DEF 14A: F & M Bank Corp. Announces 2024 Annual Meeting of Shareholders, Outlines Key Proposals

F & M Bank Corp. will hold its annual shareholder meeting on May 18, 2024, to vote on director elections, auditor ratification, and executive compensation.

Summary

• F & M Bank Corp. will hold its 2024 Annual Meeting of Shareholders on May 18, 2024, at The Barn at Klines Mill in Linville, Virginia.
• Shareholders of record as of March 28, 2024, are eligible to vote.
• The meeting will include voting on the election of three directors (Anne B. Keeler, Daphyne S. Thomas, and Peter H. Wray) for three-year terms expiring in 2027.
• Shareholders will also vote to ratify the appointment of Yount, Hyde & Barbour, P.C. as the company's independent registered public accounting firm for 2024.
• An advisory vote to approve the compensation of the company's named executive officers will also take place.
• As of March 28, 2024, F & M Bank Corp. had 3,482,529 shares of common stock outstanding, each entitled to one vote.
• The proxy statement and the company's annual report on Form 10-K for the year ended December 31, 2023, are available at fmbankva.com/investor-relations.

Sentiment

Score: 7

Explanation: The document is a standard proxy statement, which is generally neutral in tone. The company appears to be following good corporate governance practices, which is a positive sign.

Positives

• The company encourages shareholder participation through various voting methods, including internet, telephone, and mail.
• The Board of Directors has determined that 9 of its 11 members are independent, adhering to Nasdaq listing standards.
• The company has a code of ethics for all employees and directors, promoting ethical conduct.
• The company provides various retirement plans, including a pension plan, deferred compensation plan, 401(k) savings plan, and stock bonus plan (ESOP).
• The company's shareholders overwhelmingly approved the annual non-binding advisory vote on executive compensation at the 2023 annual meeting, receiving approximately 95% support.

Negatives

• There were some delinquent Section 16(a) reports for officers and directors during 2023.
• The company does not have a standing Compensation Committee; instead, the Bank's Compensation Committee makes recommendations to the Company's Board.
• The company currently does not have any policies with respect to financial instruments or transactions in derivative securities or otherwise that hedge or offset any decrease in the market value of the Common Stock.

Risks

• One area of significant risk to financial institutions revolves around the risks associated with the monitoring of existing and proposed loan relationships.
• The Compensation Committee obtains and reviews certain industry data, including a Janney Montgomery Scott, LLC report of peer banks in Virginia and adjoining states that met certain asset and performance characteristics (the peer group).
• The company's future success depends on attracting, motivating, and retaining qualified executives.

Future Outlook

The Board of Directors is not aware of any matters to be presented for consideration at the Annual Meeting other than as set forth in the proxy statement.

Management Comments

• The Board has determined that having an independent director serve as Chairman is in the best interest of the Company's shareholders at this time.
• This structure encourages a greater role for the independent directors in the oversight of the Company and active participation of the independent directors in setting agendas and establishing Board priorities and procedures.
• Further, this structure permits the Chief Executive Officer to focus on the management of the Company's day-to-day operations.

Industry Context

This proxy statement is a standard document for publicly traded companies, providing shareholders with information necessary to make informed decisions regarding voting matters. The proposals outlined are typical for annual shareholder meetings.

Comparison to Industry Standards

• The director compensation structure, including meeting fees and retainers, appears to be in line with community banks of similar size.
• The use of a peer group (Janney Montgomery Scott, LLC report of peer banks in Virginia and adjoining states) for executive compensation benchmarking is a common practice.
• The company's various retirement plans (pension, deferred compensation, 401(k), ESOP) are typical benefits offered by financial institutions to attract and retain employees.
• The company's related party transaction disclosures are consistent with regulatory requirements and industry best practices.
• The company's adherence to Nasdaq's definition of independence for directors, even though its securities are not listed on Nasdaq, demonstrates a commitment to corporate governance principles.

Management Changes

Corporate Governance

Related Party Transactions

• The Company, through its subsidiary Bank, grants loans to and accepts deposits from its directors, principal officers and related parties of such persons during the ordinary course of business.
• Loans are granted on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other customers not related to the Company and do not involve more than the normal risk of collectability or present other unfavorable features.
• The aggregate balance of loans to directors, principal officers and their related parties was $24.5 million at December 31, 2023.
• Deposits are accepted on the same terms, including interest rates, as those prevailing at the time for comparable transactions with other customers.
• The aggregate balance of deposits from directors, principal officers and their related parties was $11.8 million at December 31, 2023.
• Jason Withers, the son of director Dean Withers, is employed by the Bank as Executive Vice President/Chief Credit Officer.
• Hannah W. Hutman, a director of the Company, is a partner at the law firm of Hoover Penrod PLC, which received approximately $242,000 in 2023 for various legal services.

Stakeholder Impact

• Shareholders are asked to vote on key proposals that will impact the company's governance and executive compensation.
• Employees are affected by changes to the pension plan and the ongoing operation of the stock bonus plan.
• Customers may be indirectly impacted by the company's governance and compensation decisions, which can influence the company's performance and service quality.

Next Steps

• Shareholders should review the proxy statement and vote on the proposals.
• The company will hold its Annual Meeting of Shareholders on May 18, 2024.
• The Board of Directors will consider the voting results when making future decisions.

Key Dates

Keywords

shareholders, directors, proxy statement, annual meeting, compensation, governance, audit, stock, F & M Bank Corp, bank