F&M Bank Corp. Announces 4th Quarter Earnings and Dividend
TIMBERVILLE, VA / ACCESSWIRE / January 31, 2019 / F & M Bank Corp. (OTCQX: FMBM), parent company of Farmers & Merchants Bank, announces its financial results for the fourth quarter and year ending December 31, 2018.
Selected highlights for the quarter and year to date include:
- Net income of $2.9 million and $9.1 million, respectively;
- Non-performing assets dropped $4.65 million or 26.90% during the fourth quarter;
- Net interest margin rose to 4.68%;
- Loans held for investment increased $21.8 million YTD;
- Return on Average Assets of 1.48% and 1.19%, respectively.
Mark Hanna, President, commented “We are pleased to announce fourth quarter and year to date earnings of $2.9 million and $9.1 million, respectively. The fourth quarter results represent a record for quarterly earnings which was driven by an increasing net interest margin. Our margin increased due to our asset sensitive balance sheet which resulted in a $2.6 million increase in interest income and a $935 thousand increase in interest expense. Loans held for investment increased $21.8 million or 3.54% versus the prior year. Deposit growth also accelerated in the second half of the year to $22.1 million or 3.89%.”
Hanna continued, “During the fourth quarter we made significant progress in addressing our problem assets. Previously we had announced that two large loans were placed on non-accrual during the second quarter, resulting in our significant allowance for loan loss funding in the first half of the year. During the fourth quarter we were successful in collecting on one of these loans and we recognized a partial write-down on the other based on the appraised value and continued payment delinquency. As a result of these and other collection efforts our problem assets decreased from $17.3 million to $12.6 million.” Highlights of our financial performance are included below.
Hanna stated, “On January 23rd our Board of Directors declared a fourth quarter dividend of $.25 per share to common shareholders. Based on our most recent trade price of $30.30 per share this constitutes a 3.30% yield on an annualized basis. The dividend will be paid on February 15, 2019, to shareholders of record as of February 1, 2019.”
F & M Bank Corp. is an independent, locally-owned, financial holding company, offering a full range of financial services, through its subsidiary, Farmers & Merchants Bank’s thirteen banking offices in Rockingham, Shenandoah, Page and Augusta Counties, Virginia. The Bank also provides additional services through a loan production office located in Penn Laird, VA and through its subsidiaries, VBS Mortgage, LLC (DBA F&M Mortgage) and VSTitle, LLC located in Harrisonburg, VA. Additional information may be found by contacting us on the internet at www.fmbankva.com or by calling (540) 896-8941.
This press release may contain “forward-looking statements” as defined by federal securities laws, which may involve significant risks and uncertainties. These statements address issues that involve risks, uncertainties, estimates and assumptions made by management, and actual results could differ materially from the results contemplated by these forward-looking statements. Factors that could have a material adverse effect on our operations and future prospects include, but are not limited to, changes in: interest rates, general economic conditions, legislative and regulatory policies, and a variety of other matters. Other risk factors are detailed from time to time in our Securities and Exchange Commission filings. Readers should consider these risks and uncertainties in evaluating forward-looking statements and should not place undue reliance on such statements. We undertake no obligation to update these statements following the date of this press release.
F&M Bank Corp.
Key Statistics
| 2018 | 2017 | |||||||||||||||||||||||
| Q4 | Q3 | Q2 | Q1 | YTD | YTD | |||||||||||||||||||
|
Net Income (000’s)
|
$ | 2,910 | $ | 2,515 | $ | 1,687 | $ | 1,973 | $ | 9,085 | $ | 9,010 | ||||||||||||
|
Net Income available to Common
|
$ | 2,807 | $ | 2,412 | $ | 1,583 | $ | 1,870 | $ | 8,672 | $ | 8,595 | ||||||||||||
|
Earnings per common share
|
$ | 0.87 | $ | 0.75 | $ | 0.49 | $ | 0.57 | $ | 2.68 | $ | 2.63 | ||||||||||||
|
Return on Average Assets
|
1.48 | % | 1.29 | % | 0.91 | % | 1.11 | % | 1.19 | % | 1.62 | % | ||||||||||||
|
Return on Average Equity
|
12.51 | % | 10.82 | % | 7.38 | % | 8.75 | % | 9.89 | % | 13.34 | % | ||||||||||||
|
Dividend Payout Ratio exclude Special Dividend
|
28.83 | % | 33.33 | % | 51.37 | % | 43.53 | % | 37.34 | % | 26.25 | % | ||||||||||||
|
Dividend Payout Ratio with Special Dividend
|
78.35 | % | 44.81 | % | ||||||||||||||||||||
|
Net Interest Margin
|
4.68 | % | 4.56 | % | 4.64 | % | 4.78 | % | 4.65 | % | 4.47 | % | ||||||||||||
|
Yield on Average Earning Assets
|
5.50 | % | 5.30 | % | 5.29 | % | 5.38 | % | 5.35 | % | 5.05 | % | ||||||||||||
|
Yield on Average Interest Bearing Liabilities
|
1.14 | % | 1.04 | % | 0.94 | % | 0.87 | % | 1.00 | % | 0.82 | % | ||||||||||||
|
Net Interest Spread
|
4.36 | % | 4.26 | % | 4.35 | % | 4.51 | % | 4.35 | % | 4.23 | % | ||||||||||||
|
Provision for Loan Losses (000’s)
|
$ | 450 | $ | 450 | $ | 1,350 | $ | 680 | $ | 2,930 | $ | – | ||||||||||||
|
Net Charge-offs
|
$ | 2,483 | $ | 283 | $ | 660 | $ | 309 | $ | 3,735 | $ | 1,499 | ||||||||||||
|
Net Charge-offs as a % of Loans
|
1.55 | % | 0.18 | % | 0.42 | % | 0.20 | % | 0.58 | % | 0.24 | % | ||||||||||||
|
Non-Performing Loans (000’s)
|
$ | 10,205 | $ | 15,240 | $ | 14,977 | $ | 7,730 | $ | 10,205 | $ | 4,870 | ||||||||||||
|
Non-Performing Loans to Total Assets
|
1.31 | % | 1.96 | % | 1.94 | % | 1.06 | % | 1.31 | % | 0.65 | % | ||||||||||||
|
Non-Performing Assets (000’s)
|
$ | 12,648 | $ | 17,303 | $ | 17,011 | $ | 9,758 | $ | 12,648 | $ | 7,004 | ||||||||||||
|
Non-Performing Assets to Assets
|
1.62 | % | 2.23 | % | 2.21 | % | 1.34 | % | 1.62 | % | 0.94 | % | ||||||||||||
|
Efficiency Ratio
|
65.06 | % | 66.71 | % | 65.80 | % | 66.52 | % | 65.50 | % | 63.01 | % | ||||||||||||
| (1) | The net interest margin is calculated by dividing tax equivalent net interest income by total average earning assets. Tax equivalent interest income is calculated by grossing up interest income for the amounts that are nontaxable (i.e. municipal securities and loan income) then subtracting interest expense. The tax rate utilized is 21%. The Company’s net interest margin is a common measure used by the financial service industry to determine how profitable earning assets are funded. Because the Company earns nontaxable interest income from municipal loans and securities, net interest income for the ratio is calculated on a tax equivalent basis as described above. |
| (2) | The efficiency ratio is not a measurement under accounting principles generally accepted in the United States. The efficiency ratio is a common measure used by the financial service industry to determine operating efficiency. It is calculated by dividing non-interest expense by the sum of tax equivalent net interest income and non-interest income excluding gains and losses on the investment portfolio. The Company calculates this ratio in order to evaluate how efficiently it utilizes its operating structure to create income. An increase in the ratio from period to period indicates the Company is losing a greater percentage of its income to expenses. |
F & M Bank Corp.
Financial Highlights
| For Twelve Months Ended December 31, | ||||||||
|
INCOME STATEMENT
|
Unaudited 2018 |
Audited 2017 |
||||||
|
Interest and Dividend Income
|
$ | 36,707,958 | $ | 34,095,349 | ||||
|
Interest Expense
|
4,832,063 | 3,896,889 | ||||||
|
Net Interest Income
|
31,875,895 | 30,198,460 | ||||||
|
Gross Security Gains (Losses)
|
– | (41,914 | ) | |||||
|
Non-Interest Income
|
8,003,003 | 7,934,620 | ||||||
|
Provision for Loan Losses
|
2,930,000 | – | ||||||
|
Other Non-Interest Expenses
|
26,743,762 | 24,719,017 | ||||||
|
Income Before Income Taxes
|
10,205,136 | 13,372,149 | ||||||
|
Provision for Income Taxes
|
1,110,169 | 4,330,404 | ||||||
|
Less Minority Interest income
|
10,050 | 31,461 | ||||||
|
Net Income
|
$ | 9,084,917 | $ | 9,010,284 | ||||
|
Dividend on preferred stock
|
413,191 | 415,331 | ||||||
|
Net Income available to common shareholders
|
$ | 8,671,726 | $ | 8,594,953 | ||||
|
Average Common Shares Outstanding
|
3,238,177 | 3,269,713 | ||||||
|
Net Income Per Common Share
|
2.68 | 2.63 | ||||||
|
Dividends Declared
|
1.20 | .94 | ||||||
|
BALANCE SHEET
|
Unaudited December 31, 2018 |
Audited December 31, 2017 |
||||||
|
Cash and Due from Banks
|
$ | 9,521,741 | $ | 10,622,352 | ||||
|
Interest Bearing Bank Deposits
|
1,390,181 | 1,284,351 | ||||||
|
Federal Funds Sold
|
– | – | ||||||
|
Loans Held for Sale
|
55,909,812 | 39,774,515 | ||||||
|
Loans Held for Investment
|
638,798,885 | 616,974,067 | ||||||
|
Less Allowance for Loan Losses
|
(5,239,699 | ) | (6,044,365 | ) | ||||
|
Net Loans Held for Investment
|
633,559,186 | 610,929,702 | ||||||
|
Securities
|
21,843,918 | 41,242,965 | ||||||
|
Other Assets
|
58,028,442 | 49,416,495 | ||||||
|
Total Assets
|
$ | 780,253,280 | $ | 753,270,380 | ||||
|
Deposits
|
$ | 591,325,319 | $ | 569,176,519 | ||||
|
Short Term Debt
|
40,116,000 | 25,296,000 | ||||||
|
Long Term Debt
|
40,218,073 | 49,732,532 | ||||||
|
Other Liabilities
|
16,682,537 | 17,790,459 | ||||||
|
Total Liabilities
|
688,341,929 | 661,995,510 | ||||||
|
Stockholders’ Equity
|
91,911,351 | 91,274,870 | ||||||
|
Total Liabilities and Stockholders’ Equity
|
$ | 780,253,280 | $ | 753,270,380 | ||||
|
Book Value Per Common Share
|
$ | 26.84 | $ | 25.73 | ||||
|
Tangible Book Value Per Common Share
|
$ | 26.91 | $ | 25.64 | ||||
CONTACT:
Neil Hayslett, EVP/Chief Operating Officer
540-896-8941
NHayslett@FMBankVA.com
SOURCE: F&M Bank Corp
