8-K
0000792966false00007929662023-10-262023-10-26

 

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) October 26, 2023

 

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.


ITEM 2.02. Results of Operation and Financial Condition

On October 26, 2023, Farmers & Merchants Bancorp, Inc. issued a press release (the “Release”) announcing its earnings for the three and nine months ended September 30, 2023. 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 October 26, 2023

 

104

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

 


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: October 26, 2023

/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

 


EX-99

Exhibit 99

https://cdn.kscope.io/d57a58d4227b2cf67a96ed5c40916920-img27245342_0.jpg 

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

2023 Third-Quarter and Year-to-Date Financial Results

 

ARCHBOLD, OHIO, October 26, 2023, Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2023 third quarter and year-to-date September 30, 2023.

2023 Third Quarter Financial and Operating Highlights (on a year-over-year basis unless noted):

82 consecutive quarters of profitability
Net income was $4.8 million, or $0.35 per basic and diluted share
Stockholders’ equity increased 8.1% to $303.2 million
Regulatory tangible book value per share increased 2.8% to $18.36 per share
Total loans were a record of $2.53 billion and increased 7.2% from $2.36 billion at December 31, 2022
Total assets increased 16.2% to a record $3.23 billion
Deposits increased 4.3% to a record $2.58 billion
Asset quality remains strong as nonperforming loans were 0.89% of total loans
Net charge-offs to average loans were 0.00%
Allowance for credit losses was 112.61% of nonperforming loans
Tier 1 leverage ratio decreased to 8.02% from 9.11% last year
Strategic investments to support long-term growth continue as F&M has opened new offices, unveiled new branding and a new logo, launched new deposit products, and implemented new features across its website and online banking platform

 

Lars B. Eller, President and Chief Executive Officer, stated, “Throughout 2023, we have been focused on executing against our strategic growth plan, while simultaneously navigating a challenging banking environment. I am pleased with the progress we are making as F&M opened two full-service offices in Oxford and Toledo, Ohio last quarter and since the end of the third quarter, the Bank has opened additional offices in Fort Wayne, Indiana and Birmingham, Michigan. We have also recently launched a new shared services group formation, invested in new internal audit and marketing capabilities, and restructured our HR department.”

Mr. Eller continued, “With most of the planned investments behind us, we are focused on scaling our new offices by expanding relationships within these new and existing markets. Early indications are encouraging and reflect F&M’s strong team of local bankers. As a result of our efforts across our new and existing offices, third-quarter deposits increased 4.3% from the second quarter to a record $2.58 billion, which included a 3.3% increase in non-interest-bearing deposits. We expect future deposit growth over the next quarters as our growth strategies accelerate and we benefit from new checking accounts that have been opened since the start of the year.”

 


Income Statement

Net income for the 2023 third quarter ended September 30, 2023, was $4.8 million, compared to $9.0 million for the same period last year. Net income per basic and diluted share for the 2023 third quarter was $0.35, compared to $0.68 for the same period last year. Net income for the 2023 nine months ended September 30, 2023, was $17.2 million, compared to $25.3 million for the same period last year. Net income per basic and diluted share for the 2023 nine months was $1.26, compared to $1.94 for the same period last year.

“The rapid rise in the Federal Funds Rate continued to impact our cost of funds and increase the competition for deposits. As a result, our cost of interest-bearing liabilities has increased to 2.82% at September 30, 2023, from 0.68% at September 30, 2022. Our loan portfolio has also lagged in capturing sufficient yield to match the higher cost of funds mainly due to the timing to reprice our commercial real estate adjustable-rate mortgages. 13.3% of the loan portfolio will be subject to repricing next quarter with 22.3% subject to repricing in the next twelve months. These trends during the third quarter caused a 12.9% year-over-year decline in net interest income and impacted overall profitability. As we navigate a challenging rate environment over the near term, we continue to believe we are well positioned for net income growth to re-accelerate in 2024 and beyond, as we benefit from continued strong asset quality, and the contribution of our growth initiatives,” continued Mr. Eller.

Deposits

At September 30, 2023, total deposits were $2.58 billion, an increase of 12.8% from September 30, 2022, and an increase of 4.3% from December 31, 2022. The Company’s cost of interest-bearing liabilities was 2.82% for the quarter ended September 30, 2023, compared to 0.68% for the quarter ended September 30, 2022, and 1.32% for the quarter ended December 31, 2022.

At September 30, 2023, F&M’s average deposit account had an average balance of $25,426. In addition, uninsured deposits to total deposits were approximately 9.1% for the quarter ended September 30, 2023, and the percentage of uninsured by the FDIC was 18.84%.

Loan Portfolio and Asset Quality

Total loans, net at September 30, 2023, increased 18.1%, or by $3.87 million to $2.53 billion, compared to $2.14 billion at September 30, 2022, and up 7.2% from $2.36 billion at December 31, 2022. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth and the completion of the Peoples acquisition. Not including the Peoples acquisition, total net loans increased 13.2% organically, or by $282.8 million from the same period a year ago.

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $22.4 million, or 0.89% of total loans at September 30, 2023, compared to $5.5 million, or 0.26% at September 30, 2022. At September 30, 2023, nonperforming loans increased by $16.2 million from June 30, 2023, which was primarily due to one agricultural relationship where the Bank is well collateralized and does not foresee a loss.

F&M maintains a well-balanced, diverse and high performing CRE portfolio. CRE loans represented 51.6% of the Company’s total loan portfolio at September 30, 2023. In addition, F&M’s commercial real estate office credit exposure represented 5.1% of the Company's total loan portfolio at September 30, 2023, with a weighted average loan-to-value of approximately 64% and an average loan of $870,000.

 


F&M’s CRE portfolio included the following categories at September 30, 2023:

CRE Category

Dollar

Balance

Percent of CRE Portfolio(*)

Percent of Total Loan Portfolio(*)

Multi-family

$ 241,804

18.5%

9.5%

Industrial

$ 228,644

17.5%

9.0%

Retail

$ 212,383

16.3%

8.4%

Hotels

$ 133,579

10.2%

5.3%

Office

$ 129,619

9.9%

5.1%

Gas Stations

$ 61,484

4.7%

2.4%

Food Service

$ 49,578

3.8%

2.0%

Mixed Use

$ 39,842

3.1%

1.6%

Senior Living

$ 35,788

2.7%

1.4%

Other

$ 171,387

13.1%

6.8%

   Total CRE

$ 1,304,118

100.0%

51.4%

* Numbers have been rounded

At September 30, 2023, the Company’s allowance for credit losses to nonperforming loans was 112.61%, compared to 365.44% at September 30, 2022. The allowance to total loans was 1.00% at September 30, 2023, compared to 0.93% at September 30, 2022. As a result of F&M’s recent acquisitions, the Company had an accretable yield adjustment of $4.6 million at September 30, 2023, which further enhances F&M’s allowance, compared to $6.0 million at September 30, 2022. Including the accretable yield adjustment, F&M’s allowance for credit losses to total loans was 1.18% at September 30, 2023, compared to 1.21% at September 30, 2022.

Mr. Eller concluded, “At September 30, 2023, we saw nonperforming loans increase to 0.89% primarily due to one agricultural relationship where the Bank is well collateralized and does not foresee a loss. As we work through this credit, we are closely monitoring our loan portfolio for signs of stress, but overall, we expect our conservative credit culture and pricing will allow us to maintain excellent asset quality throughout various economic cycles. In addition, at September 30, 2023, we had the lowest level of loans over 30 days past due this year. While we continue to believe 2023 will be a transitional year, we believe we are well positioned to emerge from this period with increased market share and higher profitability and I look forward to reporting on our success in the coming quarters. Our financial performance ratios reflect the pressure on the net interest margin and the cost of the strategic investments we have made. We are cognizant of the short-term expense and are confident it will enable long-term gains.”

 

Stockholders’ Equity and Dividends

Total stockholders’ equity increased 8.1% to $303.2 million at September 30, 2023, from $280.6 million at September 30, 2022. At September 30, 2023, the Company had a Tier 1 leverage ratio of 8.02%, compared to 9.11% at September 30, 2022.

Based on a regulatory basis, tangible stockholders’ equity increased to $250.9 million at September 30, 2023, compared to $234.1 million at September 30, 2022. On a per share basis, tangible stockholders’ equity at September 30, 2023, was $18.36 per share, compared to $17.86 per share at September 30, 2022.

For the nine months ended September 30, 2023, the Company has declared cash dividends of $0.63 per share, which is a 4.6% increase over the same period last year. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for over 28 consecutive years. For the nine months ended September 30, 2023, the dividend payout ratio was 60.07% compared to 30.45% 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.

 


 

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME

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

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September
 30, 2023

 

 

June
 30, 2023

 

 

March
 31, 2023

 

 

December
 31, 2022

 

 

September
 30, 2022

 

 

September
 30, 2023

 

 

September
 30, 2022

 

Interest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

33,783

 

 

$

31,365

 

 

$

29,703

 

 

$

27,302

 

 

$

24,119

 

 

$

94,851

 

 

$

66,962

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and
   government
   agencies

 

 

1,005

 

 

 

1,030

 

 

 

1,068

 

 

 

1,118

 

 

 

1,049

 

 

 

3,103

 

 

 

3,107

 

Municipalities

 

 

392

 

 

 

401

 

 

 

408

 

 

 

420

 

 

 

373

 

 

 

1,201

 

 

 

995

 

Dividends

 

 

246

 

 

 

148

 

 

 

123

 

 

 

126

 

 

 

93

 

 

 

517

 

 

 

192

 

Federal funds sold

 

 

6

 

 

 

9

 

 

 

21

 

 

 

2

 

 

 

-

 

 

 

36

 

 

 

19

 

Other

 

 

927

 

 

 

424

 

 

 

479

 

 

 

524

 

 

 

213

 

 

 

1,830

 

 

 

382

 

Total interest income

 

 

36,359

 

 

 

33,377

 

 

 

31,802

 

 

 

29,492

 

 

 

25,847

 

 

 

101,538

 

 

 

71,657

 

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

13,323

 

 

 

10,434

 

 

 

8,151

 

 

 

4,978

 

 

 

2,166

 

 

 

31,908

 

 

 

4,905

 

Federal funds purchased
   and securities sold
   under agreement to
   repurchase

 

 

349

 

 

 

427

 

 

 

405

 

 

 

463

 

 

 

416

 

 

 

1,181

 

 

 

734

 

Borrowed funds

 

 

2,741

 

 

 

2,113

 

 

 

1,280

 

 

 

1,209

 

 

 

398

 

 

 

6,134

 

 

 

951

 

Subordinated notes

 

 

284

 

 

 

285

 

 

 

284

 

 

 

285

 

 

 

284

 

 

 

853

 

 

 

837

 

Total interest
   expense

 

 

16,697

 

 

 

13,259

 

 

 

10,120

 

 

 

6,935

 

 

 

3,264

 

 

 

40,076

 

 

 

7,427

 

Net Interest Income -
   Before Provision for
   Credit Losses*

 

 

19,662

 

 

 

20,118

 

 

 

21,682

 

 

 

22,557

 

 

 

22,583

 

 

 

61,462

 

 

 

64,230

 

Provision for Credit
   Losses - Loans*

 

 

460

 

 

 

143

 

 

 

817

 

 

 

755

 

 

 

1,637

 

 

 

1,420

 

 

 

3,845

 

Provision for Credit
   Losses - Off Balance
   Sheet Credit Exposures*

 

 

(76

)

 

 

(129

)

 

 

62

 

 

 

-

 

 

 

-

 

 

 

(143

)

 

 

-

 

Net Interest Income
   After Provision for
   Credit Losses*

 

 

19,278

 

 

 

20,104

 

 

 

20,803

 

 

 

21,802

 

 

 

20,946

 

 

 

60,185

 

 

 

60,385

 

Noninterest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer service fees

 

 

2,208

 

 

 

2,361

 

 

 

2,447

 

 

 

2,862

 

 

 

2,300

 

 

 

7,016

 

 

 

7,096

 

Other service charges
   and fees

 

 

1,162

 

 

 

1,803

 

 

 

2,554

 

 

 

1,115

 

 

 

1,105

 

 

 

5,519

 

 

 

3,111

 

Net gain on sale of loans

 

 

294

 

 

 

108

 

 

 

67

 

 

 

165

 

 

 

327

 

 

 

469

 

 

 

1,188

 

Net loss on sale of
   available-for-sale
   securities

 

 

-

 

 

 

-

 

 

 

(891

)

 

 

-

 

 

 

-

 

 

 

(891

)

 

 

-

 

Total noninterest
   income

 

 

3,664

 

 

 

4,272

 

 

 

4,177

 

 

 

4,142

 

 

 

3,732

 

 

 

12,113

 

 

 

11,395

 

 


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

 

 

6,777

 

 

 

6,500

 

 

 

6,657

 

 

 

6,353

 

 

 

5,479

 

 

 

19,934

 

 

 

16,347

 

Employee benefits

 

 

2,066

 

 

 

2,071

 

 

 

2,165

 

 

 

1,911

 

 

 

1,392

 

 

 

6,302

 

 

 

4,992

 

Net occupancy expense

 

 

950

 

 

 

840

 

 

 

856

 

 

 

753

 

 

 

693

 

 

 

2,646

 

 

 

1,813

 

Furniture and equipment

 

 

1,189

 

 

 

1,211

 

 

 

1,252

 

 

 

1,096

 

 

 

1,047

 

 

 

3,652

 

 

 

3,111

 

Data processing

 

 

840

 

 

 

796

 

 

 

726

 

 

 

1,917

 

 

 

781

 

 

 

2,362

 

 

 

2,039

 

Franchise taxes

 

 

434

 

 

 

379

 

 

 

366

 

 

 

(45

)

 

 

254

 

 

 

1,179

 

 

 

1,429

 

ATM expense

 

 

640

 

 

 

683

 

 

 

623

 

 

 

561

 

 

 

580

 

 

 

1,946

 

 

 

1,656

 

Advertising

 

 

865

 

 

 

830

 

 

 

514

 

 

 

531

 

 

 

578

 

 

 

2,209

 

 

 

1,115

 

Net (gain) loss on sale
   of other assets owned

 

 

49

 

 

 

-

 

 

 

-

 

 

 

12

 

 

 

-

 

 

 

49

 

 

 

(271

)

FDIC assessment

 

 

586

 

 

 

496

 

 

 

306

 

 

 

250

 

 

 

271

 

 

 

1,388

 

 

 

655

 

Mortgage servicing
   rights amortization - net

 

 

106

 

 

 

164

 

 

 

159

 

 

 

110

 

 

 

(50

)

 

 

429

 

 

 

35

 

Consulting fees

 

 

179

 

 

 

231

 

 

 

230

 

 

 

637

 

 

 

254

 

 

 

640

 

 

 

665

 

Other general and
   administrative

 

 

2,363

 

 

 

2,643

 

 

 

3,077

 

 

 

2,964

 

 

 

2,192

 

 

 

8,083

 

 

 

6,613

 

Total noninterest
   expense

 

 

17,044

 

 

 

16,844

 

 

 

16,931

 

 

 

17,050

 

 

 

13,471

 

 

 

50,819

 

 

 

40,199

 

Income Before Income
   Taxes

 

 

5,898

 

 

 

7,532

 

 

 

8,049

 

 

 

8,894

 

 

 

11,207

 

 

 

21,479

 

 

 

31,581

 

Income Taxes

 

 

1,121

 

 

 

1,531

 

 

 

1,583

 

 

 

1,706

 

 

 

2,253

 

 

 

4,235

 

 

 

6,254

 

Net Income

 

 

4,777

 

 

 

6,001

 

 

 

6,466

 

 

 

7,188

 

 

 

8,954

 

 

 

17,244

 

 

 

25,327

 

Other Comprehensive
   Income (Loss) (Net of
   Tax):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gain (loss)
   on available-for-sale
   securities

 

 

(4,514

)

 

 

(5,996

)

 

 

8,030

 

 

 

(628

)

 

 

(8,197

)

 

 

(2,480

)

 

 

(43,738

)

Reclassification
   adjustment for realized
   loss on sale of
   available-for-sale
   securities

 

-

 

 

 

-

 

 

 

891

 

 

 

-

 

 

 

-

 

 

 

891

 

 

 

-

 

Net unrealized gain (loss)
   on available-for-sale
   for-sale securities

 

 

(4,514

)

 

 

(5,996

)

 

 

8,921

 

 

 

(628

)

 

 

(8,197

)

 

 

(1,589

)

 

 

(43,738

)

Tax expense (benefit)

 

 

(947

)

 

 

(1,260

)

 

 

1,874

 

 

 

(132

)

 

 

(1,721

)

 

 

(333

)

 

 

(9,185

)

Other comprehensive
   income (loss)

 

 

(3,567

)

 

 

(4,736

)

 

 

7,047

 

 

 

(496

)

 

 

(6,476

)

 

 

(1,256

)

 

 

(34,553

)

Comprehensive Income
   (Loss)

 

$

1,210

 

 

$

1,265

 

 

$

13,513

 

 

$

6,692

 

 

$

2,478

 

 

$

15,988

 

 

$

(9,226

)

Basic Earnings
   Per Share

 

$

0.35

 

 

$

0.44

 

 

$

0.47

 

 

$

0.53

 

 

$

0.68

 

 

$

1.26

 

 

$

1.94

 

Diluted Earnings
   Per Share

 

$

0.35

 

 

$

0.44

 

 

$

0.47

 

 

$

0.53

 

 

$

0.68

 

 

$

1.26

 

 

$

1.94

 

Dividends Declared

 

$

0.2100

 

 

$

0.2100

 

 

$

0.2100

 

 

$

0.2100

 

 

$

0.2100

 

 

$

0.6300

 

 

$

0.6025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) ASU 2016-13 adopted during the first quarter of 2023; therefore, prior period's provision amount reflects the incurred loss
       method.

 

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

 

 

 

September
 30, 2023

 

 

June
 30, 2023

 

 

March
 31, 2023

 

 

December
 31, 2022

 

 

September
 30, 2022

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

 

 

 

(Unaudited)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

151,711

 

 

$

69,760

 

 

$

62,780

 

 

$

83,085

 

 

$

69,680

 

Federal funds sold

 

 

1,471

 

 

 

1,433

 

 

 

1,545

 

 

 

1,324

 

 

 

990

 

Total cash and cash equivalents

 

 

153,182

 

 

 

71,193

 

 

 

64,325

 

 

 

84,409

 

 

 

70,670

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing time deposits

 

 

2,989

 

 

 

3,485

 

 

 

4,435

 

 

 

4,442

 

 

 

5,187

 

Securities - available-for-sale

 

 

348,255

 

 

 

363,225

 

 

 

372,975

 

 

 

390,789

 

 

 

395,485

 

Other securities, at cost

 

 

16,995

 

 

 

17,535

 

 

 

11,543

 

 

 

9,799

 

 

 

8,227

 

Loans held for sale

 

 

1,039

 

 

 

1,459

 

 

 

951

 

 

 

827

 

 

 

2,182

 

Loans, net

 

 

2,504,329

 

 

 

2,490,883

 

 

 

2,422,018

 

 

 

2,336,074

 

 

 

2,122,626

 

Premises and equipment

 

 

31,723

 

 

 

30,398

 

 

 

28,679

 

 

 

28,381

 

 

 

26,484

 

Construction in progress

 

 

3,044

 

 

 

2,290

 

 

 

1,565

 

 

 

278

 

 

 

-

 

Goodwill

 

 

86,358

 

 

 

86,358

 

 

 

86,358

 

 

 

86,358

 

 

 

80,434

 

Loan servicing rights

 

 

5,687

 

 

 

5,635

 

 

 

4,985

 

 

 

3,549

 

 

 

3,583

 

Bank owned life insurance

 

 

33,691

 

 

 

33,470

 

 

 

33,269

 

 

 

33,073

 

 

 

28,051

 

Other assets

 

 

47,388

 

 

 

41,512

 

 

 

38,972

 

 

 

37,372

 

 

 

40,831

 

Total Assets

 

$

3,234,680

 

 

$

3,147,443

 

 

$

3,070,075

 

 

$

3,015,351

 

 

$

2,783,760

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

505,358

 

 

$

488,678

 

 

$

520,145

 

 

$

532,794

 

 

$

506,928

 

Interest-bearing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW accounts

 

 

778,133

 

 

 

770,113

 

 

 

800,230

 

 

 

750,887

 

 

 

705,888

 

Savings

 

 

591,344

 

 

 

581,192

 

 

 

590,854

 

 

 

627,203

 

 

 

607,375

 

Time

 

 

700,445

 

 

 

628,757

 

 

 

601,939

 

 

 

557,980

 

 

 

462,845

 

Total deposits

 

 

2,575,280

 

 

 

2,468,740

 

 

 

2,513,168

 

 

 

2,468,864

 

 

 

2,283,036

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds purchased and securities
   sold under agreements to repurchase

 

 

30,527

 

 

 

51,567

 

 

 

30,496

 

 

 

54,206

 

 

 

55,802

 

Federal Home Loan Bank (FHLB)
   advances

 

 

266,286

 

 

 

266,818

 

 

 

164,327

 

 

 

127,485

 

 

 

102,147

 

Other borrowings

 

 

-

 

 

 

-

 

 

 

-

 

 

 

10,000

 

 

 

10,000

 

Subordinated notes, net of unamortized
   issuance costs

 

 

34,673

 

 

 

34,644

 

 

 

34,615

 

 

 

34,586

 

 

 

34,557

 

Dividend payable

 

 

2,838

 

 

 

2,834

 

 

 

2,831

 

 

 

2,832

 

 

 

2,727

 

Accrued expenses and other liabilities

 

 

21,892

 

 

 

18,177

 

 

 

18,881

 

 

 

19,238

 

 

 

14,913

 

Total liabilities

 

 

2,931,496

 

 

 

2,842,780

 

 

 

2,764,318

 

 

 

2,717,211

 

 

 

2,503,182

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock - No par value 20,000,000
   shares authorized; issued and outstanding
   14,564,425 shares 9/30/23 and 12/31/22

 

 

135,171

 

 

 

135,647

 

 

 

135,241

 

 

 

135,497

 

 

 

121,811

 

Treasury stock - 898,843 shares 9/30/23
   and 956,003 shares 12/31/22

 

 

(11,008

)

 

 

(11,298

)

 

 

(11,310

)

 

 

(11,573

)

 

 

(11,547

)

Retained earnings

 

 

218,510

 

 

 

216,236

 

 

 

213,012

 

 

 

212,449

 

 

 

208,051

 

Accumulated other comprehensive
   loss

 

 

(39,489

)

 

 

(35,922

)

 

 

(31,186

)

 

 

(38,233

)

 

 

(37,737

)

Total stockholders' equity

 

 

303,184

 

 

 

304,663

 

 

 

305,757

 

 

 

298,140

 

 

 

280,578

 

Total Liabilities and Stockholders' Equity

 

$

3,234,680

 

 

$

3,147,443

 

 

$

3,070,075

 

 

$

3,015,351

 

 

$

2,783,760

 

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

SELECT FINANCIAL DATA

 

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

Selected financial data

 

September
30, 2023

 

 

June
30, 2023

 

 

March
31, 2023

 

 

December
31, 2022

 

 

September
 30, 2022

 

 

September
30, 2023

September
30, 2022

 

Return on average assets

 

 

 

0.59

%

 

 

 

0.77

%

 

 

 

0.84

%

 

 

 

0.96

%

 

 

 

1.31

%

 

 

0.73

%

 

 

1.25

%

Return on average equity

 

 

 

6.26

%

 

 

 

7.84

%

 

 

 

8.59

%

 

 

 

10.00

%

 

 

 

12.53

%

 

 

7.52

%

 

 

11.72

%

Yield on earning assets

 

 

 

4.79

%

 

 

 

4.53

%

 

 

 

4.41

%

 

 

 

4.18

%

 

 

 

4.00

%

 

 

4.57

%

 

 

3.76

%

Cost of interest bearing
  liabilities

 

 

 

2.82

%

 

 

 

2.35

%

 

 

 

1.85

%

 

 

 

1.32

%

 

 

 

0.68

%

 

 

2.35

%

 

 

0.53

%

Net interest spread

 

 

 

1.97

%

 

 

 

2.18

%

 

 

 

2.56

%

 

 

 

2.86

%

 

 

 

3.32

%

 

 

2.22

%

 

 

3.23

%

Net interest margin

 

 

 

2.59

%

 

 

 

2.73

%

 

 

 

3.01

%

 

 

 

3.20

%

 

 

 

3.49

%

 

 

2.77

%

 

 

3.37

%

Efficiency

 

 

 

73.07

%

 

 

 

69.06

%

 

 

 

63.53

%

 

 

 

50.46

%

 

 

 

51.19

%

 

 

68.24

%

 

 

53.16

%

Dividend payout ratio

 

 

 

60.07

%

 

 

 

47.22

%

 

 

 

43.79

%

 

 

 

39.39

%

 

 

 

30.45

%

 

 

49.50

%

 

 

40.58

%

Tangible book value
   per share
(1)

 

$

 

18.36

 

 

$

 

18.21

 

 

$

 

17.92

 

 

$

 

17.69

 

 

$

 

17.86

 

 

 

 

 

 

 

Tier 1 leverage ratio

 

 

 

8.02

%

 

 

 

9.85

%

 

 

 

8.36

%

 

 

 

8.39

%

 

 

 

9.11

%

 

 

 

 

 

 

Average shares outstanding

 

 

 

13,650,823

 

 

 

 

13,632,440

 

 

 

 

13,615,655

 

 

 

 

13,606,876

 

 

 

 

13,083,145

 

 

 

13,633,101

 

 

 

13,071,859

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

September
 30, 2023

 

 

June
 30, 2023

 

 

March
 31, 2023

 

 

December
 31, 2022

 

 

September
 30, 2022

 

(Dollar amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

 

1,304,118

 

 

$

 

1,280,902

 

 

$

 

1,225,315

 

 

$

 

1,152,603

 

 

$

 

1,063,661

 

Agricultural real estate

 

 

 

225,672

 

 

 

 

230,837

 

 

 

 

227,897

 

 

 

 

220,819

 

 

 

 

205,089

 

Consumer real estate

 

 

 

512,973

 

 

 

 

506,866

 

 

 

 

502,974

 

 

 

 

494,423

 

 

 

 

416,001

 

Commercial and industrial

 

 

 

250,891

 

 

 

 

253,444

 

 

 

 

241,598

 

 

 

 

242,360

 

 

 

 

229,388

 

Agricultural

 

 

 

123,735

 

 

 

 

128,344

 

 

 

 

131,467

 

 

 

 

128,733

 

 

 

 

128,615

 

Consumer

 

 

 

83,024

 

 

 

 

88,312

 

 

 

 

89,588

 

 

 

 

89,147

 

 

 

 

70,602

 

Other

 

 

 

31,083

 

 

 

 

28,996

 

 

 

 

29,316

 

 

 

 

29,818

 

 

 

 

30,662

 

  Less: Net deferred loan fees
      and costs

 

 

 

(1,890

)

 

 

 

(1,908

)

 

 

 

(1,503

)

 

 

 

(1,516

)

 

 

 

(1,402

)

Total loans, net

 

$

 

2,529,606

 

 

$

 

2,515,793

 

 

$

 

2,446,652

 

 

$

 

2,356,387

 

 

$

 

2,142,616

 

 

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

SELECT FINANCIAL DATA (continued)

 

Asset quality data

 

September
30, 2023

 

 

June
30, 2023

 

 

March
31, 2023

 

 

December
31, 2022

 

 

September
 30, 2022

 

(Dollar amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

 

22,447

 

 

$

 

6,295

 

 

$

 

7,717

 

 

$

 

4,689

 

 

$

 

5,470

 

90 day past due and accruing

 

$

 

-

 

 

$

 

-

 

 

$

 

-

 

 

$

 

-

 

 

$

 

-

 

Nonperforming loans

 

$

 

22,447

 

 

$

 

6,295

 

 

$

 

7,717

 

 

$

 

4,689

 

 

$

 

5,470

 

Other real estate owned

 

$

 

-

 

 

$

 

-

 

 

$

 

-

 

 

$

 

-

 

 

$

 

-

 

Nonperforming assets

 

$

 

22,447

 

 

$

 

6,295

 

 

$

 

7,717

 

 

$

 

4,689

 

 

$

 

5,470

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses(2)

 

$

 

25,277

 

 

$

 

24,910

 

 

$

 

24,507

 

 

$

 

20,313

 

 

$

 

19,990

 

Accretable yield adjustment

 

 

 

4,565

 

 

 

 

5,209

 

 

 

 

5,754

 

 

 

 

6,427

 

 

 

 

5,959

 

Adjusted credit losses with
   accretable yield included
(2)

 

$

 

29,842

 

 

$

 

30,119

 

 

$

 

30,261

 

 

$

 

26,740

 

 

$

 

25,949

 

Allowance for credit losses/
   total loans
(2)

 

 

 

1.00

%

 

 

 

0.99

%

 

 

 

1.00

%

 

 

 

0.86

%

 

 

 

0.93

%

Adjusted credit losses with
   accretable yield/total loans
(2)

 

 

 

1.18

%

 

 

 

1.20

%

 

 

 

1.24

%

 

 

 

1.13

%

 

 

 

1.21

%

Net charge-offs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Quarter-to-date

 

$

 

93

 

 

$

 

(133

)

 

$

 

60

 

 

$

 

431

 

 

$

 

71

 

   Year-to-date

 

$

 

97

 

 

$

 

(73

)

 

$

 

60

 

 

$

 

529

 

 

$

 

97

 

Net charge-offs to average loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Quarter-to-date

 

 

 

0.00

%

 

 

 

-0.01

%

 

 

 

0.00

%

 

 

 

0.02

%

 

 

 

0.00

%

   Year-to-date

 

 

 

0.00

%

 

 

 

0.00

%

 

 

 

0.00

%

 

 

 

0.03

%

 

 

 

0.00

%

Nonperforming loans/total loans

 

 

 

0.89

%

 

 

 

0.25

%

 

 

 

0.32

%

 

 

 

0.20

%

 

 

 

0.26

%

Allowance for credit losses/
   nonperforming loans
(2)

 

 

 

112.61

%

 

 

 

395.71

%

 

 

 

319.22

%

 

 

 

273.67

%

 

 

 

365.44

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) ASU 2016-13 adopted during the first quarter of 2023; therefore, prior period's provision amount reflects the incurred loss
       method.

 

 

 


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

 

 

 

September 30, 2023

 

 

September 30, 2022

 

Interest Earning Assets:

 

Average
Balance

 

 

Interest/
Dividends

 

 

Annualized
Yield/Rate

 

 

Average
Balance

 

 

Interest/
Dividends

 

 

Annualized
Yield/Rate

 

Loans

 

$

2,536,885

 

 

$

33,783

 

 

 

5.33

%

 

$

2,082,486

 

 

$

24,119

 

 

 

4.63

%

Taxable investment securities

 

 

393,910

 

 

 

1,559

 

 

 

1.58

%

 

 

422,250

 

 

 

1,426

 

 

 

1.35

%

Tax-exempt investment securities

 

 

23,986

 

 

 

84

 

 

 

1.77

%

 

 

25,169

 

 

 

89

 

 

 

1.79

%

Fed funds sold & other

 

 

85,515

 

 

 

933

 

 

 

4.36

%

 

 

58,266

 

 

 

213

 

 

 

1.46

%

Total Interest Earning Assets

 

 

3,040,296

 

 

$

36,359

 

 

 

4.79

%

 

 

2,588,171

 

 

$

25,847

 

 

 

4.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonearning Assets

 

 

180,193

 

 

 

 

 

 

 

 

 

150,044

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

3,220,489

 

 

 

 

 

 

 

 

$

2,738,215

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings deposits

 

$

1,367,168

 

 

$

7,673

 

 

 

2.24

%

 

$

1,328,344

 

 

$

1,586

 

 

 

0.48

%

Other time deposits

 

 

667,880

 

 

 

5,650

 

 

 

3.38

%

 

 

423,668

 

 

 

580

 

 

 

0.55

%

Other borrowed money

 

 

266,467

 

 

 

2,741

 

 

 

4.11

%

 

 

60,455

 

 

 

398

 

 

 

2.63

%

Fed funds purchased & securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  sold under agreement to repurchase

 

 

34,128

 

 

 

349

 

 

 

4.09

%

 

 

63,388

 

 

 

416

 

 

 

2.63

%

Subordinated notes

 

 

34,654

 

 

 

284

 

 

 

3.28

%

 

 

34,538

 

 

 

284

 

 

 

3.29

%

Total Interest Bearing Liabilities

 

$

2,370,297

 

 

$

16,697

 

 

 

2.82

%

 

$

1,910,393

 

 

$

3,264

 

 

 

0.68

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Liabilities

 

 

544,801

 

 

 

 

 

 

 

 

 

542,077

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

$

305,391

 

 

 

 

 

 

 

 

$

285,745

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income and
   Interest Rate Spread

 

 

 

 

$

19,662

 

 

 

1.97

%

 

 

 

 

$

22,583

 

 

 

3.32

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Margin

 

 

 

 

 

 

 

 

2.59

%

 

 

 

 

 

 

 

 

3.49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    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

 

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES

(in thousands of dollars, except percentages)
 

 

 

For the Nine Months Ended

 

 

For the Nine Months Ended

 

 

 

September 30, 2023

 

 

September 30, 2022

 

Interest Earning Assets:

 

Average
Balance

 

 

Interest/
Dividends

 

 

Annualized
Yield/Rate

 

 

Average
Balance

 

 

Interest/
Dividends

 

 

Annualized
Yield/Rate

 

Loans

 

$

2,470,770

 

 

$

94,851

 

 

 

5.12

%

 

$

1,997,081

 

 

$

66,962

 

 

 

4.47

%

Taxable investment securities

 

 

396,917

 

 

 

4,544

 

 

 

1.53

%

 

 

424,882

 

 

 

4,065

 

 

 

1.28

%

Tax-exempt investment securities

 

 

24,865

 

 

 

277

 

 

 

1.88

%

 

 

21,794

 

 

 

229

 

 

 

1.77

%

Fed funds sold & other

 

 

67,869

 

 

 

1,866

 

 

 

3.67

%

 

 

101,922

 

 

 

401

 

 

 

0.52

%

Total Interest Earning Assets

 

 

2,960,421

 

 

$

101,538

 

 

 

4.57

%

 

 

2,545,679

 

 

$

71,657

 

 

 

3.76

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonearning Assets

 

 

176,568

 

 

 

 

 

 

 

 

 

158,378

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

3,136,989

 

 

 

 

 

 

 

 

$

2,704,057

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings deposits

 

$

1,373,110

 

 

$

18,854

 

 

 

1.83

%

 

$

1,315,793

 

 

$

2,951

 

 

 

0.30

%

Other time deposits

 

 

620,071

 

 

 

13,054

 

 

 

2.81

%

 

 

439,534

 

 

 

1,954

 

 

 

0.59

%

Other borrowed money

 

 

204,927

 

 

 

6,134

 

 

 

3.99

%

 

 

54,184

 

 

 

951

 

 

 

2.34

%

Fed funds purchased & securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  sold under agreement to repurchase

 

 

37,649

 

 

 

1,181

 

 

 

4.18

%

 

 

42,584

 

 

 

734

 

 

 

2.30

%

Subordinated notes

 

 

34,625

 

 

 

853

 

 

 

3.28

%

 

 

34,509

 

 

 

837

 

 

 

3.23

%

Total Interest Bearing Liabilities

 

$

2,270,382

 

 

$

40,076

 

 

 

2.35

%

 

$

1,886,604

 

 

$

7,427

 

 

 

0.53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Liabilities

 

 

561,001

 

 

 

 

 

 

 

 

 

529,439

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

$

305,606

 

 

 

 

 

 

 

 

$

288,014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income and
   Interest Rate Spread

 

 

 

 

$

61,462

 

 

 

2.22

%

 

 

 

 

$

64,230

 

 

 

3.23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Margin

 

 

 

 

 

 

 

 

2.77

%

 

 

 

 

 

 

 

 

3.37

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    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

 

 


 

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

 

 

 

September 30, 2023

 

 

September 30, 2022

 

 

 

As Reported

 

Excluding Accretion/Amortization

Difference

 

 

As Reported

 

Excluding Accretion/Amortization

Difference

 

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

Interest Earning Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

33,783

 

 

 

5.33

%

 

$

32,631

 

 

 

5.15

%

 

$

1,152

 

 

 

0.18

%

 

$

24,119

 

 

 

4.63

%

 

$

23,437

 

 

 

4.50

%

 

$

682

 

 

 

0.13

%

Taxable investment securities

 

 

1,559

 

 

 

1.58

%

 

 

1,559

 

 

 

1.58

%

 

 

-

 

 

 

0.00

%

 

 

1,426

 

 

 

1.35

%

 

 

1,426

 

 

 

1.35

%

 

 

-

 

 

 

0.00

%

Tax-exempt investment securities

 

 

84

 

 

 

1.77

%

 

 

84

 

 

 

1.77

%

 

 

-

 

 

 

0.00

%

 

 

89

 

 

 

1.79

%

 

 

89

 

 

 

1.79

%

 

 

-

 

 

 

0.00

%

Fed funds sold & other

 

 

933

 

 

 

4.36

%

 

 

933

 

 

 

4.36

%

 

 

-

 

 

 

0.00

%

 

 

213

 

 

 

1.46

%

 

 

213

 

 

 

1.46

%

 

 

-

 

 

 

0.00

%

 Total Interest Earning Assets

 

 

36,359

 

 

 

4.79

%

 

 

35,207

 

 

 

4.64

%

 

 

1,152

 

 

 

0.15

%

 

 

25,847

 

 

 

4.00

%

 

 

25,165

 

 

 

3.89

%

 

 

682

 

 

 

0.11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings deposits

 

$

7,673

 

 

 

2.24

%

 

$

7,673

 

 

 

2.24

%

 

$

-

 

 

 

0.00

%

 

$

1,586

 

 

 

0.48

%

 

$

1,586

 

 

 

0.48

%

 

$

-

 

 

 

0.00

%

Other time deposits

 

 

5,650

 

 

 

3.38

%

 

 

5,500

 

 

 

3.29

%

 

 

150

 

 

 

0.09

%

 

 

580

 

 

 

0.55

%

 

 

1,199

 

 

 

1.13

%

 

 

(619

)

 

 

-0.58

%

Other borrowed money

 

 

2,741

 

 

 

4.11

%

 

 

2,759

 

 

 

4.14

%

 

 

(18

)

 

 

-0.03

%

 

 

398

 

 

 

2.63

%

 

 

419

 

 

 

2.77

%

 

 

(21

)

 

 

-0.14

%

Fed funds purchased and securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  sold under agreement to repurchase

 

 

349

 

 

 

4.09

%

 

 

349

 

 

 

4.09

%

 

 

-

 

 

 

0.00

%

 

 

416

 

 

 

2.63

%

 

 

416

 

 

 

2.63

%

 

 

-

 

 

 

0.00

%

Subordinated notes

 

 

284

 

 

 

3.28

%

 

 

284

 

 

 

3.28

%

 

 

-

 

 

 

0.00

%

 

 

284

 

 

 

3.29

%

 

 

284

 

 

 

3.29

%

 

 

-

 

 

 

0.00

%

 Total Interest Bearing Liabilities

 

 

16,697

 

 

 

2.82

%

 

 

16,565

 

 

 

2.80

%

 

 

132

 

 

 

0.02

%

 

 

3,264

 

 

 

0.68

%

 

 

3,904

 

 

 

0.81

%

 

 

(640

)

 

 

-0.13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest/Dividend income/yield

 

 

36,359

 

 

 

4.79

%

 

 

35,207

 

 

 

4.64

%

 

 

1,152

 

 

 

0.15

%

 

 

25,847

 

 

 

4.00

%

 

 

25,165

 

 

 

3.89

%

 

 

682

 

 

 

0.11

%

Interest Expense / yield

 

 

16,697

 

 

 

2.82

%

 

 

16,565

 

 

 

2.80

%

 

 

132

 

 

 

0.02

%

 

 

3,264

 

 

 

0.68

%

 

 

3,904

 

 

 

0.81

%

 

 

(640

)

 

 

-0.13

%

Net Interest Spread

 

 

19,662

 

 

 

1.97

%

 

 

18,642

 

 

 

1.84

%

 

 

1,020

 

 

 

0.13

%

 

 

22,583

 

 

 

3.32

%

 

 

21,261

 

 

 

3.08

%

 

 

1,322

 

 

 

0.24

%

Net Interest Margin

 

 

 

 

 

2.59

%

 

 

 

 

 

2.46

%

 

 

 

 

 

0.13

%

 

 

 

 

 

3.49

%

 

 

 

 

 

3.29

%

 

 

 

 

 

0.20

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    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

 

 

 


 

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES (continued)

(in thousands of dollars, except percentages)

 

 

 

For the Nine Months Ended

 

 

For the Nine Months Ended

 

 

 

September 30, 2023

 

 

September 30, 2022

 

 

 

As Reported

 

Excluding Accretion/Amortization

Difference

 

 

As Reported

 

Excluding Accretion/Amortization

Difference

 

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

Interest Earning Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

94,851

 

 

 

5.12

%

 

$

92,364

 

 

 

4.99

%

 

$

2,487

 

 

 

0.13

%

 

$

66,962

 

 

 

4.47

%

 

$

65,504

 

 

 

4.38

%

 

$

1,458

 

 

 

0.09

%

Taxable investment securities

 

 

4,544

 

 

 

1.53

%

 

 

4,544

 

 

 

1.53

%

 

 

-

 

 

 

0.00

%

 

 

4,065

 

 

 

1.28

%

 

 

4,065

 

 

 

1.28

%

 

 

-

 

 

 

0.00

%

Tax-exempt investment securities

 

 

277

 

 

 

1.88

%

 

 

277

 

 

 

1.88

%

 

 

-

 

 

 

0.00

%

 

 

229

 

 

 

1.77

%

 

 

229

 

 

 

1.77

%

 

 

-

 

 

 

0.00

%

Fed funds sold & other

 

 

1,866

 

 

 

3.67

%

 

 

1,866

 

 

 

3.67

%

 

 

-

 

 

 

0.00

%

 

 

401

 

 

 

0.52

%

 

 

401

 

 

 

0.52

%

 

 

-

 

 

 

0.00

%

 Total Interest Earning Assets

 

 

101,538

 

 

 

4.57

%

 

 

99,051

 

 

 

4.47

%

 

 

2,487

 

 

 

0.10

%

 

 

71,657

 

 

 

3.76

%

 

 

70,199

 

 

 

3.68

%

 

 

1,458

 

 

 

0.08

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings deposits

 

$

18,854

 

 

 

1.83

%

 

$

18,854

 

 

 

1.83

%

 

$

-

 

 

 

0.00

%

 

$

2,951

 

 

 

0.30

%

 

$

2,951

 

 

 

0.30

%

 

$

-

 

 

 

0.00

%

Other time deposits

 

 

13,054

 

 

 

2.81

%

 

 

13,458

 

 

 

2.89

%

 

 

(404

)

 

 

-0.08

%

 

 

1,954

 

 

 

0.59

%

 

 

3,812

 

 

 

1.16

%

 

 

(1,858

)

 

 

-0.57

%

Other borrowed money

 

 

6,134

 

 

 

3.99

%

 

 

6,187

 

 

 

4.03

%

 

 

(53

)

 

 

-0.04

%

 

 

951

 

 

 

2.34

%

 

 

1,014

 

 

 

2.50

%

 

 

(63

)

 

 

-0.16

%

Fed funds purchased and securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  sold under agreement to repurchase

 

 

1,181

 

 

 

4.18

%

 

 

1,181

 

 

 

4.18

%

 

 

-

 

 

 

0.00

%

 

 

734

 

 

 

2.30

%

 

 

734

 

 

 

2.30

%

 

 

-

 

 

 

0.00

%

Subordinated notes

 

 

853

 

 

 

3.28

%

 

 

853

 

 

 

3.28

%

 

 

-

 

 

 

0.00

%

 

 

837

 

 

 

3.23

%

 

 

837

 

 

 

3.23

%

 

 

-

 

 

 

0.00

%

 Total Interest Bearing Liabilities

 

 

40,076

 

 

 

2.35

%

 

 

40,533

 

 

 

2.38

%

 

 

(457

)

 

 

-0.03

%

 

 

7,427

 

 

 

0.53

%

 

 

9,348

 

 

 

0.66

%

 

 

(1,921

)

 

 

-0.13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest/Dividend income/yield

 

 

101,538

 

 

 

4.57

%

 

 

99,051

 

 

 

4.47

%

 

 

2,487

 

 

 

0.10

%

 

 

71,657

 

 

 

3.76

%

 

 

70,199

 

 

 

3.68

%

 

 

1,458

 

 

 

0.08

%

Interest Expense / yield

 

 

40,076

 

 

 

2.35

%

 

 

40,533

 

 

 

2.38

%

 

 

(457

)

 

 

-0.03

%

 

 

7,427

 

 

 

0.53

%

 

 

9,348

 

 

 

0.66

%

 

 

(1,921

)

 

 

-0.13

%

Net Interest Spread

 

 

61,462

 

 

 

2.22

%

 

 

58,518

 

 

 

2.09

%

 

 

2,944

 

 

 

0.13

%

 

 

64,230

 

 

 

3.23

%

 

 

60,851

 

 

 

3.02

%

 

 

3,379

 

 

 

0.21

%

Net Interest Margin

 

 

 

 

 

2.77

%

 

 

 

 

 

2.64

%

 

 

 

 

 

0.13

%

 

 

 

 

 

3.37

%

 

 

 

 

 

3.19

%

 

 

 

 

 

0.18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    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

 

 

 


 

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATION OF NET INCOME

 

 

 

(in thousands of dollars)

 

 

 

(in thousands of dollars)

 

Non-GAAP Reconciliation of Net Income

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

 

September 30, 2023

 

 

September 30, 2022

 

 

 

September 30, 2023

 

 

September 30, 2022

 

 

 

(Unaudited)

 

 

 

(Unaudited)

 

Net income as reported

 

$

4,777

 

 

$

8,954

 

 

 

$

17,244

 

 

$

25,327

 

Acquisition expenses

 

 

-

 

 

 

319

 

 

 

 

184

 

 

 

530

 

Tax effect on acquisition expenses

 

 

-

 

 

 

25

 

 

 

 

(37

)

 

 

(67

)

Net income excluding acquisition expenses and tax effect

 

$

4,777

 

 

$

9,298

 

 

 

 

17,391

 

 

 

25,790

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding
   including participating securities

 

 

13,650,823

 

 

 

13,083,145

 

 

 

 

13,633,101

 

 

 

13,071,859

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share

 

$

0.35

 

 

$

0.71

 

 

 

$

1.28

 

 

$

1.97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

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

 

 

 

September 30, 2023

 

 

September 30, 2022

 

 

 

September 30, 2023

 

 

September 30, 2022

 

 

 

 

 

 

 

 

 

Shares Outstanding

 

 

13,665,582

 

 

 

13,107,500

 

 

 

 

13,665,582

 

 

 

13,107,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

  Equity

 

$

303,184

 

 

$

280,578

 

 

 

$

303,184

 

 

$

280,578

 

  Goodwill

 

 

86,358

 

 

 

80,434

 

 

 

 

86,358

 

 

 

80,434

 

  Other Intangible

 

 

7,992

 

 

 

3,744

 

 

 

 

7,992

 

 

 

3,744

 

Comprehensive Loss Adjustment*

 

 

-

 

 

 

-

 

 

 

 

39,489

 

 

 

37,737

 

CECL Adjustment**

 

 

-

 

 

 

-

 

 

 

 

2,528

 

 

 

-

 

Tangible Equity

 

$

208,834

 

 

$

196,400

 

 

 

$

250,851

 

 

$

234,137

 

Shares Outstanding

 

 

13,666

 

 

 

13,108

 

 

 

 

13,666

 

 

 

13,108

 

Tangible Book Equity per Share

 

$

15.28

 

 

$

14.98

 

 

 

$

18.36

 

 

$

17.86

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual Average

 

 

 

Regulatory Average

 

 

 

Year to Date

 

 

 

Year to Date

 

 

 

September 30, 2023

 

 

September 30, 2022

 

 

 

September 30, 2023

 

 

September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

17,244

 

 

$

25,327

 

 

 

$

17,244

 

 

$

25,327

 

Acquisition Costs - Tax Adjusted

 

 

147

 

 

 

463

 

 

 

 

147

 

 

 

463

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shares Outstanding

 

 

13,633,101

 

 

 

13,071,859

 

 

 

 

13,633,101

 

 

 

13,071,859

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Tangible Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

  Average Equity

 

$

305,606

 

 

$

288,014

 

 

 

$

305,606

 

 

$

288,014

 

  Average Goodwill

 

 

86,358

 

 

 

80,434

 

 

 

 

86,358

 

 

 

80,434

 

  Average Other Intangible

 

 

8,717

 

 

 

4,119

 

 

 

 

8,717

 

 

 

4,119

 

Average Comprehensive Loss Adjustment*

 

 

-

 

 

 

-

 

 

 

 

35,497

 

 

 

21,181

 

Average CECL Adjustment**

 

 

-

 

 

 

-

 

 

 

 

2,528

 

 

 

 

Average Tangible Equity

 

$

210,531

 

 

$

203,461

 

 

 

$

248,556

 

 

$

224,642

 

Average Shares Outstanding

 

 

13,633

 

 

 

13,072

 

 

 

 

13,633

 

 

 

13,072

 

Average Tangible Book Equity per Share

 

$

15.44

 

 

$

15.56

 

 

 

$

18.23

 

 

$

17.19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Tangible Equity

 

 

10.92

%

 

 

16.60

%

 

 

 

9.25

%

 

 

15.03

%

Return on Average Tangible Equity w/o Acquisition

 

 

11.01

%

 

 

16.90

%

 

 

 

9.33

%

 

 

15.31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*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; therefore, prior period's provision amount reflects the incurred loss method and the Bank has elected to spread the capital adjustment over three years. The first year permits 75% of the capital adjustment to be removed from the calculation of tangible equity for regulatory purposes.