UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
Quarterly report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended Commission File Number: 0-13273
June 30, 1995
F & M BANK CORP.
Virginia 54-1280811
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
Drawer F
Timberville, Virginia 22853
(703) 896-8941
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirement for the past 90 days. Yes ..X. No ....
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.
Class Outstanding at June 30, 1995
Common Stock, par value - $5 814,288 shares
Page
F & M BANK CORP.
INDEX
Page
PART I FINANCIAL INFORMATION 2
Item 1. Financial Statements
Consolidated Statements of Income - Six Months
Ended June 30, 1995 and 1994 2
Consolidated Statements of Income - Three Months
Ended June 30, 1995 and 1994 3
Consolidated Balance Sheets - June 30, 1995 and
December 31, 1994 4
Consolidated Statements of Cash Flows - Six Months
Ended June 30, 1995 and 1994 5
Consolidated Statements of Changes in Stockholders'
Equity - Six Months Ended June 30, 1995 and 1994 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II OTHER INFORMATION 15
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibit and Reports on Form 8K 15
SIGNATURES 19
Page
Part I Financial Information
Item 1 Financial Statements
F & M BANK CORP.
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars)
Six Months Ended
June 30,
1995 1994
Interest Income
Interest and fees on loans $ 3,981 $ 3,477
Interest on federal funds sold 43 44
Interest on interest bearing deposits 19 20
Interest and dividends on investment securities
Taxable 1,207 1,184
Nontaxable 31 81
Total Interest Income 5,281 4,806
Interest Expense
Interest on demand accounts 310 328
Interest on savings deposits 596 507
Interest on time deposits 1,041 864
Total interest on deposits 1,947 1,699
Interest on short-term debt 5 4
Interest on long-term debt 592 520
Total Interest Expense 2,544 2,223
Net Interest Income 2,737 2,583
Provision for Loan Losses 40 30
Net Interest Income after Provision
for Loan Losses 2,697 2,553
Noninterest Income
Service charges 119 105
Other 79 55
Security gains (losses) 328 455
Total Noninterest Income 526 615
Noninterest Expense
Salaries 721 648
Employee benefits 284 256
Occupancy expense 72 68
Equipment expense 100 106
FDIC insurance 111 110
Other 423 362
Total Noninterest Expense 1,711 1,550
Income before Income Taxes 1,512 1,618
Provision for Income Taxes 439 481
Net Income $ 1,073 $ 1,137
Per Share Data
Net Income $ 1.32 $ 1.40
Cash Dividends $ .40 $ .35
Equivalent Shares Outstanding 814,288 814,288
The accompanying notes are an integral part of these statements.
Page
F & M BANK CORP.
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars Except Per Share Amounts)
Three Months Ended
June 30,
1995 1994
Interest Income
Interest and fees on loans $ 2,054 $ 1,778
Interest on federal funds sold 37 19
Interest on time deposits 15 15
Interest and dividends on investment securities
Taxable 624 601
Nontaxable 14 42
Total Interest Income 2,744 2,455
Interest Expense
Interest on demand deposits 150 164
Interest on savings accounts 295 253
Interest on time deposits 590 429
Total interest on deposits 1,035 846
Interest on short-term debt 2 2
Interest on long-term debt 308 289
Total Interest Expense 1,345 1,137
Net Interest Income 1,399 1,318
Provision for Loan Losses 24 15
Net Interest Income after Provision
for Loan Losses 1,375 1,303
Noninterest Income
Service charges 59 55
Other 41 7
Security gains 176 479
Total Noninterest Income 276 541
Noninterest Expense
Salaries 357 327
Employee benefits 144 125
Occupancy expense 40 34
Equipment expense 57 52
FDIC insurance 56 55
Other 219 198
Total Noninterest Expense 873 791
Income before Income Taxes 778 1,053
Provision for Income Tax 223 330
Net Income $ 555 $ 723
Per Share Data
Net Income $ .68 $ .89
Cash Dividends $ .20 $ .20
Equivalent Shares Outstanding 814,288 814,288
The accompanying notes are an integral part of these statements.
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F & M BANK CORP.
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
June 30, December 31,
ASSETS 1995 1994
Cash and due from banks $ 2,863 $ 2,921
Federal funds sold 1,980
Interest bearing deposits in banks 646 58
Securities held to maturity (note 3) 33,734 34,855
Securities available for sale (note 3) 8,935 9,137
Other investments 1,376 1,766
Loans, net of unearned discount (note 4) 89,428 81,362
Less reserve for loan losses (note 5) (752) (744)
Net Loans 88,676 80,618
Bank premises and equipment 1,953 1,560
Interest receivable 1,066 1,002
Other assets 613 732
Total Assets $ 141,842 $ 132,649
LIABILITIES
Deposits
Noninterest bearing demand $ 10,044 $ 10,299
Interest bearing
Demand 19,448 21,304
Savings deposits 29,349 29,308
Time deposits 46,489 37,843
Total Deposits 105,330 98,754
Short-term debt 467 533
Long-term debt 18,795 17,957
Accrued expenses 1,067 509
Total Liabilities 125,659 117,753
STOCKHOLDERS' EQUITY
Common stock $5 par value, 814,288 shares
issued and outstanding 4,071 4,071
Surplus 747 747
Retained earnings 10,941 10,194
Unrealized gain (loss) on securities
available for sale 424 (116)
Total Stockholders' Equity 16,183 14,896
Total Liabilities and Stockholders' Equity $ 141,842 $ 132,649
The accompanying notes are an integral part of these statements.
Page
F & M BANK CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
Six Months Ended
June 30,
1995 1994
Cash Flows from Operating Activities:
Net income $ 1,073 $ 1,137
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 86 94
Amortization of security premiums 74 101
Gain on security transactions (328) (455)
Provision for loan losses 40 30
Increase in interest receivable (64) (45)
Decrease in other assets 119 52
Increase in accrued expenses 298 199
Total Adjustments 225 (24)
Net Cash Provided by Operating Activities 1,298 1,113
Cash Flows from Investing Activities:
Proceeds from sales of investments
available for sale 1,578 729
Proceeds from maturity of investments
available for sale 2,392 1,134
Proceeds from maturity of investments
held to maturity 8,185 6,564
Purchase of investments available for sale (819) (901)
Purchase of investments held to maturity (9,157) (8,503)
Net increase in federal funds sold (1,980)
Net increase in loans (8,098) (4,705)
Purchase of property and equipment (479) (223)
Net Cash Used in Investing Activities (8,378) (5,905)
Cash Flows from Financing Activities:
Net increase (decrease) in deposits 6,576 (340)
Net decrease in short-term borrowings (66) (455)
Additions to long-term borrowings 2,000 6,000
Repayment of long-term borrowings (1,162) (644)
Payment of dividends (326) (285)
Net Cash Provided by Financing Activities 7,022 4,276
Net Decrease in Cash and Cash Equivalents (58) (516)
Cash and Cash Equivalents at Beginning of Period 2,921 2,745
Cash and Cash Equivalents at End of Period $ 2,863 $ 2,229
Supplemental Disclosure
Cash paid for:
Interest expense $ 2,630 $ 2,361
Income taxes 395 318
The accompanying notes are an integral part of these statements.
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F & M BANK CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In Thousands of Dollars)
Six Months Ended
June 30,
1995 1994
Balance, beginning of period $ 14,896 $ 13,634
Net income 1,073 1,137
Dividends declared (326) (285)
Cumulative effect of change in accounting for
securities available for sale (note 2) 757
Change in unrealized gain (loss) on securities
available for sale 540 (451)
Balance, end of period $ 16,183 $ 14,792
The accompanying notes are an integral part of these statements.
Page
F & M BANK CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 ACCOUNTING PRINCIPLES:
The consolidated financial statements conform to generally
accepted accounting principles and to general industry practices.
In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to
present fairly the financial position as of June 30, 1995 and the
results of operations for the six month periods ended June 30,
1995 and June 30, 1994. The notes included herein should be read
in conjunction with the notes to financial statements included in
the 1994 annual report to stockholders of the F & M Bank Corp.
NOTE 2 CHANGE IN ACCOUNTING PRINCIPLE:
Effective January 1, 1994, the Company adopted Statement of
Financial Accounting Standard No. 115, "Accounting For Certain
Investments in Debt and Equity Securities." The statement
requires that all investments in securities be classified as
either trading, available for sale or held to maturity. The
Company only invests in securities that are available for sale or
held to maturity. Those that are classified as available for
sale are carried on the balance sheet at their fair market value
and the unrecognized gain or loss is reflected as a component of
stockholders' equity. Such gains and losses are excluded from
earnings until realized. Those investments that are classified
as held to maturity are carried on the balance sheet at cost and
the gains or losses are recognized as income only when realized.
The adoption of this statement increased total stockholders'
equity by $757,000 as of January 1, 1994.
NOTE 3 INVESTMENT SECURITIES:
The amounts at which investment securities are carried in the
consolidated balance sheets and their approximate market values
at June 30, 1995 and December 31, 1994 follows:
1995 1994
Carrying Market Carrying Market
Value Value Value Value
Securities Held to Maturity
U. S. Treasury and
Agency obligations $ 27,711 $ 27,176 $ 28,529 $ 27,318
State and municipal 905 903 1,314 1,304
Other securities 5,118 5,211 5,012 5,010
Total $ 33,734 $ 33,290 $ 34,855 $ 33,632
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F & M BANK CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 INVESTMENT SECURITIES (CONTINUED):
1995 1994
Market Market
Value Cost Value Cost
Securities Available for Sale
U. S. Treasury and
Agency obligations $ 2,756 $ 2,771 $ 3,089 $ 3,281
Equity securities 6,179 5,480 6,048 6,035
Total $ 8,935 $ 8,251 $ 9,137 $ 9,316
NOTE 4 LOANS:
Loans outstanding are summarized as follows:
June 30, December 31,
1995 1994
Real Estate
Construction $ 3,380 $ 2,123
Mortgage 51,944 49,564
Commercial and agricultural 24,022 20,474
Installment 9,339 8,427
Credit cards 690 753
Other 53 21
Total $ 89,428 $ 81,362
NOTE 5 ALLOWANCE FOR LOAN LOSSES:
A summary of transactions in the allowance for loan losses
for the six months ended June 30, 1995 and 1994 follows:
1995 1994
Balance, beginning of period $ 744 $ 700
Provisions charged to operating expenses 40 30
Loan recoveries 3 27
Loan charge-offs (35) (26)
Balance, End of Period $ 752 $ 731
Page
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations
Overview
The financial condition of F & M Bank Corp. remained strong in the
first six months of 1995. Annualized growth in total assets was 13.86% and
annualized growth in deposits was 13.32%. The increase in capital of 8.64%
for the first six months was the result of retained operating income and a
significant increase in the unrealized gain on securities available for
sale. This increase was due to gains on equities held by the parent
company and a recovery in the market value of fixed rate investments due to
lower overall market rates.
Results of Operations
Year to Date
The dollar amount of the tax equivalent, net interest margin increased
5.27% in the first six months of 1995 compared to the first six months of
1994. An increase in the return on earning assets (.39%) was effectively
offset by an increase in the cost of funds (.53%). The increase in net
interest margin income is attributable to an increase in net earning assets
(i.e., volume increases) of 4.17%. A schedule of the net interest margin
for 1995 and 1994 is shown on page 13 as Table I.
Noninterest income decreased in the first six months of 1995 compared
to the first six months of 1994 due to declines in security gains of
$328,000 in 1995 compared to $455,000 in 1994. Service charges on deposits
increased in 1995 due to an increase in the deposit base and other
noninterest income increased due to better results in the area of life and
title insurance operations.
Noninterest expenses increased 10.39% in 1995 compared to 1994.
Noninterest expenses included an increase in salaries and employee benefits
of 11.17% and an increase in other noninterest expense of 16.85%. In the
first quarter of 1995, the Company opened a new branch office in
Bridgewater, Virginia and the start up expenses involved in this effort
accounted for a substantial portion of the increase in salaries, employee
benefits and noninterest expenses. In addition, the Company installed new
computer software to process all its banking applications in the second
quarter of the year and this contributed to the increase in noninterest
expense. Management believes the overall increase in noninterest expense
to be in line with asset growth and 1995 expectations. With the FDIC
insurance fund fully funded as of June 30, 1995, the Company believes that
declines in the cost of insurance should reduce future operating expenses
by $175,000 to $185,000 per year (based on the current level of deposits).
This reduction will be a key component in maintaining nonoperating expenses
at acceptable levels.
Quarter Ending June 30, 1995
Second quarter operations saw net income decline by 23.24% due to
significant declines in the amount of gains on the sale of securities.
Income from operations before security gains rose 3.74% due to an increase
in earning assets and an increase in the net interest margin. An increase
in the provision for loan losses was necessary as a result of an increasing
loan portfolio and the desire to keep the reserve to loans ratio relatively
stable. Other noninterest income reflects substantial income improvements
by the life insurance operations and higher service charges as a result of
deposit growth. Other noninterest expenses increased by 10.37% due mainly
to expenses relating to the start up of the branch operations at
Bridgewater, Virginia which commenced in April. As cited earlier, the Bank
expects future reductions in the FDIC insurance rate to translate into
quarterly savings of $40,000 - $45,000. This savings should help keep
noninterest expenses in line with past amounts and contribute to future
profitability.
Page
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations
Financial Condition
Securities
The Company's securities portfolio is held to assist the Company in
liquidity and asset liability management. The securities portfolio
consists of investment securities (commonly referred to as "securities held
to maturity") and securities available for sale. Securities are classified
as investment securities when management has the intent and ability to hold
the securities to maturity. Investment securities are carried at amortized
cost. Securities available for sale include securities that may be sold in
response to general market fluctuations, general liquidity needs and other
similar factors. Securities available for sale are recorded at market
value. Unrealized holding gains and losses of available for sale
securities are excluded from earnings and reported (net of deferred income
taxes) as a separate component of shareholders' equity. As of June 30,
1995, the market value of all securities available for sale exceeded their
amortized cost by $684,000 ($424,000 after the consideration of income
taxes). This excess is the result of increases in the value of equity
securities held by the parent which have shown substantial appreciation in
the first six months of 1995. Management has traditionally held debt
securities (regardless of classification) until maturity and thus it does
not expect the minor fluctuations in the value of the securities to have a
direct impact on earnings.
Investments in debt securities declined in the first six months of 1995
as loan demand was very strong and maturities were used to fund this loan
demand. The Company has invested in relatively short-term maturities in
anticipation of rising rates in 1994 and 1995. This philosophy allows for
greater flexibility in an environment of rapidly changing rates and has
served the Company well over the years. The Company's available for sale
securities benefitted from increases in the stock market and increases in
the fixed rate investment market. The result was an after tax increase in
the unrealized gain on these securities of $540,000 for the first six
months. Of the investments in securities available for sale, 61% are
invested in equities which are dividend producing and subject to the
dividend exclusion for taxation purposes. The Company believes these
investments render adequate current returns and have the potential for
future increases in value.
New investments in debt securities within the quarter continue to be in
maturities of short to intermediate terms in an effort to better match
interest rate sensitivity. At June 30, 1995, the Company had 32% of its
interest bearing investment in maturities of one year or less and 68% in
maturities exceeding one year. As of June 30, 1995, investments of all
types comprised 32% of total assets compared to 35% of total assets at
December 31, 1994.
Loan Portfolio
The Company operates in an agriculturally dominated area which includes
the counties of Rockingham, Page and Shenandoah in the western portion of
Virginia. The Company does not make a significant number of loans to
borrowers outside its primary service area. The Company is very active in
local residential construction mortgages. The commercial lending includes
small and medium sized businesses within its service area.
The principal economic risk associated with the loan portfolio is the
ability of its borrowers to repay. The risk associated with real estate
and installment notes to individuals is based upon employment, the local
and national economics and consumer confidence. All of these affect the
ability of borrowers to repay indebtedness. The risk associated with
commercial lending is based on the strength of the local and national
economies.
Page
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations
Loan Portfolio (Continued)
The first six months saw an unusually strong loan demand as loans grew
at an annualized rate of 19.83%. The Bank has made a conscious effort to
increase lending locally as loans represent the best return available in
the present investment market. Funding of the new loans was made possible
by a decline in investment securities, retained income from operations,
increases in deposits and increased long term debt outstanding. Overall,
management has been quite pleased with the loan program and believes that
loan growth will continue into 1995 but at a slower pace than the first
half of 1995.
Nonperforming loans include nonaccrual loans, loans 90 days or more
past due and restructured loans. Nonaccrual loans are loans on which
interest accruals have been suspended or discontinued permanently.
Restructured loans are loans which have changed the original interest rate
or repayment terms due to financial hardship. The loans on nonaccrual
status consist of real estate mortgages and commercial loans. The Company
had no nonaccrual loans at June 30, 1995.
Allowance for Loan Losses
Management evaluates the loan portfolio in light of national and local
economic changes, changes in the nature and value of the portfolio and
industry standards. The Company's loan classification system, which rates
existing loans, provides the basis for adjusting the allowance for loan
loss. Management reviews these classification totals, along with
internally generated loan review reports, past due reports, historical loan
loss experience and individual borrower's financial health to determine the
necessary amount to be provided in the allowance for loan losses.
Management evaluates nonperforming loans relative to their collateral value
and makes the appropriate adjustments to the loan portfolio when needed.
Management believes, based on its review, that the Company has an adequate
allowance to absorb any losses in the loan portfolio.
The gross amount of charge-offs for six months ended June 30, 1995, was
$35,000 compared to $26,000 for the six months ended June 30, 1994. The
allowance for loan losses was $752,000 at June 30, 1995 representing .84%
of period ending loans outstanding. The provision for loan losses for the
six months ended June 30, 1995 was $40,000 compared to $30,000 for the same
period in 1994. The increased provision reflects a lower rate of
recoveries in 1995 and an increasing level of loans outstanding.
Deposits and Long Term Debt
The Company's main source of funds is customer deposits received from
individuals, governmental entities and businesses located within the
Company's service area. Deposit accounts include demand deposits, savings,
money market and certificates of deposit.
Deposit growth was negligible in the first quarter of 1995 but improved
substantially in the second quarter of this year. The Bridgewater branch
was opened in April of this year and in conjunction with this opening the
Bank had a very successful new deposit campaign. The majority of the
deposit increases have been time deposits as the Bank was desirous of
attracting deposits with longer maturities.
Borrowings from the Federal Home Loan Bank of Atlanta (FHLB) continue
to be an important mechanism in funding real estate loan growth in the
area. The Bank borrows funds on a fixed rate basis and uses these
borrowings to fund loans on a fixed rate basis with repayments over a
fifteen to twenty year term. The program allows the Bank to match the
maturity of its fixed rate real estate portfolio with the maturity of its
debt and thus reduce exposure to interest rate changes.
Page
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations
Capital
The Company seeks to maintain a strong capital base to expand
facilities, promote public confidence, support current operations and grow
at a manageable level. As of June 30, 1995, the Company's total risk based
capital ratio was 18.75%, far above the regulatory minimum of 8.00%. The
ratio of total capital to total assets was 11.41% at June 30, 1995 which
exceeds that of the Company's peers. Earnings have been satisfactory to
allow an increase in dividends in 1995 over those levels experienced in
1994 and management has no reason to believe this increased level of
dividends will not continue.
Liquidity
Liquidity is the ability to meet present and future obligations through
the management of maturing assets or use of additional liabilities.
Federal funds sold, loans and investments maturing within one year are the
primary source of liquid assets. Management feels its ability to manage
assets and liabilities will maintain the overall liquidity sufficient to
meet customers' needs on a continuing basis.
As a secondary source of funds, the Company's subsidiary bank maintains
lines of credit with correspondent financial institutions that allows it to
borrow funds on an overnight basis. In the past, these lines have been
utilized sparingly as bank deposits have been more than sufficient to fund
loan demands. The Company does not foresee any change in this philosophy
in the near future.
Interest Rate Sensitivity
Management of liquidity involves controlling the degree of interest
rate risk the Company is willing to accept. Interest rate risk is the risk
that interest sensitive liabilities will reprice at a faster rate than
interest sensitive assets. The Company estimates that the point at which
its cumulative repricing opportunities for assets and liabilities are equal
is about five years.
A summary of asset and liability repricing opportunities is shown on
page 13 as Table II.
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EXHIBIT I
<TABLE>
F & M BANK CORP.
NET INTEREST MARGIN ANALYSIS
(Dollar Amounts in Thousands)
<CAPTION>
Six Months Ended Six Months Ended
June 30, 1995 June 30, 1994
Average Income/ Rates Average Income/ Rates
Balance Expense Balance Expense
<S> <C> <C> <C> <C> <C> <C>
Rate Related Income
Loans 1 $ 85,252 $ 3,987 9.35% $ 75,121 $ 3,483 9.27%
Federal funds sold 1,461 43 5.89% 2,591 44 3.40%
Bank deposits 582 19 6.53% 978 20 4.09%
Investments
Taxable 35,541 998 5.62% 38,068 1,002 5.26%
Partially taxable 1 6,869 294 8.56% 6,103 260 8.52%
Tax exempt 1 1,227 41 6.68% 2,825 110 7.79%
Total Earning Assets 130,932 5,382 8.22% 125,686 4,919 7.83%
Interest Expense
Demand deposits 20,423 310 3.04% 21,852 328 3.00%
Savings 28,782 596 4.14% 30,151 507 3.36%
Time deposits 41,683 1,041 4.99% 39,410 864 4.38%
Short-term debt 238 5 4.20% 291 4 2.75%
Long-term debt 18,436 592 6.42% 16,445 520 6.32%
Total Interest Bearing
Liabilities 109,562 2,544 4.64% 108,149 2,223 4.11%
Net Interest Margin 1 $ 2,838 $ 2,696
Net Yield on Interest
Earning Assets 1 4.34% 4.29%
1 On a taxable equivalent basis assuming a 34% tax rate.
</TABLE>
Page
TABLE I (Continued)
<TABLE>
F & M BANK CORP.
NET INTEREST MARGIN ANALYSIS
(Dollar Amounts in Thousands)
<CAPTION>
Three Months Ended Three Months Ended
June 30, 1995 June 30, 1994
Average Income/ Rates Average Income/ Rates
Balance Expense Balance Expense
<S> <C> <C> <C> <C> <C> <C>
Rate Related Income
Loans 1 $ 87,359 $ 2,057 9.42% $ 76,143 $ 1,781 9.36%
Federal funds sold 2,502 37 5.92% 2,028 19 3.75%
Bank deposits 945 15 6.35% 1,593 15 3.77%
Investments
Taxable 34,836 515 5.91% 39,164 520 5.31%
Partially taxable 1 6,912 155 8.97% 6,208 118 7.60%
Tax exempt 1 1,158 19 6.56% 2,730 57 8.35%
Total Earning Assets 133,712 2,798 8.37% 127,866 2,510 7.85%
Interest Expense
Demand deposits 19,740 150 3.04% 21,819 164 3.01%
Savings 28,345 295 4.16% 30,023 253 3.37%
Time deposits 44,776 590 5.27% 39,303 429 4.37%
Short-term debt 201 2 3.98% 278 2 2.88%
Long-term debt 18,927 308 6.51% 18,244 289 6.34%
Total Interest Bearing
Liabilities 111,989 1,345 4.80% 109,667 1,137 4.15%
Net Interest Margin 1 $ 1,453 $ 1,373
Net Yield on Interest
Earning Assets 1 4.35% 4.30%
1 On a taxable equivalent basis assuming a 34% tax rate.
</TABLE>
Page
TABLE II
<TABLE>
F & M BANK CORP.
INTEREST SENSITIVITY ANALYSIS
JUNE 30, 1995
(In Thousands of Dollars)
<CAPTION>
0 - 3 4 - 12 1 - 5 5 -10 Over 10 Not
Months Months Years Years Years Classified Total
<S> <C> <C> <C> <C> <C> <C> <C>
Uses of Funds
Loans:
Commercial $ 14,252 $ 2,038 $ 6,854 $ 547 $ 340 $ $ 24,031
Installment 38 632 8,592 77 9,339
Real estate 5,360 5,891 26,564 7,535 10,018 55,368
Credit cards 690 690
Interest bearing
bank deposits 646 646
Investment securities 4,530 7,227 19,152 3,714 1,867 7,555 44,045
Federal funds sold 1,980 1,980
Total 27,496 15,788 61,162 11,873 12,225 7,555 136,099
Sources of Funds
Interest bearing
deposits 19,448 19,448
Regular savings 29,349 29,349
Certificates of deposit
$100,000 and over 150 1,713 2,371 4,234
Other certificates
of deposit 5,885 18,032 18,004 334 42,255
Short-term borrowings 467 467
Long-term debt 510 2,151 10,391 5,743 18,795
Total 55,809 21,896 30,766 6,077 114,548
Discrete Gap (28,313) (6,108) 30,396 5,796 12,225 7,555 21,551
Cumulative Gap (28,313) (34,421) (4,025) 1,771 13,996 21,551 21,551
Ratio of Cumulative
Assets to Cumulative
Liabilities 49.27% 55.70% 96.29% 101.55% 112.22% 118.81%
</TABLE>
Page
Part II Other Information
Item 1. Legal Proceedings - Not Applicable
Item 2. Changes in Securities - Not Applicable
Item 3. Defaults Upon Senior Securities - Not Applicable
Item 4. Submission of Matters to a Vote
of Security Holders - On April 8, 1995, the
stockholders held their annual
meeting. The following item
was approved by the
shareholders by the required
majority:
1) Election of the Board of
Directors as proposed in
the proxy material without
any additions or
exceptions.
Item 5. Other Information - Not Applicable
Item 6. Exhibits and Reports on 8-K - (a) Exhibits
Exhibit 27 Financial Data
Schedule for the quarter
ending June 30, 1995.
(b) Reports on Form 8-K filed
during the six months
ended June 30, 1995.
None
Page
EXHIBIT INDEX
Exhibit
Index Page Number
27 Financial Data Schedule for the quarter ending June 30, 1995 17
Page
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 thereunto duly authorized.
F & M BANK CORP.
DAN B. TODD
Dan B. Todd
Chairman of the Board and Principal Financial Officer
RALPH C. FOLTZ, JR.
Ralph C. Foltz, Jr.
Controller and Chief Accounting Officer
Date August 10, 1995
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from F&M Bank
Corp. Form 10QSB and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 2,863
<INT-BEARING-DEPOSITS> 646
<FED-FUNDS-SOLD> 1,980
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 8,935
<INVESTMENTS-CARRYING> 35,110
<INVESTMENTS-MARKET> 34,666
<LOANS> 89,428
<ALLOWANCE> (752)
<TOTAL-ASSETS> 141,842
<DEPOSITS> 105,330
<SHORT-TERM> 467
<LIABILITIES-OTHER> 1,067
<LONG-TERM> 18,795
<COMMON> 4,071
0
0
<OTHER-SE> 12,112
<TOTAL-LIABILITIES-AND-EQUITY> 141,842
<INTEREST-LOAN> 3,981
<INTEREST-INVEST> 1,238
<INTEREST-OTHER> 62
<INTEREST-TOTAL> 5,281
<INTEREST-DEPOSIT> 1,947
<INTEREST-EXPENSE> 2,544
<INTEREST-INCOME-NET> 2,737
<LOAN-LOSSES> 40
<SECURITIES-GAINS> 328
<EXPENSE-OTHER> 1,711
<INCOME-PRETAX> 1,512
<INCOME-PRE-EXTRAORDINARY> 1,073
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,073
<EPS-PRIMARY> 1.32
<EPS-DILUTED> 1.32
<YIELD-ACTUAL> 4.34
<LOANS-NON> 0
<LOANS-PAST> 415
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 744
<CHARGE-OFFS> 35
<RECOVERIES> 3
<ALLOWANCE-CLOSE> 752
<ALLOWANCE-DOMESTIC> 752
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
