Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 06, 2018 | |
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 | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 3,228,984 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Assets | |||
Cash and due from banks | $ 9,735 | $ 10,622 | [1] |
Money market funds | 1,565 | 1,285 | [1] |
Federal funds sold | 2,064 | 0 | [1] |
Cash and cash equivalents | 13,364 | 11,907 | [1] |
Securities: | |||
Held to maturity – fair value of $122 and $125 in 2018 and 2017, respectively | 122 | 125 | [1] |
Available for sale | 8,263 | 28,615 | [1] |
Other investments | 14,771 | 12,503 | [1] |
Loans held for sale | 49,821 | 39,775 | [1] |
Loans held for investment | 634,122 | 616,974 | [1] |
Less: allowance for loan losses | (7,105) | (6,044) | [1] |
Net loans held for investment | 627,017 | 610,930 | [1] |
Other real estate owned, net | 2,034 | 1,984 | [1] |
Bank premises and equipment, net | 17,487 | 15,894 | [1] |
Interest receivable | 1,983 | 2,007 | [1] |
Goodwill | 2,956 | 2,881 | [1] |
Bank owned life insurance | 19,166 | 13,950 | [1] |
Other assets | 13,684 | 12,699 | [1] |
Total assets | 770,668 | 753,270 | [1] |
Deposits: | |||
Noninterest bearing | 163,809 | 162,233 | [1] |
Interest bearing | 404,757 | 406,944 | [1] |
Total deposits | 568,566 | 569,177 | [1] |
Short-term debt | 46,000 | 25,296 | [1] |
Accrued liabilities | 16,904 | 17,789 | [1] |
Long-term debt | 47,434 | 49,733 | [1] |
Total liabilities | 678,904 | 661,995 | [1] |
Stockholders' Equity | |||
Preferred Stock $25 par value, 400,000 shares authorized, 322,510 and 324,150 issued and outstanding for June 30, 2018 and December 31, 2017, respectively | 7,488 | 7,529 | [1] |
Common stock, $5 par value, 6,000,000 shares authorized, 3,242,462 and 3,255,036 shares issued and outstanding for June 30, 2018 and December 31, 2017, respectively. | 16,212 | 16,275 | [1] |
Additional paid in capital - common stock | 9,796 | 10,225 | [1] |
Retained earnings | 61,989 | 60,814 | [1] |
Noncontrolling interest in consolidated subsidiaries | 554 | 574 | [1] |
Accumulated other comprehensive loss | (4,275) | (4,142) | [1] |
Total stockholders' equity | 91,764 | 91,275 | |
Total liabilities and stockholders' equity | $ 770,668 | $ 753,270 | [1] |
[1] | 2017 Derived from audited consolidated financial statements. |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Held to maturity - fair value | $ 122 | $ 125 |
STOCKHOLDERS EQUITY: | ||
Preferred Stock, par value | $ 25 | $ 25 |
Preferred Stock shares authorized | 400,000 | 400,000 |
Preferred Stock shares issued | 322,510 | 324,150 |
Preferred Stock shares outstanding | 322,510 | 324,150 |
Common stock, par value | $ 5 | $ 5 |
Common stock shares authorized | 6,000,000 | 6,000,000 |
Common stock shares issued | 3,242,462 | 3,255,036 |
Common stock shares outstanding | 3,242,462 | 3,255,036 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Interest and Dividend income | ||||
Interest and fees on loans held for investment | $ 8,529 | $ 7,906 | $ 17,010 | $ 15,609 |
Interest and fees on loans held for sale | 308 | 271 | 458 | 445 |
Interest from money market funds and federal funds sold | 5 | 18 | 25 | 75 |
Interest on debt securities - taxable | 120 | 61 | 212 | 137 |
Total interest and dividend income | 8,962 | 8,256 | 17,705 | 16,266 |
Interest expense | ||||
Interest on deposits | 766 | 633 | 1,505 | 1,249 |
Interest from short-term debt | 126 | 24 | 136 | 32 |
Interest from long-term debt | 223 | 268 | 453 | 550 |
Total interest expense | 1,115 | 925 | 2,094 | 1,831 |
Net interest income | 7,847 | 7,331 | 15,611 | 14,435 |
Provision for loan losses | 1,350 | 0 | 2,030 | 0 |
Net interest income after provision for loan losses | 6,497 | 7,331 | 13,581 | 14,435 |
Noninterest income | ||||
Service charges on deposit accounts | 358 | 335 | 724 | 651 |
Investment services and insurance income | 223 | 187 | 420 | 361 |
Mortgage banking income, net | 615 | 613 | 1,135 | 1,113 |
Title insurance income | 306 | 355 | 562 | 554 |
Income on bank owned life insurance | 112 | 112 | 222 | 224 |
Low income housing partnership losses | (192) | (201) | (384) | (386) |
ATM and check card fees | 388 | 351 | 735 | 681 |
Gain on prepayment of long-term debt | 0 | 504 | ||
Loss on sale of other investments | 0 | (42) | ||
Other operating income | 189 | 130 | 318 | 268 |
Total noninterest income | 1,999 | 1,882 | 3,732 | 3,928 |
Noninterest expense | ||||
Salaries | 3,047 | 2,628 | 6,147 | 5,362 |
Employee benefits | 953 | 852 | 1,876 | 1,805 |
Occupancy expense | 286 | 254 | 537 | 503 |
Equipment expense | 259 | 207 | 517 | 393 |
FDIC insurance assessment | 48 | 90 | 96 | 180 |
Other real estate owned, net | 17 | 12 | 2 | 26 |
Marketing expense | 129 | 122 | 231 | 257 |
Legal and professional fees | 95 | 79 | 199 | 175 |
ATM and check card fees | 195 | 178 | 356 | 346 |
Telecommunication and data processing expense | 417 | 352 | 751 | 675 |
Directors fees | 114 | 116 | 228 | 243 |
Bank franchise tax | 146 | 164 | 312 | 324 |
Other operating expenses | 927 | 963 | 1,858 | 1,683 |
Total noninterest expense | 6,633 | 6,017 | 13,110 | 11,972 |
Income before income taxes | 1,863 | 3,196 | 4,203 | 6,391 |
Income tax expense | 159 | 809 | 538 | 1,686 |
Net Income | 1,704 | 2,387 | 3,665 | 4,705 |
Net income attributable to noncontrolling interest | 16 | 59 | 5 | 32 |
Net income attributable to F & M Bank Corp. | 1,688 | 2,328 | 3,660 | 4,673 |
Dividends paid/accumulated on preferred stock | 104 | 105 | 207 | 209 |
Net income available to common stockholders | $ 1,584 | $ 2,223 | $ 3,453 | $ 4,464 |
Per Common Share Data | ||||
Net income - basic | $ 0.49 | $ 0.68 | $ 1.06 | $ 1.36 |
Net income - diluted | 0.47 | 0.64 | 1.01 | 1.29 |
Cash dividends on common stock | $ 0.25 | $ 0.23 | $ .70 | $ 0.45 |
Weighted average shares outstanding - basic | 3,250,749 | 3,272,352 | 3,253,007 | 3,272,318 |
Weighted average shares outstanding - diluted | 3,609,812 | 3,637,030 | 3,612,601 | 3,635,999 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net Income: | ||||
Net Income | $ 1,688 | $ 2,328 | $ 3,660 | $ 4,673 |
Other comprehensive (loss): | ||||
Unrealized holding gains (losses) on available-for-sale securities | (22) | (1) | (168) | (2) |
Tax effect | 4 | 0 | 35 | 1 |
Unrealized holding gain (loss), net of tax | (18) | (1) | (133) | (1) |
Total other comprehensive (loss) | (18) | (1) | (133) | (1) |
Total comprehensive income | 1,670 | 2,327 | 3,527 | 4,672 |
Comprehensive income (loss) attributable to noncontrolling interests | 16 | 59 | 5 | 32 |
Comprehensive income attributable to F&M Bank Corp. | $ 1,686 | $ 2,386 | $ 3,532 | $ 4,704 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) $ in Thousands | USD ($) |
Balance, beginning of period at Dec. 31, 2016 | $ 86,682 |
Comprehensive income | |
Net income attributable to F & M Bank Corp. | 4,673 |
Net income attributable to noncontrolling interest | 32 |
Other comprehensive (loss) | (1) |
Total comprehensive income | 4,704 |
Minority interest capital distributions | (150) |
Issuance of common stock | 105 |
Repurchase of common stock | 0 |
Repurchase of preferred stock | (24) |
Dividends paid | (1,644) |
Balance, end of period at Jun. 30, 2017 | 89,673 |
Balance, beginning of period at Dec. 31, 2017 | 91,275 |
Comprehensive income | |
Net income attributable to F & M Bank Corp. | 3,660 |
Net income attributable to noncontrolling interest | 5 |
Other comprehensive (loss) | (133) |
Total comprehensive income | 3,532 |
Minority interest capital distributions | (25) |
Issuance of common stock | 154 |
Repurchase of common stock | (624) |
Repurchase of preferred stock | (63) |
Dividends paid | (2,485) |
Balance, end of period at Jun. 30, 2018 | $ 91,764 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities | ||
Net income | $ 3,660 | $ 4,673 |
Reconcile net income to net cash provided by operating activities: | ||
Depreciation | 563 | 430 |
Amortization of intangibles | 33 | 0 |
Amortization of securities | 3 | 2 |
Proceeds from loans held for sale originated | 22,918 | 38,767 |
Loans held for sale originated | (21,813) | (37,445) |
Gain on sale of loans held for sale originated | (1,105) | (1,138) |
Gain on prepayment of long-term debt | 0 | (504) |
Provision for loan losses | 2,030 | 0 |
Decrease (increase) in interest receivable | 24 | (110) |
Increase in other assets | (566) | (435) |
Decrease in accrued liabilities | (1,317) | (1,421) |
Amortization of limited partnership investments | 384 | 386 |
Income from life insurance investment | (222) | (224) |
Gain on the sale of fixed assets | (9) | 0 |
Loss on sale of other investments | 0 | 42 |
Gain on foreclosure of and valuation adjustments for other real estate owned | (30) | 0 |
Net cash provided by operating activities | 4,553 | 3,023 |
Cash flows from investing activities | ||
Purchase of investments available for sale and other investments | (3,361) | (41,436) |
Purchase of title insurance company | (75) | (304) |
Proceeds from maturity of investments available for sale | 20,893 | 41,316 |
Proceeds from the sale of investments | 0 | 55 |
Net increase in loans held for investment | (18,137) | (12,132) |
Net (increase) decrease in loans held for sale participations | (10,046) | 10,784 |
Purchase of bank owned life insurance | (5,000) | 0 |
Proceeds from the sale of fixed assets | 9 | 0 |
Proceeds from the sale of other real estate owned | 0 | 74 |
Net purchase of property and equipment | (2,156) | (2,114) |
Net cash provided by investing activities | (17,873) | (3,757) |
Cash flows from financing activities | ||
Net change in deposits | (611) | (599) |
Net change in short-term debt | 20,704 | 10,000 |
Dividends paid in cash | (2,485) | (1,644) |
Proceeds from issuance of common stock | 154 | 105 |
Repurchase of preferred stock | (63) | (24) |
Repurchase of common stock | (624) | 0 |
Repayments of long-term debt | (2,298) | (11,795) |
Net cash provided by (used in) financing activities | 14,777 | (3,957) |
Net (decrease) increase in Cash and Cash Equivalents | 1,457 | (4,691) |
Cash and cash equivalents, beginning of period | 11,907 | 16,355 |
Cash and cash equivalents, end of period | 13,364 | 11,664 |
Cash paid for: | ||
Interest | 2,087 | 1,836 |
Taxes | 1,357 | 2,530 |
Supplemental non-cash disclosures: | ||
Transfer from loans to other real estate owned | 20 | 6 |
Change in unrealized gain (loss) on securities available for sale | $ (168) | $ (2) |
1. Summary of Significant Accou
1. Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Summary Of Significant Accounting Policies | |
1. Summary of Significant Accounting Policies | Principles of Consolidation The accompanying unaudited consolidated financial statements including the accounts of Farmers & Merchants Bank, TEB Life Insurance Company, Farmers & Merchants Financial Services, Inc., VBS Mortgage, LLC (dba F&M Mortgage), (net of non-controlling interest) and VSTitle, LLC and 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 six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. 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, 2017 (the “2017 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 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), F&M Mortgage, and VSTitle, LLC (VST). The Company purchased 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 and intangibles, fair value, the valuation of deferred tax assets and liabilities, pension accounting and the valuation of foreclosed real estate. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for fair presentation of the results of operations in these financial statements, have been made. 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 stockholders by the weighted average number of common shares outstanding. In calculating diluted EPS net income available to common stockholders 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 Six months ended For the Three months ended For the Six months ended For the Three months ended June 30, 2018 June 30, 2018 June 30, 2017 June 30, 2017 Earnings available to common stockholders: Net income $ 3,665 $ 1,704 $ 4,705 $ 2,387 Non-controlling interest income 5 16 32 59 Preferred stock dividends 207 104 209 105 Net income available to common stockholders $ 3,453 $ 1,584 $ 4,464 $ 2,223 The following table shows the effect of dilutive preferred stock conversion on the Company's earnings per share for the periods indicated: Six months ended June 30, 2018 Six months ended June 30, 2017 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 3,453 3,253,007 $ 1.06 $ 4,464 3,272,318 $ 1.36 Effect of Dilutive Securities: Convertible Preferred Stock 207 359,594 (.05 ) 209 363,681 (0.07 ) Diluted EPS $ 3,660 3,612,601 $ 1.01 $ 4,673 3,635,999 $ 1.29 Three months ended June 30, 2018 Three months ended June 30, 2017 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 1,584 3,250,749 $ .49 $ 2,223 3,273,352 $ .68 Effect of Dilutive Securities: Convertible Preferred Stock 104 359,063 (.02 ) 105 363,678 (0.04 ) Diluted EPS $ 1,688 3,609,812 $ .47 $ 2,328 3,637,030 $ .64 |
2. Investment Securities
2. Investment Securities | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 and December 31, 2017 are as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value June 30, 2018 U. S. Treasuries $ 122 $ - $ - $ 122 December 31, 2017 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 June 30, 2018 U. S. Government sponsored enterprises $ 7,999 $ - $ 183 $ 7,816 Mortgage-backed obligations of federal agencies 457 - 10 447 Total Securities Available for Sale $ 8,456 $ - $ 193 $ 8,263 December 31, 2017 U. S. Treasuries $ 19,998 $ - $ - $ 19,998 U.S. Government sponsored enterprises 7,999 - 19 7,980 Mortgage-backed obligations of federal agencies 508 - 6 502 Equity securities1 135 - - 135 Total Securities Available for Sale $ 28,640 $ - $ 25 $ 28,615 1 Transferred to other investments on January 1, 2018 upon adoption of ASU 2016-01 The amortized cost and fair value of securities at June 30, 2018, 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 $ - $ - $ - $ - Due after one year through five years 122 122 7,999 7,816 Due after five years - - 457 447 Due after ten years - - - - Total $ 122 $ 122 $ 8,456 $ 8,263 There were no gains or losses on sales of available for sale securities in the three or six month periods ended June 30, 2018 or 2017. There were also no securities with other than temporary impairment and no securities that had been in a continues loss position in excess of twelve months as of June 30, 2018 and December 31, 2017. A summary of unrealized losses (in thousands) and the length of time in a continuous loss position, by security type of June 30, 2018 and December 31, 2017 were as follows: Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses June 30, 2018 U. S. Government sponsored enterprises $ 7,816 $ (183 ) $ - $ - $ 7,816 $ (183 ) Mortgage-backed obligations of federal agencies 447 (10 ) - - 447 (10 ) Total $ 8,263 $ (193 ) $ - $ - $ 8,263 $ (193 ) Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2017 U. S. Government sponsored enterprises $ 3,981 $ (19 ) $ - $ - $ 3,981 $ (19 ) Mortgage-backed obligations of federal agencies 502 (6 ) - - 502 (6 ) Total $ 4,483 $ (25 ) $ - $ - $ 4,483 $ (25 ) Other investments consist of investments in twenty low-income housing and historic equity partnerships (carrying basis of $8,523), stock in the Federal Home Loan Bank (carrying basis $4,644) and various other investments (carrying basis $1,604). 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 June 30, 2018. At June 30, 2018, the Company was committed to invest an additional $4,398 in seven 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 F&M Mortgage ended their relationship with Bankers Title Virginia resulting in a consolidated loss of $42. |
3. Loans
3. Loans | 6 Months Ended |
Jun. 30, 2018 | |
Loans Held For Investment Abstract | |
3. Loans | Loans held for investment outstanding at June 30, 2018 and December 31, 2017 are summarized as follows: (dollars in thousands) 2018 2017 Construction/Land Development $ 67,079 $ 71,620 Farmland 16,500 13,606 Real Estate 184,674 184,546 Multi-Family 9,829 10,298 Commercial Real Estate 156,041 148,906 Home Equity – closed end 10,742 11,606 Home Equity – open end 55,837 54,739 Commercial & Industrial – Non-Real Estate 41,275 36,912 Consumer 5,216 6,633 Dealer Finance 83,962 75,169 Credit Cards 2,967 2,939 Total $ 634,122 $ 616,974 The Company has pledged loans held for investment as collateral for borrowings with the Federal Home Loan Bank of Atlanta totaling $182,373 and $218,523 as of June 30, 2018 and December 31, 2017, respectively. The Company maintains a blanket lien on its entire residential real estate portfolio and certain commercial and home equity loans. The following is a summary of information pertaining to impaired loans (dollars in thousand): June 30, 2018 December 31, 2017 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance Impaired loans without a valuation allowance: Construction/Land Development $ 4,478 $ 4,478 $ - $ 4,352 $ 5,269 $ - Farmland 1,984 1,984 - 1,984 1,984 - Real Estate 1,688 1,688 - 1,273 1,273 - Multi-Family - - - - - - Commercial Real Estate 291 291 - 6,229 6,229 - Home Equity – closed end - - - - - - Home Equity – open end - - - - 347 - Commercial & Industrial – Non-Real Estate - - - - - - Consumer - - - 8 8 - Credit cards - - - - - - Dealer Finance 33 33 - 31 31 - 8,474 8,474 - 13,877 15,141 - Impaired loans with a valuation allowance Construction/Land Development 7,463 8,023 2,154 4,998 4,998 1,661 Farmland - - - - - Real Estate 110 110 7 1,188 1,188 209 Multi-Family - - - - - Commercial Real Estate 5,898 5,898 1,586 - - - Home Equity – closed end - - - - - Home Equity – open end - - - - - Commercial & Industrial – Non-Real Estate - - - - - Consumer 11 11 2 - - - Credit cards - - - - - Dealer Finance 229 229 7 47 47 12 13,711 14,271 3,756 6,233 6,233 1,882 Total impaired loans $ 22,185 $ 22,745 $ 3,756 $ 20,110 $ 21,374 $ 1,882 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 F&M 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 June 30, 2018 and December 31, 2017 were $49,821 and $39,775, respectively. The following is a summary of the average investment and interest income recognized for impaired loans (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 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 $ 4,759 $ 45 $ 4,734 $ 47 $ 4,929 $ 79 $ 4,374 $ 50 Farmland 1,984 62 1,858 - 1,984 62 1,239 - Real Estate 837 (6 ) 750 14 982 11 756 17 Multi-Family - - - - - - - - Commercial Real Estate 797 4 100 2 2,608 9 719 3 Home Equity – closed end - - - - - - - - Home Equity – open end - - 347 6 116 - 347 - Commercial & Industrial – Non-Real Estate - - 166 - - - 167 6 Consumer and credit cards - - 11 - 3 - 12 - Dealer Finance 33 - 20 1 32 1 13 1 8,410 105 7,986 70 10,654 162 7,627 77 Impaired loans with a valuation allowance: Construction/Land Development $ 7,417 $ 64 $ 6,512 $ 97 $ 6,610 $ 98 $ 6,539 $ 140 Farmland - - - - - - - - Real Estate 1,283 9 1,199 31 1,251 27 1,201 31 Multi-Family - - - - - - - - Commercial Real Estate 5,407 73 - - 3,605 141 317 - Home Equity – closed end - - - - - - - - Home Equity – open end - - - - - - - - Commercial & Industrial – Non-Real Estate - - - - - - - - Consumer and credit card 12 - - - 8 1 - - Dealer Finance 198 4 65 - 148 8 72 1 14,317 150 7,776 128 11,622 275 8,129 172 Total Impaired Loans $ 22,727 $ 255 $ 15,762 $ 198 $ 22,276 $ 437 $ 15,756 $ 249 The following table presents the aging of the recorded investment of past due loans (dollars in thousands) as of June 30, 2018 and December 31, 2017: 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 June 30, 2018 Construction/Land Development $ 1,465 $ 52 $ 5,367 $ 6,884 $ 60,195 $ 67,079 $ 5,927 $ - Farmland - - - - 16,500 16,500 - - Real Estate 1,772 1,215 1,496 4,483 180,191 184,674 1,345 899 Multi-Family 174 - - 174 9,655 9,829 - - Commercial Real Estate 4,153 4,895 218 9,266 146,775 156,041 6,460 - Home Equity – closed end - 15 - 15 10,727 10,742 - - Home Equity – open end 539 258 158 955 54,882 55,837 133 26 Commercial & Industrial – Non- Real Estate 201 150 - 351 40,924 41,275 - - Consumer 117 15 10 142 5,074 5,216 - 10 Dealer Finance 1,066 262 93 1,421 82,541 83,962 161 - Credit Cards 30 5 16 51 2,916 2,967 - 16 Total $ 9,517 $ 6,867 $ 7,358 $ 23,742 $ 610,380 $ 634,122 $ 14,026 $ 951 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, 2017 Construction/Land Development $ 167 $ 5,459 $ 3,908 $ 9,534 $ 62,086 $ 71,620 $ 3,908 $ - Farmland - - - - 13,606 13,606 - - Real Estate 2,858 1,954 560 5,372 179,174 184,546 1,720 143 Multi-Family 179 - - 179 10,119 10,298 - - Commercial Real Estate 544 - - 544 148,362 148,906 - - Home Equity – closed end - 25 - 25 11,581 11,606 3 - Home Equity – open end 454 165 268 887 53,852 54,739 448 - Commercial & Industrial – Non- Real Estate 108 36 595 739 36,173 36,912 599 - Consumer 43 5 - 48 6,585 6,633 - - Dealer Finance 1,300 252 189 1,741 73,428 75,169 226 54 Credit Cards 30 8 1 39 2,900 2,939 - 1 Total $ 5,683 $ 7,904 $ 5,521 $ 19,108 $ 597,866 $ 616,974 $ 6,904 $ 198 At June 30, 2018 and December 31, 2017, other real estate owned included $177 and $207 of foreclosed residential real estate. The Company has $465 of consumer mortgages for which foreclosure is in process at June 30, 2018 and $103 at December 31, 2017. Nonaccrual loans at June 30, 2018 and June 30, 2017, would have earned approximately $252 and $42, respectively, in interest income had they been accruing loans. |
4. Allowance for Loan Losses
4. Allowance for Loan Losses | 6 Months Ended |
Jun. 30, 2018 | |
Allowance For Loan Losses | |
4. Allowance for Loan Losses | A summary of changes in the allowance for loan losses (dollars in thousands) for June 30, 2018 and December 31, 2017 is as follows: June 30, 2018 Beginning Balance Charge-offs Recoveries Provision Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 2,547 $ 47 $ 122 $ 167 $ 2,789 $ 2,154 $ 635 Farmland 25 - - - 25 - 25 Real Estate 719 53 12 (261 ) 417 7 410 Multi-Family 19 - - (2 ) 17 - 17 Commercial Real Estate 482 - 1 1,366 1,849 1,586 263 Home Equity – closed end 66 3 3 (17 ) 49 - 49 Home Equity – open end 209 - 3 (42 ) 170 - 170 Commercial & Industrial – Non-Real Estate 337 544 57 425 275 - 275 Consumer 148 13 5 (75 ) 65 2 63 Dealer Finance 1,440 1,036 528 471 1,403 7 1,396 Credit Cards 52 21 17 (2 ) 46 - 46 Total $ 6,044 $ 1,717 $ 748 $ 2,030 $ 7,105 $ 3,756 $ 3,349 December 31, 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 $ 620 $ - $ (214 ) $ 2,547 $ 1,661 $ 886 Farmland 34 - - (9 ) 25 - 25 Real Estate 843 - 2 (126 ) 719 209 510 Multi-Family 23 - - (6 ) 19 - 19 Commercial Real Estate 705 - 13 (236 ) 482 - 482 Home Equity – closed end 75 7 25 (27 ) 66 - 66 Home Equity – open end 470 26 53 (288 ) 209 - 209 Commercial & Industrial – Non-Real Estate 586 179 72 (142 ) 337 - 337 Consumer 78 136 28 178 148 - 148 Dealer Finance 1,289 1,806 1,143 814 1,440 12 1,428 Credit Cards 59 98 37 54 52 - 52 Total $ 7,543 $ 2,872 $ 1,373 $ - $ 6,044 $ 1,882 $ 4,162 The following table presents the recorded investment in loans (dollars in thousands) based on impairment method as of June 30, 2018 and December 31, 2017: June 30, 2018 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 67,079 $ 11,941 $ 55,138 Farmland 16,500 1,984 14,516 Real Estate 184,674 1,798 182,876 Multi-Family 9,829 - 9,829 Commercial Real Estate 156,041 6,189 149,853 Home Equity – closed end 10,742 - 10,742 Home Equity –open end 55,837 - 55,837 Commercial & Industrial – Non-Real Estate 41,275 - 41,275 Consumer 5,216 11 5,205 Dealer Finance 83,962 262 83,699 Credit Cards 2,967 - 2,967 Total $ 634,122 $ 22,185 $ 611,937 December 31, 2017 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 71,620 $ 9,350 $ 62,270 Farmland 13,606 1,984 11,622 Real Estate 184,546 2,461 182,085 Multi-Family 10,298 - 10,298 Commercial Real Estate 148,906 6,229 142,677 Home Equity – closed end 11,606 - 11,606 Home Equity –open end 54,739 - 54,739 Commercial & Industrial – Non-Real Estate 36,912 - 36,912 Consumer 6,633 8 6,625 Dealer Finance 75,169 78 75,091 Credit Cards 2,939 - 2,939 Total $ 616,974 $ 20,110 $ 596,864 The following table shows the Company’s loan portfolio broken down by internal loan grade (dollars in thousands) as of June 30, 2018 and December 31, 2017: June 30, 2018 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 $ - $ 1,657 $ 15,517 $ 32,841 $ 7,011 $ 113 $ 9,940 $ - $ 67,079 Farmland 62 - 4,410 5,806 3,744 494 1,984 - 16,500 Real Estate - 1,603 53,790 100,205 21,918 2,573 4,585 - 184,674 Multi-Family - 185 2,757 6,713 174 - - - 9,829 Commercial Real Estate - 3,064 45,988 89,682 8,203 2,545 6,559 - 156,041 Home Equity – closed end - - 3,346 5,432 1,949 15 - - 10,742 Home Equity – open end 223 1,910 19,897 29,687 3,618 307 195 - 55,837 Commercial & Industrial (Non-Real Estate) 229 1,532 18,386 18,078 2,451 535 64 - 41,275 Consumer (excluding dealer) 30 274 3,057 906 910 19 20 - 5,216 Total $ 544 $ 10,225 $ 167,148 $ 289,350 $ 49,978 $ 6,601 $ 23,347 $ - $ 547,193 Credit Cards Dealer Finance Performing $ 2,951 $ 83,801 Non-performing 16 161 Total $ 2,967 $ 83,962 December 31, 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 $ - $ 690 $ 12,974 $ 30,197 $ 9,165 $ 3,520 $ 15,074 $ - $ 71,620 Farmland 63 3,153 4,120 3,793 494 1,983 - 13,606 Real Estate - 1,512 53,764 101,606 19,734 4,660 3,270 - 184,546 Multi-Family - 228 4,780 5,111 179 - - - 10,298 Commercial Real Estate - 3,525 45,384 89,195 9,012 634 1,156 - 148,906 Home Equity – closed end - - 3,535 5,410 1,279 1,379 3 - 11,606 Home Equity – open end 235 1,598 17,383 30,888 3,945 176 514 - 54,739 Commercial & Industrial (Non-Real Estate) 262 1,595 13,297 19,442 1,480 207 629 - 36,912 Consumer (excluding dealer) 34 490 2,226 88 1,065 2,254 476 - 6,633 Total $ 594 $ 9,638 $ 156,496 $ 286,057 $ 49,652 $ 13,324 $ 23,105 $ - $ 538,866 Credit Cards Dealer Finance Performing $ 2,938 $ 75,116 Non-performing 1 53 Total $ 2,939 $ 75,169 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 | 6 Months Ended |
Jun. 30, 2018 | |
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 31 st On January 1, 2018 the Company adopted ASU No. 2017 07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” No. 2017 07 No. 2017 07 The following is a summary of net periodic pension costs for the three and six month periods ended June 30, 2018 and 2017: Six Months Ended Three Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Service cost $ 384 $ 348 $ 192 $ 174 Interest cost 248 244 124 122 Expected return on plan assets (462 ) (426 ) (231 ) (213 ) Amortization of prior service cost (8 ) (8 ) (4 ) (4 ) Amortization of net loss 152 142 76 71 Net periodic pension cost $ 314 $ 300 $ 157 $ 150 |
6. Fair Value
6. Fair Value | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 and December 31, 2017 (dollars in thousands): June 30, 2018 Total Level 1 Level 2 Level 3 U.S. Government sponsored enterprises $ 7,816 $ - $ 7,816 $ - Mortgage-backed obligations of federal agencies 447 - 447 - Total securities available for sale $ 8,263 $ - $ 8,263 $ - December 31, 2017 Total Level 1 Level 2 Level 3 U. S. Treasuries $ 19,998 $ 19,998 $ - $ - U.S. Government sponsored enterprises 7,980 - 7,980 - Mortgage-backed obligations of federal agencies 502 - 502 - Equity securities1 135 - 135 - Total securities available for sale $ 28,615 $ 19,998 $ 8,617 $ - 1 Transferred to other investments on January 1, 2018 upon adoption of ASU 2016-01 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 F&M Mortgage for sale in the secondary market. Loan participations are generally repurchased within 15 days. Loans originated for sale by F&M Mortgage are recorded at lower of cost or market. No market adjustments were required at June 30, 2018 or December 31, 2017; 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 approximate fair value at June 30, 2018 and December 31, 2017. 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 as 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 June 30, 2018 and December 31, 2017, 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): June 30, 2018 Total Level 1 Level 2 Level 3 Construction/Land Development $ 5,309 $ - $ - $ 5,309 Real Estate 103 - - 103 Commercial Real Estate 4,312 - - 4,312 Consumer 9 - - 9 Dealer Finance 222 - - 222 Impaired loans $ 9,955 $ - $ - $ 9,955 December 31, 2017 Total Level 1 Level 2 Level 3 Construction/Land Development $ 3,337 $ - - $ 3,337 Real Estate 979 - - 979 Dealer Finance 35 - - 35 Impaired loans $ 4,351 $ - $ - $ 4,351 The following table presents information about Level 3 Fair Value Measurements for June 30, 2018: (dollars in thousands) Fair Value at June 30, 2018 Valuation Technique Significant Unobservable Inputs Range Impaired Loans $ 9,995 Discounted appraised value Discount for selling costs and marketability 2%-19% (Average 4.9%) The following table presents information about Level 3 Fair Value Measurements for December 31, 2017: (dollars in thousands) Fair Value at December 31, 2017 Valuation Technique Significant Unobservable Inputs Range Impaired Loans $ 4,351 Discounted appraised value Discount for selling costs and marketability 3%-19% (Average 5.5%) 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 June 30, 2018 and December 31, 2017 (dollars in thousands). June 30, 2018 Total Level 1 Level 2 Level 3 Other real estate owned $ 2,034 - - $ 2,034 December 31, 2017 Total Level 1 Level 2 Level 3 Other real estate owned $ 1,984 - - $ 1,984 The following table presents information about Level 3 Fair Value Measurements for June 30, 2018: (dollars in thousands) Fair Value at June 30, 2018 Valuation Technique Significant Unobservable Inputs Range Other real estate owned $ 2,034 Discounted appraised value Discount for selling costs 2.5%-10% (Average 4%) The following table presents information about Level 3 Fair Value Measurements for December 31, 2017: Fair Value at December 31, 2017 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Other real estate owned $ 1,984 Discounted appraised value Discount for selling costs 5%-15% (Average 8%) |
7. Disclosures About Fair Value
7. Disclosures About Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Disclosures About Fair Value Of Financial Instruments | |
7. Disclosures About Fair Value of Financial Instruments | The following presents the carrying amount, fair value and placement in the fair value hierarchy of the Company’s financial instruments as of June 30, 2018 and December 31, 2017. For short-term financial assets such as cash and cash equivalents and short-term liabilities, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as noninterest bearing demand, interest bearing demand and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity. Fair values for June 30, 2018 are estimated under the exit price notion in accordance with the prospective adoption of ASU 2016-01, “ Recognition and Measurement of Financial Assets and Financial Liabilities. The estimated fair values, and related carrying amounts (dollars in thousands), of the Company’s financial instruments are as follows: Fair Value Measurements at June 30, 2018 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 June 30, 2018 Assets: Cash and cash equivalents $ 13,364 $ 13,364 $ - $ - $ 13,364 Securities 8,385 - 8,385 - 8,385 Loans held for sale 49,821 - 49,821 - 49,821 Loans held for investment, net 627,017 - - 615,424 615,424 Interest receivable 1,983 - 1,983 - 1,983 Bank owned life insurance 19,166 - 19,166 - 19,166 Total $ 719,736 $ 13,364 $ 79,355 $ 615,424 $ 708,143 Liabilities: Deposits $ 568,566 $ - $ 406,830 $ 163,871 $ 570,701 Short-term debt 46,000 - 46,000 - 46,000 Long-term debt 47,434 - - 47,524 47,524 Interest payable 267 - 267 - 267 Total $ 662,267 $ - $ 453,097 $ 211,395 $ 664,492 Fair Value Measurements at December 31, 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 December 31, 2017 Assets: Cash and cash equivalents $ 11,907 $ 11,907 $ - $ - $ 11,907 Securities 28,740 19,998 8,742 - 28,740 Loans held for sale 39,775 - 39,775 - 39,775 Loans held for investment, net 610,930 - - 646,703 646,703 Interest receivable 2,007 - 2,007 - 2,007 Bank owned life insurance 13,950 - 13,950 - 13,950 Total $ 707,309 $ 31,905 $ 64,474 $ 646,703 $ 743,082 Liabilities: Deposits $ 569,177 $ - $ 403,907 $ 167,210 $ 571,117 Short-term debt 25,296 - 25,296 - 25,296 Long-term debt 49,733 - - 49,869 49, 869 Interest payable 260 - 260 - 260 Total $ 644,466 $ - $ 429,463 $ 217,079 $ 646,542 |
8. Troubled Debt Restructuring
8. Troubled Debt Restructuring | 6 Months Ended |
Jun. 30, 2018 | |
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 six months ended June 30, 2018, there were sixteen loan modifications that were considered to be troubled debt restructurings. Six of these loans were modified during the three months ended June 30, 2018 and ten loan modifications that would be considered a troubled debt restructuring were modified during the first quarter of 2018. 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. June 30, 2018 Pre-Modification Post-Modification (dollars in thousands) Outstanding Outstanding Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Commercial Real Estate 1 $ 1,002 $ 1,002 Real Estate 2 1,255 1,255 Consumer 13 196 196 Total 16 $ 2,453 $ 2,453 At June 30, 2018, there were no loans 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. During the six months ended June 30, 2017, there was one loan modification that was considered to be a 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 second quarter of 2017. Six Months ended June 30, 2017 Pre-Modification Post-Modification (dollars in thousands) Outstanding Outstanding Number of Contracts Recorded Investment Recorded Investment Troubled Debt Restructurings Consumer 1 $ 20 $ 20 Total 1 $ 20 $ 20 At June 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. June 30, 2017 Pre-Modification Post-Modification Outstanding Outstanding Number of Contracts Recorded Investment Recorded Investment Troubled Debt Restructurings Real Estate 1 $ 67 $ 67 Total 1 $ 67 $ 67 |
9. Accumulated Other Comprehens
9. Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2018 | |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Loss | The balances in accumulated other comprehensive loss are shown in the following tables for June 30, 2018 and 2017: (dollars in thousands) Unrealized Securities Gains (Losses) Adjustments Related to Pension Plan Accumulated Other Comprehensive Loss Balance at December 31, 2017 $ (20 ) $ (4,122 ) $ (4,142 ) Change in unrealized securities gains (losses), net of tax (133 ) - (133 ) Change in unfunded pension liability, net of tax - - - Balance at June 30, 2018 $ (153 ) $ (4,122 ) $ (4,275 ) (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 June 30, 2017 $ 5 $ (3,171 ) $ (3,166 ) There were no reclassifications adjustments reported on the consolidated statements of income during the three or six months ended June 30, 2018 or 2017. |
10. Business Segments
10. Business Segments | 6 Months Ended |
Jun. 30, 2018 | |
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 six months ended June 30, 2018 and June 30, 2017. Six Months Ended June 30, 2018 F&M Bank F&M Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 17,620 $ 71 $ 71 $ - $ - $ (57 ) $ 17,705 Service charges on deposits 724 - - - - - 724 Investment services and insurance income - - 431 - - (11 ) 420 Mortgage banking income, net - 1,135 - - - - 1,135 Title insurance income - 109 - 453 - - 562 Gain on prepayment of long-term debt - - - - - - - Loss on investments - - - - - - - Other operating income 843 48 - - - - 891 Total income 19,187 1,363 502 453 - (68 ) 21,437 Expenses: Interest Expense 2,097 54 - - - (57 ) 2,094 Provision for loan losses 2,030 - - - - - 2,030 Salary and benefit expense 6,564 831 283 345 - - 8,023 Other operating expenses 4,496 456 28 89 29 (11 ) 5,087 Total expense 15,187 1,341 311 434 29 (68 ) 17,234 Net income (loss) before taxes 4,000 22 191 19 (29 ) - 4,203 Income tax expense 284 - 36 - 218 - 538 Net income (loss) $ 3,716 $ 22 $ 155 $ 19 $ (247 ) $ - $ 3,665 Net income attributable to non-controlling interest - 5 - - - - 5 Net Income attributable to F & M Bank Corp. $ 3,716 $ 17 $ 155 $ 19 $ (247 ) $ - $ 3,660 Total Assets $ 772,244 $ 8,332 $ 6,910 $ 707 $ 91,480 $ (109,005 ) $ 770,668 Goodwill $ 2,670 $ 65 $ - $ 57 $ 164 $ - $ 2,956 Three months ended June 30, 2018 F&M Bank F&M Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 8,916 $ 42 $ 36 $ - $ - $ (32 ) $ 8,962 Service charges on deposits 358 - - - - - 358 Investment services and insurance income - - 228 - - (5 ) 223 Mortgage banking income, net - 615 - - - - 615 Title insurance income - 47 - 259 - - 306 Gain on prepayment of long-term debt - - - - - - - Loss on investments - - - - - - - Other operating income 450 47 - - - - 497 Total income 9,724 751 264 259 - (37 ) 10,961 Expenses: Interest Expense 1,116 31 - - - (32 ) 1,115 Provision for loan losses 1,350 - - - - - 1,350 Salary and benefit expense 3,268 416 137 179 - - 4,000 Other operating expenses 2,317 246 18 42 15 (5 ) 2,633 Total expense 8,051 693 155 221 15 (37 ) 9,098 Net income (loss) before taxes 1,673 58 109 38 (15 ) - 1,863 Income tax expense 144 - 21 - (6 ) - 159 Net income (loss) $ 1,529 $ 58 $ 88 $ 38 $ (9 ) $ - $ 1,704 Net income attributable to non-controlling interest - 16 - - - - 16 Net Income attributable to F & M Bank Corp. $ 1,529 $ 42 $ 88 $ 38 $ (9 ) $ - $ 1,688 Six Months Ended June 30, 2017 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 16,171 $ 65 $ 75 $ - $ - $ (45 ) $ 16,266 Service charges on deposits 651 - - - - - 651 Investment services and insurance income 1 - 360 - - - 361 Mortgage banking income, net - 1,113 - - - - 1,113 Title insurance income - - - 554 - - 554 Gain on prepayment of long-term debt 504 - - - - - 504 Loss on investments - (40 ) (2 ) - - - (42 ) Other operating income 787 - - - - - 787 Total income 18,114 1,138 433 554 - (45 ) 20,194 Expenses: Interest Expense 1,834 42 - - - (45 ) 1,831 Provision for loan losses - - - - - - - Salary expense 5,977 616 234 340 - - 7,167 Other operating expenses 4,220 470 17 94 4 - 4,805 Total expense 12,031 1,128 251 434 4 (45 ) 13,803 Net income (loss) before taxes 6,083 10 182 120 (4 ) - 6,391 Income tax expense 1,669 - 53 - (36 ) - 1,686 Net income (loss) $ 4,414 $ 10 $ 129 $ 120 $ 32 $ - $ 4,705 Net income attributable to non-controlling interest - 3 - 29 - - 32 Net Income attributable to F & M Bank Corp. $ 4,414 $ 7 $ 129 $ 91 $ 32 $ - $ 4,673 Total Assets $ 746,193 $ 6,027 $ 6,630 $ 274 $ 89,909 $ (104,770 ) $ 744,263 Goodwill $ 2,670 $ - $ - $ - $ 304 $ - $ 2,974 Three Months Ended June 30, 2017 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 8,210 $ 30 $ 38 $ - $ - $ (22 ) $ 8,256 Service charges on deposits 335 - - - - - 335 Investment services and insurance income - - 187 - - - 187 Mortgage banking income, net - 613 - - - - 613 Title insurance income - - - 355 - - 355 Gain on prepayment of long-term debt - - - - - - - Loss on investments - - - - - - - Other operating income 392 - - - - - 392 Total income 8,937 643 225 355 - (22 ) 10,138 Expenses: Interest Expense 927 20 - - - (22 ) 925 Provision for loan losses - - - - - - - Salary and benefit expense 2,968 211 119 182 - - 3,480 Other operating expenses 2,160 320 13 43 1 - 2,537 Total expense 6,055 551 132 225 1 (22 ) 6,942 Net income (loss) before taxes 2,882 92 93 130 (1 ) - 3,196 Income tax expense 801 - 26 - (18 ) - 809 Net income (loss) $ 2,081 $ 92 $ 67 $ 130 $ 17 $ - $ 2,387 Net income attributable to non-controlling interest - 28 - 31 - - 59 Net Income attributable to F & M Bank Corp. $ 2,081 $ 64 $ 67 $ 99 $ 17 $ - $ 2,328 |
11. Debt
11. Debt | 6 Months Ended |
Jun. 30, 2018 | |
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 $46 million at June 30, 2018 and has increased $20.7 million from $25.3 million at December 31, 2017 due to an increase in the loans held for sale as well as internal loan growth and a slight decline in deposits. 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 1.87% and 1.86% at June 30, 2018 and December 31, 2017, respectively. The balance of these obligations at June 30, 2018 and December 31, 2017 were $47,339 and $49,554 respectively. The Company recognized a gain of $504 on prepayment of two FHLB advances totaling $10,000 during the first quarter of 2017 and there were no additional borrowings in 2017 or 2018. FHLB advances include a $5 million 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 $85 at June 30, 2018 that is payable in one annual payment on January 1, 2019. There was $170 outstanding on this note at December 31, 2017. VS Title, LLC has a note payable for vehicle purchases with a balance of $10 at June 30, 2018. |
12. Revenue Recognition
12. Revenue Recognition | 6 Months Ended |
Jun. 30, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | On January 1, 2018, the Company adopted ASU No. 2014-09 “Revenue from Contracts with Customers” (Topic 606) Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope of the new guidance. Topic 606 is applicable to noninterest revenue streams such as deposit related fees, interchange fees, merchant income, and annuity and insurance commissions. However, the recognition of these revenue streams did not change significantly upon adoption of Topic 606. Substantially all of the Company’s revenue is generated from contracts with customers. Noninterest revenue streams in-scope of Topic 606 are discussed below. Service Charges on Deposit Accounts Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), overdraft fees, monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. Investment Services and Insurance Income Investment services and insurance income primarily consists of commissions received on mutual funds and other investment sales. Commissions from the sale of mutual funds and other investments are recognized on trade date, which is when the Company has satisfied its performance obligation. Title Insurance Income VSTitle provides title insurance and real estate settlement services. Revenue is recognized at the time the real estate transaction is completed. ATM and Check Card Fees ATM and Check Card Fees are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Other Other noninterest income consists of other recurring revenue streams such as safe deposit box rental fees, and other service charges. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation. Other service charges include revenue from processing wire transfers, online payment fees, cashier’s checks, mobile banking fees and other services. The Company’s performance obligation for fees, exchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month. The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three and six months ended June 30, 2018 and 2017. Noninterest income out-of-scope of Topic 606 in 2017 included onetime gains on prepayment of debt of $504. Six Months Ended June 30, Three Months Ended June 30, 2018 2017 2018 2017 Noninterest Income (in thousands) In-scope of Topic 606: Service Charges on Deposits $ 724 $ 651 $ 358 $ 335 Investment Services and Insurance Income 420 361 223 187 Title Insurance Income 562 554 306 355 ATM and check card fees 735 681 388 351 Other 250 240 134 118 Noninterest Income (in-scope of Topic 606) 2,691 2,487 1,409 1,348 Noninterest Income (out-of-scope of Topic 606) 1,041 1,441 590 536 Total Noninterest Income $ 3,732 $ 3,928 $ 1,999 $ 1,882 Contract Balances A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s noninterest revenue streams are largely based on transactional activity. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of June 30, 2018 and December 31, 2017, the Company did not have any significant contract balances. Contract Acquisition Costs In connection with the adoption of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of Topic 606, the Company did not capitalize any contract acquisition cost. |
1. Summary of Significant Acc20
1. Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Principles Policies Abstract | |
Principles of Consolidation | The accompanying unaudited consolidated financial statements including the accounts of Farmers & Merchants Bank, TEB Life Insurance Company, Farmers & Merchants Financial Services, Inc., VBS Mortgage, LLC (dba F&M Mortgage), (net of non-controlling interest) and VSTitle, LLC and 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 six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. 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, 2017 (the “2017 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 | 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), F&M Mortgage, and VSTitle, LLC (VST). The Company purchased 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 and intangibles, fair value, the valuation of deferred tax assets and liabilities, pension accounting and the valuation of foreclosed real estate. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for fair presentation of the results of operations in these financial statements, have been made. |
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 stockholders by the weighted average number of common shares outstanding. In calculating diluted EPS net income available to common stockholders 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 Six months ended For the Three months ended For the Six months ended For the Three months ended June 30, 2018 June 30, 2018 June 30, 2017 June 30, 2017 Earnings available to common stockholders: Net income $ 3,665 $ 1,704 $ 4,705 $ 2,387 Non-controlling interest income 5 16 32 59 Preferred stock dividends 207 104 209 105 Net income available to common stockholders $ 3,453 $ 1,584 $ 4,464 $ 2,223 The following table shows the effect of dilutive preferred stock conversion on the Company's earnings per share for the periods indicated: Six months ended June 30, 2018 Six months ended June 30, 2017 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 3,453 3,253,007 $ 1.06 $ 4,464 3,272,318 $ 1.36 Effect of Dilutive Securities: Convertible Preferred Stock 207 359,594 (.05 ) 209 363,681 (0.07 ) Diluted EPS $ 3,660 3,612,601 $ 1.01 $ 4,673 3,635,999 $ 1.29 Three months ended June 30, 2018 Three months ended June 30, 2017 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 1,584 3,250,749 $ .49 $ 2,223 3,273,352 $ .68 Effect of Dilutive Securities: Convertible Preferred Stock 104 359,063 (.02 ) 105 363,678 (0.04 ) Diluted EPS $ 1,688 3,609,812 $ .47 $ 2,328 3,637,030 $ .64 |
1. Summary of Significant Acc21
1. Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Principles Tables Abstract | |
Schedule of earnings per share | (dollars in thousands) For the Six months ended For the Three months ended For the Six months ended For the Three months ended June 30, 2018 June 30, 2018 June 30, 2017 June 30, 2017 Earnings available to common stockholders: Net income $ 3,665 $ 1,704 $ 4,705 $ 2,387 Non-controlling interest income 5 16 32 59 Preferred stock dividends 207 104 209 105 Net income available to common stockholders $ 3,453 $ 1,584 $ 4,464 $ 2,223 Six months ended June 30, 2018 Six months ended June 30, 2017 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 3,453 3,253,007 $ 1.06 $ 4,464 3,272,318 $ 1.36 Effect of Dilutive Securities: Convertible Preferred Stock 207 359,594 (.05 ) 209 363,681 (0.07 ) Diluted EPS $ 3,660 3,612,601 $ 1.01 $ 4,673 3,635,999 $ 1.29 Three months ended June 30, 2018 Three months ended June 30, 2017 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 1,584 3,250,749 $ .49 $ 2,223 3,273,352 $ .68 Effect of Dilutive Securities: Convertible Preferred Stock 104 359,063 (.02 ) 105 363,678 (0.04 ) Diluted EPS $ 1,688 3,609,812 $ .47 $ 2,328 3,637,030 $ .64 |
2. Investment Securities (Table
2. Investment Securities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Investment Securities Tables Abstract | |
Schedule of amortized cost and fair value for securities | Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value June 30, 2018 U. S. Treasuries $ 122 $ - $ - $ 122 December 31, 2017 U. S. Treasuries $ 125 $ - $ - $ 125 |
Amortized cost and fair value of securities | Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value June 30, 2018 U. S. Government sponsored enterprises $ 7,999 $ - $ 183 $ 7,816 Mortgage-backed obligations of federal agencies 457 - 10 447 Total Securities Available for Sale $ 8,456 $ - $ 193 $ 8,263 December 31, 2017 U. S. Treasuries $ 19,998 $ - $ - $ 19,998 U.S. Government sponsored enterprises 7,999 - 19 7,980 Mortgage-backed obligations of federal agencies 508 - 6 502 Equity securities1 135 - - 135 Total Securities Available for Sale $ 28,640 $ - $ 25 $ 28,615 1 Transferred to other investments on January 1, 2018 upon adoption of ASU 2016-01 |
Schedule of gain and losses on sales of debt and equity securities | 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 $ - $ - $ - $ - Due after one year through five years 122 122 7,999 7,816 Due after five years - - 457 447 Due after ten years - - - - Total $ 122 $ 122 $ 8,456 $ 8,263 |
Schedule of securities with unrealized losses | Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses June 30, 2018 U. S. Government sponsored enterprises $ 7,816 $ (183 ) $ - $ - $ 7,816 $ (183 ) Mortgage-backed obligations of federal agencies 447 (10 ) - - 447 (10 ) Total $ 8,263 $ (193 ) $ - $ - $ 8,263 $ (193 ) Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2017 U. S. Government sponsored enterprises $ 3,981 $ (19 ) $ - $ - $ 3,981 $ (19 ) Mortgage-backed obligations of federal agencies 502 (6 ) - - 502 (6 ) Total $ 4,483 $ (25 ) $ - $ - $ 4,483 $ (25 ) |
3. Loans (Tables)
3. Loans (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Loans Held For Investment Tables Abstract | |
Schedule of loans outstanding | (dollars in thousands) 2018 2017 Construction/Land Development $ 67,079 $ 71,620 Farmland 16,500 13,606 Real Estate 184,674 184,546 Multi-Family 9,829 10,298 Commercial Real Estate 156,041 148,906 Home Equity – closed end 10,742 11,606 Home Equity – open end 55,837 54,739 Commercial & Industrial – Non-Real Estate 41,275 36,912 Consumer 5,216 6,633 Dealer Finance 83,962 75,169 Credit Cards 2,967 2,939 Total $ 634,122 $ 616,974 |
Schedule impaired loans | June 30, 2018 December 31, 2017 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance Impaired loans without a valuation allowance: Construction/Land Development $ 4,478 $ 4,478 $ - $ 4,352 $ 5,269 $ - Farmland 1,984 1,984 - 1,984 1,984 - Real Estate 1,688 1,688 - 1,273 1,273 - Multi-Family - - - - - - Commercial Real Estate 291 291 - 6,229 6,229 - Home Equity – closed end - - - - - - Home Equity – open end - - - - 347 - Commercial & Industrial – Non-Real Estate - - - - - - Consumer - - - 8 8 - Credit cards - - - - - - Dealer Finance 33 33 - 31 31 - 8,474 8,474 - 13,877 15,141 - Impaired loans with a valuation allowance Construction/Land Development 7,463 8,023 2,154 4,998 4,998 1,661 Farmland - - - - - Real Estate 110 110 7 1,188 1,188 209 Multi-Family - - - - - Commercial Real Estate 5,898 5,898 1,586 - - - Home Equity – closed end - - - - - Home Equity – open end - - - - - Commercial & Industrial – Non-Real Estate - - - - - Consumer 11 11 2 - - - Credit cards - - - - - Dealer Finance 229 229 7 47 47 12 13,711 14,271 3,756 6,233 6,233 1,882 Total impaired loans $ 22,185 $ 22,745 $ 3,756 $ 20,110 $ 21,374 $ 1,882 Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 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 $ 4,759 $ 45 $ 4,734 $ 47 $ 4,929 $ 79 $ 4,374 $ 50 Farmland 1,984 62 1,858 - 1,984 62 1,239 - Real Estate 837 (6 ) 750 14 982 11 756 17 Multi-Family - - - - - - - - Commercial Real Estate 797 4 100 2 2,608 9 719 3 Home Equity – closed end - - - - - - - - Home Equity – open end - - 347 6 116 - 347 - Commercial & Industrial – Non-Real Estate - - 166 - - - 167 6 Consumer and credit cards - - 11 - 3 - 12 - Dealer Finance 33 - 20 1 32 1 13 1 8,410 105 7,986 70 10,654 162 7,627 77 Impaired loans with a valuation allowance: Construction/Land Development $ 7,417 $ 64 $ 6,512 $ 97 $ 6,610 $ 98 $ 6,539 $ 140 Farmland - - - - - - - - Real Estate 1,283 9 1,199 31 1,251 27 1,201 31 Multi-Family - - - - - - - - Commercial Real Estate 5,407 73 - - 3,605 141 317 - Home Equity – closed end - - - - - - - - Home Equity – open end - - - - - - - - Commercial & Industrial – Non-Real Estate - - - - - - - - Consumer and credit card 12 - - - 8 1 - - Dealer Finance 198 4 65 - 148 8 72 1 14,317 150 7,776 128 11,622 275 8,129 172 Total Impaired Loans $ 22,727 $ 255 $ 15,762 $ 198 $ 22,276 $ 437 $ 15,756 $ 249 |
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 June 30, 2018 Construction/Land Development $ 1,465 $ 52 $ 5,367 $ 6,884 $ 60,195 $ 67,079 $ 5,927 $ - Farmland - - - - 16,500 16,500 - - Real Estate 1,772 1,215 1,496 4,483 180,191 184,674 1,345 899 Multi-Family 174 - - 174 9,655 9,829 - - Commercial Real Estate 4,153 4,895 218 9,266 146,775 156,041 6,460 - Home Equity – closed end - 15 - 15 10,727 10,742 - - Home Equity – open end 539 258 158 955 54,882 55,837 133 26 Commercial & Industrial – Non- Real Estate 201 150 - 351 40,924 41,275 - - Consumer 117 15 10 142 5,074 5,216 - 10 Dealer Finance 1,066 262 93 1,421 82,541 83,962 161 - Credit Cards 30 5 16 51 2,916 2,967 - 16 Total $ 9,517 $ 6,867 $ 7,358 $ 23,742 $ 610,380 $ 634,122 $ 14,026 $ 951 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, 2017 Construction/Land Development $ 167 $ 5,459 $ 3,908 $ 9,534 $ 62,086 $ 71,620 $ 3,908 $ - Farmland - - - - 13,606 13,606 - - Real Estate 2,858 1,954 560 5,372 179,174 184,546 1,720 143 Multi-Family 179 - - 179 10,119 10,298 - - Commercial Real Estate 544 - - 544 148,362 148,906 - - Home Equity – closed end - 25 - 25 11,581 11,606 3 - Home Equity – open end 454 165 268 887 53,852 54,739 448 - Commercial & Industrial – Non- Real Estate 108 36 595 739 36,173 36,912 599 - Consumer 43 5 - 48 6,585 6,633 - - Dealer Finance 1,300 252 189 1,741 73,428 75,169 226 54 Credit Cards 30 8 1 39 2,900 2,939 - 1 Total $ 5,683 $ 7,904 $ 5,521 $ 19,108 $ 597,866 $ 616,974 $ 6,904 $ 198 |
4. Allowance for Loan Losses (T
4. Allowance for Loan Losses (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Allowance For Loan Losses Tables Abstract | |
Summary loan loss allowance transactions | June 30, 2018 Beginning Balance Charge-offs Recoveries Provision Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 2,547 $ 47 $ 122 $ 167 $ 2,789 $ 2,154 $ 635 Farmland 25 - - - 25 - 25 Real Estate 719 53 12 (261 ) 417 7 410 Multi-Family 19 - - (2 ) 17 - 17 Commercial Real Estate 482 - 1 1,366 1,849 1,586 263 Home Equity – closed end 66 3 3 (17 ) 49 - 49 Home Equity – open end 209 - 3 (42 ) 170 - 170 Commercial & Industrial – Non-Real Estate 337 544 57 425 275 - 275 Consumer 148 13 5 (75 ) 65 2 63 Dealer Finance 1,440 1,036 528 471 1,403 7 1,396 Credit Cards 52 21 17 (2 ) 46 - 46 Total $ 6,044 $ 1,717 $ 748 $ 2,030 $ 7,105 $ 3,756 $ 3,349 December 31, 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 $ 620 $ - $ (214 ) $ 2,547 $ 1,661 $ 886 Farmland 34 - - (9 ) 25 - 25 Real Estate 843 - 2 (126 ) 719 209 510 Multi-Family 23 - - (6 ) 19 - 19 Commercial Real Estate 705 - 13 (236 ) 482 - 482 Home Equity – closed end 75 7 25 (27 ) 66 - 66 Home Equity – open end 470 26 53 (288 ) 209 - 209 Commercial & Industrial – Non-Real Estate 586 179 72 (142 ) 337 - 337 Consumer 78 136 28 178 148 - 148 Dealer Finance 1,289 1,806 1,143 814 1,440 12 1,428 Credit Cards 59 98 37 54 52 - 52 Total $ 7,543 $ 2,872 $ 1,373 $ - $ 6,044 $ 1,882 $ 4,162 |
Schedule of recorded investment in loan receivables | June 30, 2018 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 67,079 $ 11,941 $ 55,138 Farmland 16,500 1,984 14,516 Real Estate 184,674 1,798 182,876 Multi-Family 9,829 - 9,829 Commercial Real Estate 156,041 6,189 149,853 Home Equity – closed end 10,742 - 10,742 Home Equity –open end 55,837 - 55,837 Commercial & Industrial – Non-Real Estate 41,275 - 41,275 Consumer 5,216 11 5,205 Dealer Finance 83,962 262 83,699 Credit Cards 2,967 - 2,967 Total $ 634,122 $ 22,185 $ 611,937 December 31, 2017 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 71,620 $ 9,350 $ 62,270 Farmland 13,606 1,984 11,622 Real Estate 184,546 2,461 182,085 Multi-Family 10,298 - 10,298 Commercial Real Estate 148,906 6,229 142,677 Home Equity – closed end 11,606 - 11,606 Home Equity –open end 54,739 - 54,739 Commercial & Industrial – Non-Real Estate 36,912 - 36,912 Consumer 6,633 8 6,625 Dealer Finance 75,169 78 75,091 Credit Cards 2,939 - 2,939 Total $ 616,974 $ 20,110 $ 596,864 |
Schedule of loan portfolio by internal loan grade | June 30, 2018 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 $ - $ 1,657 $ 15,517 $ 32,841 $ 7,011 $ 113 $ 9,940 $ - $ 67,079 Farmland 62 - 4,410 5,806 3,744 494 1,984 - 16,500 Real Estate - 1,603 53,790 100,205 21,918 2,573 4,585 - 184,674 Multi-Family - 185 2,757 6,713 174 - - - 9,829 Commercial Real Estate - 3,064 45,988 89,682 8,203 2,545 6,559 - 156,041 Home Equity – closed end - - 3,346 5,432 1,949 15 - - 10,742 Home Equity – open end 223 1,910 19,897 29,687 3,618 307 195 - 55,837 Commercial & Industrial (Non-Real Estate) 229 1,532 18,386 18,078 2,451 535 64 - 41,275 Consumer (excluding dealer) 30 274 3,057 906 910 19 20 - 5,216 Total $ 544 $ 10,225 $ 167,148 $ 289,350 $ 49,978 $ 6,601 $ 23,347 $ - $ 547,193 Credit Cards Dealer Finance Performing $ 2,951 $ 83,801 Non-performing 16 161 Total $ 2,967 $ 83,962 December 31, 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 $ - $ 690 $ 12,974 $ 30,197 $ 9,165 $ 3,520 $ 15,074 $ - $ 71,620 Farmland 63 3,153 4,120 3,793 494 1,983 - 13,606 Real Estate - 1,512 53,764 101,606 19,734 4,660 3,270 - 184,546 Multi-Family - 228 4,780 5,111 179 - - - 10,298 Commercial Real Estate - 3,525 45,384 89,195 9,012 634 1,156 - 148,906 Home Equity – closed end - - 3,535 5,410 1,279 1,379 3 - 11,606 Home Equity – open end 235 1,598 17,383 30,888 3,945 176 514 - 54,739 Commercial & Industrial (Non-Real Estate) 262 1,595 13,297 19,442 1,480 207 629 - 36,912 Consumer (excluding dealer) 34 490 2,226 88 1,065 2,254 476 - 6,633 Total $ 594 $ 9,638 $ 156,496 $ 286,057 $ 49,652 $ 13,324 $ 23,105 $ - $ 538,866 Credit Cards Dealer Finance Performing $ 2,938 $ 75,116 Non-performing 1 53 Total $ 2,939 $ 75,169 |
5. Employee Benefit Plan (Table
5. Employee Benefit Plan (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Employee Benefit Plan Tables Abstract | |
Schedule of employee benefit plan | Six Months Ended Three Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Service cost $ 384 $ 348 $ 192 $ 174 Interest cost 248 244 124 122 Expected return on plan assets (462 ) (426 ) (231 ) (213 ) Amortization of prior service cost (8 ) (8 ) (4 ) (4 ) Amortization of net loss 152 142 76 71 Net periodic pension cost $ 314 $ 300 $ 157 $ 150 |
6. Fair Value (Tables)
6. Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value | |
Schedule of assets and liabilities at fair value on recurring basis | June 30, 2018 Total Level 1 Level 2 Level 3 U.S. Government sponsored enterprises $ 7,816 $ - $ 7,816 $ - Mortgage-backed obligations of federal agencies 447 - 447 - Total securities available for sale $ 8,263 $ - $ 8,263 $ - December 31, 2017 Total Level 1 Level 2 Level 3 U. S. Treasuries $ 19,998 $ 19,998 $ - $ - U.S. Government sponsored enterprises 7,980 - 7,980 - Mortgage-backed obligations of federal agencies 502 - 502 - Equity securities1 135 - 135 - Total securities available for sale $ 28,615 $ 19,998 $ 8,617 $ - 1 Transferred to other investments on January 1, 2018 upon adoption of ASU 2016-01 |
Schedule of assets and liabilities at fair value on non-recurring basis | June 30, 2018 Total Level 1 Level 2 Level 3 Construction/Land Development $ 5,309 $ - $ - $ 5,309 Real Estate 103 - - 103 Commercial Real Estate 4,312 - - 4,312 Consumer 9 - - 9 Dealer Finance 222 - - 222 Impaired loans $ 9,955 $ - $ - $ 9,955 December 31, 2017 Total Level 1 Level 2 Level 3 Construction/Land Development $ 3,337 $ - - $ 3,337 Real Estate 979 - - 979 Dealer Finance 35 - - 35 Impaired loans $ 4,351 $ - $ - $ 4,351 |
Schedule of fair value measurements | (dollars in thousands) Fair Value at June 30, 2018 Valuation Technique Significant Unobservable Inputs Range Impaired Loans $ 9,995 Discounted appraised value Discount for selling costs and marketability 2%-19% (Average 4.9%) (dollars in thousands) Fair Value at December 31, 2017 Valuation Technique Significant Unobservable Inputs Range Impaired Loans $ 4,351 Discounted appraised value Discount for selling costs and marketability 3%-19% (Average 5.5%) June 30, 2018 Total Level 1 Level 2 Level 3 Other real estate owned $ 2,034 - - $ 2,034 December 31, 2017 Total Level 1 Level 2 Level 3 Other real estate owned $ 1,984 - - $ 1,984 (dollars in thousands) Fair Value at June 30, 2018 Valuation Technique Significant Unobservable Inputs Range Other real estate owned $ 2,034 Discounted appraised value Discount for selling costs 2.5%-10% (Average 4%) Fair Value at December 31, 2017 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Other real estate owned $ 1,984 Discounted appraised value Discount for selling costs 5%-15% (Average 8%) |
7. Disclosures About Fair Val27
7. Disclosures About Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosures About Fair Value Of Financial Instruments Tables Abstract | |
Schedule of carrying value and estimated fair value for financial instruments | Fair Value Measurements at June 30, 2018 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 June 30, 2018 Assets: Cash and cash equivalents $ 13,364 $ 13,364 $ - $ - $ 13,364 Securities 8,385 - 8,385 - 8,385 Loans held for sale 49,821 - 49,821 - 49,821 Loans held for investment, net 627,017 - - 615,424 615,424 Interest receivable 1,983 - 1,983 - 1,983 Bank owned life insurance 19,166 - 19,166 - 19,166 Total $ 719,736 $ 13,364 $ 79,355 $ 615,424 $ 708,143 Liabilities: Deposits $ 568,566 $ - $ 406,830 $ 163,871 $ 570,701 Short-term debt 46,000 - 46,000 - 46,000 Long-term debt 47,434 - - 47,524 47,524 Interest payable 267 - 267 - 267 Total $ 662,267 $ - $ 453,097 $ 211,395 $ 664,492 Fair Value Measurements at December 31, 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 December 31, 2017 Assets: Cash and cash equivalents $ 11,907 $ 11,907 $ - $ - $ 11,907 Securities 28,740 19,998 8,742 - 28,740 Loans held for sale 39,775 - 39,775 - 39,775 Loans held for investment, net 610,930 - - 646,703 646,703 Interest receivable 2,007 - 2,007 - 2,007 Bank owned life insurance 13,950 - 13,950 - 13,950 Total $ 707,309 $ 31,905 $ 64,474 $ 646,703 $ 743,082 Liabilities: Deposits $ 569,177 $ - $ 403,907 $ 167,210 $ 571,117 Short-term debt 25,296 - 25,296 - 25,296 Long-term debt 49,733 - - 49,869 49, 869 Interest payable 260 - 260 - 260 Total $ 644,466 $ - $ 429,463 $ 217,079 $ 646,542 |
8. Troubled Debt Restructuring
8. Troubled Debt Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Troubled Debt Restructuring Abstract | |
Schedule of troubled debt restructuring | June 30, 2018 Pre-Modification Post-Modification (dollars in thousands) Outstanding Outstanding Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Commercial Real Estate 1 $ 1,002 $ 1,002 Real Estate 2 1,255 1,255 Consumer 13 196 196 Total 16 $ 2,453 $ 2,453 Six Months ended June 30, 2017 Pre-Modification Post-Modification (dollars in thousands) Outstanding Outstanding Number of Contracts Recorded Investment Recorded Investment Troubled Debt Restructurings Consumer 1 $ 20 $ 20 Total 1 $ 20 $ 20 June 30, 2017 Pre-Modification Post-Modification Outstanding Outstanding Number of Contracts Recorded Investment Recorded Investment Troubled Debt Restructurings Real Estate 1 $ 67 $ 67 Total 1 $ 67 $ 67 |
9. Accumulated Other Comprehe29
9. Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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, 2017 $ (20 ) $ (4,122 ) $ (4,142 ) Change in unrealized securities gains (losses), net of tax (133 ) - (133 ) Change in unfunded pension liability, net of tax - - - Balance at June 30, 2018 $ (153 ) $ (4,122 ) $ (4,275 ) (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 June 30, 2017 $ 5 $ (3,171 ) $ (3,166 ) |
10. Business Segments (Tables)
10. Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Segments Tables Abstract | |
Schedule of business segments | Six Months Ended June 30, 2018 F&M Bank F&M Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 17,620 $ 71 $ 71 $ - $ - $ (57 ) $ 17,705 Service charges on deposits 724 - - - - - 724 Investment services and insurance income - - 431 - - (11 ) 420 Mortgage banking income, net - 1,135 - - - - 1,135 Title insurance income - 109 - 453 - - 562 Gain on prepayment of long-term debt - - - - - - - Loss on investments - - - - - - - Other operating income 843 48 - - - - 891 Total income 19,187 1,363 502 453 - (68 ) 21,437 Expenses: Interest Expense 2,097 54 - - - (57 ) 2,094 Provision for loan losses 2,030 - - - - - 2,030 Salary and benefit expense 6,564 831 283 345 - - 8,023 Other operating expenses 4,496 456 28 89 29 (11 ) 5,087 Total expense 15,187 1,341 311 434 29 (68 ) 17,234 Net income (loss) before taxes 4,000 22 191 19 (29 ) - 4,203 Income tax expense 284 - 36 - 218 - 538 Net income (loss) $ 3,716 $ 22 $ 155 $ 19 $ (247 ) $ - $ 3,665 Net income attributable to non-controlling interest - 5 - - - - 5 Net Income attributable to F & M Bank Corp. $ 3,716 $ 17 $ 155 $ 19 $ (247 ) $ - $ 3,660 Total Assets $ 772,244 $ 8,332 $ 6,910 $ 707 $ 91,480 $ (109,005 ) $ 770,668 Goodwill $ 2,670 $ 65 $ - $ 57 $ 164 $ - $ 2,956 Three months ended June 30, 2018 F&M Bank F&M Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 8,916 $ 42 $ 36 $ - $ - $ (32 ) $ 8,962 Service charges on deposits 358 - - - - - 358 Investment services and insurance income - - 228 - - (5 ) 223 Mortgage banking income, net - 615 - - - - 615 Title insurance income - 47 - 259 - - 306 Gain on prepayment of long-term debt - - - - - - - Loss on investments - - - - - - - Other operating income 450 47 - - - - 497 Total income 9,724 751 264 259 - (37 ) 10,961 Expenses: Interest Expense 1,116 31 - - - (32 ) 1,115 Provision for loan losses 1,350 - - - - - 1,350 Salary and benefit expense 3,268 416 137 179 - - 4,000 Other operating expenses 2,317 246 18 42 15 (5 ) 2,633 Total expense 8,051 693 155 221 15 (37 ) 9,098 Net income (loss) before taxes 1,673 58 109 38 (15 ) - 1,863 Income tax expense 144 - 21 - (6 ) - 159 Net income (loss) $ 1,529 $ 58 $ 88 $ 38 $ (9 ) $ - $ 1,704 Net income attributable to non-controlling interest - 16 - - - - 16 Net Income attributable to F & M Bank Corp. $ 1,529 $ 42 $ 88 $ 38 $ (9 ) $ - $ 1,688 Six Months Ended June 30, 2017 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 16,171 $ 65 $ 75 $ - $ - $ (45 ) $ 16,266 Service charges on deposits 651 - - - - - 651 Investment services and insurance income 1 - 360 - - - 361 Mortgage banking income, net - 1,113 - - - - 1,113 Title insurance income - - - 554 - - 554 Gain on prepayment of long-term debt 504 - - - - - 504 Loss on investments - (40 ) (2 ) - - - (42 ) Other operating income 787 - - - - - 787 Total income 18,114 1,138 433 554 - (45 ) 20,194 Expenses: Interest Expense 1,834 42 - - - (45 ) 1,831 Provision for loan losses - - - - - - - Salary expense 5,977 616 234 340 - - 7,167 Other operating expenses 4,220 470 17 94 4 - 4,805 Total expense 12,031 1,128 251 434 4 (45 ) 13,803 Net income (loss) before taxes 6,083 10 182 120 (4 ) - 6,391 Income tax expense 1,669 - 53 - (36 ) - 1,686 Net income (loss) $ 4,414 $ 10 $ 129 $ 120 $ 32 $ - $ 4,705 Net income attributable to non-controlling interest - 3 - 29 - - 32 Net Income attributable to F & M Bank Corp. $ 4,414 $ 7 $ 129 $ 91 $ 32 $ - $ 4,673 Total Assets $ 746,193 $ 6,027 $ 6,630 $ 274 $ 89,909 $ (104,770 ) $ 744,263 Goodwill $ 2,670 $ - $ - $ - $ 304 $ - $ 2,974 Three Months Ended June 30, 2017 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 8,210 $ 30 $ 38 $ - $ - $ (22 ) $ 8,256 Service charges on deposits 335 - - - - - 335 Investment services and insurance income - - 187 - - - 187 Mortgage banking income, net - 613 - - - - 613 Title insurance income - - - 355 - - 355 Gain on prepayment of long-term debt - - - - - - - Loss on investments - - - - - - - Other operating income 392 - - - - - 392 Total income 8,937 643 225 355 - (22 ) 10,138 Expenses: Interest Expense 927 20 - - - (22 ) 925 Provision for loan losses - - - - - - - Salary and benefit expense 2,968 211 119 182 - - 3,480 Other operating expenses 2,160 320 13 43 1 - 2,537 Total expense 6,055 551 132 225 1 (22 ) 6,942 Net income (loss) before taxes 2,882 92 93 130 (1 ) - 3,196 Income tax expense 801 - 26 - (18 ) - 809 Net income (loss) $ 2,081 $ 92 $ 67 $ 130 $ 17 $ - $ 2,387 Net income attributable to non-controlling interest - 28 - 31 - - 59 Net Income attributable to F & M Bank Corp. $ 2,081 $ 64 $ 67 $ 99 $ 17 $ - $ 2,328 |
12. Revenue Recognition (Tables
12. Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue Recognition Tables Abstract | |
Summary of noninterest income, segregated by revenue streams | Six Months Ended June 30, Three Months Ended June 30, 2018 2017 2018 2017 Noninterest Income (in thousands) In-scope of Topic 606: Service Charges on Deposits $ 724 $ 651 $ 358 $ 335 Investment Services and Insurance Income 420 361 223 187 Title Insurance Income 562 554 306 355 ATM and check card fees 735 681 388 351 Other 250 240 134 118 Noninterest Income (in-scope of Topic 606) 2,691 2,487 1,409 1,348 Noninterest Income (out-of-scope of Topic 606) 1,041 1,441 590 536 Total Noninterest Income $ 3,732 $ 3,928 $ 1,999 $ 1,882 |
1. Summary of Significant Acc32
1. Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings available to common stockholders: | ||||
Net income | $ 1,704 | $ 2,387 | $ 3,665 | $ 4,705 |
Noncontrolling interest income | 16 | 59 | 5 | 32 |
Preferred stock dividends | 104 | 105 | 207 | 209 |
Net income available to common stockholders | $ 1,584 | $ 2,223 | $ 3,453 | $ 4,464 |
1. Summary of Significant Acc33
1. Summary of Significant Accounting Policies (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Summary Of Significant Accounting Policies | ||||
Basic EPS, Income | $ 1,584 | $ 2,223 | $ 3,453 | $ 4,464 |
Effect of Dilutive Securities Convertible Preferred Stock, Income | 104 | 105 | 207 | 209 |
Diluted EPS, Income | $ 1,688 | $ 2,328 | $ 3,660 | $ 4,673 |
Diluted EPS, Shares | 3,250,749 | 3,272,352 | 3,253,007 | 3,272,318 |
Effect of Dilutive Securities Convertible Preferred Stock, Shares | 359,063 | 363,678 | 359,594 | 363,681 |
Diluted EPS, Shares | 3,609,812 | 3,637,030 | 3,612,601 | 3,635,999 |
Basic EPS, Per Shares | $ 0.49 | $ 0.68 | $ 1.06 | $ 1.36 |
Effect of Dilutive Securities Convertible Preferred Stock, Per Shares | (.02) | (.04) | (.05) | (.07) |
Diluted EPS, Per Shares | $ 0.47 | $ 0.64 | $ 1.01 | $ 1.29 |
2. Investment Securities (Detai
2. Investment Securities (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2017 | |||
Securities available for sale | ||||
Cost | $ 8,456 | $ 28,640 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | 193 | 25 | ||
Market Value | 8,263 | 28,615 | [1] | |
U. S. Treasury and agency obligations [Member] | ||||
Securities held to maturity | ||||
Cost | 122 | 125 | ||
Market Value | 122 | 125 | ||
Securities available for sale | ||||
Unrealized Gains | 0 | |||
Unrealized Losses | 0 | |||
U. S. Treasuries [Member] | ||||
Securities available for sale | ||||
Cost | 19,998 | |||
Unrealized Gains | 0 | |||
Unrealized Losses | 0 | |||
Market Value | 19,998 | |||
Government Sponsored Enterprises [Member] | ||||
Securities available for sale | ||||
Cost | 7,999 | 7,999 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | 183 | 19 | ||
Market Value | 7,816 | 7,980 | ||
Mortgage-backed securities [Member] | ||||
Securities available for sale | ||||
Cost | 457 | 508 | ||
Unrealized Gains | 0 | 0 | ||
Unrealized Losses | 10 | 6 | ||
Market Value | $ 447 | 502 | ||
Marketable Equities [Member] | ||||
Securities available for sale | ||||
Cost | [2] | 135 | ||
Unrealized Gains | [2] | 0 | ||
Unrealized Losses | [2] | 0 | ||
Market Value | [2] | $ 135 | ||
[1] | 2017 Derived from audited consolidated financial statements. | |||
[2] | Transferred to other investments on January 1, 2018 upon adoption of ASU 2016-01. |
2. Investment Securities (Det35
2. Investment Securities (Details 1) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | [1] |
Total, Amortized Cost | $ 122 | $ 125 | |
Securities Held to Maturity [Member] | |||
Due in one year or less, Amortized Cost | 0 | ||
Due after one year through five years, Amortized Cost | 122 | ||
Due after five years, Amortized Cost | 0 | ||
Due after ten years, Amortized Cost | 0 | ||
Total, Amortized Cost | 122 | ||
Due in one year or less, Fair Value | 0 | ||
Due after one year through five years, Fair Value | 122 | ||
Due after five years, Fair Value | 0 | ||
Due after ten years, Fair Value | 0 | ||
Total, Fair Value | 122 | ||
Securities Available for Sale [Member] | |||
Due in one year or less, Amortized Cost | 0 | ||
Due after one year through five years, Amortized Cost | 7,999 | ||
Due after five years, Amortized Cost | 457 | ||
Due after ten years, Amortized Cost | 0 | ||
Total, Amortized Cost | 8,456 | ||
Due in one year or less, Fair Value | 0 | ||
Due after one year through five years, Fair Value | 7,816 | ||
Due after five years, Fair Value | 447 | ||
Due after ten years, Fair Value | 0 | ||
Total, Fair Value | $ 8,263 | ||
[1] | 2017 Derived from audited consolidated financial statements. |
2. Investment Securities (Det36
2. Investment Securities (Details 2) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value Less than 12 Months | $ 8,263 | $ 4,483 |
Unrealized Losses Less than 12 Months | (193) | (25) |
Fair Value More than 12 Months | 0 | 0 |
Unrealized Losses More than 12 Months | 0 | 0 |
Fair Value Total | 8,263 | 4,483 |
Unrealized Losses Total | (193) | (25) |
Government sponsored Enterprises [Member] | ||
Fair Value Less than 12 Months | 7,816 | 3,981 |
Unrealized Losses Less than 12 Months | (183) | (19) |
Fair Value More than 12 Months | 0 | 0 |
Unrealized Losses More than 12 Months | 0 | 0 |
Fair Value Total | 7,816 | 3,981 |
Unrealized Losses Total | (183) | (19) |
Mortgage-backed securities [Member] | ||
Fair Value Less than 12 Months | 447 | 502 |
Unrealized Losses Less than 12 Months | (10) | (6) |
Fair Value More than 12 Months | 0 | 0 |
Unrealized Losses More than 12 Months | 0 | 0 |
Fair Value Total | 447 | 502 |
Unrealized Losses Total | $ (10) | $ (6) |
2. Investment Securities (Det37
2. Investment Securities (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Invetment Securities Details 3Abstract | |||
Other investments | $ 14,771 | $ 12,503 | [1] |
[1] | 2017 Derived from audited consolidated financial statements. |
3. Loans (Details)
3. Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Loans outstanding | $ 634,122 | $ 616,974 |
Construction/Land Development [Member] | ||
Loans outstanding | 67,079 | 71,620 |
Farmland [Member] | ||
Loans outstanding | 16,500 | 13,606 |
Real Estate [Member] | ||
Loans outstanding | 184,674 | 184,546 |
Multi-Family [Member] | ||
Loans outstanding | 9,829 | 10,298 |
Commercial Real Estate [Member] | ||
Loans outstanding | 156,041 | 148,906 |
Home Equity - Closed End [Member] | ||
Loans outstanding | 10,742 | 11,606 |
Home Equity [Member] | ||
Loans outstanding | 55,837 | 54,739 |
Commercial & Industrial - Non-Real Estate [Member] | ||
Loans outstanding | 41,275 | 36,912 |
Consumer [Member] | ||
Loans outstanding | 5,216 | 6,633 |
Dealer Finance [Member] | ||
Loans outstanding | 83,962 | 75,169 |
Credit Cards [Member] | ||
Loans outstanding | $ 2,967 | $ 2,939 |
3. Loans (Details 1)
3. Loans (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Impaired loans without a valuation allowance | |||||
Recorded Investment | $ 8,474 | $ 8,474 | $ 13,877 | ||
Unpaid Principal Balance | 8,474 | 8,474 | 15,141 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 8,410 | $ 7,986 | 10,654 | $ 7,627 | |
Interest Income Recognized | 105 | 70 | 162 | 77 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 13,711 | 13,711 | 6,233 | ||
Unpaid Principal Balance | 14,271 | 14,271 | 6,233 | ||
Related Allowance | 3,756 | 3,756 | 1,882 | ||
Average Recorded Investment | 14,317 | 7,776 | 11,622 | 8,129 | |
Interest Income Recognized | 150 | 128 | 275 | 172 | |
Total impaired loans | |||||
Recorded Investment | 22,185 | 22,185 | 20,110 | ||
Unpaid Principal Balance | 22,745 | 22,745 | 21,374 | ||
Related Allowance | 3,756 | 3,756 | 1,882 | ||
Average Recorded Investment | 22,727 | 15,762 | 22,276 | 15,756 | |
Interest Income Recognized | 255 | 198 | 437 | 249 | |
Construction/Land Development [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded Investment | 4,478 | 4,478 | 4,352 | ||
Unpaid Principal Balance | 4,478 | 4,478 | 5,269 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 4,759 | 4,734 | 4,929 | 4,374 | |
Interest Income Recognized | 45 | 47 | 79 | 50 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 7,463 | 7,463 | 4,998 | ||
Unpaid Principal Balance | 8,023 | 8,023 | 4,998 | ||
Related Allowance | 2,154 | 2,154 | 1,661 | ||
Average Recorded Investment | 7,417 | 6,512 | 6,610 | 6,539 | |
Interest Income Recognized | 64 | 97 | 98 | 140 | |
Farmland [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded Investment | 1,984 | 1,984 | 1,984 | ||
Unpaid Principal Balance | 1,984 | 1,984 | 1,984 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 1,984 | 1,858 | 1,984 | 1,239 | |
Interest Income Recognized | 62 | 0 | 62 | 0 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 0 | 0 | 0 | ||
Unpaid Principal Balance | 0 | 0 | 0 | ||
Related Allowance | 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 | 1,688 | 1,688 | 1,273 | ||
Unpaid Principal Balance | 1,688 | 1,688 | 1,273 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 837 | 750 | 982 | 756 | |
Interest Income Recognized | (6) | 14 | 11 | 17 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 110 | 110 | 1,188 | ||
Unpaid Principal Balance | 110 | 110 | 1,188 | ||
Related Allowance | 7 | 7 | 209 | ||
Average Recorded Investment | 1,283 | 1,199 | 1,251 | 1,201 | |
Interest Income Recognized | 9 | 31 | 27 | 31 | |
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 | ||||
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 | 291 | 291 | 6,229 | ||
Unpaid Principal Balance | 291 | 291 | 6,229 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 797 | 100 | 2,608 | 719 | |
Interest Income Recognized | 4 | 2 | 9 | 3 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 5,898 | 5,898 | 0 | ||
Unpaid Principal Balance | 5,898 | 5,898 | 0 | ||
Related Allowance | 1,586 | 1,586 | 0 | ||
Average Recorded Investment | 5,407 | 0 | 3,605 | 317 | |
Interest Income Recognized | 73 | 0 | 141 | 0 | |
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 | ||||
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 | 0 | 0 | 347 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 0 | 347 | 116 | 347 | |
Interest Income Recognized | 0 | 6 | 0 | 0 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 0 | 0 | 0 | ||
Unpaid Principal Balance | 0 | 0 | 0 | ||
Related Allowance | 0 | ||||
Average Recorded Investment | 0 | 0 | 0 | 0 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | |
Commercial & Industrial - Non-Real Estate [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 | 166 | 0 | 167 | |
Interest Income Recognized | 0 | 0 | 0 | 6 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 0 | 0 | 0 | ||
Unpaid Principal Balance | 0 | 0 | 0 | ||
Related Allowance | 0 | ||||
Average Recorded Investment | 0 | 0 | 0 | 0 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | |
Consumer [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded Investment | 0 | 0 | 8 | ||
Unpaid Principal Balance | 0 | 0 | 8 | ||
Related Allowance | 0 | 0 | 0 | ||
Impaired loans with a valuation allowance | |||||
Recorded Investment | 11 | 11 | 0 | ||
Unpaid Principal Balance | 11 | 11 | 0 | ||
Related Allowance | 2 | 2 | 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 | ||||
Dealer Finance [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded Investment | 33 | 33 | 31 | ||
Unpaid Principal Balance | 33 | 33 | 31 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 33 | 20 | 32 | 13 | |
Interest Income Recognized | 0 | 1 | 1 | 1 | |
Impaired loans with a valuation allowance | |||||
Recorded Investment | 229 | 229 | 47 | ||
Unpaid Principal Balance | 229 | 229 | 47 | ||
Related Allowance | 7 | 7 | $ 12 | ||
Average Recorded Investment | 198 | 65 | 148 | 72 | |
Interest Income Recognized | 4 | 0 | 8 | 1 | |
Consumer and Credit Cards [Member] | |||||
Impaired loans without a valuation allowance | |||||
Average Recorded Investment | 0 | 11 | 3 | 12 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | |
Impaired loans with a valuation allowance | |||||
Average Recorded Investment | 12 | 0 | 8 | 0 | |
Interest Income Recognized | $ 0 | $ 0 | $ 1 | $ 0 |
3. Loans (Details 2)
3. Loans (Details 2) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
30-59 Days Past due | $ 9,517 | $ 5,683 |
60-89 Days Past due | 6,867 | 7,904 |
Greater than 90 Days (excluding non-accrual) | 7,358 | 5,521 |
Total past due | 23,742 | 19,108 |
Current | 610,380 | 597,866 |
Total Loans Receivable | 634,122 | 616,974 |
Non-Accrual Loans | 14,026 | 6,904 |
Recorded Investment >90 days & accruing | 951 | 198 |
Credit Cards [Member] | ||
30-59 Days Past due | 30 | 30 |
60-89 Days Past due | 5 | 8 |
Greater than 90 Days (excluding non-accrual) | 16 | 1 |
Total past due | 51 | 39 |
Current | 2,916 | 2,900 |
Total Loans Receivable | 2,967 | 2,939 |
Non-Accrual Loans | 0 | 0 |
Recorded Investment >90 days & accruing | 16 | 1 |
Construction/Land Development [Member] | ||
30-59 Days Past due | 1,465 | 167 |
60-89 Days Past due | 52 | 5,459 |
Greater than 90 Days (excluding non-accrual) | 5,367 | 3,908 |
Total past due | 6,884 | 9,534 |
Current | 60,195 | 62,086 |
Total Loans Receivable | 67,079 | 71,620 |
Non-Accrual Loans | 5,927 | 3,908 |
Recorded Investment >90 days & accruing | 0 | 0 |
Farmland [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 | 16,500 | 13,606 |
Total Loans Receivable | 16,500 | 13,606 |
Non-Accrual Loans | 0 | 0 |
Recorded Investment >90 days & accruing | 0 | 0 |
Real Estate [Member] | ||
30-59 Days Past due | 1,772 | 2,858 |
60-89 Days Past due | 1,215 | 1,954 |
Greater than 90 Days (excluding non-accrual) | 1,496 | 560 |
Total past due | 4,483 | 5,372 |
Current | 180,191 | 179,174 |
Total Loans Receivable | 184,674 | 184,546 |
Non-Accrual Loans | 1,345 | 1,720 |
Recorded Investment >90 days & accruing | 899 | 143 |
Multi-Family [Member] | ||
30-59 Days Past due | 174 | 179 |
60-89 Days Past due | 0 | 0 |
Greater than 90 Days (excluding non-accrual) | 0 | 0 |
Total past due | 174 | 179 |
Current | 9,655 | 10,119 |
Total Loans Receivable | 9,829 | 10,298 |
Non-Accrual Loans | 0 | 0 |
Recorded Investment >90 days & accruing | 0 | 0 |
Commercial Real Estate [Member] | ||
30-59 Days Past due | 4,153 | 544 |
60-89 Days Past due | 4,895 | 0 |
Greater than 90 Days (excluding non-accrual) | 218 | 0 |
Total past due | 9,266 | 544 |
Current | 146,775 | 148,362 |
Total Loans Receivable | 156,041 | 148,906 |
Non-Accrual Loans | 6,460 | 0 |
Recorded Investment >90 days & accruing | 0 | 0 |
Home Equity - Closed End [Member] | ||
30-59 Days Past due | 0 | 0 |
60-89 Days Past due | 15 | 25 |
Greater than 90 Days (excluding non-accrual) | 0 | 0 |
Total past due | 15 | 25 |
Current | 10,727 | 11,581 |
Total Loans Receivable | 10,742 | 11,606 |
Non-Accrual Loans | 0 | 3 |
Recorded Investment >90 days & accruing | 0 | 0 |
Home Equity [Member] | ||
30-59 Days Past due | 539 | 454 |
60-89 Days Past due | 258 | 165 |
Greater than 90 Days (excluding non-accrual) | 158 | 268 |
Total past due | 955 | 887 |
Current | 54,882 | 53,852 |
Total Loans Receivable | 55,837 | 54,739 |
Non-Accrual Loans | 133 | 448 |
Recorded Investment >90 days & accruing | 26 | 0 |
Commercial & Industrial - Non-Real Estate [Member] | ||
30-59 Days Past due | 201 | 108 |
60-89 Days Past due | 150 | 36 |
Greater than 90 Days (excluding non-accrual) | 0 | 595 |
Total past due | 351 | 739 |
Current | 40,924 | 36,173 |
Total Loans Receivable | 41,275 | 36,912 |
Non-Accrual Loans | 0 | 599 |
Recorded Investment >90 days & accruing | 0 | 0 |
Consumer [Member] | ||
30-59 Days Past due | 117 | 43 |
60-89 Days Past due | 15 | 5 |
Greater than 90 Days (excluding non-accrual) | 10 | 0 |
Total past due | 142 | 48 |
Current | 5,074 | 6,585 |
Total Loans Receivable | 5,216 | 6,633 |
Non-Accrual Loans | 0 | 0 |
Recorded Investment >90 days & accruing | 10 | 0 |
Dealer Finance [Member] | ||
30-59 Days Past due | 1,066 | 1,300 |
60-89 Days Past due | 262 | 252 |
Greater than 90 Days (excluding non-accrual) | 93 | 189 |
Total past due | 1,421 | 1,741 |
Current | 82,541 | 73,428 |
Total Loans Receivable | 83,962 | 75,169 |
Non-Accrual Loans | 161 | 226 |
Recorded Investment >90 days & accruing | $ 0 | $ 54 |
3. Loans (Details Narrative)
3. Loans (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | ||
Loans | |||
Pledged loans | $ 182,373 | $ 218,523 | |
Loans held for sale | 49,821 | 39,775 | [1] |
Foreclosed residential real estate in other real estate | $ 177 | $ 207 | |
[1] | 2017 Derived from audited consolidated financial statements. |
4. Allowance for Loan Losses (D
4. Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Beginning Balance | $ 6,044 | $ 7,543 |
Charge-offs | 1,717 | 2,872 |
Recoveries | 748 | 1,373 |
Provision | 2,030 | 0 |
Ending Balance | 7,105 | 6,044 |
Individually Evaluated for Impairment | 3,756 | 1,882 |
Collectively Evaluated for Impairment | 3,349 | 4,162 |
Construction/Land Development [Member] | ||
Beginning Balance | 2,547 | 3,381 |
Charge-offs | 47 | 620 |
Recoveries | 122 | 0 |
Provision | 167 | (214) |
Ending Balance | 2,789 | 2,547 |
Individually Evaluated for Impairment | 2,154 | 1,661 |
Collectively Evaluated for Impairment | 635 | 886 |
Farmland [Member] | ||
Beginning Balance | 25 | 34 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision | 0 | (9) |
Ending Balance | 25 | 25 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 25 | 25 |
Real Estate [Member] | ||
Beginning Balance | 719 | 843 |
Charge-offs | 53 | 0 |
Recoveries | 12 | 2 |
Provision | (261) | (126) |
Ending Balance | 417 | 719 |
Individually Evaluated for Impairment | 7 | 209 |
Collectively Evaluated for Impairment | 410 | 510 |
Multi-Family [Member] | ||
Beginning Balance | 19 | 23 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision | (2) | (6) |
Ending Balance | 17 | 19 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 17 | 19 |
Commercial Real Estate [Member] | ||
Beginning Balance | 482 | 705 |
Charge-offs | 0 | 0 |
Recoveries | 1 | 13 |
Provision | 1,366 | (236) |
Ending Balance | 1,849 | 482 |
Individually Evaluated for Impairment | 1,586 | 0 |
Collectively Evaluated for Impairment | 263 | 482 |
Home Equity - Closed End [Member] | ||
Beginning Balance | 66 | 75 |
Charge-offs | 3 | 7 |
Recoveries | 3 | 25 |
Provision | (17) | (27) |
Ending Balance | 49 | 66 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 49 | 66 |
Home Equity [Member] | ||
Beginning Balance | 209 | 470 |
Charge-offs | 0 | 26 |
Recoveries | 3 | 53 |
Provision | (42) | (288) |
Ending Balance | 170 | 209 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 170 | 209 |
Commercial & Industrial - Non-Real Estate [Member] | ||
Beginning Balance | 337 | 586 |
Charge-offs | 544 | 179 |
Recoveries | 57 | 72 |
Provision | 425 | (142) |
Ending Balance | 275 | 337 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 275 | 337 |
Consumer [Member] | ||
Beginning Balance | 148 | 78 |
Charge-offs | 13 | 136 |
Recoveries | 5 | 28 |
Provision | (75) | 178 |
Ending Balance | 65 | 148 |
Individually Evaluated for Impairment | 2 | 0 |
Collectively Evaluated for Impairment | 63 | 148 |
Dealer Finance [Member] | ||
Beginning Balance | 1,440 | 1,289 |
Charge-offs | 1,036 | 1,806 |
Recoveries | 528 | 1,143 |
Provision | 471 | 814 |
Ending Balance | 1,403 | 1,440 |
Individually Evaluated for Impairment | 7 | 12 |
Collectively Evaluated for Impairment | 1,396 | 1,428 |
Credit Cards [Member] | ||
Beginning Balance | 52 | 59 |
Charge-offs | 21 | 98 |
Recoveries | 17 | 37 |
Provision | (2) | 54 |
Ending Balance | 46 | 52 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | $ 46 | $ 52 |
4. Allowance for Loan Losses 43
4. Allowance for Loan Losses (Details 1) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Loan Receivable | $ 634,122 | $ 616,974 |
Loans Individually Evaluated for Impairment | 22,185 | 20,110 |
Loans Collectively Evaluated for Impairment | 611,937 | 596,864 |
Construction/Land Development [Member] | ||
Loan Receivable | 67,079 | 71,620 |
Loans Individually Evaluated for Impairment | 11,941 | 9,350 |
Loans Collectively Evaluated for Impairment | 55,138 | 62,270 |
Farmland [Member] | ||
Loan Receivable | 16,500 | 13,606 |
Loans Individually Evaluated for Impairment | 1,984 | 1,984 |
Loans Collectively Evaluated for Impairment | 14,516 | 11,622 |
Real Estate [Member] | ||
Loan Receivable | 184,674 | 184,546 |
Loans Individually Evaluated for Impairment | 1,798 | 2,461 |
Loans Collectively Evaluated for Impairment | 182,876 | 182,085 |
Multi-Family [Member] | ||
Loan Receivable | 9,829 | 10,298 |
Loans Individually Evaluated for Impairment | 0 | 0 |
Loans Collectively Evaluated for Impairment | 9,829 | 10,298 |
Commercial Real Estate [Member] | ||
Loan Receivable | 156,041 | 148,906 |
Loans Individually Evaluated for Impairment | 6,189 | 6,229 |
Loans Collectively Evaluated for Impairment | 149,853 | 142,677 |
Home Equity - Closed End [Member] | ||
Loan Receivable | 10,742 | 11,606 |
Loans Individually Evaluated for Impairment | 0 | 0 |
Loans Collectively Evaluated for Impairment | 10,742 | 11,606 |
Home Equity [Member] | ||
Loan Receivable | 55,837 | 54,739 |
Loans Individually Evaluated for Impairment | 0 | 0 |
Loans Collectively Evaluated for Impairment | 55,837 | 54,739 |
Commercial & Industrial - Non-Real Estate [Member] | ||
Loan Receivable | 41,275 | 36,912 |
Loans Individually Evaluated for Impairment | 0 | 0 |
Loans Collectively Evaluated for Impairment | 41,275 | 36,912 |
Consumer [Member] | ||
Loan Receivable | 5,216 | 6,633 |
Loans Individually Evaluated for Impairment | 11 | 8 |
Loans Collectively Evaluated for Impairment | 5,205 | 6,625 |
Dealer Finance [Member] | ||
Loan Receivable | 83,962 | 75,169 |
Loans Individually Evaluated for Impairment | 262 | 78 |
Loans Collectively Evaluated for Impairment | 83,699 | 75,091 |
Credit Cards [Member] | ||
Loan Receivable | 2,967 | 2,939 |
Loans Individually Evaluated for Impairment | 0 | 0 |
Loans Collectively Evaluated for Impairment | $ 2,967 | $ 2,939 |
4. Allowance for Loan Losses 44
4. Allowance for Loan Losses (Details 2) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Construction/Land Development | $ 67,079 | $ 71,620 |
Farmland | 16,500 | 13,606 |
Real Estate | 184,674 | 184,546 |
Multi-Family | 9,829 | 10,298 |
Commercial Real Estate | 156,041 | 148,906 |
Home Equity - closed end | 10,742 | 11,606 |
Home Equity - open end | 55,837 | 54,739 |
Commercial & Industrial (Non-Real Estate) | 41,275 | 36,912 |
Consumer (excluding dealer) | 5,216 | 6,633 |
Total | 547,193 | 538,866 |
Grade 1 Minimal Risk [Member] | ||
Construction/Land Development | 0 | 0 |
Farmland | 62 | 63 |
Real Estate | 0 | 0 |
Multi-Family | 0 | 0 |
Commercial Real Estate | 0 | 0 |
Home Equity - closed end | 0 | 0 |
Home Equity - open end | 223 | 235 |
Commercial & Industrial (Non-Real Estate) | 229 | 262 |
Consumer (excluding dealer) | 30 | 34 |
Total | 544 | 594 |
Grade 2 Modest Risk [Member] | ||
Construction/Land Development | 1,657 | 690 |
Farmland | 0 | 0 |
Real Estate | 1,603 | 1,512 |
Multi-Family | 185 | 228 |
Commercial Real Estate | 3,064 | 3,525 |
Home Equity - closed end | 0 | 0 |
Home Equity - open end | 1,910 | 1,598 |
Commercial & Industrial (Non-Real Estate) | 1,532 | 1,595 |
Consumer (excluding dealer) | 274 | 490 |
Total | 10,225 | 9,638 |
Grade 3 Average Risk [Member] | ||
Construction/Land Development | 15,517 | 12,974 |
Farmland | 4,410 | 3,153 |
Real Estate | 53,790 | 53,764 |
Multi-Family | 2,757 | 4,780 |
Commercial Real Estate | 45,988 | 45,384 |
Home Equity - closed end | 3,346 | 3,535 |
Home Equity - open end | 19,897 | 17,383 |
Commercial & Industrial (Non-Real Estate) | 18,386 | 13,297 |
Consumer (excluding dealer) | 3,057 | 2,226 |
Total | 167,148 | 156,496 |
Grade 4 Acceptable Risk [Member] | ||
Construction/Land Development | 32,841 | 30,197 |
Farmland | 5,806 | 4,120 |
Real Estate | 100,205 | 101,606 |
Multi-Family | 6,713 | 5,111 |
Commercial Real Estate | 89,682 | 89,195 |
Home Equity - closed end | 5,432 | 5,410 |
Home Equity - open end | 29,687 | 30,888 |
Commercial & Industrial (Non-Real Estate) | 18,078 | 19,442 |
Consumer (excluding dealer) | 906 | 88 |
Total | 289,350 | 286,057 |
Grade 5 Marginally Acceptable [Member] | ||
Construction/Land Development | 7,011 | 9,165 |
Farmland | 3,744 | 3,793 |
Real Estate | 21,918 | 19,734 |
Multi-Family | 174 | 179 |
Commercial Real Estate | 8,203 | 9,012 |
Home Equity - closed end | 1,949 | 1,279 |
Home Equity - open end | 3,618 | 3,945 |
Commercial & Industrial (Non-Real Estate) | 2,451 | 1,480 |
Consumer (excluding dealer) | 910 | 1,065 |
Total | 49,978 | 49,652 |
Grade 6 Watch [Member] | ||
Construction/Land Development | 113 | 3,520 |
Farmland | 494 | 494 |
Real Estate | 2,573 | 4,660 |
Multi-Family | 0 | 0 |
Commercial Real Estate | 2,545 | 634 |
Home Equity - closed end | 15 | 1,379 |
Home Equity - open end | 307 | 176 |
Commercial & Industrial (Non-Real Estate) | 535 | 207 |
Consumer (excluding dealer) | 19 | 2,254 |
Total | 6,601 | 13,324 |
Grade 7 Substandard [Member] | ||
Construction/Land Development | 9,940 | 15,074 |
Farmland | 1,984 | 1,983 |
Real Estate | 4,585 | 3,270 |
Multi-Family | 0 | 0 |
Commercial Real Estate | 6,559 | 1,156 |
Home Equity - closed end | 0 | 3 |
Home Equity - open end | 195 | 514 |
Commercial & Industrial (Non-Real Estate) | 64 | 629 |
Consumer (excluding dealer) | 20 | 476 |
Total | 23,347 | 23,105 |
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 45
4. Allowance for Loan Losses (Details 3) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Credit cards | $ 2,967 | $ 2,939 |
Dealer Finance | 83,962 | 75,169 |
Performing [Member] | ||
Credit cards | 2,951 | 2,938 |
Dealer Finance | 83,801 | 75,116 |
Non performing [Member] | ||
Credit cards | 16 | 1 |
Dealer Finance | $ 161 | $ 53 |
5. Employee Benefit Plan (Detai
5. Employee Benefit Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Employee Benefit Plan Details Abstract | ||||
Service cost | $ 192 | $ 174 | $ 384 | $ 348 |
Interest cost | 124 | 122 | 248 | 244 |
Expected return on plan assets | (231) | (213) | (462) | (426) |
Amortization of prior service cost | (4) | (4) | (8) | (8) |
Amortization of net loss | 76 | 71 | 152 | 142 |
Net periodic pension cost | $ 157 | $ 150 | $ 314 | $ 300 |
6. Fair Value (Details)
6. Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
U. S. Treasuries | $ 19,998 | ||
U. S. Government sponsored enterprises | $ 7,816 | 7,980 | |
Mortgage-backed obligations of federal agencies | 447 | 502 | |
Equity securities | [1] | 135 | |
Total securities available for sale | 8,263 | 28,615 | |
Fair Value Inputs Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
U. S. Treasuries | 19,998 | ||
U. S. Government sponsored enterprises | 0 | 0 | |
Mortgage-backed obligations of federal agencies | 0 | 0 | |
Equity securities | [1] | 0 | |
Total securities available for sale | 0 | 19,998 | |
Fair Value Inputs Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
U. S. Treasuries | 0 | ||
U. S. Government sponsored enterprises | 7,816 | 7,980 | |
Mortgage-backed obligations of federal agencies | 447 | 502 | |
Equity securities | [1] | 135 | |
Total securities available for sale | 8,263 | 8,617 | |
Fair Value Inputs Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
U. S. Treasuries | 0 | ||
U. S. Government sponsored enterprises | 0 | 0 | |
Mortgage-backed obligations of federal agencies | 0 | 0 | |
Equity securities | [1] | 0 | |
Total securities available for sale | $ 0 | $ 0 | |
[1] | Transferred to other investments on January 1, 2018 upon adoption of ASU 2016-01. |
6. Fair Value (Details 1)
6. Fair Value (Details 1) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Impaired loans | $ 9,955 | $ 4,351 |
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 | 9,955 | 4,351 |
Construction/Land Development [Member] | ||
Impaired loans | 5,309 | 3,337 |
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 | 5,309 | 3,337 |
Real Estate [Member] | ||
Impaired loans | 103 | 979 |
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 | 103 | 979 |
Commercial Real Estate [Member] | ||
Impaired loans | 4,312 | |
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 | 4,312 | |
Consumer [Member] | ||
Impaired loans | 9 | |
Consumer [Member] | Fair Value Inputs Level 1 [Member] | ||
Impaired loans | 0 | |
Consumer [Member] | Fair Value Inputs Level 2 [Member] | ||
Impaired loans | 0 | |
Consumer [Member] | Fair Value Inputs Level 3 [Member] | ||
Impaired loans | 9 | |
Dealer Finance [Member] | ||
Impaired loans | 222 | 35 |
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 | $ 222 | $ 35 |
6. Fair Value (Details 2)
6. Fair Value (Details 2) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Impaired Loans | $ 9,955 | $ 4,351 |
Fair Value Inputs Level 3 [Member] | ||
Impaired Loans | 9,955 | 4,351 |
Other Real Estate Owned | $ 2,034 | $ 1,984 |
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 | 4.90% | 5.50% |
Average Other Real Estate Owned | 4.00% | 8.00% |
Fair Value Inputs Level 3 [Member] | Minimum [Member] | ||
Range Impaired Loans | 2.00% | 3.00% |
Range Other Real Estate Owned | 2.50% | 5.00% |
Fair Value Inputs Level 3 [Member] | Maximum [Member] | ||
Range Impaired Loans | 19.00% | 19.00% |
Range Other Real Estate Owned | 10.00% | 15.00% |
7. Disclosures About Fair Val50
7. Disclosures About Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Assets: | |||
Cash and cash equivalents, Carrying amount | $ 13,364 | $ 11,907 | [1] |
Cash and cash equivalents, Fair value | 13,364 | 11,907 | |
Securities, Carrying amount | 8,385 | 28,740 | |
Securities, Fair value | 8,385 | 28,740 | |
Loans held for sale, Carrying Amount | 49,821 | 39,775 | |
Loans held for sale, Fair Value | 49,821 | 39,775 | |
Loans held for investment, net, Carrying Amount | 627,017 | 610,930 | |
Loans held for investment, net, Fair Value | 615,424 | 646,703 | |
Interest receivable, Carrying Amount | 1,983 | 2,007 | [1] |
Interest receivable, Fair Value | 1,983 | 2,007 | |
Bank owned life insurance, Carrying Amount | 19,166 | 13,950 | [1] |
Bank owned life insurance, Fair Value | 19,166 | 13,950 | |
Total Assets, Carrying Amount | 719,736 | 707,309 | |
Total Assets, Fair Value | 708,143 | 743,082 | |
Liabilities | |||
Deposits, Carrying Amount | 568,566 | 569,177 | |
Deposits, Fair Value | 570,701 | 571,117 | |
Short-term debt, Carrying Amount | 46,000 | 25,296 | |
Short-term debt, Fair Value | 46,000 | 25,296 | |
Long-term debt, Carrying Amount | 47,434 | 49,733 | |
Long-term debt, Fair Value | 47,524 | 49,869 | |
Interest payable, Carrying Amount | 267 | 260 | |
Interest payable, Fair Value | 267 | 260 | |
Total Liabilities, Carrying Amount | 662,267 | 644,466 | |
Total Liabilities, Fair Value | 664,492 | 646,542 | |
Fair Value Inputs Level 1 [Member] | |||
Assets: | |||
Cash and cash equivalents, Fair value | 13,364 | 11,907 | |
Securities, Fair value | 0 | 19,998 | |
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 | 13,364 | 31,905 | |
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 | 8,385 | 8,742 | |
Loans held for sale, Fair Value | 49,821 | 39,775 | |
Loans held for investment, net, Fair Value | 0 | 0 | |
Interest receivable, Fair Value | 1,983 | 2,007 | |
Bank owned life insurance, Fair Value | 19,166 | 13,950 | |
Total Assets, Fair Value | 79,355 | 64,474 | |
Liabilities | |||
Deposits, Fair Value | 406,830 | 403,907 | |
Short-term debt, Fair Value | 46,000 | 25,296 | |
Long-term debt, Fair Value | 0 | 0 | |
Interest payable, Fair Value | 267 | 260 | |
Total Liabilities, Fair Value | 453,097 | 429,463 | |
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 | 615,424 | 646,703 | |
Interest receivable, Fair Value | 0 | 0 | |
Bank owned life insurance, Fair Value | 0 | 0 | |
Total Assets, Fair Value | 615,424 | 646,703 | |
Liabilities | |||
Deposits, Fair Value | 163,871 | 167,210 | |
Short-term debt, Fair Value | 0 | 0 | |
Long-term debt, Fair Value | 47,524 | 49,869 | |
Interest payable, Fair Value | 0 | 0 | |
Total Liabilities, Fair Value | $ 211,395 | $ 217,079 | |
[1] | 2017 Derived from audited consolidated financial statements. |
8. Troubled Debt Restructurin51
8. Troubled Debt Restructuring (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018USD ($)Integer | Jun. 30, 2017USD ($)Integer | |
Number of Contracts | Integer | 16 | 1 |
Pre-Modification Outstanding Recorded Investment | $ 2,453 | $ 20 |
Post-Modification Outstanding Recorded Investment | $ 2,453 | $ 20 |
Commercial Real Estate [Member] | ||
Number of Contracts | Integer | 1 | |
Pre-Modification Outstanding Recorded Investment | $ 1,002 | |
Post-Modification Outstanding Recorded Investment | $ 1,002 | |
Real Estate [Member] | ||
Number of Contracts | Integer | 2 | |
Pre-Modification Outstanding Recorded Investment | $ 1,255 | |
Post-Modification Outstanding Recorded Investment | $ 1,255 | |
Consumer [Member] | ||
Number of Contracts | Integer | 13 | 1 |
Pre-Modification Outstanding Recorded Investment | $ 196 | $ 20 |
Post-Modification Outstanding Recorded Investment | $ 196 | $ 20 |
9. Accumulated Other Comprehe52
9. Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Unrealized Securities Gains (Losses) [Member] | ||
Beginning balance | $ (20) | $ 6 |
Change in unrealized securities gains (losses), net of tax | (133) | (1) |
Change in unfunded pension liability, net of tax | 0 | 0 |
Ending balance | (153) | 5 |
Adjustments Related to Pension Plan [Member] | ||
Beginning balance | (4,122) | (3,171) |
Change in unrealized securities gains (losses), net of tax | 0 | 0 |
Change in unfunded pension liability, net of tax | 0 | 0 |
Ending balance | (4,122) | (3,171) |
Accumulated Other comprehensive Income (Loss) [Member] | ||
Beginning balance | (4,142) | (3,165) |
Change in unrealized securities gains (losses), net of tax | (133) | (1) |
Change in unfunded pension liability, net of tax | 0 | 0 |
Ending balance | $ (4,275) | $ (3,166) |
10. Business Segments (Details)
10. Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | [1] | |
Interest Income | $ 8,962 | $ 8,256 | $ 17,705 | $ 16,266 | ||
Service charges on deposits | 358 | 335 | 724 | 651 | ||
Investment services and insurance income | 223 | 187 | 420 | 361 | ||
Mortgage banking income, net | 615 | 613 | 1,135 | 1,113 | ||
Title insurance income | 306 | 355 | 562 | 554 | ||
Gain on prepayment of long-term debt | 0 | (504) | ||||
Expenses: | ||||||
Interest Expense | 1,115 | 925 | 2,094 | 1,831 | ||
Provision for loan losses | 1,350 | 0 | 2,030 | 0 | ||
Income tax expense (benefit) | 159 | 809 | 538 | 1,686 | ||
Net income (loss) | 1,704 | 2,387 | 3,665 | 4,705 | ||
Total Assets | 770,668 | 770,668 | $ 753,270 | |||
Goodwill | 2,956 | 2,956 | $ 2,881 | |||
F&M Bank Member | ||||||
Interest Income | 8,916 | 8,210 | 17,620 | 16,171 | ||
Service charges on deposits | 358 | 335 | 724 | 651 | ||
Investment services and insurance income | 0 | 0 | 0 | 1 | ||
Mortgage banking income, net | 0 | 0 | 0 | 0 | ||
Title insurance income | 0 | 0 | 0 | 0 | ||
Gain on prepayment of long-term debt | 0 | 0 | 0 | 504 | ||
Loss on investments | 0 | 0 | 0 | 0 | ||
Other operating income | 450 | 392 | 843 | 787 | ||
Total income | 9,724 | 8,937 | 19,187 | 18,114 | ||
Expenses: | ||||||
Interest Expense | 1,116 | 927 | 2,097 | 1,834 | ||
Provision for loan losses | 1,350 | 0 | 2,030 | 0 | ||
Salary and benefit expense | 3,268 | 2,968 | 6,564 | 5,977 | ||
Other operating expenses | 2,317 | 2,160 | 4,496 | 4,220 | ||
Total expense | 8,051 | 6,055 | 15,187 | 12,031 | ||
Income before income taxes | 1,673 | 2,882 | 4,000 | 6,083 | ||
Income tax expense (benefit) | 144 | 801 | 284 | 1,669 | ||
Net income (loss) | 1,529 | 2,081 | 3,716 | 4,414 | ||
Net (income)/loss attributable to noncontrolling interest | 0 | 0 | 0 | 0 | ||
Net income attributable to F & M Bank Corp. | 1,529 | 2,081 | 3,716 | 4,414 | ||
Total Assets | 772,244 | 746,193 | 772,244 | 746,193 | ||
Goodwill | 2,670 | 2,670 | 2,670 | 2,670 | ||
F&M Mortgage | ||||||
Interest Income | 42 | 30 | 71 | 65 | ||
Service charges on deposits | 0 | 0 | 0 | 0 | ||
Investment services and insurance income | 0 | 0 | 0 | 0 | ||
Mortgage banking income, net | 615 | 613 | 1,135 | 1,113 | ||
Title insurance income | 47 | 0 | 109 | 0 | ||
Gain on prepayment of long-term debt | 0 | 0 | 0 | 0 | ||
Loss on investments | 0 | 0 | 0 | (40) | ||
Other operating income | 47 | 0 | 48 | 0 | ||
Total income | 751 | 643 | 1,363 | 1,138 | ||
Expenses: | ||||||
Interest Expense | 31 | 20 | 54 | 42 | ||
Provision for loan losses | 0 | 0 | 0 | 0 | ||
Salary and benefit expense | 416 | 211 | 831 | 616 | ||
Other operating expenses | 246 | 320 | 456 | 470 | ||
Total expense | 693 | 551 | 1,341 | 1,128 | ||
Income before income taxes | 58 | 92 | 22 | 10 | ||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | ||
Net income (loss) | 58 | 92 | 22 | 10 | ||
Net (income)/loss attributable to noncontrolling interest | 16 | 28 | 5 | 3 | ||
Net income attributable to F & M Bank Corp. | 42 | 64 | 17 | 7 | ||
Total Assets | 8,332 | 6,027 | 8,332 | 6,027 | ||
Goodwill | 65 | 0 | 65 | 0 | ||
TEB Life/FMFS | ||||||
Interest Income | 36 | 38 | 71 | 75 | ||
Service charges on deposits | 0 | 0 | 0 | 0 | ||
Investment services and insurance income | 228 | 187 | 431 | 360 | ||
Mortgage banking income, net | 0 | 0 | 0 | 0 | ||
Title insurance income | 0 | 0 | 0 | 0 | ||
Gain on prepayment of long-term debt | 0 | 0 | 0 | 0 | ||
Loss on investments | 0 | 0 | 0 | (2) | ||
Other operating income | 0 | 0 | 0 | 0 | ||
Total income | 264 | 225 | 502 | 433 | ||
Expenses: | ||||||
Interest Expense | 0 | 0 | 0 | 0 | ||
Provision for loan losses | 0 | 0 | 0 | 0 | ||
Salary and benefit expense | 137 | 119 | 283 | 234 | ||
Other operating expenses | 18 | 13 | 28 | 17 | ||
Total expense | 155 | 132 | 311 | 251 | ||
Income before income taxes | 109 | 93 | 191 | 182 | ||
Income tax expense (benefit) | 21 | 26 | 36 | 53 | ||
Net income (loss) | 88 | 67 | 155 | 129 | ||
Net (income)/loss attributable to noncontrolling interest | 0 | 0 | 0 | 0 | ||
Net income attributable to F & M Bank Corp. | 88 | 67 | 155 | 129 | ||
Total Assets | 6,910 | 6,630 | 6,910 | 6,630 | ||
Goodwill | 0 | 0 | 0 | 0 | ||
VS Title | ||||||
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 | 259 | 355 | 453 | 554 | ||
Gain on prepayment of long-term debt | 0 | 0 | 0 | 0 | ||
Loss on investments | 0 | 0 | 0 | 0 | ||
Other operating income | 0 | 0 | 0 | 0 | ||
Total income | 259 | 355 | 453 | 554 | ||
Expenses: | ||||||
Interest Expense | 0 | 0 | 0 | 0 | ||
Provision for loan losses | 0 | 0 | 0 | 0 | ||
Salary and benefit expense | 179 | 182 | 345 | 340 | ||
Other operating expenses | 42 | 43 | 89 | 94 | ||
Total expense | 221 | 225 | 434 | 434 | ||
Income before income taxes | 38 | 130 | 19 | 120 | ||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | ||
Net income (loss) | 38 | 130 | 19 | 120 | ||
Net (income)/loss attributable to noncontrolling interest | 0 | 31 | 0 | 29 | ||
Net income attributable to F & M Bank Corp. | 38 | 99 | 19 | 91 | ||
Total Assets | 707 | 274 | 707 | 274 | ||
Goodwill | 57 | 0 | 57 | 0 | ||
Parent Only | ||||||
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 | 0 | 0 | ||
Gain on prepayment of long-term debt | 0 | 0 | 0 | 0 | ||
Loss on investments | 0 | 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 and benefit expense | 0 | 0 | 0 | 0 | ||
Other operating expenses | 15 | 1 | 29 | 4 | ||
Total expense | 15 | 1 | 29 | 4 | ||
Income before income taxes | (15) | (1) | (29) | (4) | ||
Income tax expense (benefit) | (6) | (18) | 218 | (36) | ||
Net income (loss) | (9) | 17 | (247) | 32 | ||
Net (income)/loss attributable to noncontrolling interest | 0 | 0 | 0 | 0 | ||
Net income attributable to F & M Bank Corp. | (9) | 17 | (247) | 32 | ||
Total Assets | 91,480 | 89,909 | 91,480 | 89,909 | ||
Goodwill | 164 | 304 | 164 | 304 | ||
Eliminations | ||||||
Interest Income | (32) | (22) | (57) | (45) | ||
Service charges on deposits | 0 | 0 | 0 | 0 | ||
Investment services and insurance income | (5) | 0 | (11) | 0 | ||
Mortgage banking income, net | 0 | 0 | 0 | 0 | ||
Title insurance income | 0 | 0 | 0 | 0 | ||
Gain on prepayment of long-term debt | 0 | 0 | 0 | 0 | ||
Loss on investments | 0 | 0 | 0 | 0 | ||
Other operating income | 0 | 0 | 0 | 0 | ||
Total income | (37) | (22) | (68) | (45) | ||
Expenses: | ||||||
Interest Expense | (32) | (22) | (57) | (45) | ||
Provision for loan losses | 0 | 0 | 0 | 0 | ||
Salary and benefit expense | 0 | 0 | 0 | 0 | ||
Other operating expenses | (5) | 0 | (11) | 0 | ||
Total expense | (37) | (22) | (68) | (45) | ||
Income before income taxes | 0 | 0 | 0 | 0 | ||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | ||
Net income (loss) | 0 | 0 | 0 | 0 | ||
Net (income)/loss attributable to noncontrolling interest | 0 | 0 | 0 | 0 | ||
Net income attributable to F & M Bank Corp. | 0 | 0 | 0 | 0 | ||
Total Assets | (109,005) | (104,770) | (109,005) | (104,770) | ||
Goodwill | 0 | 0 | 0 | 0 | ||
F&M Bank Corp Consolidated | ||||||
Interest Income | 8,962 | 8,256 | 17,705 | 16,266 | ||
Service charges on deposits | 358 | 335 | 724 | 651 | ||
Investment services and insurance income | 223 | 187 | 420 | 361 | ||
Mortgage banking income, net | 615 | 613 | 1,135 | 1,113 | ||
Title insurance income | 306 | 355 | 562 | 554 | ||
Gain on prepayment of long-term debt | 0 | 0 | 0 | 504 | ||
Loss on investments | 0 | 0 | 0 | (42) | ||
Other operating income | 497 | 392 | 891 | 787 | ||
Total income | 10,961 | 10,138 | 21,437 | 20,194 | ||
Expenses: | ||||||
Interest Expense | 1,115 | 925 | 2,094 | 1,831 | ||
Provision for loan losses | 1,350 | 0 | 2,030 | 0 | ||
Salary and benefit expense | 4,000 | 3,480 | 8,023 | 7,167 | ||
Other operating expenses | 2,633 | 2,537 | 5,087 | 4,805 | ||
Total expense | 9,098 | 6,942 | 17,234 | 13,803 | ||
Income before income taxes | 1,863 | 3,196 | 4,203 | 6,391 | ||
Income tax expense (benefit) | 159 | 809 | 538 | 1,686 | ||
Net income (loss) | 1,704 | 2,387 | 3,665 | 4,705 | ||
Net (income)/loss attributable to noncontrolling interest | 16 | 59 | 5 | 32 | ||
Net income attributable to F & M Bank Corp. | 1,688 | 2,328 | 3,660 | 4,673 | ||
Total Assets | 770,668 | 744,263 | 770,668 | 744,263 | ||
Goodwill | $ 2,956 | $ 2,974 | $ 2,956 | $ 2,974 | ||
[1] | 2017 Derived from audited consolidated financial statements. |
11. Debt (Details Narrative)
11. Debt (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | ||
Debt Details Narrative Abstract | ||||
Short term debt | $ 46,000 | $ 25,296 | [1] | |
Weighted average interest rate | 1.87% | 1.86% | ||
Debt obligations | $ 47,339 | $ 49,554 | ||
Gain on prepayment | 0 | $ (504) | ||
Note payable balance | $ 85 | $ 170 | ||
[1] | 2017 Derived from audited consolidated financial statements. |
12. Revenue Recognition (Detail
12. Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Total noninterest income | $ 1,999 | $ 1,882 | $ 3,732 | $ 3,928 |
Service Charges on Deposits | ||||
Total noninterest income | 358 | 335 | 724 | 651 |
Investment Services and Insurance Income | ||||
Total noninterest income | 223 | 187 | 420 | 361 |
Title Insurance Income | ||||
Total noninterest income | 306 | 355 | 562 | 554 |
ATM and check card fees | ||||
Total noninterest income | 388 | 351 | 735 | 681 |
Other | ||||
Total noninterest income | 134 | 118 | 250 | 240 |
Noninterest Income (in-scope of Topic 606) | ||||
Total noninterest income | 1,409 | 1,348 | 2,691 | 2,487 |
Noninterest Income (out-of-scope of Topic 606) | ||||
Total noninterest income | $ 590 | $ 536 | $ 1,041 | $ 1,441 |