2019 - F&M Bank

First Time Home Buyers Guide For Virginia

December 23, 2019/in Mortgage

Homeownership is woven into the fabric of the American dream, but the process can seem daunting to first-time homebuyers. As your community bank and mortgage lender, F&M Bank and F&M Mortgage are here to help. In this comprehensive guide we break down everything you need to know about buying your first home in Virginia, from costs to mortgage loan options and the major steps in the process. If you have questions as you read, feel free to reach out to our friendly and experienced team of mortgage lenders. We’re here to help!

How Much Does It Cost To Buy and Own a Home In Virginia?

Real estate has always been a local business, and this is especially true in Virginia, where home costs vary widely depending on the region and metro area. Here in the Shenandoah Valley, the median home price for Harrisonburg is $203,700. Your down payment will depend on the type of home loan you apply for. At F&M Mortgage, we offer everything from no-down-payment mortgage loans to low-down-payment options and conventional mortgages with a 10-20 percent down payment. In general, the more you can put down, the lower your monthly payment will be. For most home loans, you’ll need to pay Private Mortgage Insurance premiums each month if you put less than 20 percent down. However, there are plenty of options for aspiring homeowners who can’t come up with a big down payment.

Closing costs are the second expense associated with buying a home. These vary as well, but in general, you can expect to pay between $4,000-$9,000. Your lender will share a breakdown of closing costs with you beforehand so you know how much you need. If you have concerns about coming up with both a down payment and closing costs, don’t worry. We’ll cover closing cost assistance programs below.

Once you’ve bought your home, your biggest expense will be your monthly mortgage payment, which encompasses the loan payment of principal and interest, as well as your property tax and home insurance premium. To continue with our Harrisonburg example, the real estate tax rate is .86 cents per hundred of assessed value. This works out to fairly low property taxes; for example, if you need to pay $1,253 in annual real estate taxes, this is only about an extra $100 each month added to your mortgage payment. Remember that the assessed value of your home is usually less than what you bought it for. When it comes to home insurance premiums, you can expect to pay about $35 per month per $100,000 of home value.

Now that you understand the basic costs of buying and owning a home, it may be more affordable than you thought. Let’s look at federal and state programs to help first-time buyers obtain home loans and down payment or closing cost assistance.

Federal Programs for First Time Buyers

Since 1934, when the Federal Housing Administration (FHA) was created to help Americans obtain home financing in the aftermath of the Great Depression, the federal government has launched a variety of initiatives to make homeownership more accessible.

Within the context of federal home loan programs, a first-time buyer doesn’t necessarily have to be someone who has never owned a home before. We’ll cover the eligibility requirements for each program below. As you’ll see when we get to Virginia programs for first-time buyers, there are instances where federal and state home loans and home buying assistance work in tandem.

FHA Loans
This is the original federal home loan program and it is open to anyone who meets the eligibility requirements. An FHA mortgage is a great option if you’re looking for a low-down-payment home loan. Depending on your FICO credit score, you may qualify for the maximum 96.5 percent financing, meaning you’d only need to make a 3.5 percent down payment. For our $203,700 median home price, 3.5 percent would be $7,130. That’s much easier to save for than a full 20 percent down payment of $40,000.

Benefits of an FHA Mortgage Loan

Flexible credit approval
Low down payment
Low closing costs
Available for 1-4 unit properties
Can be used for manufactured and modular homes

FHA Loans and Mortgage Insurance
FHA loans are great for homebuyers who can’t afford a larger down payment or whose credit score might disqualify them from obtaining a conventional loan. In return for this flexibility, FHA borrowers pay an upfront mortgage insurance premium of 1.75 percent of the loan amount. You’ll also pay an annual mortgage insurance premium of 0.45 percent to 1.05 percent, divided by 12 and paid each month as part of your mortgage payment. The FHA mortgage insurance premium is for the life of your loan unless you refinance into a conventional mortgage.

VA Loans
Established in 1944 with the GI Bill of Rights, VA loans are available to current service members, veterans, and certain surviving spouses. The VA home loan program is very generous, with up to 100 percent financing, no mortgage insurance premiums, and low closing costs. The only added cost is a VA fee of 1.25 percent to 2.4 percent of the home’s value.

Benefits of a VA Mortgage Loan

Low or no down payment
No mortgage insurance requirement
Low closing costs

To learn more about VA loans, check out our comprehensive guide.

USDA Loans
USDA mortgages fall under the US Department of Agriculture and are intended to encourage home purchases in rural and semi-rural areas. Depending on your credit score, you may not have to make a down payment on a USDA loan. USDA loan eligibility is also based on your household income, which can’t be more than 115 percent of the median income in your county. USDA borrowers must also first try and fail to obtain a conventional mortgage.

Benefits of a USDA Loan

No or low down payment
Flexible credit approval
Some suburban areas count as “semi-rural”

HUD’s Good Neighbor Next Door Program
If you are a law enforcement officer, primary school teacher, firefighter, or EMT, you may be eligible to purchase a single-family home in a designated revitalization area at a 50 percent discount off the list price. As long as you live in the property for at least three years, you won’t have to pay back the 50 percent discount. You can also sell the house for its full market value and keep the profit. Search for current listings here.

Fannie Mae HomeReady
Designed for creditworthy low-income borrowers, the HomeReady mortgage permits down payments as low as 3 percent. Also, your down payment and closing cost money can come from a variety of sources, including grants. There is no minimum requirement for personal funds. And while you’ll need to pay for Private Mortgage Insurance (PMI), you can cancel it once you have at least 20 percent equity in the home.

Freddie Mac Home Possible Loan
Like the HomeReady mortgage, the Freddie Mac Home Possible Loan offers a down payment as low as 3 percent. You also have flexibility with the sources of your down payment and closing cost funds. Home Possible borrowers can even have a co-borrower on the loan who doesn’t live in the same residence. Overall, the Home Possible mortgage is great for self-employed individuals as well as those working in the gig economy.

Virginia-Specific Programs for First Time Home Buyers

The Virginia Housing Development Authority (VHDA) offers 30-year fixed-rate mortgages, forgivable down payment grants, and federal tax breaks to first-time homebuyers in the state. In this case, the first-time buyer simply means that you haven’t owned part or all of another house in the past three years.

VHDA loans come with income and purchase price limits that are set by county. To qualify, you need a minimum 620 credit score, must be willing to make the house your primary residence and have to finish a homeownership education course first.

VHDA Fannie Mae HFA Preferred No MI
This mortgage loan offers a low down payment of 3 percent and there is no mortgage insurance requirement. You can also use a VHDA Down Payment Assistance grant and Mortgage Credit Certificate to reduce the cash you need to pay upfront.

“The VHDA has struck a special deal with Fannie Mae with this program, which is designed for first-time and repeat homebuyers with a credit score of at least 640. Down payment requirements start at just 3 percent. The affordable monthly payment and discounted upfront cost is great, but it’s the insurance benefit that really shines.”

VHDA FHA Plus Loan
If you’re interested in a standard FHA loan, but don’t have enough cash for the down payment, the VHDA FHA Plus Loan might be the best option for you. Obtain up to 100 percent financing with a second mortgage that covers your upfront closing costs and down payment. County income limits apply and the combined loan total cannot exceed VHDA’s home price limits.

VHDA Rural Housing Services (RHS)
This is the VHDA’s version of a USDA mortgage. If you wish to buy a single-family house in a qualified area, you can take advantage of 100 percent financing, low mortgage insurance premiums, and a discount on your federal tax bill.

VHDA Down Payment Assistance Grant
This grant can be used in combination with a variety of mortgage loans. Get up to 2.5 percent of your home’s value to put toward your down payment. Qualified home buyers don’t have to repay the down payment assistance grant.

VHDA Mortgage Credit Certificate
If you qualify for the VHDA’s down payment assistance grant, you can also file for the Mortgage Credit Certificate, which lets you claim 20 percent of your annual mortgage interest as a federal tax credit for the life of the loan.

From Pre-Qualification to Closing: Understanding the Homebuying Process

One of the most important decisions you’ll make at the beginning of this process is finding the best lender. You want to look for local expertise, a long history of mortgage lending, and friendly service. This will help ensure a smooth and timely mortgage and home buying process. As a local lender serving the Shenandoah Valley, F&M Mortgage has been helping first-time buyers become homeowners since 1999. We offer a complete suite of conventional, VHDA, VA, USDA, FHA, and zero-down-payment Spark Loans.

Get pre-qualified for a home loan. Pre-qualification letters carry more weight with sellers than pre-approvals. They demonstrate the seriousness of your intentions and vouch for your ability to get a mortgage.
Find a buyer’s agent to help in your home search. As with mortgage lenders, we recommend looking for someone with experience in the local real estate market and a specialization in working with buyers.
Fall in love with a house and make an offer. Once your offer is accepted, you will be “under contract” with the seller. Your mortgage lender will appraise the house and work through the underwriting process. You may be asked to provide additional documentation during this stage.
Get a home inspection. While this isn’t a requirement, it’s highly recommended. Paying for a home inspection will give you a complete and thorough report on the condition of just about everything in your house. If repairs are needed, you can renegotiate the purchase price with the seller.
Go to closing. The entire process can take anywhere from 4-6 weeks between the contract and the closing. Once the big day arrives, you can expect to sign a lot of paperwork and walk away with the keys to your new home. Congratulations!

Learn more about buying a home in the Shenandoah Valley!

Meet our experienced team of mortgage lenders and give us a call at 540-442-8583 to get answers to all of your home buying questions. Ready to apply for a mortgage loan? You can apply online or in any of our branch locations. Looking for more information about the Shenandoah Valley region of Virginia? Check out our relocation guides for Staunton and Augusta County and Harrisonburg and Rockingham County.

F&M Bank: A Virginia Tradition Since 1908

December 12, 2019/in In the Community, Press Releases

An interview with Mark Hanna, President and CEO of F & M Bank Corp
(OTCQX: FMBM)

Interview conducted by:
Bud Wayne, Editorial Executive, CEOCFO Magazine
Published – December 9, 2019
Re-published with permission

CEOCFO: Mr. Hanna, would you tell us about your role at F & M Bank Corp. and how it developed to where you are today as President and CEO?

Mr. Hanna: I joined the bank roughly two years ago on December 1st, 2017. The former CEO Dean Withers had announced his retirement and a search for his replacement was underway. At the time, I was in banking in the Hampton Roads area of Virginia. I had long worked with big banks and served as President and CEO of a de novo community bank, founded in 2005, that sold to another bank in 2014. After a period of working for the bank that had acquired my former company, I decided it was time for me to pursue some personal and career goals.

I knew Dean through a couple of banking organizations, so I reached out to him and expressed my interest in the opportunity. The board brought me in to interview along with several other candidates, and ultimately offered me the job. Dean stayed onboard for the first six months to help me through the transition. We had, and still do have, a close working relationship as he remains on F&M Bank’s board and is currently serving as our vice chair. Since then, the Leadership team and I have been working hard to guide and direct an organization that has 111 years of history for continued success in a dynamic banking environment.

CEOCFO: Would you give us a little background and history of the bank and how it developed from its founding? Has the vision changed much from its founding vision?

Mr. Hanna: We go by F&M now; it originally started as Farmers & Merchants in 1908 in Timberville, Virginia in the Shenandoah Valley, to serve farmers and merchants in the immediate area. Where I sit today is less than a mile away from our original headquarters. We are in Rockingham County, Virginia which is the largest agricultural county in the commonwealth of Virginia. There is still a strong agricultural base in this area, but the community has grown and evolved over the years. Harrisonburg, one of the faster growing communities in the commonwealth, is less than fifteen miles away from Timberville. Harrisonburg is home to James Madison University, which has an undergraduate enrolment of almost 25,000 students and is one of the stronger economic centers of our community and in the Commonwealth of Virginia.

CEOCFO: Has the vision changed much from its founding vision?

Mr. Hanna: Yes, it has evolved but also remains very much the same. We are still here to serve the needs of the community and we bank small to midsized businesses that include agriculture, manufacturing, distribution, commercial real estate development, and residential real estate development and more. We also provide personal banking products for individuals, ranging from deposit accounts to home equity lines to any credit needs they may have. Over time we have developed an indirect dealer division for auto loans and a mortgage company –– F&M Mortgage – for consumer mortgage loans. The bank itself has a strong portfolio of customized personal mortgage loans. It is a very popular product around here given that there are a lot of non-conforming properties such as larger tracts of land or family farms. We aim to provide the deposit, investment and loan products and services consumers in the Shenandoah Valley need.

CEOCFO: Are you more of a business/commercial bank than a consumer bank? What is the mix and would you like to see that change?

Mr. Hanna: I think it is split about 50/50. We do a lot of both. We have a full menu of personal services. We have a strong loan portfolio of what we call “shelf mortgage loans” which are non-conforming mortgages and we also offer a variety of conforming mortgage products through F&M Mortgage. We also provide a variety of services to many different for-profit and not-for-profit entities. F&M has historically provided significant financial and volunteer support for charitable organizations in our communities and this year we launched a new, comprehensive suite of banking services – which even includes training for their employees and directors – to support these organizations with their financial needs.

CEOCFO: How big a part is mortgage lending for you and is it in the commercial or consumer side of the business?

Mr. Hanna: We serve both the commercial and consumer sides of mortgage lending. With the small to midsize commercial focus that we have, we do a lot of commercial mortgages, those are all portfolio and we service all our loans in-house. We have the separate division, F&M Mortgage, that is very active in the consumer market with conforming loans which traditionally offer the lowest rates and longest terms.

CEOCFO: What role does wealth management play in your strategy? Is this more for customer relations?

Mr. Hanna: We have a phenomenal investment division with very knowledgeable and high-performing financial advisors. We strive to serve the full spectrum of our clients’ financial needs, so we are happy to leverage the trust that we create with their banking relationship to help them with their short-term and long-term investment needs. Being around since 1908 in our communities, clients trust that we will continue to serve their best interests today and for future generations.

CEOCFO: What are some of the things you are doing in the area of customer satisfaction and customer retention?

Mr. Hanna: As a community bank we are about $815 million in assets. Client service is everything and if we fail to provide superior client service, we commoditize ourselves. We survey customers during the onboarding process to determine what they thought of our process, the people that they dealt with, and the products that they were offered. We also host community and client focus groups to help us identify opportunities and consumer needs. Throughout the year we do a lot of things to remain engaged with our clients. We host a variety of client appreciation events that include free document shredding days and special events geared towards kids such as free photos with Santa around the holidays. We also partner with local universities. In 2018 we had the largest tailgate in the history of James Madison University football. Once we learned of this, we had to go out this year and beat our own record. It will be tough, but we will try to keep setting the goal higher in 2020. James Madison has had a very successful football team so those client appreciation events have been extremely well attended and are a great way for our clients to network with leaders in our community.

One of the things that we take very seriously is giving back to our communities. We are a very benevolent organization that gives back and supports many causes. Sometimes we work through our clients to support charities that are important to them, which contributes to our service and retention. We have a symbiotic relationship with the Shenandoah Valley. As these communities prosper, the bank tends to flourish. Likewise, if the bank is growing and strong, we re-circulate everything from deposits, to dividends, to shareholder wealth back into the communities. That certainly has a multiplier effect which serves to grow our local economies.

CEOCFO: The world seems to be taken over by the millennial generation and now the generation Xers, who are more into technology. Do you offer the technology and FinTech products that they are looking for?

Mr. Hanna: Yes, and that is a challenge, but we do. The budget to be at the cutting-edge of new technology is overwhelming. We are probably what I would classify as a technology follower. We work with multiple vendors to provide all the bells and whistles, but we try not to make the large R&D bets in developing new technologies. We like to determine what technologies our clients want and invest heavily in those areas.

Getting back to the millennial generation, one of the things that we embrace is social media to promote the bank, to interact with our clients, and to interface with our communities. We are very active there. As you look at millennials –– and this does not necessarily relate to technology –– but one of the things that we recognize is that millennials tend to look for organizations with strong values that are active in their communities, making their communities better. These are attributes that F&M has embraced for 111 years and have really helped us connect with millennials and generation Xers at the local level.

CEOCFO: Would you tell us about the communities that you serve in Virginia. Are they more rural or urban? What are some of the businesses in the area and the employment availability for residents? Do they depend more on D.C. for employment or local businesses? And do they support their local banks?

Mr. Hanna: We are not far from the D.C. suburbs, but I would not say that our economy is heavily driven by D.C. There are folks that commute to the D.C. area but most of our economy is locally based. Two of the counties we serve, Rockingham County and Augusta County are number 1 and 2, respectively, in Virginia in terms of agricultural production in the state. Agriculture drives a significant amount of ancillary businesses that includes businesses such as veterinary services, feed, storage, processing, equipment sales and service, livestock auctioning, transportation and more.

We have a few small urban cities such as Harrisonburg and Staunton in our footprint that are fairly well diversified in terms of industries represented. Neither are large cities but they are both vibrant and growing. Harrisonburg has been impacted by James Madison University, which has been one of the fastest-growing universities in the state and in the Southeast. The University has grown to almost 25 thousand undergraduates. As it has grown, the amount of new infrastructure on and around the campus has certainly been a large contributor to our local economy. Staunton is also a city with a strong economy, a business-friendly environment, and affordable tax rates. Several well-known companies like Hershey and ComSonics have relocated or expanded there. We are fortunate to have several other Fortune 500 businesses like Molson Coors and WalMart Distribution in our footprint as well. We find that other locally based companies often support local banks like us due to our knowledge of the local markets, the flexibility we can provide and our focus on service and relationships.

CEOCFO: How many branches do you have and are you looking to grow that number in the near future?

Mr. Hanna: We currently have 14 retail bank branches, three F&M Mortgage offices, three VS Title offices and our Dealer Division offices. Timing is everything, so as we sit here today, we look to be opportunistic in our growth. We recently added our fourteenth branch in August of this year. That was the last of five branches added to our footprint through de novo expansion. De novo growth occurs when we open a new banking office with zero assets and try to grow the business from the ground up. We opened five new branches reaching into the southern part of our footprint, primarily in the Augusta County market, between June of 2015 and August of 2019.

We have been aggressive in trying to grow our infrastructure but as of today, we are more in an absorption role as we aim to aggressively leverage those investments and get the returns that we were looking for. Should an opportunity present itself, there are other segments of our community where we would like to expand with either physical retail facilities or through a loan production office. Although we are not actively seeking new investments at this time, we will continue to keep our ear to the ground.

CEOCFO: What is your management style? Are you more hands on or depending on your officers?

Mr. Hanna: I like to be out working with our team and meeting with our clients. I enjoy getting to know both our clients and our associates. We have a great staff here at the bank and I delegate to the folks who are well equipped to handle different situations. The way banking is today, I don’t honestly believe anyone can be an expert in all the different functional areas we have to oversee. On a daily basis, F&M has to manage existing and emerging technologies, regulatory compliance, loan underwriting, portfolio diversification, liquidity, asset and liability pricing just to name a few. All this needs to be done behind the scenes so that we can focus our client-facing teammates on maintaining dynamic sales and client retention efforts. One person cannot keep up with it all, so I rely heavily on F&M’s Leadership Team as well as our Board of Directors.

CEOCFO: Do you have a Chief Security Officer?

Mr. Hanna: We do! We have an information technology department and an information security officer that is independent from IT who identifies risks and establishes protocol to keep our Bank and client information secure. It takes a lot when you consider all the potential threats coming at us like Ransomware, malware, phishing attacks and so on. In addition to technology, we have to actively manage risks that may be presented to us through our vendors and facilities. Bank security is a huge and growing area.

CEOCFO: What do you look for in your tellers, bankers, lenders and support staff?

Mr. Hanna: We are a relationship business. We have to provide outstanding, unrivaled customer service and a lot of that is cultivating relationships, knowing our clients, serving their needs and being there for them in good times and bad. A lot of what we look for are people who have a passion for serving the needs of their clients as well as their communities. Outside of that there is a growing list of technical skills and knowledge required to run a bank in 2019. It used to be that we could train our associates in the skills it took to run a Bank but more and more we have to recruit specific technical skills.

CEOCFO: How did your bank manage to survive the TARP period?

Mr. Hanna: We have been a strong and high-performing financial institution for many years. While the opportunity was available, the bank was well capitalized and chose not to take preferred shares through the TARP program. We had a capital base to draw from and continued to run a strong, well-capitalized bank during those difficult years. Like every organization that I know of, we encountered our share of challenges, but overall, F&M came through that period stronger than most.

CEOCFO: What is your current funding position? Is reaching out to investors an important role for you as CEO?

Mr. Hanna: We are very well-capitalized, so we are not actively trying to attract new capital. That said, we do reach out to current and new investors to create interest in F&M, to communicate our performance, and to create transparency around any challenges or opportunities we face. Over the years, F&M stock has done well. Currently, we are not enamored with our stock performance but we have undertaken some changes to better position our organization for the future. My belief has been if you are transparent with your investors and they understand your challenges and opportunities, hopefully they will remain patient and buy-in to the path forward.

CEOCFO: In closing, what sets F & M Bank apart from other local banks and why are you important to the fabric of the community?

Mr. Hanna: I think this includes a lot of what we have talked about. F&M Bank is the only publicly owned company still headquartered in Harrisonburg and Rockingham County, Virginia. We take that seriously and I think the community embraces that. Our clients and community members understand the long, rich partnership that F&M Bank has had with the Shenandoah Valley and the communities we serve. F&M has maintained a positive reputation since 1908 serving the needs of our clients and the community. We have been an integral contributor to the growth of the Shenandoah Valley and we hope to be involved in the continued development of these communities for another 111 years to come.

Your account statements have a new look!

November 25, 2019/in Bank Products and Services

New Account Statement Formats

To make it easier to track your finances, we’re introducing a new, fresh statement format for a more user-friendly experience. Watch your mail (or email if you receive e-statements) for our updated personal and business statements and envelopes. For questions, please contact your local branch. Location details may be found here.

Preview a sample checking statement [pdf].

F&M Bank Adds to Business Development Team

November 4, 2019/in Press Releases

F&M Bank is pleased to announce the promotion of Mary Pavlovskaya to Business Deposit Services Officer. Since 2011, Mary has served in a variety of roles at F&M Bank: retail, back office, and compliance. Her well-rounded experience in the banking industry is an asset as she transitions to a commercial role.

“I am excited to step into this new position and bring with me the experience and knowledge gained over the last 8 years to provide the community with flexible and responsive service. Growing up in the Shenandoah Valley, I have developed a strong passion for helping our community thrive, and I enthusiastically look forward to helping pave the way for a bright future with strong and loyal relationships”, said Ms. Pavlovskaya.

Raised in Bridgewater, Mary has strong ties to the Shenandoah Valley. She attended James Madison University where she received a Bachelor of Science in Justice Studies and a Bachelor of Arts in Psychology. She also is bilingual and fluently speaks Russian. In her free time, Mary enjoys spending time with family and friends, hiking and traveling.

F&M Bank is happy to welcome Matt Hill as Commercial Relationship Manager to the Augusta County Business Development team. Matt brings with him over 13 years of lending and credit experience including consumer, mortgage, agriculture and commercial.

“My banking and lending experience have always found me in smaller towns and more rural areas. I’m so happy to be joining the team at F&M where banking is still about the people of our communities and the lifestyles that exist in the Shenandoah Valley”, said Mr. Hill.

Matt most recently spent 8 years with a community bank in Montana and graduated from the Pacific Coast Banking School. Originally from Alabama, Matt has strong ties to the Shenandoah Valley. He spent 10 years of his life in Virginia, during which he lived in the Staunton and Weyers Cave area.

Mr. Hill currently resides with his wife and two golden retrievers in a project farmhouse in northern Rockbridge County. In his free time, Matt enjoys home renovation projects, horses, college football and classic cars.

F&M Bank Corp. Announces Third Quarter Earnings

November 1, 2019/in Press Releases

F & M Bank Corp. (OTCQX:FMBM), parent company of Farmers & Merchants Bank, announces its financial results for the third quarter ending September 30, 2019.

Selected highlights for the quarter include:

Net loss of $186,000 due mainly to a $3.3 million increase in the Provision for Loan Losses over the third quarter of 2018;
Net interest margin of 4.39% for the quarter and 4.52% YTD;
Non-Interest Income increased $497,000 or 23.1% compared to the third quarter of 2018;
Total deposits increased $11.7 million and $30.5 million, respectively for the quarter and for the trailing 12 months;
Non-Interest Bearing deposits increased $7.8 million for the quarter and $15.1 million YTD.

Mark Hanna, President, commented “The Bank recognized a small net loss of $186,000 in the third quarter due mainly to increased provisions for loan losses resulting from higher levels of substandard loans. During the quarter, the Bank conducted an external loan review to identify and proactively address problem loans. As a result of these findings and the ongoing servicing of our loan portfolio, F&M Bank recorded a loan loss provision of $3.75 million. This provision represents a significant increase of $2.15 million over Q2 2019 and $3.3 million over Q3 2018. While the additional provisions to our Allowance for Loan Losses are burdensome, we feel that they fairly represent the current risk in our loan portfolio.”

“Despite these headwinds, pre-tax, pre-provision Income showed some positive momentum growing about 0.8% for the first nine months of 2019 over the same period in 2018. Core operating earnings continue to be fueled by a strong net interest margin of 4.39%. The margin has been negatively impacted by non-accrual adjustments and increases in the levels of short-term mortgage loans held for sale that offer lower yields than our longer-term portfolio. Non-Interest Income showed impressive growth of 17.5% during the first nine months of the year which reflects stronger results for both our mortgage and title company subsidiaries.”

Mr. Hanna continued, “We are perhaps most pleased with the growth in total deposits in general and non-interest bearing deposit balances in particular. As we work to change the composition of our deposit base, non-interest bearing deposits have increased 9.4% year to date ($15.1 million) while time deposits have declined 8.7% year to date ($13.5 million). Even with the decline in time deposits, total deposits have increased over 5% in the first nine months of 2019 which should create a stable, cost-effective funding source going forward.”

Mr. Hanna further stated, “We are excited to announce that our fourteenth branch located at 2782 Stuarts Draft Highway, Stuarts Draft, VA opened in September. As previously announced our board approved a quarterly dividend of $.26. This dividend is payable on November 15, 2019 to shareholders of record as of November 1, 2019”.

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 fourteen 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.

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.

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

SOURCE: F & M Bank Corp.

View source version on accesswire.com:
https://www.accesswire.com/564541/F-M-Bank-Corp-Announces-Third-Quarter-Earnings

A Comprehensive Guide to VA Loans

September 3, 2019/in Mortgage

Are you a veteran, service member, or surviving spouse? Perhaps you’ve heard that the VA can help you get a mortgage loan, but you’re not sure where to start. As a longtime community bank serving the residents and military veterans of the Shenandoah Valley, F&M Bank created this education guide to VA Loans to help you understand what they are, how to apply, and what the process looks like. You can also visit our VA Mortgage Loans page.

What is a VA Loan?

The VA Home Loan Benefit offers eligible homebuyers more favorable terms on a mortgage from a bank or other private lender. You must use your VA loan for a primary residence. The VA guarantees a portion of the loan against loss.

There are 3 types of VA-guaranteed home loans:

Purchase Loan: Helps you buy a new home at competitive interest rates.
Streamline Refinance: Obtain a lower interest rate.
Cash-Out Refinance: Access your home equity to pay off debt or finance a major expense like college or home renovations.

Who is Eligible?

To be eligible for a VA loan, you must meet credit and income requirements and receive a Certificate of Eligibility (COE). Eligibility extends to servicemembers and veterans, spouses, and certain beneficiaries. Browse the list below to see if you might qualify:

Veterans of WWII and the Korean or Vietnam Wars.
Gulf War service
Service during peacetime
Separated from service (other than dishonorable discharge)
Active-duty service personnel
Selected Reserve or National Guard
Un-remarried spouses of veterans who died while in service or from a service-connected disability.
Spouses of missing in action or prisoner of war servicemembers
Surviving spouses who receive Dependency and Indemnity Compensation (DIC) benefits.
Certain U.S. citizens who served in the armed forces of a government allied with the U.S. during WWII.
Service members of certain organizations, such as Public Health Service officers, cadets at the U.S. Military, Air Force, or Coast Guard Academy, midshipmen at the U.S. Naval Academy, officers of National Oceanic & Atmospheric Administration, merchant seaman with World War II service, and others.

Read the complete list of VA Loan eligibility requirements.

What are the Benefits of VA Loans?

The VA Home Loan program is designed to help eligible veterans and service members achieve the dream of homeownership. With an experienced VA loan lender like F&M Bank, you can move through the process in a smooth and efficient manner. Here are the primary benefits of applying for a VA loan:

You don’t need to make a down payment unless:
- The lender requires it.
- The purchase price is greater than the property’s appraised value.
Unlike other mortgages with less than 20 percent down, Private Mortgage Insurance (PMI) is not required for a VA Loan.
Rates may be lower.
Limited closing costs
You can use a seller’s assist (when the seller pays some or all of the closing costs).
There are no penalty fees for paying the loan off early.
If you have trouble making loan payments, the VA may be able to help.
You don’t have to be a first-time home buyer to qualify for a VA Loan.
The VA Loan benefit can be re-used (more on that later).
VA-guaranteed home loans are assumable.
Disabled veterans are exempt from the one-time VA funding fee.

What does the process look like?

Here’s what you can expect to do during the VA loan application process.

Determine your eligibility.
Apply for a Certificate of Eligibility (COE) through the eBenefits portal. Your lender can also request a COE for you.
Select a VA-approved lender to originate your VA home loan.
Review the loan origination fee, if applicable. Some lenders charge a one percent flat fee to cover the costs associated with your VA loan, such as the appraisal and inspection, recording fees, your credit report, prepaid items, hazard insurance, flood zone determination, survey, title examination and insurance, special mailing fees, VA funding fee, and the Mortgage Electronic Registration System.
Consider how you will cover closing costs. As mentioned above, you can submit an offer on a home that has the seller paying the closing costs.
Take a home buyer education workshop. This isn’t a mandatory step, but it can be very helpful, especially for first-time homeowners. Here in Virginia, the Department of Housing and Community Development facilitates free events and webinars.
Find a real estate agent to act as a buyer’s agent for you and start the home browsing process. If you need recommendations, our friendly and Shenandoah Valley-based employees can help you find local real estate agencies to work with.
Once you find a house you love and make an offer, be sure to include a “VA Option Clause” in your contract (which your real estate agent will draw up for you). This contingency, along with clauses for the VA appraisal and home inspection, protects you against contractual obligation in the event that your VA financing doesn’t come through.
If the VA-appraised value is not enough to cover the purchase price of the home, you can request a Reconsideration of Value (ROV), try to renegotiate the sale price, or pay the difference at closing with your own funds.
The process ends with closing, where you sign the loan and title paperwork and collect the keys to your new home. Congratulations!

Where can you get a VA loan in the Shenandoah Valley?

To obtain a VA loan in the Shenandoah Valley (or anywhere else in the country), you must find a lender that is approved by the U.S. Department of Veterans Affairs to originate VA mortgages. Of course, that only narrows your options somewhat. Ultimately, you want to choose a VA-approved lender with extensive VA loan experience in Virginia.

For example, F&M Mortgage has been offering full-service home mortgages to the Shenandoah Valley and beyond since 1999. With offices in Woodstock, Harrisonburg and Staunton, Va., our Mortgage Advisors also have expertise with other government-insured loan programs like FHA. We can help you evaluate all of your options to ensure the VA loan is the best fit. Then we’ll put our experience to work for you to get you to closing as soon as possible.

VA Loan Limits in the Shenandoah Valley by County

VA loan limits reflect the maximum qualified veterans with full entitlement can borrow without making a downpayment. Limits vary by county due to varied real estate markets. You can view the complete list of counties and loan limits. Below, we’ve listed the loan limits for each Shenandoah Valley county we serve.

Rockingham County: $484,350
Shenandoah County: $484,350
Page County: $484,350
Augusta County: $484,350
City of Harrisonburg: $484,350
City of Staunton: $484,350

Closing Cost Assistance for VA Loans in Virginia

In 2018, the Virginia Housing Development Authority (VHDA) launched its Closing Cost Assistance (CCA) Grant program. Receive up to 2 percent of either the purchase price or appraised value (whichever is less) of your home. The CCA grant is for first mortgage loans only and must be used for closing costs, including the VA Funding fee. Talk to your lender about reserving grant funds for your VA mortgage loan.

How does the VA Loan Compare to Other Home Loan Types?

No down payment: Only VA and USDA loans offer 100 percent financing. You may be able to make a low down payment on a conventional mortgage, FHA loan, or VHDA loan, but you will pay private mortgage insurance (PMI) until you have 20 percent equity in your home (FHA loans require mortgage insurance for the life of the loan).
No mortgage insurance requirement: As mentioned above, FHA borrowers will pay mortgage insurance through the life of the loan. Conventional borrowers must pay it until they reach 20 percent equity. Even USDA loans have (albeit low) mortgage insurance. Only the VA loan waives the PMI requirement for borrowers.
Conforming Loan Limits: VA loans have the same limits as other types of mortgages. The conforming loan limit is set by Fanny Mae/Freddie Mac. If you want to borrow more you’d need a jumbo loan.
Home Inspection: Government-backed loans like the VA and FHA programs have quality standards that a home must meet to qualify for financing. With conventional mortgages, a home inspection is not required by the lender. However, it is always recommended that buyers schedule a private home inspection before closing to uncover any potential issues.
Appraisal: Lenders always appraise the home before approving a mortgage. This is true regardless of the loan program you choose. It is usually difficult or impossible to borrow more than a house’s appraised value.

What can VA Loans be used for?

VA Home Loans can be used for purchasing a primary residence, purchasing and making improvements to an existing house, financing the construction of a new home, or refinancing an existing loan. Eligible properties and uses include:

Existing single-family homes and condominiums
New construction
Simultaneously purchase and improve
Refinance an existing non-VA loan
Refinance an existing VA loan to reduce the interest rate
Manufactured homes and lots
Energy-efficient improvements

VA loans cannot be used to purchase an investment property, finance a business, buy farmland without a residence, buy property abroad, or purchase a vacation home. Recreational vehicles (RVs) and boats are also ineligible.

Surviving spouses who remarry before age 57, as well as divorced spouses, lose their VA loan eligibility.

Restoration of Entitlement

You can use your VA loan benefit again as long as your prior VA loan has been paid in full (and the property sold). You can re-use your benefit just once if you pay off your first VA loan but do not sell the associated home. You can also find a qualified Veteran-transferee to buy your home and assume your VA loan by substituting their entitlement for yours.

F&M Mortgage is your local VA loan lender in the Shenandoah Valley

F&M Mortgage, a division of F&M Bank, has been helping Virginia’s military veterans and their families become homeowners since the VA home loan program was introduced. Our Mortgage Advisors pride themselves on offering friendly, personalized service with local expertise.

Ready to apply for a VA loan? Use our online mortgage application or apply in person at your nearest F&M Bank office. We have locations across the Valley, including dedicated mortgage offices in Harrisonburg, Staunton, and Woodstock, VA. Have questions about choosing the right mortgage loan for you? Give us a call today!

Check out our Loans for Local Heroes Home Loan Program, which provides up to $500 off your closing costs, and visit our VA Mortgage Loans page.

Stuarts Draft Now Open

August 19, 2019/in In the Community

F&M Bank is excited to announce the opening of our 14^th branch in Stuarts Draft! Over the next four weeks, we have big things planned. Be sure to keep reading to meet our staff, learn about our giveaways and save the date for our Ribbon Cutting and Grand Opening celebration!

Location

2782 Stuarts Draft Highway, Stuarts Draft, VA 24477
(540) 609-2363

You can find us conveniently located between the Stuarts Draft Professional Center and the Dollar General, up the street from the Stuarts Draft Post Office. When you visit F&M Stuarts Draft you’ll find a new brick building with limestone pavers. We have plenty of parking available in front of our branch building, as well as a wheelchair-accessible entrance.

Jason Crum, Branch Manager

Join us in welcoming Jason! Coming to F&M Bank with six years of banking experience, Jason Crum is ready to lead the Stuarts Draft team. He’s already been out and about in Stuarts Draft, but if you haven’t had a chance to connect with him, drop by our branch!

Much like his team, Jason is community centered. He is an assistant coach for a local youth sports organization and an active volunteer with United Way, Salvation Army and Adopt-a-Highway.

When asked about choosing banking as a career, Jason said, “What I enjoy most about working in banking is being able to help people and make a difference in their lives. Bank clients become family, and there is nothing more satisfying than helping someone gain financial confidence.”

Outside the office, Jason loves to spend time with his wife, Tayler, and 10-month-old son, Mackson. He also enjoys playing golf, spending time with friends, watching sports, attending ODU football games, and interestingly, mowing the grass!

Kacee Fridley, Branch Specialist

Say hello to Kacee! After spending 4 years serving the Craigsville community, Kacee Fridley is excited to make the transition to the Stuarts Draft branch. In total, she brings 7 years of banking experience to the new office.

Kacee is an active community member. Along with Jordan, she has a soft spot for animals and does what she can to help various animal rescues. She also likes to attend community meetings and help raise awareness and donations for area organizations, specifically Foster Love Ministries.

When asked what she loves most about banking, Kacee said, “I enjoy being able to firsthand help all of my customers whether it’s a simple bank transaction to accounts and loans as well! I take pride in being able to open someone’s first account, help them purchase their first vehicle and later with a mortgage!”

Outside the office, Kacee enjoys spending time with her husband, Michael, and two children. Plus, we can’t forget about her two dogs, who are a large part of her family.

Jordan Smitherman, Branch Specialist

Meet Jordan! Transitioning to Stuarts Draft from our Myers Corner (Staunton) office, Jordan Smitherman brings four years of banking experience to the new branch!

Jordan is involved in her community and enjoys volunteering at local animal shelters and working with rescues to help find foster homes and permanent placement for homeless animals. She also likes regularly volunteering at community events through the bank!

When asked what she loves most about being a banker, Jordan said, “I am able to support people with their financial needs in all stages of their lives. I love being able to witness children open up their first savings account to a newlywed couple being approved for financing on their first home.”

In her free time, you’ll find Jordan spending time with her husband, Zac, and their fur babies. They enjoy working on home improvement projects together.

Weeks of Giveaways

Our responsive and knowledgeable staff is ready to listen to your financial needs and goals and help you identify the right solutions. Come check us out in Stuarts Draft and discover all that F&M has to offer!

As an extra incentive, over the first four weeks of branch opening, you can enter to win various door prize giveaways! Stop by each week and enter to win the below prizes. Limit one entry per person, per week.

We’d also like to cordially invite you to attend our Ribbon Cutting and Grand Opening Celebration on Thursday, September 12^th at 4:30pm! Co-hosted by the Greater Augusta Regional Chamber of Commerce, our event will feature catering by Simple Elegance, local wines, the cash bag grab, and more!

To learn more about the event and our four weeks of giveaways, follow us on Facebook!

Identity Theft Protection Guide

August 6, 2019/in Personal Finance

How safe is your financial and personal data? Identity fraud has been growing for the last few years. In 2017, there were a record 16.7 million victims of identity fraud and a total of $16.8 billion stolen in the U.S. alone. And while identifying information can be stolen from offline sources like unshredded mail, online activities like shopping now pose the biggest threat. You may think you’re already familiar with cybersecurity best practices. However, cybercriminals continue to evolve their methods into increasingly sophisticated ploys to steal your identity and your money. Everyone⸺from government, corporations, and financial institutions to individuals⸺has a role to play in preventing identity theft and fraud. In this guide, you’ll find the latest tips for protecting your sensitive information and your bank account. Keep reading to discover how many you know and how many are new to you. Then put them into action!

What are the different types of identity theft?

Your first line of defense in preventing identity theft is to understand the various forms it takes. Here are the current most popular types of identity thefts:

Tax: Common during tax filing season, tax ID theft occurs when someone steals your social security number in order to falsely file federal and/or state returns under your name. The purpose of tax ID theft is to steal your tax refund before you get around to filing and collecting it yourself.
Medical: This is when someone steals your Medicaid, Medicare, or private health insurance ID number in order to obtain medical services under your name or send fraudulent bills to an insurer to collect the reimbursements.
Social Media: Cybercriminals will even steal your name and photo to use in a fake social media account. For example, Retired Army Colonel Bryan Denny had his photo stolen and used on a variety of websites, from social media platforms to online dating sites. Cybercriminals will fake romantic relationships in order to steal money from unsuspecting women. They may also use fake profiles to inflate follower numbers or to spread disinformation.
Financial Identity: This encompasses any fraudulent use of your financial accounts, such as using your stolen debit or credit card, and online shopping fraud where the cyber criminal uses your account to make a purchase and then has it shipped to a different address.
Child Identity: This type of ID theft isn’t as common as the others, but it still affects about a quarter of children under 18. Thieves can steal a child’s social security number and other identifying information to open credit accounts and other fraudulent activity.

Now that you can recognize the most common identity theft scams, it’s time to brush up on your prevention skills.

13 Tips For Foolproof Identity Protection

We start with general tips and move to specific advice for protecting yourself online and on mobile devices.

Don’t share your personal information with anyone. Reputable businesses and banks will never ask for your social security number, account number, pin, password, or any other sensitive data. So, whether you get a phone call or an email posing as a legitimate business you have an account with, never share any information that could be used to log into your bank or bill accounts, or to open a credit account in your name.
Look over your shoulder. The simplest way to steal information is to observe someone’s computer or mobile device screen. Stay alert to your surroundings, especially when you’re in a public space and entering personal information.
Shred physical mail and confidential documents. Buy a personal shredder for your home or take advantage of local shredding opportunities such as F&M Bank’s 2019 Community Shred Day Events. Dispose of receipts, bank statements, credit card offers, bills, and any other papers with sensitive information. You should also shred old tax returns once you are past the date of needing to keep them. Check the IRS guidelines for how long to hold onto returns.
Enroll in e-statement delivery and billing. One way to prevent identity theft through physical mail is to switch to electronic delivery as much as possible. Receive bank statements and monthly bills through email instead. As a bonus, you’ll also help the environment by reducing paper use!
Set up text alerts to monitor account transactions. Most banks offer mobile banking apps with an option to set up certain text alerts. For example, F&M’s Mobile Banking allows you to establish text alerts for specific types of transactions or any transaction above a specific amount. This could help you detect and report fraud as soon as it happens.
Keep tabs on your credit report. A regular review of your credit report will let you know if any unauthorized accounts have been opened in your name. Federal law gives you the right to receive a free copy of your credit report once a year from each of the three agencies. If you space it out, you could review your report 3 times a year.
Keep your virus protection updated. Since the majority of identity theft cases now originate online, particularly in the context of e-commerce, it’s very important to check your computer’s virus protection software for updates. Also, complete updates for other computer software such as your operating system, web browser, etc.
Browse the web securely. Only use websites that begin with “https” instead of just “http.” The ‘s’ stands for secure. Also, look for a padlock or key icon on your browser bar when you shop online or log into an account. When using public wifi, limit your activities to non-secure web browsing. Don’t enter your credit card information or check your bank balance, for example. Cybercriminals could steal your sensitive information because the wifi network is not secured.
Designate one card for online shopping. Instead of using multiple credit and debit cards to make online purchases and pay bills, consider using just one. That way, if your card information is stolen, you can limit your exposure. It’s also better to use a credit card if possible. You can dispute fraudulent charges and you don’t risk having your checking account emptied.
Keep your mobile device secure. A phone or other mobile device can be a treasure trove of information for a cyber-criminal. Protect yourself by using a passcode or pattern lock; wiping all data from the phone if it is lost, stolen, or you decide to give it away; and being selective about the apps you download. Both Apple and Android offer apps for finding a missing phone and remotely deleting data if it is permanently lost or stolen. You should also keep your mobile device’s operating system software up to date⸺don’t ignore those Update Needed reminders!
Beware of mobile phishing scams. “Phishing” simply refers to fraudulent messages from scammers posing as a legitimate organization or person. Don’t open links or attachments in texts and emails that you weren’t expecting or that come from unknown senders. Ignore pop-up messages offering to repair an infected device.
Make your passwords hard to guess. Don’t use publicly available information, such as a birthday or child’s name. Experts recommend passwords that consist of the first letter of each word in a phrase. For example, “Life is good at the beach” would become “LIGATB.” Add numbers and symbols to replace certain letters, such as a ‘0’ instead of an ‘o’ or ‘@’ instead of ‘a,’ and to extend the length of your password. Don’t share your passwords with anyone, even family and friends. Change them once or twice a year.
Report suspected fraud immediately. In the last section, we’ll go over the specific steps to take if you become a victim of identity theft. For now, keep in mind that time is of the essence when it comes to fraud and identity theft.

Popular Identity Theft Scams to Look Out For

Every year, the IRS publishes its “Dirty Dozen” list of the worst tax scams. Check out the 2018 list and stay alert throughout the year, especially between January-April.

Skimming devices, which read the information on your credit or debit card, are another tried-and-true identity theft scam. You can find them on ATM machines, card readers at the cash register, and gas pumps. Never insert your card into a device that looks tampered with.

In the market for a new mobile phone or laptop computer? Beware of websites advertising deals that seem too good to be true. They probably are. Scammers create websites just to bait search engine users who are looking for the best price on popular products. If you visit the fake site, you’ll be asked for your personal information in order to redeem the offer.

Identity thieves also use the bait-and-switch method over the phone. You can set up a fraud filter on incoming calls to avoid answering potential scams. If you do, never give out personal information⸺not for a free cruise, sweepstakes check, or anything else “irresistible.”

What to Do if Your Identity is Stolen

Being a victim of identity theft is a terrible experience, but there are things you can do to resolve the situation as quickly and efficiently as possible. Here are our tips for reporting scams and fixing your credit history.

Call your bank and credit card companies immediately to cancel stolen cards and set up a fraud alert on your account.
File a report with your local police station.
Contact the fraud units of the three credit reporting companies. You can also place a fraud alert online.
You may want to place a security freeze on your credit report, which will stop lenders from issuing a credit to anyone using your identity. This will also stop you from opening new credit accounts, but you can always lift the freeze when you’re ready.
Keep a record of all of your fraud-related communications with company representatives, police officers, etc. You may need to refer to this information later on.
Report your identity theft to the Federal Trade Commission (FTC) by calling 1-877-ID THEFT (1-877-438-4338) or visiting ftc.gov/idtheft.
Read the Fraud Victim Bill of Rights granted by the Fair Credit Reporting Act. Among other things, you can repair your credit history by blocking negative information related to identity theft from appearing on your credit report.

F&M Bank is Your Local Partner in Identity Theft Prevention

As your Shenandoah Valley community bank, we offer many resources to help our customers protect themselves against the growing threat of identity theft. In addition to our paper shredding events you can sign up for F&M Bank’s ID Safe Choice Program, take advantage of the free Identity Theft Protection that comes with our Cash Reward and Cash Back Checking Accounts, and take the free “Safeguard Your Identity” course in our community classroom.

The Shenandoah County Chamber of Commerce also offers periodic Identity Theft workshops⸺check their calendar for upcoming events. For more local resources, the Harrisonburg Police Department offers Identity Theft and Crime Prevention tips.

Remember that F&M Bank will never ask for your account or login information. Contact us right away if you have questions or concerns about your checking or other accounts.

F&M Bank Corp. Announces Second Quarter Earnings

August 6, 2019/in Press Releases

F & M Bank Corp. (OTCQX:FMBM), parent company of Farmers & Merchants Bank, announces its financial results for the second quarter ending June 30, 2019.

Selected highlights for the quarter include:

Net income of $1.63 million;
Net interest margin of 4.47% for the quarter and 4.57% YTD;
Net interest income increased $208,000;
Non-Interest Income increased $477,000 or 23.9% compared to the second quarter 2018;
Total deposits increased $7.6 million and $39.9 million, respectively for the quarter and for the trailing 12 months.

Mark Hanna, President, commented “Our second quarter earnings of $1.63 million is comparable to the same period last year and an increase of $347,000 versus the first quarter. We continue to enjoy strong pre-tax core operating earnings which increased in 2019 to $3.44 million versus $3.21 million in Q2 2018. Core operating earnings continue to be fueled by a strong net interest margin of 4.47%. The margin did decrease versus the first quarter due to a combination of non-accrual adjustments and an increase in short-term mortgage loans held for sale that offer lower yields than our longer-term loan portfolio. We are also particularly pleased with our increase in non-interest income, which reflects stronger results for both our mortgage and title company subsidiaries.”

Mr. Hanna continued, “Non-performing assets have increased $.9 million versus the first quarter 2019 but have decreased $3.1 million compared to second quarter 2018. During the second quarter we charged $1.6 million to the provision for loan losses. We continue to work through several long-term problem assets and the additional provisioning positions us to move these assets off our balance sheet later this year. The additional provision also captures revisions to our loan loss methodology designed to reflect risks within our loan portfolio resulting from the increase in our non-performing asset ratios in recent quarters.”

Mr. Hanna further stated, “We are excited to announce that our fourteenth branch located at 2782 Stuarts Draft Highway, Stuarts Draft, VA is slated to open later this month. As previously announced our board approved an increase in our quarterly dividend from $.25 to $.26. This dividend is payable on August 16th to shareholders of record as of August 2nd.”

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, 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.

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.

CONTACT: Neil Hayslett, EVP/Chief Operating Officer
540-896-8941
NHayslett@FMBankVA.com

Is Cash Still King? Digital Payment Services Are Increasing in Popularity

June 21, 2019/in Technology

Is cash still king? If you’re like many Americans, the answer to that question is probably no.

According to a study conducted by the Pew Research Center, roughly 3 in 10 Americans say they make no purchases using cash during a typical week. For Americans who report that all, or almost all purchases are made using cash, the numbers are declining – from 24% in 2015 to 18% in 2019.

Debit, credit, and digital payment options have created a level of consumer comfort that has completely transformed the way transactions are conducted. Instead of relying on cash or checks, many consumers are turning to various forms of digital payment services.

At F&M Bank, we recommend customers take advantage of our Person-to-Person Payment money transfer app, or as we call it, P2P.

What is P2P?

P2P is a mobile banking funds transfer app that lets you send money securely through your personal computer or phone. Simply type in the email address or phone number of the person you need to pay and send up to $500.00, for free! For the utmost in convenience, the recipient can bank with any financial institution. Here’s an example of how it works:

Your coworker is selling Girl Scout cookies for her daughter, and today is the deadline to order. You’ve resisted ordering for two weeks, but it’s been a stressful day and your salad from lunch didn’t do the trick. You reach into your wallet only to realize you have no cash, you never carry your checkbook, and the nearest ATM is a 15-minute drive from the office.

Luckily, you remember F&M Bank offers the P2P service. Instead of spending the afternoon sad and hungry, you visit the P2P website (or, mobile banking customers may visit the F&M Bank app), send payment and you’re now in Thin Mint heaven.

This scenario might be a little dramatized, but it truly is a real-life example of how one customer chose to use the app. P2P offers a convenient, alternative method for sending cash digitally in a variety of different situations. The service offers a timely, simple and secure way to pay.

It’s Timely

Mailing a check or cash can take days to reach your payee. Why wait that long? P2P payments are sent immediately, and if the payee selects to accept payment using their debit card number, payment is instantaneous! A payee may also choose to accept a payment using their deposit account number, but the transfer could take up to three days to process using ACH. The debit card method is preferred if you’re looking for a quick transfer!

One customer says, “I send my daughter and grandchildren money from time to time and use P2P. The money gets there much faster than sending a check! I love it and use it quite often.”

It’s Simple

P2P makes life easy. To send a payment, you only need to enter:

Your Name
Your Email Address
Your Recipient’s Email Address or Phone Number
Your F&M Bank Debit Card Number

F&M Bank wanted to make sending cash easy as easy as possible. We know geographical barriers can make a cash transfer difficult. Whether your family or friends live in a different town, or state, P2P offers a convenient solution.

A P2P user says, “My college friends and I get together each year for a reunion. We rent an Airbnb for a weekend and all split the rental fee. Since we’re all spread out across the state of Virginia and bank with different institutions, P2P is an easy and secure way for me to pay back a friend who banks somewhere else.”

Another user states, “I’ve used P2P to pay back my siblings who live out of state for our shared Netflix and Amazon Prime accounts!”

It’s Secure

The greatest benefit of P2P is the peace of mind it can provide users. Sending a check or cash through the mail can be risky as mail fraud is a real concern. Also, while there are many digital transfer options available for download on your app store, your local bank can provide a higher level of security.

We ensure all our web-based banking services meet or exceed industry security guidelines. Our mobile PIN pad is encrypted so it never travels across payment channels. Entering your PIN with your mouse or by touch ensures your account is protected even if your computer is infected with viruses or malware.

Customers should still be very vigilant when initiating a P2P transfer. Although security measures are in place, you should always double check to ensure the recipient’s information you are entering is correct.

Kelsey Dean, Marketing Specialist at F&M Bank, states, “Treat P2P just like a cash transfer. Would you give $50 to someone you really didn’t know on a personal level? It’s important to only send P2P payments to family or friends that you trust. Also, double check the amount you are sending. It’s easy to mistype or accidentally add an extra number on a phone screen.”

Ready to Get Started?

If you’re interested in using our P2P platform, visit our website or login to your F&M Bank Mobile Banking account. If you have any questions at all regarding P2P or our digital banking suite of products, please don’t hesitate to contact us!

Did you know you can also send payments or pay bills with iPay in online banking? To use iPay you just need an F&M bank user ID and password but anyone can send funds using P2P!