SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 20, 1999
F&M BANCORP
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(Exact name of registrant as specified in its charter)
Maryland 0-12638 52-1316473
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
110 Thomas Johnson Drive
Frederick, Maryland 21702
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(Address of principal executive offices) (Zip Code)
(301) 694-4000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS.
On January 20, 1999, F&M Bancorp issued a press release which
included the publication of certain financial data of the combined
operations of F&M Bancorp and Monocacy Bancshares, Inc. for the period
ended December 31, 1998. This press release is attached hereto as Exhibit
99.1 and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENT AND EXHIBITS.
(c) Exhibits
99.1 Press Release issued by F&M Bancorp on January 20,
1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunder duly authorized.
Dated: January 20, 1999
F&M BANCORP
By: /s/ Gordon M. Cooley
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Name: Gordon M. Cooley
Title: Secretary and General Counsel
EXHIBIT INDEX
Exhibit
Number Description
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99.1 Press Release issued by F&M Bancorp on January 20,
1999.
EXHIBIT 99.1
JANUARY 19, 1999
F&M BANCORP REPORTS INCREASED EARNINGS
David L. Spilman, Treasurer, (888) 694-4170, www.fmbn.com
Frederick, MD, January 19, 1999 - F&M Bancorp (NASDAQ:FMBN), headquartered
in Frederick, MD, today reported a 7% increase in earnings, before
merger-related expenses and special items, to $14.953 million, or $1.71 per
share for 1998, compared with $13.976 million, or $1.61 per share for 1997.
All periods reported include the financial results for Monocacy Bancshares,
Inc., acquired November 30, 1998 in a pooling-of-interests transaction. Per
share amounts are based on diluted shares outstanding and give effect to
the 5% stock dividend declared in June 1998 and the acquisition of
Keller-Stonebraker Insurance, Inc. completed in May 1998 and accounted for
as a pooling-of-interests.
Net income for 1998, including merger-related expenses and special items,
amounted to $13.092 million, or $1.49 per share, compared with $14.226
million, or $1.64 per share for 1997. Merger-related expenses for the full
year amounted to $2.837 million after tax, or $0.32 per share. Special
items for 1998 included a $315 thousand after-tax gain on the sale of real
estate, or $0.04 per share, and $661 thousand in after-tax gains on
securities transactions, or $0.07 per share. Merger-related expenses for
1997 amounted to $294 thousand after tax, or $0.03 per share. Special items
for 1997 included a $552 thousand gain on sale of merchant services, or
$0.06 per share, $177 thousand in after-tax litigation costs, or $0.02 per
share, and a $110 thousand gain on the sale of loans, or $0.01 per share.
Faye E. Cannon, president and chief executive officer, said, "Our financial
results include significant efficiencies realized through the mid-year
integration of core processing systems and administrative functions of our
Hagerstown affiliate, Home Federal Savings Bank. We look forward to the
benefits associated with the conversion and integration of Monocacy's
subsidiary, Taneytown Bank & Trust Company, in February. Our continuing
focus on cost containment, operating efficiencies, and growth in
noninterest income has helped relieve the pressure on net interest income
resulting from a highly competitive lending environment and relatively low
interest rates, and is improving the quality of our earnings."
Net interest income increased by 1.0% in 1998, while noninterest income,
driven largely by fees and service charges on deposit accounts and mortgage
banking income, increased by 7.3%, excluding special items. Total
noninterest expense, excluding merger-related costs and special items,
increased by 1.6%, which improved the efficiency ratio to 63.87% for 1998,
from 64.33% for 1997. Return on average assets and return on average
equity, based upon earnings before merger-related expenses and special
items, were 1.10% and 11.58%, respectively, for 1998, compared with 1.08%
and 11.76%, respectively, for 1997.
Addressing Year 2000 issues, F&M Bancorp said that its Year 2000 Assurance
Plan was progressing on schedule and in coordination with the guidance of
bank regulators, including consideration of systems and services in place
at Taneytown Bank & Trust Company. Affected systems have been identified,
and those that are deemed to be "mission critical" are getting priority
attention. Testing to assure compliance has been underway since mid-year
1998 and was substantially complete by December 31, 1998. All phases of
Year 2000 Contingency Planning are substantially complete. The company has
been conducting seminars on Year 2000 Issues and is keeping its customers
informed of progress with periodic communications updates.
F&M Bancorp had total assets of $1.447 billion and total deposits of $1.136
billion at December 31, 1998. Including the newly acquired offices of
Taneytown Bank & Trust Company, F&M Bancorp's lead bank subsidiary, Farmers
& Mechanics National Bank, Frederick, MD, operates 35 full-service
community offices and 38 ATMs across Frederick, Carroll, Montgomery,
Baltimore, and Howard Counties in Maryland, and Adams County, PA. Farmers &
Mechanics also operates the East Coast's first full service mobile unit,
Express Bank, and delivers electronic services throughout its market with
personal and business PC banking access and with its 24-hour telephone
banking service, ExpressLine. The bank's Hagerstown, MD-based subsidiary,
Keller-Stonebraker Insurance, Inc., provides a full line of consumer and
commercial business insurance products. F&M Bancorp's Hagerstown, MD-based
subsidiary, Home Federal Savings Bank, offers full-service banking through
eight community offices, 18 ATMs, and other electronic banking systems in
Washington and Allegany Counties, MD.
(FINANCIAL HIGHLIGHTS FOLLOW)
FINANCIAL HIGHLIGHTS
F&M Bancorp and Subsidiaries
<TABLE>
<CAPTION>
Three month period Twelve month period
ended December 31, % ended December 31, %
(Dollars in thousands, --------------------------- ---------------------------
except per share amounts) 1998 1997 Change 1998 1997 Change
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING DATA
Interest income $25,005 $25,072 -0.3% $99,179 $96,397 2.9%
Interest expense 12,260 11,833 3.6 47,223 44,944 5.1
-------------------------- --------------------------
Net interest income 12,745 13,239 (3.7) 51,956 51,453 1.0
Provision for credit losses 525 500 5.0 2,306 2,910 (20.8)
-------------------------- --------------------------
Net interest income after
provision for credit losses 12,220 12,739 (4.1) 49,650 48,543 2.3
-------------------------- --------------------------
Trust income 598 763 (21.6) 2,671 2,715 (1.6)
Service charges on deposit accounts 1,573 1,535 2.5 6,007 5,855 2.6
Insurance income 471 536 (12.1) 2,326 2,254 3.2
Other noninterest income 1,962 1,441 36.2 7,382 6,304 17.1
-------------------------- --------------------------
Total noninterest income 4,604 4,275 7.7 18,386 17,128 7.3
-------------------------- --------------------------
Salaries and employee benefits 6,837 6,576 4.0 26,523 25,550 3.8
Occupancy and equipment 1,894 2,045 (7.4) 7,786 7,864 (1.0)
Other noninterest expense 3,537 3,213 10.1 13,019 13,179 (1.2)
-------------------------- --------------------------
Total noninterest expense 12,268 11,834 3.7 47,328 46,593 1.6
-------------------------- --------------------------
Income before provision for income tax 4,556 5,180 (12.0) 20,708 19,078 8.5
Provision for income taxes 1,162 1,388 (16.3) 5,755 5,102 12.8
-------------------------- --------------------------
Net income-before special items 3,394 3,792 (10.5) 14,953 13,976 7.0
Special items-net of income tax (2,336) (242) - (1,861) 250 -
-------------------------- --------------------------
Net income-reported $1,058 $3,550 (70.2) $13,092 $14,226 (8.0)
========================== ==========================
PER SHARE DATA
Net income before special items (Basic) $0.39 $0.44 -11.0% $1.73 $1.62 6.4%
Net income before special items (Diluted) 0.39 0.43 (10.9) 1.71 1.61 5.9
Net income (Basic) 0.12 0.41 (70.4) 1.51 1.65 (8.5)
Net income (Diluted) 0.12 0.41 (70.3) 1.49 1.64 (8.9)
Cash dividends paid 0.27 0.17 58.8 1.06 0.68 55.9
Book value 15.07 14.56 3.5
Market value, NASDAQ/NMS:FMBN 32.75 36.19 (9.5)
KEY RATIOS
Return on average assets 0.29% 1.05% 0.96% 1.10%
Return on average equity 3.17 11.42 10.13 11.97
Net interest margin 4.04% 4.43% 4.29% 4.51%
Efficiency ratio 66.68% 63.69% 63.87% 64.33%
Equity capital ratio 9.04 9.40
SELECTED AVERAGE BALANCES
Securities $389,331 $331,033 17.6% $355,754 $319,920 11.2%
Loans, net of unearned income 885,006 882,760 0.3 879,705 860,993 2.2
Earning assets 1,321,901 1,241,535 6.5 1,269,330 1,197,635 6.0
Assets 1,423,830 1,336,310 6.5 1,365,559 1,295,580 5.4
Deposits 1,081,458 1,021,191 5.9 1,049,417 1,006,047 4.3
Borrowings 173,169 152,698 13.4 149,761 130,631 14.6
Shareholders' equity 132,299 123,344 7.3 129,179 118,883 8.7
AT PERIOD END
Securities $418,366 $326,169 28.3%
Loans, net of unearned income 891,741 882,550 1.0
Earning assets 1,345,822 1,238,513 8.7
Assets 1,447,231 1,335,834 8.3
Deposits 1,135,743 1,050,837 8.1
Borrowings 165,148 146,165 13.0
Shareholders' equity 130,824 125,635 4.1
ASSET QUALITY
Nonperforming assets $5,900 $12,549 53.0%
Nonperforming assets/total assets 0.41% 0.94%
Allowance/total loans 1.44 1.37
</TABLE>
