F & M Bank Corp. · OTC:FMBM
F & M Bank — Investor Presentation (September 2019)
21 slides from F & M Bank's investor presentation, Sep 5, 2019
Slide 1: F&M Bank Corp. Financial data as of June 30, 2019
« em > F&M Bank Corp. Financial data as of June 30, 2019
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 Ga F&M Bank Corp. Mark Hanna, President & CEO, F&M Bank CEO since July 2018, President since December 2017, with 29+ years in banking industry Neil W. Hayslett, EVP/Chief Operating Officer COO since March 2018, CAO for 5 years, CFO for 17 years, with 29 years in banking ind
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 110 years Leading, progressive independent bank in the Shenandoah Valley ~ serving small to medium size businesses with diverse revenue streams
Slide 6: 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 7: Market Demographics
Market Demographics a) 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 Count
Slide 8: Recent Company Timeline
Recent Company Timeline Commentary Earnings per Share Creating shareholder $3.00 ee ae, $2.50 $2.77 value through disciplined 3250 a5 8 growth: $1.50 $1.00 = Despite the decline in oo earnings for 2019, EPS ; 2015 2016 2017 2018 2019 YTD has remained strong $1.50 = Dividends to $1.00 $1.20 sharehold
Slide 9: 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 $9,568 $12,860 1.34% 11.18% 12.59% 4.34% 60.78% $2.77 $9,010 $13,413 1.21% 10.01% 11.10% 4.53% 63.54%
Slide 10: Key Ratios
Key Ratios ) F&M Bank Corp. Return on Average TCE Return on Average Assets 160 140 120 1600 1400 1.00 1200 086 1000 200 060 600 0.40 409 200 020 00 0.00 2016 207 2018 2019 2016 2017 2018 2ars mm F&M Bank Peer Medan —Peer Top 20% mm FN Bank Peer Median —Peer Top 20% Net Interest Margin Efficiency Rat
Slide 11: Balance Sheet Highlights
Balance Sheet Highlights ES Total Assets $744,889 $753,270 $780,253 $806,949 Total Gross Loans Held for Investment $591,636 $616,974 $638,799 $636,407 ( Total Gross Loans Held for Sale $62,735 $39,775 $55,910 $78,406 uy Total Deposits $537,085 $569,177 $591,325 $608,470 Loans Held for Investment/Dep
Slide 12: Asset Quality Highlights
Asset Quality Highlights ) F&M Bank Corp. NPA/Assets 0.94% NCOs/Avg Loans Held for Investment 0.22% ~ Reserves/Loans Held for Investment 1.27% = Reserves/NPLs 154.9% NPL/Assets 0.65% *annualized 1.21% 0.25% 98% 85.1% 0.94% 1.62% 0.58% 0.82% 51.3% 1.31% 1.69% 0.70% a =—s 0.95% jms 12
Slide 13: Loan Portfolio
Loan Portfolio Commentary fara ; Loan held for Investment Mix: $636.4 million at 1-4 family comprises 6/30/19 the largest concentration at 29% = Total real estate exposure is 76%; but only 11% construction and development = Owner-occupied CRE and C&I loans represent 17% of total loans = Renewed focu
Slide 14: Loan Portfolio Detail
Loan Portfolio Detail ) F&M Bank Corp. Improving Composition Mix => 2Q19 cap 4-4 Family Non-Owner Occ. CRE Agriculture Multifamily cal HELO Owner-Occ. CRE Consumer & Other $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 $62,735 $39,775 $55,910 $78,406 $591,636 $616,974 $63
Slide 15: Dealer Finance Division
Dealer Finance Division GP DEALER STATISTICS 7,940,000 120,000,000 Fy iG A 6,940,000 100,000,000 5,940,000 80,000,000 4,940,000 3,940,000 2,940,000 1,940,000 940,000 (60,000) 2017 2018 209° mmm Gross income Loan Balance (Right Axis)
Slide 16: Dealer Finance Division
Dealer Finance Division nd Average National Delinquency (Trans Union) > 60 Days Delinquent 4" Quarter 2015 4% Quarter 2016 4* Quarter 2017 4* Quarter 2018 2nd Quarter 2019 Average FICO 657/719* Average Term 69/65* *used/new
Slide 17: Nonperforming & Adversely Classified Assets
Nonperforming & Adversely Classified Assets Gp F&M Bank Corp. Historical Nonperforming Assets $11.7 $10.2 $7.4 $4.9 [J $2.4 $2.0 $2.4 $2.0 2016 2017 2018 2Q19 ™Nonperforming Loans = OREO & Repos = Total NPAs were $13.7 million at 6/30/19 * Under contract to sell notes supporting $4.1 million for an
Slide 18: Deposit Composition
Deposit Composition ) F&M Bank Corp. Commentary > The Deposit mix is desirable, with a deposit cost of 79 basis points at 6/30/19. Non Interest Bearing deposits have increased 21% since 2015. This is a stable source of funding with an average life in excess of 6 years. > F&M Bank is the deposit mark
Slide 19: Strategic Opportunities
STRATEGIC OPPORTUNITIES Enhanced approach to credit underwriting and monitoring Heightened focus on speedier NPA resolution Renewed focus on Agricultural lending with creation of a dedicated, experienced lending group Shenandoah Valley is a liquid deposit market and FMBM continues to replace time de
Slide 20: Board of Directors
Board of Directors Ga Mike W. Pugh * Chair of the Board * President of Old Dominion Realty, Inc. & licensed appraiser Larry A. Caplinger * Retired FMBM EVP/CLO - 45+ year history with the Bank John N. Crist * Attorney — real estate Daniel J. Harshman * Mayor of the Town of Edinburg Richard S. Myers
Slide 21: F&M Bank Corp.
F&M Bank Corp.