F & M Bank Corp. Announces Record Annual Earnings For 2021
F & M Bank Corp. (OTCQX:FMBM) reported a record net income of $10.5 million for 2021, marking its most profitable year in history, with diluted earnings per share of $3.12. The company experienced deposit growth of 68.3% over two years, significantly outperforming peers. Key highlights include a 31.97% annual increase in total deposits and improved asset quality, with nonperforming assets down to 0.45%. However, net interest margin compressed to 3.00% from 3.61% the previous year. The Board declared a $0.26 dividend per share for Q4 2021, reflecting a 3.31% yield.
- Record net income of $10.5 million for 2021.
- Diluted earnings per share of $3.12.
- Deposit growth of 68.3% over two years.
- Total deposits increased by $261.7 million (31.97% year-over-year).
- Nonperforming assets decreased to 0.45% of total assets.
- Improved asset quality with decreased past due loans.
- Net interest margin compressed from 3.61% to 3.00%.
TIMBERVILLE, VA / ACCESSWIRE / January 26, 2022 / F & M Bank Corp. (OTCQX:FMBM), parent company (the Company) of Farmers & Merchants Bank today reported net income available to common shareholders of
Mark Hanna, President, commented "We are pleased with December 31, 2021 year to date earnings of
Selected financial highlights include:
- Net income of
$1.3 million for the quarter ended December 31, 2021, and$10.5 million year to date. - Total deposit increase of
$50.0 million (4.85% ) and$261.7 million (31.97% ), respectively for the quarter and for the year. - Total loan increase of
$13.6 million (2.11% ) and$31.9 (5.09% ) million, respectively for the quarter and for the year (excluding PPP loans). - Nonperforming assets decreased to
0.45% of total assets at the end of the quarter from0.68% at year end 2020. - Past due loans still accruing decreased to
0.48% of loans held for investment at the end of the quarter from1.07% at year end 2020 (excluding PPP loans). - Recovery of Provision for Loan Losses of
$590,000 for the quarter and$2,821,000 year to date. - Allowance for loan losses of
1.16% of loans held for investment (1.18% excluding PPP loans).
Balance Sheet
The Company has experienced significant deposit growth during the year. This growth enabled the Company to expand the investment portfolio as well as make strategic reductions in its long-term debt.
The Company's deposit growth has continued to exceed peer performance going back to 2019. The growth has been in noninterest bearing accounts (
The investment portfolio has expanded to a balance of
The Company prepaid several long term FHLB borrowings to leverage our liquidity and reduce our cost of funds in future periods. These borrowings were paid down
Loans held for investment; net of PPP have grown
Improvements in nonperforming loans and past due loans, as well as economic stability and improved underwriting have allowed the Company to reduce the Allowance for Loan Losses from
These strategies have positioned F&M for future growth in our current footprint as we continue to evaluate opportunities for expansion.
Income Statement
The 2021 earnings are driven by growth in net interest income, strong non-interest income due to our subsidiary organizations, improved asset quality and fees earned under the Paycheck Protection Program.
Net interest income reflects year over year growth. As yields on earning assets continue to decline the Company has been able to support net interest income with savings in interest expense and growth in the investment portfolio while seeking opportunities to leverage the growth in liquidity into higher yielding assets.
Margin compression has reduced the net interest margin from
Noninterest income of
As stated above, continued improvements in asset quality and economic conditions resulted in the ability to reduce the allowance for loan losses to
Fees recognized under the Paycheck Protection Program (see below) totaled
This year the Company disposed of non-income producing properties creating a loss of
Paycheck Protection Program
The Company processed 1,080 Paycheck Protection Program ("PPP") & CARES Act loans during 2020 and 2021 totaling
Preferred Stock Redemption
On September 1, 2021, the Company gave notice to preferred shareholders that it would redeem all Series A Preferred Stock on October 29, 2021. As a result of this announcement, 180,261 shares of the 205,327 shares of preferred stock converted to common shares and 25,066 shares were redeemed for cash.
Dividends Declaration
On January 21, 2022, our Board of Directors declared a fourth quarter dividend of $.26 per share to common shareholders. Based on our most recent trade price of
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, and Augusta Counties, Virginia and the city of Winchester, VA. The Bank also provides additional services through a loan production office located in Penn Laird, VA, a loan production office in Winchester, 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) 896-1705.
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 | ||||||||||||||||||
| Q4 | Q3 | Q2 | Q1 | YTD | YTD | ||||||||||||||
Net Income (000's) | $ | 1,380 | $ | 2,337 | $ | 3,220 | $ | 3,801 | $ | 10,738 | $ | 8,788 | |||||||
Net Income available to Common | $ | 1,379 | $ | 2,272 | $ | 3,154 | $ | 3,736 | $ | 10,541 | $ | 8,525 | |||||||
Earnings per common share - basic | $ | 0.39 | $ | 0.71 | $ | 0.98 | $ | 1.17 | $ | 3.25 | $ | 2.66 | |||||||
Earnings per common share - diluted | $ | 0.40 | $ | 0.68 | $ | 0.93 | $ | 1.11 | $ | 3.12 | $ | 2.56 | |||||||
Return on Average Assets | 0.46 | % | 0.81 | % | 1.22 | % | 1.56 | % | 0.98 | % | 0.92 | % | |||||||
Return on Average Equity | 5.42 | % | 9.18 | % | 13.06 | % | 15.96 | % | 10.84 | % | 9.46 | % | |||||||
Dividend Payout Ratio excluding Special Dividend | 66.67 | % | 36.62 | % | 26.53 | % | 22.22 | % | 32.00 | % | 39.10 | % | |||||||
Net Interest Margin | 2.48 | % | 2.95 | % | 3.13 | % | 3.44 | % | 3.00 | % | 3.61 | % | |||||||
Yield on Average Earning Assets | 3.15 | % | 3.35 | % | 3.56 | % | 3.92 | % | 3.41 | % | 4.27 | % | |||||||
Yield on Average Interest Bearing Liabilities | 0.96 | % | 0.57 | % | 0.62 | % | 0.70 | % | 0.60 | % | 0.94 | % | |||||||
Net Interest Spread | 2.19 | % | 2.78 | % | 2.94 | % | 3.22 | % | 2.81 | % | 3.33 | % | |||||||
Provision for Loan Losses (000's) | $ | (590 | ) | $ | (235 | ) | $ | (1,250 | ) | $ | (725 | ) | $ | (2,800 | ) | $ | 3,300 | ||
Net Charge-offs/(recoveries) | $ | 72 | $ | 61 | $ | (272 | ) | $ | 45 | $ | (94 | ) | $ | 1,215 | |||||
Net Charge-offs/(recoveries) as a % of Loans | 0.04 | % | 0.04 | % | -0.16 | % | 0.03 | % | -0.01 | % | 0.18 | % | |||||||
Non-Performing Loans (000's) | $ | 5,508 | $ | 5,430 | $ | 5,532 | $ | 5,783 | $ | 5,508 | $ | 6,537 | |||||||
Non-Performing Loans to Total Assets | 0.45 | % | 0.46 | % | 0.50 | % | 0.57 | % | 0.45 | % | 0.68 | % | |||||||
Non-Performing Assets (000's) | $ | 5,508 | $ | 5,430 | $ | 5,532 | $ | 5,783 | $ | 5,508 | $ | 6,537 | |||||||
Non-Performing Assets to Assets | 0.45 | % | 0.46 | % | 0.50 | % | 0.57 | % | 0.45 | % | 0.68 | % | |||||||
Efficiency Ratio | 82.13 | % | 75.99 | % | 76.07 | % | 68.00 | % | 75.44 | % | 67.51 | % | |||||||
- 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.
F & M Bank Corp.
Financial Highlights
For Twelve Months Ended December 31, | ||||||||
| Unaudited 2021 | Audited 2020 | |||||||
INCOME STATEMENT | ||||||||
Interest and Dividend Income | $ | 35,576,485 | $ | 36,792,403 | ||||
Interest Expense | 4,301,238 | 5,728,482 | ||||||
Net Interest Income | 31,275,247 | 31,063,921 | ||||||
Non-Interest Income | 11,828,813 | 12,190,916 | ||||||
Provision for Loan Losses | (2,800,000 | ) | 3,300,000 | |||||
Loss on sale of securities | 524,772 | - | ||||||
Impairment of long lived assets | 171,109 | 19,193 | ||||||
Other Non-Interest Expenses | 33,147,451 | 29,938,920 | ||||||
Income Before Income Taxes | 12,060,728 | 10,035,110 | ||||||
Provision for Income Taxes | 1,323,015 | 1,141,742 | ||||||
Less Minority Interest (Income)/Loss | - | (105,193 | ) | |||||
Net Income | $ | 10,737,713 | $ | 8,788,175 | ||||
Dividend on preferred stock | 196,344 | 262,642 | ||||||
Net Income available to common shareholders | $ | 10,541,369 | $ | 8,525,533 | ||||
Average Common Shares Outstanding | 3,414,306 | 3,199,883 | ||||||
Net Income Per Common Share | 3.09 | 2.66 | ||||||
Dividends Declared | 1.04 | 1.04 | ||||||
Unaudited December 31, 2021 | Audited December 31, 2020 | |||||||
BALANCE SHEET | ||||||||
Cash and Due from Banks | $ | 8,579,007 | $ | 11,181,164 | ||||
Interest Bearing Bank Deposits | 2,874,772 | 1,243,519 | ||||||
Federal Funds Sold | 76,667,000 | 65,983,000 | ||||||
Loans Held for Sale | 4,886,534 | 58,753,055 | ||||||
Loans Held for Investment | 662,421,694 | 661,328,888 | ||||||
Less Allowance for Loan Losses | (7,747,792 | ) | (10,474,960 | ) | ||||
Net Loans Held for Investment | 654,673,903 | 650,853,928 | ||||||
Securities | 413,216,778 | 117,897,486 | ||||||
Other Assets | 58,443,571 | 61,018,331 | ||||||
Total Assets | $ | 1,219,341,565 | $ | 966,930,483 | ||||
Deposits | $ | 1,080,294,540 | $ | 818,581,503 | ||||
Long Term Debt | 21,772,052 | 33,201,631 | ||||||
Other Liabilities | 16,819,462 | 19,517,664 | ||||||
Total Liabilities | 1,118,886,054 | 871,300,798 | ||||||
Preferred Stock | - | 4,558,298 | ||||||
Common Equity | 100,455,511 | 91,071,387 | ||||||
Stockholders' Equity | 100,455,511 | 95,629,685 | ||||||
Total Liabilities and Stockholders' Equity | $ | 1,219,341,565 | $ | 966,930,483 | ||||
Book Value Per Common Share | $ | 29.42 | $ | 28.43 | ||||
Tangible Book Value Per Common Share | $ | 29.96 | $ | 28.42 | ||||
CONTACT:
Carrie Comer EVP/Chief Financial Officer
540-896-1705 or ccomer@fmbankva.com
SOURCE: F & M Bank Corp.
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