F & M Bank Corp. · OTC:FMBM
F & M Bank — Investor Presentation (September 2020)
24 slides from F & M Bank's investor presentation, Sep 22, 2020
Slide 1: F&M Bank Corp.
F&M Bank Corp. FINANCIAL DATA AS OF JUNE 30, 2020
Slide 2: Caution Regarding Forward Looking Statements
CAUTION REGARDING FORWARD LOOKING STATEMENTS [> + Genta tines nd canal condtions inthe mares tht the Company aod ity altats serve may be es ovoxble tha atcpated wich cous ‘Sean the aman elo epost and ote faa ares so eae oa Seinguen ad dees = + Changes in markt rates and res may adversely impact he v
Slide 3: F&M at a Glance
F&M AT A GLANCE [Headquartered in the Shenandoah Valley FMBM's operating market falls within the central part of the Shenandoah Valley 3-county franchise: Rockingham, Shenandoah, and ‘Augusta, and the independent cities of Harrisonburg, ‘Staunton and Waynesboro + Strategically located along the I-81
Slide 4: Recent Successes Position the Bank for Profitable Growth
RECENT SUCCESSES POSITION THE BANK FOR PROFITABLE GROWTH Recent Successes Significant Reduction in NPAs Increased ALLL Coverage Enhanced approach to credit underwriting Significant Growth in low cost core deposits Overhead Reduction Initiatives in Place Agriculture & Dealer Loan Growth Raised $12 mi
Slide 5: Executive Management Team
EXECUTIVE MANAGEMENT TEAM 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 29 years in banking industry Carrie Comer, EVP/
Slide 6: A Community Focused Institution
A COMMUNITY FOCUSED INSTITUTION Se “COMMUNITY BANKING AT ITS FINEST” Chartered in 1908, Farmers & Merchants Bank has served its local communities for more than 110 years + Leading. progressive independent bankin the Shenandoah Valley ~srving small to medium six businesses wth diverse revenve teams +
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 Distrib
Slide 8: Market Demographics
MARKET DEMOGRAPHICS ‘Shenandoah Valley — Market Drivers + James Madison University has a signfcant impact onthe local economy wih approximately 22,000 students and ‘ver 4,000 jobs atibutable tots presence + Valley Health System, one ofthe country's leading medical systems, is the Val’ largest employ
Slide 9: Recent Company Timeline
RECENT COMPANY TIMELINE Commentary Creating shareholder value through disciplined growth: = EPShas remained strong. 2019 EPS reflects impact of resolving NPAs and increasing ALLL coverage Dividends to shareholders continue to increase with approximately 5% annualized return in. last few quarters = T
Slide 10: Earnings Highlights
EARNINGS HIGHLIGHTS Potaviniowsnsonos | iy | amie | a | 2000 | $8,823 $4,509 1.15% 0.57% Net Income $8,762 Return on average assets 1.17% Return on average equity 9.89% Net Interest Margin 4.48% Efficiency Ratio 64.3% Earnings per Share $2.68 9.67% 4.93% 4.65% 4.33% 66.0% 69.0% $2.60 $1.32 $3,816 0.
Slide 11: Key Ratios
KEY RATIOS Return on Average Assets (Net Interest Margin Peer states tom he une 0, 2019 Unferm Ban Performance Rept eet Group 3
Slide 12: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS fosennmennessaes [aur [ase | ns | aa Total Assets Total Gross Loans Held for Investment Total Gross Loans Held for Sale Total Deposits Loans Held for Investment/Deposits Loans Held for Investment/Deposits (excluding Dealer Portfolio) Total Equity Total Equity/Assets $752,894
Slide 13: Asset Quality Highlights
ASSET QUALITY HIGHLIGHTS eer OO Mm aE) NPA/Assets: 0.89% 0.57% 121% 1.62% INCOs/Avg Loans Held for Investment 0.25% 0.58% o7% 0.20% Reserves/Loans Held for investment 098% 082% 139% 152% Reserves/NPLs 851% 513% —146.45% 24.70% NPL/Assets 0.948% 1.31% 0.70% 0.45%
Slide 14: Non-Performing Assets
NON-PERFORMING ASSETS AS A % OF TOTAL ASSETS
Slide 15: Allowance for Loan Loss
ALLOWANCE FOR LOAN LOSS AS A % OF TOTAL LOANS (includes PPP loans) 1.61 0.97 qe ai az aris ass aris arm ari avi a2 a2
Slide 16: Loan Composition
LOAN COMPOSITION ;-—— Commentary $60.0 million in PPP loans generating $2.3 million in Fees Total real estate exposure is 72%; but only 11% construction and development (Owner-occupied CRE and C&l loans represent 24% of total loans Renewed focus on Agriculture (4 of top § Virginia Agriculture ‘count
Slide 17: Dealer Finance Division
DEALER FINANCE DIVISION DEALER STATISTICS. 2,920,000 2,980,000 940,000 (60,000) 2017 2018 2019 2a20" we Grossincome ———Loan Balance (Right Axis) * Income annualized. $29.8 million of dealer loans sold in 4Q 2019 100,000,000 60,000,000 20,000,000
Slide 18: Dealer Loan Quality Continues to Outperform Peers
DEALER LOAN QUALITY CONTINUES TO OUTPERFORM PEERS INDIRECT/DEALER DELINQUENCY RATIOS (Experian) National State Average F&M Bank Average Dealer Division sodey | soda | ada | Dey | aDey | s0Day asz019 | 225%, 75% 207% “7% 165% | som eens | 231% 78% 213% 68% alam | 768 a1200 | 1.29%, 55% 17% 59% 16m |
Slide 19: Deposit Composition
DEPOSIT COMPOSITION Commentary > Low cost transaction accounts continue to grow > Non Interest-Bearing deposits have increased 39% since 2017. > The Deposit mix is desirable, with a deposit cost of 104 basis points at 6/30/20. Deposit Composition Total Deposits $766,652 at 6/30/20 0s, 17% p Noninter
Slide 20: Total Deposits
TOTAL DEPOSITS (in Millions) $767
Slide 21: COVID-19 Loan Modifications
COVID-19 LOAN MODIFICATIONS Loan Payment Deferrals Loan Type Deferral Balance | # Loans Deferral Balance 05/33/20 09/15/20 (Seitions) (Smitions) 534 2 $04 7 $07 58 $22.2 a saa Hoans 94 2
Slide 22: Enhanced Monitoring
ENHANCED MONITORING i) Sector °% of Loans LTV % Hotels 2.2% 40.1% Flagged 10.3 Food Service $ 87 1.3% 33.1% Brewery/Winery 38 Restaurant - Full Service 35 catering 02 Recreation $ 15.3 2.3% 27.2% Sports Complex 66 campground 40 Fairgrounds 04 ‘other 23 Assisted Living $ 10.9 1.6% 64.9% Retail/CRE $
Slide 23: Board of Directors
Ss BOARD OF DIRECTORS sane con Mike W. Pugh * Chair of the Board + President of Old Dominion Realty, nc. & 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 Christophe
Slide 24: F&M Bank Corp.
F&M Bank Corp.