TIMBERVILLE, VA / ACCESSWIRE / July 25, 2018 / F & M Bank Corp. FMBM, parent company of Farmers & Merchants Bank, announces its financial results for the second quarter ending June 30, 2018.
Selected highlights for the quarter include:
- Net income of $1.69 million;
- Net interest margin of 4.64% an increase of 13 BPs compared to one year ago;
- YTD Net interest income increased $1,175,000;
- Loans held for investment increased $30.7 million, or 5.1%, compared to one year ago;
- Total deposits increased $32.1 million, or 6.0%, compared to one year ago;
- Non-Performing Loans to Assets increase to 1.94% due to two large relationships that were placed on non-accrual status.
Mark Hanna, President, commented, "Net income for the second quarter totaled $1.69 million. While this is a $641,000 decrease compared to the second quarter of 2017, our pre-tax core operating earnings increased $709,000 in 2018 to a total of $3.04 million versus $2.33 million in 2017. Core operating earnings excludes the 2018 provision for loan losses. Loans and deposits increased approximately $31 million and $32 million, respectively, in the prior 12 months. This growth continues to drive our net interest margin which rose to 4.64% versus 4.51% when compared to the second quarter of 2017, despite the increase in nonperforming loans."
Mr. Hanna continued, "Non-performing loans and assets increased significantly versus the prior quarter. All of the increase is related to two large commercial relationships. While we continue to work with these borrowers, we recognized a $1.35 million provision for loan losses in the second quarter to reflect our updated tassessment of the value of these assets. This additional provision resulted in the allowance for loan loss balance increasing $1,061,000 as compared to year end 2017."
Hanna further stated, "During the second quarter we completed the rebranding of VBS Mortgage to F&M Mortgage to more closely align our marketing efforts across the companies. On July 19, 2018 our Board of Directors declared a second quarter dividend of $.25 per share to common shareholders. Based on our most recent trade price of $37.55 per share this constitutes a 2.66% yield on an annualized basis. The dividend will be paid on August 16, 2018, to shareholders of record as of August 2, 2018."
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.
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
|
|||||||||||||||||||||||
|
Q2
|
Q1
|
YTD
|
Q2
|
Q1
|
YTD
|
|||||||||||||||||||
|
Net Income (000's)
|
$ | 1,687 | $ | 1,973 | $ | 3,660 | $ | 2,328 | $ | 2,345 | $ | 4,673 | ||||||||||||
|
Net Income available to Common
|
$ | 1,583 | $ | 1,870 | $ | 3,453 | $ | 2,223 | $ | 2,241 | $ | 4,464 | ||||||||||||
|
Earnings per common share
|
$ | 0.49 | $ | 0.57 | $ | 1.06 | $ | 0.68 | $ | 0.68 | $ | 1.36 | ||||||||||||
|
Return on Average Assets
|
0.91 | % | 1.11 | % | 0.98 | % | 1.28 | % | 1.29 | % | 1.28 | % | ||||||||||||
|
Return on Average Equity
|
7.38 | % | 8.75 | % | 8.06 | % | 10.48 | % | 10.84 | % | 10.60 | % | ||||||||||||
|
Dividend Payout Ratio exc Special Dividend
|
51.32 | % | 43.53 | % | 47.10 | % | 33.82 | % | 32.35 | % | 33.09 | % | ||||||||||||
|
Dividend Payout Ratio with Special Dividend
|
- | 78.35 | % | 65.95 | % | |||||||||||||||||||
|
Net Interest Margin
|
4.64 | % | 4.78 | % | 4.73 | % | 4.51 | % | 4.42 | % | 4.46 | % | ||||||||||||
|
Yield on Average Earning Assets
|
5.29 | % | 5.38 | % | 5.37 | % | 5.08 | % | 4.99 | % | 5.03 | % | ||||||||||||
|
Yield on Average Interest Bearing Liabilities
|
0.94 | % | 0.87 | % | 0.91 | % | 0.78 | % | 0.80 | % | 0.78 | % | ||||||||||||
|
Net Interest Spread
|
4.35 | % | 4.51 | % | 4.46 | % | 4.30 | % | 4.19 | % | 4.25 | % | ||||||||||||
|
Provision for Loan Losses (000's)
|
$ | 1,350 | $ | 680 | $ | 2,030 | $ | - | $ | - | $ | - | ||||||||||||
|
Net Charge-offs
|
$ | 660 | $ | 309 | $ | 969 | $ | 100 | $ | 227 | $ | 327 | ||||||||||||
|
Net Charge-offs as a % of Loans
|
0.42 | % | 0.20 | % | 0.31 | % | 0.07 | % | 0.15 | % | 0.09 | % | ||||||||||||
|
Non-Performing Loans (000's)
|
$ | 14,977 | $ | 7,730 | $ | 14,977 | $ | 5,677 | $ | 5,091 | $ | 5,677 | ||||||||||||
|
Non-Performing Loans to Total Assets
|
1.94 | % | 1.06 | % | 1.94 | % | 0.76 | % | 0.71 | % | 0.76 | % | ||||||||||||
|
Non-Performing Assets (000's)
|
$ | 17,011 | $ | 9,758 | $ | 17,011 | $ | 7,685 | $ | 7,184 | $ | 7,685 | ||||||||||||
|
Non-Performing Assets to Assets
|
2.21 | % | 1.34 | % | 2.21 | % | 1.03 | % | 1.00 | % | 1.03 | % | ||||||||||||
|
Efficiency Ratio
|
65.62 | % | 66.52 | % | 66.06 | % | 66.38 | % | 66.85 | % | 66.62 | % | ||||||||||||
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 Six Months
Ended June 30,
|
||||||||
|
INCOME STATEMENT
|
Unaudited
2018
|
Unaudited
2017
|
||||||
|
Interest and Dividend Income
|
$ | 17,704,577 | $ | 16,265,977 | ||||
|
Interest Expense
|
2,093,930 | 1,830,777 | ||||||
|
Net Interest Income
|
15,610,647 | 14,435,200 | ||||||
|
Non-Interest Income
|
3,731,640 | 3,927,500 | ||||||
|
Provision for Loan Losses
|
2,030,000 | - | ||||||
|
Other Non-Interest Expenses
|
13,109,715 | 11,971,269 | ||||||
|
Income Before Income Taxes
|
4,202,572 | 6,391,431 | ||||||
|
Provision for Income Taxes
|
537,915 | 1,686,480 | ||||||
|
Less Minority Interest (income)/loss
|
(4,832) | (31,786) | ||||||
|
Net Income
|
$ | 3,659,825 | $ | 4,673,165 | ||||
|
Dividend on preferred stock
|
206,646 | 208,686 | ||||||
|
Net Income available to common shareholders
|
$ | 3,453,179 | $ | 4,464,479 | ||||
|
Average Common Shares Outstanding
|
3,253,007 | 3,271,318 | ||||||
|
Net Income Per Common Share
|
1.06 | 1.36 | ||||||
|
Dividends Declared
|
.70 | .45 | ||||||
|
BALANCE SHEET
|
Unaudited
June 30, 2018
|
Unaudited
June 30, 2017
|
||||||
|
Cash and Due from Banks
|
$ | 9,734,887 | $ | 7,875,821 | ||||
|
Interest Bearing Bank Deposits
|
1,565,043 | 614,644 | ||||||
|
Federal Funds Sold
|
2,064,000 | 3,174,000 | ||||||
|
Loans Held for Sale
|
49,820,520 | 51,766,953 | ||||||
|
Loans Held for Investment
|
634,122,196 | 603,434,882 | ||||||
|
Less Allowance for Loan Losses
|
(7,105,287) | (7,216,176) | ||||||
|
Net Loans Held for Investment
|
627,016,909 | 596,218,706 | ||||||
|
Securities
|
23,156,192 | 39,106,847 | ||||||
|
Other Assets
|
57,310,216 | 45,505,787 | ||||||
|
Total Assets
|
$ | 770,667,767 | $ | 744,262,758 | ||||
|
Deposits
|
$ | 568,565,909 | $ | 536,486,237 | ||||
|
Short Term Debt
|
46,000,000 | 50,000,000 | ||||||
|
Long Term Debt
|
47,434,221 | 51,937,857 | ||||||
|
Other Liabilities
|
16,903,229 | 16,165,865 | ||||||
|
Total Liabilities
|
678,903,359 | 654,589,959 | ||||||
|
Preferred Stock
|
7,487,873 | 7,588,873 | ||||||
|
Common Equity
|
84,276,535 | 82,083,926 | ||||||
|
Stockholders' Equity
|
91,764,408 | 89,672,799 | ||||||
|
Total Liabilities and Stockholders' Equity
|
$ | 770,667,767 | $ | 744,262,758 | ||||
|
Book Value Per Common Share
|
$ | 25.99 | $ | 25.07 | ||||
|
Tangible Book Value Per Common Share
|
$ | 26.15 | $ | 24.95 | ||||
CONTACT:
Neil Hayslett, EVP/Chief Operating Officer
540-896-8941 or NHayslett@FMBankVA.com
SOURCE: F & M Bank Corp.
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