F & M Bank Corp. · OTC:FMBM
F & M Bank — Investor Presentation (September 2016)
25 slides from F & M Bank's investor presentation, Sep 21, 2016
Slide 1: F&M Bank Corp. 2016
é ane > F&M Bank Corp. BESTS9 ONTO Vlwu 2016
Slide 2: Caution Regarding Forward Looking Statements
Caution Regarding Forward Looking Statements ) 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 p
Slide 3: Executive Management Team
Executive Management Team Gap F&M Bank Corp. Thomas “Tom” L. Cline, Chairman of the Board Trucking industry for 40+ years, Public accounting 6+ years, lifetime farmer Dean Withers, President/CEO CEO since 2004, with 38+ years in financial services industry Carrie Comer, SVP/Chief Financial Officer C
Slide 4: A Community Focused Institution
A Community Focused Institution GP F&M Bank Corp. “Community Banking at its Finest” Chartered in 1908, Farmers & Merchants Bank has served its local communities for more than 100 years Q Leading, progressive independent bank in the Shenandoah Valley — serving small to medium size businesses with div
Slide 5: Industry Recognition and Accolades
Industry Recognition and Accolades Ga F&M Bank Corp. = 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 social media efforts by the ICBA — July 20
Slide 6: Franchise Footprint — Shenandoah Valley
Franchise Footprint — Shenandoah Valley Q) 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 = Strategically
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 Ge F&M Bank Corp. Creating Shareholder Value Through Disciplined Growth $5.00 og dividend Viel? 3) ae > $25.00 $23.10 $4.00 $20.00 $3.00 $15.00 $2.55 $2.40 $2.00 tid $1.88 $1.82 $10.00 $1.00 0.64 0.68 0.68 0.73 sit 95:00 $0.00 $0.00 2012 2013 2014 2015 6/30/2016 (Annualized)
Slide 9: Balance Sheet Highlights
Balance Sheet Highlights Ga F&M Bank Corp. Diener fs fine [as [oan Total Asset $552,788 $605,308 $665,150 $730,038 Total Gross Loans Held for Investment $478,453 $518,202 $544,053 $565,999 Total Gross Loans Held for Sale $3,804 $13,382 $57,806 $97,211 Total Deposits $464,149 $491,505 $494,670 $504,7
Slide 10: Capital Highlights
Capital Highlights Ga F&M Bank Corp. Dollars in Thousands ($000’s) EEE 6/30/16 Total Equity $54,141 $77,798 $82,950 $85,982 Tangible Common Equity $51,978 $67,603 $72,963 $75,953 Total Equity/Assets 9.79% 12.85% 12.47% 11.78% Tangible Equity/Tangible Assets 9.36% 11.22% 11.01% 10.44% Tier 1 RBC Rati
Slide 11: Asset Quality Highlights
Asset Quality Highlights Ga F&M Bank Corp. Dollars in Thousands ($000’s) 2013 E—] 6/30/16 NPA/Asset 2.28% 1.73% 1.34% 1.14% NCOs/Avg Loans Held for Investment* -66% 34% .05% .26% Reserves/Loans Held for Investment 1.71% 1.68% 1.61% 1.43% Reserves/NPAs 53.8% 83.2% 101.5% 96.8% NPL/Assets 2.28% 1.15%
Slide 12: Core Earnings Highlights
Core Earnings Highlights Ga F&M Bank Corp. polrsinThowanés(0ons) | 2s | aia | 238. | 6/0/i 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 * Annualized $4,716 $9,650 0.84%
Slide 13: Margin Analysis
Margin Analysis Gap F&M Bank Corp. NET INTEREST MARGIN 2 4.43 4.39 4.4 4.30 43 4.2 41 4.02 4 3.9 3.8 DEC 2013 DEC 2014 DEC 2015 JUN 2016 > Dealer Finance division has been accretive to the NIM » Redemption of subordinated debt notes in December 2014 reduced long term cost of funds
Slide 14: Loan Portfolio
Loan Portfolio Gap F&M Bank Corp. Loan Held for Investment Mix: $566.0 million at 6/30/16 > 1-4 family comprises the largest concentration at 30% > Total real estate exposure is 82%; but only 13% construction and development >» Consumer is the fastest growing category >» Owner-occupied CRE and C&l l
Slide 15: Loan Portfolio Detail
Loan Portfolio Detail Gp F&M Bank Corp. ($000s) 2013 2014 2015 6/30/16 c&D 68,512 67,180 69,759 76,017 Agriculture 13,197 12,507 13,378 12,867 HELOC 57,586 61,576 65,734 67,452 1-4 Family 154,628 162,249 166,587 169,140 F Multifamily 11,797 11,775 7,558 6,607 cai “ Owner-Occupied CRE 58,704 59,689 5
Slide 16: Dealer Finance Division
Dealer Finance Division Ga F&M Bank Corp. DEALER STATISTICS 4,440,000 70,000,000 3,240,000 60,000,000 3,440,000 50,000,000 2,940,000 2,440,000 40,000,000 1,940,000 30,000,000 1,440,000 20,000,000 940,000 440,000 10,000,000 (60,000) - 2013 2014 2015 6/30/2016 Annualized ME Gross Income ME Net Income
Slide 17: Dealer Finance Division
Dealer Finance Division Ga F&M Bank Corp. Average National Delinquency (Trans Union) > 60 Days Delinquent 2"4 Quarter 2015 3° Quarter 2015 1.16% 1.25% 4% Quarter 2015 1.24% 1.06% -76% 1st Quarter 2016 1.12% 97% 89% 2"4 Quarter 2016 TBA TBA 67% Delinquency Ratio # Ratio $ Ratio 1st Quarter 2016 2.61
Slide 18: Dealer Finance Division
Dealer Finance Division Ge F&M Bank Corp. Credit Score 507 Loans $3,346,016.27 : ™ 660 and Above 1507 Loans $17,669,501.73 @ 659-620 891 Loans $10,215,926.94 ™ 619 and Below @ Full Recourse
Slide 19: Nonperforming & Adversely Classified Assets
Nonperforming & Adversely Classified Assets Gap F&M Bank Corp. Historical Nonperforming Assets (S Millions) $12.6 $7.0 $6.6 $5.5 $3.6 $2.6 0 $2.4 $2.8 2013 2014 2015 6/30/16 @Nonperforming Loans ™ OREO & Repos > Total NPAs were $8.3 million at 6/30/16 > Classified assets have decreased by $33.8 mill
Slide 20: Funding Overview - Deposit Composition
Funding Overview - Deposit Composition Gap F&M Bank Corp. DEPOSIT MIX 6/30/16 = Non Int. Bearing = NOW & Other Trans. = MMDA & Sav = Retail CDs = Jumbo CDs > The Deposit mix is desirable, with a deposit cost of 62 basis points at 6/30/16 > Non Interest Bearing deposits represent 26% of total deposit
Slide 21: Deposit Composition
Deposit Composition Gap F&M Bank Corp. Non Interest Bearing $92,397 $112,198 $134,787 $133,494 NOW & Other Trans. $92,562 $93,693 $81,492 $83,324 MMDA & Sav $83,186 $90,149 $117,351 $127,979 Retail CDs $126,330 $115,651 $107,415 $109,895 Jumbo CDs $69,674 $79,813 $53,625 $50,019 Total Deposits $464,
Slide 22: Strategic Focus
STRATEGIC FOCUS OQ) Strong growth and franchise expansion opportunities exist Augusta County — expansion to the south * — With recent merger activity — large community bank voi exists in this market and FMBM is experiencing increased activity as a result * — Two full service branches opened | in ao
Slide 23: Why F&M Bank Corp?
<2 F&M Bank C WHY F&M Bank Corp? Q) Further development of a profitable franchise = FMBM is already 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 deposit
Slide 24: Board of Directors
Board of Directors Gap F&M Bank Corp. Thomas L. Cline * Chairman of the Board * Retired President of Truck & Equipment Corp. and Mac Lease, Inc. Ellen R. Fitzwater Vice Chairman of the Board ¢ Financial Manager F&R Leasing/Accounting Consultant Larry A. Caplinger * Chief Lending Officer — 40+ year h
Slide 25: < ta
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