F & M Bank Corp.
Annual Report 2013

Plain-text annual report

F&M Bank Corp. 2013 Annual Report Dean Withers President & CEO F&M Bank Corp. ANNUAL REPORT 2013 We remain in our eyes the Premier Community Bank in our markets and I hope you agree. Your staff and management are committed to remaining so, and to improv- ing upon what we have accom- plished over our 105 year history. I hope to see everyone at the annual meeting in May. Dear Fellow Shareholders, For 2013 we had net income of $4.716 million compared to $4.901 million for 2012. The difference was attributed to a decrease in the Loans Held for Sale from $77.207 million to $3.804 million. With interest rates ris- ing in the secondary market through- out the year, and fewer individuals refinancing to get lower rates, the number of loans and income we re- ceived from the Loans Held for Sale category was significantly lower in 2013 versus 2012. Real estate val- ues increased some and the over- all economy continued to improve. Both of these factors should lead to improved earnings in the future. De- posits increased $10.353 million (to $464.149 million) and Loans Held for Investment increased $12.634 million (to $478.453 million). Our Net Inter- est Margin increased from 3.92% to 4.02%. We continue to offer a very competitive mix of deposit prod- ucts including Internet banking, free online bill pay, and mobile deposit features. We also are competitive with our loan products and are able to process the applications quicker than our mega bank competitors. We now have a full year’s perfor- mance from our Augusta County Loan Production office and our In- direct Dealer Division. I am happy to report that both are performing above our budgeted expectations. Total loans at year end for both divi- sions were approximately $37 million. Nonperforming Loans as a percentage of Assets remained stable at 2.75%. This is still higher than we would like for it to be. We continue to work dili- gently to collect these balances; how- ever, the ratio seems to stay relatively the same. Charge offs also remained higher than we like at .78%. With an improving economy, we can hopefully get both ratios back to normal levels. We also continued to pay a good re- turn through dividends to our share- holders. At the current price of $17.21 and a dividend of $.68 the return is 3.95%. Stockholder Equity increased from $46.180 million to $54.141 mil- lion and Book Value increased to $21.56. We are working hard to in- crease the visibility of our stock to the investment community. Hopefully, more brokers will see the value in our stock and recommend it as an in- vestment opportunity to their clients. I encourage everyone to review the enclosed 10K for details regarding our financial performance for 2013. We are certainly available for ques- tions if there is an area that you don’t understand. F&M Bank Corp. ANNUAL REPORT 2013 One of our favorite banks is Farmers & Merchants. We started our relationship three or four years ago with F&M Bank because they have always been a great contributor to the community and we are always looking for great banking relationships. We are able to talk with them about our needs and they listen to us, they are flexible enough to understand our different needs, and they are able to address them. - Frank Root Countryside Service Company F&M Bank Corp. ANNUAL REPORT 2013 Financial Figures Net Income (as a % of total assets) Net Interest Income (as a % of total assets) Overhead Expense (as a % of total assets) 2013 2012 2011 2013 2012 2011 .82% .80% .86% .73% .85% .53% 3.77% 3.34% 2013 2012 2.61% 3.14% 3.70% 2.35% 3.42% 3.14% 2011 3.62% 3.5% 2.32% 3.09% Net Loan Losses (as a % of loans held for investment) Allowance for Loan Losses (as a % of total loans) Non-Performing Assets (as a % of total assets) 2013 2012 2011 2013 2012 2011 .76% .33% .59% .57% .58% .87% 2013 2012 2011 1.71% 1.61% 1.75% 1.80% 1.54% 1.93% 2.75% 1.61% 2.73% 2.25% 3.15% 2.92% F&M Bank Peer F&M Bank Corp. ANNUAL REPORT 2013 GIVING BACK F&M employees continue to spend time volunteering and working together in our local communities. In 2013 nearly 50 employees visited schools with financial literacy programs such as Teach Children to Save, Everfi, and Cemark. Other bankers volunteered for special causes of their choice, recruited teams for Big Brothers Big Sisters’ Bowl for Kids’ Sake, or spent the day repairing homes and businesses with United Way’s Day of Caring in Rockingham and Shenandoah Counties.. F&M Bank Corp. ANNUAL REPORT 2013 2013 Year in Review EXPANSION AND GROWTH The Dealer Finance Division in Harrisonburg and Fishersville’s Loan Production Office produced significant volumes of new loans for F&M, ending the year with $20.6 and $16.7 million in loans outstand- ing, respectively. The Bank’s Net Interest Margin also increased from 3.92% to 4.02% (every .01% is worth approximately $52,000 of annual- ized earnings). In addition, funding of the Bank’s Allowance for Loan Losses was reduced by $425,000, with an outlook to continue this trend in 2014. Shareholders received $.68 per share in dividends, which represents a dividend payout ratio of approximately 4% based on a stock price just above $17 per share. In early November, five new F&M ATMs were installed at Rite-Aid Pharmacies in Staunton, Stuarts Draft, Verona, and Waynesboro, VA. F&M Bank Corp. ANNUAL REPORT 2013 KEEPING UP TO DATE In response to the changing financial industry, F&M began developing a new website for launch in 2014. During this time, the Bank also updated its mobile banking applications for Apple and Android devices, and introduced Mobile Deposit Capture, giving customers additional banking options and convenience. REFRESHING THE BRAND The Farmers & Merchants Bank logo was redesigned and updated with negative space added to the tree base, while the canopy was also redefined to express growth. The former Farmers & Merchants’ logo was evolved to accommodate the shortened moniker, F&M Bank, and more accurately represent the growing, Valley-based community bank. ACCOLADES F&M Bank received national recognition from three banking publications for being 81st of the top 200 banks in USA for Return on Equity, 14th of the top 50 banks for loan production, and one of the top 50 banks in social media efforts. NEW REFERRAL PROGRAM In early March, all 157 employees were involved in training and kicking off Velocity Referral Solutions, an invitation checking program, which has helped us grow our customer base substantially. Through out the year, employees used creative themes and decor- ations in the branches as talking points to introduce customers to the program. Velocity helped F&M open 229 new accounts in 2013. HELPING SMALL BUSINESS In the City of Harrisonburg and the Counties of Augusta and Rocking- ham, Business Development officers partnered with affiliate, Bankers Insurance to host several healthcare reform bill symposiums that assisted small business owners with the new legislation. ACTIVE IN THE COMMUNITY All nine F&M branches hosted events for the community in 2013 such as customer appreciation days, identity theft protection and document shredding events in partnership with Cintas, and Kids’ Days with unique themes and activities for school-age children. In June, the Elkton branch celebrated its 40th anniversary with a 1970s themed customer appreciation day and in July, the Timberville branch celebrated the 60th anniversary of both the branch and employee Jean Estep with a free BBQ lunch for customers. Employee Anniversaries 60 YEARS Jean Estep Customer Support 35 YEARS Stephanie Shillingburg Branch Administration 30 YEARS Jeff Lam Retail Loan Administrator 25 YEARS Kathy Grubbs Collections Manager Anthony Keyser Network Administrator Kathy Sherman Loan Department Dick Myers Director 20 YEARS Dean Withers President & CEO Linda Jenkins In special memory of Linda Jenkins, a former employee for 44 years, whom we lost in February 2014. F&M Bank Corp. ANNUAL REPORT 2013 Thank you for your service Sue Olson VP, Marketing Director, Timberville Ellen Branner SVP, Special Projects, Timberville Cindy Merica Branch Specialist, Elkton F&M Bank Corp. ANNUAL REPORT 2013 DIRECTORS Thomas L. Cline Chairman of the Board, Farmers & Merchants Bank and F&M Bank Corp. Larry A. Caplinger EVP/Chief Lending Officer, Farmers & Merchants Bank John N. Crist Partner, Hoover Penrod, PLC-Attorneys Ellen Fitzwater Accounting Consultant and Partner, F & R Leasing, LLC Daniel J. Harshman Manager, Town of Edinburg Richard S. Myers President, Dick Myers Chrysler-Dodge-Jeep, Inc Michael W. Pugh President, Old Dominion Realty, Inc Vice President, Colonial Appraisal Service, Inc Christopher S. Runion President, Eddie Edwards Signs, Inc Ronald E. Wampler Partner, Dove Ohio Farms, LLC and WWTD Ohio Farms, LLC Dean W. Withers President, Farmers & Merchants Bank and F&M Bank Corp. F&M Bank Corp. ANNUAL REPORT 2013 OFFICERS Dean W. Withers President & CEO Larry A. Caplinger EVP/Chief Lending Officer Secretary of the Board Neil W. Hayslett EVP, Chief Administrative Officer Carrie A. Comer SVP, Chief Financial Officer Stephanie E. Shillingburg EVP, Retail Services Ralph C. Foltz, Jr. SVP/Operations Jeffrey L. Lam SVP/Retail Loan Administrator Edward A. Strunk SVP/Commercial Loan Administrator Joshua P. Hale SVP/Business Development Leader VICE PRESIDENTS ASSISTANT VICE PRESIDENTS Dustin T. Branner Jacqueline D. Burner Thomas L. Campbell Kay T. Dean Keith M. Deeds Kathy L. Grubbs Chris A. Gunter Mary Ellen Harrison Anthony W. Keyser Cathy M. Lindamood Jonah J. Pence Melody D. Ritchie Sean D. Ryman Natalie M. Strickler Barbara Bartley, Branch Officer W. Brent Meadows, Branch Officer Deborah A. Andes Curtis M. Arey Anita C. Beckman Gregory T. Berkshire J.T. Bishop Sylvia T. Bowman Gary L. Davenport Carolyn J. Dove Sally H. Erickson Aaron S. Green Charles P. Harder Henry E. Hawkins Teresa D. Helmick Kate S. Pascarella Mary S. Prophet Kitty H. Purcell Robert R. Reedy, Jr. Karen B. Rose Kevin A. Russell President, VBS Mortgage Brenda L. Sayre Cynthia A. Sherman Gregory B. Spitler Krista L. Suter F&M Bank Corp. ANNUAL REPORT 2013 INVESTOR INFORMATION BRANCHES LOAN PRODUCTION OFFICES Transfer Agent for F&M Bank Corp. Stock (FMBM): Registrar and Transfer Company 10 Commerce Drive Cranford, NJ 07016-3572 Tel 1-800-368-5948 Email info@rtco.com Web www.rtco.com VBS Mortgage 2040 Deyerle Avenue, Suite 102 Harrisonburg, VA 442-8583 Dealer Finance Department 4759 Spotswood Trail Penn Laird, VA 437-3480 Loan Production Office 1842 Jefferson Highway Fishersville, VA 946-8160 Bridgewater 100 Plaza Drive 828-6300 Broadway 126 North Timber Way 896-7071 Edinburg 120 South Main Street 984-4128 Elkton 127 West Rockingham Street 298-1251 Harrisonburg - Cross Keys 80 Cross Keys Road 433-7575 Harrisonburg - Port Road 1085 Port Republic Road 433-0112 Luray 700 East Main Street 743-1130 Timberville 205 South Main Street 896-8941 Woodstock 161 South Main Street 459-3707 www.fmbankva.com 

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