F&M Bank Corp. Net Income Soars 269% on Strong Interest Gains

TL;DR

**FMBM is crushing it, with net income up 269% this quarter – definitely a buy!**

AI Summary

F&M BANK CORP (FMBM) reported a significant increase in net income for the three and nine months ended September 30, 2025. Net income for the three-month period surged to $2.924 million, a 269% increase from $0.792 million in the prior year, while nine-month net income rose 66% to $8.341 million from $5.025 million. This growth was primarily driven by a substantial increase in net interest income, which climbed 23.6% to $10.495 million for the quarter and 22.7% to $30.465 million for the nine months, largely due to higher interest and fees on loans held for investment and interest from securities available for sale. Total assets increased to $1.358 billion as of September 30, 2025, up from $1.302 billion at December 31, 2024. The allowance for credit losses decreased to $7.848 million from $8.129 million, reflecting improved credit quality. Strategic changes included the transfer of operations from F&M Mortgage to the Bank in May 2025, streamlining operations. Risks include the determination of the allowance for credit losses, which is susceptible to significant change.

Why It Matters

This robust performance from F&M Bank Corp. signals strong operational efficiency and effective interest rate management, which is crucial for investors in the current economic climate. The significant increase in net interest income, despite a competitive banking landscape, suggests FMBM is successfully leveraging its loan portfolio and investment securities. For employees, this financial health could translate into job security and potential growth opportunities. Customers may benefit from a more stable and competitive banking partner. In the broader market, FMBM's results could indicate resilience among regional banks, potentially influencing investor sentiment towards the sector.

Risk Assessment

Risk Level: low — The company's risk level is low, evidenced by a decrease in the allowance for credit losses to $7.848 million at September 30, 2025, from $8.129 million at December 31, 2024, indicating improved credit quality. Additionally, the provision for credit losses for loans decreased to $595 thousand for the three months ended September 30, 2025, from $869 thousand in the prior year, further supporting a low-risk profile.

Analyst Insight

Investors should consider FMBM's strong net income growth and efficient interest rate management as positive indicators. The significant increase in net interest income and improved credit quality suggest a well-managed financial institution. Monitor future filings for sustained growth in net interest income and continued prudent management of credit risk.

Financial Highlights

revenue

$10.495M

total Assets

$1.358B

total Debt

$7.000M

net Income

$2.924M

eps

$0.82

cash Position

$83.935M

revenue Growth

+23.6%

Revenue Breakdown

Key Numbers

• $2.924M — Net Income (Q3 2025) (Increased 269% from $0.792M in Q3 2024)
• $8.341M — Net Income (9M 2025) (Increased 66% from $5.025M in 9M 2024)
• $10.495M — Net Interest Income (Q3 2025) (Increased 23.6% from $8.493M in Q3 2024)
• $30.465M — Net Interest Income (9M 2025) (Increased 22.7% from $24.820M in 9M 2024)
• $1.358B — Total Assets (Sep 30, 2025) (Increased from $1.302B at Dec 31, 2024)
• $7.848M — Allowance for Credit Losses (Sep 30, 2025) (Decreased from $8.129M at Dec 31, 2024)
• $0.82 — Diluted EPS (Q3 2025) (Increased from $0.23 in Q3 2024)
• $2.35 — Diluted EPS (9M 2025) (Increased from $1.44 in 9M 2024)
• $595K — Provision for Credit Losses - Loans (Q3 2025) (Decreased from $869K in Q3 2024)
• $1.235B — Total Deposits (Sep 30, 2025) (Increased from $1.195B at Dec 31, 2024)

Key Players & Entities

• F&M BANK CORP. (company) — Registrant and parent company
• Farmers & Merchants Bank (company) — Subsidiary of F&M Bank Corp.
• VBS Mortgage, LLC (company) — Subsidiary whose operations were transferred to the Bank
• VSTitle, LLC (company) — Subsidiary of F&M Bank Corp.
• $2.924 million (dollar_amount) — Net income for the three months ended September 30, 2025
• $0.792 million (dollar_amount) — Net income for the three months ended September 30, 2024
• $8.341 million (dollar_amount) — Net income for the nine months ended September 30, 2025
• $5.025 million (dollar_amount) — Net income for the nine months ended September 30, 2024
• $1.358 billion (dollar_amount) — Total assets as of September 30, 2025
• $7.848 million (dollar_amount) — Allowance for credit losses as of September 30, 2025

FAQ

Risk Factors

• Allowance for Credit Losses Volatility [medium — financial]: The allowance for credit losses is susceptible to significant change based on economic conditions and loan portfolio performance. The allowance decreased to $7.848 million as of September 30, 2025, from $8.129 million at December 31, 2024, indicating improved credit quality or a change in estimation methodology.
• Integration of Mortgage Operations [medium — operational]: The transfer of F&M Mortgage operations to the Bank in May 2025 aims to streamline operations. Potential operational risks include integration challenges, system compatibility, and ensuring seamless customer experience during and after the transition.
• Interest Rate Sensitivity [medium — market]: Fluctuations in interest rates can impact net interest income. While net interest income increased by 23.6% in Q3 2025, sustained changes in interest rates could affect future profitability.

Industry Context

The banking industry is characterized by intense competition, evolving regulatory landscapes, and sensitivity to interest rate movements. Banks are increasingly focused on operational efficiency and leveraging technology to enhance customer experience and manage risk. F&M Bank Corp operates within this dynamic environment, aiming to grow its loan portfolio and deposit base while managing credit and interest rate risks.

Regulatory Implications

Banks are subject to stringent regulatory oversight concerning capital adequacy, liquidity, and risk management. Changes in accounting standards or regulatory interpretations, particularly regarding loan loss provisioning, can significantly impact financial reporting and capital requirements. F&M Bank Corp's management of its allowance for credit losses and compliance with banking regulations are critical.

What Investors Should Do

1. Monitor net interest margin trends
2. Analyze the trend in allowance for credit losses
3. Evaluate the impact of mortgage operation integration

Key Dates

• 2025-09-30: End of Q3 2025 — Reported significant net income growth of 269% and net interest income increase of 23.6%.
• 2025-05-01: Transfer of F&M Mortgage operations — Streamlined operations by integrating mortgage services directly into the bank.
• 2025-12-31: End of Fiscal Year 2024 — Baseline for comparison; Total Assets were $1.302B and Allowance for Credit Losses was $8.129M.

Glossary

Allowance for credit losses

An estimate of the amount of uncollectible loans in a bank's portfolio. (A decrease suggests improved credit quality or a change in estimation, impacting reported net loan values and provision expenses.)

Net interest income

The difference between interest income generated by a bank and the interest paid out to its depositors and lenders. (The primary driver of F&M Bank's profitability, showing strong growth in the reported periods.)

Securities available for sale

Investments in debt or equity securities that are not classified as held-to-maturity or trading securities, and are reported at fair value. (Interest income from these securities contributed significantly to the bank's revenue growth.)

Loans held for investment

Loans that a bank intends to hold until maturity, generating interest income over their life. (This category represents the largest asset on the balance sheet and is the primary source of interest income.)

Year-Over-Year Comparison

F&M Bank Corp. has demonstrated robust performance compared to the prior year. Net income for Q3 2025 surged by 269% year-over-year, driven by a 23.6% increase in net interest income, primarily from loans and securities. Total assets grew to $1.358 billion from $1.302 billion at year-end 2024. The allowance for credit losses decreased, reflecting improved credit quality, and provision for credit losses on loans also saw a reduction. Diluted EPS saw a substantial increase to $0.82 from $0.23.

Key Financial Figures

• $5 — vember 4, 2025 Common Stock, par value $5 per share 3,556,658 shares F & M BANK
• $1,279 — ecurities, net of income tax expense of $1,279 and $2,213 for the three months and $2,
• $2,213 — net of income tax expense of $1,279 and $2,213 for the three months and $2,530 and $2,
• $2,530 — 279 and $2,213 for the three months and $2,530 and $2,402 for the nine months ended Se
• $2,402 — 213 for the three months and $2,530 and $2,402 for the nine months ended September 30,

Filing Documents

• fmbm_10q.htm (10-Q) — 3218KB
• fmbm_ex311.htm (EX-31.1) — 13KB
• fmbm_ex312.htm (EX-31.2) — 13KB
• fmbm_ex32.htm (EX-32) — 4KB
• 0001654954-25-012972.txt ( ) — 14033KB
• fmbm-20250930.xsd (EX-101.SCH) — 65KB
• fmbm-20250930_lab.xml (EX-101.LAB) — 329KB
• fmbm-20250930_cal.xml (EX-101.CAL) — 61KB
• fmbm-20250930_pre.xml (EX-101.PRE) — 318KB
• fmbm-20250930_def.xml (EX-101.DEF) — 212KB
• fmbm_10q_htm.xml (XML) — 4365KB

Financial Statements

Financial Statements 3 Consolidated Balance Sheets – September 30, 2025 and December 31, 2024 3 Consolidated Statements of Income – Three Months Ended September 30, 2025 and 2024 4 Consolidated Statements of Income – Nine Months Ended September 30, 2025 and 2024 5 Consolidated Statements of Comprehensive Income – Three and Nine Months Ended September 30, 2025 and 2024 6 Consolidated Statements of Changes in Shareholders' Equity - Three and Nine Months Ended September 30, 2025 and 2024 7 Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2025 and 2024 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 34 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 45 Item 4.

Controls and Procedures

Controls and Procedures 45 Part II Other Information Item 1.

Legal Proceedings

Legal Proceedings 46 Item 1A.

Risk Factors

Risk Factors 46 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 46 Item 3. Defaults Upon Senior Securities 46 Item 4. Mine Safety Disclosures 46 Item 5. Other Information 46 Item 6. Exhibits 47

Signatures

Signatures 48 Certifications 2 Table of Contents

Financial Information

Part I Financial Information

Financial Statements

Item 1 Financial Statements F & M BANK CORP. Consolidated Balance Sheets (Dollars in thousands, except share data) September 30, December 31, 2025 2024* (Unaudited) Assets Cash and due from banks $ 18,862 $ 18,685 Money market funds and interest-bearing deposits in other banks 982 298 Federal funds sold 64,091 37,524 Cash and cash equivalents 83,935 56,507 Securities available for sale, at fair value 329,423 327,670 Other investments 2,254 2,249 Loans held for sale, at fair value 1,288 2,283 Loans held for investment, net of deferred fees and costs 872,308 839,949 Less: allowance for credit losses ( 7,848 ) ( 8,129 ) Net loans held for investment 864,460 831,820 Bank premises and equipment, net 21,568 22,192 Other real estate owned - 77 Interest receivable 4,929 4,939 Goodwill 3,082 3,082 Bank owned life insurance 24,191 23,607 Deferred tax asset, net 6,857 9,465 Other assets 16,122 18,120 Total Assets $ 1,358,109 $ 1,302,011 Liabilities Deposits: Noninterest bearing $ 280,937 $ 260,301 Interest bearing 954,404 934,804 Total deposits 1,235,341 1,195,105 Long-term debt 7,000 6,975 Other liabilities 14,275 13,793 Total Liabilities 1,256,616 1,215,873 Commitments and contingencies Shareholders' Equity Common stock, $ 5 par value, 6,000,000 shares authorized, 3,559,084 (2025) and 3,525,649 (2024) shares issued and outstanding 17,451 17,383 Additional paid in capital 11,661 11,463 Retained earnings 90,241 84,669 Accumulated other comprehensive loss ( 17,860 ) ( 27,377 ) Total Shareholders' Equity 101,493 86,138 Total Liabilities and Shareholders' Equity $ 1,358,109 $ 1,302,011 *2024 derived from audited consolidated financial statements. See Notes to Consolidated Financial Statements 3 Table of Contents F & M BANK CORP. Consolidated Statements of Income (Dollars in thousands, except shar

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