F&M BANK CORP (FMBM)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 net income was $2.26M ($0.64 EPS), up sharply from Q3 ($0.23) on higher net interest income (+$0.62M) and lower noninterest expenses (-$1.48M), aided by $0.5M of insurance proceeds related to a Q3 fraud event .
• Net interest margin expanded 14 bps sequentially to 2.91%, with earning asset yield rising to 5.41% and cost of funds edging down to 2.52% .
• Credit costs remained elevated: provision was $1.08M and net charge-offs were $934K (0.45% of average loans) as management adjusted ACL qualitative factors for macro, volume, and past due trends .
• The Board declared a quarterly dividend of $0.26 (paid Feb 28, 2025); FMBM reported robust liquidity and expects $69.8M in 2025 bond paydowns/maturities to fund loan growth .

What Went Well and What Went Wrong

What Went Well

• Net interest income increased to $9.11M (+$618K QoQ) and NIM expanded 14 bps to 2.91% on higher average cash and loan balances and lower short-term borrowings .
• Noninterest expenses fell $1.48M QoQ, primarily from $500K insurance proceeds offsetting the Q3 external fraud costs; salary and employee benefits also declined sequentially .
• CEO tone confident on strategic execution: “Strategic initiatives… drive strong results for 2024,” highlighting improvements in Wealth Management, F&M Mortgage, and VS Title; priority remains to “generate sufficient and sustainable profit” .

What Went Wrong

• Provision for credit losses rose to $1.08M (vs $0.90M in Q3), driven by $9.2M loan growth, $934K net charge-offs, and increased qualitative factors for economic conditions and past due trends .
• Noninterest income declined $66K QoQ on lower title insurance and other operating income, partially offset by card/interchange .
• Legal/professional and telecom/data processing expenses rose QoQ (+$221K and +$235K), partially offsetting overall expense improvements .

Financial Results

Note: Minor differences in certain Q3 metrics (e.g., efficiency ratio) exist between quarterly press releases due to footnote methodology (tax-equivalent basis in Q3 vs reported basis in Q4) .

Guidance Changes

No formal revenue, margin, or expense guidance ranges were provided in the Q4 materials; management emphasized continued growth and disciplined balance sheet execution .

Earnings Call Themes & Trends

No Q4 2024 earnings call transcript was available in our document catalog; themes below reflect management commentary from Q2–Q4 press releases.

Management Commentary

• “The ongoing reinvestment of maturities and cashflows from our securities portfolio into higher yielding investments and loans, along with our strong control of operational expenses, were the key drivers of our net income growth” .
• “Three business lines that showed remarkable improvement in 2024 are Wealth Management, F&M Mortgage, and VS Title. We look forward to seeing how they, and others, build on their success in the coming year” .
• “We remain committed to our number one priority, which is to generate sufficient and sustainable profit” .
• Liquidity and lending capacity: “Our financial strength and liquidity provide the capacity to make loans in 2025 and beyond…,” with scheduled $69.8M bond paydowns/maturities in 2025 .

Q&A Highlights

No Q4 2024 earnings call transcript or Q&A was found in the document set. We will monitor for any subsequent transcripts or investor presentations.

Estimates Context

Wall Street consensus estimates (S&P Global) for Q4 2024 EPS and revenue were unavailable from our data source at query time; therefore, we cannot assess beats/misses versus consensus for this quarter. We attempted retrieval but encountered a system limit error; we will update when accessible.

Key Takeaways for Investors

• Sequential earnings acceleration: EPS rose from $0.23 (Q3) to $0.64, driven by NIM expansion and lower expenses; normalization from Q3 one-time items and insurance recovery supports run-rate profitability .
• Margin momentum: NIM up 14 bps QoQ to 2.91%; earning asset yield up to 5.41% while cost of funds dipped to 2.52%—watch sustainability amid deposit mix and rate path .
• Credit costs elevated: Provision $1.08M and NCOs $934K (0.45%), with qualitative factor increases—asset quality bears monitoring, particularly auto and CRE segments cited as declining balances YoY .
• Liquidity strong: $243.0M on-balance liquidity, $172.7M FHLB capacity, and $69.8M 2025 bond paydowns provide funding flexibility for loan growth without overreliance on higher-cost sources .
• Deposit base resilient: Total deposits $1.20B (+$61.9M YoY), albeit with mix shift toward time deposits; uninsured deposits at 11.03%—a positive stability indicator .
• Non-GAAP disclosures: Tangible book value per share rose to $23.53 (non-GAAP) vs $21.55 in 2023; Q3 “core earnings” (non-GAAP) were disclosed to adjust for severance/fraud—investors should reconcile GAAP/non-GAAP when trendlining .
• Dividend maintained at $0.26; with improving profitability and liquidity, capital returns appear sustainable near-term, contingent on credit trends and operating leverage .

Cross-References and Clarifications

• Q4 expense improvement reflects insurance recovery and absence of Q3 one-time severance/fraud costs; management quantified the after-tax Q3 impact at ~$734K .
• Minor methodological differences exist between Q3 and Q4 reported efficiency ratios due to footnote treatment (tax-equivalent basis vs reported); numbers above cite each period’s release .

KPIs/Balance Sheet Notes

• Assets: $1.30B; loans: $839.9M (+$17.9M YoY); deposits: $1.20B (+$61.9M YoY); equity: $86.1M (TBVPS $23.53) .
• Loan mix YoY: increases in C&I (+$24.1M), residential mortgage (+$13.8M), and other construction (+$10.5M); declines in auto (-$18.7M) and CRE (-$14.2M) .