Farmers & Merchants Bancorp, Inc. Reports 2023 Third-Quarter and Year-to-Date Financial Results

October 26, 2023

ARCHBOLD, Ohio, Oct. 26, 2023 (GLOBE NEWSWIRE) -- 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.

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. 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 agreements 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
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 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

*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

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


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	%

(1) Tangible Equity = Stockholder Equity less goodwill, other intangibles (core deposit intangible, mortgage servicing rights and unrealized gain/loss on securities) plus CECL adjustment
(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 repurch.		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


	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 repurch.		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
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.

Release Details

Farmers & Merchants Bancorp, Inc. Reports 2023 Third-Quarter and Year-to-Date Financial Results