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
March 31, 1997
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
(540) 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 March 31, 1997
Common Stock, par value - $5 818,654 shares
F & M BANK CORP.
INDEX
Page
PART I FINANCIAL INFORMATION 2
Item 1. Financial Statements
Consolidated Statements of Income - Three Months
Ended March 31, 1997 and 1996 2
Consolidated Balance Sheets - March 31, 1997
and December 31, 1996 3
Consolidated Statements of Changes in Stockholders'
Equity - Three Months Ended March 31, 1997 and 1996 4
Consolidated Statements of Cash Flows - Three
Months Ended March 31, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II OTHER INFORMATION 16
Item 1. Legal Proceedings 16
Item 2. Changes in Securities 16
Item 3. Defaults upon Senior Securities 16
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 5. Other Information 16
Item 6. Exhibit and Reports on Form 8K 16
SIGNATURES 20
<PAGE> 2
Part I Financial Information
Item 1. Financial Statements
F & M BANK CORP.
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars)
Three Months Ended
March 31,
1997 1996
Interest Income
Interest and fees on loans $ 2,569 $ 2,295
Interest on federal funds sold 20 28
Interest on interest bearing deposits 5 7
Interest and dividends on investment securities
Taxable 697 686
Nontaxable 7 9
Total Interest Income 3,298 3,025
Interest Expense
Interest on demand accounts 124 140
Interest on savings deposits 251 298
Interest on time deposits 860 759
Total interest on deposits 1,235 1,197
Interest on short-term debt 32 14
Interest on long-term debt 287 322
Total Interest Expense 1,554 1,533
Net Interest Income 1,744 1,492
Provision for Loan Losses 45 25
Net Interest Income after Provision
for Loan Losses 1,699 1,467
Noninterest Income
Service charges 85 58
Other 39 44
Security gains (losses) (35) 172
Total Noninterest Income 89 274
Noninterest Expense
Salaries 374 371
Employee benefits 154 144
Occupancy expense 38 41
Equipment expense 69 67
Other 217 231
Total Noninterest Expense 852 854
Income before Income Taxes 936 887
Income Taxes 275 256
Net Income $ 661 $ 631
Per Share Data
Net Income $ .81 $ .78
Cash Dividends $ .22 $ .20
Equivalent Shares Outstanding 818,654 814,288
The accompanying notes are an integral part of these statements.
<PAGE> 3
F & M BANK CORP.
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
March 31, December 31,
ASSETS 1997 1996
Cash and due from banks $ 3,242 $ 3,568
Federal funds sold 90 3,397
Interest bearing deposits in banks 37 854
Securities held to maturity (note 2) 22,906 22,708
Securities available for sale (note 2) 21,172 19,722
Other investments 1,523 1,513
Loans, net of unearned discount (note 3) 115,576 111,545
Less allowance for loan losses (note 4) (1,055) (1,003)
Net Loans 114,521 110,542
Bank premises and equipment 1,883 1,953
Interest receivable 1,354 1,312
Other assets 874 942
Total Assets $167,602 $166,511
LIABILITIES
Deposits
Noninterest bearing demand $ 13,123 $ 12,614
Interest bearing
Demand 19,943 19,478
Savings deposits 29,522 28,391
Time deposits 64,021 64,116
Total Deposits 126,609 124,599
Short-term debt 2,585 3,116
Long-term debt 17,469 18,272
Accrued expenses 1,465 1,398
Total Liabilities 148,128 147,385
STOCKHOLDERS' EQUITY
Common stock $5 par value, 818,654 shares
issued and outstanding 4,093 4,093
Surplus 867 867
Retained earnings 13,877 13,396
Unrealized gain on securities available for sale 637 770
Total Stockholders' Equity 19,474 19,126
Total Liabilities and Stockholders' Equity $167,602 $166,511
The accompanying notes are an integral part of these statements.
<PAGE> 4
F & M BANK CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In Thousands of Dollars)
Three Months
Ended
March 31,
1997 1996
Balance, beginning of period $ 19,126 $ 17,098
Dividends declared (180) (162)
Change in unrealized (gains) on securities
available for sale (133) (189)
Net income for period 661 631
Balance, end of period $ 19,474 $ 17,378
The accompanying notes are an integral part of these statements.
<PAGE> 5
F & M BANK CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
Three Months
Ended
March 31,
1997 1996
Cash Flows from Operating Activities:
Net income $ 661 $ 631
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 61 58
Amortization of security premiums 24 33
Provision for loan losses 45 25
Increase in interest receivable (42) (58)
Decrease in other assets 9 3
Increase in accrued expenses 141 200
(Gain) loss on security transactions 35 (172)
Losses (income) on limited partnership
investments (3) 10
Net adjustments 270 99
Net Cash Provided by Operating Activities 931 730
Cash Flows from Investing Activities:
Purchase of investments available for sale (3,784) (3,003)
Proceeds from sales of investments
available for sale 2,189 874
Proceeds from maturity of investments
available for sale 683 130
Proceeds from maturity of investments
held to maturity 1,374 3,310
Purchase of investments held to maturity (2,268) (4,256)
Net increase in loans (4,024) (2,995)
Purchase of property and equipment (48) (12)
Change in federal funds sold 3,307 419
Net decrease in interest bearing bank deposits 817 31
Net Cash Used in Investing Activities (1,754) (5,502)
Cash Flows from Financing Activities:
Net increase in deposits 2,010 2,900
Net increase (decrease) in short-term borrowings (531) 690
Cash dividends paid (180) (162)
Increase in long-term debt 1,000
Repayment of long-term debt (802) (727)
Net Cash Provided by Financing Activities 497 3,701
Net Decrease in Cash and Cash Equivalents (326) (1,071)
Cash and Cash Equivalents, Beginning of Period 3,568 3,716
Cash and Cash Equivalents, End of Period $ 3,242 $ 2,645
Supplemental Disclosure:
Cash paid for:
Interest expense $ 1,560 $ 1,523
Income taxes 44 55
The accompanying notes are an integral part of these statements.
<PAGE> 6
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 March
31, 1997 and the results of operations for the three month
periods ended March 31, 1997 and March 31, 1996. The notes
included herein should be read in conjunction with the notes to
financial statements included in the 1996 annual report to
stockholders of the F & M Bank Corp.
NOTE 2 INVESTMENT SECURITIES:
The amounts at which investment securities are carried in
the consolidated balance sheets and their approximate market
values at March 31, 1997 and December 31, 1996 follows:
1997 1996
Carrying Market Carrying Market
Value Value Value Value
Securities Held to Maturity
U. S. Treasury and
Agency obligations $ 13,706 $ 13,554 $ 14,381 $ 14,336
State and municipal 405 404 450 449
Other securities 4,331 4,344 3,156 3,195
Mortgage-backed
securities 4,464 4,390 4,721 4,687
Total $ 22,906 $ 22,692 $ 22,708 $ 22,667
1997 1996
Market Market
Value Cost Value Cost
Securities Available for Sale
U. S. Treasury and
Agency obligations $ 6,378 $ 6,415 $ 4,762 $ 4,747
Equity securities 7,188 6,074 7,308 6,077
Mortgage-backed
securities 1,376 1,405 1,468 1,480
Other securities 6,230 6,246 6,184 6,177
Total $ 21,172 $ 20,140 $ 19,722 $ 18,481
<PAGE> 7
F & M BANK CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 LOANS:
Loans outstanding are summarized as follows:
March 31, December 31,
1997 1996
Real Estate
Construction $ 4,118 $ 2,925
Mortgage 68,903 68,614
Commercial and agricultural 28,977 26,922
Installment 12,832 12,248
Credit cards 725 799
Other 21 37
Total $115,576 $111,545
NOTE 4 ALLOWANCE FOR LOAN LOSSES:
A summary of transactions in the allowance for loan losses
for the three months ended March 31, 1997 and 1996 follows:
1997 1996
Balance, beginning of period $ 1,003 $ 863
Provisions charged to operating expenses 45 25
Loan recoveries 18 2
Loan charge-offs (11) (28)
Balance, End of Period $ 1,055 $ 862
<PAGE> 8
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 quarter of 1997. Annualized growth in total assets slowed to 2.62%
and annualized growth in deposits was 6.46%. Net income for the first
quarter increased $30,000 or 4.59% despite a $207,000 change in security
gains and losses.
Results of Operations
The dollar amount of the tax equivalent net interest margin increased
$250,000 or 16.22% in the first quarter of 1997 compared to the first
quarter of 1996. An increase in the return on earning assets of nine basis
points combined with a decrease in the cost of funds (twenty-three basis
points) yielded the improved results. The increase in net interest margin
income is primarily attributable to an increase in net earning assets (i.e.
volume increases). A schedule of the net interest margin for the first
quarter of 1997 and 1996 is shown on page 14 as Table I.
Noninterest income decreased $185,000 or 67.52% in the first three
months of 1997. This decrease was caused by a combination of a $35,000
loss on securities transactions in 1997 compared to a $172,000 gain on
securities transactions in 1996. Tempering this decline was a 46.55%
increase in service charges as a result of increased rates on overdrafts
and smaller account balances.
Noninterest expense decreased slightly (.23%) in 1997 compared to
1996. Small decreases in several areas of operations (occupancy expense,
FDIC insurance, and other expense) coupled with only a minimal 2.52%
increase in personnel costs were responsible for the small overall
decrease.
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 March 31,
1997, the market value of all securities available for sale exceeded their
amortized cost by $1,032,000 ($637,000 after the consideration of income
taxes). This excess is the result of increases in the value of equity
securities held by the parent. Management has traditionally held debt
securities (regardless of classification) until maturity and thus it does
not expect the minor fluctuation in the value of the securities to have a
direct impact on earnings.
<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Securities (Continued)
Investments in securities increased 3.77% in the first quarter of
1997 as deposit growth has been steady and some of this growth has been
directed to investments. The Company has invested in relatively short-term
maturities due to uncertainty in the direction of interest rates. This
philosophy allows for greater flexibility in an environment of rapidly
changing rates and has served the Company well over the years. Of the
investments in securities available for sale, 34% 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.
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. A large percentage of agricultural loans are made to poultry
growers. In the past year, the poultry industry has suffered due to high
grain prices, excess supplies of all types of meat and high mortality rates
among poults. In addition to direct agricultural loans, a significant
percentage of residential real estate loans and consumer installment loans
are made to borrowers employed in the agricultural sector of the economy.
Although the Company has not experienced elevated loan delinquency rates
through the first quarter of 1997, if these conditions persist, the Company
would expect greater delinquency rates in the future.
The first three months of 1997 saw continued strong loan demand as
loans grew at an annualized rate of 14.45%. Funding of the new loans was
made possible by increases in demand and savings deposits, reduction in
federal funds sold and interest bearing bank deposits and retained income
from operations. Overall, management has been quite pleased with the loan
program and believes that loan growth will continue throughout 1997.
<PAGE> 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Asset Quality and Risk Elements
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. Loans 90 days or more past
due totaled $1,003,000 at March 31, 1997 compared to $1,430,000 at December
31, 1996. The Company had no nonaccrual or restructured loans at March 31,
1997.
The Company did not have any loans that were considered impaired
under Statement of Financial Accounting Standards No. 114 and No. 118. The
Company does not foresee a material impact on operations as a result of
these statements.
Real estate acquired through foreclosure was $107,000 at March 31,
1997 and December 31, 1996. All foreclosed property held at March 31, 1997
was in the Company's primary service area. The Company's practice is to
value real estate acquired through foreclosure at the lower of (i) an
independent current appraisal or market analysis less anticipated costs of
disposal, or (ii) the existing loan balance. The Company is actively
marketing all foreclosed real estate and does not anticipate material
write-downs in value before disposition.
An inherent risk in the lending of money is that the borrower will
not be able to repay the loan under the terms of the original agreement.
The allowance for loan losses (see subsequent section) provides for this
risk and is reviewed periodically for adequacy. This review also considers
concentrations of loans in terms of geography, business type or level of
risk. While lending is geographically diversified within the service area,
the Company does have some concentration of loans in the area of
agriculture (primarily poultry farming) and related industries. Management
recognizes these concentrations and considers them when structuring its
loan portfolio. As of March 31, 1997, management is not aware of any
significant potential problem loans in which the debtor is currently
meeting their obligations as stated in the loan agreement but which may
change in future periods.
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. Specific factors considered by management in
determining the adequacy of the level of the allowance include 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 allowance when needed.
<PAGE> 11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Allowance for Loan Losses (Continued)
The provision for credit losses and changes in the allowance for
loan losses are shown below (in thousands of dollars).
Quarter Ended
March 31,
1997 1996
Balance, beginning of period $ 1,003 $ 863
Net charge-offs (recoveries)
Charge-offs 11 28
Recoveries (18) (2)
Total net charge-offs (recoveries) * (7) 26
Provision for credit losses 45 25
Balance, End of Period $ 1,055 $ 862
* Components of net charge-offs (recoveries):
Rest estate - construction - -
- mortgages - -
Commercial (1) 7
Installment (6) 19
Total $ (7) $ 26
The allowance for credit losses of $1,055,000 at March 31, 1997 was up
$52,000 from its level at December 31, 1996. The allowance was equal to
.91% and .90% of total loans at March 31, 1997 and December 31, 1996,
respectively. The Company believes that its allowance should be viewed in
its entirety and, therefore, is available for potential credit losses in
its entire portfolio, including loans, credit-related commitments and other
financial instruments. In the opinion of management, the allowance, when
taken as a whole, is adequate to absorb reasonably estimated credit losses
inherent in the Company's portfolio.
On January 1, 1995, the Company adopted SFAS 114, "Accounting by
Creditors for Impairment of a Loan" as amended by SFAS 118, "Accounting by
Creditors for Impairment of a Loan - Income Recognition and Disclosure."
SFAS 114 requires the creation of a valuation allowance for impaired loans.
Under SFAS 114, a loan is impaired when, based on current information and
events, it is probable that a creditor will be unable to collect all
amounts due according to the loan's contractual terms. At March 31, 1997,
the Company had only an insignificant amount of loans that would be
considered impaired under SFAS 114.
<PAGE> 12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
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. The Company realized annualized
deposit growth of 6.46% in the first quarter of 1997. Growth was mainly in
the area of transaction and savings accounts but is not believed to be from
any single event or promotion.
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 Company borrows funds on a fixed rate basis and uses these
borrowings to fund loans on a fixed rate basis with repayments over a
fifteen year term. As an alternative, borrowers may opt for a twenty year
repayment term of which the first ten years have a fixed rate. This
program allows the Bank to match the maturity of its fixed rate real estate
portfolio with the maturity of its debt and thus reduce its exposure to
interest rate changes. No additional borrowings were obtained in the first
quarter of 1997. Normal repayments have totaled $803,000 so far this year.
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 March 31, 1997, the Company's total risk
based capital ratio was 17.58%, far above the regulatory minimum of 8.00%.
The ratio of total capital to total assets was 11.62% at March 31, 1997
which exceeds that of the Company's peers. Management anticipates
maintaining these capital levels throughout 1997.
Liquidity
Liquidity is the ability to meet present and future financial
obligations through either the sale or maturity of existing assets or the
acquisition of additional funds through liability management. Liquid
assets include cash, interest bearing deposits with banks, federal funds
sold, investments and loans maturing within one year. The Company's
ability to obtain deposits and purchase funds at favorable rates determines
its liquidity exposure. As a result of the Company's management of liquid
assets and the ability to generate liquidity through liability funding,
management believes that the Company maintains overall liquidity sufficient
to satisfy its depositors' requirements and meet its customers' credit
needs.
Additional sources of liquidity available to the Company include, but
are not limited to, loan repayments, the ability to obtain deposits through
the adjustment of interest rates and the purchasing of federal funds. To
further meet its liquidity needs, the Company also maintains lines of
credit with correspondent financial institutions. The Bank also has a line
of credit with the Federal Home Loan Bank of Atlanta that allows for
secured borrowings. In the past, growth in deposits and proceeds from the
maturity of investment securities have been sufficient to fund most of the
net increase in loans and investment securities.
<PAGE> 13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Interest Rate Sensitivity
In conjunction with maintaining a satisfactory level of liquidity,
management must also control the degree of interest rate risk assumed on
the balance sheet. Managing this risk involves regular monitoring of the
interest sensitive assets relative to interest sensitive liabilities over
specific time intervals.
At March 31, 1997 the Company had a negative gap position. This
liability sensitive position typically produces an unfavorable contribution
to earnings during a period of increasing rates. Increases in the volume
of earning assets and an increasing spread on the difference in the amounts
received and charged have provided an increase in overall interest income
for the period.
With the largest amount of interest sensitive assets and liabilities
repricing within five years, the Company monitors these areas very closely.
Early withdrawal of deposits, prepayments of loans and loan delinquencies
are some of the factors that could affect actual versus expected cash
flows. In addition, changes in rates on interest sensitive assets and
liabilities may not be equal, which could result in a change in net
interest margin. While the Company does not match each of its interest
sensitive assets against specific interest sensitive liabilities, it does
monitor closely the maturities of loans, investments and time deposits to
limit interest rate risk and the financial effect of market rate changes.
A summary of asset and liability repricing opportunities is shown on
page 15 as Table II.
Effect of Newly Issued Accounting Standards
The Company does not believe that any newly issued but as yet
unapplied accounting standards will have a material impact on the Company's
financial position or operations.
Securities and Exchange Commission Web Site
The Securities and Exchange Commission maintains a Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission,
including F & M Bank Corp., and the address is (http://www.sec.gov).
<PAGE> 14
TABLE I
<TABLE>
F & M BANK CORP.
NET INTEREST MARGIN ANALYSIS
(Dollar Amounts in Thousands)
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1997 March 31, 1996
Average Income/ Average Income/
Balance Expense Rates Balance Expense Rates
<S> <C> <C> <C> <C> <C> <C>
Rate Related Income
Loans 1 $113,164 $ 2,572 9.09% $ 99,187 $ 2,298 9.27%
Federal funds sold 1,539 20 5.20 2,060 28 5.44
Interest bearing
deposits 399 5 5.01 514 7 5.45
Investments
Taxable 36,301 586 6.46 38,222 580 6.07
Partially taxable 6,852 154 8.99 6,802 149 8.76
Tax exempt 1 468 8 6.84 700 12 6.86
Total Earning Assets 158,723 3,345 8.43 147,485 3,074 8.34
Interest Expense
Demand deposits 20,213 124 2.45 20,299 140 2.76
Savings 28,427 251 3.53 30,609 298 3.89
Time deposits 64,393 860 5.34 53,716 759 5.65
Short-term debt 2,717 32 4.71 957 14 5.85
Long-term debt 17,819 287 6.44 19,975 322 6.45
Total Interest Bearing
Liabilities $133,569 1,554 4.65 $125,556 1,533 4.88
Net Interest Margin 1 $ 1,791 $ 1,541
Net Yield on Interest
Earning Assets 4.51% 4.18%
<F1>
1 On a taxable equivalent basis.
</TABLE>
<PAGE> 15
TABLE II
<TABLE>
F & M BANK CORP.
INTEREST SENSITIVITY ANALYSIS
MARCH 31, 1997
(In Thousands of Dollars)
<CAPTION>
0 - 3 4 - 12 1 - 5 Over 5 Not
Months Months Years Years Classified Total
<S> <C> <C> <C> <C> <C> <C>
Uses of Funds
Loans:
Commercial $ 18,446 $ 1,378 $ 8,521 $ 686 $ $ 29,031
Installment 79 561 11,991 159 12,790
Real estate 6,316 6,852 39,810 20,052 73,030
Credit cards 725 725
Interest bearing
bank deposits 37 37
Investment securities 3,051 7,563 20,816 5,450 8,721 45,601
Federal funds sold 90 90
Total $ 28,744 $ 16,354 $ 81,138 $ 26,347 $ 8,721 $161,304
Sources of Funds
Interest bearing
deposits $ 19,943 $ $ $ $ $ 19,943
Regular savings 29,522 29,522
Certificates of deposit
$100,000 and over 1,833 3,206 1,929 6,968
Other certificates
of deposit 8,174 32,177 16,702 57,053
Short-term borrowings 2,585 2,585
Long-term debt 917 2,236 11,007 3,309 17,469
Total $ 62,974 $ 37,619 $ 29,638 $ 3,309 $ $133,540
Discrete Gap $ (34,230) $(21,265) $ 51,500 $ 23,038 $ 8,721 $ 27,764
Cumulative Gap (34,230) (55,495) (3,995) 19,043 27,764
Ratio of Cumulative Gap
to Total Earning Assets (21.22)% (34.40)% (2.48)% 11.81% 17.21%
<F2>
Table II reflects the earlier of the maturity or repricing dates for various assets and
liabilities at March 31, 1997. In preparing the above table no assumptions are made with respect to
loan prepayments or deposit runoffs. Loan principal payments are included in the earliest period in
which the loan matures or can be repriced. Principal payments on installment loans scheduled prior
to maturity are included in the period of maturity or repricing. Proceeds from the redemption of
investments and deposits are included in the period of maturity.
</TABLE>
<PAGE> 16
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 - Not Applicable
Item 5. Other Information - Not Applicable
Item 6. Exhibits and Reports on 8-K
(a) Exhibit
3 i Articles of Incorporation of F & M Bank Corp.
are incorporated by reference to Exhibits to F
& M Bank Corp.'s Form S14 filed February 17,
1984.
3 ii Bylaws of F & M Bank Corp. are incorporated by
reference to Exhibits to F & M Bank Corp.'s
Form S14 filed February 17, 1984.
21 Subsidiaries of the small business issuers are
incorporated by reference to Exhibits to F & M
Bank Corp.'s 1995 Form 10-KSB filed March 26,
1997.
27 Financial Data Schedule attached
(b) Reports on Form 8-K
The Corporation did not file any reports on Form 8-K for
the quarter ending March 31, 1997.
<PAGE> 17
EXHIBIT INDEX
Exhibit
Index Page Number
27 Financial Data Schedule for the quarter ending
March 31, 1997 18
<PAGE> 20
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.
JULIAN D. FISHER
Julian D. Fisher
President and Chief Executive Officer
NEIL W. HAYSLETT
Neil W. Hayslett
Vice President & Chief Accounting Officer
May 14, 1997
<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> 3-MOS
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0
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