F & M Bank Corp. · OTC:FMBM
F & M Bank — Investor Presentation (February 2018)
23 slides from F & M Bank's investor presentation, Feb 8, 2018
Slide 1: F&M Bank Corp.
Rey es F&M Bank Corp. Financial data as of December 31, 2017 (unaudited)
Slide 2: Caution Regarding Forward Looking Statements
Caution Regarding Forward Looking Statements Vo) F&M Bank Corp. 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
Slide 3: F&M At A Glance
F&M At A Glance Gp F&M Bank Corp. Headquartered in the Shenandoah Valley F&M Target Market + FMBM’s operating market falls within the central part of the Shenandoah Valley + 4-county franchise: Rockingham, Shenandoah, Page and Augusta, and the independent cities of Harrisonburg, Staunton and Waynesb
Slide 4: Executive Management Team
Executive Management Team F&M Bank Corp. Dean Withers, CEO CEO since 2004, with 38+ years in financial services industry Mark Hanna, President, F&M Bank President since December 2017, with 27+ years in banking industry Neil W. Hayslett, EVP/Chief Administrative Officer CAO since 2013, CFO for 17 yea
Slide 5: A Community Focused Institution
A Community Focused Institution “Community Banking at its Finest” Chartered in 1908, Farmers & Merchants Bank has served its local communities for more than 100 years Leading, progressive independent bank in the Shenandoah Valley ~ serving small to medium size businesses with diverse revenue streams
Slide 6: Industry Recognition and Accolades
Industry Recognition and Accolades Ga F&M Bank Corp. = Named one of 2018 Best 50 on the OTCQX. = Ranked 104th of top 200 banks in US for 3 year average ROE — American Banker Magazine, April 2017 = Ranked 3rd of top 50 US loan producers by IB Magazine — July 2016 = Recognized as a top 50 US bank for
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 Dist
Slide 8: Market Demographics
Market Demographics a) F&M Bank Corp. Shenandoah Valley — Market Drivers Shenandoah Valley Region + 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,
Slide 9: Recent Company Timeline
Recent Company Timeline a) F&M Bank Corp. Commentary s per Share $3.00 Creating shareholder we: $250 $2.77 value through disciplined $2.63 growth: $2.00 $1.88 . . $1.50 2 Exclusive of one-time $1.00 deferred tax expense 2013 2014 2015 2016 2017 related to the Tax Cuts Dividends per Share and Jobs Ac
Slide 10: Earnings Highlights
Earnings Highlights Net Income Core pre-tax, pre-provision earnings Return on average assets Return on average equity Return on average TCE Net Interest Margin | Efficiency Ratio Earnings per Share *unaudited $5,801 $10,390 1.00% 8.65% 9.48% 4.30% 60.54% $1.82 $8,417 $11,768 1.31% 10.46% 11.25% 4.43
Slide 11: Key Ratios
Key Ratios ) F&M Bank Corp. ROAA ROATCE 1.60 1400 1.31 238, 11.98 11.92 nae 2.21 12.00 10 1.20 2.00 10.00 oAs: 1.00 0.80 S00 0.60 600 0.40 4.00 0.20 2.00 0.00 0.00 2014 2015 2016 2017 2014 2015 2016 2017 ROAA ROATCE fees FRM Bank ——Peer Median ———Peer Top 20% MME FEM Bank Peer Median —=Peer Top 20%
Slide 12: Balance Sheet Highlights
Balance Sheet Highlights Ea ESE aE Total Asset $605,308 $665,150 $744,889 $753,270 Total Gross Loans Held for Investment $518,202 $544,053 $591,636 $616,974 ( Total Gross Loans Held for Sale $13,382 $57,806 $62,735 $39,775 Ay Total Deposits $491,505 $494,670 $537,085 $569,177 Loans Held for Investme
Slide 13: Asset Quality Highlights
Asset Quality Highlights Ga F&M Bank Corp. NPA/Asset 1.73% 1.34% 94% 1.21% NCOs/Avg Loans Held for Investment 34% .05% .22% .25% | wea Reserves/Loans Held for Investment 1.68% 1.61% 1.27% 98% 5 baad = = = Reserves/NPLs 125.1% 134.6% 154.9% 85.1% —— NPL/Assets 1.15% -98% 65% -94% *unaudited 13
Slide 14: Loan Portfolio
Loan Portfolio Commentary an Held for Investment Mi at 12/31/17 > 1-4 family comprises the largest concentration at 30% > Total real estate 2% exposure is 80%; but only 12% construction and development = 2% | » Consumer is the fastest growing category > Owner-occupied CRE and C&I loans represent 18%
Slide 15: Loan Portfolio Detail
Loan Portfolio Detail ) F&M Bank Corp. 2014 6 - Improving Composition Mix c&D 1-4 Family Non-Owner Occ. CRE Agriculture Multifamily cal HELOC ‘Owner-Oce. CRE Consumer & Other $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 $62,735 $57,806 $39,775 $13,382 $518,202 $544,053 $591,636
Slide 16: Dealer Finance Division
Dealer Finance Division 5,940,000 4,940,000 1,940,000 DEALER STATISTICS 2014 mE Gross Income 2015 mE Net Income 2017 Loan Balance (Right Axis) 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000
Slide 17: Dealer Finance Division
Dealer Finance Division Average National Delinquency (Trans Union) > 60 Days Delinquent H 3:¢ Quarter 2016 1.33% 4th Quarter 2016 1.44% 1st Quarter 2017 1.30% 2°¢ Quarter 2017 1.23% 3" Quarter 2017 1.40% 4* Quarter 2017 1.43%* Average FICO 714 new 652 used Average Term 60 Independent 67 Franchise *
Slide 18: Nonperforming & Adversely Classified Assets
Nonperforming & Adversely Classified Assets Gap F&M Bank Corp. Historical Nonperforming Assets $7.1 $7.0 $6.6 $4.9 $3.6 524 $24 say 2014 2015 2016 2Q17 mNonperforming Loans = OREO & Repos > Total NPAs were $9.1 million at 12/31/17 > Classified assets have decreased by $35.3 million for an NPA/Assets
Slide 19: Deposit Composition
Deposit Composition Gp F&M Bank Corp. Commentary : Deposit Composition > The Deposit mix is desirable, with a deposit cost of 49 basis points at 12/31/17. > Non Interest Bearing deposits have increased 76% since 2013. This is a stable = A A Non interest Bearing wa Savings Jumbo cDs source of ing wit
Slide 20: Strategic Focus
STRATEGIC FOCUS Ga F&M Bank Corp. ing 8 l SS er 7 a AF ' Legacy Branch - Recently Opened Branch 5a Strong Growth and Franchise Expansion Opportunities Exist = Augusta County — expansion to the south * Two full service branches opened in 2015, one in the City of Staunton and one in the Town of Craigs
Slide 21: Why F&M Bank Corp?
F&M Bank Corp. WHY F&M Bank Corp? Q_ Further development of a profitable franchise FMBM is a highly profitable institution — growth in the Tranchise increases tangible book value and earnings per share Shenandoah Valley is a liquid deposit market and FMBM continues to replace time deposits with lowe
Slide 22: Board of Directors
Board of Directors Ellen R. Fitzwater * Chairman of the Board * Financial Manager F&R Leasing/Accounting Consultant Gp F&M Bank Corp. Larry A. Caplinger * Chief Lending Officer — 40+ year history with the Bank John N. Crist * Attorney — real estate * Chairman of VBS Mortgage Daniel J. Harshman * May
Slide 23: F&M Bank Corp.
F&M Bank Corp.