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F & M Bank Corp. Reports 4th Quarter and Full Year Financial Results

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TIMBERVILLE, VA -- (Marketwire) -- 01/24/13 -- F & M Bank Corp. (OTCQB: FMBM), parent company of Farmers & Merchants Bank, announces its financial results for the fourth quarter and year ending December 31, 2012 and its recently declared fourth quarter dividend.

Year to date net income for 2012 totaled $4.901 million, an increase of 4.54% over 2011 earnings which totaled $4.688 million. Net income for the fourth quarter of 2012 totaled $1.244 million, compared to $1.433 million of earnings for the same period in 2011.


Selected Financial Highlights: 2012 YTD 2011 YTD 2012 Q4 2011 Q4 -------- -------- -------- --------Net Income (000's) $ 4,901 $ 4,688 $ 1,244 $ 1,433Earnings per share 1.96 1.91 0.49 0.57Net Interest Margin 3.95% 3.87% 4.03% 3.98%Allowance for loan losses 1.75% 1.54% 1.75% 1.54%Provision for loan losses (000's) $ 4,200 $ 4,000 $ 1,500 $ 900Non-Performing Loans (000's) $ 13,386 $ 14,776 $ 13,386 $ 14,776Equity to Assets 8.27% 8.15% 8.27% 8.15%Efficiency Ratio 54.03% 55.43% 50.82% 53.40%




Dean Withers, President and CEO, commented, "This is our third consecutive year of earnings improvement and, for the first time since 2005, we have achieved record earnings on a nominal basis. While we are pleased with these results, this level of earnings does not reflect our pre-recession performance relative to traditional measures of Return on Assets and Return on Equity." Withers continued, "We are cautiously optimistic that 2013 will result in the further, slow progress in reducing non-performing loans. As I stated in our last quarterly earnings announcement, we are seeing signs of modest improvement in both the local housing and commercial real estate markets. However, we still believe at this time that it is important to build our reserves, as there are still some borrowers that are struggling to recover from the lingering effects of the recession."

Withers stated, "Economic activity in our markets appears to be picking up, as we've seen an improvement in recent loan demand. This improved demand crosses multiple business lines, as we are seeing good growth in our Dealer Finance Division, strong interest in our new Fishersville Loan Production Office and improved loan demand in our established markets. On January 17, 2013, our Board of Directors declared a fourth quarter dividend of $0.17 per share. This is an increase of $.01 per share, compared to the prior year and prior quarter. Based on our most recent trade price of $16 per share, this dividend constitutes a 4.25% yield on an annualized basis. The dividend will be paid on February 8, 2013, to shareholders of record as of January 29, 2013." Highlights of the company's financial performance are included below.

F & M Bank Corp. is an independent, locally-owned, community bank holding company, offering a full range of financial services, through its subsidiary, Farmers & Merchants Bank's nine banking offices in Rockingham, Shenandoah and Page Counties, Virginia. The Bank also provides additional services through two loan production offices located in Penn Laird, VA and Fishersville, VA and through its subsidiary, VBS Mortgage located in Harrisonburg, VA. Additional information may be found by contacting us on the internet at www.FMBankVA.com or by calling (540) 896-8941.

This press release may contain "forward-looking statements" as defined by federal securities laws, which may involve significant risks and uncertainties. These statements address issues that involve risks, uncertainties, estimates and assumptions made by management, and actual results could differ materially from the results contemplated by these forward-looking statements. Factors that could have a material adverse effect on our operations and future prospects include, but are not limited to, changes in: interest rates, general economic conditions, legislative and regulatory policies, and a variety of other matters. Other risk factors are detailed from time to time in our Securities and Exchange Commission filings. Readers should consider these risks and uncertainties in evaluating forward-looking statements and should not place undue reliance on such statements. We undertake no obligation to update these statements following the date of this press release.


F & M Bank Corp. Financial Highlights For Twelve Months Ended December 31 ---------------------------------- Unaudited AuditedINCOME STATEMENT 2012 2011 ---------------- ----------------Interest and Dividend Income $ 27,224,539 $ 27,680,179Interest Expense 6,294,071 7,718,651 ---------------- ---------------- Net Interest Income 20,930,468 19,961,528Non-Interest Income 3,704,153 3,178,195Provision for Loan Losses 4,200,000 4,000,000Other Non-Interest Expenses 13,361,377 12,891,818 ---------------- ---------------- Income Before Income Taxes & Securities Transactions 7,073,244 6,247,905Securities Gains (Losses) 1,024,539Provision For Income Taxes 2,026,193 2,522,728Less Minority Interest 145,967 61,525 ---------------- ----------------Net Income $ 4,901,084 $ 4,688,191Average Shares Outstanding 2,496,300 2,449,864Net Income Per Common Share 1.96 1.91Dividends Declared .64 .60 Unaudited Audited December 31, December 31,BALANCE SHEET 2012 2011 ---------------- ----------------Cash and Due From Banks $ 7,960,633 $ 6,813,243Interest Bearing Bank Deposits 1,283,581 1,187,996Federal Funds Sold 2,180,601Loans Held for Sale 77,206,517 60,542,812Loans Held for Investment 465,819,073 451,570,491 Less Allowance for Loan Losses (8,154,074) (6,936,904) ---------------- ---------------- Net Loans Held for Investment 457,664,999 444,633,587Securities 18,807,173 22,107,621Other Assets 33,981,232 29,268,015 ---------------- ---------------- Total Assets $ 596,904,135 $ 566,773,875Deposits $ 453,795,539 $ 435,946,623Short Term Debt 34,597,352 18,538,963Long Term Debt 37,714,286 47,107,143Subordinated Debt 10,191,000 10,191,000Other Liabilities 11,221,998 8,770,427 ---------------- ---------------- Total Liabilities 547,520,175 520,554,156Stockholders' Equity 49,383,960 46,179,719 ---------------- ---------------- Total Liabilities and Stockholders' Equity $ 596,904,135 $ 566,733,875Book Value Per Common Share $ 19.76 $ 18.53





CONTACT:
Neil Hayslett
EVP/CFO
Farmers & Merchants Bank
540-896-8941
NHayslett@FMBankVA.com



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