F & M Bank (FMBM) 10-Q 11 Aug 20 2020 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	Jun. 30, 2020	Aug. 04, 2020
Cover [Abstract]
Entity Registrant Name	F&M BANK CORP
Entity Central Index Key	0000740806
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Jun. 30, 2020
Entity Filer Category	Accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2020
Entity Common Stock Shares Outstanding		3,196,103
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Entity File Number	000-13273
Entity Incorporation State Country Code	VA
Entity Tax Identification Number	54-1280811
Entity Address Address Line 1	P. O. Box 1111
Entity Address City Or Town	Timberville
Entity Address State Or Province	VA
Entity Address Postal Zip Code	22853
City Area Code	540
Local Phone Number	896-8941
Security 12b Title	Common Stock, par value $5

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Assets
Cash and due from banks	$ 16,947	$ 8,119
Money market funds and interest-bearing deposits in other banks	1,203	1,126
Federal funds sold	68,548	66,559
Cash and cash equivalents	86,698	75,804
Securities:
Held to maturity, at amortized cost - fair value of $125 and $124 in 2020 and 2019, respectively	125	124
Available for sale, at fair value	81,044	4,366
Other investments	12,212	13,525
Loans held for sale, at fair value	90,602	66,798
Loans held for investment	661,529	603,425
Less: allowance for loan losses	(10,033)	(8,390)
Net loans held for investment	651,496	595,035
Other real estate owned, net	1,160	1,489
Bank premises and equipment, net	18,295	18,931
Bank premises held for sale	520	0
Interest receivable	2,640	2,044
Goodwill	2,884	2,884
Bank owned life insurance	20,345	20,050
Other assets	13,581	12,949
Total assets	981,602	813,999
Deposits:
Noninterest bearing	225,130	168,715
Interest bearing	541,522	472,994
Total deposits	766,652	641,709
Short-term debt	0	10,000
Other liabilities	22,307	17,514
Long-term debt	100,585	53,201
Total liabilities	889,544	722,424
Commitments and contingencies	0	0
Stockholders' Equity
Preferred Stock $25 par value, 400,000 shares authorized, 206,660 issued and outstanding for June 30, 2020 and December 31, 2019	4,592	4,592
Common stock, $5 par value, 6,000,000 shares authorized, 3,195,938 and 3,208,498 shares issued and outstanding for June 30, 2020 and December 31, 2019, respectively.	15,980	16,042
Additional paid in capital - common stock	6,744	7,510
Retained earnings	68,018	66,008
Non-controlling interest in consolidated subsidiaries	0	634
Accumulated other comprehensive loss	(3,276)	(3,211)
Total stockholders' equity	92,058	91,575
Total liabilities and stockholders' equity	$ 981,602	$ 813,999

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Assets
Held to maturity - fair value	$ 125	$ 124
Stockholders' Equity
Common stock, shares par value	$ 5	$ 5
Common stock, shares authorized	6,000,000	6,000,000
Common stock, shares issued	3,195,938	3,208,498
Common stock, shares outstanding	3,195,938	3,208,498
Preferred stock, shares par value	$ 25	$ 25
Preferred stock, shares authorized	400,000	400,000
Preferred stock, shares issued	206,660	206,660
Preferred stock, shares outstanding	206,660	206,660

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Interest and Dividend income
Interest and fees on loans held for investment	$ 8,544,000	$ 9,107,000	$ 16,996,000	$ 18,194,000
Interest and fees on loans held for sale	323,000	497,000	593,000	823,000
Interest from money market funds and federal funds sold	24,000	40,000	321,000	53,000
Interest on debt securities - taxable	101,000	138,000	192,000	243,000
Total interest and dividend income	8,992,000	9,782,000	18,102,000	19,313,000
Interest expense
Total interest on deposits	1,159,000	1,258,000	2,611,000	2,359,000
Interest from short-term debt	0	216,000	41,000	419,000
Interest from long-term debt	226,000	252,000	439,000	446,000
Total interest expense	1,385,000	1,726,000	3,091,000	3,224,000
Net interest income	7,607,000	8,056,000	15,011,000	16,089,000
Provision for Loan Losses	800,000	1,600,000	2,300,000	3,050,000
Net Interest Income After Provision for Loan Losses	6,807,000	6,456,000	12,711,000	13,039,000
Noninterest income
Service charges on deposit accounts	225,000	417,000	586,000	803,000
Investment services and insurance income, net	173,000	171,000
Investment services and insurance income			358,000	322,000
Mortgage banking income, net	1,971,000	815,000	2,900,000	1,345,000
Title insurance income	472,000	406,000	843,000	682,000
Income on bank owned life insurance	136,000	149,000	287,000	296,000
Low income housing partnership losses	(224,000)	(213,000)	(447,000)	(427,000)
ATM and check card fees	462,000	529,000	895,000	898,000
Other operating income	143,000	201,000	365,000	346,000
Total noninterest income	3,358,000	2,475,000	5,787,000	4,265,000
Noninterest expense
Salaries	2,932,000	2,633,000	5,944,000	5,466,000
Employee benefits	1,202,000	1,444,000	2,224,000	2,634,000
Occupancy expense	305,000	291,000	572,000	571,000
Equipment expense	290,000	294,000	596,000	563,000
FDIC insurance assessment	94,000	84,000	189,000	166,000
Other real estate owned, net	121,000	25,000	140,000	299,000
Marketing expense	174,000	139,000	304,000	287,000
Legal and professional fees	132,000	196,000	281,000	350,000
ATM and check card fees	270,000	213,000	513,000	406,000
Telecommunication and data processing expense	542,000	426,000	1,079,000	788,000
Directors fees	113,000	102,000	229,000	204,000
Bank franchise tax	189,000	152,000	384,000	283,000
Impairment on long lived assets	19,000	0	19,000	0
Other operating expenses	901,000	1,093,000	1,930,000	2,105,000
Total noninterest expense	7,284,000	7,092,000	14,404,000	14,122,000
Income before income taxes	2,881,000	1,839,000	4,094,000	3,182,000
Income tax expense	211,000	153,000	173,000	232,000
Net Income	2,670,000	1,686,000	3,921,000	2,950,000
Net income attributable to non-controlling interest	43,000	51,000	105,000	29,000
Net Income attributable to F & M Bank Corp.	2,627,000	1,635,000	3,816,000	2,921,000
Dividends paid/accumulated on preferred stock	66,000	79,000	132,000	157,000
Net income available to common stockholders	$ 2,561,000	$ 1,556,000	$ 3,684,000	$ 2,764,000
Per Common Share Data
Net income - basic	$ 0.80	$ 0.49	$ 1.15	$ 0.86
Net income - diluted	0.77	0.47	1.11	0.84
Cash dividends on common stock	$ 0.26	$ 0.25	$ 0.52	$ 0.50
Weighted average common shares outstanding - basic	3,194,282	3,200,119	3,199,183	3,200,119
Weighted average common shares outstanding - diluted	3,400,942	3,447,148	3,428,782	3,474,569

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Consolidated Statements of Comprehensive Income (Unaudited)
Net Income	$ 2,627	$ 1,635	$ 3,816	$ 2,921
Other comprehensive (loss) income:
Unrealized holding (losses) gains on available-for sale securities	80	(33)	(82)	113
Tax effect	17	7	17	24
Unrealized holding (losses) gains, net of tax	63	(26)	(65)	89
Total other comprehensive (loss) income	(26)	63	(65)	89
Comprehensive income attributable to F&M Bank Corp.	1,698	2,601	3,751	3,010
Comprehensive income (loss) attributable to noncontrolling interests	51	43	105	29
Total comprehensive income	$ 1,749	$ 2,644	$ 3,856	$ 3,039

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Total	Preferred Stock	Common Stock	Additional Paid-In Capital	Retained Earnings	Noncontrolling Interest	Accumulated Other Comprehensive Loss
Balance, amount at Dec. 31, 2018	$ 91,911,000	$ 5,672,000	$ 16,066,000	$ 7,987,000	$ 65,596,000	$ 559,000	$ (3,969,000)
Net income	2,950,000	0	0	0	2,921,000	29,000	0
Other comprehensive income	89,000	0	0	0	0	0	89,000
Dividends on preferred stock ($1.488 per share)	(157,000)	0	0	0	(157,000)	0	0
Dividends on common stock ($.80 per share)	(1,619,000)	0	0	0	(1,619,000)	0	0
Common stock repurchased (22,583 shar	(1,187,000)	0	(190,000)	(997,000)	0	0	0
Preferred converted to Common (2,000 pfd shares)	0	(50,000)	11,000	39,000	0	0	0
Common stock issued (7,494 shares)	129,000	0	20,000	109,000	0	0	0
Preferred stock repurchased (1,200 shares)	(41,000)	(30,000)	0	(11,000)	0	0	0
Balance, amount at Jun. 30, 2019	92,075,000	5,592,000	15,907,000	7,127,000	66,741,000	588,000	(3,880,000)
Balance, amount at Mar. 31, 2019	91,975,000	5,592,000	16,019,000	7,707,000	66,063,000	537,000	(3,943,000)
Net income	1,686,000	0	0	0	1,635,000	51,000	0
Other comprehensive income	63,000	0	0	0	0	0	63,000
Dividends on preferred stock ($1.488 per share)	(158,000)	0	0	0	(158,000)	0	0
Dividends on common stock ($.80 per share)	(799,000)	0	0	0	(799,000)	0	0
Common stock repurchased (22,583 shar	(766,000)	0	(124,000)	(642,000)	0	0	0
Common stock issued (7,494 shares)	74,000	0	12,000	62,000	0	0	0
Balance, amount at Jun. 30, 2019	92,075,000	5,592,000	15,907,000	7,127,000	66,741,000	588,000	(3,880,000)
Balance, amount at Dec. 31, 2019	91,575,000	4,592,000	16,042,000	7,510,000	66,008,000	634,000	(3,211,000)
Net income	3,921,000	0	0	0	3,816,000	105,000	0
Other comprehensive income	(65,000)	0	0	0	0	0	(65,000)
Dividends on preferred stock ($1.488 per share)	(132,000)	0	0	0	(132,000)	0	0
Distributions to noncontrolling interest	(177,000)					(177,000)
Dividends on common stock ($.80 per share)	(1,674,000)	0	0	0	(1,674,000)	0	0
Common stock repurchased (22,583 shar	(473,000)	0	(92,000)	(381,000)	0	0	0
Common stock issued (7,494 shares)	133,000	0	30,000	103,000	0	0	0
Purchase of noncontrolling interest	(1,050,000)	0	0	(488,000)	0	(562,000)	0
Preferred stock repurchased (1,200 shares)	0	0	0	0	0	0	0
Balance, amount at Jun. 30, 2020	92,058,000	4,592,000	15,980,000	6,744,000	68,018,000	0	(3,276,000)
Balance, amount at Mar. 31, 2020	91,434,000	4,592,000	15,962,000	7,184,000	66,297,000	649,000	(3,250,000)
Net income	2,670,000	0	0	0	2,627,000	43,000	0
Other comprehensive income	(26,000)	0	0	0	0		(26,000)
Dividends on preferred stock ($1.488 per share)	(66,000)	0	0	0	(66,000)	0	0
Distributions to noncontrolling interest	(130,000)					(130,000)
Dividends on common stock ($.80 per share)	(840,000)	0	0	0	(840,000)	0	0
Common stock issued (7,494 shares)	66,000	0	18,000	48,000	0	0	0
Purchase of noncontrolling interest	(1,050,000)	0	0	(488,000)	0	(562,000)	0
Balance, amount at Jun. 30, 2020	$ 92,058,000	$ 4,592,000	$ 15,980,000	$ 6,744,000	$ 68,018,000	$ 0	$ (3,276,000)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities
Net income	$ 3,921,000	$ 2,950,000
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	639,000	603,000
Amortization of intangibles	26,000	41,000
Amortization of securities	12,000	1,000
Proceeds from loans held for sale originated	80,574,000	55,011,000
Loans held for sale originated	(95,369,000)	(53,685,000)
Gain on sale of loans held for sale originated	(2,400,000)	(1,326,000)
Provision for loan losses	2,300,000	3,050,000
(Increase) in interest receivable	(596,000)	(69,000)
(Increase) in other assets	(420,000)	(752,000)
Increase in other liabilities	4,264,000	1,372,000
Amortization of limited partnership investments	447,000	427,000
Income from life insurance investment	(303,000)	(296,000)
(Gain) loss on the sale of fixed assets	(14,000)	10,000
Loss on sale and valuation adjustments for other real estate owned and bank premises held for sale	150,000	274,000
Net cash (used in) provided by operating activities	(6,874,000)	7,582,000
Cash flows from investing activities
Purchase of investments available for sale and other investments	(79,003,000)	(2,054,000)
Proceeds from maturity of investments available for sale	2,230,000	59,000
Proceeds from the redemption of restricted stock, net	866,000	0
Purchase of investments held to maturity	(125,000)	0
Proceeds from maturity of investments held to maturity	125,000	0
Net (increase) decrease in loans held for investment	58,761,000	92,000
Net (increase) in loans held for sale participations	(6,609,000)	(22,496,000)
Proceeds from the sale of fixed assets	34,000	0
Proceeds from the sale of other real estate owned	199,000	260,000
Cash paid for noncontrolling interest	(806,000)	0
Net purchase of property and equipment	(563,000)	(1,428,000)
Net cash (used) in investing activities	(142,413,000)	(25,567,000)
Cash flows from financing activities
Net change in deposits	124,943,000	17,145,000
Net change in short-term debt	(10,000,000)	(116,000)
Dividends paid in cash	(1,806)	(1,776)
Proceeds from issuance of common stock	133,000	129,000
Repurchase of preferred stock	0	(41,000)
Repurchase of common stock	(473,000)	(1,187,000)
Issuance of long-term debt	59,603,000	10,000,000
Repayments of long-term debt	(12,219,000)	(2,301,000)
Net cash provided by financing activities	160,181,000	21,853,000
Net increase in Cash and Cash Equivalents	10,894,000	3,868,000
Cash and cash equivalents, beginning of period	75,804,000	10,912,000
Cash and cash equivalents, end of period	86,698,000	14,780,000
Supplemental Cash Flow information:
Cash paid for: Interest	3,106	3,201
Cash paid for: Taxes	275,000	0
Supplemental non-cash disclosures:
Change in unrealized (loss) gain on securities available for sale	(82,000)	113,000
Right of Use asset and lease liability, upon adoption	0	1,034,000
Bank premises and equipment transferred to held for sale	520,000	0
Liability to former noncontrolling interest for remainder of purchase price	$ 244,000	$ 0

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2020
Summary of Significant Accounting Policies
Note 1. Summary of Significant Accounting Policies	Note 1. Summary of Significant Accounting Policies Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of Farmers & Merchants Bank, TEB Life Insurance Company, Farmers & Merchants Financial Services, Inc., VBS Mortgage, LLC (dba F&M Mortgage), (net of non-controlling interest) and VSTitle, LLC and were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for the interim financial information and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). On May 1, 2020 the Bank purchased the noncontrolling interest of VBS Mortgage, LLC. 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, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. 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, 2019 (the “2019 Form 10-K”). During the second quarter of 2020, the Company purchased the minority interest in F&M Mortgage. 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 eleven (as of August 1, 2020) 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). 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, fair value, and 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. Risk and Uncertainties The coronavirus (“COVID-19”) spread rapidly across the world in the first quarter of 2020 and was declared a pandemic by the World Health Organization. The government and private sector responses to contain its spread began to significantly affect our operating businesses in March with branch lobby closings, operations and administrative staff working remotely and the use of virtual meetings. These changes will likely affect our operations throughout the remainder of 2020, although the extent and significance are unknown. The duration and extent of the effects over longer terms cannot be reasonably estimated at this time. The risks and uncertainties resulting from the pandemic that may affect our future earnings, cash flows and financial condition include the nature and duration of the long-term effect on our borrowers’ ability to repay. Accordingly, significant estimates used in the preparation of our financial statements including those associated with evaluations of goodwill for impairment, and allowance for loan losses may be subject to adjustments in future periods. 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. Note 1. Summary of Significant Accounting Policies, continued 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 for the three and six month periods ended June 30, 2020 and 2019. 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: For the Six months ended For the Three months ended For the Six months ended For the Three months ended June 30, 2020 June 30, 2020 June 30, 2019 June 30, 2019 Earnings available to com mon stockholders: Net income $ 3,921 $ 2,670 $ 2,950 $ 1,686 Non-controlling interest income (loss) 105 43 29 51 Preferred stock dividends 132 66 157 79 Net income available to common stockholders $ 3,684 $ 2,561 $ 2,764 $ 1,556 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, 2020 Six months ended June 30, 2019 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 3,684 3,199,183 $ 1.15 $ 2,764 3,200,119 $ .86 Effect of Dilutive Securities: Convertible Preferred Stock 132 229,599 (.04 ) 157 274,450 (.02 ) Diluted EPS $ 3,816 3,428,782 $ 1.11 $ 2,921 3,474,569 $ .84 Three months ended June 30, 2020 Three months ended June 30, 2019 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 2,561 3,194,282 $ .80 $ 1,556 3,200,119 $ .49 Effect of Dilutive Securities: Convertible Preferred Stock 66 206,660 (.04 ) 79 247,029 (.02 ) Diluted EPS $ 2,627 3,400,942 $ .77 $ 1,635 3,447,148 $ .47

Investment Securities

Investment Securities	6 Months Ended
	Jun. 30, 2020
Investment Securities
Note 2. Investment Securities	Note 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, 2020 and December 31, 2019 are as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value June 30, 2020 U. S. Treasuries $ 125 $ - $ - $ 125 December 31, 2019 U. S. Treasuries $ 124 $ - $ - $ 124 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, 2020 U. S. Treasuries $ 3,000 $ - $ - $ 3,000 U. S. Government sponsored enterprises 21,003 5 - 21,008 Securities issued by States and political subdivisions in the U.S. 8,876 86 (11 ) 8,951 Mortgage-backed obligations of federal agencies 45,211 10 (225 ) 44,996 Corporate debt security 3,045 44 - 3,089 Total Securities Available for Sale $ 81,135 $ 145 $ (236 ) $ 81,044 December 31, 2019 U. S. Government sponsored enterprises $ 2,000 $ - $ (11 ) $ 1,989 Mortgage-backed obligations of federal agencies 317 2 - 319 Corporate debt security 2,059 - (1 ) 2,058 Total Securities Available for Sale $ 4,376 $ 2 $ (12 ) $ 4,366 The amortized cost and fair value of securities at June 30, 2020, 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 $ 125 $ 125 $ 3,000 $ 3,000 Due after one year through five years - - 18,551 18,601 Due after five years - - 16,019 16,029 Due after ten years - - 43,565 43,414 Total $ 125 $ 125 $ 81,135 $ 81,044 There were no sales of available for sale securities in the first or second quarters of 2020 or 2019. Securities held that are U.S. Agency and Government Sponsored Entities and Agency MBS which carry an implicit government guarantee and are not subject to other than temporary impairment evaluation. Other securities were reviewed for impairment and there were no securities with other than temporary impairment. Note 2. Investment Securities, continued A summary of unrealized losses (in thousands) and the length of time in a continuous loss position, by security type of June 30, 2020 and December 31, 2019 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, 2020 Securities issued by States and political subdivisions in the U.S. $ 21,008 $ (11 ) $ - $ - $ 21,008 $ (11 ) Mortgage-backed obligations of federal agencies 44,996 (225 ) - - 44,996 (225 ) Total $ 66,004 $ (236 ) $ - $ - $ 66,004 $ (236 ) Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2019 U. S. Government sponsored enterprises $ 1,989 $ (11 ) $ - $ - $ 1,989 $ (11 ) Corporate debt security 2,058 (1 ) - - 2,058 (1 ) Total $ 4,047 $ (12 ) $ - $ - $ 4,047 $ (12 ) As of June 30, 2020, other investments consist of investments in twenty low-income housing and historic equity partnerships (carrying basis of $8,082), stock in the Federal Home Loan Bank (carrying basis $2,526 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, 2020. At June 30, 2020, the Company was committed to invest an additional $2,831 in six 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 other liabilities on the consolidated balance sheet. The Company does not have any pledged securities.

Loans

Loans	6 Months Ended
	Jun. 30, 2020
Loans
Note 3. Loans	Note 3. Loans As of June 30, 2020, we had executed 922 modifications allowing principal and interest deferrals of no more than 6 months in connection with COVID-19 relief. Of those, 155 of those modifications remain in deferral as of June 30, 2020 with balances of $24.5 million. These modifications and deferrals were not considered troubled debt restructurings pursuant to interagency guidance issued in March 2020 and the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. Loans held for investment outstanding at June 30, 2020 and December 31, 2019 are summarized as follows: (dollars in thousands) 2020 2019 Construction/Land Development $ 73,783 $ 77,131 Farmland 36,966 29,718 Real Estate 172,205 178,267 Multi-Family 6,065 5,364 Commercial Real Estate 128,763 129,850 Home Equity – closed end 9,069 9,523 Home Equity – open end 46,510 47,774 Commercial & Industrial – Non-Real Estate 90,103 33,535 Consumer 10,072 10,165 Dealer Finance 85,257 78,976 Credit Cards 2,736 3,122 Total $ 661,529 $ 603,425 The Company has pledged loans held for investment as collateral for borrowings with the Federal Home Loan Bank of Atlanta totaling $170,970 and $178,253 as of June 30, 2020 and December 31, 2019, respectively. The Company maintains a blanket lien on certain loans in its residential real estate, commercial and home equity portfolios. Note 3. Loans, continued 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, 2020 and December 31, 2019 were $90,602 and $66,798, respectively. The following is a summary of information pertaining to impaired loans (dollars in thousand): June 30, 2020 December 31, 2019 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment(1) Balance Allowance Investment Balance Allowance Impaired loans without a valuation allowance: Construction/Land Development $ 1,428 $ 1,428 $ - $ 2,042 $ 2,042 $ - Farmland - - - - - - Real Estate 4,899 4,899 - 5,131 5,131 - Multi-Family - - - - - - Commercial Real Estate 2,298 2,298 - 1,302 1,302 - Home Equity – closed end 703 703 - 716 716 - Home Equity – open end - - - - - - Commercial & Industrial – Non-Real Estate 14 14 - 17 17 - Consumer - - - - - - Credit cards - - - - - - Dealer Finance 42 42 - 79 79 - $ 9,384 $ 9,384 - $ 9,287 $ 9,287 $ - Impaired loans with a valuation allowance Construction/Land Development 356 356 3 1,036 2,061 85 Farmland 1,774 1,774 110 1,933 1,933 537 Real Estate 9,619 9,619 617 10,404 10,404 569 Multi-Family - - - - - - Commercial Real Estate 2,840 2,840 515 638 638 213 Home Equity – closed end - - - - - - Home Equity – open end 151 151 13 151 151 151 Commercial & Industrial – Non-Real Estate - - - 192 192 192 Consumer 1 1 - 4 4 1 Credit cards - - - - - - Dealer Finance 131 131 12 136 136 7 14,872 14,872 1,270 14,494 15,519 1,755 Total impaired loans $ 24,256 $ 24,256 $ 1,270 $ 23,781 $ 24,806 $ 1,755 ______________ 1 Note 3. Loans Held for Investment, continued 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, 2020 2019 2020 2019 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 $ 1,518 $ 15 $ 2,011 $ 84 $ 1,736 $ 40 $ 2,195 $ 123 Farmland 352 - 1,942 1 352 - 1,942 1 Real Estate 5,258 60 2,013 (7 ) 5,015 136 2,020 22 Multi-Family - - - - - - - - Commercial Real Estate 1,883 29 1,901 189 1,800 49 4,076 228 Home Equity – closed end - 21 360 - 358 21 360 - Home Equity – open end - - - - - - - - Commercial & Industrial – Non-Real Estate 101 - 12 - 16 - - - Consumer and credit cards 21 - - - 21 - 12 - Dealer Finance 14 1 45 (1 ) 40 2 33 - 9,147 126 8,284 266 9,338 248 10,638 374 Impaired loans with a valuation allowance: Construction/Land Development $ 356 $ - $ 2,651 $ (27 ) $ 696 $ - $ 3,445 $ 31 Farmland 964 178 - - 967 184 - - Real Estate 9,695 122 417 58 10,012 262 419 65 Multi-Family - - - - - - - - Commercial Real Estate 2,338 21 4,152 (104 ) 1,739 49 2,056 33 Home Equity – closed end 429 (10 ) - 41 76 - - 41 Home Equity – open end 76 2 - - 76 4 - - Commercial & Industrial – Non-Real Estate 35 (1 ) - 2 96 - - 1 Consumer and credit card 67 - 5 - 68 - 6 - Dealer Finance 964 1 176 5 955 5 194 9 14,924 313 7,401 (25 ) 14,685 504 6,120 180 Total Impaired Loans $ 24,071 $ 439 $ 15,685 $ 241 $ 24,023 $ 752 $ 16,758 $ 554 Note 3. Loans, continued The following table presents the aging of the recorded investment of past due loans (dollars in thousands) as of June 30, 2020 and December 31, 2019: 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, 2020 Construction/Land Development $ - $ - $ 374 $ 374 $ 73,409 $ 73,783 $ 414 $ - Farmland - 26 - 26 36,940 36,966 1,774 - Real Estate 1,421 366 558 2,345 169,860 172,205 734 - Multi-Family - - - - 6,065 6,065 - - Commercial Real Estate - 156 - 156 128,607 128,763 1,125 - Home Equity – closed end - - 31 31 9,038 9,069 - 31 Home Equity – open end 179 8 217 404 46,106 46,510 240 - Commercial & Industrial – Non- Real Estate 25 - - 25 90,078 90,103 7 - Consumer 20 1 - 21 10,051 10,072 - - Dealer Finance 839 139 24 1,002 84,255 85,257 135 6 Credit Cards 22 - - 22 2,714 2,736 - - Total $ 2,506 $ 696 $ 1,204 $ 4,406 $ 657,123 $ 661,529 $ 4,429 $ 37 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, 2019 Construction/Land Development $ 117 $ 45 $ 1,255 $ 1,417 $ 75,714 $ 77,131 $ 1,301 $ - Farmland 27 - 1,933 1,960 27,758 29,718 1,933 - Real Estate 2,440 1,035 837 4,312 173,955 178,267 420 619 Multi-Family - - - - 5,364 5,364 - - Commercial Real Estate 563 - 137 700 129,150 129,850 900 - Home Equity – closed end - - - - 9,523 9,523 - - Home Equity – open end 429 296 15 740 47,034 47,774 - 15 Commercial & Industrial – Non- Real Estate 726 4 - 730 32,805 33,535 203 - Consumer 89 14 - 103 10,062 10,165 1 - Dealer Finance 1,943 400 198 2,541 76,435 78,976 249 84 Credit Cards 31 - 4 35 3,087 3,122 - 4 Total $ 6,365 $ 1,794 $ 4,379 $ 12,538 $ 590,887 $ 603,425 $ 5,007 $ 722 On June 30, 2020 other real estate owned did not include any foreclosed residential real estate and December 31, 2019 included $133 of foreclosed residential real estate. The Company has $878 of consumer mortgages for which foreclosure is in process on June 30, 2020. Nonaccrual loans on June 30, 2020 would have earned approximately $52 in interest income for the quarter had they been accruing loans.

Allowance for Loan Losses

Allowance for Loan Losses	6 Months Ended
	Jun. 30, 2020
Allowance for Loan Losses
Note 4. Allowance for Loan Losses	Note 4. Allowance for Loan Losses A summary of changes in the allowance for loan losses (dollars in thousands) for June 30, 2020 and December 31, 2019 is as follows: June 30, 2020 Beginning Balance Charge-offs Recoveries Provision Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 1,190 $ 7 $ - $ 254 $ 1,437 $ 3 $ 1,435 Farmland 668 - - (333 ) 335 110 225 Real Estate 1,573 36 4 396 1,937 617 1,319 Multi-Family 20 - - 36 56 - 56 Commercial Real Estate 1,815 - - 1,106 2,921 515 2,406 Home Equity – closed end 42 - - 18 60 - 61 Home Equity – open end 457 - - (25 ) 434 13 422 Commercial & Industrial – Non-Real Estate 585 64 10 (154 ) 377 - 377 Consumer 186 67 38 279 436 - 433 Dealer Finance 1,786 971 465 685 1,965 12 1,952 Credit Cards 68 59 30 38 77 - 78 Total $ 8,390 $ 1,204 $ 547 $ 2,300 $ 10,033 $ 1,270 $ 8,764 December 31, 2019 Beginning Balance Charge-offs Recoveries Provision Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 2,094 $ 2,319 $ 50 $ 1,365 $ 1,190 $ 85 $ 1,105 Farmland 15 - - 653 668 537 131 Real Estate 292 32 4 1,309 1,573 569 1,004 Multi-Family 10 - - 10 20 - 20 Commercial Real Estate 416 677 16 2,060 1,815 213 1,602 Home Equity – closed end 13 1 2 28 42 - 42 Home Equity – open end 126 126 1 456 457 151 306 Commercial & Industrial – Non-Real Estate 192 127 81 439 585 192 393 Consumer 70 116 44 188 186 1 185 Dealer Finance 1,974 2,118 1,144 786 1,786 7 1,779 Credit Cards 38 110 29 111 68 - 68 Total $ 5,240 $ 5,626 $ 1,371 $ 7,405 $ 8,390 $ 1,755 $ 6,635 Note 4. Allowance for Loan Losses, continued The following table presents the recorded investment in loans (dollars in thousands) based on impairment method as of June 30, 2020 and December 31, 2019: June 30, 2020 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 73,783 $ 1,784 $ 71,999 Farmland 36,966 1,774 35,192 Real Estate 172,205 14,518 157,687 Multi-Family 6,065 - 6,065 Commercial Real Estate 128,763 5,138 123,625 Home Equity – closed end 9,069 703 8,366 Home Equity –open end 46,510 151 46,359 Commercial & Industrial – Non-Real Estate 90,103 14 90,089 Consumer 10,072 1 10,071 Dealer Finance 85,257 173 85,084 Credit Cards 2,736 - 2,736 Total $ 661,529 $ 24,256 $ 637,273 December 31, 2019 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 77,131 $ 3,078 $ 74,053 Farmland 29,718 1,933 27,785 Real Estate 178,267 15,535 162,732 Multi-Family 5,364 - 5,364 Commercial Real Estate 129,850 1,940 127,910 Home Equity – closed end 9,523 716 8,807 Home Equity –open end 47,774 151 47,623 Commercial & Industrial – Non-Real Estate 33,535 209 33,326 Consumer 10,165 4 10,161 Dealer Finance 78,976 215 78,761 Credit Cards 3,122 - 3,122 Total $ 603,425 $ 23,781 $ 579,644 Note 4. Allowance for Loan Losses, continued The following table shows the Company’s loan portfolio broken down by internal loan grade (dollars in thousands) as of June 30, 2020 and December 31, 2019: June 30, 2020 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 $ - $ 146 $ 12,664 $ 39,099 $ 8,487 $ 12,390 $ 997 $ - $ 73,783 Farmland 59 489 12,922 15,974 5,080 668 1,774 - 36,966 Real Estate - 2,459 43,527 77,176 27,790 4,196 17,057 - 172,205 Multi-Family - - 1,095 3,612 1,358 - - - 6,065 Commercial Real Estate - 1,898 31,680 63,007 6,770 21,934 3,474 - 128,763 Home Equity – closed end - 176 2,703 3,669 1,240 1,250 31 - 9,069 Home Equity – open end - 1,732 18,693 20,907 3,616 826 736 - 46,510 Commercial & Industrial (Non-Real Estate) 113 1,508 8,965 13,148 65,037 1,279 53 - 90,103 Consumer (excluding dealer) 3 191 3,870 4,270 1,729 9 - - 10,072 Total $ 175 $ 8,599 $ 136,119 $ 240,862 $ 121,107 $ 42,552 $ 24,122 $ - $ 573,536 Credit Cards Dealer Finance Performing $ 2,736 $ 85,109 Non-performing - 148 Total $ 2,736 $ 85,257 Note 4. Allowance for Loan Losses, continued December 31, 2019 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 $ - $ 615 $ 21,904 $ 41,693 $ 8,218 $ 2,434 $ 2,267 $ - $ 77,131 Farmland 60 363 9,479 13,754 2,942 1,188 1,932 - 29,718 Real Estate - 1,900 48,308 81,371 23,876 5,635 17,177 - 178,267 Multi-Family - - 1,327 3,711 153 173 - - 5,364 Commercial Real Estate - 2,465 40,227 67,626 14,139 4,397 996 - 129,850 Home Equity – closed end - 189 2,999 3,816 1,154 1,365 - - 9,523 Home Equity – open end 17 1,965 17,789 22,705 3,769 1,198 331 - 47,774 Commercial & Industrial (Non-Real Estate) 142 2,042 12,818 15,035 2,877 373 248 - 33,535 Consumer (excluding dealer) 6 170 3,476 4,726 1,729 56 2 - 10,165 Total $ 225 $ 9,709 $ 158,327 $ 254,437 $ 58,857 $ 16,819 $ 22,953 $ - $ 521,327 Credit Cards Dealer Finance Performing $ 3,118 $ 78,529 Non-performing 4 447 Total $ 3,122 $ 78,976 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 Note 4. Allowance for Loan Losses, continued 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.

Employee Benefit Plan

Employee Benefit Plan	6 Months Ended
	Jun. 30, 2020
Employee Benefit Plan
Note 5. Employee Benefit Plan	Note 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 The following is a summary of net periodic pension costs for the three and six month periods ended June 30, 2020 and 2019: Six Months Ended Three Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Service cost $ 404 $ 369 $ 202 $ 184 Interest cost 209 274 105 137 Expected return on plan assets (367 ) (403 ) (183 ) (201 ) Amortization of prior service cost (6 ) (8 ) (3 ) (4 ) Amortization of net loss 111 141 55 7 Net periodic pension cost $ 351 $ 373 $ 176 $ 187

Fair Value

Fair Value	6 Months Ended
	Jun. 30, 2020
Fair Value
Note 6. Fair Value	Note 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. Note 6. Fair Value, continued 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. Loans Held for Sale During the second quarter of 2020, simultaneous with the purchase of the minority interest in F&M Mortgage, the Company elected to begin using fair value accounting for its entire portfolio of loans held for sale in accordance with ASC 820 – Fair Value Measurement and Disclosures. Fair value of the Company’s loans held for sale is based on observable market prices for similar instruments traded in the secondary mortgage loan markets in which the Company conducts business. The Company’s portfolio of loans held for sale is classified as Level 2. At December 31, 2019, these loans were carried at the lower of cost or estimated fair value on an aggregate basis as determined by outstanding commitments from investors. Gains and losses on the sale of loans are recorded within mortgage banking income, net on the Consolidated Statements of Income. Derivative assets – IRLCs Beginning with the second quarter of 2020, simultaneous with the purchase of the minority interest in F&M Mortgage, the Company elected to recognize IRLCs at fair value based on the price of the underlying loans obtained from an investor for loans that will be delivered on a best efforts basis while taking into consideration the probability that the rate lock commitments will close. All of the Company’s IRLCs are classified as Level 2. The fair value of interest rate lock commitments was considered immaterial at December 31, 2019. Note 6. Fair Value, continued Derivative Asset/Liability – Forward Sale Commitments Beginning with the second quarter of 2020, simultaneous with the purchase of the minority interest in F&M Mortgage, the Company elected to begin using fair value accounting for its forward sales commitments related to IRLCs and LHFS. Best efforts sales commitments are entered into for loans intended for sale in the secondary market at the time the borrower commitment is made. The best efforts commitments are valued using the committed price to the counter-party against the current market price of the interest rate lock commitment or mortgage loan held for sale. All the Company’s forward sale commitments are classified Level 2. Derivative Asset/Liability – Indexed Certificate of Deposit The Company’s derivatives, which are associated with the Indexed Certificate of Deposit (ICD) product once offered, 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. This product is no longer offered, however there are a few certificates of deposits that have not matured. The following tables present the balances of financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 (dollars in thousands): June 30, 2020 Total Level 1 Level 2 Level 3 Assets: Loans held for sale $ 90,602 $ - $ 90,602 $ - IRLC 1,012 - 1,012 - U. S. Treasury securities 3,000 - 3,000 - U. S. Government sponsored enterprises 21,008 - 21,008 - Securities issued by States and political subdivisions in the U. S. 8,951 - 8,951 - Mortgage-backed obligations of federal agencies 44,996 - 44,996 - Corporate debt securities 3,089 - 3,089 - Assets at Fair Value $ 172,658 $ - $ 172,658 $ - Liabilities: Derivatives - ICD $ 45 $ - $ 45 $ - Forward sales commitments 554 - 554 - Liabilities at Fair Value $ 599 $ - $ 599 $ - December 31, 2019 Total Level 1 Level 2 Level 3 Assets: U. S. Government sponsored enterprises $ 1,989 $ - $ 1,989 $ - Mortgage-backed obligations of federal agencies 319 - 319 - Other debt securities 2,058 - 2,058 - Assets at Fair Value $ 4,366 $ - $ 4,366 $ - Derivatives - ICD $ 72 $ - $ 72 $ - Liabilities at Fair Value $ 72 $ - $ 72 $ - 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: Note 6. Fair Value, continued 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, 2020 and December 31, 2019, 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, 2020 Total Level 1 Level 2 Level 3 Construction/Land Development $ 353 $ - $ - $ 353 Farmland 1,664 - - 1,664 Real Estate 9,002 - - 9,002 Commercial Real Estate 2,325 - - 2,325 Consumer 1 - - 1 Home Equity – open end 138 - - 138 Dealer Finance 119 - - 119 Impaired loans $ 13,602 $ - $ - $ 13,602 December 31, 2019 Total Level 1 Level 2 Level 3 Construction/Land Development $ 951 - - $ 951 Farmland 1,396 - - 1,396 Real Estate 9,835 - - 9,835 Commercial Real Estate 425 - - 425 Consumer 3 - - 3 Dealer Finance 129 - - 129 Impaired loans $ 12,739 $ - $ - $ 12,739 Note 6. Fair Value, continued The following table presents information about Level 3 Fair Value Measurements for June 30, 2020: Fair Value at June 30, 2020 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Impaired Loans $ 13,602 Discounted appraised value Discount for selling costs and marketability 3%-45% (Average 23.58%) Fair Value at December 31, 2019 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Impaired Loans $ 12,739 Discounted appraised value Discount for selling costs and marketability 0%-58.98% (Average 24.04%) Assets Held for Sale Assets held for sale were transferred from bank premises at the lower of cost less accumulated depreciation or fair value at the date of transfer. The Company periodically evaluates the value of assets held for sale and records an impairment charge for any subsequent declines in fair value less selling costs. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the assets held for sale as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the asset held for sale a s nonrecurring Level 3. 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 and assets held for sale 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 and assets held for sale that were measured at fair value on a nonrecurring basis as of June 30, 2020 and December 31, 2019 (dollars in thousands). June 30, 2020 Total Level 1 Level 2 Level 3 Other real estate owned $ 1,160 $ - $ - $ 1,160 Assets held for sale $ 520 $ - $ 520 $ - December 31, 2019 Total Level 1 Level 2 Level 3 Other real estate owned $ 1,489 $ - $ - $ 1,489 The following table presents information about Level 3 Fair Value Measurements for June 30, 2020: Fair Value at June 30, 2020 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Other real estate owned $ 1,160 Discounted appraised value Discount for selling costs 6%-10% (Average 8%) Note 6. Fair Value, continued The following table presents information about Level 3 Fair Value Measurements for December 31, 2019: Fair Value at December 31, 2019 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Other real estate owned $ 1,489 Discounted appraised value Discount for selling costs 5%-10% (Average 8%)

Disclosures About Fair Value of

Disclosures About Fair Value of Financial Instruments	6 Months Ended
	Jun. 30, 2020
Disclosures About Fair Value of Financial Instruments
Note 7. Disclosures about Fair Value of Financial Instruments	N ote 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, 2020 and December 31, 2019. Fair values for June 30, 2020 and December 31, 2019 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, 2020 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, 2020 Assets: Cash and cash equivalents $ 86,698 $ 86,698 $ - - $ 86,698 Securities 81,169 - 81,169 - 81,169 Loans held for sale 90,602 - 90,602 - 90,602 Loans held for investment, net 651,496 - - 638,433 638,433 Interest receivable 2,640 - 2,640 - 2,640 Bank owned life insurance 20,345 - 20,345 - 20,345 Total $ 932,920 $ 86,698 $ 194,756 $ 638,433 $ 919,887 Liabilities: Deposits $ 766,652 $ - $ 639,064 $ 131,165 $ 770,229 Short-term debt - - - - - Long-term debt 100,585 - - 101,717 101,717 Interest payable 338 - 338 - 338 Total $ 867,575 $ - $ 639,402 $ 232,882 $ 872,284 Note 7. Disclosures About Fair Value of Financial Instruments, continued Fair Value Measurements at December 31, 2019 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, 2019 Assets: Cash and cash equivalents $ 75,804 $ 75,804 $ - $ - $ 75,804 Securities 4,490 - 4,490 - 4,490 Loans held for sale 66,798 - 66,798 - 66,798 Loans held for investment, net 595,035 - - 580,903 580,903 Interest receivable 2,044 - 2,044 - 2,044 Bank owned life insurance 20,050 - 20,050 - 20,050 Total $ 764,221 $ 75,804 $ 93,382 $ 580,903 $ 750,089 Liabilities: Deposits $ 641,709 $ - $ 504,522 $ 139,713 $ 644,235 Short-term debt 10,000 - 10,000 - 10,000 Long-term debt 53,201 - - 53,543 53,543 Interest payable 354 - 354 - 354 Total $ 705,264 $ - $ 514,876 $ 193,256 $ 708,132

Troubled Debt Restructuring

Troubled Debt Restructuring	6 Months Ended
	Jun. 30, 2020
Troubled Debt Restructuring
Note 8. Troubled Debt Restructuring	Note 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, 2020, there were two loan modifications that were considered to be troubled debt restructurings. One of these loans was modified during the three months ended June 30, 2020 and one loan modification that would be considered a troubled debt restructuring was modified during the first quarter of 2020. 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, 2020 Pre-Modification Post-Modification Outstanding Outstanding (dollars in thousands) Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Consumer 2 $ 11 $ 11 Total 2 $ 11 $ 11 Note 8. Troubled Debt Restructuring, continued On June 30, 2020, 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, 2020 Pre-Modification Post-Modification Outstanding Outstanding (dollars in thousands) Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Consumer 1 $ 3 $ 3 Total 1 $ 3 $ 3 During the six months ended June 30, 2019, there were nine loan modifications that were considered to be troubled debt restructurings. Seven of these loans were modified during the three months ended June 30, 2019 and two loan modifications that would be considered a troubled debt restructuring were modified during the first quarter of 2019. 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. Six months ended June 30, 2019 Pre-Modification Post-Modification Outstanding Outstanding (dollars in thousands) Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Commercial Real Estate 1 $ 182 $ 182 Real Estate 1 193 193 Home Equity 1 720 720 Commercial and Industrial 1 23 23 Consumer 5 35 35 Total 9 $ 1,153 $ 1,153 On June 30, 2019, 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.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	6 Months Ended
	Jun. 30, 2020
Accumulated Other Comprehensive Loss
Note 9. Accumulated Other Comprehensive Loss	Note 9. Accumulated Other Comprehensive Loss The balances in accumulated other comprehensive loss are shown in the following tables for June 30, 2020 and 2019: (dollars in thousands) Unrealized Securities Gains (Losses) Adjustments Related to Pension Plan Accumulated Other Comprehensive Loss Balance at December 31, 2019 $ (7 ) $ (3,204 ) $ (3,211 ) Change in unrealized securities gains (losses), net of tax (65 ) - (65 ) Balance at June 30, 2020 $ (72 ) $ (3,204 ) $ (3,276 ) (dollars in thousands) Unrealized Securities Gains (Losses) Adjustments Related to Pension Plan Accumulated Other Comprehensive Loss Balance at December 31, 2018 $ (94 ) $ (3,875 ) $ (3,969 ) Change in unrealized securities gains (losses), net of tax 89 - 89 Balance at June 30, 2019 $ (5 ) $ (3,875 ) $ (3,880 ) There were no reclassifications adjustments reported on the consolidated statements of income during the three or six months ended June 30, 2020 or 2019.

Business Segments

Business Segments	6 Months Ended
	Jun. 30, 2020
Business Segments
Note 10. Business Segments	Note 10. 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 Company purchased the noncontrolling interest of F&M Mortgage and VSTitle during the second quarter of 2020. The following tables represent revenues and expenses by segment for the three and six months ended June 30, 2020 and June 30, 2019. Six Months Ended June 30, 2020 F&M Bank F&M Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 18,036 $ 120 $ 80 $ - $ - $ (134 ) $ 18,102 Service charges on deposits 586 - - - - - 586 Investment services and insurance income - - 368 - - (10 ) 358 Mortgage banking income, net - 2,900 - - - - 2,900 Title insurance income - - - 843 - - 843 Other operating income (loss) 1,097 56 - - (53 ) - 1100 Total income (loss) 19,719 3,076 448 843 (53 ) (144 ) 23889 Expenses: Interest Expense $ 3,111 $ 114 $ - $ - $ - $ (134 ) $ 3,091 Provision for loan losses 2,300 - - - - - 2,300 Salary and benefit expense 6,366 1,151 157 494 - - 8,168 Other operating expenses 5,724 352 28 127 15 (10 ) 6,236 Total expense 17,501 1,617 185 621 15 (144 ) 19,795 Net income (loss) before taxes 2,218 1,459 263 222 (68 ) - 4,094 Income tax expense 190 - 39 - (56 ) - 173 Net income (loss) 2,028 1,459 224 222 (12 ) - 3,921 Net income attributable to non-controlling interest - 105 - - - - 105 Net Income attributable to F & M Bank Corp. $ 2,028 $ 1,354 $ 224 $ 222 $ (12 ) $ - $ 3816 Total Assets $ 983,611 $ 25,546 $ 7,875 $ 3,855 $ 92,418 $ (131,702 ) $ 981,602 Goodwill $ 2,670 $ 47 $ - $ 3 $ 164 $ - $ 2,884 Three months ended June 30, 2020 F&M Bank F&M Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 8,965 $ 84 $ 36 $ - $ - $ (93 ) $ 8,992 Service charges on deposits 225 - - - - - 225 Investment services and insurance income - - 178 - - (5 ) 173 Mortgage banking income, net - 1,971 - - - - 1,971 Title insurance income - - - 472 - - 472 Other operating income (loss) 516 54 - - (53 ) - 517 Total income (loss) 9,706 2,109 214 472 (53 ) (98 ) 12,350 Expenses: Interest Expense 1,392 86 - - - (93 ) $ 1,385 Provision for loan losses 800 - - - - - 800 Salary and benefit expense 3,200 626 72 236 - - 4,134 Other operating expenses 2,937 134 18 62 4 (5 ) 3,150 Total expense 8,329 846 90 298 4 (98 ) 9,469 Net income (loss) before taxes 1,377 1,263 124 174 (57 ) - 2,881 Income tax expense 260 - 21 - (70 ) - 211 Net income (loss) 1,117 1,263 103 174 13 - 2,670 Net income attributable to non-controlling interest - 43 - (11 ) 11 - 43 Net Income attributable to F & M Bank Corp. $ 1,117 $ 1,220 $ 103 $ 185 $ 2 $ - $ 2,627 Note 10. Business Segments, continued Six Months Ended June 30, 2019 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 19,254 $ 68 $ 75 $ - $ - $ (84 ) $ 19,313 Service charges on deposits 803 - - - - - 803 Investment services and insurance income - - 325 - - (3 ) 322 Mortgage banking income, net - 1,345 - - - - 1,345 Title insurance income - - - 682 - - 682 Other operating income (loss) 1,110 28 - - (24 ) (1 ) 1,113 Total income (loss) 21,167 1,441 400 682 (24 ) (88 ) 23,578 Expenses: Interest Expense 3,233 75 - - - (84 ) 3,224 Provision for loan losses 3,050 - - - - - 3,050 Salary and benefit expense 6,576 917 150 457 - - 8,100 Other operating expenses 5,489 354 28 124 31 (4 ) 6,022 Total expense 18,348 1,346 178 581 31 (88 ) 20,396 Net income (loss) before taxes 2,819 95 222 101 (55 ) - 3,182 Income tax expense 158 - 33 - 41 - 232 Net income (loss) $ 2,661 $ 95 $ 189 $ 101 $ (96 ) $ - $ 2,950 Net income attributable to non-controlling interest - 29 - 24 (24 ) - 29 Net Income attributable to F & M Bank Corp. $ 2,661 $ 66 $ 189 $ 77 $ (72 ) $ - $ 2,921 Total Assets $ 809,712 $ 11,210 $ 7,332 $ 1,615 $ 91,674 $ (114,594 ) $ 806,949 Goodwill $ 2,670 $ 47 $ - $ 3 $ 164 $ - $ 2,884 Note 10. Business Segments, continued Three Months Ended June 30, 2019 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 9,754 $ 43 $ 41 $ - $ - $ (56 ) $ 9,782 Service charges on deposits 417 - - - - - 417 Investment services and insurance income - - 174 - - (3 ) 171 Mortgage banking income, net - 815 - - - - 815 Title insurance income - - - 406 - - 406 Other operating income (loss) 665 28 - - (27 ) - 666 Total income (loss) 10,836 886 215 406 (27 ) (59 ) 12,257 Expenses: Interest Expense 1,732 50 - - - (56 ) 1,726 Provision for loan losses 1,600 - - - - - 1,600 Salary and benefit expense 3,285 489 69 234 - - 4,077 Other operating expenses 2,739 177 16 62 24 (3 ) 3,015 Total expense 9,356 716 85 296 24 (59 ) 10,418 Net income (loss) before taxes 1,480 170 130 110 (51 ) - 1,839 Income tax expense 112 - 19 - 22 - 153 Net income (loss) $ 1,368 $ 170 $ 111 $ 110 $ (73 ) $ - $ 1,686 Net income attributable to non-controlling interest - 51 - 27 (27 ) - 51 Net Income attributable to F & M Bank Corp. $ 1,368 $ 119 $ 111 $ 83 $ (46 ) $ - $ 1,635

Debt

Debt	6 Months Ended
	Jun. 30, 2020
Debt
Note 11. Debt	Note 11. 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. There was no short term debt at June 30, 2020 and $10,000 at December 31, 2019. 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 .80% to 2.56%; the weighted average interest rate was 1.82% at June 30, 2020 and 1.85% at December 31, 2019.The balance of these obligations at June 30, 2020 and December 31, 2019 were $40,982 and $53,197 respectively. FHLB advances include a $6,000 letter of credit at FHLB that is pledged to the Commonwealth of Virginia to secure public funds. The Company utilized the Federal Reserve Paycheck Protection Program Liquidity Facility to fund the Paycheck Protection Program (“PPP”) loans funded in the second quarter. This funding facility is secured by the PPP loans and interest is set at a fixed rate of .35%.On June 30, 2020 the balances totaled $59,603; there were no borrowings under this program on December 31, 2019. VSTitle, LLC had a note payable to purchase vehicles that totaled $4 at December 31, 2019 and was paid off by June 30, 2020.

Revenue Recognition

Revenue Recognition	6 Months Ended
	Jun. 30, 2020
Revenue Recognition
Note 12. Revenue Recognition	Note 12. Revenue Recognition 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. 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), 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. Note 12. Revenue Recognition, continued 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, 2020 and 2019. Six Months Ended June 30, Three Months Ended June 30, 2020 2019 2020 2019 Noninterest Income (in thousands) In-scope of Topic 606: Service Charges on Deposits $ 586 $ 803 $ 225 $ 417 Investment Services and Insurance Income 358 322 173 171 Title Insurance Income 843 682 472 406 ATM and check card fees 894 898 462 529 Other 283 281 123 153 Noninterest Income (in-scope of Topic 606) 2,964 2,986 1,455 1,676 Noninterest Income (out-of-scope of Topic 606) 2,823 1,279 1,903 799 Total Noninterest Income $ 5,787 $ 4,265 $ 3,358 $ 2,475 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, 2020 and December 31, 2019, 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.

Leases

Leases	6 Months Ended
	Jun. 30, 2020
Leases
Note 13. Leases	Note 13. Leases On January 1, 2019, the Company adopted ASU No. 2016-02 “Leases (Topic 842)” Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor. The Company’s long-term lease agreements are classified as operating leases. Certain of these leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably assured of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations. The following tables present information about the Company’s leases: (Dollars in thousands) June 30, 2020 Lease Liabilities $ 882 Right-of-use assets 867 Weighted average remaining lease term 4.58 Weighted average discount rate 3.46 % For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 2020 2019 Lease cost (in thousands) Operating lease cost $ 25 $ 32 $ 58 $ 64 Total lease cost $ 25 $ 32 $ 58 $ 64 Cash paid for amounts included in the measurement of lease liabilities $ 31 $ 38 $ 69 $ 75 A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows: As of June 30, 2020 Six months ending December 31, 2020 $ 52 Twelve months ending December 31, 2021 127 Twelve months ending December 31, 2022 129 Twelve months ending December 31, 2023 93 Twelve months ending December 31, 2024 92 Thereafter 611 Total undiscounted cash flows $ 1,104 Discount 222 Lease liabilities $ 882

Mortgage Banking and Derivative

Mortgage Banking and Derivatives	6 Months Ended
	Jun. 30, 2020
Mortgage Banking and Derivatives
Note 14. Mortgage Banking and Derivatives	Note 14. Mortgage Banking and Derivatives Loans Held for Sale The Company, through the Bank’s mortgage banking subsidiary, F&M Mortgage Company, originates residential mortgage loans for sale in the secondary market. Residential mortgage loans held for sale are sold to the permanent investor with the mortgage servicing rights released. During the second quarter of 2020, the Company elected to begin using fair value accounting for its entire portfolio of loans held for sale (LHFS) in accordance with ASC 820 – Fair Value Measurement and Disclosures. Fair value of the Company’s LHFS is based on observable market prices for the identical instruments traded in the secondary mortgage loan markets in which the Company conducts business total $20.0 million as of June 30, 2020 of which $19.8 million is related to unpaid principal. The Company’s portfolio of LHFS is classified as Level 2. These loans were previously carried as of December 31, 2019 at the lower of cost or estimated fair value on an aggregate basis as determined by outstanding commitments from investors and totaled $3.0 million. Interest Rate Lock Commitments and Forward Sales Commitments The Company, through F&M Mortgage Company, enters into commitments to originate residential mortgage loans in which the interest rate on the loan is determined prior to funding, termed interest rate lock commitments (IRLCs). Such rate lock commitments on mortgage loans to be sold in the secondary market are considered to be derivatives. Upon entering into a commitment to originate a loan, the Company protects itself from changes in interest rates during the period prior to sale by requiring a firm purchase agreement from a permanent investor before a loan can be closed (forward sales commitment). The Company locks in the loan and rate with an investor and commits to deliver the loan if settlement occurs on a best efforts basis, thus limiting interest rate risk. Certain additional risks exist if the investor fails to meet its purchase obligation; however, based on historical performance and the size and nature of the investors the Company does not expect them to fail to meet their obligation. The Company determines the fair value of the IRLCs based on the price of the underlying loans obtained from an investor for loans that will be delivered on a best efforts basis while taking into consideration the probability that the rate loan commitments will close. The fair value of these derivative instruments is reported in “Other Assets” in the Consolidated Balance Sheet at June 30, 2020, and totaled $1.0 million, with a notional amount of $43.8 million and total positions of 207. The fair value of the IRLCs was considered immaterial at December 31, 2019. Changes in fair value are recorded as a component of “Mortgage banking, net” in the Consolidated Income Statement for the period ended June 30, 2020. The Company’s IRLCs are classified as Level 2. At June 30, 2020 and December 31, 2019, each IRLC and all LHFS were subject to a forward sales commitment on a best efforts basis. During the second quarter of 2020, the Company elected to begin using fair value accounting for its forward sales commitments related to IRLCs and LHFS under ASC 825-10-15-4(b). The fair value of forward sales commitments is reported in “Other Liabilities” in the Consolidated Balance Sheet at June 30, 2020, and totaled $554 thousand, with a notional amount of $63.8 million and total positions of 286.

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2020
Mortgage Banking and Derivatives
Note 15. Subsequent Events	Note 15. Subsequent Events On July 29, 2020, the Company entered into Subordinated Note Purchase Agreements (collectively, the “Purchase Agreement”) with certain institutional accredited investors pursuant to which the Company sold and issued $5.0 million in aggregate principal amount of 5.75% fixed rated subordinated notes due July 31, 2027 (the “2027 Notes”) and $7.0 million in aggregate principal amount of 6.00% fixed to floating rate subordinated notes due July 31, 2030 (the “2030 Notes and, together with the 2027 Notes, the “Notes”).Raymond James & Associates, Inc. served as the sole placement agent. The 2027 Notes will bear interest at 5.75% per annum, payable semi-annually in arrears. Beginning on July 31, 2022 through maturity, the 2027 Notes may be redeemed, at the Company’s option, on any scheduled interest payment date. The 2027 Notes will mature on July 31, 2027. The 2030 Notes will initially bear interest at 6.00% per annum, beginning July 29, 2020 to but excluding July 31, 2025, payable semi-annually in arrears. From and including July 31, 2025 through July 30, 2030, or up to an early redemption date, the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month SOFR plus 593 basis points, payable quarterly in arrears. Beginning on July 31, 2025 through maturity, the 2030 Notes may be redeemed, at the Company’s option, on any scheduled interest payment date. The 2030 Notes will mature on July 31, 2030.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2020
Summary of Significant Accounting Policies
Principles of Consolidation	The accompanying unaudited consolidated financial statements include the accounts of Farmers & Merchants Bank, TEB Life Insurance Company, Farmers & Merchants Financial Services, Inc., VBS Mortgage, LLC (dba F&M Mortgage), (net of non-controlling interest) and VSTitle, LLC and were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for the interim financial information and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). On May 1, 2020 the Bank purchased the noncontrolling interest of VBS Mortgage, LLC. 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, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. 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, 2019 (the “2019 Form 10-K”). During the second quarter of 2020, the Company purchased the minority interest in F&M Mortgage. 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 eleven (as of August 1, 2020) 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).
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, fair value, and 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.
Risk and Uncertainties	The coronavirus (“COVID-19”) spread rapidly across the world in the first quarter of 2020 and was declared a pandemic by the World Health Organization. The government and private sector responses to contain its spread began to significantly affect our operating businesses in March with branch lobby closings, operations and administrative staff working remotely and the use of virtual meetings. These changes will likely affect our operations throughout the remainder of 2020, although the extent and significance are unknown. The duration and extent of the effects over longer terms cannot be reasonably estimated at this time. The risks and uncertainties resulting from the pandemic that may affect our future earnings, cash flows and financial condition include the nature and duration of the long-term effect on our borrowers’ ability to repay. Accordingly, significant estimates used in the preparation of our financial statements including those associated with evaluations of goodwill for impairment, and allowance for loan losses may be subject to adjustments in future periods.
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 for the three and six month periods ended June 30, 2020 and 2019. 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: For the Six months ended For the Three months ended For the Six months ended For the Three months ended June 30, 2020 June 30, 2020 June 30, 2019 June 30, 2019 Earnings available to com mon stockholders: Net income $ 3,921 $ 2,670 $ 2,950 $ 1,686 Non-controlling interest income (loss) 105 43 29 51 Preferred stock dividends 132 66 157 79 Net income available to common stockholders $ 3,684 $ 2,561 $ 2,764 $ 1,556 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, 2020 Six months ended June 30, 2019 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 3,684 3,199,183 $ 1.15 $ 2,764 3,200,119 $ .86 Effect of Dilutive Securities: Convertible Preferred Stock 132 229,599 (.04 ) 157 274,450 (.02 ) Diluted EPS $ 3,816 3,428,782 $ 1.11 $ 2,921 3,474,569 $ .84 Three months ended June 30, 2020 Three months ended June 30, 2019 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 2,561 3,194,282 $ .80 $ 1,556 3,200,119 $ .49 Effect of Dilutive Securities: Convertible Preferred Stock 66 206,660 (.04 ) 79 247,029 (.02 ) Diluted EPS $ 2,627 3,400,942 $ .77 $ 1,635 3,447,148 $ .47

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2020
Summary of Significant Accounting Policies
Schedule of earnings per share	For the Six months ended For the Three months ended For the Six months ended For the Three months ended June 30, 2020 June 30, 2020 June 30, 2019 June 30, 2019 Earnings available to com mon stockholders: Net income $ 3,921 $ 2,670 $ 2,950 $ 1,686 Non-controlling interest income (loss) 105 43 29 51 Preferred stock dividends 132 66 157 79 Net income available to common stockholders $ 3,684 $ 2,561 $ 2,764 $ 1,556
Schedule of effect of dilutive preferred stock conversion	Six months ended June 30, 2020 Six months ended June 30, 2019 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 3,684 3,199,183 $ 1.15 $ 2,764 3,200,119 $ .86 Effect of Dilutive Securities: Convertible Preferred Stock 132 229,599 (.04 ) 157 274,450 (.02 ) Diluted EPS $ 3,816 3,428,782 $ 1.11 $ 2,921 3,474,569 $ .84 Three months ended June 30, 2020 Three months ended June 30, 2019 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 2,561 3,194,282 $ .80 $ 1,556 3,200,119 $ .49 Effect of Dilutive Securities: Convertible Preferred Stock 66 206,660 (.04 ) 79 247,029 (.02 ) Diluted EPS $ 2,627 3,400,942 $ .77 $ 1,635 3,447,148 $ .47

Investment Securities (Tables)

Investment Securities (Tables)	6 Months Ended
	Jun. 30, 2020
Investment Securities
Schedule of amortized cost and fair value for securities	Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value June 30, 2020 U. S. Treasuries $ 125 $ - $ - $ 125 December 31, 2019 U. S. Treasuries $ 124 $ - $ - $ 124
Schedule of amortized cost and fair value of securities current	Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value June 30, 2020 U. S. Treasuries $ 3,000 $ - $ - $ 3,000 U. S. Government sponsored enterprises 21,003 5 - 21,008 Securities issued by States and political subdivisions in the U.S. 8,876 86 (11 ) 8,951 Mortgage-backed obligations of federal agencies 45,211 10 (225 ) 44,996 Corporate debt security 3,045 44 - 3,089 Total Securities Available for Sale $ 81,135 $ 145 $ (236 ) $ 81,044 December 31, 2019 U. S. Government sponsored enterprises $ 2,000 $ - $ (11 ) $ 1,989 Mortgage-backed obligations of federal agencies 317 2 - 319 Corporate debt security 2,059 - (1 ) 2,058 Total Securities Available for Sale $ 4,376 $ 2 $ (12 ) $ 4,366
Schedule of 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, 2020 Securities issued by States and political subdivisions in the U.S. $ 21,008 $ (11 ) $ - $ - $ 21,008 $ (11 ) Mortgage-backed obligations of federal agencies 44,996 (225 ) - - 44,996 (225 ) Total $ 66,004 $ (236 ) $ - $ - $ 66,004 $ (236 ) Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2019 U. S. Government sponsored enterprises $ 1,989 $ (11 ) $ - $ - $ 1,989 $ (11 ) Corporate debt security 2,058 (1 ) - - 2,058 (1 ) Total $ 4,047 $ (12 ) $ - $ - $ 4,047 $ (12 )
Schedule amortized cost and fair value of securities, maturity	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 $ 125 $ 125 $ 3,000 $ 3,000 Due after one year through five years - - 18,551 18,601 Due after five years - - 16,019 16,029 Due after ten years - - 43,565 43,414 Total $ 125 $ 125 $ 81,135 $ 81,044

Loans (Tables)

Loans (Tables)	6 Months Ended
	Jun. 30, 2020
Loans
Summary of information pertaining to impaired loans	June 30, 2020 December 31, 2019 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment(1) Balance Allowance Investment Balance Allowance Impaired loans without a valuation allowance: Construction/Land Development $ 1,428 $ 1,428 $ - $ 2,042 $ 2,042 $ - Farmland - - - - - - Real Estate 4,899 4,899 - 5,131 5,131 - Multi-Family - - - - - - Commercial Real Estate 2,298 2,298 - 1,302 1,302 - Home Equity – closed end 703 703 - 716 716 - Home Equity – open end - - - - - - Commercial & Industrial – Non-Real Estate 14 14 - 17 17 - Consumer - - - - - - Credit cards - - - - - - Dealer Finance 42 42 - 79 79 - $ 9,384 $ 9,384 - $ 9,287 $ 9,287 $ - Impaired loans with a valuation allowance Construction/Land Development 356 356 3 1,036 2,061 85 Farmland 1,774 1,774 110 1,933 1,933 537 Real Estate 9,619 9,619 617 10,404 10,404 569 Multi-Family - - - - - - Commercial Real Estate 2,840 2,840 515 638 638 213 Home Equity – closed end - - - - - - Home Equity – open end 151 151 13 151 151 151 Commercial & Industrial – Non-Real Estate - - - 192 192 192 Consumer 1 1 - 4 4 1 Credit cards - - - - - - Dealer Finance 131 131 12 136 136 7 14,872 14,872 1,270 14,494 15,519 1,755 Total impaired loans $ 24,256 $ 24,256 $ 1,270 $ 23,781 $ 24,806 $ 1,755 ______________
Summary of the average investment and interest income	Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 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 $ 1,518 $ 15 $ 2,011 $ 84 $ 1,736 $ 40 $ 2,195 $ 123 Farmland 352 - 1,942 1 352 - 1,942 1 Real Estate 5,258 60 2,013 (7 ) 5,015 136 2,020 22 Multi-Family - - - - - - - - Commercial Real Estate 1,883 29 1,901 189 1,800 49 4,076 228 Home Equity – closed end - 21 360 - 358 21 360 - Home Equity – open end - - - - - - - - Commercial & Industrial – Non-Real Estate 101 - 12 - 16 - - - Consumer and credit cards 21 - - - 21 - 12 - Dealer Finance 14 1 45 (1 ) 40 2 33 - 9,147 126 8,284 266 9,338 248 10,638 374 Impaired loans with a valuation allowance: Construction/Land Development $ 356 $ - $ 2,651 $ (27 ) $ 696 $ - $ 3,445 $ 31 Farmland 964 178 - - 967 184 - - Real Estate 9,695 122 417 58 10,012 262 419 65 Multi-Family - - - - - - - - Commercial Real Estate 2,338 21 4,152 (104 ) 1,739 49 2,056 33 Home Equity – closed end 429 (10 ) - 41 76 - - 41 Home Equity – open end 76 2 - - 76 4 - - Commercial & Industrial – Non-Real Estate 35 (1 ) - 2 96 - - 1 Consumer and credit card 67 - 5 - 68 - 6 - Dealer Finance 964 1 176 5 955 5 194 9 14,924 313 7,401 (25 ) 14,685 504 6,120 180 Total Impaired Loans $ 24,071 $ 439 $ 15,685 $ 241 $ 24,023 $ 752 $ 16,758 $ 554
Schedule of recorded investment of past due loans	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, 2020 Construction/Land Development $ - $ - $ 374 $ 374 $ 73,409 $ 73,783 $ 414 $ - Farmland - 26 - 26 36,940 36,966 1,774 - Real Estate 1,421 366 558 2,345 169,860 172,205 734 - Multi-Family - - - - 6,065 6,065 - - Commercial Real Estate - 156 - 156 128,607 128,763 1,125 - Home Equity – closed end - - 31 31 9,038 9,069 - 31 Home Equity – open end 179 8 217 404 46,106 46,510 240 - Commercial & Industrial – Non- Real Estate 25 - - 25 90,078 90,103 7 - Consumer 20 1 - 21 10,051 10,072 - - Dealer Finance 839 139 24 1,002 84,255 85,257 135 6 Credit Cards 22 - - 22 2,714 2,736 - - Total $ 2,506 $ 696 $ 1,204 $ 4,406 $ 657,123 $ 661,529 $ 4,429 $ 37 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, 2019 Construction/Land Development $ 117 $ 45 $ 1,255 $ 1,417 $ 75,714 $ 77,131 $ 1,301 $ - Farmland 27 - 1,933 1,960 27,758 29,718 1,933 - Real Estate 2,440 1,035 837 4,312 173,955 178,267 420 619 Multi-Family - - - - 5,364 5,364 - - Commercial Real Estate 563 - 137 700 129,150 129,850 900 - Home Equity – closed end - - - - 9,523 9,523 - - Home Equity – open end 429 296 15 740 47,034 47,774 - 15 Commercial & Industrial – Non- Real Estate 726 4 - 730 32,805 33,535 203 - Consumer 89 14 - 103 10,062 10,165 1 - Dealer Finance 1,943 400 198 2,541 76,435 78,976 249 84 Credit Cards 31 - 4 35 3,087 3,122 - 4 Total $ 6,365 $ 1,794 $ 4,379 $ 12,538 $ 590,887 $ 603,425 $ 5,007 $ 722
Schedule of loans outstanding	(dollars in thousands) 2020 2019 Construction/Land Development $ 73,783 $ 77,131 Farmland 36,966 29,718 Real Estate 172,205 178,267 Multi-Family 6,065 5,364 Commercial Real Estate 128,763 129,850 Home Equity – closed end 9,069 9,523 Home Equity – open end 46,510 47,774 Commercial & Industrial – Non-Real Estate 90,103 33,535 Consumer 10,072 10,165 Dealer Finance 85,257 78,976 Credit Cards 2,736 3,122 Total $ 661,529 $ 603,425

Allowance for Loan Losses (Tabl

Allowance for Loan Losses (Tables)	6 Months Ended
	Jun. 30, 2020
Allowance for Loan Losses
Schedule of recorded investment in loans	June 30, 2020 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 73,783 $ 1,784 $ 71,999 Farmland 36,966 1,774 35,192 Real Estate 172,205 14,518 157,687 Multi-Family 6,065 - 6,065 Commercial Real Estate 128,763 5,138 123,625 Home Equity – closed end 9,069 703 8,366 Home Equity –open end 46,510 151 46,359 Commercial & Industrial – Non-Real Estate 90,103 14 90,089 Consumer 10,072 1 10,071 Dealer Finance 85,257 173 85,084 Credit Cards 2,736 - 2,736 Total $ 661,529 $ 24,256 $ 637,273 December 31, 2019 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 77,131 $ 3,078 $ 74,053 Farmland 29,718 1,933 27,785 Real Estate 178,267 15,535 162,732 Multi-Family 5,364 - 5,364 Commercial Real Estate 129,850 1,940 127,910 Home Equity – closed end 9,523 716 8,807 Home Equity –open end 47,774 151 47,623 Commercial & Industrial – Non-Real Estate 33,535 209 33,326 Consumer 10,165 4 10,161 Dealer Finance 78,976 215 78,761 Credit Cards 3,122 - 3,122 Total $ 603,425 $ 23,781 $ 579,644
Schedule of loan portfolio	June 30, 2020 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 $ - $ 146 $ 12,664 $ 39,099 $ 8,487 $ 12,390 $ 997 $ - $ 73,783 Farmland 59 489 12,922 15,974 5,080 668 1,774 - 36,966 Real Estate - 2,459 43,527 77,176 27,790 4,196 17,057 - 172,205 Multi-Family - - 1,095 3,612 1,358 - - - 6,065 Commercial Real Estate - 1,898 31,680 63,007 6,770 21,934 3,474 - 128,763 Home Equity – closed end - 176 2,703 3,669 1,240 1,250 31 - 9,069 Home Equity – open end - 1,732 18,693 20,907 3,616 826 736 - 46,510 Commercial & Industrial (Non-Real Estate) 113 1,508 8,965 13,148 65,037 1,279 53 - 90,103 Consumer (excluding dealer) 3 191 3,870 4,270 1,729 9 - - 10,072 Total $ 175 $ 8,599 $ 136,119 $ 240,862 $ 121,107 $ 42,552 $ 24,122 $ - $ 573,536 Credit Cards Dealer Finance Performing $ 2,736 $ 85,109 Non-performing - 148 Total $ 2,736 $ 85,257 December 31, 2019 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 $ - $ 615 $ 21,904 $ 41,693 $ 8,218 $ 2,434 $ 2,267 $ - $ 77,131 Farmland 60 363 9,479 13,754 2,942 1,188 1,932 - 29,718 Real Estate - 1,900 48,308 81,371 23,876 5,635 17,177 - 178,267 Multi-Family - - 1,327 3,711 153 173 - - 5,364 Commercial Real Estate - 2,465 40,227 67,626 14,139 4,397 996 - 129,850 Home Equity – closed end - 189 2,999 3,816 1,154 1,365 - - 9,523 Home Equity – open end 17 1,965 17,789 22,705 3,769 1,198 331 - 47,774 Commercial & Industrial (Non-Real Estate) 142 2,042 12,818 15,035 2,877 373 248 - 33,535 Consumer (excluding dealer) 6 170 3,476 4,726 1,729 56 2 - 10,165 Total $ 225 $ 9,709 $ 158,327 $ 254,437 $ 58,857 $ 16,819 $ 22,953 $ - $ 521,327 Credit Cards Dealer Finance Performing $ 3,118 $ 78,529 Non-performing 4 447 Total $ 3,122 $ 78,976
Summary loan loss allowance transactions	June 30, 2020 Beginning Balance Charge-offs Recoveries Provision Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 1,190 $ 7 $ - $ 254 $ 1,437 $ 3 $ 1,435 Farmland 668 - - (333 ) 335 110 225 Real Estate 1,573 36 4 396 1,937 617 1,319 Multi-Family 20 - - 36 56 - 56 Commercial Real Estate 1,815 - - 1,106 2,921 515 2,406 Home Equity – closed end 42 - - 18 60 - 61 Home Equity – open end 457 - - (25 ) 434 13 422 Commercial & Industrial – Non-Real Estate 585 64 10 (154 ) 377 - 377 Consumer 186 67 38 279 436 - 433 Dealer Finance 1,786 971 465 685 1,965 12 1,952 Credit Cards 68 59 30 38 77 - 78 Total $ 8,390 $ 1,204 $ 547 $ 2,300 $ 10,033 $ 1,270 $ 8,764 December 31, 2019 Beginning Balance Charge-offs Recoveries Provision Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 2,094 $ 2,319 $ 50 $ 1,365 $ 1,190 $ 85 $ 1,105 Farmland 15 - - 653 668 537 131 Real Estate 292 32 4 1,309 1,573 569 1,004 Multi-Family 10 - - 10 20 - 20 Commercial Real Estate 416 677 16 2,060 1,815 213 1,602 Home Equity – closed end 13 1 2 28 42 - 42 Home Equity – open end 126 126 1 456 457 151 306 Commercial & Industrial – Non-Real Estate 192 127 81 439 585 192 393 Consumer 70 116 44 188 186 1 185 Dealer Finance 1,974 2,118 1,144 786 1,786 7 1,779 Credit Cards 38 110 29 111 68 - 68 Total $ 5,240 $ 5,626 $ 1,371 $ 7,405 $ 8,390 $ 1,755 $ 6,635

Employee Benefit Plan (Tables)

Employee Benefit Plan (Tables)	6 Months Ended
	Jun. 30, 2020
Employee Benefit Plan
Schedule of employee benefit plan	Six Months Ended Three Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Service cost $ 404 $ 369 $ 202 $ 184 Interest cost 209 274 105 137 Expected return on plan assets (367 ) (403 ) (183 ) (201 ) Amortization of prior service cost (6 ) (8 ) (3 ) (4 ) Amortization of net loss 111 141 55 7 Net periodic pension cost $ 351 $ 373 $ 176 $ 187

Fair Value (Tables)

Fair Value (Tables)	6 Months Ended
	Jun. 30, 2020
Fair Value
Summarizes measured at fair value on a nonrecurring basis	June 30, 2020 Total Level 1 Level 2 Level 3 Construction/Land Development $ 353 $ - $ - $ 353 Farmland 1,664 - - 1,664 Real Estate 9,002 - - 9,002 Commercial Real Estate 2,325 - - 2,325 Consumer 1 - - 1 Home Equity – open end 138 - - 138 Dealer Finance 119 - - 119 Impaired loans $ 13,602 $ - $ - $ 13,602 December 31, 2019 Total Level 1 Level 2 Level 3 Construction/Land Development $ 951 - - $ 951 Farmland 1,396 - - 1,396 Real Estate 9,835 - - 9,835 Commercial Real Estate 425 - - 425 Consumer 3 - - 3 Dealer Finance 129 - - 129 Impaired loans $ 12,739 $ - $ - $ 12,739
Schedule Fair Value Measurements Level 3	Fair Value at June 30, 2020 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Impaired Loans $ 13,602 Discounted appraised value Discount for selling costs and marketability 3%-45% (Average 23.58%) Fair Value at December 31, 2019 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Impaired Loans $ 12,739 Discounted appraised value Discount for selling costs and marketability 0%-58.98% (Average 24.04%)
Summary of Other Real Estate Owned	June 30, 2020 Total Level 1 Level 2 Level 3 Other real estate owned $ 1,160 $ - $ - $ 1,160 Assets held for sale $ 520 $ - $ 520 $ - December 31, 2019 Total Level 1 Level 2 Level 3 Other real estate owned $ 1,489 $ - $ - $ 1,489 The following table presents information about Level 3 Fair Value Measurements for June 30, 2020: Fair Value at June 30, 2020 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Other real estate owned $ 1,160 Discounted appraised value Discount for selling costs 6%-10% (Average 8%) Fair Value at December 31, 2019 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Other real estate owned $ 1,489 Discounted appraised value Discount for selling costs 5%-10% (Average 8%)
Schedule of assets and liabilities at fair value on recurring basis	June 30, 2020 Total Level 1 Level 2 Level 3 Assets: Loans held for sale $ 90,602 $ - $ 90,602 $ - IRLC 1,012 - 1,012 - U. S. Treasury securities 3,000 - 3,000 - U. S. Government sponsored enterprises 21,008 - 21,008 - Securities issued by States and political subdivisions in the U. S. 8,951 - 8,951 - Mortgage-backed obligations of federal agencies 44,996 - 44,996 - Corporate debt securities 3,089 - 3,089 - Assets at Fair Value $ 172,658 $ - $ 172,658 $ - Liabilities: Derivatives - ICD $ 45 $ - $ 45 $ - Forward sales commitments 554 - 554 - Liabilities at Fair Value $ 599 $ - $ 599 $ - December 31, 2019 Total Level 1 Level 2 Level 3 Assets: U. S. Government sponsored enterprises $ 1,989 $ - $ 1,989 $ - Mortgage-backed obligations of federal agencies 319 - 319 - Other debt securities 2,058 - 2,058 - Assets at Fair Value $ 4,366 $ - $ 4,366 $ - Derivatives - ICD $ 72 $ - $ 72 $ - Liabilities at Fair Value $ 72 $ - $ 72 $ -

Disclosures About Fair Value _2

Disclosures About Fair Value of Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2020
Disclosures About Fair Value of Financial Instruments
Schedule of carrying value and estimated fair value for financial instruments	Fair Value Measurements at June 30, 2020 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, 2020 Assets: Cash and cash equivalents $ 86,698 $ 86,698 $ - - $ 86,698 Securities 81,169 - 81,169 - 81,169 Loans held for sale 90,602 - 90,602 - 90,602 Loans held for investment, net 651,496 - - 638,433 638,433 Interest receivable 2,640 - 2,640 - 2,640 Bank owned life insurance 20,345 - 20,345 - 20,345 Total $ 932,920 $ 86,698 $ 194,756 $ 638,433 $ 919,887 Liabilities: Deposits $ 766,652 $ - $ 639,064 $ 131,165 $ 770,229 Short-term debt - - - - - Long-term debt 100,585 - - 101,717 101,717 Interest payable 338 - 338 - 338 Total $ 867,575 $ - $ 639,402 $ 232,882 $ 872,284 Fair Value Measurements at December 31, 2019 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, 2019 Assets: Cash and cash equivalents $ 75,804 $ 75,804 $ - $ - $ 75,804 Securities 4,490 - 4,490 - 4,490 Loans held for sale 66,798 - 66,798 - 66,798 Loans held for investment, net 595,035 - - 580,903 580,903 Interest receivable 2,044 - 2,044 - 2,044 Bank owned life insurance 20,050 - 20,050 - 20,050 Total $ 764,221 $ 75,804 $ 93,382 $ 580,903 $ 750,089 Liabilities: Deposits $ 641,709 $ - $ 504,522 $ 139,713 $ 644,235 Short-term debt 10,000 - 10,000 - 10,000 Long-term debt 53,201 - - 53,543 53,543 Interest payable 354 - 354 - 354 Total $ 705,264 $ - $ 514,876 $ 193,256 $ 708,132

Troubled Debt Restructuring (Ta

Troubled Debt Restructuring (Tables)	6 Months Ended
	Jun. 30, 2020
Troubled Debt Restructuring
Schedule of loan restructured	Six months ended June 30, 2019 Pre-Modification Post-Modification Outstanding Outstanding (dollars in thousands) Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Commercial Real Estate 1 $ 182 $ 182 Real Estate 1 193 193 Home Equity 1 720 720 Commercial and Industrial 1 23 23 Consumer 5 35 35 Total 9 $ 1,153 $ 1,153
Schedule of troubled debt restructuring	June 30, 2020 Pre-Modification Post-Modification Outstanding Outstanding (dollars in thousands) Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Consumer 2 $ 11 $ 11 Total 2 $ 11 $ 11 June 30, 2020 Pre-Modification Post-Modification Outstanding Outstanding (dollars in thousands) Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Consumer 1 $ 3 $ 3 Total 1 $ 3 $ 3

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Loss (Tables)	6 Months Ended
	Jun. 30, 2020
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, 2019 $ (7 ) $ (3,204 ) $ (3,211 ) Change in unrealized securities gains (losses), net of tax (65 ) - (65 ) Balance at June 30, 2020 $ (72 ) $ (3,204 ) $ (3,276 ) (dollars in thousands) Unrealized Securities Gains (Losses) Adjustments Related to Pension Plan Accumulated Other Comprehensive Loss Balance at December 31, 2018 $ (94 ) $ (3,875 ) $ (3,969 ) Change in unrealized securities gains (losses), net of tax 89 - 89 Balance at June 30, 2019 $ (5 ) $ (3,875 ) $ (3,880 )

Business Segments (Tables)

Business Segments (Tables)	6 Months Ended
	Jun. 30, 2020
Business Segments
Schedule of business segments	Six Months Ended June 30, 2020 F&M Bank F&M Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 18,036 $ 120 $ 80 $ - $ - $ (134 ) $ 18,102 Service charges on deposits 586 - - - - - 586 Investment services and insurance income - - 368 - - (10 ) 358 Mortgage banking income, net - 2,900 - - - - 2,900 Title insurance income - - - 843 - - 843 Other operating income (loss) 1,097 56 - - (53 ) - 1100 Total income (loss) 19,719 3,076 448 843 (53 ) (144 ) 23889 Expenses: Interest Expense $ 3,111 $ 114 $ - $ - $ - $ (134 ) $ 3,091 Provision for loan losses 2,300 - - - - - 2,300 Salary and benefit expense 6,366 1,151 157 494 - - 8,168 Other operating expenses 5,724 352 28 127 15 (10 ) 6,236 Total expense 17,501 1,617 185 621 15 (144 ) 19,795 Net income (loss) before taxes 2,218 1,459 263 222 (68 ) - 4,094 Income tax expense 190 - 39 - (56 ) - 173 Net income (loss) 2,028 1,459 224 222 (12 ) - 3,921 Net income attributable to non-controlling interest - 105 - - - - 105 Net Income attributable to F & M Bank Corp. $ 2,028 $ 1,354 $ 224 $ 222 $ (12 ) $ - $ 3816 Total Assets $ 983,611 $ 25,546 $ 7,875 $ 3,855 $ 92,418 $ (131,702 ) $ 981,602 Goodwill $ 2,670 $ 47 $ - $ 3 $ 164 $ - $ 2,884 Three months ended June 30, 2020 F&M Bank F&M Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 8,965 $ 84 $ 36 $ - $ - $ (93 ) $ 8,992 Service charges on deposits 225 - - - - - 225 Investment services and insurance income - - 178 - - (5 ) 173 Mortgage banking income, net - 1,971 - - - - 1,971 Title insurance income - - - 472 - - 472 Other operating income (loss) 516 54 - - (53 ) - 517 Total income (loss) 9,706 2,109 214 472 (53 ) (98 ) 12,350 Expenses: Interest Expense 1,392 86 - - - (93 ) $ 1,385 Provision for loan losses 800 - - - - - 800 Salary and benefit expense 3,200 626 72 236 - - 4,134 Other operating expenses 2,937 134 18 62 4 (5 ) 3,150 Total expense 8,329 846 90 298 4 (98 ) 9,469 Net income (loss) before taxes 1,377 1,263 124 174 (57 ) - 2,881 Income tax expense 260 - 21 - (70 ) - 211 Net income (loss) 1,117 1,263 103 174 13 - 2,670 Net income attributable to non-controlling interest - 43 - (11 ) 11 - 43 Net Income attributable to F & M Bank Corp. $ 1,117 $ 1,220 $ 103 $ 185 $ 2 $ - $ 2,627 Six Months Ended June 30, 2019 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 19,254 $ 68 $ 75 $ - $ - $ (84 ) $ 19,313 Service charges on deposits 803 - - - - - 803 Investment services and insurance income - - 325 - - (3 ) 322 Mortgage banking income, net - 1,345 - - - - 1,345 Title insurance income - - - 682 - - 682 Other operating income (loss) 1,110 28 - - (24 ) (1 ) 1,113 Total income (loss) 21,167 1,441 400 682 (24 ) (88 ) 23,578 Expenses: Interest Expense 3,233 75 - - - (84 ) 3,224 Provision for loan losses 3,050 - - - - - 3,050 Salary and benefit expense 6,576 917 150 457 - - 8,100 Other operating expenses 5,489 354 28 124 31 (4 ) 6,022 Total expense 18,348 1,346 178 581 31 (88 ) 20,396 Net income (loss) before taxes 2,819 95 222 101 (55 ) - 3,182 Income tax expense 158 - 33 - 41 - 232 Net income (loss) $ 2,661 $ 95 $ 189 $ 101 $ (96 ) $ - $ 2,950 Net income attributable to non-controlling interest - 29 - 24 (24 ) - 29 Net Income attributable to F & M Bank Corp. $ 2,661 $ 66 $ 189 $ 77 $ (72 ) $ - $ 2,921 Total Assets $ 809,712 $ 11,210 $ 7,332 $ 1,615 $ 91,674 $ (114,594 ) $ 806,949 Goodwill $ 2,670 $ 47 $ - $ 3 $ 164 $ - $ 2,884 Three Months Ended June 30, 2019 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 9,754 $ 43 $ 41 $ - $ - $ (56 ) $ 9,782 Service charges on deposits 417 - - - - - 417 Investment services and insurance income - - 174 - - (3 ) 171 Mortgage banking income, net - 815 - - - - 815 Title insurance income - - - 406 - - 406 Other operating income (loss) 665 28 - - (27 ) - 666 Total income (loss) 10,836 886 215 406 (27 ) (59 ) 12,257 Expenses: Interest Expense 1,732 50 - - - (56 ) 1,726 Provision for loan losses 1,600 - - - - - 1,600 Salary and benefit expense 3,285 489 69 234 - - 4,077 Other operating expenses 2,739 177 16 62 24 (3 ) 3,015 Total expense 9,356 716 85 296 24 (59 ) 10,418 Net income (loss) before taxes 1,480 170 130 110 (51 ) - 1,839 Income tax expense 112 - 19 - 22 - 153 Net income (loss) $ 1,368 $ 170 $ 111 $ 110 $ (73 ) $ - $ 1,686 Net income attributable to non-controlling interest - 51 - 27 (27 ) - 51 Net Income attributable to F & M Bank Corp. $ 1,368 $ 119 $ 111 $ 83 $ (46 ) $ - $ 1,635

Revenue Recognition (Tables)

Revenue Recognition (Tables)	6 Months Ended
	Jun. 30, 2020
Revenue Recognition
Summary of noninterest income, segregated by revenue streams	Six Months Ended June 30, Three Months Ended June 30, 2020 2019 2020 2019 Noninterest Income (in thousands) In-scope of Topic 606: Service Charges on Deposits $ 586 $ 803 $ 225 $ 417 Investment Services and Insurance Income 358 322 173 171 Title Insurance Income 843 682 472 406 ATM and check card fees 894 898 462 529 Other 283 281 123 153 Noninterest Income (in-scope of Topic 606) 2,964 2,986 1,455 1,676 Noninterest Income (out-of-scope of Topic 606) 2,823 1,279 1,903 799 Total Noninterest Income $ 5,787 $ 4,265 $ 3,358 $ 2,475

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 30, 2020
Leases
Schedule of operating lease liabilities and reconciliation	As of June 30, 2020 Six months ending December 31, 2020 $ 52 Twelve months ending December 31, 2021 127 Twelve months ending December 31, 2022 129 Twelve months ending December 31, 2023 93 Twelve months ending December 31, 2024 92 Thereafter 611 Total undiscounted cash flows $ 1,104 Discount 222 Lease liabilities $ 882
Schedule of leases	(Dollars in thousands) June 30, 2020 Lease Liabilities $ 882 Right-of-use assets 867 Weighted average remaining lease term 4.58 Weighted average discount rate 3.46 % For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 2020 2019 Lease cost (in thousands) Operating lease cost $ 25 $ 32 $ 58 $ 64 Total lease cost $ 25 $ 32 $ 58 $ 64 Cash paid for amounts included in the measurement of lease liabilities $ 31 $ 38 $ 69 $ 75

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings available to common stockholders:
Net income	$ 2,670	$ 1,686	$ 3,921	$ 2,950
Non-controlling interest (income) loss	43	51	105	29
Preferred stock dividends	66	79	132	157
Net income (loss) available to common stockholders	$ 2,561	$ 1,556	$ 3,684	$ 2,764

Summary of Significant Accoun_5

Summary of Significant Accounting Policies (Details 1) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Summary of Significant Accounting Policies
Basic EPS, income	$ 2,561	$ 1,556	$ 3,684	$ 2,764
Effect of dilutive securities convertible preferred stock, income	66	79	132	157
Net Income	$ 2,627	$ 1,635	$ 3,816	$ 2,921
Basic EPS, shares	3,194,282	3,200,119	3,199,183	3,200,119
Effect of dilutive securities convertible preferred stock, shares	206,660	247,029	229,599	274,450
Diluted EPS, shares	3,400,942	3,447,148	3,428,782	3,474,569
Basic EPS, per shares	$ 0.80	$ 0.49	$ 1.15	$ 0.86
Effect of dilutive securities convertible preferred stock, per shares	(0.04)	(0.02)	(0.04)	(0.02)
Diluted EPS, per shares	$ 0.77	$ 0.47	$ 1.11	$ 0.84

Investment Securities (Details)

Investment Securities (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Securities available for sale
Cost	$ 81,135,000	$ 4,376,000
Unrealized gains	145,000	2,000
Unrealized losses	(236,000)	(12,000)
Market value	81,044,000	4,366,000
Securities issued by state and political subdivision
Securities available for sale
Cost	8,876,000
Unrealized gains	86,000
Unrealized losses	11,000
Market value	8,951,000
U. S. Treasury and agency obligations
Securities available for sale
Cost	3,000,000
Unrealized gains	0	0
Unrealized losses	0	0
Market value	3,000,000
Cost	125,000	124,000
Market value	125,000	124,000
Mortgage-backed securities
Securities available for sale
Cost	45,211,000	317,000
Unrealized gains	10,000	2,000
Unrealized losses	(225,000)	0
Market value	44,996,000	319,000
Government Sponsored Enterprises
Securities available for sale
Cost	21,003,000	2,000,000
Unrealized gains	5,000	0
Unrealized losses	0	(11,000)
Market value	21,008,000	1,989,000
Corporate debt security
Securities available for sale
Cost	3,045,000	2,059,000
Unrealized gains	44,000	0
Unrealized losses	0	(1,000)
Market value	$ 3,089,000	$ 2,058,000

Investment Securities (Details

Investment Securities (Details 1) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Total, amortized cost	$ 125,000	$ 124,000
Securities Held to Maturity
Due in one year or less, amortized cost	125,000
Due after one year through five years, amortized cost	0
Due after five years, amortized cost	0
Due after ten years, amortized cost	0
Total, amortized cost	125,000
Due in one year or less, fair value	125,000
Due after one year through five years, fair value	0
Due after five years, fair value	0
Due after ten years, fair value	0
Market value	125,000
Securities Available for Sale
Due in one year or less, amortized cost	3,000,000
Due after one year through five years, amortized cost	18,551,000
Due after five years, amortized cost	16,019,000
Due after ten years, amortized cost	43,565,000
Total, amortized cost	81,135,000
Due in one year or less, fair value	3,000,000
Due after one year through five years, fair value	18,601,000
Due after five years, fair value	16,029,000
Due after ten years, fair value	43,414,000
Market value	$ 81,044,000

Investment Securities (Detail_2

Investment Securities (Details 2) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Fair value less than 12 months	$ 66,004,000	$ 4,047,000
Unrealized losses less than 12 months	(236,000)	(12,000)
Fair value more than 12 months	0	0
Unrealized losses more than 12 months	0	0
Fair value total	(66,004,000)	4,047,000
Unrealized losses total	(236,000)	(12,000)
Mortgage-backed securities
Fair value less than 12 months	44,996,000
Unrealized losses less than 12 months	(225,000)
Fair value more than 12 months	0
Unrealized losses more than 12 months	0
Fair value total	44,996,000
Unrealized losses total	(225,000)
Government Sponsored Enterprises
Fair value less than 12 months		1,989,000
Unrealized losses less than 12 months		(11,000)
Fair value more than 12 months		0
Unrealized losses more than 12 months		0
Fair value total		1,989,000
Unrealized losses total		(11,000)
Corporate debt security
Fair value less than 12 months		2,058,000
Unrealized losses less than 12 months		(1,000)
Fair value more than 12 months		0
Unrealized losses more than 12 months		0
Fair value total		2,058,000
Unrealized losses total		$ (1,000)
Securities issued by States and political subdivisions [Member]
Fair value less than 12 months	21,008,000
Unrealized losses less than 12 months	(11,000)
Fair value more than 12 months	0
Unrealized losses more than 12 months	0
Fair value total	21,008,000
Unrealized losses total	$ (11,000)

Investment Securities (Detail_3

Investment Securities (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Other investments	$ 12,212	$ 13,525
Federal Home Loan Bank [Member]
Stock	2,526
Other investments	1,604
Twenty Low-Income housing [Member]
Other investments	8,082
Six low-income housing limited partnerships [Member]
Other investments	$ 2,831

Loans (Details)

Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Loans outstanding	$ 661,529	$ 603,425
Consumer [Member]
Loans outstanding	10,072	10,165
Construction/Land Development [Member]
Loans outstanding	73,783	77,131
Farmland [Member]
Loans outstanding	36,966	29,718
Real Estate [Member]
Loans outstanding	172,205	178,267
Multi-Family [Member]
Loans outstanding	6,065	5,364
Commercial Real Estate [Member]
Loans outstanding	128,763	129,850
Home Equity - Closed End
Loans outstanding	9,069	9,523
Home Equity
Loans outstanding	46,510	47,774
Commercial & Industrial - Non-Real Estate
Loans outstanding	90,103	33,535
Credit Cards
Loans outstanding	2,736	3,122
Dealer Finance
Loans outstanding	$ 85,257	$ 78,976

Loans (Details 1)

Loans (Details 1) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Impaired loans without a valuation allowance
Recorded investment	$ 9,384,000		$ 9,384,000		$ 9,287,000
Unpaid principal balance	9,384,000		9,384,000		9,287,000
Related allowance	0		0		0
Average recorded investment	9,147,000	$ 8,284,000	9,338,000	$ 10,638,000
Interest income recognized	126,000	266,000	248,000	374,000
Impaired loans with a valuation allowance
Recorded investment	14,872,000		14,872,000		14,494,000
Unpaid principal balance	14,872,000		14,872,000		15,519,000
Related Allowance	1,270,000		1,270,000		1,755,000
Average recorded investment	14,924,000	7,401,000	14,685,000	6,120,000
Interest income recognized	313,000	(25,000)	504,000	180,000
Total impaired loans
Recorded investment	24,256,000		24,256,000		23,781,000
Unpaid principal balance	24,256,000		24,256,000		24,806,000
Related allowance	1,270,000		1,270,000		1,755,000
Average recorded investment	24,071,000	15,685,000	24,023,000	16,758,000
Interest income recognized	439,000	241,000	752,000	554,000
Consumer [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	21,000	0	21,000	12,000
Interest income recognized	0	0	0	0
Impaired loans with a valuation allowance
Recorded investment	1,000		1,000		4,000
Unpaid principal balance	1,000		1,000		4,000
Related Allowance					1,000
Average recorded investment		5	68,000	6
Interest income recognized	0	0	0	0
Home Equity - Close End [Member]
Impaired loans without a valuation allowance
Recorded investment	703,000		703,000		716,000
Unpaid principal balance	703,000		703,000		716,000
Related allowance	0		0		0
Average recorded investment	0	360,000	358,000	360,000
Interest income recognized	21,000	0	21,000	0
Impaired loans with a valuation allowance
Recorded investment	0		0		0
Unpaid principal balance	0		0		0
Average recorded investment	429,000	0	76,000	0
Interest income recognized	(10,000)	41,000	0	41,000
Home Equity Open 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	2,000	0	0	0
Impaired loans with a valuation allowance
Recorded investment	151,000		151,000		151,000
Unpaid principal balance	151,000		151,000		151,000
Related Allowance	13,000		13,000		151,000
Average recorded investment	0	0	76,000	0
Interest income recognized	0	0	4,000	0
Credit Card [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	67,000	5,000	21	6,000
Interest income recognized	0	0	0	0
Impaired loans with a valuation allowance
Recorded investment	0		0		0
Unpaid principal balance					0
Average recorded investment			68
Interest income recognized			0
Dealers Finance [Member]
Impaired loans without a valuation allowance
Recorded investment	42,000		42,000		79,000
Unpaid principal balance	42,000		42,000		79,000
Related allowance	0		0		0
Average recorded investment	14,000	45,000	40,000	33,000
Interest income recognized	1,000	(1,000)	2,000	0
Impaired loans with a valuation allowance
Recorded investment	131,000		131,000		136,000
Unpaid principal balance	131,000		131,000
Related Allowance	12,000		12,000		7,000
Average recorded investment	964,000	176,000	955,000	194,000
Interest income recognized	1,000	5,000	5,000	9,000
Construction/Land Development [Member]
Impaired loans without a valuation allowance
Recorded investment	1,428,000		1,428,000		2,042,000
Unpaid principal balance	1,428,000		1,428,000		2,042,000
Related allowance	0		0		0
Average recorded investment	1,518,000	2,011,000	1,736,000	2,195,000
Interest income recognized	15,000	84,000	40,000	123,000
Impaired loans with a valuation allowance
Recorded investment	356,000		356,000		1,036,000
Unpaid principal balance	356,000		356,000		2,061,000
Related Allowance	3,000		3,000		85,000
Average recorded investment	352	2,651,000	696,000	3,445,000
Interest income recognized		(27,000)	0	31,000
Farmland [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	352,000	1,942,000	352,000	1,942,000
Interest income recognized	0	1,000	0	1,000
Impaired loans with a valuation allowance
Recorded investment	1,774,000		1,774,000		1,933,000
Unpaid principal balance	1,774,000		1,774,000		1,933,000
Related Allowance	110,000		110,000		537,000
Average recorded investment	964,000	0	967,000	0
Interest income recognized	178,000	0	184,000	0
Real Estate [Member]
Impaired loans without a valuation allowance
Recorded investment	4,899,000		4,899,000		5,131,000
Unpaid principal balance	4,899,000		4,899,000		5,131,000
Related allowance	0		0		0
Average recorded investment	5,258,000	2,013,000	5,015,000	2,020,000
Interest income recognized	60,000	(7,000)	136,000	22,000
Impaired loans with a valuation allowance
Recorded investment	9,619,000		9,619,000		10,404,000
Unpaid principal balance	9,619,000		9,619,000		10,404,000
Related Allowance	617,000		617,000		569,000
Average recorded investment	9,695,000	417,000	10,012,000	419,000
Interest income recognized	122,000	58,000	262,000	65,000
Multi-Family [Member]
Impaired loans without a valuation allowance
Recorded investment	0		0		0
Unpaid principal balance	0		0		0
Related allowance	0		0		0
Average recorded investment	0	0	0	0
Interest income recognized	0	0	0	0
Impaired loans with a valuation allowance
Recorded investment	0		0		0
Unpaid principal balance	0		0		0
Related Allowance	0		0		0
Average recorded investment	0	0	0	0
Interest income recognized	0	0	0	0
Commercial Real Estate [Member]
Impaired loans without a valuation allowance
Recorded investment	2,298,000		2,298,000		1,302,000
Unpaid principal balance	2,298,000		2,298,000		1,302,000
Related allowance	0		0		0
Average recorded investment	1,883,000	1,901,000	1,800,000	4,076,000
Interest income recognized	29,000	189,000	49,000	228,000
Impaired loans with a valuation allowance
Recorded investment	2,840,000		2,840,000		638,000
Unpaid principal balance	2,840,000		2,840,000		638,000
Related Allowance	515,000		515,000		213,000
Average recorded investment	2,338,000	4,152,000	1,739,000	2,056,000
Interest income recognized	21,000	(104,000)	49,000	33,000
Commercial & Industrial - Non Real Estate [Member]
Impaired loans without a valuation allowance
Recorded investment	14,000		14,000		17,000
Unpaid principal balance	14,000		14,000		17,000
Related allowance	0		0		0
Average recorded investment	101,000	12,000	16,000	0
Interest income recognized	0	0	0	0
Impaired loans with a valuation allowance
Recorded investment	0		0		192,000
Unpaid principal balance	0		0		192,000
Related Allowance					$ 192,000
Average recorded investment	35,000	0	96,000	0
Interest income recognized	$ (1,000)	$ 2,000	$ 0	$ 1,000

Loans (Details 2)

Loans (Details 2) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
30-59 days past due	$ 2,506,000	$ 6,365,000
60-89 days past due	696,000	1,794,000
Greater than 90 days (excluding non-accrual)	1,204,000	4,379,000
Total past due	4,406,000	12,538,000
Current	657,123,000	590,887,000
Total loans receivable	661,529,000	603,425,000
Non-accrual loans	4,429,000	5,007,000
Recorded investment 90 days & accruing	37,000	722,000
Construction/Land Development [Member]
30-59 days past due	0	117,000
60-89 days past due	0	45,000
Greater than 90 days (excluding non-accrual)	374,000	1,255,000
Total past due	374,000	1,417,000
Current	73,409,000	75,714,000
Total loans receivable	73,783,000	77,131,000
Non-accrual loans	414,000	1,301,000
Recorded investment 90 days & accruing	0	0
Farmland [Member]
30-59 days past due	0	27,000
60-89 days past due	26,000	0
Greater than 90 days (excluding non-accrual)	0	1,933,000
Total past due	26,000	1,960,000
Current	36,940,000	27,758,000
Total loans receivable	36,966,000	29,718,000
Non-accrual loans	1,774,000	1,933,000
Recorded investment 90 days & accruing	0	0
Real Estate [Member]
30-59 days past due	1,421,000	2,440,000
60-89 days past due	366,000	1,035,000
Greater than 90 days (excluding non-accrual)	558,000	837,000
Total past due	2,345,000	4,312,000
Current	169,860,000	173,955,000
Total loans receivable	172,205,000	178,267,000
Non-accrual loans	734,000	420,000
Recorded investment 90 days & accruing	0	619,000
Multi-Family [Member]
30-59 days past due	0	0
60-89 days past due	0	0
Greater than 90 days (excluding non-accrual)	0	0
Total past due	0	0
Current	6,065,000	5,364,000
Total loans receivable	6,065,000	5,364,000
Non-accrual loans	0	0
Recorded investment 90 days & accruing	0	0
Commercial Real Estate [Member]
30-59 days past due	0	563,000
60-89 days past due	156,000	0
Greater than 90 days (excluding non-accrual)	0	137,000
Total past due	156,000	700,000
Current	128,607,000	129,150,000
Total loans receivable	128,763,000	129,850,000
Non-accrual loans	1,125,000	900,000
Recorded investment 90 days & accruing	0	0
Commercial & Industrial - Non Real Estate [Member]
30-59 days past due	25,000	726,000
60-89 days past due	0	4,000
Greater than 90 days (excluding non-accrual)	0	0
Total past due	25,000	730,000
Current	90,078,000	32,805,000
Total loans receivable	90,103,000	33,535,000
Non-accrual loans	7,000	203,000
Recorded investment 90 days & accruing	0	0
Home Equity - Close End [Member]
30-59 days past due	0	0
60-89 days past due	0	0
Greater than 90 days (excluding non-accrual)	31,000	0
Total past due	31,000	0
Current	9,038,000	9,523,000
Total loans receivable	9,069,000	9,523,000
Non-accrual loans	0	0
Recorded investment 90 days & accruing	31,000	0
Home Equity Open End [Member]
30-59 days past due	179,000	429,000
60-89 days past due	8,000	296,000
Greater than 90 days (excluding non-accrual)	217,000	15,000
Total past due	404,000	740,000
Current	46,106,000	47,034,000
Total loans receivable	46,510,000	47,774,000
Non-accrual loans	240,000	0
Recorded investment 90 days & accruing	0	15,000
Credit Card [Member]
30-59 days past due	22,000	31,000
60-89 days past due	0	0
Greater than 90 days (excluding non-accrual)	0	4,000
Total past due	22,000	35,000
Current	2,714,000	3,087,000
Total loans receivable	2,736,000	3,122,000
Non-accrual loans	0	0
Recorded investment 90 days & accruing	0	4,000
Dealers Finance [Member]
30-59 days past due	839,000	1,943,000
60-89 days past due	139,000	400,000
Greater than 90 days (excluding non-accrual)	24,000	198,000
Total past due	1,002,000	2,541,000
Current	84,255,000	76,435,000
Total loans receivable	85,257,000	78,976,000
Non-accrual loans	135,000	249,000
Recorded investment 90 days & accruing	6,000	84,000
Consumer
30-59 days past due	20,000	89,000
60-89 days past due	1,000	14,000
Greater than 90 days (excluding non-accrual)	0	0
Total past due	21,000	103,000
Current	10,051,000	10,062,000
Total loans receivable	10,072,000	10,165,000
Non-accrual loans	0	1,000
Recorded investment 90 days & accruing	$ 0	$ 0

Loans (Details Narrative)

Loans (Details Narrative) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Loans
Pledged loans	$ 170,970,000	$ 178,253,000
Loans held for sale	90,602,000	66,798,000
Foreclosed residential real estate in other real estate	0	$ 133,000
Interest income	52,000
Consumer mortgages	$ 878,000

Allowance for Loan Losses (Deta

Allowance for Loan Losses (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Beginning balance	$ 8,390,000	$ 5,240,000
Charge-offs	1,204,000	5,626,000
Recoveries	547,000	1,371,000
Provision	2,300,000	7,405,000
Ending balance	10,033,000	8,390,000
Individually evaluated for impairment	1,270,000	1,755,000
Collectively evaluated for impairment	8,764,000	6,635,000
Home Equity - Close End [Member]
Beginning balance	42,000	13,000
Charge-offs	0	1,000
Recoveries	0	2,000
Provision	18,000	28,000
Ending balance	60,000	42,000
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	61,000	42,000
Home Equity Open End [Member]
Beginning balance	457,000	126,000
Charge-offs	0	126,000
Recoveries	1	1,000
Provision	25,000	456,000
Ending balance	434,000	457,000
Individually evaluated for impairment	13,000	151,000
Collectively evaluated for impairment	422,000	306,000
Credit Card [Member]
Beginning balance	68,000	38,000
Charge-offs	59,000	110,000
Recoveries	30,000	29,000
Provision	38,000	111,000
Ending balance	77,000	68,000
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	78,000	68,000
Dealers Finance [Member]
Beginning balance	1,786,000	1,974,000
Charge-offs	971,000	2,118,000
Recoveries	465,000	1,144,000
Provision	685,000	786,000
Ending balance	1,965,000	1,786,000
Individually evaluated for impairment	12,000	7,000
Collectively evaluated for impairment	1,952,000	1,779,000
Consumers
Beginning balance	186,000	70,000
Charge-offs	67,000	116,000
Recoveries	38,000	44,000
Provision	279,000	188,000
Ending balance	436,000	186,000
Individually evaluated for impairment	0	1,000
Collectively evaluated for impairment	433,000	185,000
Construction/Land Development [Member]
Beginning balance	1,190,000	2,094,000
Charge-offs	7,000	2,319,000
Recoveries	0	50,000
Provision	254,000	1,365,000
Ending balance	1,437,000	1,190,000
Individually evaluated for impairment	3,000	85,000
Collectively evaluated for impairment	1,435,000	1,105,000
Farmland [Member]
Beginning balance	668,000	15,000
Charge-offs	0	0
Recoveries	0	0
Provision	333,000	653,000
Ending balance	335,000	668,000
Individually evaluated for impairment	110,000	537,000
Collectively evaluated for impairment	225,000	131,000
Real Estate [Member]
Beginning balance	1,573,000	292,000
Charge-offs	36,000	32,000
Recoveries	4,000	4,000
Provision	396,000	1,309,000
Ending balance	1,937,000	1,573,000
Individually evaluated for impairment	617,000	569,000
Collectively evaluated for impairment	1,319,000	1,004,000
Multi-Family [Member]
Beginning balance	20,000	10,000
Charge-offs	0	0
Recoveries	0	0
Provision	36,000	10,000
Ending balance	56,000	20,000
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	56,000	20,000
Commercial Real Estate [Member]
Beginning balance	1,815,000	416,000
Charge-offs	0	677,000
Recoveries	0	16,000
Provision	1,106,000	2,060,000
Ending balance	2,921,000	1,815,000
Individually evaluated for impairment	515,000	213,000
Collectively evaluated for impairment	2,406,000	1,602,000
Commercial & Industrial - Non Real Estate [Member]
Beginning balance	585,000	192,000
Charge-offs	64,000	127,000
Recoveries	10,000	81,000
Provision	154,000	439,000
Ending balance	377,000	585,000
Individually evaluated for impairment	0	192,000
Collectively evaluated for impairment	$ 377,000	$ 393,000

Allowance for Loan Losses (De_2

Allowance for Loan Losses (Details 1) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Loan receivable	$ 661,529,000	$ 603,425,000
Loans individually evaluated for impairment	24,256,000	23,781,000
Loans collectively evaluated for impairment	637,273,000	579,644,000
Construction/Land Development [Member]
Loan receivable	73,783,000	77,131,000
Loans individually evaluated for impairment	1,784,000	3,078,000
Loans collectively evaluated for impairment	71,999,000	74,053,000
Farmland [Member]
Loan receivable	36,966,000	29,718,000
Loans individually evaluated for impairment	1,774,000	1,933,000
Loans collectively evaluated for impairment	35,192,000	27,785,000
Real Estate [Member]
Loan receivable	172,205,000	178,267,000
Loans individually evaluated for impairment	14,518,000	15,535,000
Loans collectively evaluated for impairment	157,687,000	162,732,000
Multi-Family [Member]
Loan receivable	6,065,000	5,364,000
Loans individually evaluated for impairment	0	0
Loans collectively evaluated for impairment	6,065,000	5,364,000
Commercial Real Estate [Member]
Loan receivable	128,763,000	129,850,000
Loans individually evaluated for impairment	5,138,000	1,940,000
Loans collectively evaluated for impairment	123,625,000	127,910,000
Commercial & Industrial - Non Real Estate [Member]
Loan receivable	90,103,000	33,535,000
Loans individually evaluated for impairment	14,000	209,000
Loans collectively evaluated for impairment	90,089,000	33,326,000
Home Equity - Close End [Member]
Loan receivable	9,069,000	9,523,000
Loans individually evaluated for impairment	703,000	716,000
Loans collectively evaluated for impairment	8,366,000	8,807,000
Home Equity Open End [Member]
Loan receivable	46,510,000	47,774,000
Loans individually evaluated for impairment	151,000	151,000
Loans collectively evaluated for impairment	46,359,000	47,623,000
Credit Card [Member]
Loan receivable	2,736,000	3,122,000
Loans individually evaluated for impairment	0	0
Loans collectively evaluated for impairment	2,736,000	3,122,000
Dealers Finance [Member]
Loan receivable	85,257,000	78,976,000
Loans individually evaluated for impairment	173,000	215,000
Loans collectively evaluated for impairment	85,084,000	78,761,000
Consumers
Loan receivable	10,072,000	10,165,000
Loans individually evaluated for impairment	1,000	4,000
Loans collectively evaluated for impairment	$ 10,071,000	$ 10,161,000

Allowance for Loan Losses (De_3

Allowance for Loan Losses (Details 2) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Construction/Land Development	$ 73,783,000	$ 77,131,000
Farmland	36,966,000	29,718,000
Real Estate	172,205,000	178,267,000
Multi-Family	6,065,000	5,364,000
Commercial Real Estate	128,763,000	129,850,000
Home Equity - closed end	9,069,000	9,523,000
Home Equity - open end	46,510,000	47,774,000
Commercial & Industrial (Non-Real Estate)	90,103,000	33,535,000
Consumer (excluding dealer)	10,072,000	10,165,000
Total	573,536,000	521,327,000
Grade 8 Doubtful
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
Grade 6 Watch
Construction/Land Development	12,390,000	2,434,000
Farmland	668,000	1,188,000
Real Estate	4,196,000	5,635,000
Multi-Family	0	173,000
Commercial Real Estate	21,934,000	4,397,000
Home Equity - closed end	1,250,000	1,365,000
Home Equity - open end	826,000	1,198,000
Commercial & Industrial (Non-Real Estate)	1,279,000	373,000
Consumer (excluding dealer)	9,000	56,000
Total	42,552,000	16,819,000
Grade 1 Minimal Risk
Construction/Land Development	0	0
Farmland	59,000	60,000
Real Estate	0	0
Multi-Family	0	0
Commercial Real Estate	0	0
Home Equity - closed end	0	0
Home Equity - open end	0	17,000
Commercial & Industrial (Non-Real Estate)	113,000	142,000
Consumer (excluding dealer)	3,000	6,000
Total	175,000	225,000
Grade 2 Modest Risk
Construction/Land Development	146,000	615,000
Farmland	489,000	363,000
Real Estate	2,459,000	1,900,000
Multi-Family	0	0
Commercial Real Estate	1,898,000	2,465,000
Home Equity - closed end	176,000	189,000
Home Equity - open end	1,732,000	1,965,000
Commercial & Industrial (Non-Real Estate)	1,508,000	2,042,000
Consumer (excluding dealer)	191,000	170,000
Total	8,599,000	9,709,000
Grade 3 Average Risk
Construction/Land Development	12,664,000	21,904,000
Farmland	12,922,000	9,479,000
Real Estate	43,527,000	48,308,000
Multi-Family	1,095,000	1,327,000
Commercial Real Estate	31,680,000	40,227,000
Home Equity - closed end	2,703,000	2,999,000
Home Equity - open end	18,693,000	17,789,000
Commercial & Industrial (Non-Real Estate)	8,965,000	12,818,000
Consumer (excluding dealer)	3,870,000	3,476,000
Total	136,119,000	158,327,000
Grade 4 Acceptable Risk
Construction/Land Development	39,099,000	41,693,000
Farmland	15,974,000	13,754,000
Real Estate	77,176,000	81,371,000
Multi-Family	3,612,000	3,711,000
Commercial Real Estate	63,007,000	67,626,000
Home Equity - closed end	3,669,000	3,816,000
Home Equity - open end	20,907,000	22,705,000
Commercial & Industrial (Non-Real Estate)	13,148,000	15,035,000
Consumer (excluding dealer)	4,270,000	4,726,000
Total	240,862,000	254,437,000
Grade 5 Marginally Acceptable
Construction/Land Development	8,487,000	8,218,000
Farmland	5,080,000	2,942,000
Real Estate	27,790,000	23,876,000
Multi-Family	1,358,000	153,000
Commercial Real Estate	6,770,000	14,139,000
Home Equity - closed end	1,240,000	1,154,000
Home Equity - open end	3,616,000	3,769,000
Commercial & Industrial (Non-Real Estate)	65,037,000	2,877,000
Consumer (excluding dealer)	1,729,000	1,729,000
Total	121,107,000	58,857,000
Grade 7 Substandard
Construction/Land Development	997,000	2,267,000
Farmland	1,774,000	1,932,000
Real Estate	17,057,000	17,177,000
Multi-Family	0	0
Commercial Real Estate	3,474,000	996,000
Home Equity - closed end	31,000	0
Home Equity - open end	736,000	331,000
Commercial & Industrial (Non-Real Estate)	53,000	248,000
Consumer (excluding dealer)	0	2,000
Total	$ 24,122,000	$ 22,953,000

Allowance for Loan Losses (De_4

Allowance for Loan Losses (Details 3) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Credit cards	$ 2,736,000	$ 3,122,000
Dealer finance	85,257,000	78,976,000
Performing
Credit cards	2,736,000	3,118,000
Dealer finance	85,109,000	78,529,000
Non performing
Credit cards	0	4,000
Dealer finance	$ 148,000	$ 447,000

Employee Benefit Plan (Details)

Employee Benefit Plan (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Employee Benefit Plan
Service cost	$ 202	$ 184	$ 404	$ 369
Interest cost	105	137	209	274
Expected return on plan assets	183	201	367	403
Amortization of prior service cost	(3)	(4)	(6)	(8)
Amortization of net loss	55	7	111	141
Net periodic pension cost	$ 176	$ 187	$ 351	$ 373

Fair Value (Details)

Fair Value (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Loans held for sale	$ 90,602,000
IRLC	1,012,000
U.S. Treasury securities	3,000,000
U. S. Government sponsored enterprises	21,008,000	$ 1,989,000
Securities issued by States and political subdivisions in the U. S.	8,951,000
Mortgage-backed obligations of federal agencies	44,996,000	319,000
Corporate debt securities	3,089,000
Other debt securities		2,058,000
Total securities available for sale	172,658,000	4,366,000
Derivatives (Indexed CD product)	45	72
Forward sales commitments	554,000
Total fair value of liabilities	599
Fair Value Inputs Level 1
Loans held for sale	0
IRLC	0
U.S. Treasury securities	0
U. S. Government sponsored enterprises	0	0
Securities issued by States and political subdivisions in the U. S.	0
Mortgage-backed obligations of federal agencies	0	0
Corporate debt securities	0
Other debt securities		0
Total securities available for sale	0	0
Derivatives (Indexed CD product)	0	0
Forward sales commitments	0
Total fair value of liabilities	0	0
Fair Value Inputs Level 2
Loans held for sale	90,602,000
IRLC	1,012,000
U.S. Treasury securities	3,000,000
U. S. Government sponsored enterprises	21,008,000	1,989,000
Securities issued by States and political subdivisions in the U. S.	8,951,000
Mortgage-backed obligations of federal agencies	44,996,000	319,000
Corporate debt securities	3,089,000
Other debt securities		2,058,000
Total securities available for sale	172,658,000	4,366,000
Derivatives (Indexed CD product)	45	72
Forward sales commitments	554,000
Total fair value of liabilities	599,000	72,000
Fair Value Inputs Level 3
Loans held for sale	0
IRLC	0
U.S. Treasury securities	0
U. S. Government sponsored enterprises	0	0
Securities issued by States and political subdivisions in the U. S.	0
Mortgage-backed obligations of federal agencies	0	0
Corporate debt securities	0
Other debt securities		0
Total securities available for sale	0	0
Derivatives (Indexed CD product)	0	72
Forward sales commitments	0
Total fair value of liabilities	$ 0	$ 0

Fair Value (Details 1)

Fair Value (Details 1) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Impaired loans	$ 13,602,000	$ 12,739,000
Consumer [Member]
Impaired loans	1,000	3,000
Dealers Finance [Member]
Impaired loans	119,000	129,000
Construction/Land Development [Member]
Impaired loans	353,000	951,000
Farmland [Member]
Impaired loans	1,664,000	1,396,000
Real Estate [Member]
Impaired loans	9,002,000	9,835,000
Commercial Real Estate [Member]
Impaired loans	2,325,000	425,000
Home Equity
Impaired loans	138,000
Fair Value Inputs Level 1
Impaired loans	0	0
Fair Value Inputs Level 1 | Home Equity
Impaired loans	0
Fair Value Inputs Level 1 | Consumer
Impaired loans	0	0
Fair Value Inputs Level 1 | Dealers Finance [Member]
Impaired loans	0	0
Fair Value Inputs Level 1 | Farmland
Impaired loans	0	0
Fair Value Inputs Level 1 | Construction/Land Development [Member]
Impaired loans	0	0
Fair Value Inputs Level 1 | Real Estate [Member]
Impaired loans	0	0
Fair Value Inputs Level 1 | Commercial Real Estate [Member]
Impaired loans	0	0
Fair Value Inputs Level 2
Impaired loans	0	0
Fair Value Inputs Level 2 | Home Equity
Impaired loans	0
Fair Value Inputs Level 2 | Consumer
Impaired loans	0	0
Fair Value Inputs Level 2 | Dealers Finance [Member]
Impaired loans	0	0
Fair Value Inputs Level 2 | Farmland
Impaired loans	0	0
Fair Value Inputs Level 2 | Construction/Land Development [Member]
Impaired loans	0	0
Fair Value Inputs Level 2 | Real Estate [Member]
Impaired loans	0	0
Fair Value Inputs Level 2 | Commercial Real Estate [Member]
Impaired loans	0	0
Fair Value Inputs Level 3
Impaired loans	13,602,000	12,739,000
Fair Value Inputs Level 3 | Home Equity
Impaired loans	138,000
Fair Value Inputs Level 3 | Consumer
Impaired loans	1,000	3,000
Fair Value Inputs Level 3 | Dealers Finance [Member]
Impaired loans	119,000	129,000
Fair Value Inputs Level 3 | Farmland
Impaired loans	1,664,000	1,396,000
Fair Value Inputs Level 3 | Construction/Land Development [Member]
Impaired loans	353,000	951,000
Fair Value Inputs Level 3 | Real Estate [Member]
Impaired loans	9,002,000	9,835,000
Fair Value Inputs Level 3 | Commercial Real Estate [Member]
Impaired loans	$ 2,325,000	$ 425,000

Fair Value (Details 2)

Fair Value (Details 2) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Other real estate owned	$ 1,160,000	$ 1,489,000
Assets held for sale	520,000
Impaired loans	13,602,000	12,739,000
Fair Value Inputs Level 1
Assets held for sale	0
Impaired loans	0	0
Other real estate owned	0	0
Fair Value Inputs Level 2
Assets held for sale	520,000
Impaired loans	0	0
Other real estate owned	0	0
Fair Value Inputs Level 3
Assets held for sale	0
Impaired loans	13,602,000	12,739,000
Other real estate owned	$ 1,160,000	$ 1,489,000
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 lmpaired 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	23.58%	24.04%
Average other real estate owned	800.00%	800.00%
Fair Value Inputs Level 3 | Maximum
Range impaired loans	4500.00%	58.98%
Range other real estate owned	1000.00%	1000.00%
Fair Value Inputs Level 3 | Minimum
Range impaired loans	300.00%	0.00%
Range other real estate owned	600.00%	500.00%

Disclosures About Fair Value _3

Disclosures About Fair Value of Financial Instruments (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Assets:
Cash and cash equivalents	$ 86,698,000	$ 75,804,000
Cash and cash equivalents, fair value	86,698,000	75,804,000
Securities, carrying amount	81,169,000	4,490,000
Securities, fair value	81,169,000	4,490,000
Loans held for sale, carrying amount	90,602,000	66,798,000
Loans held for sale, fair value	90,602,000	66,798,000
Loans held for investment, net, carrying amount	651,496,000	595,035,000
Loans held for investment, net, fair value	638,433,000	580,903,000
Interest receivable, carrying amount	2,640,000	2,044,000
Interest receivable, fair value	2,640,000	2,044,000
Bank owned life insurance, carrying amount	20,345,000	20,050,000
Bank owned life insurance, fair value	20,345,000	20,050,000
Total assets, carrying amount	932,920,000	764,221,000
Total assets, fair value	919,887,000	750,089,000
Liabilities
Deposits, carrying amount	766,652,000	641,709,000
Deposits, fair value	770,229,000	644,235,000
Short-term debt, carrying amount	0	10,000,000
Short-term debt, fair value	0	10,000,000
Long-term debt, carrying amount	100,585,000	53,201,000
Long-term debt, fair value	101,717,000	53,543,000
Interest payable, carrying amount	338,000	354,000
Interest payable, fair value	338,000	354,000
Total liabilities, carrying amount	867,575,000	705,264,000
Total liabilities, fair value	872,284,000	708,132,000
Fair Value Inputs Level 1
Assets:
Cash and cash equivalents, fair value	86,698,000	75,804,000
Securities, fair value	0	0
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	86,698,000	75,804,000
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
Assets:
Cash and cash equivalents, fair value	0	0
Securities, fair value	81,169,000	4,490,000
Loans held for sale, fair value	90,602,000	66,798,000
Loans held for investment, net, fair value	0	0
Interest receivable, fair value	2,640,000	2,044,000
Bank owned life insurance, fair value	20,345,000	20,050,000
Total assets, fair value	194,756,000	93,382,000
Liabilities
Deposits, fair value	639,064,000	504,522,000
Short-term debt, fair value	0	10,000,000
Long-term debt, fair value	0	0
Interest payable, fair value	338,000	354,000
Total liabilities, fair value	639,402,000	514,876,000
Fair Value Inputs Level 3
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	638,433,000	580,903,000
Interest receivable, fair value	0	0
Bank owned life insurance, fair value	0	0
Total assets, fair value	638,433,000	580,903,000
Liabilities
Deposits, fair value	131,165,000	139,713,000
Short-term debt, fair value	0	0
Long-term debt, fair value	101,717,000	53,543,000
Interest payable, fair value	0	0
Total liabilities, fair value	$ 232,882,000	$ 193,256,000

Troubled Debt Restructuring (De

Troubled Debt Restructuring (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2020USD ($)integer	Jun. 30, 2019USD ($)integer
Number of contracts | integer	2	9
Pre-modification outstanding recorded investment	$ 11	$ 1,153
Post-modification outstanding recorded investment	$ 11	$ 1,153
In Default
Number of contracts | integer	1
Pre-modification outstanding recorded investment	$ 3
Post-modification outstanding recorded investment	$ 3
Real Estate [Member]
Number of contracts | integer		1
Pre-modification outstanding recorded investment		$ 193
Post-modification outstanding recorded investment		$ 193
Commercial Real Estate [Member]
Number of contracts | integer		1
Pre-modification outstanding recorded investment		$ 182
Post-modification outstanding recorded investment		$ 182
Home Equity
Number of contracts | integer		1
Pre-modification outstanding recorded investment		$ 720
Post-modification outstanding recorded investment		$ 720
Consumers
Number of contracts | integer	2	5
Pre-modification outstanding recorded investment	$ 11	$ 35
Post-modification outstanding recorded investment	$ 11	$ 35
Consumers | In Default
Number of contracts | integer	1
Pre-modification outstanding recorded investment	$ 3
Post-modification outstanding recorded investment	$ 3
Commercial & Industrial
Number of contracts | integer		1
Pre-modification outstanding recorded investment		$ 23
Post-modification outstanding recorded investment		$ 23

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Loss (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Beginning Balance	$ (3,211,000)
Ending Balance	(3,276,000)
Unrealized Securities Gains (Losses) [Member]
Beginning Balance	(7,000)	$ (94,000)
Change in unrealized securities gains (losses), net of tax	(65,000)	89,000
Ending Balance	(72,000)	(5,000)
Adjustments Related to Pension Plan [Member]
Beginning Balance	(3,204,000)	(3,875,000)
Change in unrealized securities gains (losses), net of tax	0	0
Ending Balance	(3,204,000)	(3,875,000)
Accumulated Other Comprehensive Loss [Member]
Beginning Balance	(3,211,000)	(3,969,000)
Change in unrealized securities gains (losses), net of tax	(65,000)	89,000
Ending Balance	$ 3,276,000	$ (3,880,000)

Business Segments (Details)

Business Segments (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Interest Income	$ 8,992,000	$ 9,782,000	$ 18,102,000	$ 19,313,000
Service charges on deposits	225,000	417,000	586,000	803,000
Investment services and insurance income			358,000	322,000
Mortgage banking income, net	1,971,000	815,000	2,900,000	1,345,000
Title insurance income	472,000	406,000	843,000	682,000
Interest expense	1,385,000	1,726,000	3,091,000	3,224,000
Provision for loan losses	800,000	1,600,000	2,300,000	3,050,000
Income tax expense	211,000	153,000	173,000	232,000
Net income (loss)	2,670,000	1,686,000	3,921,000	2,950,000
Total assets	981,602,000		981,602,000		$ 813,999,000
Goodwill	2,884,000		2,884,000		$ 2,884,000
F&M Bank Member
Interest Income	8,965,000	9,754,000	18,036,000	19,254,000
Service charges on deposits	225,000	417,000	586,000	803,000
Investment services and insurance income	0	0	0	0
Mortgage banking income, net	0	0	0	0
Title insurance income	0	0	0	0
Other operating income (loss)	516,000	665,000	1,097,000	1,110,000
Total income (loss)	9,706,000	10,836,000	19,719,000	21,167,000
Interest expense	1,392,000	1,732,000	3,111,000	3,233,000
Provision for loan losses	800,000	1,600,000	2,300,000	3,050,000
Salary and benefit expense	3,200,000	3,285,000	6,366,000	6,576,000
Other operating expenses	2,937,000	2,739,000	5,724,000	5,489,000
Total expense	8,329,000	9,356,000	17,501,000	18,348,000
Net income (loss) before taxes	1,377,000	1,480,000	2,218,000	2,819,000
Income tax expense	260,000	112,000	190,000	158,000
Net income (loss)	1,117,000	1,368,000	2,028,000	2,661,000
Net income attributable to non-controlling interest	0	0	0	0
Net Income attributable to F & M Bank Corp.	1,117,000	1,368,000	2,028,000	2,661,000
Total assets	983,611,000	809,712,000	983,611,000	809,712,000
Goodwill	2,670,000	2,670,000	2,670,000	2,670,000
VBS Mortgage
Interest Income		43,000		68,000
Service charges on deposits		0		0
Investment services and insurance income		0		0
Mortgage banking income, net		815,000		1,345,000
Title insurance income		0		0
Other operating income (loss)		28,000		28,000
Total income (loss)		886,000		1,441,000
Interest expense		50,000		75,000
Provision for loan losses		0		0
Salary and benefit expense		489,000		917,000
Other operating expenses		177,000		354,000
Total expense		716,000		1,346,000
Net income (loss) before taxes		170,000		95,000
Income tax expense		0		0
Net income (loss)		170,000		95,000
Net income attributable to non-controlling interest		51,000		29,000
Net Income attributable to F & M Bank Corp.		119,000		66,000
Total assets		11,210,000		11,210,000
Goodwill		47,000		47,000
TEB Life/FMFS
Interest Income	36,000	41,000	80,000	75,000
Service charges on deposits	0	0	0	0
Investment services and insurance income	178,000	174,000	368,000	325,000
Mortgage banking income, net	0	0	0	0
Title insurance income	0	0	0	0
Other operating income (loss)	0	0	0	0
Total income (loss)	214,000	215,000	448,000	400,000
Interest expense	0	0	0	0
Provision for loan losses	0	0	0	0
Salary and benefit expense	72,000	69,000	157,000	150,000
Other operating expenses	18,000	16,000	28,000	28,000
Total expense	90,000	85,000	185,000	178,000
Net income (loss) before taxes	124,000	130,000	263,000	222,000
Income tax expense	21,000	19,000	39,000	33,000
Net income (loss)	103,000	111,000	224,000	189,000
Net income attributable to non-controlling interest	0	0	0	0
Net Income attributable to F & M Bank Corp.	103,000	111,000	224,000	189,000
Total assets	7,875,000	7,332,000	7,875,000	7,332,000
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	472,000	406,000	843,000	682,000
Other operating income (loss)	0	0	0	0
Total income (loss)	472,000	406,000	843,000	682,000
Interest expense	0	0	0	0
Provision for loan losses	0	0	0	0
Salary and benefit expense	236,000	234,000	494,000	457,000
Other operating expenses	62,000	62,000	127,000	124,000
Total expense	298,000	296,000	621,000	581,000
Net income (loss) before taxes	174,000	110,000	222,000	101,000
Income tax expense	0	0	0	0
Net income (loss)	174,000	110,000	222,000	101,000
Net income attributable to non-controlling interest	(11,000)	27,000	0	24,000
Net Income attributable to F & M Bank Corp.	185,000	83,000	222,000	77,000
Total assets	3,855,000	1,615,000	3,855,000	1,615,000
Goodwill	3,000	3,000	3,000	3,000
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
Other operating income (loss)	(53,000)	(27,000)	(53,000)	(24,000)
Total income (loss)	(53,000)	(27,000)	(53,000)	(24,000)
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	4,000	24,000	15,000	31,000
Total expense	4,000	24,000	15,000	31,000
Net income (loss) before taxes	(57,000)	(51,000)	(68,000)	(55,000)
Income tax expense	70,000	22,000	56,000	41,000
Net income (loss)	13,000	(73,000)	(12,000)	(96,000)
Net income attributable to non-controlling interest	11,000	(27,000)	0	(24,000)
Net Income attributable to F & M Bank Corp.	2,000	(46,000)	(12,000)	(72,000)
Total assets	92,418,000	91,674,000	92,418,000	91,674,000
Goodwill	164,000	164,000	164,000	164,000
Eliminations
Interest Income	(93,000)	(56,000)	(134,000)	(84,000)
Service charges on deposits	0	0		0
Investment services and insurance income	(5,000)	(3,000)	(10,000)	(3,000)
Mortgage banking income, net	0	0		0
Title insurance income	0	0		0
Other operating income (loss)	0	0	0	(1,000)
Total income (loss)	(98,000)	(59,000)	(144,000)	(88,000)
Interest expense	93,000	56,000	134,000	84,000
Provision for loan losses	0	0	0	0
Salary and benefit expense	0	0		0
Other operating expenses	(5,000)	(3,000)	(10,000)	(4,000)
Total expense	98,000	59,000	144,000	88,000
Net income (loss) before taxes	0	0	0	0
Income tax expense	0	0	0	0
Net income (loss)	0	0	0	0
Net income attributable to non-controlling interest	0	0	0	0
Net Income attributable to F & M Bank Corp.		0	0	0
Total assets	(131,702,000)	(114,594,000)	(131,702,000)	(114,594,000)
Goodwill	0	0	0	0
F&M Bank Corp Consolidated
Interest Income	8,992,000	9,782,000	18,102,000	19,313,000
Service charges on deposits	225,000	417,000	586,000	803,000
Investment services and insurance income	173,000	171,000	358,000	322,000
Mortgage banking income, net	1,971,000	815,000	2,900,000	1,345,000
Title insurance income	472,000	406,000	843,000	682,000
Other operating income (loss)	517,000	666,000	1,100,000	1,113,000
Total income (loss)	12,350,000	12,257,000	23,889,000	23,578,000
Interest expense	1,385,000	1,726,000	3,091,000	3,224,000
Provision for loan losses	800,000	1,600,000	2,300,000	3,050,000
Salary and benefit expense	4,134,000	4,077,000	8,168,000	8,100,000
Other operating expenses	3,150,000	3,015,000	6,236,000	6,022,000
Total expense	9,469,000	10,418,000	19,795,000	20,396,000
Net income (loss) before taxes	2,881,000	1,839,000	4,094,000	3,182,000
Income tax expense	211,000	153,000	173,000	232,000
Net income (loss)	2,670,000	1,686,000	3,921,000	2,950,000
Net income attributable to non-controlling interest	43,000	51,000	105,000	29,000
Net Income attributable to F & M Bank Corp.	2,627,000	1,635,000	3,816,000	2,921,000
Total assets	981,602,000	806,949,000	981,602,000	806,949,000
Goodwill	2,884,000	$ 2,884,000	2,884,000	$ 2,884,000
F&M Mortgage
Interest Income	84,000		120,000
Service charges on deposits	0		0
Investment services and insurance income	0		0
Mortgage banking income, net	1,971,000		2,900,000
Title insurance income	0		0
Other operating income (loss)	54,000		56,000
Total income (loss)	2,109,000		3,076,000
Interest expense	86,000		114,000
Provision for loan losses	0		0
Salary and benefit expense	626,000		1,151,000
Other operating expenses	134,000		352,000
Total expense	846,000		1,617,000
Net income (loss) before taxes	1,263,000		1,459,000
Income tax expense	0		0
Net income (loss)	1,263,000		1,459,000
Net income attributable to non-controlling interest	43,000		105,000
Net Income attributable to F & M Bank Corp.	1,220,000		1,354,000
Total assets	25,546,000		25,546,000
Goodwill	$ 47,000		$ 47,000

Debt (Details Narrative)

Debt (Details Narrative) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Short term debt	$ 0	$ 10,000,000
Weighted average interest rate	1.82%	1.85%
Debt obligations	$ 40,982,000	$ 53,197,000
Note payable balance	0	4,000
Debt amount	59,603,000	$ 0
FHLB [Member]
Line of credit	$ 6,000,000

Revenue Recognition (Details)

Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Total noninterest income	$ 3,358	$ 2,475	$ 5,787	$ 4,265
Service Charges on Deposits
Total noninterest income	225	417	586	803
Investment Services and Insurance Income
Total noninterest income	173	171	358	322
Title Insurance Income
Total noninterest income	472	406	843	682
ATM and check card fees
Total noninterest income	462	529	894	898
Other
Total noninterest income	123	153	283	281
Noninterest Income (in-scope of Topic 606)
Total noninterest income	1,455	1,676	2,964	2,986
Noninterest Income (out-of-scope of Topic 606)
Total noninterest income	$ 1,903	$ 799	$ 2,823	$ 1,279

Leases (Details)

Leases (Details) $ in Thousands	Jun. 30, 2020USD ($)
Leases
Lease liabilities	$ 882
Right-of-use assets	$ 867
Weighted average remaining lease term	4 years 6 months 29 days
Weighted average discount rate	3.46%

Leases (Details 1)

Leases (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Leases
Operating lease cost	$ 25	$ 32	$ 58	$ 64
Total lease cost	25	32	58	64
Cash paid for amounts included in the measurement of lease liabilities	$ 31	$ 38	$ 69	$ 75

Leases (Details 2)

Leases (Details 2) $ in Thousands	Jun. 30, 2020USD ($)
Leases
Six months ending December 31, 2020	$ 52
Twelve months ending December 31, 2021	127
Twelve months ending December 31, 2022	129
Twelve months ending December 31, 2023	93
Twelve months ending December 31, 2024	92
Thereafter	611
Total undiscounted cash flows	1,104
Discount	222
Lease liabilities	$ 882

Leases (Details Narrative)

Leases (Details Narrative)	Jun. 30, 2020USD ($)
Right-of-use asset	$ 867,000
Lease liability	882,000
January 1, 2019 [Member]
Right-of-use asset	1.03
Lease liability	$ 1,030,000

Mortgage Banking and Derivati_2

Mortgage Banking and Derivatives (Details Narrative) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Unpaid principal			$ 3,000
Outstanding debt	$ 19,800
Mortgage loan	20,000
Fair value of derivative instruments		$ 1,000
Notional amount		43,800
Other Liabilities
Fair value of forward sales	554	554
Notional debt amount	$ 63,800	$ 63,800

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - Subsequent Event [Member] $ in Millions	1 Months Ended
	Jul. 29, 2020USD ($)
Subordinated Note Purchase Agreements One [Member]
Note issued	$ 7
Interest rate	6.00%
Note description	The 2027 Notes will bear interest at 5.75% per annum, payable semi-annually in arrears. Beginning on July 31, 2022 through maturity, the 2027 Notes may be redeemed, at the Company’s option, on any scheduled interest payment date. The 2027 Notes will mature on July 31, 2027
Subordinated Note Purchase Agreements [Member]
Note issued	$ 5
Interest rate	5.75%