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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 19, 2022

 

Farmers & Merchants Bancorp, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

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

 

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

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

N/A

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

 

 

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

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

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

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

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

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

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

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

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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ITEM 2.02. Results of Operation and Financial Condition

On October 19, 2022, Farmers & Merchants Bancorp, Inc. issued a press release (the “Release”) announcing its earnings for the three and nine months ended September 30, 2022. 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 19, 2022

 

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

 

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Signatures

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

 

	FARMERS & MERCHANTS BANCORP, INC.
		(Registrant)
Dated: October 19, 2022		/s/ Lars B. Eller
		Lars B. Eller
		President and Chief Executive Officer
		/s/ Barbara J. Britenriker
		Barbara J. Britenriker
		Executive Vice President and Chief Financial Officer

 

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Exhibit 99

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

 

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

 

Farmers & Merchants Bancorp, Inc. Reports

2022 Third-Quarter and Year-to-Date Financial Results

 

ARCHBOLD, OHIO, October 19, 2022, Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2022 third quarter and year-to-date September 30, 2022.

 

2022 Third Quarter Financial Highlights Include

(Compared to the 2021 third quarter period unless noted):

 

 

Lars B. Eller, President and Chief Executive Officer, stated, “Record third quarter results demonstrate the continued success of our strategic growth plan, the value we provide our local communities, and the power of our financial model. Throughout 2022, we have experienced strong organic loan growth across our Ohio, Indiana and Michigan markets as loans increased organically by $301.4 million, or 21.3% on a year-over-year basis. Robust loan growth, combined with our recent acquisitions, excellent asset quality, and stable net interest margin, have driven a 30.0% increase in net interest income after the provision for loan losses. These outstanding trends and our focus on prudently controlling operating expenses are supporting a powerful financial model as we achieved record quarterly and year-to-date net income and earnings per share.”

 

Mr. Eller continued, “As we enter the fourth quarter, positive momentum across many areas of our business remains strong and we started the quarter with a robust pipeline of news loans expected to close over the next three months. On

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October 1, 2022, we completed the Peoples-Sidney Financial Corporation acquisition. Peoples adds slightly over $130 million in total assets to F&M, expands F&M’s community banking franchise into compelling markets throughout Shelby County Ohio, and excluding one-time transaction costs, is expected to be accretive to 2023 earnings by approximately 2.5%. We also continue to pursue opportunities for de novo growth. Expansion plans underway include new full-service offices that are expected to open over the next 12 months in Toledo, Ohio, Fort Wayne, Indiana, and Birmingham, Michigan as well as an office relocation in Auburn, Indiana.”

 

Income Statement

Net income for the 2022 third quarter ended September 30, 2022, was $9.0 million, compared to $5.9 million for the same period last year. Net income per basic and diluted share for the 2022 third quarter was $0.68, compared to $0.53 for the same period last year. Net income for the 2022 nine months ended September 30, 2022, was $25.3 million, compared to $15.8 million for the same period last year. Net income per basic and diluted share for the 2022 nine months was $1.94, compared to $1.41 for the same period last year.

 

Noninterest expense for the 2022 third quarter and nine months included approximately $0.5 million and approximately $0.5 million, respectively of one-time expenses associated with the Company’s recent acquisitions. Noninterest expense for the 2021 third quarter and nine months included $1.4 million and $2.7 million, respectively of one-time expenses associated with the Company’s recent acquisitions.

 

Profitability is benefitting from F&M’s larger scale, strong asset quality, and prudent expense management. The Company’s efficiency ratio improved to 51.19% during the 2022 third quarter, and 53.16% for the 2022 nine-month period. Strong profitability also drove higher returns, and ROAA, ROAE, and ROATCE all expanded on a year-over-year basis.

 

Deposits

At September 30, 2022, total deposits were $2.283 billion, an increase of 22.3% from September 30, 2021, and an increase of 4.1% from December 31, 2021. F&M continues to see growing customer preferences to more stable and secure saving instruments as deposits have increased since the COVID-19 crisis began. The Company’s cost of interest-bearing liabilities was 0.68% for the quarter ended September 30, 2022, compared to 0.45% for the quarter ended September 30, 2021, and 0.51% for the quarter ended December 31, 2021.

 

Loan Portfolio and Asset Quality

Total net loans, at September 30, 2022, increased 43.3%, or by $647.1 million to $2.143 billion, compared to $1.496 billion at September 30, 2021, and up 15.4% from $1.857 billion at December 31, 2021. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth and the completion of the Perpetual Federal Savings Bank and Ossian Financial Services acquisitions.

 

Not including the Ossian acquisition and PPP, loans increased 21.3% organically or by $301.4 million from the same period a year ago. Additionally, there were only $7,000 of PPP loans within F&M’s loan portfolio at September 30, 2022.

 

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $5.5 million, or 0.26% of total loans at September 30, 2022, compared to $6.2 million, or 0.42% at September 30, 2021. Due to loan growth, F&M continues to prudently fund its allowance for loan and lease losses which has increased 27.3% on a year-over-year basis.

 

At September 30, 2022, the Company’s allowance for loan and lease losses to nonperforming loans was 365.44%, compared to 251.26% at September 30, 2021. As a result of F&M’s recent acquisitions, the Company has a total gross credit mark of nearly $6.0 million, which further enhances F&M’s allowance at September 30, 2022. Including the total gross credit mark, F&M’s allowance for loan and lease losses to total loans improved to 1.21% at September 30, 2022.

 

Mr. Eller concluded, “Economic uncertainty continues to increase as a result of more restrictive monetary policies and rapid inflation. We are watching our markets closely and working with our business, retail, and agricultural customers to help them navigate a more fluid economic environment. Overall, F&M is well positioned for changes in the economic cycle as our asset quality remains strong, and we remain well capitalized. In addition, while we anticipate inflation to impact noninterest expenses and competition for deposits to increase our cost of funds in the coming quarters, our

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efficiency ratio is strong, and our larger scale continues to benefit profitability. As you can see, trends in our business are at record levels, and we believe 2022 will be another record year of earnings and growth for F&M.”

 

Stockholders’ Equity and Dividends

Total stockholders’ equity increased 10.1% to $280.6 million at September 30, 2022, from $254.7 million at September 30, 2021. At September 30, 2022, the Company had a Tier 1 leverage ratio of 9.11%, compared to 9.45% at September 30, 2021.

 

Tangible stockholders’ equity on a regulatory basis increased to $234.1 million at September 30, 2022, compared to $194.6 million at September 30, 2021. On a per share basis, tangible stockholders’ equity at September 30, 2022, was $17.86 per share, compared to $17.33 per share at September 30, 2021.

 

For the nine months ended September 30, 2022, the Company has declared cash dividends of $0.6025 per share, which is a 15.9% increase over the same period last year. Dividends declared for the 2022 nine months included a special one-time cash dividend of $0.0125 to honor F&M’s 125th anniversary, and a 16.7% year-over-year increase for the 2022 third quarter dividend payment to $0.21 per share. 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, 2022, the dividend payout ratio was 40.58% compared to 36.55% for the same period last year.

 

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. Our locations are in Champaign, Fulton, Defiance, Hancock, Henry, Lucas, Shelby, Williams, and Wood counties in Western Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, Steuben and Wells counties, and we have Loan Production Offices in West Bloomfield, Michigan; Muncie, Indiana; and Bryan and Oxford, Ohio.

 

Safe harbor statement

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

 

Non-GAAP Financial Measures

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

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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, 2022				June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021				September  30, 2022				September 30, 2021
Interest Income
Loans, including fees		$	24,119			$	22,388			$	20,455			$	21,008			$	18,766			$	66,962			$	50,637
Debt securities:
U.S. Treasury and    government    agencies			1,049				1,035				1,023				964				924				3,107				2,532
Municipalities			373				322				300				289				284				995				881
Dividends			93				57				42				49				44				192				125
Federal funds sold			-				9				10				10				10				19				21
Other			213				100				69				103				94				382				221
Total interest income			25,847				23,911				21,899				22,423				20,122				71,657				54,417
Interest Expense
Deposits			2,166				1,379				1,360				1,581				1,221				4,905				3,837
Federal funds purchased    and securities sold    under agreement to    repurchase			416				166				152				155				165				734				494
Borrowed funds			398				218				335				361				87				951				424
Subordinated notes			284				284				269				291				199				837				199
Total interest    expense			3,264				2,047				2,116				2,388				1,672				7,427				4,954
Net Interest Income -    Before Provision for    Loan Losses			22,583				21,864				19,783				20,035				18,450				64,230				49,463
Provision for Loan    Losses			1,637				1,628				580				444				659				3,845				3,000
Net Interest Income    After Provision for    Loan Losses			20,946				20,236				19,203				19,591				17,791				60,385				46,463
Noninterest Income
Customer service fees			2,300				2,148				2,648				2,417				2,242				7,096				7,254
Other service charges    and fees			1,105				1,008				998				1,026				1,010				3,111				2,722
Net gain on sale of loans			327				164				697				1,074				822				1,188				2,823
Net gain on sale of    available-for-sale    securities			-				-				-				-				-				-				293
Total noninterest    income			3,732				3,320				4,343				4,517				4,074				11,395				13,092
Noninterest Expense
Salaries and wages			5,479				5,366				5,502				5,761				5,442				16,347				14,423
Employee benefits			1,392				1,546				2,054				1,792				1,621				4,992				5,530
Net occupancy expense			693				522				598				532				529				1,813				1,652
Furniture and equipment			1,047				1,008				1,056				782				903				3,111				2,542
Data processing			781				654				604				1,020				1,548				2,039				2,481
Franchise taxes			254				757				418				361				372				1,429				1,112
ATM expense			580				544				532				478				460				1,656				1,368
Advertising			578				300				237				431				439				1,115				1,005
Net (gain) loss on sale    of other assets owned			-				(266	)			(5	)			13				219				(271	)			421
FDIC assessment			271				270				114				265				296				655				808

 

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Mortgage servicing    rights amortization			(50	)			59				26				266				285				35				1,314
Consulting fees			254				233				178				761				256				665				873
Other general and    administrative			2,192				2,242				2,179				1,964				1,951				6,613				6,211
Total noninterest    expense			13,471				13,235				13,493				14,426				14,321				40,199				39,740
Income Before Income    Taxes			11,207				10,321				10,053				9,682				7,544				31,581				19,815
Income Taxes			2,253				2,050				1,951				1,999				1,624				6,254				4,003
Net Income			8,954				8,271				8,102				7,683				5,920				25,327				15,812
Other Comprehensive    Income (Loss) (Net of    Tax):
Net unrealized gain    (loss) on available-    for-sale securities			(8,197	)			(14,602	)			(20,939	)			(5,170	)			173				(43,738	)			(5,778	)
Reclassification    adjustment for realized    gain on sale of    available-for-sale    securities			-				-				-				-				-				-				(293	)
Net unrealized gain    (loss) on available-    for-sale securities			(8,197	)			(14,602	)			(20,939	)			(5,170	)			173				(43,738	)			(6,071	)
Tax expense (benefit)			(1,721	)			(3,067	)			(4,397	)			(1,085	)			36				(9,185	)			(1,275	)
Other comprehensive    income (loss)			(6,476	)			(11,535	)			(16,542	)			(4,085	)			137				(34,553	)			(4,796	)
Comprehensive Income    (Loss)		$	2,478			$	(3,264	)		$	(8,440	)		$	3,598			$	6,057			$	(9,226	)		$	11,016
Basic and Diluted    Earnings Per Share		$	0.68			$	0.63			$	0.62			$	0.59			$	0.53			$	1.94			$	1.41
Dividends Declared		$	0.2100			$	0.2025			$	0.1900			$	0.1900			$	0.1800			$	0.6025			$	0.5200

 

 

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

 

		September  30, 2022				June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021
		(Unaudited)				(Unaudited)				(Unaudited)								(Unaudited)
Assets
Cash and due from banks		$	69,680			$	69,955			$	94,118			$	135,485			$	112,875
Federal funds sold			990				1,484				45,404				45,338				45,203
Total cash and cash equivalents			70,670				71,439				139,522				180,823				158,078
Interest-bearing time deposits			5,187				6,684				8,677				10,913				14,622
Securities - available-for-sale			395,485				399,687				413,996				429,931				426,717
Other securities, at cost			8,227				8,735				8,568				8,162				4,905
Loans held for sale			2,182				4,230				6,060				7,714				3,735
Loans, net			2,122,626				2,016,394				1,945,449				1,841,177				1,479,864
Premises and equipment			26,484				26,492				26,653				26,913				26,476
Goodwill			80,434				80,434				80,434				80,434				55,214
Mortgage servicing rights			3,583				3,426				3,336				3,157				3,097
Other real estate owned			-				-				-				159				167
Bank owned life insurance			28,051				27,874				27,715				27,558				27,397
Other assets			40,831				29,321				25,735				21,359				18,711
Total Assets		$	2,783,760			$	2,674,716			$	2,686,145			$	2,638,300			$	2,218,983
Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing		$	506,928			$	503,395			$	497,249			$	473,689			$	438,076
Interest-bearing
NOW accounts			705,888				678,552				681,975				650,466				646,237
Savings			607,375				617,850				626,787				597,828				529,532
Time			462,845				424,249				447,586				471,479				252,383
Total deposits			2,283,036				2,224,046				2,253,597				2,193,462				1,866,228
Federal funds purchased and securities    sold under agreements to repurchase			55,802				71,944				31,680				29,268				29,601
Federal Home Loan Bank (FHLB)    advances			102,147				42,635				22,656				24,065				17,868
Other borrowings			10,000				-				40,000				40,000				-
Subordinated notes, net of unamortized    issuance costs			34,557				34,528				34,499				34,471				34,441
Dividend payable			2,727				2,626				2,462				2,461				2,002
Accrued expenses and other liabilities			14,913				18,064				14,773				17,406				14,097
Total liabilities			2,503,182				2,393,843				2,399,667				2,341,133				1,964,237
Commitments and Contingencies
Stockholders' Equity
Common stock - No par value 20,000,000    shares authorized; issued and outstanding    14,063,999 shares 9/30/22 and 12/31/21			121,811				123,145				122,886				122,674				81,382
Treasury stock - 956,499 shares 9/30/22,    997,766 shares 12/31/21			(11,547	)			(11,822	)			(11,739	)			(11,724	)			(11,718	)
Retained earnings			208,051				200,811				195,057				189,401				184,181
Accumulated other comprehensive    income (loss)			(37,737	)			(31,261	)			(19,726	)			(3,184	)			901
Total stockholders' equity			280,578				280,873				286,478				297,167				254,746
Total Liabilities and Stockholders' Equity		$	2,783,760			$	2,674,716			$	2,686,145			$	2,638,300			$	2,218,983

 

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

SELECT FINANCIAL DATA

 

		For the Three Months Ended																									For the Nine Months Ended
Selected financial data		September  30, 2022					June 30, 2022					March 31, 2022					December 31, 2021					September 30, 2021					September  30, 2022				September 30, 2021
Return on average assets				1.31	%				1.23	%				1.21	%				1.17	%				1.07	%			1.25	%			1.01	%
Return on average equity				12.53	%				11.66	%				11.00	%				10.94	%				9.32	%			11.72	%			8.40	%
Yield on earning assets				4.00	%				3.79	%				3.47	%				3.59	%				3.85	%			3.76	%			3.70	%
Cost of interest bearing   liabilities				0.68	%				0.44	%				0.45	%				0.51	%				0.45	%			0.53	%			0.47	%
Net interest spread				3.32	%				3.35	%				3.02	%				3.08	%				3.40	%			3.23	%			3.23	%
Net interest margin				3.49	%				3.47	%				3.14	%				3.21	%				3.53	%			3.37	%			3.36	%
Efficiency				51.19	%				50.17	%				55.44	%				58.76	%				63.50	%			53.16	%			63.70	%
Dividend payout ratio				30.45	%				30.02	%				30.64	%				32.03	%				33.81	%			40.58	%			36.55	%
Tangible book value    per share (1)		$		17.86			$		17.43			$		16.96			$		16.49			$		17.33
Tier 1 capital to    average assets				9.11	%				8.75	%				8.51	%				8.47	%				9.45	%
Average Shares Outstanding				13,083,145					13,065,975					13,066,272					13,046,299					11,209,732				13,071,859				11,199,309
(1) Tangible Equity = Stockholder Equity less goodwill and other intangibles (core deposit intangible, mortgage servicing rights and unrealized gain/loss on securities)

 

Loans		September  30, 2022					June 30, 2022					March 31, 2022					December 31, 2021					September 30, 2021
(Dollar amounts in thousands)
Commercial real estate		$		1,063,661			$		979,176			$		910,839			$		848,477			$		728,852
Agricultural real estate				205,089					199,972					196,223					198,343					179,374
Consumer real estate				416,001					410,450					410,120					395,873					202,454
Commercial and industrial				229,388					232,975					216,918					208,270					194,767
Agricultural				128,615					127,143					140,709					118,368					105,580
Consumer				70,602					55,411					57,521					57,737					55,521
Other				30,662					31,243					31,573					32,089					31,096
Less: Net deferred loan fees       and costs				(1,402	)				(1,552	)				(1,683	)				(1,738	)				(2,082	)
Total loans, net		$		2,142,616			$		2,034,818			$		1,962,220			$		1,857,419			$		1,495,562

 

 

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

SELECT FINANCIAL DATA (continued)

 

Asset quality data		September  30, 2022					June 30, 2022					March 31, 2022					December 31, 2021					September 30, 2021
(Dollar amounts in thousands)
Nonaccrual loans		$		5,470			$		5,247			$		8,581			$		8,076			$		6,248
Troubled debt restructuring		$		3,978			$		2,748			$		7,268			$		7,614			$		6,035
90 day past due and accruing		$		-			$		-			$		-			$		-			$		-
Nonperforming loans		$		5,470			$		5,247			$		8,581			$		8,076			$		6,248
Other real estate owned		$		-			$		-			$		-			$		159			$		167
Nonperforming assets		$		5,470			$		5,247			$		8,581			$		8,235			$		6,415
Allowance for loan and lease losses    (ALLL)		$		19,990			$		18,424			$		16,771			$		16,242			$		15,698
Total credit mark				5,959					6,724					7,201					7,616					2,348
Adjusted ALLL with credit mark    included		$		25,949			$		25,148			$		23,972			$		23,858			$		18,046
Allowance for loan and lease    losses/total loans				0.93	%				0.91	%				0.85	%				0.87	%				1.05	%
Adjusted ALLL with credit mark/total    loans				1.21	%				1.24	%				1.22	%				1.28	%				1.21	%
Net charge-offs:
Quarter-to-date		$		71			$		(25	)		$		51			$		(101	)		$		48
Year-to-date		$		97			$		26			$		51			$		874			$		974
Net charge-offs to average loans
Quarter-to-date				0.00	%				0.00	%				0.00	%				-0.01	%				0.00	%
Year-to-date				0.00	%				0.00	%				0.00	%				0.06	%				0.07	%
Nonperforming loans/total loans				0.26	%				0.26	%				0.44	%				0.43	%				0.42	%
Allowance for loan and lease    losses/nonperforming loans				365.44	%				351.44	%				198.29	%				201.11	%				251.26	%

 

 

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES

(in thousands of dollars, except percentages)

 

		For the Three Months Ended												For the Three Months Ended
		September 30, 2022												September 30, 2021
Interest Earning Assets:		Average Balance				Interest/ Dividends				Annualized Yield/Rate				Average Balance				Interest/ Dividends				Annualized Yield/Rate
Loans		$	2,082,486			$	24,119				4.63	%		$	1,490,988			$	18,766				5.04	%
Taxable investment securities			422,250				1,426				1.35	%			398,060				1,177				1.18	%
Tax-exempt investment securities			25,169				89				1.79	%			17,293				75				2.20	%
Fed funds sold & other			58,266				213				1.46	%			187,398				104				0.22	%
Total Interest Earning Assets			2,588,171			$	25,847				4.00	%			2,093,739			$	20,122				3.85	%
Nonearning Assets			150,044												127,160
Total Assets		$	2,738,215											$	2,220,899
Interest Bearing Liabilities:
Savings deposits		$	1,328,344			$	1,586				0.48	%		$	1,181,103			$	560				0.19	%
Other time deposits			423,668				580				0.55	%			252,966				661				1.05	%
Other borrowed money			60,455				398				2.63	%			17,868				87				1.95	%
Fed funds purchased & securities
sold under agreement to repurchase			63,388				416				2.63	%			29,729				165				2.22	%
Subordinated notes			34,538				284				3.29	%			23,807				199				3.34	%
Total Interest Bearing Liabilities		$	1,910,393			$	3,264				0.68	%		$	1,505,473			$	1,672				0.45	%
Noninterest Bearing Liabilities			542,077												461,252
Stockholders' Equity		$	285,745											$	254,174
Net Interest Income and    Interest Rate Spread						$	22,583				3.32	%						$	18,450				3.40	%
Net Interest Margin											3.49	%											3.53	%
Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts

 

 

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES (continued)

(in thousands of dollars, except percentages)

 

		For the Nine Months Ended												For the Nine Months Ended
		September 30, 2022												September 30, 2021
Interest Earning Assets:		Average Balance				Interest/ Dividends				Annualized Yield/Rate				Average Balance				Interest/ Dividends				Annualized Yield/Rate
Loans		$	1,997,081			$	66,962				4.47	%		$	1,413,625			$	50,637				4.78	%
Taxable investment securities			424,882				4,065				1.28	%			363,284				3,286				1.21	%
Tax-exempt investment securities			21,794				229				1.77	%			18,387				252				2.31	%
Fed funds sold & other			101,922				401				0.52	%			171,015				242				0.19	%
Total Interest Earning Assets			2,545,679			$	71,657				3.76	%			1,966,311			$	54,417				3.70	%
Nonearning Assets			158,378												134,108
Total Assets		$	2,704,057											$	2,100,419
Interest Bearing Liabilities:
Savings deposits		$	1,315,793			$	2,951				0.30	%		$	1,106,674			$	1,700				0.20	%
Other time deposits			439,534				1,954				0.59	%			248,426				2,137				1.15	%
Other borrowed money			54,184				951				2.34	%			17,859				424				3.17	%
Fed funds purchased & securities
sold under agreement to repurchase			42,584				734				2.30	%			29,973				494				2.20	%
Subordinated notes			34,509				837				3.23	%			8,023				199				3.31	%
Total Interest Bearing Liabilities		$	1,886,604			$	7,427				0.53	%		$	1,410,955			$	4,954				0.47	%
Noninterest Bearing Liabilities			529,439												438,518
Stockholders' Equity		$	288,014											$	250,946
Net Interest Income and    Interest Rate Spread						$	64,230				3.23	%						$	49,463				3.23	%
Net Interest Margin											3.37	%											3.36	%
Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts

 

 

 

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATION OF TANGIBLE BOOK VALUE

 

		Actual End of Period									Regulatory End of Period
Non-GAAP Reconciliation of Tangible Book Value		Year to Date									Year to Date
		September 30, 2022				September 30, 2021					September 30, 2022				September 30, 2021
Shares Outstanding			13,107,500				11,232,320					13,107,500				11,232,320
Tangible Equity
Equity		$	280,578			$	254,746				$	280,578			$	254,746
Goodwill			80,434				55,214					80,434				55,214
Other Intangible			3,744				3,994					3,744				3,994
Comprehensive Adjustment*			-				-					37,737				(901	)
Tangible Equity		$	196,400			$	195,538				$	234,137			$	194,637
Shares Outstanding			13,108				11,232					13,108				11,232
Tangible Book Equity per Share		$	14.98			$	17.41				$	17.86			$	17.33
		Actual Average									Regulatory Average
		Year to Date									Year to Date
		September 30, 2022				September 30, 2021					September 30, 2022				September 30, 2021
Net Income		$	25,327			$	15,812				$	25,327			$	15,812
Acquisition Costs - Tax Adjusted			463				2,155					463				2,155
Average Shares Outstanding			13,071,859				11,199,309					13,071,859				11,199,309
Average Tangible Equity
Average Equity		$	288,014			$	250,946				$	288,014			$	250,946
Average Goodwill			80,434				51,884					80,434				51,884
Average Other Intangible			4,119				3,887					4,119				3,887
Average Comprehensive Adjustment*			-				-					21,181				(2,442	)
Average Tangible Equity		$	203,461			$	195,175				$	224,642			$	192,733
Average Shares Outstanding			13,072				11,199					13,072				11,199
Average Tangible Book Equity per Share		$	15.56			$	17.43				$	17.19			$	17.21
Return on Average Tangible Equity			16.60	%			10.80	%				15.03	%			10.94	%
Return on Average Tangible Equity w/o Acquisition			16.90	%			12.27	%				15.31	%			12.43	%
*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.

 

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