false000079296600007929662024-05-012024-05-01

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT Pursuant

to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 1, 2024

 

Farmers & Merchants Bancorp, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Ohio	001-38084	34-1469491
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

 

307 North Defiance Street, Archbold, Ohio	43502
(Address of Principal Executive Offices)	(Zip Code)

Registrant's Telephone Number, including Area Code (419) 446-2501

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

 

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

Title of each class	Trading Symbol(s)	Name of Each Exchange
Common Stock, No Par Value	FMAO	NASDAQ Capital Market

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17-CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)

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. ☐

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ITEM 2.02. Results of Operation and Financial Condition

On May 1, 2024, Farmers & Merchants Bancorp, Inc. issued a press release (the “Release”) announcing its earnings for the three months ended March 31, 2024. A copy of the press release is attached hereto as Exhibit 99 and is incorporated by reference herein.

ITEM 9.01. Financial Statements and Exhibits

(d) Exhibits.

 

Exhibit Number	Exhibit
99	Company Press Release dated May 1, 2024

 

104	The Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto authorized.

 

	FARMERS & MERCHANTS BANCORP, INC.
		(Registrant)
Dated: May 1, 2024		/s/ Lars B. Eller
		Lars B. Eller
		President and Chief Executive Officer
		/s/ Barbara J. Britenriker
		Barbara J. Britenriker
		Executive Vice President and Chief Financial Officer

 

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Exhibit 99

Post Office Box 216 307 North Defiance Street Archbold, Ohio 43502	NEWS RELEASE

 

Company Contact:	Investor and Media Contact:
Lars B. Eller President and Chief Executive Officer Farmers & Merchants Bancorp, Inc. (419) 446-2501 leller@fm.bank	Andrew M. Berger Managing Director SM Berger & Company, Inc. (216) 464-6400 andrew@smberger.com

 

Farmers & Merchants Bancorp, Inc. Reports

2024 First-Quarter Financial Results

 

ARCHBOLD, OHIO, May 1, 2024, Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2024 first quarter ended March 31, 2024.

2024 First Quarter Financial and Operating Highlights (on a year-over-year basis unless noted):

 

Lars B. Eller, President and Chief Executive Officer, stated, “Our first quarter financial results demonstrate the strategies we are pursuing to enhance profitability, leverage the operating investments we made last year, and further strengthen our balance sheet. The progress we made, especially from the 2023 fourth quarter is encouraging and is a testament to the hard work of our team members, as well as the local value we provide our Ohio, Indiana and Michigan communities.”

Mr. Eller continued, “We are cautiously optimistic that our net interest margin has stabilized, even as we continue to navigate high levels of deposit competition and overall interest rate uncertainty. Over the past three months, F&M experienced a slight increase in its net interest margin, which combined with stable asset quality, drove a 6.2% increase in net interest income during this period. We expect to benefit from higher productivity of the four offices we opened during 2023 as our local market presence expands. In fact, total deposits at March 31, 2024, included $78.6 million of deposits from these new offices. In addition, we expect our efficiency ratio to improve throughout 2024 as we benefit from the investments we made last year to support a bank with over $4 billion in assets.”

Income Statement

Net income for the 2024 first quarter ended March 31, 2024, was $5.4 million, compared to $6.5 million for the same period last year. Net income per basic and diluted share for the 2024 first quarter was $0.39, compared to $0.47 for the same period last year.

“Core profitability has improved from fourth quarter levels due to higher net interest and noninterest income. We continue to believe that approximately 25% of our loan portfolio will be subject to repricing in 2024, which will benefit

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the yield on earnings assets and profitability in the coming quarters. Loan growth on a year-over-year basis is expected to be more limited compared to prior years as we focus on the spread between loans and deposits, pursue opportunities to pay down higher cost of funds, and increase our cash position. The progress we are making is encouraging and since the 2023 fourth quarter our cash position has increased by 32.1%, while our Federal Home Loan Bank advances has decreased by 3.4%. We also continue to make progress growing deposits with a prudent focus on managing the interest rates on deposit accounts. On a year-over-year basis, total deposits increased 4.3% and we continue to experience net, new demand deposit account (DDA) growth, which increased 1.4% over the past 12 months,” continued Mr. Eller.

Deposits

At March 31, 2024, total deposits were $2.62 billion, an increase of 4.3% from March 31, 2023. The Company’s cost of interest-bearing liabilities was 3.06% for the quarter ended March 31, 2024, compared to 1.85% for the quarter ended March 31, 2023, and 3.02% for the 2023 fourth quarter ended December 31, 2023.

Loan Portfolio and Asset Quality

Total loans, net at March 31, 2024, increased 3.9%, or by $94.7 million to $2.52 billion, compared to $2.42 billion at March 31, 2023. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth.

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $19.4 million, or 0.76% of total loans at March 31, 2024, compared to $7.7 million, or 0.32% at March 31, 2023, and $22.4 million, or 0.87% at December 31, 2023. The year-over-year increase in nonperforming loans was primarily due to one agricultural relationship, representing a balance of $16.5 million. F&M expects to receive a paydown on this lending relationship in the second quarter this year.

F&M maintains a well-balanced, diverse and high performing CRE portfolio. CRE loans represented 51.3% of the Company’s total loan portfolio at March 31, 2024. In addition, F&M’s commercial real estate office credit exposure represented 5.5% of the Company's total loan portfolio at March 31, 2024, with a weighted average loan-to-value of approximately 63% and an average loan of approximately $921,000.

F&M’s CRE portfolio included the following categories at March 31, 2024:

 

CRE Category		Dollar Balance				Percent of CRE Portfolio				Percent of Total Loan Portfolio
Industrial		$	259,191				19.9	%			10.2	%
Multi-family			221,884				17.0	%			8.7	%
Retail			220,755				16.9	%			8.7	%
Office			139,021				10.7	%			5.5	%
Hotels			128,313				9.8	%			5.0	%
Gas Stations			63,202				4.9	%			2.5	%
Food Service			47,304				3.6	%			1.9	%
Senior Living			34,534				2.7	%			1.4	%
Development			33,961				2.6	%			1.3	%
Auto Dealers			31,856				2.4	%			1.2	%
Other			124,379				9.5	%			4.9	%
Total CRE		$	1,304,400				100.0	%			51.3	%

* Numbers have been rounded

 

At March 31, 2024, the Company’s allowance for credit losses to nonperforming loans was 127.28%, compared to 319.38% at March 31, 2023, and 111.95% at December 31, 2023. The allowance to total loans was 0.97% at March 31, 2024, compared to 1.01% at March 31, 2023. Including accretable yield adjustments, associated with the Company’s recent acquisitions, F&M’s allowance for credit losses to total loans was 1.11% at March 31, 2024, compared to 1.24% at March 31, 2023.

Mr. Eller concluded, “Our asset quality remains strong, and I am pleased to report that during the first quarter one of two larger nonperforming credits paid off in full. In addition, net charge-offs to average outstanding loans remains at

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historically low levels, we remain well reserved, and we continue to proactively monitor our loan portfolio for any signs of stress. While the macro-economic environment is expected to remain fluid, we believe we are well positioned to navigate this period by maintaining solid asset quality, optimizing our balance sheet, and improving earnings.”

 

Stockholders’ Equity and Dividends

Total stockholders’ equity increased 3.9% to $317.7 million at March 31, 2024, from $305.8 million at March 31, 2023. At March 31, 2024, the Company had a Tier 1 leverage ratio of 8.40%, compared to 8.36% at March 31, 2023.

Based on a regulatory basis, tangible stockholders’ equity increased to $256.5 million at March 31, 2024, compared to $244.2 million at March 31, 2023. On a per share basis, tangible stockholders’ equity at March 31, 2024, was $18.75 per share, compared to $17.92 per share at March 31, 2023.

For the three months ended March 31, 2024, the Company has declared cash dividends of $0.22 per share, which is a 4.8% increase over the same period last year. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 29 consecutive years. For the three months ended March 31, 2024, the dividend payout ratio was 55.52% compared to 43.79% for the same period last year.

 

About Farmers & Merchants State Bank:

Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) is the holding company of F&M Bank, a local independent community bank that has been serving its communities since 1897. F&M Bank provides commercial banking, retail banking and other financial services. Our locations are in Butler, Champaign, Fulton, Defiance, Hancock, Henry, Lucas, Shelby, Williams, and Wood counties in Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, Steuben and Wells counties. The Michigan footprint includes Oakland County, and F&M has Loan Production Offices in West Bloomfield, Michigan; Muncie, Indiana; and Bryan, Ohio.

Safe Harbor Statement

Farmers & Merchants Bancorp, Inc. (“F&M”) wishes to take advantage of the Safe Harbor provisions included in the

Private Securities Litigation Reform Act of 1995. Statements by F&M, including management’s expectations and comments, may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21B of the Securities Exchange Act of 1934, as amended. Actual results could vary materially depending on risks and uncertainties inherent in general and local banking conditions, competitive factors specific to markets in which F&M and its subsidiaries operate, future interest rate levels, legislative and regulatory decisions, capital market conditions, or the effects of the COVID-19 pandemic, and its impacts on our credit quality and business operations, as well as its impact on general economic and financial market conditions. F&M assumes no responsibility to update this information. For more details, please refer to F&M’s SEC filing, including its most recent Annual Report on Form 10-K and quarterly reports on Form 10-Q. Such filings can be viewed at the SEC’s website, www.sec.gov or through F&M’s website www.fm.bank.

 

Non-GAAP Financial Measures

This press release includes disclosure of financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers & Merchants Bancorp, Inc. believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers & Merchants Bancorp, Inc.’s marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. A reconciliation of GAAP to non-GAAP financial measures is included within this press release.

 

 

 

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME

(Unaudited) (in thousands of dollars, except per share data)

 

		Three Months Ended
		March  31, 2024				December  31, 2023				September  30, 2023				June  30, 2023				March  31, 2023
Interest Income
Loans, including fees		$	35,200			$	34,493			$	33,783			$	31,365			$	29,703
Debt securities:
U.S. Treasury and    government    agencies			1,045				987				1,005				1,030				1,068
Municipalities			394				397				392				401				408
Dividends			333				365				246				148				123
Federal funds sold			7				8				6				9				21
Other			1,675				2,020				927				424				479
Total interest income			38,654				38,270				36,359				33,377				31,802
Interest Expense
Deposits			15,279				15,015				13,323				10,434				8,151
Federal funds purchased    and securities sold    under agreement to    repurchase			284				293				349				427				405
Borrowed funds			2,689				2,742				2,741				2,113				1,280
Subordinated notes			284				285				284				285				284
Total interest    expense			18,536				18,335				16,697				13,259				10,120
Net Interest Income -    Before Provision for    Credit Losses			20,118				19,935				19,662				20,118				21,682
Provision for Credit    Losses - Loans			(289	)			278				460				143				817
Provision for Credit    Losses - Off Balance    Sheet Credit Exposures			(266	)			189				(76	)			(129	)			62
Net Interest Income    After Provision for    Credit Losses			20,673				19,468				19,278				20,104				20,803
Noninterest Income
Customer service fees			2,782				2,576				2,208				2,361				2,447
Other service charges    and fees			1,057				1,121				1,162				1,803				2,554
Net gain on sale of loans			107				230				294				108				67
Net loss on sale of    available-for-sale    securities			-				-				-				-				(891	)
Total noninterest    income			3,946				3,927				3,664				4,272				4,177

 

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME (continued)

(Unaudited) (in thousands of dollars, except per share data)

 

Noninterest Expense
Salaries and wages			7,846				6,981				6,777				6,500				6,657
Employee benefits			2,171				1,218				2,066				2,071				2,165
Net occupancy expense			1,027				1,187				950				840				856
Furniture and equipment			1,353				1,370				1,189				1,211				1,252
Data processing			500				785				840				796				726
Franchise taxes			555				308				434				379				366
ATM expense			473				665				640				683				623
Advertising			530				397				865				830				514
Net loss on sale    of other assets owned			-				86				49				-				-
FDIC assessment			580				594				586				496				306
Servicing rights    amortization - net			168				182				106				164				159
Consulting fees			186				192				179				231				230
Other general and    administrative			2,452				2,555				2,363				2,643				3,077
Total noninterest    expense			17,841				16,520				17,044				16,844				16,931
Income Before Income    Taxes			6,778				6,875				5,898				7,532				8,049
Income Taxes			1,419				1,332				1,121				1,531				1,583
Net Income			5,359				5,543				4,777				6,001				6,466
Other Comprehensive    Income (Loss) (Net of    Tax):
Net unrealized gain (loss)    on available-for-sale    securities			(1,995	)			13,261				(4,514	)			(5,996	)			8,030
Reclassification    adjustment for realized    loss on sale of    available-for-sale    securities			-				-				-				-				891
Net unrealized gain (loss)    on available-for-sale    for-sale securities			(1,995	)			13,261				(4,514	)			(5,996	)			8,921
Tax expense (benefit)			(418	)			2,784				(947	)			(1,260	)			1,874
Other comprehensive    income (loss)			(1,577	)			10,477				(3,567	)			(4,736	)			7,047
Comprehensive Income		$	3,782			$	16,020			$	1,210			$	1,265			$	13,513
Basic Earnings    Per Share		$	0.39			$	0.41			$	0.35			$	0.44			$	0.47
Diluted Earnings    Per Share		$	0.39			$	0.41			$	0.35			$	0.44			$	0.47
Dividends Declared		$	0.22			$	0.22			$	0.21			$	0.21			$	0.21

 

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited) (in thousands of dollars, except share data)

 

		March  31, 2024				December  31, 2023				September  30, 2023				June  30, 2023				March  31, 2023
		(Unaudited)								(Unaudited)				(Unaudited)				(Unaudited)
Assets
Cash and due from banks		$	186,541			$	140,917			$	151,711			$	69,760			$	62,780
Federal funds sold			1,241				1,284				1,471				1,433				1,545
Total cash and cash equivalents			187,782				142,201				153,182				71,193				64,325
Interest-bearing time deposits			2,735				2,740				2,989				3,485				4,435
Securities - available-for-sale			347,516				358,478				348,255				363,225				372,975
Other securities, at cost			14,744				17,138				16,995				17,535				11,543
Loans held for sale			2,410				1,576				1,039				1,459				951
Loans, net of allowance for credit losses of $24,680    3/31/24 and $25,024 12/31/23			2,516,687				2,556,167				2,504,329				2,490,883				2,422,018
Premises and equipment			35,007				35,790				31,723				30,398				28,679
Construction in progress			9				8				3,044				2,290				1,565
Goodwill			86,358				86,358				86,358				86,358				86,358
Loan servicing rights			5,555				5,648				5,687				5,635				4,985
Bank owned life insurance			34,123				33,907				33,691				33,470				33,269
Other assets			54,628				43,218				47,388				41,512				38,972
Total Assets		$	3,287,554			$	3,283,229			$	3,234,680			$	3,147,443			$	3,070,075
Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing		$	510,731			$	528,465			$	505,358			$	488,678			$	520,145
Interest-bearing
NOW accounts			829,236				816,790				778,133				770,113				800,230
Savings			635,430				599,191				591,344				581,192				590,854
Time			645,985				663,017				700,445				628,757				601,939
Total deposits			2,621,382				2,607,463				2,575,280				2,468,740				2,513,168
Federal funds purchased and securities    sold under agreements to repurchase			28,218				28,218				30,527				51,567				30,496
Federal Home Loan Bank (FHLB)    advances			256,628				265,750				266,286				266,818				164,327
Subordinated notes, net of unamortized    issuance costs			34,731				34,702				34,673				34,644				34,615
Dividend payable			2,975				2,974				2,838				2,834				2,831
Accrued expenses and other liabilities			25,930				27,579				21,892				18,177				18,881
Total liabilities			2,969,864				2,966,686				2,931,496				2,842,780				2,764,318
Commitments and Contingencies
Stockholders' Equity
Common stock - No par value 20,000,000    shares authorized; issued and outstanding    14,564,425 shares 3/31/24 and 12/31/23			135,482				135,515				135,171				135,647				135,241
Treasury stock - 881,155 shares 3/31/24    and 899,784 shares 12/31/23			(10,851	)			(11,040	)			(11,008	)			(11,298	)			(11,310	)
Retained earnings			223,648				221,080				218,510				216,236				213,012
Accumulated other comprehensive    loss			(30,589	)			(29,012	)			(39,489	)			(35,922	)			(31,186	)
Total stockholders' equity			317,690				316,543				303,184				304,663				305,757
Total Liabilities and Stockholders' Equity		$	3,287,554			$	3,283,229			$	3,234,680			$	3,147,443			$	3,070,075

 

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

SELECT FINANCIAL DATA

 

		For the Three Months Ended
Selected financial data		March 31, 2024					December 31, 2023					September 30, 2023					June 30, 2023					March 31, 2023
Return on average assets				0.66	%				0.67	%				0.59	%				0.77	%				0.84	%
Return on average equity				6.76	%				7.27	%				6.26	%				7.84	%				8.59	%
Yield on earning assets				5.00	%				4.93	%				4.79	%				4.53	%				4.41	%
Cost of interest bearing   liabilities				3.06	%				3.02	%				2.82	%				2.35	%				1.85	%
Net interest spread				1.94	%				1.91	%				1.97	%				2.18	%				2.56	%
Net interest margin				2.60	%				2.57	%				2.59	%				2.73	%				3.01	%
Efficiency				74.08	%				69.23	%				73.07	%				69.06	%				63.53	%
Dividend payout ratio				55.52	%				54.23	%				60.07	%				47.22	%				43.79	%
Tangible book value    per share (1)				18.75					18.60			$		18.36			$		18.21			$		17.92
Tier 1 leverage ratio				8.40	%				8.20	%				8.02	%				9.85	%				8.36	%
Average shares outstanding				13,671,166					13,665,773					13,650,823					13,632,440					13,615,655
(1)  Tangible Equity = Stockholder Equity less goodwill, other intangibles (core deposit intangible, mortgage servicing rights
and unrealized gain/loss on securities) plus CECL adjustment

 

Loans		March  31, 2024					December  31, 2023					September  30, 2023					June  30, 2023					March  31, 2023
(Dollar amounts in thousands)
Commercial real estate		$		1,304,400			$		1,337,766			$		1,304,118			$		1,280,902			$		1,225,315
Agricultural real estate				227,455					223,791					225,672					230,837					227,897
Consumer real estate				525,178					521,895					512,973					506,866					502,974
Commercial and industrial				256,051					254,935					250,891					253,444					241,598
Agricultural				127,670					132,560					123,735					128,344					131,467
Consumer				74,819					79,591					83,024					88,312					89,588
Other				26,776					30,136					31,083					28,996					29,316
Less: Net deferred loan fees       costs andd other (2)				(982	)				517					(1,890	)				(1,908	)				(1,503	)
Total loans, net		$		2,541,367			$		2,581,191			$		2,529,606			$		2,515,793			$		2,446,652
(2) Includes carrying value adjustments of $969 thousand as of March 31, 2024 and $2.7 million as of December 31, 2023 related to interest rate swaps associated with fixed rate loans

 

 

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

SELECT FINANCIAL DATA (continued)

 

Asset quality data		March 31, 2024					December 31, 2023					September 30, 2023					June 30, 2023					March 31, 2023
(Dollar amounts in thousands)
Nonaccrual loans		$		19,391			$		22,353			$		22,447			$		6,295			$		7,717
90 day past due and accruing		$		-			$		-			$		-			$		-			$		-
Nonperforming loans		$		19,391			$		22,353			$		22,447			$		6,295			$		7,717
Other real estate owned		$		-			$		-			$		-			$		-			$		-
Nonperforming assets		$		19,391			$		22,353			$		22,447			$		6,295			$		7,717
Allowance for credit losses		$		24,680			$		25,024			$		25,277			$		24,910			$		24,634
Allowance for unfunded				1,946					2,212					2,023					2,099					2,228
Total allowance for    credit losses		$		26,626			$		27,236			$		27,300			$		27,009			$		26,862
Allowance for credit losses/    total loans				0.97	%				0.97	%				1.00	%				0.99	%				1.01	%
Adjusted credit losses with    accretable yield/total loans				1.11	%				1.13	%				1.18	%				1.20	%				1.24	%
Net charge-offs:
Quarter-to-date		$		55			$		454			$		93			$		(133	)		$		60
Year-to-date		$		55			$		551			$		97			$		(73	)		$		60
Net charge-offs to average loans
Quarter-to-date				0.00	%				0.02	%				0.00	%				-0.01	%				0.00	%
Year-to-date				0.00	%				0.02	%				0.00	%				0.00	%				0.00	%
Nonperforming loans/total loans				0.76	%				0.87	%				0.89	%				0.25	%				0.32	%
Allowance for credit losses/    nonperforming loans				127.28	%				111.95	%				112.61	%				395.71	%				319.38	%
NPA coverage ratio				127.28	%				111.95	%				112.61	%				395.71	%				319.38	%

 

 

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES

(in thousands of dollars, except percentages)

 

		For the Three Months Ended												For the Three Months Ended
		March 31, 2024												March 31, 2023
Interest Earning Assets:		Average Balance				Interest/ Dividends				Annualized Yield/Rate				Average Balance				Interest/ Dividends				Annualized Yield/Rate
Loans		$	2,577,114			$	35,200				5.46	%		$	2,397,061			$	29,703				4.96	%
Taxable investment securities			384,928				1,686				1.75	%			397,480				1,499				1.51	%
Tax-exempt investment securities			21,109				86				2.06	%			26,352				100				1.92	%
Fed funds sold & other			110,388				1,682				6.09	%			68,557				500				2.92	%
Total Interest Earning Assets			3,093,539			$	38,654				5.00	%			2,889,450			$	31,802				4.41	%
Nonearning Assets			159,240												180,259
Total Assets		$	3,252,779											$	3,069,709
Interest Bearing Liabilities:
Savings deposits		$	1,443,530			$	9,407				2.61	%		$	1,400,769			$	4,943				1.41	%
Other time deposits			650,580				5,872				3.61	%			579,409				3,208				2.21	%
Other borrowed money			263,280				2,689				4.09	%			132,494				1,280				3.86	%
Fed funds purchased & securities
sold under agreement to repurchase			28,458				284				3.99	%			38,853				405				4.17	%
Subordinated notes			34,712				284				3.27	%			34,596				284				3.28	%
Total Interest Bearing Liabilities		$	2,420,560			$	18,536				3.06	%		$	2,186,121			$	10,120				1.85	%
Noninterest Bearing Liabilities			514,986												582,345
Stockholders' Equity		$	317,233											$	301,243
Net Interest Income and    Interest Rate Spread						$	20,118				1.94	%						$	21,682				2.56	%
Net Interest Margin											2.60	%											3.01	%
Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based         on a 21% tax rate in the charts

 

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES (continued)

(in thousands of dollars, except percentages)

 

		For the Three Months Ended																								For the Three Months Ended
		March 31, 2024																								March 31, 2023
		As Reported							Excluding Accretion/Amortization									Difference								As Reported							Excluding Accretion/Amortization									Difference
		$				Yield				$				Yield				$				Yield				$				Yield				$				Yield				$				Yield
Interest Earning Assets:
Loans		$	35,200				5.46	%		$	34,525				5.36	%		$	675				0.10	%		$	29,703				4.96	%		$	29,036				4.85	%		$	667				0.11	%
Taxable investment securities			1,686				1.75	%			1,686				1.75	%			-				0.00	%			1,499				1.51	%			1,499				1.51	%			-				0.00	%
Tax-exempt investment securities			86				2.06	%			86				2.06	%			-				0.00	%			100				1.92	%			100				1.92	%			-				0.00	%
Fed funds sold & other			1,682				6.09	%			1,682				6.09	%			-				0.00	%			500				2.92	%			500				2.92	%			-				0.00	%
Total Interest Earning Assets			38,654				5.00	%			37,979				4.92	%			675				0.08	%			31,802				4.41	%			31,135				4.31	%			667				0.10	%
Interest Bearing Liabilities:
Savings deposits		$	9,407				2.61	%		$	9,407				2.61	%		$	-				0.00	%		$	4,943				1.41	%		$	4,943				1.41	%		$	-				0.00	%
Other time deposits			5,872				3.61	%			5,872				3.61	%			-				0.00	%			3,208				2.21	%			3,667				2.53	%			(459	)			-0.32	%
Other borrowed money			2,689				4.09	%			2,707				4.11	%			(18	)			-0.02	%			1,280				3.86	%			1,298				3.92	%			(18	)			-0.06	%
Fed funds purchased and securities
sold under agreement to repurchase			284				3.99	%			284				3.99	%			-				0.00	%			405				4.17	%			405				4.17	%			-				0.00	%
Subordinated notes			284				3.27	%			284				3.27	%			-				0.00	%			284				3.28	%			284				3.28	%			-				0.00	%
Total Interest Bearing Liabilities			18,536				3.06	%			18,554				3.07	%			(18	)			-0.01	%			10,120				1.85	%			10,597				1.94	%			(477	)			-0.09	%
Interest/Dividend income/yield			38,654				5.00	%			37,979				4.92	%			675				0.08	%			31,802				4.41	%			31,135				4.31	%			667				0.10	%
Interest Expense / yield			18,536				3.06	%			18,554				3.07	%			(18	)			-0.01	%			10,120				1.85	%			10,597				1.94	%			(477	)			-0.09	%
Net Interest Spread			20,118				1.94	%			19,425				1.85	%			693				0.09	%			21,682				2.56	%			20,538				2.37	%			1,144				0.19	%
Net Interest Margin							2.60	%							2.52	%							0.08	%							3.01	%							2.85	%							0.16	%
Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts

 

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATION OF TANGIBLE BOOK VALUE

 

		Actual End of Period									Regulatory End of Period
Non-GAAP Reconciliation of Tangible Book Value		Year to Date									Year to Date
		March 31, 2024				March 31, 2023					March 31, 2024				March 31, 2023
Shares Outstanding			13,683,270				13,630,122					13,683,270				13,630,122
Tangible Equity
Equity		$	317,690			$	305,757				$	317,690			$	305,757
Goodwill			86,358				86,358					86,358				86,358
Other Intangible			7,103				8,882					7,103				8,882
Comprehensive Loss Adjustment*			-				-					30,589				31,186
CECL Adjustment**			-				-					1,685				2,528
Tangible Equity		$	224,229			$	210,517				$	256,503			$	244,231
Shares Outstanding			13,683				13,630					13,683				13,630
Tangible Book Equity per Share		$	16.39			$	15.44				$	18.75			$	17.92
		Actual Average									Regulatory Average
		Year to Date									Year to Date
		March 31, 2024				March 31, 2023					March 31, 2024				March 31, 2023
Net Income		$	5,359			$	6,466				$	5,359			$	6,466
Acquisition Costs - Tax Adjusted			-				77					-				77
Average Shares Outstanding			13,671,166				13,615,655					13,671,166				13,615,655
Average Tangible Equity
Average Equity		$	317,233			$	301,243				$	317,233			$	301,243
Average Goodwill			86,358				86,358					86,358				86,358
Average Other Intangible			7,388				9,167					7,388				9,167
Average Comprehensive Loss Adjustment*			-				-					30,700				36,764
Average CECL Adjustment**			-				-					1,685				2,528
Average Tangible Equity		$	223,487			$	205,718				$	255,872			$	245,010
Average Shares Outstanding			13,671				13,616					13,671				13,616
Average Tangible Book Equity per Share		$	16.35			$	15.11				$	18.72			$	17.99
Return on Average Tangible Equity			9.59	%			12.57	%				8.38	%			10.56	%
Return on Average Tangible Equity w/o Acquisition			9.59	%			12.72	%				8.38	%			10.68	%
*The Bank has adopted the Accumulated Other Comprehensive Income (AOCI) opt out election which removed AOCI from the calculation of tangible equity for regulatory purposes.
**ASU 2016-13 adopted during the first quarter of 2023. The Bank has elected to spread the capital adjustment over three years. The first year permits 75% of the capital adjustment and the second year permits 50% of the capital adjustment to be removed from the calculation of tangible equity for regulatory purposes.

 

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