Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 10, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | F&M BANK CORP | |
Entity Central Index Key | 740,806 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 3,269,052 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | [1] |
Assets | |||
Cash and due from banks | $ 8,801 | $ 7,755 | |
Money market funds | 945 | 674 | |
Federal funds sold | 0 | 7,926 | |
Cash and cash equivalents | 9,746 | 16,355 | |
Securities: | |||
Held to maturity – fair value of $125 in 2017 and 2016 | 125 | 125 | |
Available for sale | 22,682 | 24,783 | |
Other investments | 13,600 | 14,567 | |
Loans held for sale | 58,177 | 62,735 | |
Loans held for investment | 619,960 | 591,636 | |
Less: allowance for loan losses | (6,942) | (7,543) | |
Net loans held for investment | 613,018 | 584,093 | |
Other real estate owned | 2,148 | 2,076 | |
Bank premises and equipment, net | 12,716 | 10,340 | |
Interest receivable | 1,845 | 1,785 | |
Goodwill | 3,113 | 2,670 | |
Bank owned life insurance | 13,841 | 13,513 | |
Other assets | 12,674 | 11,847 | |
Total assets | 763,685 | 744,889 | |
Deposits: | |||
Noninterest bearing | 156,922 | 146,617 | |
Interest bearing | 405,458 | 390,468 | |
Total deposits | 562,380 | 537,085 | |
Short-term debt | 42,128 | 40,000 | |
Accrued liabilities | 17,181 | 16,885 | |
Long-term debt | 50,840 | 64,237 | |
Total liabilities | 672,529 | 658,207 | |
Stockholders' Equity | |||
Preferred stock $5 par value, 400,000 shares authorized, 324,150 and 327,350 Issued and outstanding for September 30, 2017 and December 31, 2016, respectively | 7,529 | 7,609 | |
Common stock, $5 par value, 6,000,000 shares authorized, 3,268,956 and 3,270,315 shares issued and outstanding for September 30, 2017 and December 31, 2016, respectively | 16,345 | 16,352 | |
Additional paid in capital - common stock | 10,621 | 10,684 | |
Retained earnings | 59,233 | 54,509 | |
Noncontrolling interest in consolidated subsidiaries | 594 | 693 | |
Accumulated other comprehensive loss | (3,166) | (3,165) | |
Total stockholders' equity | 91,156 | 86,682 | |
Total liabilities and stockholders' equity | $ 763,685 | $ 744,889 | |
[1] | 2016 Derived from audited consolidated financial statements. |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Held to maturity - fair value | $ 125 | $ 125 |
STOCKHOLDERS EQUITY: | ||
Preferred Stock, par value | $ 5 | $ 5 |
Preferred Stock shares authorized | 400,000 | 400,000 |
Preferred Stock shares issued | 324,150 | 327,350 |
Preferred Stock shares outstanding | 324,150 | 327,350 |
Common stock, par value | $ 5 | $ 5 |
Common stock shares authorized | 6,000,000 | 6,000,000 |
Common stock shares issued | 3,268,956 | 3,270,315 |
Common stock shares outstanding | 3,268,956 | 3,270,315 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Interest and Dividend income | ||||
Interest and fees on loans held for investment | $ 8,221 | $ 7,542 | $ 23,830 | $ 22,064 |
Interest and fees on loans held for sale | 329 | 550 | 774 | 1,451 |
Interest from money market funds and federal funds sold | 41 | 11 | 116 | 25 |
Interest on debt securities - taxable | 97 | 112 | 234 | 253 |
Total interest and dividend income | 8,688 | 8,215 | 24,954 | 23,793 |
Interest expense | ||||
Interest on deposits | 698 | 609 | 1,947 | 1,757 |
Interest from short-term debt | 14 | 9 | 46 | 35 |
Interest from long-term debt | 318 | 352 | 868 | 853 |
Total interest expense | 1,030 | 970 | 2,861 | 2,645 |
Net interest income | 7,658 | 7,245 | 22,093 | 21,148 |
Provision for loan losses | 0 | 0 | 0 | 0 |
Net interest income after provision for loan losses | 7,658 | 7,245 | 22,093 | 21,148 |
Noninterest income | ||||
Service charges on deposit accounts | 359 | 336 | 1,010 | 842 |
Investment services and insurance income | 169 | 112 | 530 | 317 |
Mortgage banking income, net | 861 | 694 | 1,974 | 1,891 |
Title insurance income | 247 | 0 | 668 | 0 |
Income on bank owned life insurance | 112 | 119 | 336 | 356 |
Low income housing partnership losses | (201) | (183) | (587) | (548) |
ATM and check card fees | 353 | 328 | 1,034 | 1,020 |
Gain on prepayment of long-term debt | 0 | 0 | 504 | 0 |
Loss on sale of other investments | (42) | 0 | ||
Other operating income | 245 | 129 | 513 | 238 |
Total noninterest income | 2,145 | 1,535 | 5,940 | 4,116 |
Noninterest expense | ||||
Salaries | 3,194 | 2,471 | 8,502 | 7,161 |
Employee benefits | 689 | 699 | 2,467 | 2,113 |
Occupancy expense | 281 | 215 | 776 | 643 |
Equipment expense | 224 | 183 | 613 | 569 |
FDIC insurance assessment | 20 | 113 | 200 | 338 |
Other real estate owned, net | (4) | 19 | 22 | 72 |
Marketing expense | 147 | 128 | 404 | 396 |
Legal and professional fees | 78 | 100 | 253 | 293 |
ATM and check card fees | 183 | 184 | 529 | 518 |
Telecommunication and data processing expense | 370 | 309 | 1,045 | 861 |
Directors fees | 117 | 46 | 360 | 254 |
Bank franchise tax | 167 | 170 | 491 | 480 |
Other operating expenses | 793 | 823 | 2,464 | 2,176 |
Total noninterest expense | 6,259 | 5,460 | 18,126 | 15,874 |
Income before income taxes | 3,544 | 3,320 | 9,907 | 9,390 |
Income tax expense | 946 | 654 | 2,633 | 2,187 |
Net Income | 2,598 | 2,666 | 7,274 | 7,203 |
Net (income) loss attributable to noncontrolling interest | 48 | 64 | 51 | 154 |
Net income attributable to F & M Bank Corp. | 2,550 | 2,602 | 7,223 | 7,049 |
Dividends paid/accumulated on preferred stock | 103 | 128 | 312 | 382 |
Net income available to common stockholders | $ 2,447 | $ 2,474 | $ 6,911 | $ 6,667 |
Per Common Share Data | ||||
Net income - basic | $ 0.75 | $ 0.75 | $ 2.11 | $ 2.03 |
Net income - diluted | .70 | .70 | 1.99 | 1.89 |
Cash dividends on common stock | $ 0.24 | $ .20 | $ 0.69 | $ 0.58 |
Weighted average shares outstanding - basic | 3,270,969 | 3,286,756 | 3,271,863 | 3,286,165 |
Weighted average shares outstanding - diluted | 3,632,607 | 3,731,156 | 3,634,856 | 3,730,565 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net Income: | ||||
Net Income - F & M Bank Corp. | $ 2,550 | $ 2,602 | $ 7,223 | $ 7,049 |
Net income (loss) attributable to noncontrolling interest | 48 | 64 | 51 | 154 |
Total Net Income: | 2,598 | 2,666 | 7,274 | 7,203 |
Unrealized holding gains (losses) on available-for-sale securities | 0 | (6) | (2) | 32 |
Tax effect | 0 | 2 | 1 | (10) |
Unrealized holding gain (loss), net of tax | 0 | (4) | (1) | 22 |
Total other comprehensive income (loss) | 0 | (4) | (1) | 22 |
Comprehensive income | $ 2,598 | $ 2,662 | $ 7,273 | $ 7,225 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) $ in Thousands | USD ($) | |
Balance, beginning of period at Dec. 31, 2015 | $ 82,950 | |
Comprehensive income | ||
Net income attributable to F & M Bank Corp. | 7,049 | |
Net income (loss) attributable to noncontrolling interest | 154 | |
Other comprehensive income (loss) | 22 | |
Total comprehensive income | 7,225 | |
Minority interest capital distributions | (74) | |
Issuance of common stock | 132 | |
Repurchase of common stock | (421) | |
Repurchase of preferred stock | 0 | |
Dividends paid | (2,287) | |
Balance, end of period at Sep. 30, 2016 | 87,525 | |
Balance, beginning of period at Dec. 31, 2016 | 86,682 | [1] |
Comprehensive income | ||
Net income attributable to F & M Bank Corp. | 7,223 | |
Net income (loss) attributable to noncontrolling interest | 51 | |
Other comprehensive income (loss) | (1) | |
Total comprehensive income | 7,273 | |
Minority interest capital distributions | (149) | |
Issuance of common stock | 150 | |
Repurchase of common stock | (199) | |
Repurchase of preferred stock | (101) | |
Dividends paid | (2,500) | |
Balance, end of period at Sep. 30, 2017 | $ 91,156 | |
[1] | 2016 Derived from audited consolidated financial statements. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities | ||
Net income | $ 7,223 | $ 7,049 |
Reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation | 660 | 602 |
Amortization of securities | 2 | 105 |
Proceeds from loans held for sale originated | 61,310 | 65,553 |
Loans held for sale originated | (59,250) | (66,706) |
Gain on sale of loans held for sale originated | (1,876) | (2,075) |
Gain on prepayment of long-term debt | (504) | 0 |
Increase in interest receivable | (60) | 29 |
Increase in other assets | (336) | (66) |
Decrease in accrued liabilities | (422) | (1,167) |
Amortization of limited partnership investments | 587 | 548 |
Income from life insurance investment | (336) | (356) |
Loss on sale of other investments | 42 | 0 |
Loss on sale and valuation adjustments for other real estate owned | 0 | 20 |
Net cash provided by (used in) operating activities | 7,040 | 3,536 |
Cash flows from investing activities | ||
Purchase of investments available for sale and other investments | (61,432) | (26,109) |
Purchase of title insurance company | (304) | 0 |
Proceeds from maturity of investments available for sale | 63,811 | 12,175 |
Proceeds from the sale of investments | 55 | 0 |
Net increase in loans held for investment | (29,070) | (35,837) |
Net decrease (increase) in loans held for sale participations | 4,373 | (22,131) |
Other real estate improvements | (7) | 0 |
Proceeds from the sale of other real estate owned | 80 | 623 |
Net purchase of property and equipment | (3,036) | (2,403) |
Net cash used in investing activities | (25,530) | (73,682) |
Cash flows from financing activities | ||
Net change in deposits | 25,295 | 33,154 |
Net change in short-term debt | 2,128 | 26,275 |
Dividends paid in cash | (2,500) | (2,287) |
Proceeds from issuance of common stock | 150 | 132 |
Proceeds from issuance of long-term debt | 0 | 20,000 |
Repurchase of preferred stock | (101) | 0 |
Repurchase of common stock | (199) | (421) |
Repayments of long-term debt | (12,892) | (3,070) |
Net cash provided by financing activities | 11,881 | 73,783 |
Net (decrease) increase in Cash and Cash Equivalents | (6,609) | 3,637 |
Cash and cash equivalents, beginning of period | 16,355 | 8,519 |
Cash and cash equivalents, end of period | 9,746 | 12,156 |
Cash paid for: | ||
Interest | 2,850 | 2,633 |
Taxes | 3,495 | 2,300 |
Supplemental non-cash disclosures: | ||
Transfer from loans to other real estate owned | 145 | 592 |
Change in unrealized gain (loss) on securities available for sale | $ (2) | $ 0 |
1. Summary of Significant Accou
1. Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Summary Of Significant Accounting Policies | |
1. Summary of Significant Accounting Policies | Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of Farmers & Merchants Bank, TEB Life Insurance Company, Farmers & Merchants Financial Services, Inc., VBS Mortgage, LLC, (net of noncontrolling interest) and VSTitle, LLC (net of noncontrolling interest) and were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for the interim financial information and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the information and footnotes required by U. S. GAAP for complete financial statements. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (the “2016 Form 10-K”). The accompanying unaudited consolidated financial statements include the accounts of the Company, the Bank and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Nature of Operations F & M Bank Corp. (the “Company”), through its subsidiary Farmers & Merchants Bank (the “Bank”), operates under a charter issued by the Commonwealth of Virginia and provides commercial banking services. As a state chartered bank, the Bank is subject to regulation by the Virginia Bureau of Financial Institutions and the Federal Reserve Bank. The Bank provides services to customers primarily located in Rockingham, Shenandoah, Page and Augusta Counties in Virginia. Services are provided at thirteen branch offices and a Dealer Finance Division. The Company offers insurance, mortgage lending, title insurance and financial services through its subsidiaries, TEB Life Insurance, Inc., Farmers & Merchants Financial Services, Inc (FMFS), VBS Mortgage, LLC (VBS), and VSTitle, LLC (VST). The Company purchased a majority interest VSTitle, a title company headquartered in Harrisonburg, VA with offices in Harrisonburg, Fishersville and Charlottesville, VA on January 1, 2017. Basis of Presentation The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, goodwill, other than temporary impairment, pension accounting and the valuation of foreclosed real estate. Reclassification Certain reclassifications have been made to prior period amounts to conform to current period presentation. None of these reclassifications are considered material and have no impact on net income. Earnings per Share Accounting guidance specifies the computation, presentation and disclosure requirements for earnings per share (“EPS”) for entities with publicly held common stock or potential common stock such as options, warrants, convertible securities or contingent stock agreements if those securities trade in a public market. Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding. In calculating diluted EPS net income is used as the numerator and the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive common shares had been issued. The dilutive effect of conversion of preferred stock is reflected in the diluted earnings per share calculation. Net income available to common stockholders represents consolidated net income adjusted for preferred dividends declared. The following table provides a reconciliation of net income to net income available to common stockholders for the periods presented: (dollars in thousands) For the Nine months ended For the Three months Ended For the Nine months ended For the Three months ended September 30, 2017 September 30, 2017 September 30, 2016 September 30, 2016 Earnings available to common stockholders: Net income $ 7,274 $ 2,598 $ 7,203 $ 2,666 Noncontrolling interest income (loss) 51 48 154 64 Preferred stock dividends 312 103 382 128 Net income available to common stockholders $ 6,911 $ 2,447 $ 6,667 $ 2,474 The following table shows the effect of dilutive preferred stock conversion on the Company's earnings per share for the periods indicated: Nine months ended September 30, 2017 Nine months ended September 30, 2016 Income Shares Per Share Amounts Income Shares Per Share Amounts Basic EPS $ 6,911 3,271,863 $ 2.11 $ 6,667 3,286,165 $ 2.03 Effect of Dilutive Securities: Convertible Preferred Stock 312 362,993 (0.12 ) 382 444,400 (0.14 ) Diluted EPS $ 7,223 3,634,856 $ 1.99 $ 7,049 3,730,565 $ 1.89 Three months ended September 30, 2017 Three months ended September 30, 2016 Income Shares Per Share Amounts Income Shares Per Share Amounts Basic EPS $ 2,447 3,270,969 $ .75 $ 2,474 3,286,756 $ .75 Effect of Dilutive Securities: Convertible Preferred Stock 103 361,638 (0.05 ) 128 444,400 (0.05 ) Diluted EPS $ 2,550 3,632,607 $ .70 $ 2,602 3,731,156 $ .70 |
2. Investment Securities
2. Investment Securities | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements Tables | |
2. Investment Securities | Investment securities available for sale are carried in the consolidated balance sheets at their approximate fair value. Investment securities held to maturity are carried in the consolidated balance sheets at their amortized cost at September 30, 2017 and December 31, 2016 are as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value September 30, 2017 U. S. Treasuries $ 125 $ - $ - $ 125 December 31, 2016 U. S. Treasuries $ 125 $ - $ - $ 125 The amortized cost and fair value of securities available for sale are as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value September 30, 2017 U. S. Treasuries $ 22,001 $ - $ 3 $ 21,998 Mortgage-backed obligations of federal agencies 539 10 - 549 Equity securities 135 - - 135 Total Securities Available for Sale $ 22,675 $ 10 $ 3 $ 22,682 December 31, 2016 U. S. Treasuries $ 24,005 $ 9 $ - $ 24,014 Mortgage-backed obligations of federal agencies 634 - - 634 Equity securities 135 - - 135 Total Securities Available for Sale $ 24,774 $ 9 $ - $ 24,783 The amortized cost and fair value of securities at September 30, 2017, by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities Held to Maturity Securities Available for Sale Amortized Fair Amortized Fair (dollars in thousands) Cost Value Cost Value Due in one year or less $ - $ - $ 22,001 $ 21,998 Due after one year through five years 125 125 - - Due after five years - - 539 549 Due after ten years - - 135 135 Total $ 125 $ 125 $ 22,675 $ 22,682 There were no gains or losses on sales of available for sale securities in the three month or nine month periods ended September 30, 2017 or 2016. There were also no securities with other than temporary impairment. In the three months ended September 30, 2017, the treasury securities were in an unrealized loss position. There were no securities in an unrealized loss positions for more than twelve months as of September 30, 2017. Other investments consist of investments in nineteen low-income housing and historic equity partnerships (carrying basis of $7,607,198), stock in the Federal Home Loan Bank (carrying basis $4,523,700) and various other investments (carrying basis $1,469,572). The interests in low-income housing and historic equity partnerships have limited transferability and the interests in the other stocks are restricted as to sales. The fair values of these securities are estimated to approximate their carrying value as of September 30, 2017. At September 30, 2017, the Company was committed to invest an additional $4,231,047 in nine low-income housing limited partnerships. These funds will be paid as requested by the general partner to complete the projects. This additional investment has been reflected in the above carrying basis and in accrued liabilities on the consolidated balance sheet. During the first quarter of 2017, both Farmers & Merchants Financial Services and VBS Mortgage ended their relationship with Bankers Title Virginia resulting in a consolidated loss of $41,914. |
3. Loans
3. Loans | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Asset Types | |
3. Loans | (dollars in thousands) 2017 2016 Construction/Land Development $ 74,313 $ 76,172 Farmland 15,578 12,901 Real Estate 177,786 172,758 Multi-Family 8,504 7,605 Commercial Real Estate 155,510 150,061 Home Equity – closed end 11,189 11,453 Home Equity – open end 55,461 54,420 Commercial & Industrial – Non-Real Estate 38,050 31,306 Consumer 7,328 6,643 Dealer Finance 73,567 65,495 Credit Cards 2,674 2,822 Total $ 619,960 $ 591,636 Loans held for investment outstanding at September 30, 2017 and December 31, 2016 are summarized as follows: The Company has pledged loans held for investment as collateral for borrowings with the Federal Home Loan Bank of Atlanta totaling $213,184,000 and $199,401,000 as of September 30, 2017 and December 31, 2016, respectively. The Company maintains a blanket lien on its entire residential real estate portfolio and certain commercial and home equity loans. September 30, 2017 December 31, 2016 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance Impaired loans without a valuation allowance: Construction/Land Development $ 4,784 $ 5,140 $ - $ 3,296 $ 3,652 $ - Farmland 1,983 1,983 - - - - Real Estate 740 740 - 768 768 - Multi-Family - - - - - - Commercial Real Estate 300 300 - 1,958 1,958 - Home Equity – closed end - - - - - - Home Equity – open end - 347 - - 347 - Commercial & Industrial – Non-Real Estate 162 162 - 170 170 - Consumer 9 9 - 13 13 - Credit cards - - - - - - Dealer Finance 25 25 - - - - 8,003 8,706 6,205 6,908 Impaired loans with a valuation allowance Construction/Land Development 5,619 5,619 2,054 6,592 6,592 1,853 Farmland - - - - - - Real Estate 1,192 1,192 214 1,206 1,206 221 Multi-Family - - - - - - Commercial Real Estate - - - 952 952 60 Home Equity – closed end - - - - - - Home Equity – open end - - - - - - Commercial & Industrial – Non-Real Estate - - - - - - Consumer - - - - - - Credit cards - - - - - - Dealer Finance 48 48 12 87 87 20 6,859 6,859 2,280 8,837 8,837 2,154 Total impaired loans $ 14,862 $ 15,565 $ 2,280 $ 15,042 $ 15,745 $ 2,154 The following is a summary of information pertaining to impaired loans (dollars in thousand): The Recorded Investment is defined as the original principal balance less principal payments, charge-offs and nonaccrual payments applied to principal. Loans held for sale consists of loans originated by VBS Mortgage for sale in the secondary market, and the Bank’s commitment to purchase residential mortgage loan participations from Northpointe Bank. The volume of loans purchased from Northpointe fluctuates due to a number of factors including changes in secondary market rates, which affects demand for mortgage loans; the number of participating banks involved in the program; the number of mortgage loan originators selling loans to the lead bank and the funding capabilities of the lead bank. Loans held for sale as of September 30, 2017 and December 31, 2016 were $58,177,450 and $62,734,803, respectively. The following is a summary of the average investment and interest income recognized for impaired loans (dollars in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Average Recorded Interest Income Average Recorded Interest Income Average Recorded Interest Income Average Recorded Interest Income Investment Recognized Investment Recognized Investment Recognized Investment Recognized Impaired loans without a valuation allowance: Construction/Land Development $ 5,414 $ 14 $ 2,649 $ 15 $ 4,870 $ 64 $ 2,009 $ 32 Farmland 1,921 - - - 1,900 - - - Real Estate 743 8 778 8 746 25 860 28 Multi-Family - - - - - - - - Commercial Real Estate 200 9 993 77 167 12 674 79 Home Equity – closed end - - - - - - - - Home Equity – open end 347 - 964 (35 ) 347 - 1,167 8 Commercial & Industrial – Non-Real Estate 164 2 174 2 165 8 177 2 Consumer and credit cards 10 - 7 2 10 - 12 - Dealer Finance 23 1 24 (1 ) 22 2 15 1 8,822 34 5,589 68 8,227 111 4,914 150 Impaired loans with a valuation allowance: Construction/Land Development $ 5,640 $ 75 $ 8,429 $ 112 $ 6,215 $ 215 $ 9,761 $ 212 Farmland - - - - - - - - Real Estate 1,194 10 1,214 14 1,196 41 994 40 Multi-Family - - - - - - - - Commercial Real Estate - - 958 14 - - 944 42 Home Equity – closed end - - - - - - - - Home Equity – open end - - 1,234 (5 ) - - 1,322 14 Commercial & Industrial – Non-Real Estate - - 14 (1 ) - - 14 - Consumer and credit card - - - - - - - - Dealer Finance 59 1 72 - 59 2 72 3 6,893 86 11,921 134 7,470 258 13,107 311 Total Impaired Loans $ 15,715 $ 120 $ 17,510 $ 202 $ 15,697 $ 369 $ 18,021 $ 461 The following table presents the aging of the recorded investment of past due loans (dollars in thousands) as of September 30, 2017 and December 31, 2016: 30-59 Days Past due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loan Receivable Non-Accrual Loans Recorded Investment >90 days & accruing September 30, 2017 Construction/Land Development $ 62 $ 1,692 $ 2,372 $ 4,126 $ 70,187 $ 74,313 $ 2,788 $ - Farmland - 1,984 - 1,984 13,594 15,578 - - Real Estate 2,250 1,202 536 3,988 173,798 177,786 1,714 - Multi-Family - - - - 8,504 8,504 - - Commercial Real Estate 840 287 - 1,127 154,383 155,510 - - Home Equity – closed end 273 5 - 278 10,911 11,189 - - Home Equity – open end 488 100 173 761 54,700 55,461 436 - Commercial & Industrial – Non- Real Estate 264 110 481 855 37,195 38,050 481 - Consumer 13 23 5 41 7,287 7,328 5 - Dealer Finance 1,052 287 148 1,487 72,080 73,567 238 - Credit Cards 16 16 - 32 2,642 2,674 - - Total $ 5,258 $ 5,706 $ 3,715 $ 14,679 $ 605,281 $ 619,960 $ 5,662 $ - 30-59 Days Past due 60-89 Days Past Due Greater than 90 Days) Total Past Due Current Total Loan Receivable Non-Accrual Loans Recorded Investment >90 days & accruing December 31, 2016 Construction/Land Development $ 73 $ 101 $ 2,175 $ 2,349 $ 73,823 $ 76,172 $ 2,805 $ - Farmland - - - - 12,901 12,901 - - Real Estate 2,135 746 774 3,655 169,103 172,758 1,399 81 Multi-Family - - - - 7,605 7,605 - - Commercial Real Estate 139 - - 139 149,922 150,061 - - Home Equity – closed end 101 - 32 133 11,320 11,453 32 - Home Equity – open end 484 - 69 553 53,867 54,420 279 - Commercial & Industrial – Non- Real Estate 313 5 - 318 30,988 31,306 70 - Consumer 35 4 6 45 6,598 6,643 - - Dealer Finance 797 187 183 1,167 64,328 65,495 178 26 Credit Cards 18 4 - 22 2,800 2,822 - - Total $ 4,095 $ 1,047 $ 3,239 $ 8,381 $ 583,255 $ 591,636 $ 4,763 $ 107 At September 30, 2017 and December 31, 2016, other real estate owned included $711,000 and $565,000 of foreclosed residential real estate. The Company has $93,000 of consumer mortgages for which foreclosure is in process at September 30, 2017 and $40,000 at December 31, 2016. Nonaccrual loans at September 30, 2017 and September 30, 2016, would have earned approximately $109,000 and $54,000, respectively, in interest income had they been accruing loans. |
4. Allowance for Loan Losses
4. Allowance for Loan Losses | 9 Months Ended |
Sep. 30, 2017 | |
Allowance For Loan Losses | |
4. Allowance for Loan Losses | A summary of changes in the allowance for loan losses (dollars in thousands) for September 30, 2017 and December 31, 2016 is as follows: September 30, 2017 Beginning Balance Charge-offs Recoveries Provision Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 3,381 $ - $ - $ (213 ) $ 3,168 $ 2,054 $ 1,114 Farmland 34 - - (4 ) 30 - 30 Real Estate 843 - 2 (105 ) 740 214 526 Multi-Family 23 - - (2 ) 21 - 21 Commercial Real Estate 705 - 11 (165 ) 551 - 551 Home Equity – closed end 75 8 25 (20 ) 72 - 72 Home Equity – open end 470 25 - (85 ) 360 - 360 Commercial & Industrial – Non-Real Estate 586 31 66 (249 ) 372 - 372 Consumer 78 34 11 55 110 - 110 Dealer Finance 1,289 1,395 816 751 1,461 12 1,449 Credit Cards 59 69 30 37 57 - 57 Total $ 7,543 $ 1,562 $ 961 $ - $ 6,942 $ 2,280 $ 4,662 December 31, 2016 Beginning Balance Charge-offs Recoveries Provision Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 4,442 $ 356 $ 7 $ (712 ) $ 3,381 $ 1,853 $ 1,528 Farmland 95 - - (61 ) 34 - 34 Real Estate 806 23 4 56 843 221 622 Multi-Family 71 - - (48 ) 23 - 23 Commercial Real Estate 445 19 135 144 705 - 705 Home Equity – closed end 174 8 - (91 ) 75 - 75 Home Equity – open end 634 370 120 86 470 60 410 Commercial & Industrial – Non-Real Estate 1,055 293 267 (443 ) 586 - 586 Consumer 108 37 19 (12 ) 78 - 78 Dealer Finance 836 1,081 417 1,117 1,289 20 1,269 Credit Cards 115 74 54 (36 ) 59 - 59 Total $ 8,781 $ 2,261 $ 1,023 $ - $ 7,543 $ 2,154 $ 5,389 September 30, 2017 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 74,313 $ 10,403 $ 63,910 Farmland 15,578 1,983 13,595 Real Estate 177,786 1,932 175,854 Multi-Family 8,504 - 8,504 Commercial Real Estate 155,510 300 155,210 Home Equity – closed end 11,189 - 11,189 Home Equity –open end 55,461 - 55,461 Commercial & Industrial – Non-Real Estate 38,050 162 37,888 Consumer 7,328 9 7,319 Dealer Finance 73,567 73 73,494 Credit Cards 2,674 - 2,674 Total $ 619,960 $ 14,862 $ 605,098 The following table presents the recorded investment in loans (dollars in thousands) based on impairment method as of September 30, 2017 and December 31, 2016: December 31, 2016 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 76,172 $ 9,888 $ 66,284 Farmland 12,901 - 12,901 Real Estate 172,758 1,974 170,784 Multi-Family 7,605 - 7,605 Commercial Real Estate 150,061 2,910 147,151 Home Equity – closed end 11,453 - 11,453 Home Equity –open end 54,420 - 54,420 Commercial & Industrial – Non-Real Estate 31,306 170 31,136 Consumer 6,643 13 6,630 Dealer Finance 65,495 87 65,408 Credit Cards 2,822 - 2,822 Total $ 591,636 $ 15,042 $ 576,594 The following table shows the Company’s loan portfolio broken down by internal loan grade (dollars in thousands) as of September 30, 2107 and December 31, 2016: September 30, 2017 Grade 1 Minimal Risk Grade 2 Modest Risk Grade 3 Average Risk Grade 4 Acceptable Risk Grade 5 Marginally Acceptable Grade 6 Watch Grade 7 Substandard Grade 8 Doubtful Total Construction/Land Development $ - $ 730 $ 12,931 $ 36,673 $ 10,285 $ 4,989 $ 8,705 $ - $ 74,313 Farmland 64 333 3,897 4,459 4,348 494 1,983 - 15,578 Real Estate - 1,404 53,245 95,135 19,963 5,285 2,754 - 177,786 Multi-Family - 249 2,898 5,177 180 - - - 8,504 Commercial Real Estate - 2,811 43,962 97,798 9,312 1,040 587 - 155,510 Home Equity – closed end - 130 3,815 4,499 1,298 1,442 5 - 11,189 Home Equity – open end 84 2,612 16,619 31,730 3,771 142 503 - 55,461 Commercial & Industrial (Non-Real Estate) 277 1,460 15,039 19,061 1,368 322 523 - 38,050 Consumer (excluding dealer) 47 362 2,640 415 1,187 2,202 475 - 7,328 Total $ 472 $ 10,091 $ 155,046 $ 294,947 $ 51,712 $ 15,916 $ 15,535 $ - $ 543,719 Credit Cards Dealer Finance Performing $ 2,674 $ 73,329 Non performing - 238 Total $ 2,674 $ 73,567 December 31, 2016 Grade 1 Minimal Risk Grade 2 Modest Risk Grade 3 Average Risk Grade 4 Acceptable Risk Grade 5 Marginally Acceptable Grade 6 Watch Grade 7 Substandard Grade 8 Doubtful Total Construction/Land Development $ - $ 1,478 $ 10,870 $ 43,863 $ 8,399 $ 2,473 $ 9,089 $ - $ 76,172 Farmland 65 - 3,073 3,456 4,446 1,861 - - 12,901 Real Estate - 1,149 62,168 74,242 28,266 4,680 2,253 - 172,758 Multi-Family - 311 3,009 4,099 186 - - - 7,605 Commercial Real Estate - 2,793 32,986 91,157 19,181 1,840 2,104 - 150,061 Home Equity – closed end - 150 3,966 4,139 1,746 1,414 38 - 11,453 Home Equity – open end 124 1,724 16,415 30,974 4,547 125 511 - 54,420 Commercial & Industrial (Non-Real Estate) 1,375 1,267 6,827 19,530 2,198 39 70 - 31,306 Consumer (excluding dealer) 67 174 1,837 607 1,242 2,252 466 - 6,643 Total $ 1,631 $ 9,046 $ 141,151 $ 272,065 $ 70,211 $ 14,684 $ 14,531 $ - $ 523,319 Credit Cards Dealer Finance Performing $ 2,822 $ 65,291 Non performing - 204 Total $ 2,822 $ 65,495 Description of internal loan grades: Grade 1 – Minimal Risk Grade 2 – Modest Risk Grade 3 – Average Risk Grade 4 – Acceptable Risk Grade 5 – Marginally acceptable s Grade 6 – Watch Grade 7 – Substandard Grade 8 – Doubtful Credit card and dealer finance loans are classified as performing or nonperforming. A loan is nonperforming when payments of principal and interest are past due 90 days or more. |
5. Employee Benefit Plan
5. Employee Benefit Plan | 9 Months Ended |
Sep. 30, 2017 | |
Employee Benefit Plan | |
5. Employee Benefit Plan | The Bank has a qualified noncontributory defined benefit pension plan which covers substantially all of its full-time employees hired before April 1, 2012. The benefits are primarily based on years of service and earnings. The Company uses December 31st as the measurement date for the defined benefit pension plan. The Bank does not expect to contribute to the pension plan in 2017. The following is a summary of net periodic pension costs for the three and nine month periods ended September 30, 2017 and 2016: (dollars in thousands) Nine Months Ended Three Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 20, 2016 Service cost $ 522 $ 474 $ 174 $ 158 Interest cost 365 340 122 113 Expected return on plan assets (638 ) (641 ) (213 ) (214 ) Amortization of prior service cost (11 ) (11 ) (4 ) (4 ) Amortization of net (gain) or loss 213 167 71 56 Net periodic pension cost $ 451 $ 329 $ 150 $ 109 |
6. Fair Value
6. Fair Value | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Abstract | |
6. Fair Value | The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Accounting guidance for fair value excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. The Company records fair value adjustments to certain assets and liabilities and determines fair value disclosures utilizing a definition of fair value of assets and liabilities that states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Additional considerations are involved to determine the fair value of financial assets in markets that are not active. The Company uses a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels of the fair value hierarchy based on these two types of inputs are as follows: Level 1 – Valuation is based on quoted prices in active markets for identical assets and liabilities. Level 2 – Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the market. Level 3 – Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements: Securities Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities would include highly liquid government bonds, mortgage products and exchange traded equities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flow. Level 2 securities would include U.S. agency securities, mortgage-backed agency securities, obligations of states and political subdivisions and certain corporate, asset backed and other securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy. The carrying value of restricted Federal Reserve Bank and Federal Home Loan Bank stock approximates fair value based upon the redemption provisions of each entity and is therefore excluded from the following table. Derivatives The Company’s derivatives are recorded at fair value based on third party vendor supplied information using discounted cash flow analysis from observable-market based inputs, which are considered Level 2 inputs. The following tables present the balances of financial assets measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 (dollars in thousands): September 30, 2017 Total Level 1 Level 2 Level 3 U. S. Treasuries $ 21,998 $ 21,998 $ - $ - Mortgage-backed obligations of federal agencies 549 - 549 - Equity securities 135 - 135 - Total securities available for sale $ 22,682 $ 21,998 $ 684 - December 31, 2016 Total Level 1 Level 2 Level 3 U. S. Treasuries $ 24,014 $ 24,014 $ - $ - Mortgage-backed obligations of federal agencies 634 - 634 - Equity securities 135 - 135 - Total securities available for sale $ 24,783 $ 24,014 $ 769 - Certain financial assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets. The following describes the valuation techniques used by the Company to measure certain financial assets recorded at fair value on a nonrecurring basis in the financial statements: Loans Held for Sale Loans held for sale are short-term loans purchased at par for resale to investors at the par value of the loan and loans originated by VBS for sale in the secondary market. Loan participations are generally repurchased within 15 days. Loans originated for sale by VBS are recorded at lower of cost or market. No market adjustments were required at September 30, 2017 or December 31, 2016; therefore, loans held for sale were carried at cost. Because of the short-term nature and fixed repurchase price, the book value of these loans approximates fair value at September 30, 2017 and December 31, 2016. Impaired Loans Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due will not be collected according to the contractual terms of the loan agreement. Troubled debt restructurings are impaired loans. Impaired loans are measured at fair value on a nonrecurring basis. If an individually-evaluated impaired loan’s balance exceeds fair value, the amount is allocated to the allowance for loan losses. Any fair value adjustments are recorded in the period incurred as provision for loan losses on the Consolidated Statements of Income. The fair value of an impaired loan and measurement of associated loss is based on one of three methods: the observable market price of the loan, the present value of projected cash flows, or the fair value of the collateral. The observable market price of a loan is categorized as a Level 1 input. The present value of projected cash flows method results in a Level 3 categorization because the calculation relies on the Company’s judgment to determine projected cash flows, which are then discounted at the current rate of the loan, or the rate prior to modification if the loan is a troubled debt restructure. Loans measured using the fair value of collateral method are categorized in Level 3. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. Most collateral is real estate. The Company bases collateral method fair valuation upon the “as-is” value of independent appraisals or evaluations. The value of real estate collateral is determined by an independent appraisal utilizing an income or market valuation approach. Appraisals conducted by an independent, licensed appraiser outside of the Company using observable market data is categorized as Level 3. The value of business equipment is based upon an outside appraisal (Level 3) if deemed significant, or the net book value on the applicable business’ financial statements (Level 3) if not considered significant. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). As of September 30, 2017 and December 31, 2016, the fair value measurements for impaired loans with specific allocations were primarily based upon the fair value of the collateral. The following table summarizes the Company’s financial assets that were measured at fair value on a nonrecurring basis during the period (dollars in thousands): September 30, 2017 Total Level 1 Level 2 Level 3 Construction/Land Development $ 3,565 - - $ 3,565 Real Estate 978 - - 978 Dealer Finance 36 - - 36 Impaired loans $ 4,579 - - $ 4,579 December 31, 2016 Total Level 1 Level 2 Level 3 Construction/Land Development $ 4,739 - - $ 4,739 Real Estate 985 - - 985 Commercial Real Estate 892 - - 892 Dealer Finance 67 - - 67 Impaired loans $ 6,683 - - $ 6,683 The following table presents information about Level 3 Fair Value Measurements for September 30, 2017: Fair Value at September 30, 2017 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Impaired Loans $ 4,579 Discounted appraised value Discount for selling costs and marketability 3%-19% (Average 5.1%) The following table presents information about Level 3 Fair Value Measurements for December 31, 2016: Fair Value at December 31, 2016 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Impaired Loans $ 6,683 Discounted appraised value Discount for selling costs and marketability 2%-50% (Average 4.7%) Other Real Estate Owned Certain assets such as other real estate owned (OREO) are measured at fair value less cost to sell. Valuation of other real estate owned is determined using current appraisals from independent parties, a level two input. If current appraisals cannot be obtained prior to reporting dates, or if declines in value are identified after a recent appraisal is received, appraisal values are discounted, resulting in Level 3 estimates. If the Company markets the property with a realtor, estimated selling costs reduce the fair value, resulting in a valuation based on Level 3 inputs. The Company markets other real estate owned both independently and with local realtors. Properties marketed by realtors are discounted by selling costs. Properties that the Company markets independently are not discounted by selling costs. The following table summarizes the Company’s other real estate owned that were measured at fair value on a nonrecurring basis as of September 30, 2017 and December 31, 2016 (dollars in thousands). September 30, 2017 Total Level 1 Level 2 Level 3 Other real estate owned $ 2,148 - - $ 2,148 December 31, 2016 Total Level 1 Level 2 Level 3 Other real estate owned $ 2,076 - - $ 2,076 The following table presents information about Level 3 Fair Value Measurements for September 30, 2017: Fair Value at September 30, 2017 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Other real estate owned $ 2,148 Discounted appraised value Discount for selling costs 5%-15% (Average 8%) The following table presents information about Level 3 Fair Value Measurements for December 31, 2016: Fair Value at December 31, 2016 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Other real estate owned $ 2,076 Discounted appraised value Discount for selling costs 5%-15% (Average 8%) The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments: Cash and Cash Equivalents The carrying amounts approximate fair value. Securities The fair values of securities, excluding restricted stock, are determined by quoted market prices or dealer quotes. The fair value of certain state and municipal securities is not readily available through market sources other than dealer quotations, so fair value estimates are based on quoted market prices of similar instruments adjusted for differences between the quoted instruments and the instruments being valued. The carrying value of restricted securities and other investments approximates fair value and are therefore excluded from the following table. Loans Held for Sale Fair values of loans held for sale are based on commitments on hand from investors or prevailing market prices. Loans Held for Investment Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as commercial, real estate – commercial, real estate – construction, real estate – mortgage, credit card and other consumer loans. Each loan category is further segmented into fixed and adjustable rate interest terms and by performing and nonperforming categories. The fair value of performing loans is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the loan, as well as estimates for prepayments. The estimate of maturity is based on the Company’s historical experience with repayments for loan classification, modified, as required, by an estimate of the effect of economic conditions on lending. Fair value for significant nonperforming loans is based on estimated cash flows which are discounted using a rate commensurate with the risk associated with the estimated cash flows. Assumptions regarding credit risk, cash flows and discount rates are determined within management’s judgment, using available market information and specific borrower information. Bank-Owned Life Insurance Bank-owned life insurance represents insurance policies on certain officers of the Company. The cash values of the policies are estimates using information provided by insurance carriers. These policies are carried at their cash surrender value, which approximates fair value. Deposits The fair value of demand and savings deposits is the amount payable on demand. The fair value of fixed maturity term deposits and certificates of deposit is estimated using the rates currently offered for deposits with similar remaining maturities. Short-Term Debt The carrying amounts of short-term debt maturing within 90 days approximate their fair values. Fair values of any other short-term debt are estimated using discounted cash flow analyses based on the current incremental borrowing rates for similar types of debt. Long-Term Debt The fair value of the Company’s long-term debt is estimated using discounted cash flow analyses based on the Company’s incremental borrowing rates for similar types of debt arrangements. Accrued Interest The carrying amounts of accrued interest approximate fair value. |
7. Disclosures About Fair Value
7. Disclosures About Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Disclosures About Fair Value Of Financial Instruments | |
7. Disclosures About Fair Value of Financial Instruments | Fair Value Measurements at September 30, 2017 Using (dollars in thousands) Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at September 30, 2017 Assets: Cash and cash equivalents $ 9,746 $ 9,746 $ - $ - $ 9,746 Securities 22,807 21,998 809 - 22,807 Loans held for sale 58,177 - 58,177 - 58,177 Loans held for investment, net 613,018 - - 642,322 642,322 Interest receivable 1,845 - 1,845 - 1,845 Bank owned life insurance 13,841 - 13,841 - 13,841 Total $ 719,434 $ 31,744 $ 74,672 $ 642,322 $ 762,338 Liabilities: Deposits $ 562,380 $ - $ 398,229 $ 165,926 $ 564,155 Short-term debt 42,128 - 42,128 - 42,128 Long-term debt 50,840 - - 50,943 50,943 Interest payable 239 - 239 - 239 Total $ 655,587 $ - $ 440,596 $ 216,869 $ 657,465 The estimated fair values, and related carrying amounts (dollars in thousands), of the Company’s financial instruments are as follows: Fair Value Measurements at December 31, 2016 Using (dollars in thousands) Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at December 31, 2016 Assets: Cash and cash equivalents $ 16,355 $ 16,355 $ - $ - $ 16,355 Securities 24,908 24,014 894 - 24,908 Loans held for sale 62,735 - 62,735 - 62,735 Loans held for investment, net 584,093 - - 598,991 598,991 Interest receivable 1,785 - 1,785 - 1,785 Bank owned life insurance 13,513 - 13,513 - 13,513 Total $ 703,389 $ 40,369 $ 78,927 $ 598,991 $ 718,287 Liabilities: Deposits $ 537,085 $ - $ 379,857 $ 158,073 $ 537,930 Short-term debt 40,000 - 40,000 - 40,000 Long-term debt 64,237 - - 63,945 63,945 Interest payable 228 - 228 - 228 Total $ 641,550 $ - $ 420,085 $ 222,018 $ 642,103 |
8. Troubled Debt Restructuring
8. Troubled Debt Restructuring | 9 Months Ended |
Sep. 30, 2017 | |
Troubled Debt Restructuring Abstract | |
8. Troubled Debt Restructuring | In the determination of the allowance for loan losses, management considers troubled debt restructurings and subsequent defaults in these restructurings by adjusting the loan grades of such loans, which are considered in the qualitative factors within the allowance. Defaults resulting in charge-offs affect the historical loss experience ratios which are a component of the allowance for loan loss methodology. Additionally, specific reserves may be established on restructured loans which are evaluated individually for impairment. During the nine months ended September 30, 2017, there was one loan modification that was considered to be troubled debt restructuring. This loan was modified during the three months ended June 30, 2017, there were no loan modifications that would be considered a troubled debt restructuring during the first or third quarters of 2017. Modifications may have included rate adjustments, revisions to amortization schedules, suspension of principal payments for a temporary period, re-advancing funds to be applied as payments to bring the loan(s) current, or any combination thereof. September 30, 2017 Pre-Modification Post-Modification (dollars in thousands) Outstanding Outstanding Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Consumer 1 $ 18 $ 18 Total 1 $ 18 $ 18 At September 30, 2017, there was one loan restructured in the previous 12 months in default or on nonaccrual status. A restructured loan is considered in default when it becomes 90 days past due, or when a charge off or foreclosure occurs. September 30, 2017 Pre-Modification Post-Modification (dollars in thousands) Outstanding Outstanding Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Real Estate 1 $ 67 $ 67 Total 1 $ 67 $ 67 During the nine months ended September 30, 2016, there were seven loan modifications that were considered to be troubled debt restructurings, however since then one has paid off and one was charged off. Nine Months ended September 30, 2016 Pre-Modification Post-Modification (dollars in thousands) Outstanding Outstanding Number of Contracts Recorded Investment Recorded Investment Troubled Debt Restructurings Real Estate 2 $ 142 $ 142 Consumer 3 33 33 Total 5 $ 175 $ 175 During the quarter ended September 30, 2016, there was one loan modification that was considered to be troubled debt restructuring. Three Months ended September 30, 2016 Pre-Modification Post-Modification (dollars in thousands) Outstanding Outstanding Number of Contracts Recorded Investment Recorded Investment Troubled Debt Restructurings Consumer 1 $ 6 $ 6 Total 1 $ 6 $ 6 |
9. Accumulated Other Comprehens
9. Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Loss | The balances in accumulated other comprehensive loss are shown in the following tables for September 30, 2017 and 2016: (dollars in thousands) Unrealized Securities Gains (Losses) Adjustments Related to Pension Plan Accumulated Other Comprehensive Loss Balance at December 31, 2016 $ 6 $ (3,171 ) $ (3,165 ) Change in unrealized securities gains (losses), net of tax (1 ) - (1 ) Change in unfunded pension liability, net of tax - - - Balance at September 30, 2017 $ 5 $ (3,171 ) $ (3,166 ) (dollars in thousands) Unrealized Securities Gains (Losses) Adjustments Related to Pension Plan Accumulated Other Comprehensive Loss Balance at December 31, 2015 $ 3 $ (2,683 ) $ (2,680 ) Change in unrealized securities gains, net of tax 22 - 22 Change in unfunded pension liability, net of tax - - - Balance at September 30, 2016 $ 25 $ (2,683 ) $ (2,658 ) There were no reclassifications adjustments reported on the consolidated statements of income during the three or nine months periods ended September 30, 2017 or 2016. |
10. Business Segments
10. Business Segments | 9 Months Ended |
Sep. 30, 2017 | |
Business Segments | |
Business Segments | The Company utilizes its subsidiaries to provide multiple business segments including retail banking, mortgage banking, title insurance services, investment services and credit life and accident and health insurance products related to lending. Revenues from retail banking operations consist primarily of interest earned on loans and investment securities and service charges on deposit accounts. Mortgage Banking operating revenues consist principally of gains on sales of loans in the secondary market, loan origination fee income and interest earned on mortgage loans held for sale. Revenues from title insurance services, investment services and insurance products consist of commissions on products provided. The following tables represent revenues and expenses by segment for the three and nine months ended September 30, 2017 and 2016. Nine Months Ended September 30, 2017 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 24,815 $ 97 $ 112 $ - $ - $ (70 ) $ 24,954 Service charges on deposits 1,010 - - - - - 1,010 Investment services and insurance income 1 - 529 - - - 530 Mortgage banking income, net - 1,974 - - - - 1,974 Title insurance income - - - 668 - - 668 Income from bank owned life insurance 336 - - - - - 336 Low income housing partnership losses (587 ) - - - - - (587 ) ATM and check card fees 1,034 - - - - - 1,034 Gain on prepayment of long-term debt 504 - - - - - 504 Loss on investments - (40 ) (2 ) - - - (42 ) Other operating income 513 - - - - - 513 Total income 27,626 2,031 639 668 - (70 ) 30,894 Expenses: Interest Expense 2,866 65 - - - (70 ) 2,861 Provision for loan losses - - - - - - - Salary expense 6,781 1,035 341 345 - - 8,502 Employee benefit expense 2,245 168 - 54 - - 2,467 Occupancy expense 624 115 - 37 - - 776 Equipment expense 551 39 - 23 - - 613 FDIC insurance assessment 200 - - - - - 200 Other real estate owned, net 22 - - - - - 22 Marketing expense 352 42 6 4 - - 404 Legal and professional fees 246 7 - - - - 253 ATM and check card fees 526 3 - - - - 529 Telecom and data processing expense 967 78 - - - - 1,045 Directors fees 315 45 - - - - 360 Bank franchise Tax 491 - - - - - 491 Other operating expenses 2,127 262 17 54 4 - 2,464 Total expense 18,313 1,859 364 517 4 (70 ) 20,987 Income tax expense (benefit) 2,603 - 83 - (53 ) - 2,633 Net income $ 6,710 $ 172 $ 192 $ 151 $ 49 $ - $ 7,274 Net income attributable to noncontrolling interest - 51 - - - - 51 Net Income attributable to F & M Bank Corp. $ 6,710 $ 121 $ 192 $ 151 $ 49 $ - $ 7,223 Total Assets $ 750,048 $ 6,309 $ 6,644 $ 443 $ 91,362 $ (91,121 ) $ 763,685 Goodwill $ 2,670 $ 103 $ - $ - $ 340 $ - $ 3,113 Three Months Ended September 30, 2017 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 8,644 $ 32 $ 37 $ - $ - $ (25 ) $ 8,688 Service charges on deposits 359 - - - - - 359 Investment services and insurance income - - 169 - - - 169 Mortgage banking income, net - 861 - - - - 861 Title insurance income - - - 247 - - 247 Income from bank owned life insurance 113 - - - - - 113 Low income housing partnership losses (201 ) - - - - - (201 ) ATM and check card fees 352 - - - - - 352 Gain on prepayment of long-term debt - - - - - - - Loss on investments - - - - - - - Other operating income 246 - - - - - 246 Total income 9,513 893 206 247 - (25 ) 10,834 Expenses: Interest Expense 1,032 24 - - - (25 ) 1,031 Provision for loan losses - - - - - - - Salary expense 2,326 586 107 175 - - 3,194 Employee benefit expense 722 1 - (34 ) - - 689 Occupancy expense 221 48 - 12 - - 281 Equipment expense 192 20 - 12 - - 224 FDIC insurance assessment 20 - - - - - 20 Other real estate owned, net (3 ) - - - - - (3 ) Marketing expense 136 8 2 2 - - 148 Legal and professional fees 75 3 - - - - 78 ATM and check card fees 182 1 - - - - 183 Telecom and data processing expense 342 28 - - - - 370 Directors fees 105 11 - - - - 116 Bank franchise Tax 166 - - - - - 166 Other operating expenses 767 2 4 20 - - 793 Total expense 6,283 732 113 187 - (25 ) 7,290 Income tax expense (benefit) 933 - 30 - (17 ) - 946 Net income $ 2,297 $ 161 $ 63 $ 60 $ 17 $ - $ 2,598 Net income attributable to noncontrolling interest - 48 - - - - 48 Net Income attributable to F & M Bank Corp. $ 2,297 $ 113 $ 63 $ 60 $ 17 $ - $ 2,550 Nine Months Ended September 30, 2016 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 23,653 $ 30 $ 114 $ - $ - $ (4 ) $ 23,793 Service charges on deposits 842 - - - - - 842 Investment services and insurance income 1 - 316 - - - 317 Mortgage banking income, net - 1,891 - - - - 1,891 Income from bank owned life insurance 356 - - - - - 356 Low income housing partnership losses (548 ) - - - - - (548 ) ATM and check card fees 1,020 - - - - - 1,020 Gain on prepayment of long-term debt - - - - - - - Loss on investments - - - - - - - Other operating income 238 - - - - - 238 Total income 25,562 1,921 430 - - (4 ) 27,909 Expenses: Interest Expense 2,649 - - - - (4 ) 2,645 Provision for loan losses - - - - - - - Salary expense 6,117 823 221 - - - 7,161 Employee benefit expense 1,927 186 - - - - 2,113 Occupancy expense 552 91 - - - - 643 Equipment expense 536 33 - - - - 569 FDIC insurance assessment 338 - - - - - 338 Other real estate owned, net 72 - - - - - 72 Marketing expense 356 39 1 - - - 396 Legal and professional fees 286 7 - - - - 293 ATM and check card fees 514 4 - - - - 518 Telecom and data processing expense 795 66 - - - - 861 Directors fees 234 20 - - - - 254 Bank franchise Tax 480 - - - - - 480 Other operating expenses 2,011 138 26 - 1 - 2,176 Total expense 16,867 1,407 248 - 1 (4 ) 18,519 Income tax expense (benefit) 2,353 - 48 - (214 ) - 2,187 Net income $ 6,342 $ 514 $ 134 $ - $ 213 $ - $ 7,203 Net income attributable to noncontrolling interest - 154 - - - - 154 Net Income attributable to F & M Bank Corp. $ 6,342 $ 360 $ 134 $ - $ 213 $ - $ 7,049 Total Assets $ 736,642 $ 2,492 $ 6,315 $ - $ 87,369 $ (87,526 ) $ 745,292 Goodwill $ 2,670 $ - $ - $ - $ - $ - $ 2,670 Three Months Ended September 30, 2016 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 8,160 $ 17 $ 39 $ - $ - $ (1 ) $ 8,215 Service charges on deposits 336 - - - - - 336 Investment services and insurance income - - 112 - - - 112 Mortgage banking income, net - 694 - - - - 694 Income from bank owned life insurance 119 - - - - - 119 Low income housing partnership losses (183 ) - - - - - (183 ) ATM and check card fees 328 - - - - - 328 Other operating income 129 - - - - - 129 Total income 8,889 711 151 - - (1 ) 9,750 Expenses: Interest Expense 971 - - - - (1 ) 970 Provision for loan losses - - - - - - - Salary expense 2,094 295 82 - - - 2,471 Employee benefit expense 628 71 - - - - 699 Occupancy expense 185 30 - - - - 215 Equipment expense 181 2 - - - - 183 FDIC insurance assessment 113 - - - - - 113 Other real estate owned, net 19 - - - - - 19 Marketing expense 120 6 2 - - - 128 Legal and professional fees 98 2 - - - - 100 ATM and check card fees 183 1 - - - - 184 Telecom and data processing expense 286 23 - - - - 309 Directors fees 42 4 - - - - 46 Bank franchise Tax 170 - - - - - 170 Other operating expenses 755 63 5 - - - 823 Total expense 5,845 497 89 - - (1 ) 6,430 Income tax expense (benefit) 770 - 16 - (132 ) - 654 Net income $ 2,274 $ 214 $ 46 $ - $ 132 $ - $ 2,666 Net income attributable to noncontrolling interest - 64 - - - - 64 Net Income attributable to F & M Bank Corp. $ 2,274 $ 150 $ 46 $ - $ 132 $ - $ 2,602 |
11. Debt
11. Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt | |
Debt | Short-term Debt The Company utilizes short-term debt such as Federal funds purchased and Federal Home Loan Bank of Atlanta (FHLB) short term borrowings to support the loans held for sale participation program and provide liquidity. Federal funds purchased are unsecured overnight borrowings from other financial institutions. FHLB short term debt, which is secured by the loan portfolio, can be a daily rate variable loan that acts as a line of credit or a fixed rate advance, depending on the need of the Company. Short-term debt totaled $42,128,000 at September 30, 2017 and has increased $2,128,000 from $40 million at December 31, 2016; the total of increase was in Federal funds purchased. Long-term Debt The Company utilizes the FHLB advance program to fund loan growth and provide liquidity. The interest rates on long-term debt are fixed at the time of the advance and range from 1.16% to 2.56%; the weighted average interest rate was 1.86% and 1.80% at September 30, 2017 and December 31, 2016, respectively. The balance of these obligations at September 30, 2017 and December 31, 2016 were $50,661,000 and $63,982,000 respectively. The Company recognized a gain of $504,000 on prepayment of two FHLB advances totaling $10,000,000 during the first quarter of 2017 and there were no additional borrowings in 2017. FHLB advances include a $5,000,000 line of credit at FHLB that is pledged to the Commonwealth of Virginia to secure public funds. In addition, the Company has a note payable to purchase a lot adjacent to one of the Bank branches for $170,000 at September 30, 2017 that is payable in two remaining annual payments on January 1, 2018 and 2019. There was $255,000 outstanding on this note at December 31, 2016. VS Title, LLC has a note payable for vehicle purchases with a balance of $9,000 at September 30, 2017. |
1. Summary of Significant Acc19
1. Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Summary Of Significant Accounting Policies Policies | |
Principles of Consolidation | The accompanying unaudited consolidated financial statements include the accounts of Farmers & Merchants Bank, TEB Life Insurance Company, Farmers & Merchants Financial Services, Inc., VBS Mortgage, LLC, (net of noncontrolling interest) and VSTitle, LLC (net of noncontrolling interest) and were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for the interim financial information and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the information and footnotes required by U. S. GAAP for complete financial statements. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (the “2016 Form 10-K”). The accompanying unaudited consolidated financial statements include the accounts of the Company, the Bank and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Nature of Operations | F & M Bank Corp. (the “Company”), through its subsidiary Farmers & Merchants Bank (the “Bank”), operates under a charter issued by the Commonwealth of Virginia and provides commercial banking services. As a state chartered bank, the Bank is subject to regulation by the Virginia Bureau of Financial Institutions and the Federal Reserve Bank. The Bank provides services to customers primarily located in Rockingham, Shenandoah, Page and Augusta Counties in Virginia. Services are provided at thirteen branch offices and a Dealer Finance Division. The Company offers insurance, mortgage lending, title insurance and financial services through its subsidiaries, TEB Life Insurance, Inc., Farmers & Merchants Financial Services, Inc (FMFS), VBS Mortgage, LLC (VBS), and VSTitle, LLC (VST). The Company purchased a majority interest VSTitle, a title company headquartered in Harrisonburg, VA with offices in Harrisonburg, Fishersville and Charlottesville, VA on January 1, 2017. |
Basis of Presentation | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, goodwill, other than temporary impairment, pension accounting and the valuation of foreclosed real estate. |
Reclassification | Certain reclassifications have been made to prior period amounts to conform to current period presentation. None of these reclassifications are considered material and have no impact on net income. |
Earnings per Share | Accounting guidance specifies the computation, presentation and disclosure requirements for earnings per share (“EPS”) for entities with publicly held common stock or potential common stock such as options, warrants, convertible securities or contingent stock agreements if those securities trade in a public market. Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding. In calculating diluted EPS net income is used as the numerator and the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive common shares had been issued. The dilutive effect of conversion of preferred stock is reflected in the diluted earnings per share calculation. Net income available to common stockholders represents consolidated net income adjusted for preferred dividends declared. The following table provides a reconciliation of net income to net income available to common stockholders for the periods presented: (dollars in thousands) For the Nine months ended For the Three months Ended For the Nine months ended For the Three months ended September 30, 2017 September 30, 2017 September 30, 2016 September 30, 2016 Earnings available to common stockholders: Net income $ 7,274 $ 2,598 $ 7,203 $ 2,666 Noncontrolling interest income (loss) 51 48 154 64 Preferred stock dividends 312 103 382 128 Net income available to common stockholders $ 6,911 $ 2,447 $ 6,667 $ 2,474 The following table shows the effect of dilutive preferred stock conversion on the Company's earnings per share for the periods indicated: Nine months ended September 30, 2017 Nine months ended September 30, 2016 Income Shares Per Share Amounts Income Shares Per Share Amounts Basic EPS $ 6,911 3,271,863 $ 2.11 $ 6,667 3,286,165 $ 2.03 Effect of Dilutive Securities: Convertible Preferred Stock 312 362,993 (0.12 ) 382 444,400 (0.14 ) Diluted EPS $ 7,223 3,634,856 $ 1.99 $ 7,049 3,730,565 $ 1.89 Three months ended September 30, 2017 Three months ended September 30, 2016 Income Shares Per Share Amounts Income Shares Per Share Amounts Basic EPS $ 2,447 3,270,969 $ .75 $ 2,474 3,286,756 $ .75 Effect of Dilutive Securities: Convertible Preferred Stock 103 361,638 (0.05 ) 128 444,400 (0.05 ) Diluted EPS $ 2,550 3,632,607 $ .70 $ 2,602 3,731,156 $ .70 |
1. Summary of Significant Acc20
1. Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Summary Of Significant Accounting Policies Tables | |
Schedule of Earnings per share | (dollars in thousands) For the Nine months ended For the Three months Ended For the Nine months ended For the Three months ended September 30, 2017 September 30, 2017 September 30, 2016 September 30, 2016 Earnings available to common stockholders: Net income $ 7,274 $ 2,598 $ 7,203 $ 2,666 Noncontrolling interest income (loss) 51 48 154 64 Preferred stock dividends 312 103 382 128 Net income available to common stockholders $ 6,911 $ 2,447 $ 6,667 $ 2,474 Nine months ended September 30, 2017 Nine months ended September 30, 2016 Income Shares Per Share Amounts Income Shares Per Share Amounts Basic EPS $ 6,911 3,271,863 $ 2.11 $ 6,667 3,286,165 $ 2.03 Effect of Dilutive Securities: Convertible Preferred Stock 312 362,993 (0.12 ) 382 444,400 (0.14 ) Diluted EPS $ 7,223 3,634,856 $ 1.99 $ 7,049 3,730,565 $ 1.89 Three months ended September 30, 2017 Three months ended September 30, 2016 Income Shares Per Share Amounts Income Shares Per Share Amounts Basic EPS $ 2,447 3,270,969 $ .75 $ 2,474 3,286,756 $ .75 Effect of Dilutive Securities: Convertible Preferred Stock 103 361,638 (0.05 ) 128 444,400 (0.05 ) Diluted EPS $ 2,550 3,632,607 $ .70 $ 2,602 3,731,156 $ .70 |
2. Investment Securities (Table
2. Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investment Securities Tables Abstract | |
Schedule of Securities Impairment | Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value September 30, 2017 U. S. Treasuries $ 125 $ - $ - $ 125 December 31, 2016 U. S. Treasuries $ 125 $ - $ - $ 125 |
Schedule of Amortized Cost and Fair Value for Securities | Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value September 30, 2017 U. S. Treasuries $ 22,001 $ - $ 3 $ 21,998 Mortgage-backed obligations of federal agencies 539 10 - 549 Equity securities 135 - - 135 Total Securities Available for Sale $ 22,675 $ 10 $ 3 $ 22,682 December 31, 2016 U. S. Treasuries $ 24,005 $ 9 $ - $ 24,014 Mortgage-backed obligations of federal agencies 634 - - 634 Equity securities 135 - - 135 Total Securities Available for Sale $ 24,774 $ 9 $ - $ 24,783 |
Schedule of Securities with Unrealized Losses | Securities Held to Maturity Securities Available for Sale Amortized Fair Amortized Fair (dollars in thousands) Cost Value Cost Value Due in one year or less $ - $ - $ 22,001 $ 21,998 Due after one year through five years 125 125 - - Due after five years - - 539 549 Due after ten years - - 135 135 Total $ 125 $ 125 $ 22,675 $ 22,682 |
3. Loans (Tables)
3. Loans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Loans Tables | |
Schedule of Loans Outstanding | (dollars in thousands) 2017 2016 Construction/Land Development $ 74,313 $ 76,172 Farmland 15,578 12,901 Real Estate 177,786 172,758 Multi-Family 8,504 7,605 Commercial Real Estate 155,510 150,061 Home Equity – closed end 11,189 11,453 Home Equity – open end 55,461 54,420 Commercial & Industrial – Non-Real Estate 38,050 31,306 Consumer 7,328 6,643 Dealer Finance 73,567 65,495 Credit Cards 2,674 2,822 Total $ 619,960 $ 591,636 |
Schedule Impaired Loans | September 30, 2017 December 31, 2016 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance Impaired loans without a valuation allowance: Construction/Land Development $ 4,784 $ 5,140 $ - $ 3,296 $ 3,652 $ - Farmland 1,983 1,983 - - - - Real Estate 740 740 - 768 768 - Multi-Family - - - - - - Commercial Real Estate 300 300 - 1,958 1,958 - Home Equity – closed end - - - - - - Home Equity – open end - 347 - - 347 - Commercial & Industrial – Non-Real Estate 162 162 - 170 170 - Consumer 9 9 - 13 13 - Credit cards - - - - - - Dealer Finance 25 25 - - - - 8,003 8,706 6,205 6,908 Impaired loans with a valuation allowance Construction/Land Development 5,619 5,619 2,054 6,592 6,592 1,853 Farmland - - - - - - Real Estate 1,192 1,192 214 1,206 1,206 221 Multi-Family - - - - - - Commercial Real Estate - - - 952 952 60 Home Equity – closed end - - - - - - Home Equity – open end - - - - - - Commercial & Industrial – Non-Real Estate - - - - - - Consumer - - - - - - Credit cards - - - - - - Dealer Finance 48 48 12 87 87 20 6,859 6,859 2,280 8,837 8,837 2,154 Total impaired loans $ 14,862 $ 15,565 $ 2,280 $ 15,042 $ 15,745 $ 2,154 Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Average Recorded Interest Income Average Recorded Interest Income Average Recorded Interest Income Average Recorded Interest Income Investment Recognized Investment Recognized Investment Recognized Investment Recognized Impaired loans without a valuation allowance: Construction/Land Development $ 5,414 $ 14 $ 2,649 $ 15 $ 4,870 $ 64 $ 2,009 $ 32 Farmland 1,921 - - - 1,900 - - - Real Estate 743 8 778 8 746 25 860 28 Multi-Family - - - - - - - - Commercial Real Estate 200 9 993 77 167 12 674 79 Home Equity – closed end - - - - - - - - Home Equity – open end 347 - 964 (35 ) 347 - 1,167 8 Commercial & Industrial – Non-Real Estate 164 2 174 2 165 8 177 2 Consumer and credit cards 10 - 7 2 10 - 12 - Dealer Finance 23 1 24 (1 ) 22 2 15 1 8,822 34 5,589 68 8,227 111 4,914 150 Impaired loans with a valuation allowance: Construction/Land Development $ 5,640 $ 75 $ 8,429 $ 112 $ 6,215 $ 215 $ 9,761 $ 212 Farmland - - - - - - - - Real Estate 1,194 10 1,214 14 1,196 41 994 40 Multi-Family - - - - - - - - Commercial Real Estate - - 958 14 - - 944 42 Home Equity – closed end - - - - - - - - Home Equity – open end - - 1,234 (5 ) - - 1,322 14 Commercial & Industrial – Non-Real Estate - - 14 (1 ) - - 14 - Consumer and credit card - - - - - - - - Dealer Finance 59 1 72 - 59 2 72 3 6,893 86 11,921 134 7,470 258 13,107 311 Total Impaired Loans $ 15,715 $ 120 $ 17,510 $ 202 $ 15,697 $ 369 $ 18,021 $ 461 |
Schedule of Recorded Investment | 30-59 Days Past due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loan Receivable Non-Accrual Loans Recorded Investment >90 days & accruing September 30, 2017 Construction/Land Development $ 62 $ 1,692 $ 2,372 $ 4,126 $ 70,187 $ 74,313 $ 2,788 $ - Farmland - 1,984 - 1,984 13,594 15,578 - - Real Estate 2,250 1,202 536 3,988 173,798 177,786 1,714 - Multi-Family - - - - 8,504 8,504 - - Commercial Real Estate 840 287 - 1,127 154,383 155,510 - - Home Equity – closed end 273 5 - 278 10,911 11,189 - - Home Equity – open end 488 100 173 761 54,700 55,461 436 - Commercial & Industrial – Non- Real Estate 264 110 481 855 37,195 38,050 481 - Consumer 13 23 5 41 7,287 7,328 5 - Dealer Finance 1,052 287 148 1,487 72,080 73,567 238 - Credit Cards 16 16 - 32 2,642 2,674 - - Total $ 5,258 $ 5,706 $ 3,715 $ 14,679 $ 605,281 $ 619,960 $ 5,662 $ - 30-59 Days Past due 60-89 Days Past Due Greater than 90 Days) Total Past Due Current Total Loan Receivable Non-Accrual Loans Recorded Investment >90 days & accruing December 31, 2016 Construction/Land Development $ 73 $ 101 $ 2,175 $ 2,349 $ 73,823 $ 76,172 $ 2,805 $ - Farmland - - - - 12,901 12,901 - - Real Estate 2,135 746 774 3,655 169,103 172,758 1,399 81 Multi-Family - - - - 7,605 7,605 - - Commercial Real Estate 139 - - 139 149,922 150,061 - - Home Equity – closed end 101 - 32 133 11,320 11,453 32 - Home Equity – open end 484 - 69 553 53,867 54,420 279 - Commercial & Industrial – Non- Real Estate 313 5 - 318 30,988 31,306 70 - Consumer 35 4 6 45 6,598 6,643 - - Dealer Finance 797 187 183 1,167 64,328 65,495 178 26 Credit Cards 18 4 - 22 2,800 2,822 - - Total $ 4,095 $ 1,047 $ 3,239 $ 8,381 $ 583,255 $ 591,636 $ 4,763 $ 107 |
4. Allowance for Loan Losses (T
4. Allowance for Loan Losses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Allowance For Loan Losses Tables | |
Summary Loan Loss Allowance Transactions | September 30, 2017 Beginning Balance Charge-offs Recoveries Provision Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 3,381 $ - $ - $ (213 ) $ 3,168 $ 2,054 $ 1,114 Farmland 34 - - (4 ) 30 - 30 Real Estate 843 - 2 (105 ) 740 214 526 Multi-Family 23 - - (2 ) 21 - 21 Commercial Real Estate 705 - 11 (165 ) 551 - 551 Home Equity – closed end 75 8 25 (20 ) 72 - 72 Home Equity – open end 470 25 - (85 ) 360 - 360 Commercial & Industrial – Non-Real Estate 586 31 66 (249 ) 372 - 372 Consumer 78 34 11 55 110 - 110 Dealer Finance 1,289 1,395 816 751 1,461 12 1,449 Credit Cards 59 69 30 37 57 - 57 Total $ 7,543 $ 1,562 $ 961 $ - $ 6,942 $ 2,280 $ 4,662 December 31, 2016 Beginning Balance Charge-offs Recoveries Provision Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 4,442 $ 356 $ 7 $ (712 ) $ 3,381 $ 1,853 $ 1,528 Farmland 95 - - (61 ) 34 - 34 Real Estate 806 23 4 56 843 221 622 Multi-Family 71 - - (48 ) 23 - 23 Commercial Real Estate 445 19 135 144 705 - 705 Home Equity – closed end 174 8 - (91 ) 75 - 75 Home Equity – open end 634 370 120 86 470 60 410 Commercial & Industrial – Non-Real Estate 1,055 293 267 (443 ) 586 - 586 Consumer 108 37 19 (12 ) 78 - 78 Dealer Finance 836 1,081 417 1,117 1,289 20 1,269 Credit Cards 115 74 54 (36 ) 59 - 59 Total $ 8,781 $ 2,261 $ 1,023 $ - $ 7,543 $ 2,154 $ 5,389 |
Schedule of Recorded Investment in Loan Receivables | September 30, 2017 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 74,313 $ 10,403 $ 63,910 Farmland 15,578 1,983 13,595 Real Estate 177,786 1,932 175,854 Multi-Family 8,504 - 8,504 Commercial Real Estate 155,510 300 155,210 Home Equity – closed end 11,189 - 11,189 Home Equity –open end 55,461 - 55,461 Commercial & Industrial – Non-Real Estate 38,050 162 37,888 Consumer 7,328 9 7,319 Dealer Finance 73,567 73 73,494 Credit Cards 2,674 - 2,674 Total $ 619,960 $ 14,862 $ 605,098 December 31, 2016 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 76,172 $ 9,888 $ 66,284 Farmland 12,901 - 12,901 Real Estate 172,758 1,974 170,784 Multi-Family 7,605 - 7,605 Commercial Real Estate 150,061 2,910 147,151 Home Equity – closed end 11,453 - 11,453 Home Equity –open end 54,420 - 54,420 Commercial & Industrial – Non-Real Estate 31,306 170 31,136 Consumer 6,643 13 6,630 Dealer Finance 65,495 87 65,408 Credit Cards 2,822 - 2,822 Total $ 591,636 $ 15,042 $ 576,594 |
Schedule of Loan Portfolio by internal loan grade | September 30, 2017 Grade 1 Minimal Risk Grade 2 Modest Risk Grade 3 Average Risk Grade 4 Acceptable Risk Grade 5 Marginally Acceptable Grade 6 Watch Grade 7 Substandard Grade 8 Doubtful Total Construction/Land Development $ - $ 730 $ 12,931 $ 36,673 $ 10,285 $ 4,989 $ 8,705 $ - $ 74,313 Farmland 64 333 3,897 4,459 4,348 494 1,983 - 15,578 Real Estate - 1,404 53,245 95,135 19,963 5,285 2,754 - 177,786 Multi-Family - 249 2,898 5,177 180 - - - 8,504 Commercial Real Estate - 2,811 43,962 97,798 9,312 1,040 587 - 155,510 Home Equity – closed end - 130 3,815 4,499 1,298 1,442 5 - 11,189 Home Equity – open end 84 2,612 16,619 31,730 3,771 142 503 - 55,461 Commercial & Industrial (Non-Real Estate) 277 1,460 15,039 19,061 1,368 322 523 - 38,050 Consumer (excluding dealer) 47 362 2,640 415 1,187 2,202 475 - 7,328 Total $ 472 $ 10,091 $ 155,046 $ 294,947 $ 51,712 $ 15,916 $ 15,535 $ - $ 543,719 Credit Cards Dealer Finance Performing $ 2,674 $ 73,329 Non performing - 238 Total $ 2,674 $ 73,567 December 31, 2016 Grade 1 Minimal Risk Grade 2 Modest Risk Grade 3 Average Risk Grade 4 Acceptable Risk Grade 5 Marginally Acceptable Grade 6 Watch Grade 7 Substandard Grade 8 Doubtful Total Construction/Land Development $ - $ 1,478 $ 10,870 $ 43,863 $ 8,399 $ 2,473 $ 9,089 $ - $ 76,172 Farmland 65 - 3,073 3,456 4,446 1,861 - - 12,901 Real Estate - 1,149 62,168 74,242 28,266 4,680 2,253 - 172,758 Multi-Family - 311 3,009 4,099 186 - - - 7,605 Commercial Real Estate - 2,793 32,986 91,157 19,181 1,840 2,104 - 150,061 Home Equity – closed end - 150 3,966 4,139 1,746 1,414 38 - 11,453 Home Equity – open end 124 1,724 16,415 30,974 4,547 125 511 - 54,420 Commercial & Industrial (Non-Real Estate) 1,375 1,267 6,827 19,530 2,198 39 70 - 31,306 Consumer (excluding dealer) 67 174 1,837 607 1,242 2,252 466 - 6,643 Total $ 1,631 $ 9,046 $ 141,151 $ 272,065 $ 70,211 $ 14,684 $ 14,531 $ - $ 523,319 Credit Cards Dealer Finance Performing $ 2,822 $ 65,291 Non performing - 204 Total $ 2,822 $ 65,495 |
5. Employee Benefit Plan (Table
5. Employee Benefit Plan (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Employee Benefit Plan Tables Abstract | |
Schedule of Employee Benefit Plan | (dollars in thousands) Nine Months Ended Three Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 20, 2016 Service cost $ 522 $ 474 $ 174 $ 158 Interest cost 365 340 122 113 Expected return on plan assets (638 ) (641 ) (213 ) (214 ) Amortization of prior service cost (11 ) (11 ) (4 ) (4 ) Amortization of net (gain) or loss 213 167 71 56 Net periodic pension cost $ 451 $ 329 $ 150 $ 109 |
6. Fair Value (Tables)
6. Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Tables | |
Schedule of Assets and Liabilities at Fair Value on Recurring Basis | September 30, 2017 Total Level 1 Level 2 Level 3 U. S. Treasuries $ 21,998 $ 21,998 $ - $ - Mortgage-backed obligations of federal agencies 549 - 549 - Equity securities 135 - 135 - Total securities available for sale $ 22,682 $ 21,998 $ 684 - December 31, 2016 Total Level 1 Level 2 Level 3 U. S. Treasuries $ 24,014 $ 24,014 $ - $ - Mortgage-backed obligations of federal agencies 634 - 634 - Equity securities 135 - 135 - Total securities available for sale $ 24,783 $ 24,014 $ 769 - |
Schedule of Assets and Liabilities at Fair Value on Non-recurring Basis | September 30, 2017 Total Level 1 Level 2 Level 3 Construction/Land Development $ 3,565 - - $ 3,565 Real Estate 978 - - 978 Dealer Finance 36 - - 36 Impaired loans $ 4,579 - - $ 4,579 December 31, 2016 Total Level 1 Level 2 Level 3 Construction/Land Development $ 4,739 - - $ 4,739 Real Estate 985 - - 985 Commercial Real Estate 892 - - 892 Dealer Finance 67 - - 67 Impaired loans $ 6,683 - - $ 6,683 |
Schedule of Fair value measurements | Fair Value at September 30, 2017 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Impaired Loans $ 4,579 Discounted appraised value Discount for selling costs and marketability 3%-19% (Average 5.1%) Fair Value at December 31, 2016 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Impaired Loans $ 6,683 Discounted appraised value Discount for selling costs and marketability 2%-50% (Average 4.7%) September 30, 2017 Total Level 1 Level 2 Level 3 Other real estate owned $ 2,148 - - $ 2,148 December 31, 2016 Total Level 1 Level 2 Level 3 Other real estate owned $ 2,076 - - $ 2,076 Fair Value at September 30, 2017 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Other real estate owned $ 2,148 Discounted appraised value Discount for selling costs 5%-15% (Average 8%) Fair Value at December 31, 2016 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Other real estate owned $ 2,076 Discounted appraised value Discount for selling costs 5%-15% (Average 8%) |
7. Disclosures About Fair Val26
7. Disclosures About Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosures About Fair Value Of Financial Instruments Tables | |
Schedule of Carrying Value and Estimated Fair Value for Financial Instruments | Fair Value Measurements at September 30, 2017 Using (dollars in thousands) Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at September 30, 2017 Assets: Cash and cash equivalents $ 9,746 $ 9,746 $ - $ - $ 9,746 Securities 22,807 21,998 809 - 22,807 Loans held for sale 58,177 - 58,177 - 58,177 Loans held for investment, net 613,018 - - 642,322 642,322 Interest receivable 1,845 - 1,845 - 1,845 Bank owned life insurance 13,841 - 13,841 - 13,841 Total $ 719,434 $ 31,744 $ 74,672 $ 642,322 $ 762,338 Liabilities: Deposits $ 562,380 $ - $ 398,229 $ 165,926 $ 564,155 Short-term debt 42,128 - 42,128 - 42,128 Long-term debt 50,840 - - 50,943 50,943 Interest payable 239 - 239 - 239 Total $ 655,587 $ - $ 440,596 $ 216,869 $ 657,465 Fair Value Measurements at December 31, 2016 Using (dollars in thousands) Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at December 31, 2016 Assets: Cash and cash equivalents $ 16,355 $ 16,355 $ - $ - $ 16,355 Securities 24,908 24,014 894 - 24,908 Loans held for sale 62,735 - 62,735 - 62,735 Loans held for investment, net 584,093 - - 598,991 598,991 Interest receivable 1,785 - 1,785 - 1,785 Bank owned life insurance 13,513 - 13,513 - 13,513 Total $ 703,389 $ 40,369 $ 78,927 $ 598,991 $ 718,287 Liabilities: Deposits $ 537,085 $ - $ 379,857 $ 158,073 $ 537,930 Short-term debt 40,000 - 40,000 - 40,000 Long-term debt 64,237 - - 63,945 63,945 Interest payable 228 - 228 - 228 Total $ 641,550 $ - $ 420,085 $ 222,018 $ 642,103 |
8. Troubled Debt Restructuring
8. Troubled Debt Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Troubled Debt Restructuring Abstract | |
Schedule of Troubled debt restructuring | September 30, 2017 Pre-Modification Post-Modification (dollars in thousands) Outstanding Outstanding Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Consumer 1 $ 18 $ 18 Total 1 $ 18 $ 18 September 30, 2017 Pre-Modification Post-Modification (dollars in thousands) Outstanding Outstanding Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Real Estate 1 $ 67 $ 67 Total 1 $ 67 $ 67 Nine Months ended September 30, 2016 Pre-Modification Post-Modification (dollars in thousands) Outstanding Outstanding Number of Contracts Recorded Investment Recorded Investment Troubled Debt Restructurings Real Estate 2 $ 142 $ 142 Consumer 3 33 33 Total 5 $ 175 $ 175 Three Months ended September 30, 2016 Pre-Modification Post-Modification (dollars in thousands) Outstanding Outstanding Number of Contracts Recorded Investment Recorded Investment Troubled Debt Restructurings Consumer 1 $ 6 $ 6 Total 1 $ 6 $ 6 |
9. Accumulated Other Comprehe28
9. Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Loss | |
Schedule of Accumulated Other Comprehensive Loss | (dollars in thousands) Unrealized Securities Gains (Losses) Adjustments Related to Pension Plan Accumulated Other Comprehensive Loss Balance at December 31, 2016 $ 6 $ (3,171 ) $ (3,165 ) Change in unrealized securities gains (losses), net of tax (1 ) - (1 ) Change in unfunded pension liability, net of tax - - - Balance at September 30, 2017 $ 5 $ (3,171 ) $ (3,166 ) (dollars in thousands) Unrealized Securities Gains (Losses) Adjustments Related to Pension Plan Accumulated Other Comprehensive Loss Balance at December 31, 2015 $ 3 $ (2,683 ) $ (2,680 ) Change in unrealized securities gains, net of tax 22 - 22 Change in unfunded pension liability, net of tax - - - Balance at September 30, 2016 $ 25 $ (2,683 ) $ (2,658 ) |
10. Business Segments (Tables)
10. Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Segments Tables | |
Schedule of Business Segments | The Company utilizes its subsidiaries to provide multiple business segments including retail banking, mortgage banking, title insurance services, investment services and credit life and accident and health insurance products related to lending. Revenues from retail banking operations consist primarily of interest earned on loans and investment securities and service charges on deposit accounts. Mortgage Banking operating revenues consist principally of gains on sales of loans in the secondary market, loan origination fee income and interest earned on mortgage loans held for sale. Revenues from title insurance services, investment services and insurance products consist of commissions on products provided. The following tables represent revenues and expenses by segment for the three and nine months ended September 30, 2017 and 2016. Nine Months Ended September 30, 2017 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 24,815 $ 97 $ 112 $ - $ - $ (70 ) $ 24,954 Service charges on deposits 1,010 - - - - - 1,010 Investment services and insurance income 1 - 529 - - - 530 Mortgage banking income, net - 1,974 - - - - 1,974 Title insurance income - - - 668 - - 668 Income from bank owned life insurance 336 - - - - - 336 Low income housing partnership losses (587 ) - - - - - (587 ) ATM and check card fees 1,034 - - - - - 1,034 Gain on prepayment of long-term debt 504 - - - - - 504 Loss on investments - (40 ) (2 ) - - - (42 ) Other operating income 513 - - - - - 513 Total income 27,626 2,031 639 668 - (70 ) 30,894 Expenses: Interest Expense 2,866 65 - - - (70 ) 2,861 Provision for loan losses - - - - - - - Salary expense 6,781 1,035 341 345 - - 8,502 Employee benefit expense 2,245 168 - 54 - - 2,467 Occupancy expense 624 115 - 37 - - 776 Equipment expense 551 39 - 23 - - 613 FDIC insurance assessment 200 - - - - - 200 Other real estate owned, net 22 - - - - - 22 Marketing expense 352 42 6 4 - - 404 Legal and professional fees 246 7 - - - - 253 ATM and check card fees 526 3 - - - - 529 Telecom and data processing expense 967 78 - - - - 1,045 Directors fees 315 45 - - - - 360 Bank franchise Tax 491 - - - - - 491 Other operating expenses 2,127 262 17 54 4 - 2,464 Total expense 18,313 1,859 364 517 4 (70 ) 20,987 Income tax expense (benefit) 2,603 - 83 - (53 ) - 2,633 Net income $ 6,710 $ 172 $ 192 $ 151 $ 49 $ - $ 7,274 Net income attributable to noncontrolling interest - 51 - - - - 51 Net Income attributable to F & M Bank Corp. $ 6,710 $ 121 $ 192 $ 151 $ 49 $ - $ 7,223 Total Assets $ 750,048 $ 6,309 $ 6,644 $ 443 $ 91,362 $ (91,121 ) $ 763,685 Goodwill $ 2,670 $ 103 $ - $ - $ 340 $ - $ 3,113 Three Months Ended September 30, 2017 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 8,644 $ 32 $ 37 $ - $ - $ (25 ) $ 8,688 Service charges on deposits 359 - - - - - 359 Investment services and insurance income - - 169 - - - 169 Mortgage banking income, net - 861 - - - - 861 Title insurance income - - - 247 - - 247 Income from bank owned life insurance 113 - - - - - 113 Low income housing partnership losses (201 ) - - - - - (201 ) ATM and check card fees 352 - - - - - 352 Gain on prepayment of long-term debt - - - - - - - Loss on investments - - - - - - - Other operating income 246 - - - - - 246 Total income 9,513 893 206 247 - (25 ) 10,834 Expenses: Interest Expense 1,032 24 - - - (25 ) 1,031 Provision for loan losses - - - - - - - Salary expense 2,326 586 107 175 - - 3,194 Employee benefit expense 722 1 - (34 ) - - 689 Occupancy expense 221 48 - 12 - - 281 Equipment expense 192 20 - 12 - - 224 FDIC insurance assessment 20 - - - - - 20 Other real estate owned, net (3 ) - - - - - (3 ) Marketing expense 136 8 2 2 - - 148 Legal and professional fees 75 3 - - - - 78 ATM and check card fees 182 1 - - - - 183 Telecom and data processing expense 342 28 - - - - 370 Directors fees 105 11 - - - - 116 Bank franchise Tax 166 - - - - - 166 Other operating expenses 767 2 4 20 - - 793 Total expense 6,283 732 113 187 - (25 ) 7,290 Income tax expense (benefit) 933 - 30 - (17 ) - 946 Net income $ 2,297 $ 161 $ 63 $ 60 $ 17 $ - $ 2,598 Net income attributable to noncontrolling interest - 48 - - - - 48 Net Income attributable to F & M Bank Corp. $ 2,297 $ 113 $ 63 $ 60 $ 17 $ - $ 2,550 Nine Months Ended September 30, 2016 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 23,653 $ 30 $ 114 $ - $ - $ (4 ) $ 23,793 Service charges on deposits 842 - - - - - 842 Investment services and insurance income 1 - 316 - - - 317 Mortgage banking income, net - 1,891 - - - - 1,891 Income from bank owned life insurance 356 - - - - - 356 Low income housing partnership losses (548 ) - - - - - (548 ) ATM and check card fees 1,020 - - - - - 1,020 Gain on prepayment of long-term debt - - - - - - - Loss on investments - - - - - - - Other operating income 238 - - - - - 238 Total income 25,562 1,921 430 - - (4 ) 27,909 Expenses: Interest Expense 2,649 - - - - (4 ) 2,645 Provision for loan losses - - - - - - - Salary expense 6,117 823 221 - - - 7,161 Employee benefit expense 1,927 186 - - - - 2,113 Occupancy expense 552 91 - - - - 643 Equipment expense 536 33 - - - - 569 FDIC insurance assessment 338 - - - - - 338 Other real estate owned, net 72 - - - - - 72 Marketing expense 356 39 1 - - - 396 Legal and professional fees 286 7 - - - - 293 ATM and check card fees 514 4 - - - - 518 Telecom and data processing expense 795 66 - - - - 861 Directors fees 234 20 - - - - 254 Bank franchise Tax 480 - - - - - 480 Other operating expenses 2,011 138 26 - 1 - 2,176 Total expense 16,867 1,407 248 - 1 (4 ) 18,519 Income tax expense (benefit) 2,353 - 48 - (214 ) - 2,187 Net income $ 6,342 $ 514 $ 134 $ - $ 213 $ - $ 7,203 Net income attributable to noncontrolling interest - 154 - - - - 154 Net Income attributable to F & M Bank Corp. $ 6,342 $ 360 $ 134 $ - $ 213 $ - $ 7,049 Total Assets $ 736,642 $ 2,492 $ 6,315 $ - $ 87,369 $ (87,526 ) $ 745,292 Goodwill $ 2,670 $ - $ - $ - $ - $ - $ 2,670 Three Months Ended September 30, 2016 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 8,160 $ 17 $ 39 $ - $ - $ (1 ) $ 8,215 Service charges on deposits 336 - - - - - 336 Investment services and insurance income - - 112 - - - 112 Mortgage banking income, net - 694 - - - - 694 Income from bank owned life insurance 119 - - - - - 119 Low income housing partnership losses (183 ) - - - - - (183 ) ATM and check card fees 328 - - - - - 328 Other operating income 129 - - - - - 129 Total income 8,889 711 151 - - (1 ) 9,750 Expenses: Interest Expense 971 - - - - (1 ) 970 Provision for loan losses - - - - - - - Salary expense 2,094 295 82 - - - 2,471 Employee benefit expense 628 71 - - - - 699 Occupancy expense 185 30 - - - - 215 Equipment expense 181 2 - - - - 183 FDIC insurance assessment 113 - - - - - 113 Other real estate owned, net 19 - - - - - 19 Marketing expense 120 6 2 - - - 128 Legal and professional fees 98 2 - - - - 100 ATM and check card fees 183 1 - - - - 184 Telecom and data processing expense 286 23 - - - - 309 Directors fees 42 4 - - - - 46 Bank franchise Tax 170 - - - - - 170 Other operating expenses 755 63 5 - - - 823 Total expense 5,845 497 89 - - (1 ) 6,430 Income tax expense (benefit) 770 - 16 - (132 ) - 654 Net income $ 2,274 $ 214 $ 46 $ - $ 132 $ - $ 2,666 Net income attributable to noncontrolling interest - 64 - - - - 64 Net Income attributable to F & M Bank Corp. $ 2,274 $ 150 $ 46 $ - $ 132 $ - $ 2,602 |
1. Summary of Significant Acc30
1. Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings available to common stockholders: | ||||
Net income | $ 2,598 | $ 2,666 | $ 7,274 | $ 7,203 |
Noncontrolling interest income (loss) | 48 | 64 | 51 | 154 |
Preferred stock dividends | 103 | 128 | 312 | 382 |
Net income available to common stockholders | $ 2,447 | $ 2,474 | $ 6,911 | $ 6,667 |
1. Summary of Significant Acc31
1. Summary of Significant Accounting Policies (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Summary Of Significant Accounting Policies | ||||
Basic EPS, Income | $ 2,447 | $ 2,474 | $ 6,911 | $ 6,667 |
Effect of Dilutive Securities Convertible Preferred Stock, Income | 103 | 128 | 312 | 382 |
Diluted EPS, Income | $ 2,550 | $ 2,602 | $ 7,223 | $ 7,049 |
Diluted EPS, Shares | 3,270,969 | 3,286,756 | 3,271,863 | 3,286,165 |
Effect of Dilutive Securities Convertible Preferred Stock, Shares | 361,638 | 444,400 | 362,993 | 444,400 |
Diluted EPS, Shares | 3,632,607 | 3,731,156 | 3,634,856 | 3,730,565 |
Basic EPS, Per Shares | $ 0.75 | $ 0.75 | $ 2.11 | $ 2.03 |
Effect of Dilutive Securities Convertible Preferred Stock, Per Shares | (.05) | (.05) | (.12) | (.14) |
Diluted EPS, Per Shares | $ .70 | $ .70 | $ 1.99 | $ 1.89 |
2. Investment Securities (Detai
2. Investment Securities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | ||
Securities available for sale | |||
Cost | $ 22,675 | $ 24,774 | |
Unrealized Gains | 10 | 9 | |
Unrealized Losses | 3 | 0 | |
Market Value | 22,682 | 24,783 | [1] |
U. S. Treasuries [Member] | |||
Securities available for sale | |||
Cost | 22,001 | 24,005 | |
Unrealized Gains | 0 | 9 | |
Unrealized Losses | 3 | 0 | |
Market Value | 21,998 | 24,014 | |
Securities held to maturity | |||
Cost | 125 | 125 | |
Market Value | 125 | 125 | |
Mortgage-backed securities [Member] | |||
Securities available for sale | |||
Cost | 539 | 634 | |
Unrealized Gains | 10 | 0 | |
Unrealized Losses | 0 | 0 | |
Market Value | 549 | 634 | |
Marketable Equities [Member] | |||
Securities available for sale | |||
Cost | 135 | 135 | |
Unrealized Gains | 0 | 0 | |
Unrealized Losses | 0 | 0 | |
Market Value | 135 | 135 | |
U. S. Treasury and agency obligations [Member] | |||
Securities available for sale | |||
Unrealized Gains | 0 | 0 | |
Unrealized Losses | 0 | 0 | |
Securities held to maturity | |||
Cost | 125 | 125 | |
Market Value | $ 125 | $ 125 | |
[1] | 2016 Derived from audited consolidated financial statements. |
2. Investment Securities (Det33
2. Investment Securities (Details 1) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | [1] |
Total, Amortized Cost | $ 125 | $ 125 | |
Securities Held to Maturity [Member] | |||
Due in one year or less, Amortized Cost | 0 | ||
Due after one year through five years, Amortized Cost | 125 | ||
Due after five years, Amortized Cost | 0 | ||
Due after five years, Amortized Cost | 0 | ||
Total, Amortized Cost | 125 | ||
Due in one year or less, Fair Value | 0 | ||
Due after one year through five years, Fair Value | 125 | ||
Due after five years, Fair Value | 0 | ||
Due after five years, Fair Value | 0 | ||
Total, Fair Value | 125 | ||
Securities Available for Sale [Member] | |||
Due in one year or less, Amortized Cost | 22,001 | ||
Due after one year through five years, Amortized Cost | 0 | ||
Due after five years, Amortized Cost | 539 | ||
Due after five years, Amortized Cost | 135 | ||
Total, Amortized Cost | 22,675 | ||
Due in one year or less, Fair Value | 21,998 | ||
Due after one year through five years, Fair Value | 0 | ||
Due after five years, Fair Value | 549 | ||
Due after five years, Fair Value | 135 | ||
Total, Fair Value | $ 22,682 | ||
[1] | 2016 Derived from audited consolidated financial statements. |
2. Investment securities (Det34
2. Investment securities (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Invetment Securities Details 3Abstract | |||
Other investments | $ 13,600 | $ 14,567 | [1] |
[1] | 2016 Derived from audited consolidated financial statements. |
3. Loans (Details)
3. Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Loans outstanding | $ 619,960 | $ 591,636 |
Construction/Land Development [Member] | ||
Loans outstanding | 74,313 | 76,172 |
Farmland [Member] | ||
Loans outstanding | 15,578 | 12,901 |
Real Estate [Member] | ||
Loans outstanding | 177,786 | 172,758 |
Multi-Family [Member] | ||
Loans outstanding | 8,504 | 7,605 |
Commercial Real Estate [Member] | ||
Loans outstanding | 155,510 | 150,061 |
Home Equity - Closed End [Member] | ||
Loans outstanding | 11,189 | 11,453 |
Home Equity [Member] | ||
Loans outstanding | 55,461 | 54,420 |
Commercial & Industrial - Non-Real Estate [Member] | ||
Loans outstanding | 38,050 | 31,306 |
Consumer [Member] | ||
Loans outstanding | 7,328 | 6,643 |
Dealer Finance [Member] | ||
Loans outstanding | 73,567 | 65,495 |
Credit Cards [Member] | ||
Loans outstanding | $ 2,674 | $ 2,822 |
3. Loans (Details 1)
3. Loans (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Impaired loans without a valuation allowance | |||||
Recorded Investment | $ 8,003 | $ 8,003 | $ 6,205 | ||
Unpaid Principal Balance | 8,706 | 8,706 | 6,908 | ||
Average Recorded Investment | 8,822 | $ 5,589 | 8,227 | $ 4,914 | |
Interest Income Recognized | 34 | 68 | 111 | 150 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 6,859 | 6,859 | 8,837 | ||
Unpaid Principal Balance | 6,859 | 6,859 | 8,837 | ||
Related Allowance | 2,280 | 2,280 | 2,154 | ||
Average Recorded Investment | 6,893 | 11,921 | 7,470 | 13,107 | |
Interest Income Recognized | 86 | 134 | 258 | 311 | |
Total impaired loans | |||||
Recorded Investment | 14,862 | 14,862 | 15,042 | ||
Unpaid Principal Balance | 15,565 | 15,565 | 15,745 | ||
Related Allowance | 2,280 | 2,280 | 2,154 | ||
Average Recorded Investment | 15,715 | 17,510 | 15,697 | 18,021 | |
Interest Income Recognized | 120 | 202 | 369 | 461 | |
Construction/Land Development [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded Investment | 4,784 | 4,784 | 3,296 | ||
Unpaid Principal Balance | 5,140 | 5,140 | 3,652 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 5,414 | 2,649 | 4,870 | 2,009 | |
Interest Income Recognized | 14 | 15 | 64 | 32 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 5,619 | 5,619 | 6,592 | ||
Unpaid Principal Balance | 5,619 | 5,619 | 6,592 | ||
Related Allowance | 2,054 | 2,054 | 1,853 | ||
Average Recorded Investment | 5,640 | 8,429 | 6,215 | 9,761 | |
Interest Income Recognized | 75 | 112 | 215 | 212 | |
Farmland [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded Investment | 1,983 | 1,983 | 0 | ||
Unpaid Principal Balance | 1,983 | 1,983 | 0 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 1,921 | 0 | 1,900 | 0 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 0 | 0 | 0 | ||
Unpaid Principal Balance | 0 | 0 | 0 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 0 | 0 | 0 | 0 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | |
Real Estate [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded Investment | 740 | 740 | 768 | ||
Unpaid Principal Balance | 740 | 740 | 768 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 743 | 778 | 746 | 860 | |
Interest Income Recognized | 8 | 8 | 25 | 28 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 1,192 | 1,192 | 1,206 | ||
Unpaid Principal Balance | 1,192 | 1,192 | 1,206 | ||
Related Allowance | 214 | 214 | 221 | ||
Average Recorded Investment | 1,194 | 1,214 | 1,196 | 994 | |
Interest Income Recognized | 10 | 14 | 41 | 40 | |
Multi-Family [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded Investment | 0 | 0 | 0 | ||
Unpaid Principal Balance | 0 | 0 | 0 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 0 | 0 | 0 | 0 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 0 | 0 | 0 | ||
Unpaid Principal Balance | 0 | 0 | 0 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 0 | 0 | 0 | 0 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | |
Commercial Real Estate [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded Investment | 300 | 300 | 1,958 | ||
Unpaid Principal Balance | 300 | 300 | 1,958 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 200 | 993 | 167 | 674 | |
Interest Income Recognized | 9 | 77 | 12 | 79 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 0 | 0 | 952 | ||
Unpaid Principal Balance | 0 | 0 | 952 | ||
Related Allowance | 0 | 0 | 60 | ||
Average Recorded Investment | 0 | 958 | 0 | 944 | |
Interest Income Recognized | 0 | 14 | 0 | 42 | |
Home Equity - Closed End [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded Investment | 0 | 0 | 0 | ||
Unpaid Principal Balance | 0 | 0 | 0 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 0 | 0 | 0 | 0 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 0 | 0 | 0 | ||
Unpaid Principal Balance | 0 | 0 | 0 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 0 | 0 | 0 | 0 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | |
Home Equity [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded Investment | 0 | 0 | 0 | ||
Unpaid Principal Balance | 347 | 347 | 347 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 347 | 964 | 347 | 1,167 | |
Interest Income Recognized | 0 | (35) | 0 | 8 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 0 | 0 | 0 | ||
Unpaid Principal Balance | 0 | 0 | 0 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 0 | 1,234 | 0 | 1,322 | |
Interest Income Recognized | 0 | (5) | 0 | 14 | |
Commercial & Industrial - Non-Real Estate [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded Investment | 162 | 162 | 170 | ||
Unpaid Principal Balance | 162 | 162 | 170 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 164 | 174 | 165 | 177 | |
Interest Income Recognized | 2 | 2 | 8 | 2 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 0 | 0 | 0 | ||
Unpaid Principal Balance | 0 | 0 | 0 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 0 | 14 | 0 | 14 | |
Interest Income Recognized | 0 | (1) | 0 | 0 | |
Consumer [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded Investment | 9 | 9 | 13 | ||
Unpaid Principal Balance | 9 | 9 | 13 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 10 | 7 | 10 | 12 | |
Interest Income Recognized | 0 | 2 | 0 | 0 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 0 | 0 | 0 | ||
Unpaid Principal Balance | 0 | 0 | 0 | ||
Related Allowance | 0 | 0 | 0 | ||
Credit Cards [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded Investment | 0 | 0 | 0 | ||
Unpaid Principal Balance | 0 | 0 | 0 | ||
Related Allowance | 0 | 0 | 0 | ||
Impaired loans with a valuation allowance | |||||
Recorded Investment | 0 | 0 | 0 | ||
Unpaid Principal Balance | 0 | 0 | 0 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 0 | 0 | 0 | 0 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | |
Dealer Finance [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded Investment | 25 | 25 | 0 | ||
Unpaid Principal Balance | 25 | 25 | 0 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 23 | 24 | 22 | 15 | |
Interest Income Recognized | 1 | (1) | 2 | 1 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 48 | 48 | 87 | ||
Unpaid Principal Balance | 48 | 48 | 87 | ||
Related Allowance | 12 | 12 | $ 20 | ||
Average Recorded Investment | 59 | 72 | 59 | 72 | |
Interest Income Recognized | $ 1 | $ 0 | $ 2 | $ 3 |
3. Loans (Details 2)
3. Loans (Details 2) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
30-59 Days Past due | $ 5,258 | $ 4,095 |
60-89 Days Past due | 5,706 | 1,047 |
Greater than 90 Days (excluding non-accrual) | 3,715 | 3,239 |
Total past due | 14,679 | 8,381 |
Current | 605,281 | 583,255 |
Total Loans Receivable | 619,960 | 591,636 |
Non-Accrual Loans | 5,662 | 4,763 |
Recorded Investment >90 days & accruing | 0 | 107 |
Credit Cards [Member] | ||
30-59 Days Past due | 16 | 18 |
60-89 Days Past due | 16 | 4 |
Greater than 90 Days (excluding non-accrual) | 0 | 0 |
Total past due | 32 | 22 |
Current | 2,642 | 2,800 |
Total Loans Receivable | 2,674 | 2,822 |
Non-Accrual Loans | 0 | 0 |
Recorded Investment >90 days & accruing | 0 | 0 |
Construction/Land Development [Member] | ||
30-59 Days Past due | 62 | 73 |
60-89 Days Past due | 1,692 | 101 |
Greater than 90 Days (excluding non-accrual) | 2,372 | 2,175 |
Total past due | 4,126 | 2,349 |
Current | 70,187 | 73,823 |
Total Loans Receivable | 74,313 | 76,172 |
Non-Accrual Loans | 2,788 | 2,805 |
Recorded Investment >90 days & accruing | 0 | 0 |
Farmland [Member] | ||
30-59 Days Past due | 0 | 0 |
60-89 Days Past due | 1,984 | 0 |
Greater than 90 Days (excluding non-accrual) | 0 | 0 |
Total past due | 1,984 | 0 |
Current | 13,594 | 12,901 |
Total Loans Receivable | 15,578 | 12,901 |
Non-Accrual Loans | 0 | 0 |
Recorded Investment >90 days & accruing | 0 | 0 |
Real Estate [Member] | ||
30-59 Days Past due | 2,250 | 2,135 |
60-89 Days Past due | 1,202 | 746 |
Greater than 90 Days (excluding non-accrual) | 536 | 774 |
Total past due | 3,988 | 3,655 |
Current | 173,798 | 169,103 |
Total Loans Receivable | 177,786 | 172,758 |
Non-Accrual Loans | 1,714 | 1,399 |
Recorded Investment >90 days & accruing | 0 | 81 |
Multi-Family [Member] | ||
30-59 Days Past due | 0 | 0 |
60-89 Days Past due | 0 | 0 |
Greater than 90 Days (excluding non-accrual) | 0 | 0 |
Total past due | 0 | 0 |
Current | 8,504 | 7,605 |
Total Loans Receivable | 8,504 | 7,605 |
Non-Accrual Loans | 0 | 0 |
Recorded Investment >90 days & accruing | 0 | 0 |
Commercial Real Estate [Member] | ||
30-59 Days Past due | 840 | 139 |
60-89 Days Past due | 287 | 0 |
Greater than 90 Days (excluding non-accrual) | 0 | 0 |
Total past due | 1,127 | 139 |
Current | 154,383 | 149,922 |
Total Loans Receivable | 155,510 | 150,061 |
Non-Accrual Loans | 0 | 0 |
Recorded Investment >90 days & accruing | 0 | 0 |
Home Equity - Closed End [Member] | ||
30-59 Days Past due | 273 | 101 |
60-89 Days Past due | 5 | 0 |
Greater than 90 Days (excluding non-accrual) | 0 | 32 |
Total past due | 278 | 133 |
Current | 10,911 | 11,320 |
Total Loans Receivable | 11,189 | 11,453 |
Non-Accrual Loans | 0 | 32 |
Recorded Investment >90 days & accruing | 0 | 0 |
Home Equity [Member] | ||
30-59 Days Past due | 488 | 484 |
60-89 Days Past due | 100 | 0 |
Greater than 90 Days (excluding non-accrual) | 173 | 69 |
Total past due | 761 | 553 |
Current | 54,700 | 53,867 |
Total Loans Receivable | 55,461 | 54,420 |
Non-Accrual Loans | 436 | 279 |
Recorded Investment >90 days & accruing | 0 | 0 |
Commercial & Industrial - Non-Real Estate [Member] | ||
30-59 Days Past due | 264 | 313 |
60-89 Days Past due | 110 | 5 |
Greater than 90 Days (excluding non-accrual) | 481 | 0 |
Total past due | 855 | 318 |
Current | 37,195 | 30,988 |
Total Loans Receivable | 38,050 | 31,306 |
Non-Accrual Loans | 481 | 70 |
Recorded Investment >90 days & accruing | 0 | 0 |
Consumer [Member] | ||
30-59 Days Past due | 13 | 35 |
60-89 Days Past due | 23 | 4 |
Greater than 90 Days (excluding non-accrual) | 5 | 6 |
Total past due | 41 | 45 |
Current | 7,287 | 6,598 |
Total Loans Receivable | 7,328 | 6,643 |
Non-Accrual Loans | 5 | 0 |
Recorded Investment >90 days & accruing | 0 | 0 |
Dealer Finance [Member] | ||
30-59 Days Past due | 1,052 | 797 |
60-89 Days Past due | 287 | 187 |
Greater than 90 Days (excluding non-accrual) | 148 | 183 |
Total past due | 1,487 | 1,167 |
Current | 72,080 | 64,328 |
Total Loans Receivable | 73,567 | 65,495 |
Non-Accrual Loans | 238 | 178 |
Recorded Investment >90 days & accruing | $ 0 | $ 26 |
3. Loans (Details Narrative)
3. Loans (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | ||
Loans Details Narrative | |||
Loans held for sale | $ 58,177 | $ 62,735 | [1] |
Foreclosed residential real estate in other real estate | $ 93 | $ 40 | |
[1] | 2016 Derived from audited consolidated financial statements. |
4. Allowance for Loan Losses (D
4. Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Beginning Balance | $ 7,543 | $ 8,781 |
Charge-offs | 1,562 | 2,261 |
Recoveries | 961 | 1,023 |
Provision | 0 | 0 |
Ending Balance | 6,942 | 7,543 |
Individually Evaluated for Impairment | 2,280 | 2,154 |
Collectively Evaluated for Impairment | 4,662 | 5,389 |
Construction/Land Development [Member] | ||
Beginning Balance | 3,381 | 4,442 |
Charge-offs | 0 | 356 |
Recoveries | 0 | 7 |
Provision | (213) | (712) |
Ending Balance | 3,168 | 3,381 |
Individually Evaluated for Impairment | 2,054 | 1,853 |
Collectively Evaluated for Impairment | 1,114 | 1,528 |
Farmland [Member] | ||
Beginning Balance | 34 | 95 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision | (4) | (61) |
Ending Balance | 30 | 34 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 30 | 34 |
Real Estate [Member] | ||
Beginning Balance | 843 | 806 |
Charge-offs | 0 | 23 |
Recoveries | 2 | 4 |
Provision | (105) | 56 |
Ending Balance | 740 | 843 |
Individually Evaluated for Impairment | 214 | 221 |
Collectively Evaluated for Impairment | 526 | 622 |
Multi-Family [Member] | ||
Beginning Balance | 23 | 71 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision | (2) | (48) |
Ending Balance | 21 | 23 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 21 | 23 |
Commercial Real Estate [Member] | ||
Beginning Balance | 705 | 445 |
Charge-offs | 0 | 19 |
Recoveries | 11 | 135 |
Provision | (165) | 144 |
Ending Balance | 551 | 705 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 551 | 705 |
Home Equity - Closed End [Member] | ||
Beginning Balance | 75 | 174 |
Charge-offs | 8 | 8 |
Recoveries | 25 | 0 |
Provision | (20) | (91) |
Ending Balance | 72 | 75 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 72 | 75 |
Home Equity [Member] | ||
Beginning Balance | 470 | 634 |
Charge-offs | 25 | 370 |
Recoveries | 0 | 120 |
Provision | (85) | 86 |
Ending Balance | 360 | 470 |
Individually Evaluated for Impairment | 0 | 60 |
Collectively Evaluated for Impairment | 360 | 410 |
Commercial & Industrial - Non-Real Estate [Member] | ||
Beginning Balance | 586 | 1,055 |
Charge-offs | 31 | 293 |
Recoveries | 66 | 267 |
Provision | (249) | (443) |
Ending Balance | 372 | 586 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 372 | 586 |
Consumer [Member] | ||
Beginning Balance | 78 | 108 |
Charge-offs | 34 | 37 |
Recoveries | 11 | 19 |
Provision | 55 | (12) |
Ending Balance | 110 | 78 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 110 | 78 |
Dealer Finance [Member] | ||
Beginning Balance | 1,289 | 836 |
Charge-offs | 1,395 | 1,081 |
Recoveries | 816 | 417 |
Provision | 751 | 1,117 |
Ending Balance | 1,461 | 1,289 |
Individually Evaluated for Impairment | 12 | 20 |
Collectively Evaluated for Impairment | 1,449 | 1,269 |
Credit Cards [Member] | ||
Beginning Balance | 59 | 115 |
Charge-offs | 69 | 74 |
Recoveries | 30 | 54 |
Provision | 37 | (36) |
Ending Balance | 57 | 59 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | $ 57 | $ 59 |
4. Allowance for Loan Losses 40
4. Allowance for Loan Losses (Details 1) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Loan Receivable | $ 619,960 | $ 591,636 |
Loans Individually Evaluated for Impairment | 14,862 | 15,042 |
Loans Collectively Evaluated for Impairment | 605,098 | 576,594 |
Construction/Land Development [Member] | ||
Loan Receivable | 74,313 | 76,172 |
Loans Individually Evaluated for Impairment | 10,403 | 9,888 |
Loans Collectively Evaluated for Impairment | 63,910 | 66,284 |
Farmland [Member] | ||
Loan Receivable | 15,578 | 12,901 |
Loans Individually Evaluated for Impairment | 1,983 | 0 |
Loans Collectively Evaluated for Impairment | 13,595 | 12,901 |
Real Estate [Member] | ||
Loan Receivable | 177,786 | 172,758 |
Loans Individually Evaluated for Impairment | 1,932 | 1,974 |
Loans Collectively Evaluated for Impairment | 175,854 | 170,784 |
Multi-Family [Member] | ||
Loan Receivable | 8,504 | 7,605 |
Loans Individually Evaluated for Impairment | 0 | 0 |
Loans Collectively Evaluated for Impairment | 8,504 | 7,605 |
Commercial Real Estate [Member] | ||
Loan Receivable | 155,510 | 150,061 |
Loans Individually Evaluated for Impairment | 300 | 2,910 |
Loans Collectively Evaluated for Impairment | 155,210 | 147,151 |
Home Equity - Closed End [Member] | ||
Loan Receivable | 11,189 | 11,453 |
Loans Individually Evaluated for Impairment | 0 | 0 |
Loans Collectively Evaluated for Impairment | 11,189 | 11,453 |
Home Equity [Member] | ||
Loan Receivable | 55,461 | 54,420 |
Loans Individually Evaluated for Impairment | 0 | 0 |
Loans Collectively Evaluated for Impairment | 55,461 | 54,420 |
Commercial & Industrial - Non-Real Estate [Member] | ||
Loan Receivable | 38,050 | 31,306 |
Loans Individually Evaluated for Impairment | 162 | 170 |
Loans Collectively Evaluated for Impairment | 37,888 | 31,136 |
Consumer [Member] | ||
Loan Receivable | 7,328 | 6,643 |
Loans Individually Evaluated for Impairment | 9 | 13 |
Loans Collectively Evaluated for Impairment | 7,319 | 6,630 |
Dealer Finance [Member] | ||
Loan Receivable | 73,567 | 65,495 |
Loans Individually Evaluated for Impairment | 73 | 87 |
Loans Collectively Evaluated for Impairment | 73,494 | 65,408 |
Credit Cards [Member] | ||
Loan Receivable | 2,674 | 2,822 |
Loans Individually Evaluated for Impairment | 0 | 0 |
Loans Collectively Evaluated for Impairment | $ 2,674 | $ 2,822 |
4. Allowance for Loan Losses 41
4. Allowance for Loan Losses (Details 2) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Construction/Land Development | $ 74,313 | $ 76,172 |
Farmland | 15,578 | 12,901 |
Real Estate | 177,786 | 172,758 |
Multi-Family | 8,504 | 7,605 |
Commercial Real Estate | 155,510 | 150,061 |
Home Equity - closed end | 11,189 | 11,453 |
Home Equity - open end | 55,461 | 54,420 |
Commercial & Industrial (Non-Real Estate) | 38,050 | 31,306 |
Consumer (excluding dealer) | 7,328 | 6,643 |
Total | 543,719 | 523,319 |
Grade 1 Minimal Risk [Member] | ||
Construction/Land Development | 0 | 0 |
Farmland | 64 | 65 |
Real Estate | 0 | 0 |
Multi-Family | 0 | 0 |
Commercial Real Estate | 0 | 0 |
Home Equity - closed end | 0 | 0 |
Home Equity - open end | 84 | 124 |
Commercial & Industrial (Non-Real Estate) | 277 | 1,375 |
Consumer (excluding dealer) | 47 | 67 |
Total | 472 | 1,631 |
Grade 2 Modest Risk [Member] | ||
Construction/Land Development | 730 | 1,478 |
Farmland | 333 | 0 |
Real Estate | 1,404 | 1,149 |
Multi-Family | 249 | 311 |
Commercial Real Estate | 2,811 | 2,793 |
Home Equity - closed end | 130 | 150 |
Home Equity - open end | 2,612 | 1,724 |
Commercial & Industrial (Non-Real Estate) | 1,460 | 1,267 |
Consumer (excluding dealer) | 362 | 174 |
Total | 10,091 | 9,046 |
Grade 3 Average Risk [Member] | ||
Construction/Land Development | 12,931 | 10,870 |
Farmland | 3,897 | 3,073 |
Real Estate | 53,245 | 62,168 |
Multi-Family | 2,898 | 3,009 |
Commercial Real Estate | 43,962 | 32,986 |
Home Equity - closed end | 3,815 | 3,966 |
Home Equity - open end | 16,619 | 16,415 |
Commercial & Industrial (Non-Real Estate) | 15,039 | 6,827 |
Consumer (excluding dealer) | 2,640 | 1,837 |
Total | 155,046 | 141,151 |
Grade 4 Acceptable Risk [Member] | ||
Construction/Land Development | 36,673 | 43,863 |
Farmland | 4,459 | 3,456 |
Real Estate | 95,135 | 74,242 |
Multi-Family | 5,177 | 4,099 |
Commercial Real Estate | 97,798 | 91,157 |
Home Equity - closed end | 4,499 | 4,139 |
Home Equity - open end | 31,730 | 30,974 |
Commercial & Industrial (Non-Real Estate) | 19,061 | 19,530 |
Consumer (excluding dealer) | 415 | 607 |
Total | 294,947 | 272,065 |
Grade 5 Marginally Acceptable [Member] | ||
Construction/Land Development | 10,285 | 8,399 |
Farmland | 4,348 | 4,446 |
Real Estate | 19,963 | 28,266 |
Multi-Family | 180 | 186 |
Commercial Real Estate | 9,312 | 19,181 |
Home Equity - closed end | 1,298 | 1,746 |
Home Equity - open end | 3,771 | 4,547 |
Commercial & Industrial (Non-Real Estate) | 1,368 | 2,198 |
Consumer (excluding dealer) | 1,187 | 1,242 |
Total | 51,712 | 70,211 |
Grade 6 Watch [Member] | ||
Construction/Land Development | 4,989 | 2,473 |
Farmland | 494 | 1,861 |
Real Estate | 5,285 | 4,680 |
Multi-Family | 0 | 0 |
Commercial Real Estate | 1,040 | 1,840 |
Home Equity - closed end | 1,442 | 1,414 |
Home Equity - open end | 142 | 125 |
Commercial & Industrial (Non-Real Estate) | 322 | 39 |
Consumer (excluding dealer) | 2,202 | 2,252 |
Total | 15,916 | 14,684 |
Grade 7 Substandard [Member] | ||
Construction/Land Development | 8,705 | 9,089 |
Farmland | 1,983 | 0 |
Real Estate | 2,754 | 2,253 |
Multi-Family | 0 | 0 |
Commercial Real Estate | 587 | 2,104 |
Home Equity - closed end | 5 | 38 |
Home Equity - open end | 503 | 511 |
Commercial & Industrial (Non-Real Estate) | 523 | 70 |
Consumer (excluding dealer) | 475 | 466 |
Total | 15,535 | 14,531 |
Grade 8 Doubtful [Member] | ||
Construction/Land Development | 0 | 0 |
Farmland | 0 | 0 |
Real Estate | 0 | 0 |
Multi-Family | 0 | 0 |
Commercial Real Estate | 0 | 0 |
Home Equity - closed end | 0 | 0 |
Home Equity - open end | 0 | 0 |
Commercial & Industrial (Non-Real Estate) | 0 | 0 |
Consumer (excluding dealer) | 0 | 0 |
Total | $ 0 | $ 0 |
4. Allowance for Loan Losses 42
4. Allowance for Loan Losses (Details 3) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Credit cards | $ 2,674 | $ 2,822 |
Dealer Finance | 73,567 | 65,495 |
Performing [Member] | ||
Credit cards | 2,674 | 2,822 |
Dealer Finance | 73,329 | 65,291 |
Non performing [Member] | ||
Credit cards | 0 | 0 |
Dealer Finance | $ 238 | $ 204 |
5. Employee Benefit Plan (Detai
5. Employee Benefit Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Employee Benefit Plan Details Abstract | ||||
Service cost | $ 174 | $ 158 | $ 522 | $ 474 |
Interest cost | 122 | 113 | 365 | 340 |
Expected return on plan assets | (213) | (214) | (638) | (641) |
Amortization of prior service cost | (4) | (4) | (11) | (11) |
Amortization of net (gain) or loss | 71 | 56 | 213 | 167 |
Net periodic pension cost | $ 150 | $ 109 | $ 451 | $ 329 |
6. Fair Value (Details)
6. Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Total assets at fair value | $ 22,682 | $ 24,783 |
Fair Value Inputs Level 1 [Member] | ||
Total assets at fair value | 21,998 | 24,014 |
Fair Value Inputs Level 2 [Member] | ||
Total assets at fair value | 684 | 769 |
Fair Value Inputs Level 3 [Member] | ||
Total assets at fair value | 0 | 0 |
U. S. Treasuries [Member] | ||
Total assets at fair value | 21,998 | 24,014 |
U. S. Treasuries [Member] | Fair Value Inputs Level 1 [Member] | ||
Total assets at fair value | 21,998 | 24,014 |
U. S. Treasuries [Member] | Fair Value Inputs Level 2 [Member] | ||
Total assets at fair value | 0 | 0 |
U. S. Treasuries [Member] | Fair Value Inputs Level 3 [Member] | ||
Total assets at fair value | 0 | 0 |
Mortgage-backed obligations of federal agencies [Member] | ||
Total assets at fair value | 549 | 634 |
Mortgage-backed obligations of federal agencies [Member] | Fair Value Inputs Level 1 [Member] | ||
Total assets at fair value | 0 | 0 |
Mortgage-backed obligations of federal agencies [Member] | Fair Value Inputs Level 2 [Member] | ||
Total assets at fair value | 549 | 634 |
Mortgage-backed obligations of federal agencies [Member] | Fair Value Inputs Level 3 [Member] | ||
Total assets at fair value | 0 | 0 |
Marketable Equities [Member] | ||
Total assets at fair value | 135 | 135 |
Marketable Equities [Member] | Fair Value Inputs Level 1 [Member] | ||
Total assets at fair value | 0 | 0 |
Marketable Equities [Member] | Fair Value Inputs Level 2 [Member] | ||
Total assets at fair value | 135 | 135 |
Marketable Equities [Member] | Fair Value Inputs Level 3 [Member] | ||
Total assets at fair value | 0 | 0 |
Securities Available for Sale [Member] | ||
Total assets at fair value | 22,682 | 24,783 |
Securities Available for Sale [Member] | Fair Value Inputs Level 1 [Member] | ||
Total assets at fair value | 21,998 | 24,014 |
Securities Available for Sale [Member] | Fair Value Inputs Level 2 [Member] | ||
Total assets at fair value | 684 | 634 |
Securities Available for Sale [Member] | Fair Value Inputs Level 3 [Member] | ||
Total assets at fair value | $ 0 | $ 0 |
6. Fair Value (Details 1)
6. Fair Value (Details 1) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Impaired loans | $ 4,579 | $ 6,683 |
Fair Value Inputs Level 1 [Member] | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 2 [Member] | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 3 [Member] | ||
Impaired loans | 4,579 | 6,683 |
Construction/Land Development [Member] | ||
Impaired loans | 3,565 | 4,739 |
Construction/Land Development [Member] | Fair Value Inputs Level 1 [Member] | ||
Impaired loans | 0 | 0 |
Construction/Land Development [Member] | Fair Value Inputs Level 2 [Member] | ||
Impaired loans | 0 | 0 |
Construction/Land Development [Member] | Fair Value Inputs Level 3 [Member] | ||
Impaired loans | 3,565 | 4,739 |
Real Estate [Member] | ||
Impaired loans | 978 | 985 |
Real Estate [Member] | Fair Value Inputs Level 1 [Member] | ||
Impaired loans | 0 | 0 |
Real Estate [Member] | Fair Value Inputs Level 2 [Member] | ||
Impaired loans | 0 | 0 |
Real Estate [Member] | Fair Value Inputs Level 3 [Member] | ||
Impaired loans | 978 | 985 |
Dealer Finance [Member] | ||
Impaired loans | 36 | 67 |
Dealer Finance [Member] | Fair Value Inputs Level 1 [Member] | ||
Impaired loans | 0 | 0 |
Dealer Finance [Member] | Fair Value Inputs Level 2 [Member] | ||
Impaired loans | 0 | 0 |
Dealer Finance [Member] | Fair Value Inputs Level 3 [Member] | ||
Impaired loans | $ 36 | 67 |
Commercial Real Estate [Member] | ||
Impaired loans | 892 | |
Commercial Real Estate [Member] | Fair Value Inputs Level 1 [Member] | ||
Impaired loans | 0 | |
Commercial Real Estate [Member] | Fair Value Inputs Level 2 [Member] | ||
Impaired loans | 0 | |
Commercial Real Estate [Member] | Fair Value Inputs Level 3 [Member] | ||
Impaired loans | $ 892 |
6. Fair Value (Details 2)
6. Fair Value (Details 2) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Impaired Loans | $ 4,579 | $ 6,683 |
Fair Value Inputs Level 3 [Member] | ||
Impaired Loans | 4,579 | 6,683 |
Other Real Estate Owned | $ 2,148 | $ 2,076 |
Valuation Technique Impaired Loans | Discounted appraised value | Discounted appraised value |
Valuation Technique Other Real Estate Owned | Discounted appraised value | Discounted appraised value |
Significant Unobservable Inputs Impaired Loans | Discount for selling costs and marketability | Discount for selling costs and marketability |
Significant Unobservable Inputs Other Real Estate Owned | Discount for selling costs | Discount for selling costs |
Average Impaired Loans | 5.10% | 4.70% |
Average Other Real Estate Owned | 4.70% | 4.70% |
Fair Value Inputs Level 3 [Member] | Minimum [Member] | ||
Range Impaired Loans | 3.00% | 2.00% |
Range Other Real Estate Owned | 5.00% | 5.00% |
Fair Value Inputs Level 3 [Member] | Maximum [Member] | ||
Range Impaired Loans | 19.00% | 50.00% |
Range Other Real Estate Owned | 15.00% | 15.00% |
7. Disclosures About Fair Val47
7. Disclosures About Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Assets: | |||
Cash and cash equivalents, Carrying amount | $ 9,746 | $ 16,355 | [1] |
Cash and cash equivalents, Fair value | 9,746 | 16,355 | |
Securities, Carrying amount | 22,807 | 24,908 | |
Securities, Fair value | 22,807 | 24,908 | |
Loans held for sale, Carrying Amount | 58,177 | 62,735 | |
Loans held for sale, Fair Value | 58,177 | 62,735 | |
Loans held for investment, net, Carrying Amount | 613,018 | 584,093 | |
Loans held for investment, net, Fair Value | 642,322 | 598,991 | |
Interest receivable, Carrying Amount | 1,845 | 1,785 | [1] |
Interest receivable, Fair Value | 1,845 | 1,785 | |
Bank owned life insurance, Carrying Amount | 13,841 | 13,513 | [1] |
Bank owned life insurance, Fair Value | 13,841 | 13,513 | |
Total Assets, Carrying Amount | 719,434 | 703,389 | |
Total Assets, Fair Value | 762,338 | 718,287 | |
Liabilities | |||
Deposits, Carrying Amount | 562,380 | 537,085 | |
Deposits, Fair Value | 564,155 | 537,930 | |
Short-term debt, Carrying Amount | 42,128 | 40,000 | |
Short-term debt, Fair Value | 42,128 | 40,000 | |
Long-term debt, Carrying Amount | 50,840 | 64,237 | |
Long-term debt, Fair Value | 50,943 | 63,945 | |
Interest payable, Carrying Amount | 239 | 228 | |
Interest payable, Fair Value | 239 | 228 | |
Total Liabilities, Carrying Amount | 655,587 | 641,550 | |
Total Liabilities, Fair Value | 657,465 | 642,103 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) for selling costs | |||
Assets: | |||
Cash and cash equivalents, Fair value | 9,746 | 16,355 | |
Securities, Fair value | 21,998 | 24,014 | |
Loans held for sale, Fair Value | 0 | 0 | |
Loans held for investment, net, Fair Value | 0 | 0 | |
Interest receivable, Fair Value | 0 | 0 | |
Bank owned life insurance, Fair Value | 0 | 0 | |
Total Assets, Fair Value | 31,744 | 40,369 | |
Liabilities | |||
Deposits, Fair Value | 0 | 0 | |
Short-term debt, Fair Value | 0 | 0 | |
Long-term debt, Fair Value | 0 | 0 | |
Interest payable, Fair Value | 0 | 0 | |
Total Liabilities, Fair Value | 0 | 0 | |
Fair Value Inputs Level 2 [Member] | |||
Assets: | |||
Cash and cash equivalents, Fair value | 0 | 0 | |
Securities, Fair value | 809 | 894 | |
Loans held for sale, Fair Value | 58,177 | 62,735 | |
Loans held for investment, net, Fair Value | 0 | 0 | |
Interest receivable, Fair Value | 1,845 | 1,785 | |
Bank owned life insurance, Fair Value | 13,841 | 13,513 | |
Total Assets, Fair Value | 74,672 | 78,927 | |
Liabilities | |||
Deposits, Fair Value | 398,229 | 379,857 | |
Short-term debt, Fair Value | 42,128 | 40,000 | |
Long-term debt, Fair Value | 0 | 0 | |
Interest payable, Fair Value | 239 | 228 | |
Total Liabilities, Fair Value | 440,596 | 420,085 | |
Fair Value Inputs Level 3 [Member] | |||
Assets: | |||
Cash and cash equivalents, Fair value | 0 | 0 | |
Securities, Fair value | 0 | 0 | |
Loans held for sale, Fair Value | 0 | 0 | |
Loans held for investment, net, Fair Value | 642,322 | 598,991 | |
Interest receivable, Fair Value | 0 | 0 | |
Bank owned life insurance, Fair Value | 0 | 0 | |
Total Assets, Fair Value | 642,322 | 598,991 | |
Liabilities | |||
Deposits, Fair Value | 165,926 | 158,073 | |
Short-term debt, Fair Value | 0 | 0 | |
Long-term debt, Fair Value | 50,943 | 63,945 | |
Interest payable, Fair Value | 0 | 0 | |
Total Liabilities, Fair Value | $ 216,869 | $ 222,018 | |
[1] | 2016 Derived from audited consolidated financial statements. |
8. Troubled Debt Restructurin48
8. Troubled Debt Restructuring (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016USD ($)Integer | Sep. 30, 2016USD ($)Integer | Sep. 30, 2017USD ($)Integer | |
Number of Contracts | Integer | 1 | 5 | |
Pre-Modification Outstanding Recorded Investment | $ 6 | $ 175 | |
Post-Modification Outstanding Recorded Investment | $ 6 | $ 175 | |
Consumer [Member] | |||
Number of Contracts | Integer | 1 | 3 | |
Pre-Modification Outstanding Recorded Investment | $ 6 | $ 33 | |
Post-Modification Outstanding Recorded Investment | $ 6 | $ 33 | |
Number of Contracts | Integer | 1 | ||
Pre-Modification Outstanding Recorded Investment | $ 18 | ||
Post-Modification Outstanding Recorded Investment | $ 18 | ||
Real Estate [Member] | |||
Number of Contracts | Integer | 2 | ||
Pre-Modification Outstanding Recorded Investment | $ 142 | ||
Post-Modification Outstanding Recorded Investment | $ 142 | ||
Number of Contracts | Integer | 1 | ||
Pre-Modification Outstanding Recorded Investment | $ 67 | ||
Post-Modification Outstanding Recorded Investment | $ 67 |
9. Accumulated Other Comprehe49
9. Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Unrealized Securities Gains (Losses) [Member] | ||
Balance at December 31, 2016 | $ 6 | $ 3 |
Change in unrealized securities gains (losses), net of tax | (1) | 22 |
Change in unfunded pension liability, net of tax | 0 | 0 |
Balance at September 30, 2017 | 5 | 25 |
Adjustments Related to Pension Plan [Member] | ||
Balance at December 31, 2016 | (3,171) | (2,683) |
Change in unrealized securities gains (losses), net of tax | 0 | 0 |
Change in unfunded pension liability, net of tax | 0 | 0 |
Balance at September 30, 2017 | (3,171) | (2,683) |
Accumulated Other comprehensive Income (Loss) [Member] | ||
Balance at December 31, 2016 | (3,165) | (2,680) |
Change in unrealized securities gains (losses), net of tax | (1) | 22 |
Change in unfunded pension liability, net of tax | 0 | 0 |
Balance at September 30, 2017 | $ (3,166) | $ (2,658) |
10. Business Segments (Details)
10. Business Segments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | [1] | |
Net interest income | $ 7,658,000 | $ 7,245,000 | $ 22,093,000 | $ 21,148,000 | ||
Service charges on deposits | 359,000 | 336,000 | 1,010,000 | 842,000 | ||
Investment services and insurance income | 169,000 | 112,000 | 530,000 | 317,000 | ||
Mortgage banking income, net | 861,000 | 694,000 | 1,974,000 | 1,891,000 | ||
Title insurance income | 247,000 | 0 | 668,000 | 0 | ||
Income from bank owned life insurance | 112,000 | 119,000 | 336,000 | 356,000 | ||
Low income housing partnership losses | (201,000) | (183,000) | (587,000) | (548,000) | ||
ATM and check card fees | 353,000 | 328,000 | 1,034,000 | 1,020,000 | ||
Gain on prepayment of long-term debt | 0 | 0 | (504,000) | 0 | ||
Other operating income | 245,000 | 129,000 | 513,000 | 238,000 | ||
Expenses: | ||||||
Interest Expense | 1,030,000 | 970,000 | 2,861,000 | 2,645,000 | ||
Provision for loan losses | 0 | 0 | 0 | 0 | ||
Salary expense | 3,194,000 | 2,471,000 | 8,502,000 | 7,161,000 | ||
Employee benefit expense | 689,000 | 699,000 | 2,467,000 | 2,113,000 | ||
Occupancy expense | 281,000 | 215,000 | 776,000 | 643,000 | ||
Equipment expense | 224,000 | 183,000 | 613,000 | 569,000 | ||
FDIC insurance assessment | 20,000 | 113,000 | 200,000 | 338,000 | ||
Other real estate owned, net | (4,000) | 19,000 | 22,000 | 72,000 | ||
Marketing expense | 147,000 | 128,000 | 404,000 | 396,000 | ||
Legal and professional fees | 78,000 | 100,000 | 253,000 | 293,000 | ||
ATM and check card fees | 183,000 | 184,000 | 529,000 | 518,000 | ||
Telecom and data processing expense | 370,000 | 309,000 | 1,045,000 | 861,000 | ||
Directors fees | 117,000 | 46,000 | 360,000 | 254,000 | ||
Bank franchise Tax | 167,000 | 170,000 | 491,000 | 480,000 | ||
Other operating expenses | 793,000 | 823,000 | 2,464,000 | 2,176,000 | ||
Income tax expense (benefit) | 946,000 | 654,000 | 2,633,000 | 2,187,000 | ||
Net income | 2,598,000 | 2,666,000 | 7,274,000 | 7,203,000 | ||
Total Assets | 763,685,000 | 763,685,000 | $ 744,889,000 | |||
Goodwill | 3,113,000 | 3,113,000 | $ 2,670,000 | |||
F&M Bank Member | ||||||
Net interest income | 8,644 | 8,160 | 24,815 | 23,653 | ||
Service charges on deposits | 359 | 336 | 1,010 | 842 | ||
Investment services and insurance income | 0 | 0 | 1 | 1 | ||
Mortgage banking income, net | 0 | 0 | 0 | 0 | ||
Title insurance income | 0 | 0 | ||||
Income from bank owned life insurance | 113 | 119 | 336 | 356 | ||
Low income housing partnership losses | (201) | (183) | (587) | (548) | ||
ATM and check card fees | 352 | 328 | 1,034 | 1,020 | ||
Gain on prepayment of long-term debt | 0 | 504 | 0 | |||
Loss on investments | 0 | 0 | 0 | |||
Other operating income | 246 | 129 | 513 | 238 | ||
Total income | 9,513 | 8,889 | 27,626 | 25,562 | ||
Expenses: | ||||||
Interest Expense | 1,032 | 971 | 2,866 | 2,649 | ||
Provision for loan losses | 0 | 0 | 0 | 0 | ||
Salary expense | 2,326 | 2,094 | 6,781 | 6,117 | ||
Employee benefit expense | 722 | 628 | 2,245 | 1,927 | ||
Occupancy expense | 221 | 185 | 624 | 552 | ||
Equipment expense | 192 | 181 | 551 | 536 | ||
FDIC insurance assessment | 20 | 113 | 200 | 338 | ||
Other real estate owned, net | (3) | 19 | 22 | 72 | ||
Marketing expense | 136 | 120 | 352 | 356 | ||
Legal and professional fees | 75 | 98 | 246 | 286 | ||
ATM and check card fees | 182 | 183 | 526 | 514 | ||
Telecom and data processing expense | 342 | 286 | 967 | 795 | ||
Directors fees | 105 | 42 | 315 | 234 | ||
Bank franchise Tax | 166 | 170 | 491 | 480 | ||
Other operating expenses | 767 | 755 | 2,127 | 2,011 | ||
Total expense | 6,283 | 5,845 | 18,313 | 16,867 | ||
Income tax expense (benefit) | 933 | 770 | 2,603 | 2,353 | ||
Net income | 2,297 | 2,274 | 6,710 | 6,342 | ||
Net income attributable to noncontrolling interest | 0 | 0 | 0 | 0 | ||
Net income attributable to F & M Bank Corp. | 2,297 | 2,274 | 6,710 | 6,342 | ||
Total Assets | 750,048 | 736,642 | 750,048 | 736,642 | ||
Goodwill | 2,670 | 2,670 | 2,670 | 2,670 | ||
VBS Mortgage | ||||||
Net interest income | 32 | 17 | 97 | 30 | ||
Service charges on deposits | 0 | 0 | 0 | 0 | ||
Investment services and insurance income | 0 | 0 | 0 | 0 | ||
Mortgage banking income, net | 861 | 694 | 1,974 | 1,891 | ||
Title insurance income | 0 | 0 | ||||
Income from bank owned life insurance | 0 | 0 | 0 | 0 | ||
Low income housing partnership losses | 0 | 0 | 0 | 0 | ||
ATM and check card fees | 0 | 0 | 0 | 0 | ||
Gain on prepayment of long-term debt | 0 | 0 | 0 | |||
Loss on investments | 0 | (40) | 0 | |||
Other operating income | 0 | 0 | 0 | 0 | ||
Total income | 893 | 711 | 2,031 | 1,921 | ||
Expenses: | ||||||
Interest Expense | 24 | 0 | 65 | 0 | ||
Provision for loan losses | 0 | 0 | 0 | 0 | ||
Salary expense | 586 | 295 | 1,035 | 823 | ||
Employee benefit expense | 1 | 71 | 168 | 186 | ||
Occupancy expense | 48 | 30 | 115 | 91 | ||
Equipment expense | 20 | 2 | 39 | 33 | ||
FDIC insurance assessment | 0 | 0 | 0 | 0 | ||
Other real estate owned, net | 0 | 0 | 0 | 0 | ||
Marketing expense | 8 | 6 | 42 | 39 | ||
Legal and professional fees | 3 | 2 | 7 | 7 | ||
ATM and check card fees | 1 | 1 | 3 | 4 | ||
Telecom and data processing expense | 28 | 23 | 78 | 66 | ||
Directors fees | 11 | 4 | 45 | 20 | ||
Bank franchise Tax | 0 | 0 | 0 | 0 | ||
Other operating expenses | 2 | 63 | 262 | 138 | ||
Total expense | 732 | 497 | 1,859 | 1,407 | ||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | ||
Net income | 161 | 214 | 172 | 514 | ||
Net income attributable to noncontrolling interest | 48 | 64 | 51 | 154 | ||
Net income attributable to F & M Bank Corp. | 113 | 150 | 121 | 360 | ||
Total Assets | 6,309 | 2,492 | 6,309 | 2,492 | ||
Goodwill | 103 | 0 | 103 | 0 | ||
TEB Life/FMFS | ||||||
Net interest income | 37 | 39 | 112 | 114 | ||
Service charges on deposits | 0 | 0 | 0 | 0 | ||
Investment services and insurance income | 169 | 112 | 529 | 316 | ||
Mortgage banking income, net | 0 | 0 | 0 | 0 | ||
Title insurance income | 0 | 0 | ||||
Income from bank owned life insurance | 0 | 0 | 0 | 0 | ||
Low income housing partnership losses | 0 | 0 | 0 | 0 | ||
ATM and check card fees | 0 | 0 | 0 | 0 | ||
Gain on prepayment of long-term debt | 0 | 0 | 0 | |||
Loss on investments | 0 | (2) | 0 | |||
Other operating income | 0 | 0 | 0 | 0 | ||
Total income | 206 | 151 | 639 | 430 | ||
Expenses: | ||||||
Interest Expense | 0 | 0 | 0 | 0 | ||
Provision for loan losses | 0 | 0 | 0 | 0 | ||
Salary expense | 107 | 82 | 341 | 221 | ||
Employee benefit expense | 0 | 0 | 0 | 0 | ||
Occupancy expense | 0 | 0 | 0 | 0 | ||
Equipment expense | 0 | 0 | 0 | 0 | ||
FDIC insurance assessment | 0 | 0 | 0 | 0 | ||
Other real estate owned, net | 0 | 0 | 0 | 0 | ||
Marketing expense | 2 | 2 | 6 | 1 | ||
Legal and professional fees | 0 | 0 | 0 | 0 | ||
ATM and check card fees | 0 | 0 | 0 | 0 | ||
Telecom and data processing expense | 0 | 0 | 0 | 0 | ||
Directors fees | 0 | 0 | 0 | 0 | ||
Bank franchise Tax | 0 | 0 | 0 | 0 | ||
Other operating expenses | 4 | 5 | 17 | 26 | ||
Total expense | 113 | 89 | 364 | 248 | ||
Income tax expense (benefit) | 30 | 16 | 83 | 48 | ||
Net income | 63 | 46 | 192 | 134 | ||
Net income attributable to noncontrolling interest | 0 | 0 | 0 | 0 | ||
Net income attributable to F & M Bank Corp. | 63 | 46 | 192 | 134 | ||
Total Assets | 6,644 | 6,315 | 6,644 | 6,315 | ||
Goodwill | 0 | 0 | 0 | 0 | ||
VS Title | ||||||
Net interest income | 0 | 0 | 0 | 0 | ||
Service charges on deposits | 0 | 0 | 0 | 0 | ||
Investment services and insurance income | 0 | 0 | 0 | 0 | ||
Mortgage banking income, net | 0 | 0 | 0 | 0 | ||
Title insurance income | 247 | 668 | ||||
Income from bank owned life insurance | 0 | 0 | 0 | 0 | ||
Low income housing partnership losses | 0 | 0 | 0 | 0 | ||
ATM and check card fees | 0 | 0 | 0 | 0 | ||
Gain on prepayment of long-term debt | 0 | 0 | 0 | |||
Loss on investments | 0 | 0 | 0 | |||
Other operating income | 0 | 0 | 0 | 0 | ||
Total income | 247 | 0 | 668 | 0 | ||
Expenses: | ||||||
Interest Expense | 0 | 0 | 0 | 0 | ||
Provision for loan losses | 0 | 0 | 0 | 0 | ||
Salary expense | 175 | 0 | 345 | 0 | ||
Employee benefit expense | (34) | 0 | 54 | 0 | ||
Occupancy expense | 12 | 0 | 37 | 0 | ||
Equipment expense | 12 | 0 | 23 | 0 | ||
FDIC insurance assessment | 0 | 0 | 0 | 0 | ||
Other real estate owned, net | 0 | 0 | 0 | 0 | ||
Marketing expense | 2 | 0 | 4 | 0 | ||
Legal and professional fees | 0 | 0 | 0 | 0 | ||
ATM and check card fees | 0 | 0 | 0 | 0 | ||
Telecom and data processing expense | 0 | 0 | 0 | 0 | ||
Directors fees | 0 | 0 | 0 | 0 | ||
Bank franchise Tax | 0 | 0 | 0 | 0 | ||
Other operating expenses | 20 | 0 | 54 | 0 | ||
Total expense | 187 | 0 | 517 | 0 | ||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | ||
Net income | 60 | 0 | 151 | 0 | ||
Net income attributable to noncontrolling interest | 0 | 0 | 0 | 0 | ||
Net income attributable to F & M Bank Corp. | 60 | 0 | 151 | 0 | ||
Total Assets | 443 | 0 | 443 | 0 | ||
Goodwill | 0 | 0 | 0 | 0 | ||
Parent Only | ||||||
Net interest income | 0 | 0 | 0 | 0 | ||
Service charges on deposits | 0 | 0 | 0 | 0 | ||
Investment services and insurance income | 0 | 0 | 0 | 0 | ||
Mortgage banking income, net | 0 | 0 | 0 | 0 | ||
Title insurance income | 0 | 0 | ||||
Income from bank owned life insurance | 0 | 0 | 0 | 0 | ||
Low income housing partnership losses | 0 | 0 | 0 | 0 | ||
ATM and check card fees | 0 | 0 | 0 | 0 | ||
Gain on prepayment of long-term debt | 0 | 0 | 0 | |||
Loss on investments | 0 | 0 | 0 | |||
Other operating income | 0 | 0 | 0 | 0 | ||
Total income | 0 | 0 | 0 | 0 | ||
Expenses: | ||||||
Interest Expense | 0 | 0 | 0 | 0 | ||
Provision for loan losses | 0 | 0 | 0 | 0 | ||
Salary expense | 0 | 0 | 0 | 0 | ||
Employee benefit expense | 0 | 0 | 0 | 0 | ||
Occupancy expense | 0 | 0 | 0 | 0 | ||
Equipment expense | 0 | 0 | 0 | 0 | ||
FDIC insurance assessment | 0 | 0 | 0 | 0 | ||
Other real estate owned, net | 0 | 0 | 0 | 0 | ||
Marketing expense | 0 | 0 | 0 | 0 | ||
Legal and professional fees | 0 | 0 | 0 | 0 | ||
ATM and check card fees | 0 | 0 | 0 | 0 | ||
Telecom and data processing expense | 0 | 0 | 0 | 0 | ||
Directors fees | 0 | 0 | 0 | 0 | ||
Bank franchise Tax | 0 | 0 | 0 | 0 | ||
Other operating expenses | 0 | 0 | 4 | 1 | ||
Total expense | 0 | 0 | 4 | 1 | ||
Income tax expense (benefit) | (17) | (132) | (53) | (214) | ||
Net income | 17 | 132 | 49 | 213 | ||
Net income attributable to noncontrolling interest | 0 | 0 | 0 | 0 | ||
Net income attributable to F & M Bank Corp. | 17 | 132 | 49 | 213 | ||
Total Assets | 91,362 | 87,369 | 91,362 | 87,369 | ||
Goodwill | 340 | 0 | 340 | 0 | ||
Eliminations | ||||||
Net interest income | (25) | (1) | (70) | (4) | ||
Service charges on deposits | 0 | 0 | 0 | 0 | ||
Investment services and insurance income | 0 | 0 | 0 | 0 | ||
Mortgage banking income, net | 0 | 0 | 0 | 0 | ||
Title insurance income | 0 | 0 | ||||
Income from bank owned life insurance | 0 | 0 | 0 | 0 | ||
Low income housing partnership losses | 0 | 0 | 0 | 0 | ||
ATM and check card fees | 0 | 0 | 0 | 0 | ||
Gain on prepayment of long-term debt | 0 | 0 | 0 | |||
Loss on investments | 0 | 0 | 0 | |||
Other operating income | 0 | 0 | 0 | 0 | ||
Total income | (25) | (1) | (70) | (4) | ||
Expenses: | ||||||
Interest Expense | (25) | (1) | (70) | (4) | ||
Provision for loan losses | 0 | 0 | 0 | 0 | ||
Salary expense | 0 | 0 | 0 | 0 | ||
Employee benefit expense | 0 | 0 | 0 | 0 | ||
Occupancy expense | 0 | 0 | 0 | 0 | ||
Equipment expense | 0 | 0 | 0 | 0 | ||
FDIC insurance assessment | 0 | 0 | 0 | 0 | ||
Other real estate owned, net | 0 | 0 | 0 | 0 | ||
Marketing expense | 0 | 0 | 0 | 0 | ||
Legal and professional fees | 0 | 0 | 0 | 0 | ||
ATM and check card fees | 0 | 0 | 0 | 0 | ||
Telecom and data processing expense | 0 | 0 | 0 | 0 | ||
Directors fees | 0 | 0 | 0 | 0 | ||
Bank franchise Tax | 0 | 0 | 0 | 0 | ||
Other operating expenses | 0 | 0 | 0 | 0 | ||
Total expense | (25) | (1) | (70) | (4) | ||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | ||
Net income | 0 | 0 | 0 | 0 | ||
Net income attributable to noncontrolling interest | 0 | 0 | 0 | 0 | ||
Net income attributable to F & M Bank Corp. | 0 | 0 | 0 | 0 | ||
Total Assets | (91,121) | (87,526) | (91,121) | (87,526) | ||
Goodwill | 0 | 0 | 0 | 0 | ||
F&M Bank Corp Consolidated | ||||||
Net interest income | 8,688 | 8,215 | 24,954 | 23,793 | ||
Service charges on deposits | 359 | 336 | 1,010 | 842 | ||
Investment services and insurance income | 169 | 112 | 530 | 317 | ||
Mortgage banking income, net | 861 | 694 | 1,974 | 1,891 | ||
Title insurance income | 247 | 668 | ||||
Income from bank owned life insurance | 113 | 119 | 336 | 356 | ||
Low income housing partnership losses | (201) | (183) | (587) | (548) | ||
ATM and check card fees | 352 | 328 | 1,034 | 1,020 | ||
Gain on prepayment of long-term debt | 0 | 504 | 0 | |||
Loss on investments | 0 | (42) | 0 | |||
Other operating income | 246 | 129 | 513 | 238 | ||
Total income | 10,834 | 9,750 | 30,894 | 27,909 | ||
Expenses: | ||||||
Interest Expense | 1,031 | 970 | 2,861 | 2,645 | ||
Provision for loan losses | 0 | 0 | 0 | 0 | ||
Salary expense | 3,194 | 2,471 | 8,502 | 7,161 | ||
Employee benefit expense | 689 | 699 | 2,467 | 2,113 | ||
Occupancy expense | 281 | 215 | 776 | 643 | ||
Equipment expense | 224 | 183 | 613 | 569 | ||
FDIC insurance assessment | 20 | 113 | 200 | 338 | ||
Other real estate owned, net | (3) | 19 | 22 | 72 | ||
Marketing expense | 148 | 128 | 404 | 396 | ||
Legal and professional fees | 78 | 100 | 253 | 293 | ||
ATM and check card fees | 183 | 184 | 529 | 518 | ||
Telecom and data processing expense | 370 | 309 | 1,045 | 861 | ||
Directors fees | 116 | 46 | 360 | 254 | ||
Bank franchise Tax | 166 | 170 | 491 | 480 | ||
Other operating expenses | 793 | 823 | 2,464 | 2,176 | ||
Total expense | 7,290 | 6,430 | 20,987 | 18,519 | ||
Income tax expense (benefit) | 946 | 654 | 2,633 | 2,187 | ||
Net income | 2,598 | 2,666 | 7,274 | 7,203 | ||
Net income attributable to noncontrolling interest | 48 | 64 | 51 | 154 | ||
Net income attributable to F & M Bank Corp. | 2,550 | 2,602 | 7,223 | 7,049 | ||
Total Assets | 763,685 | 745,292 | 763,685 | 745,292 | ||
Goodwill | $ 3,113 | $ 2,670 | $ 3,113 | $ 2,670 | ||
[1] | 2016 Derived from audited consolidated financial statements. |
11. Debt (Details Narrative)
11. Debt (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | ||
Debt Details Narrative | ||||
Short term debt | $ 42,128 | $ 40,000 | [1] | |
Increase short term debt | $ 2,128 | |||
Weighted average interest rate | 1.86% | 1.80% | ||
Debt obligations | $ 50,661 | $ 63,982 | ||
Line of credit | 5,000 | 5,000 | ||
Gain on prepayment | (504) | $ 0 | ||
Note payable balance | 170 | 255 | ||
VS Title note payable | $ 9 | $ 0 | ||
[1] | 2016 Derived from audited consolidated financial statements. |