F & M Bank Corp. · OTC:FMBM
F & M Bank — Investor Presentation (March 2017)
23 slides from F & M Bank's investor presentation, Mar 17, 2017
Slide 1: F&M Bank Corp. 2016
« ane > F&M Bank Corp. BESTS9O ONTO Villu 2016
Slide 2: Caution Regarding Forward Looking Statements
Caution Regarding Forward Looking Statements a) 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: Executive Management Team
Executive Management Team Gap F&M Bank Corp. Ellen R. Fitzwater, Chair of the Board Partner/Financial Manager of F&R Leasing, LLC for 30+ years and 33+ years experience in corporate entities Dean Withers, President/CEO CEO since 2004, with 38+ years in financial services industry Carrie Comer, SVP/C
Slide 4: 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 aQ Q Q Leading, progressive independent bank in the Shenandoah Valley — serving small to medium size businesses with diverse revenue
Slide 5: Industry Recognition and Accolades
Industry Recognition and Accolades Gap F&M Bank Corp. = Named one of 2016 Best 50 on the OTCQX. = Ranked 138th of top 200 banks in US for 3 year average ROE — American Banker Magazine, April 2016 ® Ranked 3rd of top 50 US loan producers by IB Magazine — July 2016 = Recognized as a top 50 US bank for
Slide 6: Franchise Footprint — Shenandoah Valley
Franchise Footprint — Shenandoah Valley <2 F&M Bank C QC) FMBM is headquartered within the Shenandoah Valley Region of Virginia: «= FMBM’s operating market falls within the central part of the Shenandoah Valley * 4-county franchise: Rockingham, Shenandoah, Page and Augusta and 3 independent cities =
Slide 7: Market Overview — Shenandoah Valley
Market Overview — Shenandoah Valley Ga F&M Bank Corp. Q) Predominately 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
Slide 8: Recent Company Timeline
Recent Company Timeline Ga F&M Bank Corp. Creating Shareholder Value Through Disciplined Growth $5.00 $25.00 $4.00 $20.00 $3.00 oF $15.00 $2.40 $2.00 = sie $182 $10.00 1.00 5.00 $ 0.64 0.68 0.68 0.73 wad $ $0.00 $0.00 2012 2013 2014 2015 2016 @EBEarnings Per Share ABB Dividends Per Share Tangible Bo
Slide 9: Earnings Highlights
Earnings Highlights a) F&M Bank Corp. Net Income $4,716 $5,801 $8,417 $9,567 Core pre-tax, pre-provision earnings $9,650 $10,390 $11,768 $12,860 Return on average assets 0.84% 1.00% 1.31% 1.34% Return on average equity 9.11% 8.65% 10.46% 11.18% Return on average TCE 9.36% 9.48% 11.25% 12.59% Net Int
Slide 10: Key Ratios
Key Ratios 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 ROAA 2013 2014 ROAA 2015 2016 mms FRM Bank ———=Peer Median ———Peer Top 20% NET INTEREST MARGIN 434 483 430 oo! moe 43s 4.02 i. 3.68. 3.64 ec 2043 exc aoe ec 2015 3.65 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 69.00 67.00 65.00 63.00 61.00 59.0
Slide 11: Balance Sheet Highlights
Balance Sheet Highlights am) F&M Bank Corp. Dollars in Thousands ($000’s) - Total Asset Total Gross Loans Held for Investment Total Gross Loans Held for Sale Total Deposits ‘ Loans Held for Investment/Deposits Total Equity Total Equity/Assets $552,788 $605,308 $665,150 $744,889 $478,453 $518,202 $54
Slide 12: Asset Quality Highlights
Asset Quality Highlights am) F&M Bank Corp. NPA/Asset NCOs/Avg Loans Held for Investment Reserves/Loans Held for Investment Reserves/NPAs NPL/Assets 2.28% -66% 1.71% 53.8% 2.28% 1.73% 34% 1.68% 83.2% 1.15% 1.34% 05% 1.61% 101.5% -98% -94% 22% 1.27% 107.7% 65% 12 1118 0 om
Slide 13: Loan Portfolio
Loan Portfolio Gap F&M Bank Corp. Loan Held for Investment Mix: $591.6 million at 12/31/16 Gp 2% 1% = C&D ® Agriculture = HELOC > 1-4 family comprises the largest concentration at 29% > Total real estate exposure is 90%; but only 13% construction and development > Consumer is the fastest growing cat
Slide 14: Loan Portfolio Detail
Loan Portfolio Detail Gp F&M Bank Corp. 2014 2015 67,180 69,759 76,172 12,507 13,378 +~=—«12,901 HELOC 61,576 65,734 65,873 1-4 Family 162,249 166,587 172,758 | Multifamily 11,775 7,558 7,605 Owner-Occupied CRE 58,870 71,123 = Non-Owner Occ. CRE 69,162 78,938 c&l 27,955 31,306 Consumer & other 65,05
Slide 15: Dealer Finance Division
Dealer Finance Division Ga F&M Bank Corp. DEALER STATISTICS 4,940,000 70,000,000 4,440,000 60,000,000 3,940,000 5480;000 50,000,000 27240,000 40,000,000 2,440,000 1,940,000 30,000,000 1,440,000 20,000,000 940,000 10,000,000 440,000 | = I (60,000) 2013 2014 2016 mB Gross Income Mmmm Net Income Loan B
Slide 16: Dealer Finance Division
Dealer Finance Division Ga F&M Bank Corp. Average National Delinquency (Trans Union) > 60 Days Delinquent P| Nationalave | Virginia AVG 1st Quarter 2016 1.12% .97% .89% 2"4 Quarter 2016 1.11% ? 67% 34 Quarter 2016 1.33% 1.12% 49% 4‘ Quarter 2016 1.44% 1.24% 58% 16
Slide 17: Nonperforming & Adversely Classified Assets
Nonperforming & Adversely Classified Assets Gap F&M Bank Corp. Historical Nonperforming Assets (S Millions) $12.6 $7.0 $6.6 $4.9 $3.6 $2.6 _ $2.4 $2.1 2013 2014 2015 2016 @Nonperforming Loans ™ OREO & Repos > Total NPAs were $7.0 million at 12/31/16 > Classified assets have decreased by $37.4 millio
Slide 18: Funding Overview - Deposit Composition
Funding Overview - Deposit Composition Gap F&M Bank Corp. DEPOSIT MIX 12/31/16 = Non Int. Bearing = NOW & Other Trans. MMDA & Sav = Retail CDs = Jumbo CDs >» The Deposit mix is desirable, with a deposit cost of 64 basis points at 12/31/16 > Non Interest Bearing deposits represent 27% of total deposi
Slide 19: Deposit Composition
Deposit Composition Ga F&M Bank Corp. Non Interest Bearing $92,397 $112,198 $134,787 $146,617 NOW & Other Trans. $92,562 $93,693 $81,492 $92,872 MMDA & Savings $83,186 $90,149 $117,351 $140,368 Retail CDs $126,330 $115,651 $107,415 $106,359 Jumbo CDs $69,674 $79,813 $53,625 $50,869 Total Deposits $4
Slide 20: Strategic Focus
Gp F&M Bank Corp. STRATEGIC FOCUS QO) 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 Craigsville . Myer Corner (Fishersville) branch scheduled to open A
Slide 21: Why F&M Bank Corp?
<2 F&M Bank. WHY F&M Bank Corp? Q Further development of a profitable franchise FMBM is a highly profitable institution — growth in the franchise increases tangible book value and earnings per share Shenandoah Valley is a liquid deposit market and FMBM continues to replace time deposits with lower c
Slide 22: Board of Directors
Board of Directors Gap ‘orp. Ellen R. Fitzwater * Chairman of the Board Financial Manager F&R Leasing/Accounting Consultant 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 * Mayor of the
Slide 23: < ta
< ta F&M Bank Corp.