F & M Bank Corp. · OTC:FMBM
F & M Bank — Investor Presentation (December 2023)
26 slides from F & M Bank's investor presentation, Dec 15, 2023
Slide 1: Investor Presentation
Slide 2: Caution Regarding Forward Looking Statements
Caution Regarding Forward Looking Statements F&M," “we,"“our” or “us” refer to F & M Bank Corp. and its consolidated subsidiaries. The “Bank” refers to Farmers & Merchants Bank, which is a wholly ‘As used in this presentation, the terms “Company, ‘owned subsidiary of the Company. Certain statements
Slide 3: Non-GAAP disclaimer
Non-GAAP disclaimer ‘The Company uses certain non-GAAP (Generally Accepted Accounting Principles) financial measures in this presentation, including tangible common equity and tangible book value. Generally, a non-GAAP financial measure is a numerical measure of a company's performance or financial
Slide 4: F&M at a glance
F&M at a glance Overview F&M Branch Footprint 115 year-old depository institution operating in the Shenandoah Valley along the 1-81& 1-64 corridors — Very lucrative/high growth market areas with the ability to reach into the Charlottesville and northem Virginia markets on the I-64 & 1.66 corridors >
Slide 5: Executive management biographies
Executive management biographies Mike Wilkerson Chief Executive Officer ‘Mr. Wilkerson has served as the Chief Executive Officer of the Company and the Bank since April 2023. He commenced his banking career in 1982, Dealer Financial Services before transitioning to managing branches and exploring co
Slide 6: Corporate focus
Corporate focus Key Objeci Accomplishments and Init % Grow sustainable profitability to a top quartile ROAA Reconstituted executive management team focused on 10) collective management and key performance objectives $2) _pemixthe balance'sheet to grow loans with only very modest 220 — Revitalized co
Slide 7: Recent key events
Recent key events Early Retirement Program Offered November 2023 The Company offers certain employees an early March Madness retirement, with the expectation of one-time March 2023 costs to not exceed $1.8M + Distrust spreads in the banking market after the failure of Silicon Valley Bank and ‘causes
Slide 8: Market overview & demographics
Market overview & demographics Market Drivers Market Overview + Diverse economy based on manufacturing, agriculture and education with major industries of advanced food manufacturing, farming, retail trade, government, education and health care + Winchester/Frederick County is part of the “Quad Stat
Slide 9: Growing deposit market share
Growing deposit market share F&M has continued to gain market share as other institutions have left the market 2018 Market Share company 1 Trust Financial Cop. 24 1585,686 230 2 WellsFargouco. 10,74 155 3 Allantic Union Bankshares Corp. RB e930 ast 4 Fist National Corporation 10 Sa7AK6 828 [5 Fempan
Slide 10: Securities portfolio provides near-term cash flow
Securities portfolio provides near-term cash flow Commentary > Projected cash flow and maturities in the bond portfolio provide actionable opportunity to restructure the balance sheet > Asof November 30, the AOCI balance was $39.1M, down, from $42.6M at the end of Q3 > With an immaterial HTM securit
Slide 11: Strong asset quality
Strong asset quality Commentary > Priorto the pandemic, the Company worked through legacy problem credits Current levels of problem assets are very low ¥ > The Company hasa strong level of reserves, > The Company has experienced limited recent charge-offs Source HP CaptaliQPo NPAs / Assets (%) amie
Slide 12: Growing, diversified loan portfolio
Growing, diversified loan portfolio ¥ Commenta ny, Total Core Loan Balance ($MMs) A diversified loan portfolio is a % Growth seen ot eee @ $681.6 $583.7 569.5, sea54 Increasing scrutiny has been paid $538.7 $5 to loan portfolios with heavy CRE balances, while the Company's portfolio only has ~13% no
Slide 13: Attractive dealer-based lending business
Attractive dealer-based lending business Dealer Credit Score Commentary > F&M has an active indirect lending business focused on its community banking footprint > Vast majority of collateral is used automobiles > Credit scores have increased over the past five years > F&M has been able to increase i
Slide 14: Granular deposit base
Granular deposit base Commentary > Historically, the Company has excelled at having a granular, core deposit base, an attribute that is particularly important in the current operating environment with an average account balance of ~$25k ve F&M has very little reliance on brokered deposits or CDs and
Slide 15: Historical capital ratios
Historical capital ratios Consolidated Total Equity / Total Assets 10.3% 9.1% 8.0% | in o 2019 20204 aot 202393 Bank Leverage Ratio 10.9% 9.9% | l 8.6% 8.2% 8.2% 13.3% 13.6% zoey 2000 021Y aay 202308, 20187 20207 (a) TCElzanon-ceaP nani meseue a8 ade 24 formore Information incladngereconliion ofthis
Slide 16: Key operating metrics
Key operating metrics ROAA (%) ROATCE (%)() PPNR / AA (9) as oar 098 B79 0.95 ; | , I | | i In. nowy aay Yea voy mney aay 2a ois Core ROAA (%) Core ROATCE (%)!) Core ie PPNR/AAL (%) nas wed 2a zea aay aor oar (2) Toe anon-cAinanciol mess se side 25 fo moreifomation including secretion cl his on-GAA
Slide 17: Expense and fee income metrics
Expense and fee income metrics NII / AA (%) 109 1.09 3 36 | [ Iu. I :° | ae a ee eaaa ae Net NIE / AA (%) ‘ete! a 22 2s 2D a ae Core Non Core NIE /AA (96) lI ee 1s" av Core mNon-Core Efficiency Ratio (%) ras 7330 8257 79.08 2ni9y e204 zany amv smcore mNon-core Not Non-coreincudes impact of noneeurin
Slide 18: Net interest margin detail
Net interest margin detail 7.00 6.36% 6.00 5.00 7 202302: 4.00 2023Q2 NIM of 2.65% 3 2.71% 2.69% 2.00 2.03% 1.00 0.00 2019@1 «201993» 020Q1-—=—«2020Q3.~«=—20zIQ_«—=—2021Q3 202201202208» 2023Q1—202308 —Yield on Securities. —=Net Interest Margin —=Yield on Loans —=Cost of Int-bearing Deposits. Yield o
Slide 19: Bottom line financial results
Bottom line financial results Earnings per Share gous24 289 2.569 iat $2.20 sia05tae a ee ee en) Hl Reporteders core eps Annualized Tangible Book Value per Share sais 529.99 $28.42 cia $26.95 527. ail 2oiy — 20a0Y = ORY 0202293 Mitsv(exaoc) rev (2)_Tengblebookvalue enon GAAP nancial measure Sees 24
Slide 20: Key investment considerations
Key investment ‘ considerations . Loyal customer following in strong and stable market Positioned adjacent to other healthy, growing markets * Collaborative, experienced management team focused on long- term shareholder results * Growing loan and deposit balances * Opportunity to remix the balance s
Slide 21: Board of directors
F&M Bank Corp. board of directors Michael Pugh - Chairman Peter Wray President of Old Dominion Realty, nc. and VP of Colonial Appraisal Service, nc. Principal broker at Triangle Realtors Chair of Executive Committee Dean Withers — Vice Chairman Ray Burkholder Previously served as Chief Executive Off
Slide 22: Appendix
Appendix
Slide 23: Non-GAAP reconciliation (page 1 of 4)
Non-GAAP reconciliation (page 1 of 4) 9/30 YTD Net interest income 31,392 § 31,064 31,274 34,939 23,585 Provision for Credit Losses 7,405 3,300 (2,821) 866 1,159 Noninterest Income 9,920 12,210, ‘11,831 10,236, 7,275 Realized 6 it - - (525) (2,852) ; Non-Recurring Revenue” - : = 3,785, 370 Nonintere
Slide 24: Non-GAAP reconciliation (page 2 of 4)
Non-GAAP reconciliation (page 2 of 4) ‘common Equity S suo S$ Lon $ 1046 (tangible sss 301 300 3169 Tangible common Equity “S6h2a8” “3 —65009" S_57.267 9 20c1 gay Gorm __ 60) "TCE (ExAOCT 3 wa SF _a106 S123 Common hares Outstanding 3.208498 «3203372344 3562573482217 Tota assets S sin § seem Ss 1238
Slide 25: Non-GAAP reconciliation (page 3 of 4)
Non-GAAP reconciliation (page 3 of 4) fretar it incme Ss 4m § oms S| Bon Same Same ‘()) Realized Gains on Securities : - (525) (2,852) - {} Now Reng Revewe ; Sas am {+) Non-Recurring Expense = a = = 1,025 CorPretaxNethcone — “aap oes ase Tas aa Provan for ret Loses rsa) wn Ta Ter Faas Soa Foe Far co
Slide 26: Non-GAAP reconciliation (page 4 of 4)
Non-GAAP reconciliation (page 4 of 4) Source SUP CaptalQ Pro; Comoany fin 2019 20207 ony vo TotalNoninterestincome «$9820 -$ «IONS S$ | OSS TB 14788 (0) Realized Gains on Securities (2) (285) 2 {Q) Non Recurring Revenue - = 375, 370 CoreNoninterestincome “Sago “Stans “Sass S185 Zaas TotalNoninterest