Financial Condition

Dear Clients,

In 2016 we experienced another year of steady and conservative growth with total assets increasing 3.8% to over $553 million.  This growth was driven largely by a focus over the year on increasing our deposits.  With successful results from this focus, total deposits increased nearly 12% in 2016 to $473 million, funding prior growth and supporting the 3% growth in loans experienced during 2016.  After another solid year in terms of income, our capital and reserves grew to over $66 million.  Our mission continues to be “Exceeding Clients’ Expectations”.  With that in mind, we continue to seek prudent growth that provides the stability you, our valued clients, deserve and expect from F & M.

After several years of declining to flat interest rates which resulted in historically low levels, we now have begun to see interest rates rise.  As always, our clients on the deposit side are excited for this change while those on the borrowing side are somewhat concerned.  While more interest rate hikes are being projected for 2017, the consensus seems to be that increases will be moderate as long as the economy continues to grow. 

In general terms, the economies in our markets are fairly strong and are indicating some optimism for growth in 2017.  However, here in the Midwest, whether in a larger metro market or a smaller rural market, we are all impacted by agriculture.  As we began the 2016 crop season, the outlook for agriculture was not a very pretty picture.  With the high cost of inputs and the prediction for low commodity prices, the press had us convinced it was not going to be a good year in agriculture.  Fortunately, due largely to excellent crop yields, better expense control, and better than expected commodity prices, the majority of the farmers across the region appear to be in position to repay their operating debt and cover any term loan payments.  While it will take time to get to a position where the large ag equipment manufacturers and other related ag businesses are back to full production, there is optimism that the bottom of the market may not be as low as expected.

Over this past year, fraudulent activity seemed to become much more prevalent.   The new chip technology incorporated into debit and credit cards is expected to help, but we strongly encourage you to be vigilant in monitoring your account and mindful when conducting financial transactions.  Monitoring your accounts through our mobile banking app, internet banking, utilizing Shazam Bolt$ and enrolling in ID TheftSmart are all excellent ways to be proactive in combating fraudulent activity.  To prevent fraud in the first place we encourage you to avoid giving out personal information over the telephone or the computer, guard your PIN numbers closely and watch for skimmers on gas pumps, ATMs, or other devices when you are using your debit/credit cards.   Our team is here and ready to help you download or activate any of the tools that are available to defend against fraud.  We want to help you protect your accounts and your information to the fullest extent!

We continue to grow stronger after our merger with our sister bank, Security Savings Bank in Wright County, Iowa.  Ideas and the talents of our team members are flowing more freely between the locations than they ever had in the past.  Taking the best practices from each location and sharing them throughout the organization has proved to be an improvement to the client experience and to our efficiency.

As we enter our 92nd year, our dedicated team continues to work every day to deliver exceptional service and personalized financial solutions to you, our valued clients.  We fully understand that we will not be successful unless you succeed.  Thank you for the opportunity to serve you and best wishes for an outstanding 2017.


Timothy R. German

President & Chief Executive Officer