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F&M Bank Corp. (OTCQX: FMBM) redeploys $4.8M Bearing gain into higher-yield bonds

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

F&M Bank Corp. used a one-time, after-tax gain of $3.8 million from the April 30, 2026 sale of its investment in Bearing Insurance Group, Inc. to support a restructuring of its available-for-sale securities portfolio completed in June 2026. The company sold $29.8 million of securities with a weighted average yield of 1.66%, about 8.2% of its total securities portfolio, and purchased approximately $29.4 million of higher-yielding securities at about 4.92%.

The restructuring produced a one-time, pre-tax loss of about $3.5 million, or $2.7 million after tax, which is expected to be recovered over roughly three-and-a-half years. Management expects the changes to increase annualized earnings per share by about $0.21 and improve net interest margin by around 6 basis points, with no impact on total consolidated equity or tangible book value per share. Together, the Bearing sale and the portfolio restructuring result in a net pre-tax gain of $1.3 million, both components to be recognized in second quarter 2026 results.

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After-tax gain from Bearing sale $3.8 million One-time after-tax gain from April 30, 2026 sale of Bearing Insurance Group, Inc.
Pre-tax gain from Bearing sale $4.8 million One-time pre-tax gain recognized from sale of Bearing in April 2026
AFS securities sold $29.8 million Book value of available-for-sale securities sold, about 8.2% of securities portfolio
Yield on securities sold 1.66% Weighted average yield on available-for-sale securities sold in restructuring
AFS securities purchased $29.4 million Approximate amount of available-for-sale securities purchased in restructuring
Yield on securities purchased 4.92% Approximate weighted average yield on newly purchased securities
Pre-tax loss on restructuring $3.5 million Approximate one-time pre-tax loss from securities portfolio restructuring
Expected EPS impact $0.21 per share Anticipated annualized improvement in earnings per share from restructuring
available-for-sale (AFS) securities portfolio financial
"completed a restructuring of its available-for-sale (AFS) securities portfolio in June"
net interest margin financial
"improve earnings per share by approximately $0.21 per share and net interest margin by"
Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.
tangible book value per share financial
"no impact on the Company’s total consolidated equity or tangible book value per share"
Tangible book value per share is the company's total physical and financial assets minus its liabilities and intangible items (like goodwill and brand value), divided by the number of outstanding shares. It gives investors a conservative, per‑share estimate of what would remain if the business sold only its hard assets and paid its debts—useful for judging whether a stock is priced above or below its underlying, tangible worth, like valuing a property by its bricks and cash rather than its reputation.
forward-looking statements regulatory
"This press release contains forward-looking statements as defined by federal securities laws"
Forward-looking statements are predictions or plans that companies share about what they expect to happen in the future, like estimating sales or profits. They matter because they help investors understand a company's outlook, but since they are based on guesses and assumptions, they can sometimes be wrong.
basis points financial
"improve earnings per share by approximately $0.21 per share and net interest margin by approximately 6 basis points"
Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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FAQ

What did F&M Bank Corp. (FMBM) announce regarding its bond portfolio?
F&M Bank Corp. completed a restructuring of its available-for-sale securities portfolio in June 2026. It sold $29.8 million of lower-yielding bonds and bought about $29.4 million of higher-yielding securities to enhance future earnings and net interest margin.

How is F&M Bank Corp. (FMBM) using the gain from the Bearing Insurance sale?
The company realized a one-time, after-tax gain of $3.8 million (pre-tax $4.8 million) from selling its Bearing Insurance investment. It used this gain to offset a one-time loss from restructuring its securities portfolio into significantly higher-yielding investments.

What financial impact does F&M Bank Corp. (FMBM) expect from the restructuring?
F&M Bank Corp. expects the restructuring to increase annualized earnings per share by about $0.21 and improve net interest margin by about 6 basis points. The after-tax loss of $2.7 million is expected to be recovered over roughly three-and-a-half years.

How large was the securities sale relative to F&M Bank Corp.’s (FMBM) portfolio?
The company sold $29.8 million in book value of available-for-sale securities, representing about 8.2% of its entire securities portfolio. It reinvested roughly the same amount into new securities with a significantly higher weighted average yield.

Will F&M Bank Corp. (FMBM) see changes to equity or tangible book value from this move?
The company states that the loss recognized from the restructuring is expected to have no impact on total consolidated equity or tangible book value per share. Both the gain and loss will be reflected in second quarter 2026 financial results.

When will F&M Bank Corp. (FMBM) recognize the gain and loss from these transactions?
F&M Bank Corp. will recognize both the one-time, pre-tax gain of $4.8 million from the Bearing sale and the one-time, pre-tax loss of about $3.5 million from the portfolio restructuring in its second quarter 2026 financial results.

EXHIBIT 99.1

 

 

FOR RELEASE

 

FOR MORE INFORMATION, CONTACT

July 10, 2026

 

Lisa F. Campbell | EVP | Chief Financial Officer

F&M Bank Corp.

 

540-896-1705

OTCQX: FMBM

 

fmbankva.com

 

F&M BANK CORP. USES AFTER-TAX GAIN

TO RESTRUCTURE BOND PORTFOLIO

 

The one-time, after-tax gain of $3.8 million resulted from the Company’s investment in Richmond, Virginia-based Bearing Insurance Group, Inc., which was sold on April 30, 2026.

 

Timberville, VA / July 10, 2026 . . . F&M Bank Corp. (the “Company” or “F&M”), (OTCQX: FMBM), the parent company of Farmers & Merchants Bank (“F&M Bank” or the “Bank”), today reported that it completed a restructuring of its available-for-sale (AFS) securities portfolio in June 2026. The restructuring follows the recognition of a one-time, pre-tax gain of $4.8 million from the April 2026 sale of Richmond-based Bearing Insurance (“Bearing”).

 

In the restructuring, the Company sold $29.8 million in book value of securities AFS with a weighted average yield of 1.66%, representing approximately 8.2% of the entire securities portfolio, and purchased approximately $29.4 million of securities AFS with a weighted average yield of approximately 4.92%. The restructuring resulted in a pre-tax loss of approximately $3.5 million. The after-tax loss of $2.7 million is expected to be recovered over approximately three-and-a-half years. The Company expects the restructuring to improve earnings per share by approximately $0.21 per share and net interest margin by approximately 6 basis points, both on an annualized basis. The loss recognized from the restructuring is expected to have no impact on the Company’s total consolidated equity or tangible book value per share. The combination of the two transactions resulted in a net pre-tax gain of $1.3 million.

 

“In May 2026 when we initially reported the gain from the sale of Bearing, I expressed excitement about the opportunities it offered F&M,” said CEO Mike Wilkerson. “At that time, we contemplated bringing forward the timing of several corporate initiatives in our strategic growth plan. After a great deal of consideration, we made the decision to utilize the one-time gain to offset a one-time loss, restructuring lower-yielding securities into significantly higher-yielding investments. The anticipated increases, in both earnings per share and net interest margin on an annualized basis, allow F&M to potentially accelerate our performance and support our ongoing priority of generating sufficient, sustainable profitability.”

 

F&M will recognize both the one-time, pre-tax gain of $4.8 million from the sale and the one-time, pre-tax loss of approximately $3.5 million from the restructuring in the Company’s financial results for second quarter 2026.

 

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ABOUT US

F&M Bank Corp. is an independent, locally owned, financial holding company offering a full range of financial services through our subsidiary, Farmers & Merchants Bank’s (F&M Bank), fourteen banking offices in Rockingham, Shenandoah, and Augusta counties, Virginia, and the cities of Winchester and Waynesboro, Virginia. The Company also owns VSTitle, a title company subsidiary. Founded in 1908 as a community venture to serve the farmers and merchants of the Shenandoah Valley, where both the Company and the Bank are headquartered, F&M Bank remains as committed as ever to the success of the agricultural industry, small business ventures, and the nonprofit sector. F&M’s values, which are gregarious, resolute, original, and wholehearted (G.R.O.W.), combined with our brand pillars of sustenance, security, and enrichment, shape the Company’s decision-making, philanthropy, and volunteerism. The only publicly traded organization based in Rockingham County, we offer a diverse suite of financial products and services, and a strong team dedicated to living our mission of being the financial partner of choice in the Shenandoah Valley, both today and tomorrow, as we have been since 1908. Additional information may be found by visiting our website, fmbankva.com.

 

FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements” as defined by federal securities laws, which are subject to significant risks and uncertainties. These include statements regarding future plans, strategies, results, or expectations that are not historical facts, and are generally identified by the use of words such as “believe,” “expect,” “intend,” “anticipate,” “will,” “estimate,” “project,” “potential,” or similar expressions. Without limitation, the statements in this press release regarding the Company’s expectation of improved earnings per share and net interest margin, and the statement regarding the expected recovery period of the after-tax loss, are forward-looking statements. These statements are based on estimates and assumptions, and our ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Our actual results could differ materially from those contemplated by these forward-looking statements. Factors that could have a material adverse effect on our operations and future prospects include, but are not limited to, the Company’s ability to realize the anticipated benefits of the securities portfolio restructuring within the expected timeframe or at all, changes in local and national economies or market conditions; changes in interest rates; regulations and accounting principles; changes in policies or guidelines; loan demand and asset quality, including values of real estate and other collateral; deposit flow; the impact of competition from traditional or new sources; changes in tariffs and trade barriers, including potential changes in U.S. and international trade policies and the resulting impact on the Company and the Bank’s borrowers; and other factors. Readers should consider these risks and uncertainties in evaluating forward-looking statements and should not place undue reliance on such statements. We undertake no obligation to update these statements following the date of this press release.

 

 
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Source: View Original Filing on SEC EDGAR

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