How To Avoid a Cash Flow Crisis: A Comprehensive Guide for Virginia Small Business Owners

This is part two in a series about cash flow management for small business owners in Virginia. Check out part one, “Cash Flow, Debt, & Refinancing for Virginia Small Business Owners.”

Cash flow problems can strike any business, regardless of size or industry. The Covid-19 pandemic is an example of how an unexpected event can suddenly disrupt the economy and require a pivot to survive. In this article, we’ll offer tips for operating your business more efficiently so you can avoid cash flow problems that could negatively impact your business’s bottom line.

Understanding Your Business’s Cash Flow Needs

Watching your statements closely will help you stay aware of any potential issues before they turn into a cash flow crisis.

Taking your cash flow seriously will help you avoid and avert a cash flow crisis before it gets out of control.

  • Start by looking at KPIs such as sales and profit margins to help you avoid a cash shortage.
  • Update your financial statements regularly so you know how money is moving through your business.
  • Understand your cash flow cycles, such as busy seasons and slower ones.
  • Stay on top of inventory, which is essentially cash out until it gets sold.
  • Streamline your account receivables and payables to ensure optimal inflow and outflow.
  • Build relationships with your vendors, suppliers, and clients so they will be more willing to renegotiate terms or pay quicker to help your business stay afloat.

You may not be able to prevent every cash flow crisis, but watching your statements closely will warn you of any potential issues before they get out of hand. It’s better to get a handle on the situation before it gets out of control.

Open a business line of credit

Having a commercial line of credit can serve as a safety net for any potential business cash flow problems.

To help with any business cash flow problems, a commercial line of credit can serve as a safety net when you need it. And when you don’t need it, you don’t have to use it.

Commercial lines of credit can be used for just about any cash expense such as payroll, inventory, and other overhead expenses. Whether you have predictable seasonal cash flow needs or something unexpected happens, you can transfer funds from your credit line into your business checking account.

Look for ways to cut back

Cutting back on unnecessary expenses can help your business prevent potential cash flow problems in the future.

Review your expenses and look for places to cut back, though not in areas that could end up being harmful to your business. You won’t want to alarm employees with excessive cutbacks either. Some expenses, such as employee costs or inventory, are crucial to have, but others can be eliminated to help prevent cash flow problems.

Consider looking into your expense categories such as energy consumption, travel, entertainment, event venues, etc. to find areas where you can reduce spending.

Also, there may be assets that you no longer need or are not making the best use of, such as company cars, corporate travel, or rented office space.

Improve Inventory Management

If applicable to your business, auditing your inventory can help your business stay lean and efficient.

Audit your inventory. Make a list of the items you purchase that don’t sell as quickly as other products. They take up cash and could improve your cash flow if you cut some of those slow-moving products. Even if you have to put items on sale to get them out the door, it’s worth it to free up cash for other needs.

Trust the future of your business to our expert lending team!

Reviewing and updating your business plan can help you get ahead of any cash flow challenges your business may face before they get too big. F&M Bank’s Business Team is here to help! Wherever you are in the Shenandoah Valley, from Harrisonburg to Staunton, you can contact a member of our team or visit one of your local branches in Augusta, Page, Rockingham, or Shenandoah county to learn more about cash flow management or to apply for a new business loan today. Have questions? Get in touch today!

Pet Costume Contest

Happy Halloween!

Let’s have a little fun this spooky season with a Halloween Pet Costume Contest! Prizes will be awarded to the pet who has the most “likes” on their photo.

How It Works:

  • Voting is now taking place on our F&M Bank Facebook page thru October 28th. Simply give a photo a like/thumbs up to vote. The photos that have the most “likes” win! Voting will end at 11:59pm on Thursday, October 28th.
  • Winners will be announced on our Facebook page on October 29th.


The top 3 winners will receive a goodie bag filled with special treats, including but not limited to dog/cat treats, F&M Bank swag, and gift cards!


F & M Bank Corp. Announces Record Quarterly Earnings & Reaches $1 Billion In Assets In First Quarter 2021

News and Financials |

F & M Bank Corp. Announces Record Quarterly Earnings & Reaches $1 Billion In Assets In First Quarter 2021

Contact: Carrie Comer, EVP/Chief Financial Officer, (540) 896-1705 or

TIMBERVILLE, VA—April 26, 2021—F & M Bank Corp. (OTCQX: FMBM), parent company of Farmers & Merchants Bank today reported net income available to common shareholders of $3.8 million and diluted earnings per common share of $1.11 for the first quarter ending March 31, 2021.

Record Quarterly Earnings

The bank is reporting record quarterly earnings in the first quarter of 2021 of $3.8 million while continuing to position the company for success over the long term.  F&M Bank continues to strengthen its solid financial position with historic levels of liquidity and historically strong capital base as we grew to over $1 Billion in Assets.

With continued strong asset quality metrics and improved optimism for economic recovery due to COVID-19 vaccines and government stimulus, we believe that credit losses will not be as high as initially anticipated and that loan growth will continue to improve.  Coupled with the significant growth in our client base over the past year, we remain optimistic that F&M Bank is well positioned to deliver profitable growth and continue to build long term value for our shareholders,” said Mark Hanna, president and chief executive officer.

Non-Interest Income

Noninterest income increased to $3.4 million for the quarter ended March 31, 2021 from $3.2 million in the prior quarter and $2.4 million in the quarter ended March 31, 2020.  Growth is primarily driven by continued high volumes of mortgage originations, growth in our wealth management division, and title division.  Volumes in these areas more than offset the decreases in deposit service charges.

Paycheck Protection Program (“PPP”) & CARES Act

During 2021, the Company processed 280 Paycheck Protection Program (PPP) loans that totaled $20.2 million; PPP loans processed during 2020 and 2021 YTD totaled 997 loans for $83.4 million. In addition to an insignificant amount of PPP loan payoffs, the Company has processed a total of $46.4 million of forgiveness on 560 loans program to date resulting in a remaining balance of PPP loans of $37.0 million. The Company is continuing to accept PPP applications, and processing applications for forgiveness.

In addition, we have granted 35 individual loan deferrals in 2021, for a total of 1,266 deferrals since COVID began. As of March 31, 2021, 52 loans remain in deferral with a balance of $11.8 million or 1.7% of total loans.

Waynesboro Branch Opening & Branch Lobbies Reopen

The bank is set to open a new branch in the Waynesboro market on April 26, 2021.  This will expand our presence in Augusta County to serve the community’s financial needs with our full suite of branch services.  Branch lobbies at all our locations were reopened to the public on April 12, 2021.  We will continue to assess our procedures to maintain the safety of our customers, employees, and community as we move forward.

Selected financial highlights for the quarter include:

  • Quarterly net income of $3.8 million
  • Net interest margin of 3.44%.
  • Total deposits increased $44.2 million and $183.4 million, respectively for the quarter and for the trailing 12 months as the bank continues to grow our composition of DDA accounts and decrease balances of Time Deposits.
  • Total loans increased $12.8 million for the trailing 12 months (excluding PPP loans).
  • Nonperforming assets decreased to 0.57% of total assets at the end of the quarter from 0.68% on 12/31/20 and .66% on 3/31/20.
  • Negative Provision for Loan Losses of $725,000
  • Allowance for loan losses totaled 1.46% of loans held for investment (1.54% excluding PPP loans).

Mark Hanna, President, commented “We are pleased with first quarter earnings of $3.8 million.  Our mortgage and title companies, continue to see volumes in excess of expectations which drives noninterest income growth.  Our net interest margin of 3.44% shows a historical decline but remains strong especially given the changes in our balance sheet and the current rate environment.  Net interest income reflected a 4% increase over March 31, 2020.  F&M’s liquidity has increased significantly over the last four quarters and we are implementing strategic solutions to leverage these assets including deploying $64.2 million into the investment portfolio since year end 2020.  Despite the current low-rate environment, these strategies should augment our net interest margin in the future.” 

Mr. Hanna stated, “Nonperforming assets have continued to improve, decreasing $754 thousand since year end 2020.  We feel these efforts put F&M in a strong position to leverage a more optimistic economic forecast while seeking opportunities for continued growth in the communities we serve.”

On April 21, 2021 our Board of Directors declared a first quarter dividend of $.26 per share to common shareholders. Based on our most recent trade price of $28.19 per share this constitutes a 3.69% yield on an annualized basis. The dividend will be paid on May 31, 2021, to shareholders of record as of May 15, 2021.”

F & M Bank Corp. is an independent, locally-owned, financial holding company, offering a full range of financial services, through its subsidiary, Farmers & Merchants Bank’s eleven banking offices in Rockingham, Shenandoah, Page and Augusta Counties, Virginia. The Bank also provides additional services through a loan production office located in Penn Laird, VA and through its subsidiaries, F&M Mortgage and VSTitle, both of which are located in Harrisonburg, VA.  Additional information may be found by contacting us on the internet at or by calling (540) 896-1705.

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

2021 2020    
Q1 Q4 Q3 Q2 Q1
Net Income (000’s)  $3,801  $2,766  $2,207  $2,626  $1,189
Net Income available to Common  $3,736  $2,700  $2,142  $2,560  $1,123
Earnings per common share – basic  $1.17  $0.84  $0.67  $ 0.80  $0.35
Earnings per common share – diluted
Return on Average Assets 1.56% 1.12% 0.88% 1.17% 0.58%
Return on Average Equity 15.96% 11.75% 9.44% 11.50% 5.23%
Dividend Payout Ratio excluding Special Dividend 22.22% 30.95% 38.81% 32.50% 74.29%
Net Interest Margin 3.44% 3.81% 3.60% 3.75% 3.97%
Yield on Average Earning Assets 3.92% 4.77% 4.31% 4.52% 4.88%
Yield on Average Interest Bearing Liabilities 0.70% 1.33% 0.99% 1.09% 1.27%
Net Interest Spread 3.22% 3.44% 3.32% 3.43% 3.61%
Provision for Loan Losses (000’s)  $(725)  $-  $1,000  $ 800  $1,500
Net Charge-offs  $45  $ 351  $208  $203  $453
Net Charge-offs as a % of Loans 0.03% 0.21% 0.12% 0.12% 0.30%
Non-Performing Loans (000’s)  $  5,783  $6,537  $4,254  $4,465  $4,168
Non-Performing Loans to Total Assets 0.57% 0.68% 0.42% 0.45% 0.50%
Non-Performing Assets (000’s)  $5,783  $6,537  $ 4,420  $5,625  $5,504
Non-Performing Assets to Assets 0.57% 0.68% 0.44% 0.57% 0.66%
Efficiency Ratio 68.00% 69.10% 65.35% 65.33% 70.51%


(1)   The net interest margin is calculated by dividing tax equivalent net interest income by total average earning assets. Tax equivalent interest income is calculated by grossing up interest income for the amounts that are nontaxable (i.e. municipal securities and loan income) then subtracting interest expense. The tax rate utilized is 21%. The Company’s net interest margin is a common measure used by the financial service industry to determine how profitable earning assets are funded. Because the Company earns nontaxable interest income from municipal loans and securities, net interest income for the ratio is calculated on a tax equivalent basis as described above.

(2)   The efficiency ratio is not a measurement under accounting principles generally accepted in the United States. The efficiency ratio is a common measure used by the financial service industry to determine operating efficiency. It is calculated by dividing non-interest expense by the sum of tax equivalent net interest income and non-interest income excluding gains and losses on the investments portfolio and Other Real Estate Owned. The Company calculates this ratio in order to evaluate how efficiently it utilizes its operating structure to create income. An increase in the ratio from period to period indicates the Company is losing a greater percentage of its income to expenses.


F & M Bank Corp.  Financial Highlights



For Three Months Ended March 31,
INCOME STATEMENT Unaudited 2021 Audited 2020
Interest and Dividend Income $8,746,348 $9,110,585
Interest Expense 1,068,509 1,706,084
  Net Interest Income 7,677,839 7,404,501
Non-Interest IncomeProvision for Loan Losses

Other Non-Interest Expenses





  Income Before Income Taxes 4,072,546 1,213,415
Provision for Income TaxesLess Minority Interest (income)/loss 271,294  (38,371) (62,429)
Net Income $3,801,252   $1,189,357
Dividend on preferred stock 65.448   65,873
Net Income available to common shareholders $3.735.804   $1,123,494
Average Common Shares Outstanding 3,205,074   3,204,084
Net Income Per Common ShareDividends Declared  1.17.26  .35.26
BALANCE SHEET Unaudited March  31, 2021  Audited March 31, 2020
Cash and Due from Banks $12,088,442 $8,528,494
Interest Bearing Bank Deposits 1,541,581 1,645,590
Federal Funds Sold  90,099,000  78,944,000
Loans Held for SaleLoans Held for Investment 15,922,810659,373,490 60,765,429609,585,135
  Less Allowance for Loan Losses (9,704,286)  (9,437,359)
  Net Loans Held for Investment  649,669,204  600,147,776
Securities 182,091,328 19,838,180
Other Assets   58,817,489    57,597,524
    Total Assets $1,010,229,854   $828,466,993
Deposits $862,751,952 $679,310,203
Long Term Debt 32,158,578 42,089,286
Other Liabilities 17,791,953 15,633,317
  Total Liabilities 912,702,483 737,032,806
Preferred Stock 4,558,298 4,591,623
Common Equity 92,969,073 86,842,564
Stockholders’ Equity 97,527,371 91,434,187
    Total Liabilities and Stockholders’ Equity $1,010,229,854 $828,466,993
Book Value Per Common Share $28.99   $27.20
Tangible Book Value Per Common Share $29.33   $26.05

Source: F & M Bank Corp.

Contact: Carrie Comer EVP/Chief Financial Officer, (540) 896-1705 or

5-Star F&M Bank: A Trusted Community Bank

April 2021: F&M Bank, Timberville, Virginia has been awarded the highest (5-Star) rating for financial strength and stability from the Nation’s Premier Bank Rating Firm, BauerFinancial, Inc. Earning this 5-Star rating is proof that F&M Bank excels in such areas as capital adequacy, profitability, asset quality and much more.

Bauer Five Star Rating

“This is indeed reflective of F&M Bank’s dedication and commitment, not only to its customers, but to the entire community”, reflects Karen Dorway, president of BauerFinancial. “Community banks, like F&M Bank, have been on the front lines doing what is necessary to help their neighbors and friends. This is the type of devotion you will only find in a community bank.”

Established in 1908, F&M Bank has been a trusted ally of the communities it serves for 113 years. Rest assured, 5-Star rated F&M Bank’s personnel are eager to serve: at the branch, by phone and online at

F&M Bank: “Your 5-Star Community Bank”            

Bank and Credit Union data compiled from financial data for the period noted, as reported to federal regulators. The financial data obtained from these sources is consistently reliable, although; the accuracy and completeness of the data cannot be guaranteed by BauerFinancial, Inc. Since 1983, BauerFinancial has relied upon this data in its judgment and in rendering its opinion (e.g. determination of star ratings). BauerFinancial, Inc. is not a financial advisor; it is an independent bank research firm. No institution can pay for or opt out of a BauerFinancial rating. Star-ratings are all available for free at


F&M Bank Announces Two Senior Vice President Promotions

March 31, 2021, Timberville, VA ‐‐ The F&M Bank executive team is pleased to announce the promotions of Terri Dart Bradley of F&M Mortgage and Holly Thorne of F&M Bank to the role of Senior Vice President.

terri dart bradley
Terri Dart Bradley oversees mortgage operations for the entire footprint of F&M Mortgage and has been with the company over 14 years. Mrs. Bradley attended Columbus College of Art & Design in Ohio before finding a passion for the mortgage and housing industry 16 years ago. A native of Shenandoah County, Terri currently resides in Harrisonburg with her husband and two children.




Holly Thorne

Holly Thorne is the Director of Marketing for F&M Bank and has been with the company for over eight years. Mrs. Thorne is a communication studies graduate of Bridgewater College and received a Master of Science in marketing communications from West Virginia University. A Valley local, Holly currently resides in Harrisonburg with her husband, son and two dogs.




About F&M Bank
F&M Bank Corp. (OTCQX: FMBM) proudly remains the only publicly traded organization based in Rockingham County, VA, and since 1908, has served the Shenandoah Valley through its banking subsidiary F&M Bank, with full-service branches and a wide variety of financial services, including home loans through F&M Mortgage, and real estate settlement services and title insurance through VSTitle. Both individuals and businesses find the organization’s local decision-making, and up-to-date technology provide the kind of responsive, knowledgeable, and reliable service that only a progressive community bank can. F&M Bank has grown to $1 billion in assets with more than 175 full and part-time employees. Its conservative approach to finances and sound investments, along with excellent customer service, has made F&M Bank profitable and continues to pave the way for a bright future.

F&M Bank’s 2019 Community Shred Day Events

One in 14 will become a victim of identity theft. Protect your identity by safely disposing of personal documents at our Community Shred Days at a location near you.

Crossroads (Harrisonburg)
Friday, April 5th, 3:00-5:00pm

Friday, April 12th, 3:00-5:00pm

Friday, April 26th, 3:00-5:00pm

Friday, May 3rd, 3:00-5:00pm

Saturday, May 4th, 9:00-12:00pm

Staunton Route 250/Gosnell
Friday, May 10th, 3:00-5:00pm

Staunton (North Augusta St.)
Friday, May 17th, 3:00-5:00pm

Saturday, May 18th, 9:00-12:00pm

Coffman’s Corner (Harrisonburg)
Friday, May 31st, 3:00-5:00pm

Friday, June 7th, 3:00-5:00pm

Friday, June 14th, 3:00-5:00pm

Crossroads (Harrisonburg)
Friday, September 6th, 3:00-5:00pm

Staunton (North Augusta St.)
Friday, September 13th, 3:00-5:00pm​​

Staunton Route 250/Gosnell Crossing
Friday, September 20th, 3:00-5:00pm

Saturday, September 21st, 10:00-12:00pm

Coffman’s Corner (Harrisonburg)
Friday, September 27th, 3:00-5:00pm

Saturday, September 28th, 9:00-12:00pm

Learn more about protecting your digital identity at home and work with this blog post about Phishing scams.

Learn more about F&M Bank’s Identity Theft Protection Service, provided free with Cash Back and Cash Rewards Checking.