Release Details

Farmers & Merchants Bancorp, Inc. Reports Record 2020 Fourth-Quarter and Full-Year Financial Results

February 10, 2021

ARCHBOLD, Ohio, Feb. 10, 2021 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2020 fourth quarter and twelve months ended December 31, 2020.

2020 Fourth Quarter Financial Highlights Include (on a year-over-year basis unless noted):

  • Net income increased 43.5% to a quarterly record of $6.8 million
  • Earnings increased 39.5% to a quarterly record of $0.60 per basic and diluted share
  • Net interest income after provision for loan losses increased 12.1% to $14.1 million, which included a $1.3 million increase in the provision for loan losses as a result of the COVID-19 crisis
  • Noninterest income increased 88.5% to $5.6 million, primarily due to strong residential mortgage demand
  • A gain on the settlement of a bank-owned life insurance contract (“BOLI”) and interest and fees associated with the Paycheck Protection Program (“PPP”) benefited 2020 fourth quarter after-tax income by $0.4 million and $1.0 million, respectively
  • Efficiency ratio, adjusted for BOLI and PPP benefits, was 56.49%, compared to 63.67%
  • Return on average assets adjusted for BOLI and PPP benefits, was 1.14%, compared to 1.18%
  • Loans 30 days past due to total loans, excluding COVID related loans, was only 0.29%
  • Net charge-offs to average loans were 0.02%, compared to 0.03%

2020 Full-Year Financial Highlights Include (on a year-over-year basis unless noted):

  • Total loans increased 6.9% to $1.303 billion, and included $36.2 million of PPP loans
  • Total assets increased 18.8% to a record $1.910 billion
  • Total assets managed increased to a record $2.6 billion
  • Deposits increased 23.9% to a record $1.596 billion
  • Net interest income after provision for loan losses increased 0.7% to $52.8 million, which included a $5.8 million increase in the provision for loan losses as a result of the COVID-19 crisis
  • Net income increased 9.2% to an annual record of $20.1 million
  • Earnings increased 8.4% to an annual record of $1.80 per basic and diluted share
  • Book value per share increased 7.6% to $22.25 per share
  • Tangible book value per share increased 7.4% to $17.19 per share
  • 2020 cash dividend increased 8.2% to $0.66 per share

2020 Operating Highlights Include:

  • Created operation hubs to protect the health and safety of the Company’s employees, customers, and communities throughout the COVID-19 pandemic
  • Approved $87.8 million in PPP loans, helping nearly 950 small businesses protect over 12,400 jobs
  • Donated over $167,000 to local organizations during 2020, a nearly 20% increase from 2019
  • Opened new loan production offices in Muncie, IN, Oxford, OH and West Bloomfield, MI
  • Completed construction on a new full-service office in FT. Wayne, IN, which is expected to open in Q1 2021
  • Announced the acquisition of Ossian Financial Services, Inc., which operates two full-service bank offices in Northeast Indiana and had approximately $122.0 million in assets at September 30, 2020
  • Purchased the assets and clients of Adams County Financial Resources, a registered investment advisory firm located in Geneva, IN, with approximately $83.0 million of assets under management at November 30, 2020
  • Announced an office realignment program that will consolidate three offices in Ohio and one office in Indiana
  • Added talent to both the Company’s senior leadership team and Board of Directors
  • Continued to invest in expanding the Company’s digital resources and infrastructure

“Across the board 2020 was a record year for F&M, despite the challenges associated with the COVID-19 pandemic. Our record results speak to the dedication of our 354 associates throughout our Ohio, Indiana, and Michigan markets and our daily commitment to provide our communities with superior and individual financial services,” stated Lars B. Eller, President and Chief Executive Officer. “In addition, our record performance demonstrates the success of our 2019 strategic plan that is focused on growing earnings and creating long-term value for our shareholders.”

“As we look forward to 2021, I am excited to complete the Ossian acquisition, which we believe will be completed during the second quarter. In addition, we plan to finish integrating Adams County Financial Resources during the first quarter, as well as implementing our office realignment strategy, investing in new offices in compelling markets, and expanding our digital offerings throughout 2021. We expect to incur an estimated $2.5 million of one-time expenses associated with these initiatives in 2021. Once fully integrated, we believe the combination of reduced operating expenses and the contribution of additional sources of revenue will provide an approximately $2.1 million benefit to income in 2022 and beyond as we further increase our scale, diversify our revenues, improve our cost structure, and better serve our customers. Over the past two years, we have gained valuable experience integrating prior acquisitions, while we have focused on expanding our leadership team and investing in our infrastructure to support our rapid growth. I look forward to updating our shareholders on the progress we are making throughout 2021,” continued Mr. Eller.   

Income Statement
Net income for the 2020 fourth quarter ended December 31, 2020, was $6.8 million, compared to $4.7 million for the same period last year. Net income per basic and diluted share for the 2020 fourth quarter was $0.60, compared to $0.43 for the same period last year. Net income for the 2020 twelve-month period ended December 31, 2020, was $20.1 million, compared to $18.4 million for the same period last year. Net income per basic and diluted share for the 2020 twelve months was $1.80, compared to $1.66 for the same period last year.

Mr. Eller continued, “Our provision for loan losses increased from $1.1 million for the twelve months ended December 31, 2019, to $7.0 million for the twelve months ended December 31, 2020, as we prudently increased our allowance of loan losses primarily associated with the expected economic impacts caused by the COVID-19 crisis. The increase in our provision for loans losses was successfully offset by higher interest income, successful reductions in our cost of funds, interest and fees earned from the Paycheck Protection Program, a gain on the settlement of a BOLI contract, a 42.0% or $5.0 million year-over-year increase in noninterest income, and controlled noninterest expenses. 2020 was our sixth consecutive year of record earnings, while achieving our lowest efficiency ratio in 16 years.”

Deposits
At December 31, 2020, total deposits were $1.596 billion, an increase of 23.9% from December 31, 2019, and an increase of 5.1% from September 30, 2020. The significant organic deposit growth being experienced is a result of continued strength in expanding relationships with new and existing customers, and the benefits of PPP activity. In addition, we continue to see growing customer preferences to more stable and secure saving instruments as deposits have increased since the COVID-19 crisis began.

Loan Portfolio and Asset Quality
Total loans, net at December 31, 2020, increased 6.9% to $1.303 billion, compared to $1.219 billion at December 31, 2019. The year-over-year improvement resulted primarily from the contribution of strong organic loan growth. During 2020, the Company processed $51.6 million of PPP loan forgiveness and principal payments received and at December 31, 2020, there were $36.2 million of PPP loans included in F&M’s loan portfolio.

Mr. Eller continued, “Despite the challenges created by the COVID-19 crisis, we continue to grow our loan portfolio with high quality customers, reflecting the personal financial services and value we provide our local communities and the recent contribution of our newly opened loan production offices in Muncie, IN, Oxford, OH, and West Bloomfield, MI.”

Mr. Eller continued: “Our loan portfolio remains resilient as loans 30 days past due to total loans, excluding COVID related loans, was only 0.29% as of December 31, 2020. In addition, at year-end there were only five loans totaling $3.6 million of interest only and full deferrals out of 190 loans that had modification of terms due to the COVID-19 crisis during the year. These 190 loans had an overall loan outstanding at year-end of $120 million. Given the uncertainty surrounding the COVID-19 crisis and the continued impacts the pandemic is having on the global economy, we are proactively monitoring our portfolio’s performance and our approach to risk remains prudent. As a result, we have increased our allowance for loan and lease losses by 89.2% over the past 12 months. Our allowance for loan and lease losses to total loans, adjusted for our PPP balances, is now over 1.20% and includes the $1.7 million credit mark associated with the 2019 Bank of Geneva acquisition.”  

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $9.4 million or 0.72% of total loans at December 31, 2020, compared to $3.4 million, or 0.28% at December 31, 2019. The year-over-year increase in nonperforming loans is primarily due to the impacts of the COVID-19 crisis, as well as the accounting treatment for nonaccrual loans associated with a $5.2 million real-estate secured relationship.

The Bank had 190 loans that received either deferment payments or interest only payments due to the COVID-19 crisis. As of December 31, 2020, there were only five modifications left representing a total of $3.6 million. Of those remaining there were no outstanding full payment deferment loans. Three loans are interest only in the entertainment sector with $1.2 million in total balances with all scheduled for original repayment terms to begin by early April 2021. One office building with a $2.3 million balance with interest only payments will return to payments in May 2021. One restaurant with a $13,000 balance received an interest only modification in December 2020 with payments to resume in March 2021.

F&M’s agriculture portfolio continues to perform well, with a 0.59% past due balance at December 31, 2020. F&M is optimistic trends will remain positive as a result of strong global demand for agricultural products and a favorable commodity price environment expected during 2021. At December 31, 2020, F&M’s $94.4 million agriculture portfolio consisted primarily of row crop and livestock production, with almost no dairy exposure. Agriculture customers are proven farmers with strong balance sheets and 95% of row crop producers utilize crop insurance to mitigate weather and production risks.  At December 31, 2020, approximately 24% of F&M’s agriculture portfolio was within the livestock sector, and approximately 69% of this exposure is to customers that support production but do not have direct livestock ownership. In addition, approximately 40% of F&M’s livestock exposure is for loans with balances under $750,000 and of the borrowers with direct livestock ownership, approximately 55% are not dependent on the income from livestock to manage their debt payments.   Of the $71.5 million of agricultural real estate loans originated in 2020, F&M sold approximately 45% in the secondary market at a premium of $1.2 million, while servicing and maintaining the relationship of these accounts.

Mr. Eller concluded: “As our record financial and operating results demonstrate, we successfully responded to the unprecedented challenges of the COVID-19 crisis, while remaining focused on executing our growth-oriented strategic plan. I am very proud of our performance during 2020 and the hard work of all F&M’s associates. Although F&M’s scale has increased, we remain committed to nurturing lasting and personal relationships within our communities throughout the near-term economic challenges and future periods of prosperity.”

Stockholders’ Equity and Dividends 
Total stockholders’ equity increased 8.2% to $249.2 million at December 31, 2020, from $230.3 million at December 31, 2019. At December 31, 2020, the Company had a Tier 1 leverage ratio of 10.46%, compared to 11.52% at September 30, 2019.

Tangible stockholders’ equity increased to $192.5 million at December 31, 2020, compared to $178.3 million at December 31, 2019. The largest change to intangible stockholders’ equity was an increase in accumulated comprehensive income, which increased from $1.098 million as of December 31, 2019, to $5.697 million as of December 31, 2020. On a per share basis, tangible stockholders’ equity at December 31, 2020, was $17.19 per share, compared to $16.01 per share at December 31, 2019.

For the twelve months ended December 31, 2020, the Company has declared cash dividends of $0.66 per share, which is an 8.2% increase over the 2019 twelve-month declared dividend payment. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 26 consecutive years. For the twelve months ended December 31, 2020, the dividend payout ratio was 35.76% compared to 36.59% for the same period last year.

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

About Farmers & Merchants State Bank:  
The Farmers & Merchants State Bank is a local independent community bank that has been serving Northwest Ohio and Northeast Indiana since 1897. The Farmers & Merchants State Bank provides commercial banking, retail banking and other financial services through its 30 offices. Our locations are in Fulton, Defiance, Hancock, Henry, Lucas, Williams, and Wood counties in Northwest Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, and Steuben counties.

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   Twelve Months Ended
   December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019  December 31, 2020 December 31, 2019
Interest Income                
Loans, including fees  $17,061  $16,181  $16,192  $15,883  $15,608   $65,317  $62,213 
Debt securities:                              
U.S. Treasury and government agencies   695   761   767   1,146   840    3,369   3,341 
Municipalities   295   279   243   262   225    1,079   837 
Dividends   35   36   26   45   60    142   293 
Federal funds sold   5   4   5   6   97    20   416 
Other.   48   32   40   122   319    242   1,206 
Total interest income   18,139   17,293   17,273   17,464   17,149    70,169   68,306 
Interest Expense                              
Deposits   1,619   1,864   2,254   2,901   3,336    8,638   12,942 
Federal funds purchased and securities sold                              
under agreements to repurchase   170   174   187   244   207    775   734 
Borrowed funds   226   231   257   266   270    980   1,083 
Total interest expense   2,015   2,269   2,698   3,411   3,813    10,393   14,759 
Net Interest Income - Before Provision for Loan Losses   16,124   15,024   14,575   14,053   13,336    59,776   53,547 
Provision for Loan Losses    1,995   1,987   1,569   1,430   728    6,981   1,138 
Net Interest Income After Provision For Loan Losses   14,129   13,037   13,006   12,623   12,608    52,795   52,409 
Noninterest Income                              
Customer service fees   2,750   2,299   2,258   1,586   1,732    8,893   6,726 
Other service charges and fees   980   879   704   1,039   1,132    3,602   4,443 
Net gain on sale of loans   1,894   1,537   364   227   119    4,022   677 
Net gain (loss) on sale of available-for-sale securities   -   -   -   270   -    270   (26)
Total noninterest income   5,624   4,715   3,326   3,122   2,983    16,787   11,820 
Noninterest Expense                              
Salaries and wages   5,068   5,102   4,095   4,223   4,029    18,488   16,329 
Employee benefits   1,140   1,566   1,218   1,677   1,410    5,601   5,558 
Net occupancy expense   585   558   564   564   406    2,271   2,317 
Furniture and equipment   760   875   750   758   596    3,143   2,775 
Data processing   428   490   408   442   396    1,768   2,553 
Franchise taxes   241   368   369   368   246    1,346   981 
ATM expense   456   444   376   414   434    1,690   1,715 
Advertising   353   411   265   303   340    1,332   1,569 
Net (gain) loss on sale of other assets owned   20   (7)  (7)  1   16    7   81 
FDIC assessment   223   194   144   72   (11)   633   183 
Mortgage servicing rights amortization   247   296   356   132   158    1,031   487 
Consulting fees   407   205   217   139   264    968   668 
Other general and administrative   1,358   1,553   1,612   1,575   1,455    6,098   6,251 
Total noninterest expense   11,286   12,055   10,367   10,668   9,739    44,376   41,467 
Income Before Income Taxes   8,467   5,697   5,965   5,077   5,852    25,206   22,762 
Income Taxes   1,691   1,287   1,161   972   1,129    5,111   4,360 
Net Income   6,776   4,410   4,804   4,105   4,723    20,095   18,402 
Other Comprehensive Income (Loss) (Net of Tax):                              
Net unrealized gain (loss) on available-for-sale securities   (207)  639   661   4,998   (472)   6,091   5,179 
Reclassification adjustment for realized (gain) loss on sale of available-for-sale securities   -   -   -   (270)  -    (270)  26 
Net unrealized gain (loss) on available-for-sale securities   (207)  639   661   4,728   (472)   5,821   5,205 
Tax expense (benefit)   (44)  134   139   993   (99)   1,222   1,093 
Other comprehensive income (loss)   (163)  505   522   3,735   (373)   4,599   4,112 
Comprehensive Income  $6,613  $4,915  $5,326  $7,840  $4,350   $24,694  $22,514 
Basic and Diluted Earnings Per Share  $0.60  $0.40  $0.43  $0.37  $0.43   $1.80  $1.66 
Dividends Declared  $0.17  $0.17  $0.16  $0.16  $0.16   $0.66  $0.61 
                               


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (in thousands of dollars, except share data)
 
   December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 
     (Unaudited) (Unaudited) (Unaudited)   
Assets            
Cash and due from banks $98,279  $46,395  $54,336  $49,844  $50,137  
Federal funds sold  77,427   41,358   31,105   40,993   1,159  
 Total cash and cash equivalents  175,706   87,753   85,441   90,837   51,296  
             
Interest-bearing time deposits  4,653   4,657   4,636   4,869   4,309  
Securities - available-for-sale  307,812   259,041   236,292   204,121   222,293  
Other securities, at cost  5,939   5,827   5,810   5,810   5,810  
Loans held for sale  7,740   7,621   11,445   2,153   4,248  
Loans, net  1,289,318   1,351,979   1,334,790   1,239,108   1,211,771  
Premises and equipment  27,063   26,776   26,049   26,120   26,351  
Goodwill  47,340   47,340   47,340   47,340   47,340  
Mortgage servicing rights  3,320   3,027   2,740   2,672   2,629  
Other real estate owned  71   206   135   185   214  
Bank owned life insurance  25,208   15,501   15,399   15,313   15,235  
Other assets  15,374   16,872   14,370   16,597   15,834  
             
Total Assets $1,909,544  $1,826,600  $1,784,447  $1,655,125  $1,607,330  
 Liabilities and Stockholders' Equity           
Liabilities           
Deposits           
 Noninterest-bearing $351,147  $330,845  $336,027  $261,786  $265,156  
 Interest-bearing           
 NOW accounts  542,317   534,792   504,846   463,734   423,655  
 Savings  455,145   392,059   374,871   341,256   322,973  
 Time  247,553   261,177   261,631   281,931   276,563  
 Total deposits  1,596,162   1,518,873   1,477,375   1,348,707   1,288,347  
                       
Federal Funds Purchased and                     
securities sold under agreements to repurchase  30,239   29,859   30,949   30,585   48,073  
Federal Home Loan Bank (FHLB) advances  17,861   17,724   19,087   24,788   24,806  
Dividend payable  1,889   1,882   1,768   1,768   1,768  
Accrued expenses and other liabilities  14,233   14,841   14,971   12,820   14,078  
 Total liabilities  1,660,384   1,583,179   1,544,150   1,418,668   1,377,072  
                       
Commitments and Contingencies                     
                       
Stockholders' Equity                     
Common stock - No par value 20,000,000 shares authorized; issued                     
and outstanding 12,230,000 shares 12/31/20 and 12/31/19  81,804   81,577   82,134   81,844   81,535  
Treasury stock - 1,032,456 shares 12/31/20, 1,093,065 shares 12/31/19 (11,932)  (12,397)  (12,668)  (12,636)  (12,456) 
Retained earnings  173,591   168,381   165,476   162,416   160,081  
Accumulated other comprehensive income  5,697   5,860   5,355   4,833   1,098  
 Total stockholders' equity  249,160   243,421   240,297   236,457   230,258  
                       
Total Liabilities and Stockholders' Equity $1,909,544  $1,826,600  $1,784,447  $1,655,125  $1,607,330  
                       


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
SELECT FINANCIAL DATA
                      
   For the Three Months Ended For the Twelve Months Ended
Selected financial data December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019  December 31, 2020  December 31, 2019
Return on average assets  1.43%  0.98%  1.10%  1.02%  1.18%  1.14%  1.23%
Return on average equity  11.04%  7.28%  8.07%  7.06%  8.26%  8.38%  8.26%
Yield on earning assets  4.09%  4.04%  4.25%  4.66%  4.63%  4.25%  4.85%
Cost of interest bearing liabilities  0.64%  0.74%  0.91%  1.22%  1.40%  0.87%  1.42%
Net interest spread  3.45%  3.30%  3.34%  3.44%  3.23%  3.38%  3.43%
Net interest margin  3.63%  3.51%  3.59%  3.75%  3.60%  3.62%  3.80%
Efficiency  52.20%  62.11%  57.91%  63.09%  63.67%  58.17%  63.42%
Dividend payout ratio  27.77%  42.66%  36.80%  43.07%  43.34%  35.76%  36.59%
Tangible book value per share (1) $17.19  $16.78  $16.33  $16.26  $16.01       
Tier 1 capital to average assets  10.46%  10.65%  10.70%  11.56%  11.52%      
Average Shares Outstanding  11,177,765   11,142,797   11,129,341   11,134,870   11,137,004   11,146,270   11,113,810 
               
Loans December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019      
(Dollar amounts in thousands)                     
Commercial real estate $588,825  $595,146  $589,382  $570,217  $551,309       
Agricultural real estate  189,159   192,883   194,606   194,383   199,105       
Consumer real estate  175,588   175,963   174,069   174,731   165,349       
Commercial and industrial  189,246   238,175   223,842   143,261   135,631       
Agricultural  94,358   103,330   107,458   109,584   111,820       
Consumer  52,540   53,320   50,108   49,022   49,237       
Other  15,757   9,030   9,714   8,336   8,314       
Less: Net deferred loan fees and costs  (2,483)  (3,985)  (4,456)  (1,893)  (1,766)      
Total loans,net $1,302,990  $1,363,862  $1,344,723  $1,247,641  $1,218,999       
                      
               
Asset quality data December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019      
(Dollar amounts in thousands)                     
Nonaccrual loans $9,404  $7,870  $8,473  $3,344  $3,400       
Troubled debt restructuring $6,514  $7,028  $7,034  $1,934  $956       
90 day past due and accruing $-  $-  $-  $-  $-       
Nonperforming loans $9,404  $7,870  $8,473  $3,344  $3,400       
Other real estate owned $71  $206  $135  $185  $214       
Nonperforming assets $9,475  $8,076  $8,608  $3,529  $3,614       
                      
(Dollar amounts in thousands)                     
Allowance for loan and lease losses $13,672  $11,883  $10,538  $8,533  $7,228       
Allowance for loan and lease losses/total loans  1.05%  0.87%  0.78%  0.68%  0.59%      
Net charge-offs:                     
Quarter-to-date $205  $37  $169  $125  $295       
Year-to-date $537  $331  $294  $125  $685       
Net charge-offs to average loans                     
Quarter-to-date  0.02%  0.00%  0.01%  0.01%  0.03%      
Year-to-date  0.04%  0.03%  0.02%  0.01%  0.06%      
Nonperforming loans/total loans  0.72%  0.58%  0.63%  0.27%  0.28%      
Allowance for loan and lease losses/nonperforming loans  177.96%  151.01%  117.24%  256.66%  187.17%      
                      
(1) Tangible Equity = Stockholder Equity less goodwill and other intangibles (core deposit intangible, mortgage servicing rights and unrealized gain/loss on securities)      
                      


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 
  December 31, 2020 December 31, 2019 
Interest Earning Assets: Average Balance Interest/Dividends Annualized
Yield/Rate
 Average Balance Interest/Dividends Annualized
Yield/Rate
 
Loans $1,336,538 $17,061 5.11% $1,174,748 $15,608 5.32% 
Taxable Investment Securities  250,601  916 1.46%  165,745  975 2.35% 
Tax-exempt Investment Securities  23,216  109 2.38%  31,831  150 2.39% 
Fed Funds Sold & Other  169,116  53 0.13%  114,278  416 1.46% 
Total Interest Earning Assets  1,779,471 $18,139 4.09%  1,486,602 $17,149 4.63% 
                    
Nonearning Assets  112,177      111,367     
                    
Total Assets $1,891,648       $1,597,969     
                 
Interest Bearing Liabilities:                
Savings Deposits $967,355 $705 0.29%  758,594  1,746 0.92% 
Other Time Deposits  253,023  914 1.44%  275,406  1,590 2.31% 
Other Borrowed Money  17,775  226 5.09%  24,715  270 4.37% 
Fed Funds Purchased & Securities             
  Sold under Agreement to Repurch.  30,100  170 2.26%  30,464  207 2.72% 
Total Interest Bearing Liabilities $1,268,253 $2,015 0.64% $1,089,179 $3,813 1.40% 
              
Noninterest bearing Liabilities  377,791      280,027     
              
Stockholders Equity $245,604     $228,763     
              
Net Interest Income and interest rate spread   $16,124 3.45%   $13,336 3.23% 
              
Net Interest Margin     3.63%     3.60% 
              
    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 Twelve Months Ended For the Twelve Months Ended 
  December 31, 2020 December 31, 2019 
Interest Earning Assets: Average Balance Interest/Dividends Annualized
Yield/Rate
 Average Balance Interest/Dividends Annualized
Yield/Rate
 
Loans $1,313,675 $65,317 4.98% $1,129,231 $62,213 5.51% 
Taxable Investment Securities  219,044  4,136 1.89%  163,777  3,832 2.34% 
Tax-exempt Investment Securities  24,958  454 2.30%  33,112  639 2.44% 
Fed Funds Sold & Other  99,304  262 0.26%  86,971  1,622 1.86% 
Total Interest Earning Assets  1,656,981 $70,169 4.25%  1,413,091 $68,306 4.85% 
              
Nonearning Assets  113,303      86,119     
              
Total Assets $1,770,284     $1,499,210     
              
Interest Bearing Liabilities:             
Savings Deposits $879,669 $3,942 0.45% $720,879 $7,323 1.02% 
Other Time Deposits  264,827  4,696 1.77%  265,046  5,619 2.12% 
Other Borrowed Money  21,245  980 4.61%  25,538  1,083 4.24% 
Fed Funds Purchased & Securities             
  Sold under Agreement to Repurch.  32,363  775 2.39%  29,859  734 2.46% 
Total Interest Bearing Liabilities $1,198,104 $10,393 0.87% $1,041,322 $14,759 1.42% 
              
Noninterest bearing Liabilities  332,482      235,010     
              
Stockholders Equity $239,698     $222,878     
              
Net Interest Income and interest rate spread   $59,776 3.38%   $53,547 3.43% 
              
Net Interest Margin     3.62%     3.80% 
              
    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.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
 
 
Non-GAAP Earnings Per Share              
(in thousands of dollars, expect per share data) Non-GAAP Three Months Ended Non-GAAP Twelve Months Ended
  December 31, September 30, June 30, March 31, December 31, December 31, December 31,
   2020   2020   2020   2020   2019   2020   2019 
               
Net income $6,776  $4,410  $4,804  $4,105  $4,723  $20,095  $18,402 
Less: Accelerated net fee income for forgiveness of PPP loans  (1,211)  -   -   -   -   (1,211)  - 
Less: Gain on settlement of bank owned life insurance  (430)  -   -   -   -   (430)  - 
Tax effect  254   -   -   -   -   254   - 
Adjusted net income  5,389   4,410   4,804   4,105   4,723   18,708   18,402 
Less: distributed earnings allocated to participating securities  (16)  (15)  (13)  (13)  (14)  (57)  (51)
Less: undistributed earnings allocated to participating securities  (37)  (19)  (22)  (18)  (24)  (96)  (87)
Net earnings available to common shareholders $5,389  $4,376  $4,769  $4,074  $4,685  $18,555  $18,264 
               
Weighted average common shares outstanding including participating securities  11,177,765   11,142,797   11,129,341   11,134,870   11,137,004   11,146,270   11,113,810 
Less: average unvested restricted shares  (89,150)  (83,257)  (80,062)  (84,732)  (88,711)  (84,879)  (83,369)
Weighted average common shares outstanding  11,088,615   11,059,540   11,049,279   11,050,138   11,048,293   11,061,391   11,030,441 
Basic earnings and diluted per share $0.48  $0.40  $0.43  $0.37  $0.43  $1.68  $1.66 
               
               
  Three Months       Twelve Months
  December 31, December 31,       December 31, December 31,
Reconciliation of Efficiency Ratio  2020   2020         2020   2020 
  Non-GAAP Actual       Non-GAAP Actual
               
Net interest income (+)  14,785   15,996         58,565   59,776 
Noninterest Income (+)  5,194   5,624         16,357   16,787 
Gain on Security Sale (-)  -   -         270   270 
Operating Expenses (/)  11,286   11,286         44,376   44,376 
Efficiency Ratio  56.49%  52.20%        59.44%  58.17%
               
               
               
  Three Months       Twelve Months
  December 31, December 31,       December 31, December 31,
   2020   2020         2020   2020 
Reconciliation of Return on Average Assets Non-GAAP Actual       Non-GAAP Actual
               
Net income $6,776  $6,776        $20,095  $20,095 
Less: Accelerated net fee income for forgiveness of PPP loans  (1,211)  -         (1,211)  - 
Less: Gain on settlement of bank owned life insurance  (430)  -         (430)  - 
Tax effect  254   -         254   - 
Adjusted net income  5,389   6,776         18,708   20,095 
               
Average Assets  1,891,648   1,891,648         1,770,284   1,770,284 
               
ROA  1.14%  1.43%        1.06%  1.14%