F&M Bank Posts Positive Results
Timberville-Based Company Keeps Improving Bottom Line
Posted: January 30, 2013
Left to right: Alice Grow and Frances Foltz check credit card payments on Monday at Farmers and Merchants Bank in Timberville. (Photo by Michael Reilly / DN-R)
The Timberville-based community bank’s year-end financial results for 2012 show a net income increase of 4.54 percent over the previous year, to $4.901 million.
Fourth-quarter earnings, released along with the annual results on Thursday, were $1.244 million, compared to $1.433 million during the same period in 2011.
As of Dec. 31, Farmers and Merchants had total assets of $596.9 million, up from $566.7 million in 2011. It has nine banking locations in Rockingham, Page and Shenandoah counties, along with two loan production offices in Penn Laird and Fishersville and a subsidiary, VBS Mortgage, in Harrisonburg.
At a meeting earlier this month, the bank’s board of directors approved a fourth-quarter dividend of 17 cents per share, up a penny from the prior quarter and year, according to a press release from the bank. It represents a 4.25 percent annual yield, to be paid on Feb. 8, the release says.
Dean Withers, president and CEO of Farmers and Merchants, said it was a record year for earnings, but the company still has yet to reach its performance level prior to the recession.
While the earnings are higher than ever, the bank also is much larger than before, reducing the return on investment, Withers explained.
“We were a $350 million bank, and now we’re almost $600 million,” he said.
Other highlights from the past year include the reduction in nonperforming loans, which dipped to $13.38 million from $14.7 million the year before. Nonperforming loans, such as past due accounts the bank isn’t earning interest on, increased dramatically during the recession.
“I would say you’re probably looking at another two years before you work through it,” Withers said. “It doesn’t mean you’re not performing, and the trend continues to go down, but it’s probably going to take that long before we would feel we were back to a normal level.”
Withers said the weakness of the real estate market continues to be a challenge, as does adapting to new regulations.
But on the bright side, the economy is recovering, albeit slowly, he added.
“The economy is coming back. The real estate market is showing signs of turning back,” he said. “Certainly, some of the problem real estate loans and foreclosures in general, those are getting out of the system.”
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