Executive Summary

Q3 2025 delivered steady profitability: EPS of $0.82 on net income of $2.9M, modestly down 2.4% QoQ on higher noninterest expense, and sharply higher YoY from $0.23 as NIM and earning-asset yields improved .
Net interest margin eased 12 bps QoQ to 3.36% (yield on earning assets -11 bps; cost of funds +3 bps), but remains well above Q3 2024’s 2.75%; loan growth of $23.5M supported interest income despite higher debt costs after sub debt repriced to SOFR+593 bps on Aug 1 (10.25%) .
Balance sheet trends positive: loans +$23.5M QoQ to $872.3M; deposits +$38.9M QoQ to $1.235B; TBVPS rose for the fourth straight quarter to $27.63; liquidity robust with $285.3M on-balance and ample contingent capacity .
No S&P Global consensus coverage was available for EPS or revenue; therefore, no beat/miss determination vs Street estimates. Results should be viewed against prior quarter and prior year trends [GetEstimates].

What Went Well and What Went Wrong

What Went Well
- Sustained profitability with improved YoY metrics: NIM 3.36% (vs 2.75% LY), ROAA 0.87% and ROAE 11.99%; EPS rose to $0.82 vs $0.23 LY on higher net revenue and lower funding costs vs 2024 .
- Healthy organic growth and mix: loans +$23.5M QoQ with strength in farmland and residential mortgage; deposits +$38.9M QoQ; TBVPS increased to $27.63, up 17.4% YTD .
- Management focus on fundamentals and sustainable profit: “generate sufficient and sustainable profit” remained the priority; CEO highlighted four straight quarters of positive trends in NIM, ROAA/ROAE, and leverage ratio .
What Went Wrong
- NIM compressed 12 bps QoQ to 3.36% as asset yields slipped 11 bps and cost of funds rose 3 bps; sub debt reset to 10.25% on Aug 1 also lifted long‑term debt expense .
- Higher noninterest expense (+$0.61M QoQ) pressured earnings; salary expense, card fees, and data processing all increased .
- Credit costs remained a headwind: provision of $0.54M (down from Q2 but positive), with net charge‑offs to average loans up to 0.49% (vs 0.25% in Q2; 0.32% LY) .

Financial Results

Quarterly results – sequential (oldest → newest)

Metric	Q1 2025	Q2 2025	Q3 2025
Total net revenue ($MM) = Net interest income + Noninterest income	$12.29 = 9.444 + 2.847	$13.32 = 10.527 + 2.792	$13.23 = 10.495 + 2.734
Diluted EPS ($)	$0.70	$0.84	$0.82
Net interest margin (%)	3.15%	3.48%	3.36%
ROAA (%)	0.76%	0.91%	0.87%
ROAE (%)	11.31%	12.81%	11.99%
Provision for credit losses ($MM)	(0.10)	1.19	0.54
Noninterest expense ($MM)	9.52	8.71	9.32

YoY snapshot – Q3 2024 vs Q3 2025 (oldest → newest)

Metric	Q3 2024	Q3 2025
Total net revenue ($MM) = Net interest income + Noninterest income	$11.25 = 8.493 + 2.758	$13.23 = 10.495 + 2.734
Diluted EPS ($)	$0.23	$0.82
Net interest margin (%)	2.75%	3.36%
Loans HFI (period-end, $MM)	$830.72	$872.31
Deposits (period-end, $MM)	$1,218.29	$1,235.34
Net charge-offs / avg loans (%)	0.32%	0.49%

Segment breakdown – Loan portfolio (Q3 2025)

Segment (Loans HFI)	Q3 2025 ($MM)
Residential mortgage	$240.14
Non-owner-occupied CRE	$114.38
Owner-occupied CRE	$92.30
Secured by farmland	$111.16
Residential construction	$31.81
Other construction & land dev.	$42.28
Commercial & industrial	$75.11
Automobile	$83.46
Home equity	$50.40
Multifamily	$14.62
Credit card & other consumer	$12.24
Other loans	$4.41
Total loans HFI	$872.31

KPIs and capital (Q3 2025)

NPLs/total loans: 0.85%
ACLL/total loans: 0.90%
Net charge-offs/avg loans: 0.49%
TBVPS: $27.63
Bank capital ratios: CET1 12.76%, Tier 1 12.76%, Total 13.69%, Leverage 8.69%

Guidance Changes

Metric	Period	Previous Guidance	Current Update	Change
Dividend per share	Q4 2025 (declared 10/22/25)	$0.26 (Q1 & Q2 declarations)	$0.26 declared; ~3.9% yield at $26.95	Maintained
Loan demand	Q3 2025	Projected sustained demand into Q3	Achieved: loans +$23.5M QoQ; no explicit forward outlook provided	Achieved/No forward guide
Securities paydowns	Remainder 2025	~$26.4M expected	Liquidity update: $285.3M on-balance; FHLB $168.3M available; Fed funds lines $90M	Liquidity detail updated
Subordinated debt	Post-Q3	—	Issued $10.0M 7.55% fixed-to-float sub notes (Tier 2); intent to redeem existing sub debt; proceeds for general corporate purposes	New issuance
Legacy sub debt rate	From Aug 1, 2025	6.00% fixed to 7/31/25	Floats at SOFR + 593 bps (10.25% at reset); raised LT debt interest in Q3	Higher funding cost

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript was available in our search; themes below draw from quarterly press releases.

Topic	Q1 2025	Q2 2025	Q3 2025	Trend
Net interest margin trajectory	NIM +24 bps QoQ to 3.15% on lower funding costs	NIM +33 bps QoQ to 3.48% aided by loan growth and nonaccrual recoveries	NIM -12 bps QoQ to 3.36% as asset yields slipped and funds cost rose	Stabilizing above 3.3% after rebound
Funding costs & debt	Funding cost fell 22 bps QoQ; mix shift from time deposits	Cost of funds down to 2.11%; expected $26.4M securities cash flows	Sub debt reset to 10.25% lifted interest expense; cost of funds +3 bps QoQ	Slight pressure from higher-rate sub debt
Credit quality & provisioning	Net recovery of $0.10M; NCOs 0.09%	Provision $1.19M; NCOs 0.25%	Provision $0.54M; NCOs 0.49%; NPLs 0.85%	Elevated but manageable
Loan mix and growth	Auto/C&I down; residential & farmland up	Loans +$21.8M QoQ; mix shift to farm/residential/CRE	Loans +$23.5M QoQ; continued strength in mortgage/farmland	Broad-based growth
Liquidity & securities	Unrealized loss improved $4.5M; liquidity $191.8M	Unrealized loss improved to $29.3M; liquidity $211.6M	Unrealized loss improved to $23.2M; on-balance liquidity $285.3M	Improving flexibility

Management Commentary

“We remain focused on our highest priority, which is to generate sufficient and sustainable profit. Doing so gives us the financial strength and liquidity to continue to make loans that support both businesses and individuals in the Shenandoah Valley.” – CEO Mike Wilkerson, Q3 release .
“Most significant, are four straight 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 the Bank’s leverage ratio.” – CEO Mike Wilkerson, Q3 release .
“We are currently projecting sustained loan demand into the third quarter. This reflects the strength of our market, as well as the hard work of our lenders.” – CEO Mike Wilkerson, Q2 release .
“The management team remains committed to the fundamentals of disciplined balance sheet control, safety and soundness of the loan portfolio, as well as the effective management of cost of funds and net interest margin.” – CEO Mike Wilkerson, Q1 release .

Q&A Highlights

No Q3 2025 earnings call transcript was available; the company did not provide a public Q&A transcript in our document search. We relied on the Q3, Q2, and Q1 earnings press releases for qualitative themes .

Estimates Context

S&P Global consensus estimates for EPS and revenue were not available for FMBM for Q3 2025; “Primary EPS Consensus Mean” and “Revenue Consensus Mean” had no estimate data, indicating limited Street coverage for the name. As such, no beat/miss vs consensus can be determined [GetEstimates].

Key Takeaways for Investors

Earnings quality steady amid modest NIM compression: QoQ EPS slippage was driven by higher noninterest expense and slightly higher funding costs; nonetheless, YoY profitability remains materially stronger on improved NIM and asset yields .
Core growth intact: Loans grew $23.5M QoQ and deposits $38.9M QoQ, demonstrating healthy organic momentum and funding stability; TBVPS rose to $27.63, extending a four‑quarter uptrend .
Funding cost watch item: The Aug 1 reset of legacy sub debt to 10.25% and new 7.55% sub notes issued post‑quarter could pressure interest expense; management intends to redeem existing sub debt with proceeds, mitigating some impact over time .
Credit costs elevated but manageable: Provision normalized from Q2’s spike; NCOs rose to 0.49% with NPLs at 0.85% and ACLL at 0.90% of loans—levels consistent with a conservative reserve stance amid mix shifts .
Liquidity and capital provide resilience: $285.3M on-balance liquidity plus FHLB and Fed facilities, and strong bank-level capital ratios (CET1 12.76%, Total 13.69%) support growth and risk absorption capacity .
Near‑term setup: With no Street estimates, trading may hinge on intra‑quarter signs of NIM stability, funding mix, and credit normalization. Continued loan growth and controlled expenses are key to sustain mid‑teens ROE levels demonstrated in recent quarters .

Notes:

Primary sources read in full: Q3 2025 8-K & earnings press release (Exhibit 99.1), plus Q2 and Q1 2025 8‑Ks and press releases .
No Q3 2025 earnings call transcript was available in the document system; the analysis relies on the company’s press releases for qualitative commentary .

F&M BANK CORP (FMBM)·Q3 2025 Earnings Summary