended Year to Date 6/30/2025 3/31/2025 12/31/2024 9/30/2024 6/30/2024 6/30/2025 6/30/2024 Selected Income Statement Data Interest and dividend income $ 16,812 $ 16,264 $ 16,896 $ 16,290 $ 15,720 $ 33,077 $ 31,297 Interest expense 6,285 6,820 7,785 7,797 7,521 13,103 14,968 Net interest income 10,527 9,444 9,111 8,493 8,199 19,974 16,329 Provision for (recovery of) provision for credit losses 1,187 (104 ) 1,075 902 (458 ) 1,083 366 Net interest income after (recovery of) provision for credit losses 9,340 9,548 8,036 7,591 8,657 18,891 15,963 Noninterest income 2,792 2,847 2,682 2,748 2,998 5,637 5,332 Noninterest expenses 8,712 9,524 8,180 9,657 8,170 18,237 16,592 Income tax expense (benefit) 455 414 278 (110 ) 471 869 470 Net Income $ 2,965 $ 2,457 $ 2,260 $ 792 $ 3,014 $ 5,422 $ 4,233 Key Performance Ratios Return on average assets1 0.91 % 0.76 % 0.67 % 0.24 % 0.93 % 0.84 % 0.65 % Return on average equity1 12.81 % 11.31 % 10.17 % 3.70 % 15.58 % 12.08 % 10.96 % Net interest spread 3.45 % 3.13 % 2.88 % 2.75 % 2.68 % 3.29 % 2.72 % Net interest margin 3.48 % 3.15 % 2.91 % 2.77 % 2.72 % 3.32 % 2.72 % Yield on earning assets 5.56 % 5.43 % 5.40 % 5.29 % 5.19 % 5.49 % 5.21 % Cost of funds 2.11 % 2.30 % 2.52 % 2.54 % 2.51 % 2.20 % 2.49 % Noninterest income to average assets 0.86 % 0.88 % 0.80 % 0.83 % 0.93 % 0.87 % 0.82 % Noninterest expense to average assets 2.68 % 2.96 % 2.44 % 2.91 % 2.53 % 2.82 % 2.56 % Share and Per Share Data Net income (basic and diluted) $ 0.84 $ 0.70 $ 0.64 $ 0.23 $ 0.86 $ 1.53 $ 1.21 Book value per share 26.56 25.62 24.43 25.93 23.54 26.56 23.54 Selected Balance Sheet Data Assets $ 1,311,924 $ 1,312,159 $ 1,302,011 $ 1,344,595 $ 1,309,645 $ 1,311,924 $ 1,309,645 Securities available for sale 340,021 321,158 327,670 376,159 352,211 340,021 352,211 Loans held for sale 2,280 634 2,283 2,332 3,958 2,280 3,958 Loans held for investment 848,773 827,007 839,949 830,717 826,340 848,773 826,340 Allowance for credit losses 8,312 7,762 8,129 8,028 7,815 8,312 7,815 Deposits 1,196,451 1,200,021 1,195,105 1,218,288 1,185,257 1,196,451 1,185,257 Non-interest bearing 278,322 271,400 260,301 270,783 270,246 278,322 270,246 Interest bearing 918,129 928,621 934,804 947,505 915,011 918,129 915,011 Borrowings 6,996 6,986 6,975 21,965 26,954 6,996 26,954 Short-term debt - - - 15,000 20,000 - 20,000 Long-term debt 6,996 6,986 6,975 6,965 6,954 6,996 6,954 Shareholders' equity 94,741 91,311 86,138 89,994 81,616 94,741 81,616 Average shares outstanding (basic and diluted) 3,564,133 3,530,708 3,522,756 3,519,182 3,517,122 3,547,513 3,503,790 Loan Data Residential construction $ 26,173 $ 24,377 $ 25,102 $ 26,649 $ 24,478 $ 26,173 $ 24,478 Other construction and land development 38,807 61,275 58,208 61,568 58,061 38,807 58,061 Secured by farmland 105,235 88,323 86,016 83,326 81,326 105,235 81,326 Home equity 51,364 50,245 49,542 47,396 45,743 51,364 45,743 Residential mortgage loans 234,870 225,467 219,218 214,731 213,760 234,870 213,760 Multifamily 11,185 10,670 10,805 10,942 11,043 11,185 11,043 Owner occupied commercial real estate 94,021 81,724 86,168 82,577 87,282 94,021 87,282 Non-owner occupied commercial real estate 104,415 97,177 98,189 98,527 99,265 104,415 99,265 Commercial and industrial loans 75,547 72,398 82,829 74,251 67,675 75,547 67,675 Credit card and other consumer loans 12,592 13,273 14,451 14,988 16,003 12,592 16,003 Automobile loans 90,016 97,637 104,271 110,952 116,770 90,016 116,770 Other loans 4,548 4,441 5,150 4,810 4,934 4,548 4,934 Total loans held for investment $ 848,773 $ 827,007 $ 839,949 $ 830,717 $ 826,340 $ 848,773 $ 826,340 Asset Quality Nonperforming loans total loans3 0.90 % 1.08 % 0.84 % 0.79 % 0.92 % 0.90 % 0.92 % Allowance for credit losses to total loans2 0.98 % 0.94 % 0.97 % 0.97 % 0.95 % 0.98 % 0.95 % Allowance for credit losses to nonperforming loans 108.60 % 86.76 % 114.90 % 122.06 % 103.02 % 108.60 % 103.02 % Nonperforming assets to total assets4 0.58 % 0.69 % 0.55 % 0.49 % 0.58 % 0.58 % 0.58 % Net charge-offs to average loans3 0.25 % 0.09 % 0.45 % 0.32 % 0.09 % 0.17 % 0.24 % Capital Ratios5 Leverage 8.89 % 8.50 % 8.23 % 8.20 % 8.29 % 8.89 % 8.29 % Risk-based capital ratios: Common equity tier 1 capital 12.73 % 12.57 % 12.42 % 12.28 % 12.21 % 12.73 % 12.21 % Tier 1 capital 12.73 % 12.57 % 12.42 % 12.28 % 12.21 % 12.73 % 12.21 % Total capital 13.73 % 13.50 % 13.39 % 13.23 % 13.13 % 13.73 % 13.13 % Other Data Number of banking offices 14 14 14 14 14 14 14 Number of full-time equivalent employees 172 170 169 170 169 172 169 F&M BANK CORP. Non-GAAP Reconciliation (in thousands, except share and per share data) (unaudited) At 6/30/2025 3/31/2025 12/31/2024 9/30/2024 6/30/2024 Tangible Common Equity and Tangible Assets Total Assets (GAAP) $ 1,311,924 $ 1,312,159 $ 1,302,011 $ 1,344,595 $ 1,309,645 Subtract: Goodwill (3,082 ) (3,082 ) (3,082 ) (3,082 ) (3,082 ) Subtract: Core Deposit Intangibles, net (70 ) (78 ) (86 ) (93 ) (101 ) Tangible assets (Non-GAAP) $ 1,308,772 $ 1,308,999 $ 1,298,843 $ 1,341,420 $ 1,306,462 Total Shareholders' Equity (GAAP) $ 94,741 $ 91,311 $ 86,138 $ 89,994 $ 81,616 Subtract: Goodwill (3,082 ) (3,082 ) (3,082 ) (3,082 ) (3,082 ) Subtract: Core Deposit Intangibles, net (70 ) (78 ) (86 ) (93 ) (101 ) Tangible common equity (Non-GAAP) $ 91,589 $ 88,151 $ 82,970 $ 86,819 $ 78,433 Tangible Common Equity to Tangible Assets ratio 7.00 % 6.73 % 6.39 % 6.47 % 6.00 % Tangible Book Value Per Share Tangible Common Equity (Non-GAAP) $ 91,589 $ 88,151 $ 82,970 $ 86,819 $ 78,433 Common shares outstanding, ending 3,567,056 3,563,910 3,525,655 3,471,291 3,466,688 Tangible Book Value Per Share $ 25.68 $ 24.73 $ 23.53 $ 25.01 $ 22.62 1 Ratios are primarily based on daily average balances. 2 Calculated based on Loans Held for Investment, excludes Loans Held for Sale. 3 Calculated based on 90 day past due loans and non-accrual loans to Total Loans. 4 Calculated based on 90 day past due loans, non-accrual loans, and other real estate owned to Total Assets. 5 Capital ratios are for Farmers & Merchants Bank. SOURCE: F&M Bank Corp View the original press release on ACCESS Newswire