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DIVIDEND LIMITATIONS ON SUBSIDIARY BANK
12 Months Ended
Dec. 31, 2011
Notes to Financial Statements  
DIVIDEND LIMITATIONS ON SUBSIDIARY BANK

 

NOTE 19    DIVIDEND LIMITATIONS ON SUBSIDIARY BANK:

 

The principal source of funds of F & M Bank Corp. is dividends paid by the Farmers and Merchants Bank.  The Federal Reserve Act restricts the amount of dividends the Bank may pay. Approval by the Board of Governors of the Federal Reserve System is required if the dividends declared by a state member bank, in any year, exceed the sum of (1) net income of the current year and (2) income net of dividends for the preceding two years. As of January 1, 2012, approximately $7,120,000 was available for dividend distribution without permission of the Board of Governors.  Dividends paid by the Bank to the Company totaled $930,000 in 2011, $920,000 in 2010 and $2,428,000 in 2009.