F&M BANK CORP [FMBM] Filings

10-Q 1 fmbm_10q.htm FORM 10-Q fmbm_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

☒	Quarterly report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2022.

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 000-13273

F&M BANK CORP.

Virginia

54-1280811

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

P. O. Box 1111

Timberville, Virginia 22853

(Address of Principal Executive Offices) (Zip Code)

(540) 896-8941

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files. Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

State the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Class		Outstanding at November 7, 2022
Common Stock, par value ‑ $5		3,454,455 shares

F & M BANK CORP.

Index

		Page

Part I	Financial Information	3

Item 1.	Financial Statements	3

	Consolidated Balance Sheets – September 30, 2022 and December 31, 2021	3

	Consolidated Statements of Income – Three Months Ended September 30, 2022 and 2021	4

	Consolidated Statements of Income – Nine Months Ended September 30, 2022 and 2021	5

	Consolidated Statements of Comprehensive (Loss) Income – Three and Nine Months Ended September 30, 2022 and 2021	6

	Consolidated Statements of Changes in Stockholders’ Equity – Three and Nine Months Ended September 30, 2022 and 2021	7

	Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2022 and 2021	9

	Notes to Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	46

Item 4.	Controls and Procedures	46

Part II	Other Information	47

Item 1.	Legal Proceedings	47

Item 1a.	Risk Factors	47

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47

Item 3.	Defaults upon Senior Securities	47

Item 4.	Mine Safety Disclosures	47

Item 5.	Other Information	47

Item 6.	Exhibits	47

Signatures		48

Certifications

Table of Contents

Part I Financial Information

Item 1 Financial Statements

F & M BANK CORP.

Consolidated Balance Sheets

(Dollars in thousands, except per share data)

	September 30,			December 31,
	2022			2021*
	*(Unaudited)*
Assets
Cash and due from banks	$	17,305		$	8,516
Money market funds and interest-bearing deposits in other banks		312			2,938
Federal funds sold		12,695			76,667
Cash and cash equivalents		30,312			88,121

Securities:
Held to maturity, at amortized cost – fair value of $125 in 2022 and 2021, respectively		125			125
Available for sale, at fair value		430,460			403,882
Other investments		9,709			9,210
Loans held for sale, at fair value		3,310			4,887
Loans held for investment, net of deferred fees and costs		699,592			662,421
Less: allowance for loan losses		(7,513	)		(7,748	)
Net loans held for investment		692,079			654,673

Bank premises and equipment, net		18,933			17,063
Bank premises held for sale		300			300
Interest receivable		3,660			3,117
Goodwill		3,082			3,082
Bank owned life insurance		23,381			22,878
Other assets		21,298			12,004
Total Assets	$	1,236,649		$	1,219,342

Liabilities
Deposits:
Noninterest bearing	$	300,394		$	280,993
Interest bearing		817,000			799,302
Total deposits		1,117,394			1,080,295

Short-term debt		30,000			-
Long-term debt		6,879			21,772
Other liabilities		16,699			16,819
Total liabilities		1,170,972			1,118,886

Commitments and contingencies

Stockholders’ Equity
Common stock, $5 par value, 6,000,000 shares authorized, 200,000 designated, 3,453,799 and 3,430,175 shares issued and outstanding (26,767 and 15,869 unvested restricted shares)		17,135			17,071
Additional paid in capital – common stock		10,467			10,127
Retained earnings		82,279			78,350
Accumulated other comprehensive loss		(44,204	)		(5,092	)
Total stockholders’ equity		65,677			100,456
Total liabilities and stockholders’ equity	$	1,236,649		$	1,219,342

*2021 derived from audited consolidated financial statements.

See Notes to Consolidated Financial Statements

Table of Contents

F & M BANK CORP.

Consolidated Statements of Income

(Dollars in thousands)

(Unaudited)

	Three Months Ended
	September 30,
*Interest and Dividend income*	2022			2021
Interest and fees on loans held for investment	$	8,881		$	8,201
Interest and fees on loans held for sale		29			24
Interest from money market funds and federal funds sold		48			55
Interest on debt securities		2,054			775
Total interest and dividend income		11,012			9,055

*Interest expense*
Total interest on deposits		1,378			851
Interest from short-term debt		158			-
Interest from long-term debt		345			238
Total interest expense		1,881			1,089

*Net interest income*		9,131			7,966

*Provision for (Recovery of) Loan Losses*		-			(235	)
*Net Interest Income After Provision for (Recovery of) Loan Losses*		9,131			8,201

*Noninterest income*
Service charges on deposit accounts		255			300
Investment services and insurance income, net		190			210
Mortgage banking income, net		328			1,176
Title insurance income		376			556
Income on bank owned life insurance		178			169
Low income housing partnership losses		(205	)		(215	)
ATM and check card fees		628			595
Other operating income		263			165
Total noninterest income		2,013			2,956

*Noninterest expense*
Salaries		3,924			3,655
Employee benefits		1,131			1,047
Occupancy expense		342			295
Equipment expense		280			292
FDIC insurance assessment		215			105
OREO expense, net		59			-
Advertising expense		193			221
Legal and professional fees		189			267
ATM and check card fees		321			276
Telecommunication and data processing expense		619			613
Directors fees		131			111
Bank franchise tax		124			180
Other operating expenses		1,075			1,439
Total noninterest expense		8,603			8,501

*Income before income taxes*		2,541			2,656
Income tax expense		237			319
*Net Income*	$	2,304		$	2,337
Dividends paid/accumulated on preferred stock		-			65
*Net income available to common stockholders*	$	2,304		$	2,272

*Per Common Share Data*
Net income – basic	$	0.67		$	0.71
Net income – diluted	$	0.67		$	0.66
Cash dividends on common stock		0.26			0.26
Weighted average common shares outstanding – basic		3,453,767			3,210,577
Weighted average common shares outstanding – diluted		3,453,767			3,415,904

See Notes to Consolidated Financial Statements

Table of Contents

F & M BANK CORP.

Consolidated Statements of Income

(Dollars in thousands)

(Unaudited)

	Nine Months Ended
	September 30,
*Interest and Dividend income*	2022			2021
Interest and fees on loans held for investment	$	24,384		$	24,588
Interest and fees on loans held for sale		90			161
Interest from money market funds and federal funds sold		87			99
Interest on debt securities		5,521			1,772
Total interest and dividend income		30,082			26,620

*Interest expense*
Total interest on deposits		3,060			2,464
Interest from short-term debt		204			-
Interest from long-term debt		628			762
Total interest expense		3,892			3,226

*Net interest income*		26,190			23,394

*Provision for (Recovery of) Loan Losses*		150			(2,210	)
*Net Interest Income After Provision for (Recovery of) Loan Losses*		26,040			25,604

*Noninterest income*
Service charges on deposit accounts		836			839
Investment services and insurance income, net		639			736
Mortgage banking income, net		1,707			3,874
Title insurance income		1,215			1,607
Income on bank owned life insurance		522			502
Low-income housing partnership losses		(613	)		(646	)
ATM and check card fees		1,823			1,715
Loss on sale of securities		(97	)		-
Other operating income		735			770
Total noninterest income		6,767			9,397

*Noninterest expense*
Salaries		11,526			10,540
Employee benefits		3,556			3,319
Occupancy expense		1,028			933
Equipment expense		880			888
FDIC insurance assessment		496			309
OREO expense, net		59			-
Advertising expense		599			554
Legal and professional fees		612			712
ATM and check card fees		954			827
Telecommunication and data processing expense		2,205			1,735
Directors fees		424			369
Bank franchise tax		456			532
Impairment of long-lived assets		-			171
Other operating expenses		3,111			3,742
Total noninterest expense		25,906			24,631

*Income before income taxes*		6,901			10,370
Income tax expense		280			1,012
*Net Income*	$	6,621		$	9,358
Dividends paid/accumulated on preferred stock		-			196
*Net income available to common stockholders*	$	6,621		$	9,162

*Per Common Share Data*
Net income – basic	$	1.92		$	2.86
Net income – diluted	$	1.92		$	2.72
Cash dividends on common stock		0.78			0.78
Weighted average common shares outstanding – basic		3,447,470			3,207,916
Weighted average common shares outstanding – diluted		3,447,470			3,436,034

See Notes to Consolidated Financial Statements

Table of Contents

F & M BANK CORP.

Consolidated Statements of Comprehensive (Loss) Income

(Dollars in thousands)

(Unaudited)

	Nine Months Ended September 30,						Three Months Ended September 30,
	2022			2021			2022			2021

Net Income	$	6,621		$	9,358		$	2,304		$	2,337

Other comprehensive (loss):
Unrealized holding (losses) on available-for sale securities		(49,606	)		(1,129	)		(9,879	)		(72	)
Tax effect		10,417			237			2,075			15
Unrealized holding (losses), net of tax		(39,189	)		(892	)		(7,804	)		(57	)

Less:
Reclassifications adjustment for losses included in net income		97			-			-			-
Tax effect		20			-			-			-
Realized losses on sale of available-for sale securities, net		77			-			-			-

Total other comprehensive (loss)		(39,112	)		(892	)		(7,804	)		(57	)

Total comprehensive (loss) income	$	(32,491	)	$	8,466		$	(5,500	)	$	2,280

See Notes to Consolidated Financial Statements

Table of Contents

F & M BANK CORP.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Dollars in thousands)

(Unaudited)

Three Months Ended September 30, 2022 and 2021.

	Preferred Stock		Common Stock		Additional Paid in Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total

*Balance June 30, 2021*	$	4,558	$	16,047	$	7,034	$	76,425		$	(3,852	)	$	100,212
Net income		-		-		-		2,337			-			2,337
Other comprehensive (loss)		-		-		-		-			(57	)		(57	)
Dividends on preferred stock ($.32 per share)		-		-		-		(65	)		-			(65	)
Dividends on common stock ($.26 per share)		-		-		-		(839	)		-			(839	)
Common stock issued (2,235 shares)		-		11		53		-			-			64
Stock-based compensation expense		-		-		26		-			-			26
*Balance, September 30, 2021*	$	4,558	$	16,058	$	7,113	$	77,858		$	(3,909	)	$	101,678

*Balance June 30, 2022*	$	-	$	17,121	$	10,351	$	80,878		$	(36,400	)	$	71,950
Net income		-		-		-		2,304			-			2,304
Other comprehensive (loss)		-		-		-		-			(7,804	)		(7,804	)
Dividends on common stock ($.26 per share)		-		-		-		(903	)		-			(903	)
Common stock issued (2,877 shares)		-		14		55		-			-			69
Stock-based compensation expense		-		-		61		-			-			61
*Balance, September 30, 2022*	$	-	$	17,135	$	10,467	$	82,279		$	(44,204	)	$	65,677

See Notes to Consolidated Financial Statements

Table of Contents

F & M BANK CORP.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Dollars in thousands)

(Unaudited)

Nine Months Ended September 30, 2022 and 2021.

	Preferred Stock		Common Stock		Additional Paid in Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total

*Balance, December 31, 2020*	$	4,558	$	16,017	$	6,866	$	71,205		$	(3,017	)	$	95,629
Net Income		-		-		-		9,358			-			9,358
Other comprehensive (loss)		-		-		-		-			(892	)		(892	)
Dividends on preferred stock ($.96 per share)		-		-		-		(196	)		-			(196	)
Dividends on common stock ($.78 per share)		-		-		-		(2,509	)		-			(2,509	)
Common stock issued (6,870 shares)		-		37		157		-			-			191
Common stock issued for Stock-based Compensation (1,332 shares)		-		7		29		-			-			36
Stock-based compensation expense		-		-		61		-			-			61
*Balance, September 30, 2021*	$	4,558	$	16,058	$	7,113	$	77,858		$	(3,909	)	$	101,678

*Balance, December 31, 2021*	$	-	$	17,071	$	10,127	$	78,350		$	(5,092	)	$	100,456
Net Income		-		-		-		6,621			-			6,621
Other comprehensive (loss)		-		-		-		-			(39,112	)		(39,112	)
Dividends on common stock ($.78 per share)		-		-		-		(2,692	)		-			(2,692	)
Common stock issued (7,661 shares)		-		38		175		-			-			213
Common stock issued for Stock-based Compensation (1,145 shares)		-		26		30		-			-			56
Stock-based compensation expense		-		-		135		-			-			135
*Balance, September 30, 2022*	$	-	$	17,135	$	10,467	$	82,279		$	(44,204	)	$	65,677

See Notes to Consolidated Financial Statements

Table of Contents

F & M BANK CORP.

Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2022			2021
*Cash flows from operating activities*
Net income	$	6,621		$	9,358
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		833			891
Amortization of intangibles		28			53
Amortization of securities		19,173			739
Proceeds from loans held for sale originated		116,448			170,129
Loans held for sale originated		(112,954	)		(155,044	)
Gain on sale of loans held for sale originated		(1,917	)		(4,388	)
Provision for (Recovery of) loan losses		150			(2,210	)
(Increase) decrease in interest receivable		(543	)		148
Decrease (increase) in deferred taxes		9,179			(138	)
(Decrease) in taxes payable		-			(469	)
Decrease in other assets		1,039			2,040
(Decrease) in accrued expenses		(9,244	)		(1,609	)
Amortization of limited partnership investments		613			658
Amortization of debt issuance costs		107			24
Income from life insurance investment		(522	)		(502	)
Loss on the sale of investment securities		97			-
(Gain) on the sale of fixed assets		(10	)		-
Stock-based compensation expense		135			61
Loss on sale and valuation adjustments for other real estate owned and bank premises held for sale		59			171
Net cash provided by operating activities		29,292			19,912
*Cash flows from investing activities*
Purchase of investments available for sale and other investments		(108,057	)		(179,735	)
Proceeds from maturity of investments available for sale		4,000			13,321
Proceeds from the sale of investments available for sale		8,699			-
(Investment in) proceeds from the redemption of restricted stock, net		(891	)		790
(Investment in) limited partnership		(220	)		-
Net (increase) decrease in loans held for investment		(37,753	)		5,664
Net decrease in loans held for sale participations		-			44,372
Proceeds from the sale of fixed assets		27			150
Net purchase of property and equipment		(2,720	)		(496	)
Proceeds from the sale of other real estate owned		138
Proceeds from life insurance benefits		-			421
Cash received in branch acquisition (net of cash paid)		-			13,946
Net cash (used in) investing activities		(136,777	)		(101,567	)
*Cash flows from financing activities*
Net change in deposits		37,099			197,764
Net change in short-term debt		30,000			-
Dividends paid in cash		(2,692	)		(2,705	)
Proceeds from issuance of common stock		269			227
Repayments of long-term debt		(15,000	)		(11,462	)
Net cash provided by financing activities		49,676			183,824
*Net (decrease) increase in Cash and Cash Equivalents*		(57,809	)		102,169
*Cash and cash equivalents, beginning of period*		88,121			78,408
*Cash and cash equivalents, end of period*	$	30,312		$	180,577
*Supplemental Cash Flow information:*
Cash paid for: Interest	$	4,031		$	3,578
Taxes	$	-		$	2,012
*Supplemental non-cash disclosures:*
Change in unrealized (loss) on securities available for sale	$	(49,509	)	$	(1,129	)
Transfer from loans to other real estate owned	$	197		$	-

Branch purchase:
Tangible assets acquired (net of cash received)	$	-		$	61
Identifiable intangible assets acquired	$	-		$	73
Liabilities assumed	$	-		$	14,044

See Notes to Consolidated Financial Statements

Table of Contents

Notes to the Consolidated Financial Statements

Note 1. Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying unaudited consolidated financial statements include the accounts of Farmers & Merchants Bank, TEB Life Insurance Company, Farmers & Merchants Financial Services, Inc., VBS Mortgage, LLC (dba F&M Mortgage), and VSTitle, LLC and were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for the interim financial information and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”).

The accompanying unaudited consolidated financial statements include the accounts of the Company, the Bank and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Nature of Operations

The Company, through its subsidiary Farmers & Merchants Bank (the “Bank”), operates under a charter issued by the Commonwealth of Virginia and provides commercial banking services. As a state chartered bank, the Bank is subject to regulation by the Virginia Bureau of Financial Institutions and the Federal Reserve Bank. The Bank provides services to customers primarily in the counties of Rockingham, Shenandoah, and Augusta, and the cities of Harrisonburg, Staunton, Waynesboro and Winchester in Virginia. Services are provided at thirteen branch offices and a Dealer Finance Division. The Company offers insurance, mortgage lending, title insurance and financial services through its subsidiaries, TEB Life Insurance Company, Farmers & Merchants Financial Services, Inc. (“FMFS”), F&M Mortgage, and VSTitle, LLC (“VST”).

Basis of Presentation

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses and fair value. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for fair presentation of the results of operations in these financial statements, have been made.

Reclassification

Certain reclassifications have been made to prior period amounts to conform to current period presentation. None of these reclassifications are considered material and have no impact on net income.

Earnings per Share

Accounting guidance specifies the computation, presentation and disclosure requirements for earnings per share (“EPS”) for entities with publicly held common stock or potential common stock such as options, warrants, convertible securities or contingent stock agreements if those securities trade in a public market. Basic EPS is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding. Diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive common shares had been issued. The dilutive effect of conversion of preferred stock is reflected in the diluted earnings per common share calculation. All of the Company’s outstanding preferred stock was redeemed by the Company for cash or converted to common stock during the fourth quarter of 2021. Nonvested restricted shares are included in the computation of basic earnings per share as the holder is entitled to full shareholder benefits during the vesting period, including voting rights and sharing in nonforfeitable dividends.

Table of Contents

Note 1. Summary of Significant Accounting Policies, continued

Earnings per Share, continued

Net income available to common stockholders represents consolidated net income adjusted for preferred dividends declared. The following table provides a reconciliation of net income to net income available to common stockholders for the periods presented (dollars in thousands):

	For the Nine months ended		For the Three months ended		For the Nine months ended		For the Three months ended
	September 30, 2022		September 30, 2022		September 30, 2021		September 30, 2021
Earnings available to common stockholders:
Net income	$	6,621	$	2,304	$	9,358	$	2,337
Preferred stock dividends		-		-		196		65
Net income available to common stockholders	$	6,621	$	2,304	$	9,162	$	2,272

The following table shows the effect of dilutive preferred stock conversion on the Company’s earnings per share for the periods indicated (dollars in thousands):

	Nine months ended September 30, 2022						Nine months ended September 30, 2021
	Income		Weighted Average Shares		Per Share Amounts		Income		Weighted Average Shares		Per Share Amounts
Basic EPS	$	6,621		3,447,470	$	1.92	$	9,162		3,207,916	$	2.86
Effect of Dilutive Securities:
Convertible Preferred Stock		-		-		-		196		228,118		(0.14	)
Diluted EPS	$	6,621		3,447,470	$	1.92	$	9,358		3,436,034	$	2.72

	Three months ended September 30, 2022						Three months ended September 30, 2021
	Income		Weighted Average Shares		Per Share Amounts		Income		Weighted Average Shares		Per Share Amounts
Basic EPS	$	2,304		3,453,767	$	0.67	$	2,272		3,210,577	$	0.71
Effect of Dilutive Securities:
Convertible Preferred Stock		-		-		-		65		205,327		(0.05	)
Diluted EPS	$	2,304		3,453,767	$	0.67	$	2,337		3,415,904	$	0.66

Note 2. Investment Securities

Investment securities available for sale are carried in the consolidated balance sheets at their approximate fair value. Investment securities held to maturity are carried in the consolidated balance sheets at their amortized cost at September 30, 2022 and December 31, 2021 are as follows (dollars in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
September 30, 2022
U. S. Treasuries	$	125	$	-	$	-	$	125
December 31, 2021
U. S. Treasuries	$	125	$	-	$	-	$	125

Table of Contents

Note 2. Investment Securities, continued

The amortized cost and fair value of securities available for sale are as follows (dollars in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2022
U.S. Government treasuries	$	49,793	$	-	$	3,907	$	45,886
U.S. Government sponsored enterprises		168,468		-		15,758		152,710
Securities issued by States and political subdivisions in the U.S.		46,374		-		4,538		41,836
Mortgage-backed obligations of federal agencies		187,064		173		24,536		162,701
Corporate debt security		30,550		2		3,225		27,327
Total Securities Available for Sale	$	482,249	$	175	$	51,964	$	430,460

December 31, 2021
U.S. Government treasuries	$	29,847	$	-	$	365	$	29,482
U.S. Government sponsored enterprises		134,466		-		752		133,714
Securities issued by States and political subdivisions of the U.S.		34,078		406		147		34,337
Mortgage-backed obligations of federal agencies		185,216		522		2,091		183,647
Corporate debt securities		22,555		372		225		22,702
Total Securities Available for Sale	$	406,162	$	1,300	$	3,580	$	403,882

The amortized cost and fair value of securities at September 30, 2022, by contractual maturity are shown below (dollars in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Securities Held to Maturity				Securities Available for Sale
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Due in one year or less	$	125	$	125	$	4,830	$	4,755
Due after one year through five years		-		-		214,351		197,909
Due after five years		-		-		102,321		89,274
Due after ten years		-		-		160,747		138,522
Total	$	125	$	125	$	482,249	$	430,460

The following table presents the gross realized gains and losses on and the proceeds from the sale of securities during the three and nine months ended September 30, 2022 and 2021 (dollars in thousands):

	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Realized gains (losses):
Gross realized gains	$	-	$	-
Gross realized losses		-		(97	)
Net realized (losses)	$	-	$	(97	)
Proceeds from sales of securities	$	-	$	8,699

	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
Realized gains (losses):
Gross realized gains	$	-	$	-
Gross realized (losses)		-		-
Net realized (losses)	$	-	$	-
Proceeds from sales of securities	$	-	$	-

Table of Contents

Note 2. Investment Securities, continued

Securities held that are U.S. Agency, Treasury, Government Sponsored Entities and Agency MBS carry an implicit government guarantee and are not subject to other than temporary impairment evaluation. Other securities were reviewed for impairment. One security issued by States and political subdivisions in the U.S. was in an unrealized loss position for more than 12 months. Four bank subordinated debt offerings were in a loss position for more than 12 consecutive months and totaled $3,668 thousand. The pricing services tend to not be exact on these offerings because of the marketability of the offering. The Company reviews the relevant ratios on each subordinated debt holding quarterly. Because management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions, no declines are currently deemed to be other than temporary.

A summary of unrealized losses (in thousands) and the length of time in a continuous loss position, by security type of September 30, 2022 and December 31, 2021 were as follows:

	Less than 12 Months					More than 12 Months				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2022
U.S. Government treasuries	$	23,769	$	1,144		$	22,118	$	2,763	$	45,887	$	3,907
U.S. Government sponsored enterprises		107,258		8,216			45,452		7,542		152,710		15,758
Securities issued by States and political subdivisions in the U.S.		31,785		3,133			10,050		1,405		41,835		4,538
Mortgage-backed obligations of federal agencies		80,149		10,332			77,922		14,204		158,071		24,536
Corporate debt security		22,657		2,643			3,668		582		26,325		3,225
Total	$	265,618	$	25,468	<

F&M BANK CORP [FMBM] Filings
10-Q	[2022-11-14]
10-Q	[2022-08-15]
10-Q	[2022-05-13]
10-K	[2022-03-10]
10-Q	[2021-11-10]
10-Q	[2021-08-16]
10-Q	[2021-05-11]
10-K	[2021-03-18]
10-Q	[2020-11-09]
10-Q	[2020-08-11]
10-Q	[2020-05-11]
10-K	[2020-03-16]
10-Q	[2019-11-12]
10-Q	[2019-08-08]
10-Q	[2019-05-10]
10-K	[2019-03-14]
10-Q	[2018-11-09]
10-Q	[2018-08-08]
10-Q	[2018-05-10]
10-K	[2018-03-16]
10-Q	[2017-11-14]
10-Q	[2017-08-14]
10-Q	[2017-05-15]
10-K	[2017-03-28]
10-Q	[2016-11-14]
10-Q	[2016-08-15]
10-Q	[2016-05-16]
10-K	[2016-03-30]
10-Q	[2015-11-12]
10-Q	[2015-08-14]
10-Q	[2015-05-15]
10-K	[2015-03-24]
10-Q	[2014-11-14]
10-Q	[2014-08-06]
10-Q	[2014-05-14]
10-K	[2014-03-28]
S-1	[2014-03-21]
10-Q	[2013-11-13]
10-Q	[2013-08-12]
10-Q	[2013-05-14]
10-K	[2013-03-29]
10-Q	[2012-11-13]
10-Q	[2012-08-13]
10-Q	[2012-05-15]
10-K	[2012-03-22]