F&M BANK CORP (FMBM)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered accelerating profitability: net income rose to $3.0M and diluted EPS to $0.84, up 21% QoQ, with ROA 0.91% and ROE 12.81% driven by higher net interest income and lower noninterest expense .
• Net interest margin expanded 33 bps to 3.48% as earning asset yield improved and cost of funds fell; recovery of $601K in nonaccrual interest/fees and mix shifts in deposits were notable tailwinds .
• Loans grew $21.8M QoQ to $848.8M while deposits declined $3.6M QoQ; management projects sustained loan demand into Q3, supporting continued NII momentum .
• Asset quality mixed: NPLs rose to 0.90% of loans and net charge-offs increased to 0.25% of average loans; ACLL rose to 0.98% of loans amid growth and specific reserves, partially offset by improved securities unrealized losses .
• No Wall Street consensus estimates available via S&P Global; the primary narrative catalysts are NIM expansion, loan growth outlook, and disciplined expense control; dividend maintained at $0.26/share (4.3% implied yield at $22.00) .

What Went Well and What Went Wrong

What Went Well

• Net interest income climbed to $10.5M (+$1.1M QoQ) on loan growth and a $601K recovery of nonaccrual interest/fees; NIM expanded to 3.48% (+33 bps QoQ) as yield rose and cost of funds declined .
• Operating efficiency improved: noninterest expenses fell $812K QoQ to $8.7M, driven by lower salaries/benefits and broad-based cost discipline .
• Management emphasized sustained profitability and strengthening capital/tangible book value, citing “continued positive trends” across NIM, asset yields, cost of funds, ROE/ROA, and capital ratios; TBVPS reached $25.68, up 9.1% YTD .

What Went Wrong

• Asset quality pressures: NPLs/loans increased to 0.90% (from 0.84% at YE), and net charge-offs rose to 0.25% of average loans (vs. 0.09% in Q1), prompting a $1.2M provision (vs. net recovery in Q1) .
• Noninterest income dipped $55K QoQ to $2.8M as mortgage banking and wealth management softened, partially offset by title insurance and card/interchange .
• Deposits slipped $3.6M QoQ, continuing pressure on funding volumes even as cost of funds improved; time deposits were the main headwind .

Financial Results

Results vs Estimates (S&P Global)

• No consensus data available for EPS or revenue; FMBM appears not covered by sell-side on S&P Global for the periods assessed [GetEstimates: S&P Global values unavailable].

Segment Breakdown – Loan Portfolio ($USD Millions)

Key KPIs and Balance Sheet

Guidance Changes

Earnings Call Themes & Trends

Note: No Q2 2025 earnings call transcript or slides were found; themes reflect management’s press release commentary [ListDocuments search returned none].

Management Commentary

• “Most significant are the past four quarters of positive trends in the key categories of net income, net interest margin, yield on earning assets, cost of funds, return on average equity, return on average assets, and all capital ratios.” — CEO Mike Wilkerson .
• “During second quarter, loans grew by $21.8 million. We are currently projecting sustained loan demand into the third quarter.” .
• “Tangible book value of F&M shares increased for the third consecutive quarter… $25.681, an increase of 9.1%, or $2.15 per share year-to-date.” .
• “Overall, the F&M team remains focused on our highest priority, which is to generate sufficient and sustainable profit.” .

Q&A Highlights

• No Q2 2025 earnings call transcript available; therefore, no Q&A themes or clarifications to report [ListDocuments earnings-call-transcript returned none].

Estimates Context

• S&P Global consensus estimates for EPS and revenue were not available for FMBM for Q2 2025, Q1 2025, or Q2 2024; as a result, beat/miss analysis vs sell-side is not possible for this period [GetEstimates: S&P Global values unavailable].
• Implication: Model updates for investors should rely on company-reported drivers (NIM trajectory, loan demand, funding mix, credit costs) rather than consensus variance.

Key Takeaways for Investors

• NIM expansion and lower funding costs are the primary earnings drivers; the $601K recovery in nonaccrual interest/fees provided a one-time boost but structural margin improvement appears underway .
• Loan growth resumed strongly (+$21.8M QoQ) with management projecting sustained demand into Q3; watch deposit trends and mix to sustain NII gains .
• Credit costs normalized higher (provision $1.2M; NCOs 0.25%); asset quality remains manageable but warrants monitoring as growth continues .
• Expense discipline is taking hold (−$812K QoQ), supporting operating leverage even as noninterest income faced mix headwinds; continued focus on salaries/benefits and other categories should underpin margins .
• Capital and TBVPS are improving alongside earnings momentum; dividend maintained at $0.26/share (4.3% implied yield), signaling confidence in cash generation .
• With no consensus coverage, catalysts for stock reaction are likely narrative-driven: continued NIM gains, confirmation of loan demand, credit trend stability, and progress on deposit mix .
• Near-term: constructive setup into Q3 if margin expansion persists and credit costs stabilize; medium-term: thesis centers on profitable growth with disciplined funding and costs, plus gradual AFS portfolio improvement .

Additional Notes

• Documents read in full: Q2 2025 8-K and attached press release; Q1 2025 8-K and press release; Q4 2024 8-K and press release .
• No Q2 2025 earnings call transcript or slides found; no other company press releases specific to Q2 2025 earnings beyond the dividend announcement embedded in the release .