-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ALPa4Fjm+6Gk3RC6RgBEk2BMrnmBM3NoFOhpi9bNxmrYoRO/j0ry5ycglGTMIB1k jkUY8LDLsVBtum/Zq1EQtA== 0000930609-96-000022.txt : 19960816 0000930609-96-000022.hdr.sgml : 19960816 ACCESSION NUMBER: 0000930609-96-000022 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: F&M BANK CORP CENTRAL INDEX KEY: 0000740806 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 541280811 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-13273 FILM NUMBER: 96612020 BUSINESS ADDRESS: STREET 1: PO BOX F CITY: TIMBERVILLE STATE: VA ZIP: 22853 BUSINESS PHONE: 7038968941 MAIL ADDRESS: STREET 1: DRAWER F CITY: TIMBERVILLE STATE: VA ZIP: 22853 10QSB 1 LIVE FILING ON FORM 10QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-QSB Quarterly report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended Commission File Number: 0-13273 June 30, 1996 F & M BANK CORP. Virginia 54-1280811 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) Drawer F Timberville, Virginia 22853 (540) 896-8941 (Registrant's Telephone Number, Including Area Code) Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes ..X. No .... State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. Class Outstanding at June 30, 1996 Common Stock, par value - $5 818,654 shares F & M BANK CORP. INDEX Page PART I FINANCIAL INFORMATION 2 Item 1. Financial Statements Consolidated Statements of Income - Six Months Ended June 30, 1996 and 1995 2 Consolidated Statements of Income - Three Months Ended June 30, 1996 and 1995 3 Consolidated Balance Sheets - June 30, 1996 and December 31, 1995 4 Consolidated Statements of Cash Flows - Six Months Ended June 30, 1996 and 1995 5 Consolidated Statements of Changes in Stockholders' Equity - Six Months Ended June 30, 1996 and 1995 6 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II OTHER INFORMATION 15 Item 1. Legal Proceedings 15 Item 2. Changes in Securities 15 Item 3. Defaults upon Senior Securities 15 Item 4. Submission of Matters to a Vote of Security Holders 15 Item 5. Other Information 15 Item 6. Exhibit and Reports on Form 8K 15 SIGNATURES 19 Page Part I Financial Information Item 1 Financial Statements F & M BANK CORP. CONSOLIDATED STATEMENTS OF INCOME (In Thousands of Dollars) Six Months Ended June 30, 1996 1995 Interest Income Interest and fees on loans $ 4,652 $ 3,981 Interest on federal funds sold 45 43 Interest on interest bearing deposits 10 19 Interest and dividends on investment securities Taxable 1,417 1,207 Nontaxable 18 31 Total Interest Income 6,142 5,281 Interest Expense Interest on demand accounts 267 310 Interest on savings deposits 570 596 Interest on time deposits 1,527 1,041 Total interest on deposits 2,364 1,947 Interest on short-term debt 41 5 Interest on long-term debt 633 592 Total Interest Expense 3,038 2,544 Net Interest Income 3,104 2,737 Provision for Loan Losses 50 40 Net Interest Income after Provision for Loan Losses 3,054 2,697 Noninterest Income Service charges 121 119 Other 83 79 Security gains 169 328 Total Noninterest Income 373 526 Noninterest Expense Salaries 732 721 Employee benefits 284 284 Occupancy expense 82 72 Equipment expense 132 100 FDIC insurance 16 111 Other 441 423 Total Noninterest Expense 1,687 1,711 Income before Income Taxes 1,740 1,512 Provision for Income Taxes 520 439 Net Income $ 1,220 $ 1,073 Per Share Data Net Income $ 1.50 $ 1.32 Cash Dividends $ .42 $ .40 Equivalent Shares Outstanding 815,224 814,288 The accompanying notes are an integral part of these statements. Page F & M BANK CORP. CONSOLIDATED STATEMENTS OF INCOME (In Thousands of Dollars Except Per Share Amounts) Three Months Ended June 30, 1996 1995 Interest Income Interest and fees on loans $ 2,357 $ 2,054 Interest on federal funds sold 17 37 Interest on time deposits 3 15 Interest and dividends on investment securities Taxable 710 624 Nontaxable 9 14 Total Interest Income 3,096 2,744 Interest Expense Interest on demand deposits 127 150 Interest on savings accounts 272 295 Interest on time deposits 768 590 Total interest on deposits 1,167 1,035 Interest on short-term debt 27 2 Interest on long-term debt 311 308 Total Interest Expense 1,505 1,345 Net Interest Income 1,591 1,399 Provision for Loan Losses 25 24 Net Interest Income after Provision for Loan Losses 1,566 1,375 Noninterest Income Service charges 63 59 Other 39 41 Security gains (losses) (3) 176 Total Noninterest Income 99 276 Noninterest Expense Salaries 361 357 Employee benefits 140 144 Occupancy expense 41 40 Equipment expense 65 57 FDIC insurance 8 56 Other 218 219 Total Noninterest Expense 833 873 Income before Income Taxes 832 778 Provision for Income Tax 243 223 Net Income $ 589 $ 555 Per Share Data Net Income $ .72 $ .68 Cash Dividends $ .22 $ .20 Equivalent Shares Outstanding 816,159 814,288 The accompanying notes are an integral part of these statements. Page F & M BANK CORP. CONSOLIDATED BALANCE SHEETS (In Thousands of Dollars) June 30, December 31, ASSETS 1996 1995 Cash and due from banks $ 3,235 $ 3,716 Federal funds sold 54 1,787 Interest bearing deposits in banks 114 82 Securities held to maturity (note 2) 24,724 26,910 Securities available for sale (note 2) 19,309 17,316 Other investments 1,429 1,462 Loans, net of unearned discount (note 3) 104,312 97,964 Less reserve for loan losses (note 4) (884) (863) Net Loans 103,428 97,101 Bank premises and equipment 1,933 1,983 Interest receivable 1,281 1,264 Other assets 680 680 Total Assets $ 156,187 $ 152,301 LIABILITIES Deposits Noninterest bearing demand $ 12,216 $ 10,941 Interest bearing Demand 19,181 20,243 Savings deposits 29,644 30,234 Time deposits 54,948 52,243 Total Deposits 115,989 113,661 Repurchase agreements outstanding 1,664 Other short-term debt 749 838 Long-term debt 18,799 19,418 Accrued expenses 1,109 1,286 Total Liabilities 138,310 135,203 STOCKHOLDERS' EQUITY Common stock $5 par value, 818,654 shares issued and outstanding 4,093 4,071 Surplus 867 747 Retained earnings 12,536 11,658 Unrealized gain (loss) on securities available for sale 381 622 Total Stockholders' Equity 17,877 17,098 Total Liabilities and Stockholders' Equity $ 156,187 $ 152,301 The accompanying notes are an integral part of these statements. Page F & M BANK CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of Dollars) Six Months Ended June 30, 1996 1995 Cash Flows from Operating Activities: Net income $ 1,220 $ 1,073 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 116 86 Amortization of security premiums 60 74 Gain on security transactions (169) (328) Provision for loan losses 50 40 Increase in interest receivable (17) (64) Decrease in other assets 119 Increase (decrease) in accrued expenses 104 298 Losses on limited partnership investments 19 Total Adjustments 163 225 Net Cash Provided by Operating Activities 1,383 1,298 Cash Flows from Investing Activities: Proceeds from sales of investments available for sale 1,920 1,578 Proceeds from maturity of investments available for sale 667 2,392 Proceeds from maturity of investments held to maturity 6,893 8,185 Purchase of investments available for sale (4,771) (819) Purchase of investments held to maturity (4,773) (9,157) Net decrease (increase) in federal funds sold 1,733 (1,980) Net increase in loans (6,377) (8,098) Purchase of property and equipment (66) (479) Net increase in interest bearing bank deposits (32) Net Cash Used in Investing Activities (4,806) (8,378) Cash Flows from Financing Activities: Net increase in deposits 2,328 6,576 Increase in repurchase liabilities 1,664 Net decrease in other short-term borrowings (89) (66) Additions to long-term borrowings 1,000 2,000 Repayment of long-term borrowings (1,619) (1,162) Payment of dividends (342) (326) Net Cash Provided by Financing Activities 2,942 7,022 Net Decrease in Cash and Cash Equivalents (481) (58) Cash and Cash Equivalents, Beginning of Period 3,716 2,921 Cash and Cash Equivalents, End of Period $ 3,235 $ 2,863 Supplemental Disclosure Cash paid for: Interest expense $ 3,027 $ 2,630 Income taxes 545 395 Noncash Transaction The Company satisfied the profit sharing liability as of December 31, 1995 by contributing 4,366 common shares to the Plan on May 22, 1996. The accompanying notes are an integral part of these statements. Page F & M BANK CORP. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (In Thousands of Dollars) Six Months Ended June 30, 1996 1995 Balance, beginning of period $ 17,098 $ 14,896 Net income 1,220 1,073 Dividends declared (342) (326) Common stock issued to fund accrued stock bonus plan liability (4,366 shares) 142 Change in unrealized gain (loss) on securities available for sale (241) 540 Balance, end of period $ 17,877 $ 16,183 The accompanying notes are an integral part of these statements. Page F & M BANK CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 ACCOUNTING PRINCIPLES: The consolidated financial statements conform to generally accepted accounting principles and to general industry practices. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of June 30, 1996 and the results of operations for the six month periods ended June 30, 1996 and June 30, 1995. The notes included herein should be read in conjunction with the notes to financial statements included in the 1995 annual report to stockholders of the F & M Bank Corp. The Company does not expect the anticipated adoption of any newly issued accounting standards to have a material impact on future operations or financial position. NOTE 2 INVESTMENT SECURITIES: The amounts at which investment securities are carried in the consolidated balance sheets and their approximate market values at June 30, 1996 and December 31, 1995 follows: 1996 1995 Carrying Market Carrying Market Value Value Value Value Securities Held to Maturity U. S. Treasury and Agency obligations $ 15,392 $ 15,291 $ 18,280 $ 18,290 State and municipal 705 702 476 476 Other securities 3,429 3,464 4,523 4,620 Mortgaged-backed securities 5,198 5,126 3,631 3,662 Total $ 24,724 $ 24,583 $ 26,910 $ 27,048 1996 1995 Market Market Value Cost Value Cost Securities Available for Sale U. S. Treasury and Agency obligations $ 4,228 $ 4,226 $ 3,028 $ 2,999 Equity securities 6,760 6,084 7,318 6,429 Mortgage-backed securities 2,162 2,185 2,864 2,859 Other securities 6,159 6,197 4,106 4,032 Total $ 19,309 $ 18,692 $ 17,316 $ 16,319 Page F & M BANK CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 3 LOANS: Loans outstanding are summarized as follows: June 30, December 31, 1996 1995 Real Estate Construction $ 2,443 $ 2,540 Mortgage 65,011 58,771 Commercial and agricultural 24,362 25,018 Installment 11,727 10,807 Credit cards 695 807 Other 74 21 Total $ 104,312 $ 97,964 NOTE 4 ALLOWANCE FOR LOAN LOSSES: A summary of transactions in the allowance for loan losses for the six months ended June 30, 1996 and 1995 follows: 1996 1995 Balance, beginning of period $ 863 $ 744 Provisions charged to operating expenses 50 40 Loan recoveries 6 3 Loan charge-offs (35) (35) Balance, End of Period $ 884 $ 752 Page Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Overview The financial condition of F & M Bank Corp. remained strong throughout the first six months of 1996. Annualized growth in total assets for the first six months was 5.10% and annualized growth in deposits for this time period was 4.10%. Net income for the first six months of 1996 increased $147,000 or 13.70% compared to 1995. The increase in capital of 4.56% is attributed to earnings retained from operations for the period. This increase in capital was achieved in spite of a $241,000 net decline in the unrealized gains on securities available for sale. Results of Operations - Six Months Ending June 30, 1996 The dollar amount of the tax equivalent, net interest margin increased 12.86% in the first six months of 1996 compared to the first six months of 1995. An increase in the cost of funds of .19% was effectively offset by an increase in the return on earning assets of .15%. The increase in net interest margin income is thus attributable to an increase in net earning assets (i.e. volume increase) of 13.88%. A schedule of the net interest margin for 1996 and 1995 is shown on page 13 or Table I. Noninterest income decreased 29.09% in the first six months of 1996 compared to the first six months of 1995. The fall in other income is attributed to a decline in security gains from $328,000 in 1995 to $169,000 in 1996. Minor increases in service charges and other fees were the result of an increase in the deposit base and total assets. Noninterest expense decreased 1.40% in 1996 compared to 1995. This decline was mainly the result of a decrease of $95,000 in FDIC insurance premiums. The FDIC premiums were virtually eliminated in June, 1995 as the agency's trust fund met its congressionally mandated reserve requirements by that date. All other noninterest expenses increased 4.44% due to asset growth and expanded branch operations. Result of Operations - Quarter Ending June 30, 1996 Net income for the quarter ending June 30, 1996 increased 6.13% over earnings in the same quarter of 1995. Net interest income increased due to increases in the levels of earning assets and stability in the spread between the cost of funds and the return on invested funds. The Company's net yield on earning assets has remained consistent over the last twelve months and is expected to remain so in the near future. The Company saw a decline in security gains of $179,000 in 1996 as gains of $176,000 were recognized in 1995 compared with a loss of $3,000 in 1996. Partially offsetting this decline was a reduction in the FDIC insurance expense from $56,000 in 1995 to $8,000 in 1996. The reduction was the result of changes in the FDIC cost of coverage. Other noninterest income and expenses increased only slightly within 1996 due to asset growth and inflation. The Company's overhead costs are low relative to its peer group and it is not anticipated that this will change in the near future. Page Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Financial Condition Securities The Company's securities portfolio is held to assist the Company in liquidity and asset liability management. The securities portfolio consists of investment securities (commonly referred to as "securities held to maturity") and securities available for sale. Securities are classified as investment securities when management has the intent and ability to hold the securities to maturity. Investment securities are carried at amortized cost. Securities available for sale include securities that may be sold in response to general market fluctuations, general liquidity needs and other similar factors. Securities available for sale are recorded at market value. Unrealized holding gains and losses of available for sale securities are excluded from earnings and reported (net of deferred income taxes) as a separate component of shareholders' equity. As of June 30, 1996, the market value of all securities available for sale exceeded their amortized cost by $618,000 ($381,000 after the consideration of income taxes). This excess is the result of unrecognized gains in the value of equity securities held by the parent. Management has traditionally held debt securities (regardless of classification) until maturity and thus it does not expect the minor fluctuations in the value of the securities to have a direct impact on earnings. Investments in securities decreased slightly in the first six months of 1996. Loan growth was excellent the first six months of 1996 and maturities of securities held to maturity were directed to loan growth. The Company has invested in relatively short-term maturities due to uncertainty in the direction of rates. This philosophy allows for greater flexibility in an environment of rapidly changing rates and has served the Company well over the years. Of the investments in securities available for sale, 34% are invested in equities which are dividend producing and subject to the dividend exclusion for taxation purposes. The Company believes these investments render adequate returns and have the potential for future increases in value. Loan Portfolio The Company operates in an agriculturally dominated area which incudes the counties of Rockingham, Page and Shenandoah in the western portion of Virginia. The Company does not make a significant number of loans to borrowers outside its primary service area. The Company is very active in local residential construction mortgages. The commercial lending includes small and medium sized businesses within its service area. The principal economic risk associated with the loan portfolio is the ability of its borrowers to repay. The risk associated with real estate and installment notes to individuals is based upon employment, the local and national economics and consumer confidence. All of these affect the ability of borrowers to repay indebtedness. The risk associated with commercial lending is substantially based on the strength of the local and national economies. A large percentage of agricultural loans are made to poultry growers. Poultry production in the Company's trade area showed moderate growth in 1995, however, 1996 income for the industry will be far below historical amounts due to a period of sustained high grain prices. Page Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Loan Portfolio (Continued) The first six months of 1996 saw continued strong loan demand as loans grew at an annualized rate of 12.96%. Funding of the increased loan volume was made possible by growth in time deposits and retained income from operations. Overall, management has been quite pleased with the loan program and believes that loan growth will continue throughout 1996 although at a slower pace. Nonperforming loans include nonaccrual loans, loans 90 days or more past due and restructured loans. Nonaccrual loans are loans on which interest accruals have been suspended or discontinued permanently. Restructured loans are loans which have changed the original interest rate or repayment terms due to financial hardship. Loans 90 days or more past due totaled $479,000 at June 30, 1996 compared to $380,000 at December 31, 1995. The Company had no nonaccrual or restructured loans at June 30, 1996. The Company did not have any loans that were considered impaired under Statement of Financial Accounting Standards No. 114 and No. 118. The Company does not foresee a material impact on operations as a result of these statements. Allowance for Loan Losses Management evaluates the loan portfolio in light of national and local economic changes, changes in the nature and value of the portfolio and industry standards. The Company's loan classification system, which rates existing loans, provides the basis for adjusting the allowance for loan loss. Management reviews these classifications totals, along with internally generated loan review reports, past due reports, historical loan loss experience and individual borrowers financial health to determine the necessary amount to be provided in the allowance for loan losses. Management evaluated nonperforming loans relative to their collateral value and makes the appropriate adjustments to the allowance for loan losses when needed. Management believes, based on its review, that the Company has an adequate allowance to absorb any losses in the loan portfolio. The net amount of loan charge-offs for the first six months of 1996 was $29,000 compared to $32,000 in the first six months ended June 30, 1995. The allowance for loan losses was $884,000 at June 30, 1996 representing .85% of period ending loans outstanding. The provision for loan losses for the first six months of 1996 was $50,000 compared to $40,000 for the same period in 1995. The increase reflects an increasing volume of loans outstanding and is not a reflection of changes in the loan portfolio. Deposits and Long-Term Debt The Company's main source of funds is customer deposits received from individuals, governmental entities and businesses located within the Company's service area. Deposit accounts include demand deposits, savings, money market and certificates of deposit. Deposit growth was good in the first six months of 1996 with an annualized growth rate of 4.10%. This increase can be attributed to the deposit growth at the Bridgewater office which was opened in April 1995 and to rates that exceed the local competition in almost every category. In 1996, the Company began offering repurchase agreements (a/k/a "repos") to customers desiring such investments. Repos are designed for companies and individuals desiring a higher rate of return than traditional deposit accounts and who will accept the risk of not being covered by FDIC insurance. Page Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Deposits and Long-Term Debt (Continued) Borrowings from the Federal Home Loan Bank of Atlanta (FHLB) continue to be an important mechanism in funding real estate loan growth in the area. The Bank borrows funds on a fixed rate basis and uses these borrowings to make fixed rate loans with a fifteen year repayment term. As an alternative, borrowers may opt for a twenty year repayment term in which only the first ten years have a fixed rate. This program allows the Bank to match the maturity of its fixed rate real estate portfolio with the maturity of its debt and thus reduce its exposure to interest rate changes. Year-to-date borrowings totaled $1,000,000 in 1996 compared to repayments of $1,619,000 in this year. Capital The Company seeks to maintain a strong capital base to expand facilities, promote public confidence, support current operations and grow at a manageable level. As of June 30, 1996, the Company's total risk based capital ratio was 18.02% which is far above the regulatory minimum of 8.00%. The ratio of total capital to total assets was 11.45% at June 30, 1996 and this exceeds the level of the Company's peer group. Earnings have been satisfactory to allow an increase in dividends in 1996 over those levels experienced in 1995. Management anticipates maintaining these capital levels throughout 1996 and into the foreseeable future. Liquidity Liquidity is the ability to meet present and future obligations through the management of maturing assets or use of additional liabilities. Federal funds sold, loans and investments maturing within one year are the primary source of liquid assets. Management feels its ability to manage assets and liabilities will maintain the overall liquidity sufficient to meet customer needs on a continuing basis. As a secondary source of funds, the Company's subsidiary bank maintains lines of credit with correspondent financial institutions that allow it to borrow funds on an overnight basis. In the past, these lines have been utilized sparingly as bank deposits have been more than sufficient to fund loan demand. Interest Rate Sensitivity Management of liquidity involves controlling the degree of interest rate risk the Company is willing to accept. Interest rate risk is the risk that interest sensitive liabilities will reprice at a faster pace than interest sensitive assets. The Company estimates that the point at which its cumulative repricing opportunities for assets and liabilities are equal is about five years. A summary of asset and liability repricing opportunities is shown on page 14 or Table II. Page Table 1 F & M BANK CORP. NET INTEREST MARGIN ANALYSIS (Dollar Amounts in Thousands)
Six Months Ended Six Months Ended June 30, 1996 June 30, 1995 Average Income/ Rates Average Income/ Rates Balance Expense Balance Expense Rate Related Income Loans 1 $ 100,923 $ 4,657 9.23% $ 85,252 $ 3,987 9.35% Federal funds sold 1,687 45 5.33% 1,461 43 5.89% Bank deposits 358 10 5.59% 582 19 6.53% Investments Taxable 38,600 1,203 6.23% 35,541 998 5.62% Partially taxable 1 6,830 301 8.81% 6,869 294 8.56% Tax exempt 1 705 25 7.09% 1,227 41 6.68% Total Earning Assets 149,103 6,241 8.37% 130,932 5,382 8.22% Interest Expense Demand deposits 20,046 267 2.66% 20,423 310 3.04% Savings 30,208 570 3.77% 28,782 596 4.14% Time deposits 54,418 1,527 5.61% 41,683 1,041 4.99% Repurchase agreement 1,087 26 4.78% Other short-term debt 453 15 6.62% 238 5 4.20% Long-term debt 19,553 633 6.47% 18,436 592 6.42% Total Interest Bearing Liabilities 125,765 3,038 4.83% 109,562 2,544 4.64% Net Interest Margin 1 $ 3,203 $ 2,838 Net Yield on Interest Earning Assets 1 4.30% 4.34% 1 On a taxable equivalent basis assuming a 34% tax rate.
Page Table 1 (Continued) F & M BANK CORP. NET INTEREST MARGIN ANALYSIS (Dollar Amounts in Thousands)
Three Months Ended Three Months Ended June 30, 1996 June 30, 1995 Average Income/ Rates Average Income/ Rates Balance Expense Balance Expense Rate Related Income Loans 1 $ 102,448 $ 2,359 9.21% $ 87,359 $ 2,057 9.42% Federal funds sold 1,314 17 5.18% 2,502 37 5.92% Bank deposits 202 3 5.94% 945 15 6.35% Investments Taxable 38,569 602 6.24% 34,836 515 5.91% Partially taxable 1 6,858 152 8.87% 6,912 155 8.97% Tax exempt 1 710 13 7.32% 1,158 19 6.56% Total Earning Assets 150,101 3,146 8.38% 133,712 2,798 8.37% Interest Expense Demand deposits 19,792 127 2.57% 19,740 150 3.04% Savings 29,807 272 3.65% 28,345 295 4.16% Time deposits 55,120 768 5.57% 44,776 590 5.27% Repurchase agreement 1,647 20 4.86% Other short-term debt 593 7 4.72% 201 2 3.98% Long-term debt 19,130 311 6.50% 18,927 308 6.51% Total Interest Bearing Liabilities 126,089 1,505 4.77% 111,989 1,345 4.80% Net Interest Margin 1 $ 1,641 $ 1,453 Net Yield on Interest Earning Assets 1 4.37% 4.35% 1 On a taxable equivalent basis assuming a 34% tax rate.
Page Table II F & M BANK CORP. INTEREST SENSITIVITY ANALYSIS JUNE 30, 1996 (In Thousands of Dollars)
0 - 3 4 - 12 1 - 5 5 -10 Over 10 Not Months Months Years Years Years Classified Total Uses of Funds Loans: Commercial $ 15,332 $ 1,980 $ 5,888 $ 858 $ 378 $ $ 24,436 Installment 42 674 10,896 115 11,727 Real estate 4,296 6,653 35,910 9,866 10,729 67,454 Credit cards 695 695 Interest bearing bank deposits 114 114 Investment securities 2,719 6,302 22,416 5,837 8,188 45,462 Federal funds sold 54 54 Total 23,252 15,609 75,110 16,676 11,107 8,188 149,942 Sources of Funds Interest bearing deposits 19,181 19,181 Regular savings 29,644 29,644 Certificates of deposit $100,000 and over 866 2,702 2,002 5,570 Other certificates of deposit 12,789 16,058 20,531 49,378 Repurchase agreement 1,664 1,664 Other short-term borrowings 749 749 Long-term debt 706 2,228 11,277 4,588 18,799 Total 65,599 20,988 33,810 4,588 124,985 Discrete Gap (42,347) (5,379) 41,300 12,088 11,107 8,188 24,957 Cumulative Gap (42,347) (47,726) (6,426) 5,662 16,769 24,957 Ratio of Cumulative Assets to Cumulative Liabilities 35.4% 44.9% 94.7% 104.5% 113.4% N/A Table II reflects the earlier of the maturity on repricing dates for various assets and liabilities at June 30, 1996. In preparing the above table no assumptions are made with respect to loan prepayments or deposit runoffs. Loan principal payments are included in the earliest period in which the loan matures or can be repriced. Principal payments on installment loans scheduled prior to maturity are included in the period of maturity or repricing. Proceeds from the redemption of investments and deposits are included in the period of maturity.
Page Part II Other Information Item 1. Legal Proceedings - Not Applicable Item 2. Changes in Securities - Not Applicable Item 3. Defaults Upon Senior Securities - Not Applicable Item 4. Submission of Matters to a Vote of Security Holders - On April 13, 1996, the stockholders held their annual meeting. The following item was approved by the shareholders by the required majority: 1) Election of the Board of Directors as proposed in the proxy material without any additions or exception. Item 5. Other Information - Not Applicable Item 6. Exhibits and Reports on 8-K (a) Exhibits 3 i Articles of Incorporation of F & M Bank Corp. are incorporated by reference to Exhibits to F & M Bank Corp.'s Form S14 filed February 17, 1984. 3 ii Bylaws of F & M Bank Corp. are incorporated by reference to Exhibits to F & M Bank Corp.'s Form S14 filed February 17, 1984. 21 Subsidiaries of the small business issuers are incorporated by reference to Exhibits to F & M Bank Corp.'s 1995 Form 10-KSB filed March 26, 1996. 27 Financial Data Schedule attached. (b) Reports on Form 8-K The Corporation did not file any reports on Form 8-K for the quarter ending June 30, 1996. Page EXHIBIT INDEX Exhibit Index Page Number 27 Financial Data Schedule for the quarter ending June 30, 1996 17 Page Signature Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. F & M BANK CORP. JULIAN D. FISHER Julian D. Fisher President and Principal Financial Officer RALPH C. FOLTZ, JR. Ralph C. Foltz, Jr. Controller and Chief Accounting Officer Date August 12, 1996 EX-27 2
9 This schedule contains summary financial information extracted from F & M Bank Corp. Form 10QSB and is qualified in its entirety by reference to such financial statements. 1,000 6-MOS DEC-31-1996 JUN-30-1996 3,235 114 54 0 19,309 24,724 24,583 104,312 (884) 156,187 115,989 2,413 1,109 18,799 0 0 4,093 13,784 156,187 4,652 1,435 55 6,142 2,364 3,038 3,104 50 169 1,687 1,740 1,220 0 0 1,220 1.50 1.50 4.30 0 479 0 0 863 35 6 884 884 0 0
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