F & M Bank Corp. · OTC:FMBM
F & M Bank — Investor Presentation (February 2021)
26 slides from F & M Bank's investor presentation, Feb 5, 2021
Slide 1: F&M Bank Corp. Financial Data as of December 31, 2020
Rey es F&M Bank Corp. FINANCIAL DATA AS OF DECEMBER 31, 2020
Slide 2: Caution Regarding Forward Looking Statements
CAUTION REGARDING FORWARD LOOKING STATEMENTS This presentation contains projections, predictions, expectations, and other statements with respect to the Company and its subsidiaries as to beliefs, future events, and/or results that are based on current expectations, estimates, and projections about,
Slide 3: F&M at a Glance
F&M AT A GLANCE F&M Bank Corp. Headquartered in the Shenandoah Valley * FMBM's operating market falls within the central part of the Shenandoah Valley * 4-county franchise: Rockingham, Shenandoah, Augusta, and Frederick and the independent cities of Harrisonburg, Staunton, Waynesboro, and Winchester
Slide 4: Recent Successes Position
RECENT SUCCESSES POSITION THE BANK FOR PROFITABLE GROWTH Recent Successes = Commercial, Agriculture, & Dealer Loan Growth = Continued stable Asset Quality = Increased ALLL Coverage = Enhanced approach to credit underwriting = Significant Growth in low-cost core deposits "Overhead Reduction Initiativ
Slide 5: Executive Management Team
EXECUTIVE MANAGEMENT TEAM FAM Bank Corp Mark Hanna, President & CEO, F&M Bank CEO since July 2018, President since December 2017, with 30+ years in banking industry Barton Black, EVP/Chief Operating Officer COO since June 2020, joined F&M as CSRO in March 2019, with 30 years in banking industry Carr
Slide 6: A Community Focused Institution
A COMMUNITY FOCUSED INSTITUTION “COMMUNITY BANKING AT ITS FINEST” F&M Bank Corp. Chartered in 1908, Farmers & Merchants Bank has served its local communities for more than 112 years * Leading, progressive independent bank in the Shenandoah Valley ~ serving small to medium size businesses with divers
Slide 7: Market Overview — Shenandoah Valley
MARKET OVERVIEW — SHENANDOAH VALLEY = Rural area with a diverse economy based on manufacturing, agriculture and education » Major industries include advanced food manufacturing, farming, retail trade, government, education and health care = Top employers include James Madison University, Wal-Mart Di
Slide 8: Market Demographics
MARKET DEMOGRAPHICS F&M Bank Corp. Shenandoah Valley — Market Drivers + James Madison University has a significant impact on the + The Shenandoah Valley includes Augusta, Clarke, Frederick, local economy with approximately 22,000 students and Page, Rockbridge, Rockingham, Shenandoah, Warren Counties
Slide 9: Recent Company Timeline
RECENT COMPANY TIMELINE Commentary Creating shareholder value through disciplined growth: = EPS has remained strong. 2019 EPS reflects impact of resolving NPAs and increasing ALLL coverage = Dividends to shareholders continue approximate 4% annualized return in last few quarters. = TBVPS continues t
Slide 10: Earnings Highlights
EARNINGS HIGHLIGHTS Dollars in Thousands (000’s) 2017 2018 | 2019 | 2020 | Net Income Return on average assets Return on average equity Net Interest Margin Efficiency Ratio Earnings per Share $8,762 1.17% 9.89% 4.48% 64.3% $2.68 $8,823 1.15% 9.67% 4.65% 66.0% $2.60 $4,509 0.57% 4.93% 4.33% 69.0% $1.
Slide 11: Key Ratios
KEY RATIOS a Hank Corp Return on Average Assets Return on Average TCE 1.40 1.47 1.20 1.15 12.00 0.99 9.89 9.67 9.39 1.00 10.00 8.00 0.80 sae 6.00 4.93 0.60 4.00 0.40 2.00 Per 0.00 2017 2018 2019 2020 0.00 2017 2018 2019 2020 Net Interest Margin Efficiency Ratio 69.0. Sa 709 67.5 66.0 4.65 4: Ks = 4.
Slide 12: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS se Dollars in Thousands ($000’s) 2017 | 2018 | 2019 | 2020 | Total Assets $752,894 $779,743 $813,999 $966,930 Total Gross Loans Held for Investment $616,974 $638,799 $603,425 $661,329 (2020 includes $34.9 PPP Loans) Total Gross Loans Held for Sale $39,775 $55,910 $66,798 $58
Slide 13: Asset Quality Highlights
ASSET QUALITY HIGHLIGHTS Oe — Se NPA/Assets NCOs/Avg Loans Held for Investment Reserves/Loans Held for Investment (includes PPP) Reserves/NPLs NPL/Assets 1.21% 0.25% 0.98% 85.1% 0.94% 1.62% 0.58% 0.82% 51.3% 1.31% 0.89% 0.71% 1.39% 146.45% 0.70% 0.14% 1.58% 160.24% 0.68% 3
Slide 14: Non-Performing Assets
NON-PERFORMING ASSETS se AS A % OF TOTAL ASSETS 2.60 2.40 221 2.23 2.20 2.00 1.80 1.60 140 1,30 1.20 1.00 0.80 0.60 0.40 0.20 Q4'17 Q1'18 «G28 Q3'18 SIS = «QI'19- 219. «Q3'19.Q4'19. 120 Q2'20Q3'20Q4'20
Slide 15: Allowance for Loan Loss
ALLOWANCE FOR LOAN LOSS Se AS A % OF TOTAL LOANS (excludes PPP loans) 1.72 1.67 1.02 0.97 0.81 Q4'17 Q118 «G28 «318 Q4'I8 —QI'19 G29. «Q3'19 A419. QL'20. Q2'20Q3'20 Q4'20
Slide 16: Loan Composition
LOAN COMPOSITION Commentary Total Loans increased $16.5 million in 4Q 2020 Loan growth driven by Commercial, Agriculture, and Dealer $62.7 million in PPP loans generating $2.3 million in Fees, $34.9 million remain Total real estate exposure is 75%; only 11% construction and development Low Non-Owner
Slide 17: Dealer Finance Division
DEALER FINANCE DIVISION DEALER STATISTICS 6,940,000 5,940,000 4,940,000 3,940,000 2,940,000 1,940,000 940,000 (60,000) 2017 2018 2019 2020 Mmmm Gross Income — ==—=Loan Balance (Right Axis) $29.8 million of dealer loans sold in 4Q 2019
Slide 18: Dealer Loan Quality Continues to Outperform Peers
DEALER LOAN QUALITY CONTINUES TO OUTPERFORM PEERS INDIRECT/DEALER DELINQUENCY RATIOS FAM Bank Corp (Experian) National Average State Average F&M Bank Dealer Division 30 Day 60 Day 30 Day 60 Day 30 Day 60 Day ai 1.89% 165% 1.72% 59% 1.67% .25% 2020 a2 NR NR NR NR 1.12% .20% 2020 a3 1.51% A9$ 1.39% 44
Slide 19: Deposit Composition
DEPOSIT COMPOSITION oS Commentary >» Non-Interest Bearing and Low Cost transaction accounts continue to grow > Continued growth in Business/Commercial deposit accounts > Leveraging new technologies to better serve consumer & commercial accounts > The Deposit mix is desirable, with a deposit cost of
Slide 20: Total Deposits
TOTAL DEPOSITS (in Millions) FeM Bank Corp, 550 500 $818 $594 $597 $574 O47 QUIS «GZS QBS Q418 QLD. «Q219.Q3'19 A419 Q1'20Q2z'20.Q3'20Qa'20 $574 $573
Slide 21: % of $ in Deferral
% of $ $ in Deferral Performing Well $9,944,000 9.7% |SO $17,047,000 16.6% |$10,800,000 TOTAL IN CATEGORY $ 102,386,000 $10,800,000 7 $6.6 mm Rec Facility $2.9mm Campground ‘$1.3mm Restaurant $10.8 mm 224
Slide 22: COVID-Impacted Industry Categories
COVID-IMPACTED INDUSTRY CATEGORIES $ in Deferral Performing Well $3,525,000 Minimal impact $8,860,000 60.8% Concerning Impact $14,584,000 Performing Well $1,113,000 ‘Minimal impact ‘$4,178,000 Concerning Impact $2,907,000 $8,198,000 ASSISTED LIVING Performing Well $o 0.0% Minimal Impact Concerning I
Slide 23: COVID-Impacted Industry Categories
COVID-IMPACTED INDUSTRY CATEGORIES MULTIFAMILY Performing Well Concerning Impact Performing Well Concerning Impact CHILDCARE & EDUCATION Performing Well Concerning Impact $6,001,000 $1,844,000
Slide 24: CARES Act - Loan Deferrals
CARES ACT - Loan Deferrals Se aa Bak Corp Deferral Deferral Deferral Deferral # Loans Balance Balance Balance Balance 4/30/2020 8/8/2020 9/30/2020 12/31/2020 $7,907,420 $1,650,023 $1,054,500 $2,344,853 165 $469,939 $258,889 $44,261 $93,441 13 y $1,422,220 $585,666 $594,577 $180,216 $52,835,254 $18,0
Slide 25: Board of Directors
BOARD OF DIRECTORS FAM Bank Corp Mike W. Pugh Larry A. Caplinger John N. Christ Daniel J. Harshman Christopher S. Runion Dean W. Withers E. Ray Burkholder Peter Wray Mark C. Hanna Anne Keeler Chairman of the Board President of Old Dominion Realty, Inc. & licensed appraiser Retired FMBM EVP/CLO with
Slide 26: . xs me >
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