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F & M Bank Corp. Reports 1st Quarter 2013 Financial Results

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TIMBERVILLE, VA -- (Marketwired) -- 04/24/13 -- F & M Bank Corp. (OTCQB: FMBM), parent company of Farmers & Merchants Bank, announces its financial results for the first quarter and it's recently declared first quarter dividend.

Selected Financial Highlights: 2013 Q1 2012 Q1 2012 Q4 ----------- ----------- -----------Net Income (000's) $ 1,216 $ 1,135 $ 1,244Earnings per share 0.49 0.46 0.49Net Interest Margin 3.98% 3.88% 4.03%Allowance for loan losses 1.77% 1.62% 1.75%Provision for loan losses (000's) $ 900 $ 900 $ 1,500Non-Performing Loans (000's) $ 11,685 $ 17,704 $ 13,386Equity to Assets 8.86% 8.42% 8.27%Efficiency Ratio 57.74% 56.11% 50.82%

Dean Withers, President and CEO, commented, "We're pleased to announce that our first quarter earnings for 2013 total $1.216 million, which is a 7.14% increase over the first quarter 2012. Our core earnings continue to benefit from improving net interest income, which increased $324,000 in the first quarter of 2013." Withers continued, "During the first quarter of 2013, our cost of funds declined $418,000 when compared to the prior year. We continue to see incremental benefits from rate reductions we have enacted on various deposit products. Our costs of FHLB borrowings has declined significantly as our borrowings continue to re-price at significantly lower rates. We have also reduced our reliance on FHLB borrowings as a result of strong deposit growth."

Withers stated, "Non-performing loans at $11.68 million decreased $1.70 million compared to year end 2012 and $6.02 million compared to the first quarter 2012. The majority of the risk in our loan portfolio continues to be associated with real estate development lending. While there has been increasing real estate sales and price stabilization, it is not uniform across all markets and price points. As such, we continue our efforts to increase our loan loss reserves via funding levels that exceed actual losses." Withers continued, "On April 23, 2013, our Board of Directors declared a first quarter dividend of $0.17 per share. Based on our most recent trade price of $17.75 per share, this dividend constitutes a 3.83% yield on an annualized basis. The dividend will be paid on May 15, 2013, to shareholders of record as of May 3, 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 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 Three Months Ended March 31 Unaudited UnauditedINCOME STATEMENT 2013 2012Interest and Dividend Income $ 6,599,082 $ 6,693,124Interest Expense 1,278,129 1,696,317 ------------- ------------- Net Interest Income 5,320,953 4,996,807Non-Interest Income 894,754 775,799Provision for Loan Losses 900,000 900,000Other Non-Interest Expenses 3,603,453 3,251,308 ------------- ------------- Income Before Income Taxes & Securities Transactions 1,712,254 1,621,298Securities Gains (Losses) 0Provision For Income Taxes 468,292 473,921Less Minority Interest 28,386 11,952 ------------- -------------Net Income $ 1,215,576 $ 1,135,425Average Shares Outstanding 2,500,473 2,493,758Net Income Per Common Share .49 .46Dividends Declared .17 .16 Unaudited Unaudited March 31, March 31,BALANCE SHEET 2013 2012Cash and Due From Banks $ 5,845,092 $ 5,390,099Interest Bearing Bank Deposits 978,396 667,184Federal Funds Sold 27,244,000 22,921,000Loans Held for Sale 21,130,211 25,160,152Loans Held for Investment 465,742,100 450,800,760 Less Allowance for Loan Losses (8,259,185) (7,314,145) ------------- ------------- Net Loans Held for Investment 457,482,915 443,486,615Securities 19,090,090 26,967,077Other Assets 34,723,397 32,829,313 ------------- ------------- Total Assets $ 566,494,101 $ 557,421,440Deposits $ 458,979,703 $ 444,933,690Short Term Debt 3,172,055 4,660,738Long Term Debt 32,285,714 41,500,000Subordinated Debt 10,191,000 10,191,000Other Liabilities 11,701,655 9,185,042 ------------- ------------- Total Liabilities 516,330,127 510,470,470Stockholders' Equity 50,163,974 46,950,970 ------------- ------------- Total Liabilities and Stockholders' Equity $ 566,494,101 $ 557,421,440Book Value Per Common Share $ 20.06 $ 18.82

Neil Hayslett
Farmers & Merchants Bank

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