8-K
0000792966false00007929662023-02-082023-02-08

 

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) February 8, 2023

 

Farmers & Merchants Bancorp, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Ohio

001-38084

34-1469491

(State or Other Jurisdiction

(Commission

(IRS Employer

of Incorporation)

File Number)

Identification No.)

 

307 North Defiance Street, Archbold, Ohio

43502

(Address of Principal Executive Offices)

(Zip Code)

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

N/A

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

 

 

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

Title of each class

Trading Symbol(s)

Name of Each Exchange

Common Stock, No Par Value

FMAO

NASDAQ Capital Market

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

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

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

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

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

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

Emerging growth company

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


ITEM 2.02. Results of Operation and Financial Condition

On February 8, 2023, Farmers & Merchants Bancorp, Inc. issued a press release (the “Release”) announcing its earnings for the three and twelve months ended December 31, 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 February 8, 2023

 

104

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

 


Signatures

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

 

 

FARMERS & MERCHANTS BANCORP, INC.

 

(Registrant)

 

 

Dated: February 8, 2023

/s/ Lars B. Eller

 

Lars B. Eller

 

President and Chief Executive Officer

 

 

 

/s/ Barbara J. Britenriker

 

Barbara J. Britenriker

 

Executive Vice President and Chief Financial Officer

 


EX-99

Exhibit 99

https://cdn.kscope.io/d59506c9e69e43f498b94bb288bf82dc-img27245342_0.jpg 

Post Office Box 216

307 North Defiance Street

Archbold, Ohio 43502

NEWS RELEASE

 

Company Contact:

Investor and Media Contact:

Lars B. Eller

President and Chief Executive Officer

Farmers & Merchants Bancorp, Inc.

(419) 446-2501

leller@fm.bank

Andrew M. Berger

Managing Director

SM Berger & Company, Inc.

(216) 464-6400

andrew@smberger.com

 

Farmers & Merchants Bancorp, Inc. Reports

Record 2022 Full-Year Financial Results

 

ARCHBOLD, OHIO, February 8, 2023, Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2022 fourth quarter and twelve months ended December 31, 2022.

 

2022 Fourth Quarter Financial Highlights Include (on a year-over-year basis unless noted):

Net income was $7.2 million compared to $7.7 million for the same period last year
Earnings were $0.53 per basic and diluted share, compared to $0.59 per basic and diluted share
Adjusted net income, excluding one-time tax adjusted acquisition expenses, was $8.8 million, compared to $8.7 million
Adjusted earnings, excluding one-time tax adjusted acquisition expenses, were $0.65 per basic and diluted share, compared to $0.66 per basic and diluted share
Efficiency rate improved to 50.46% for the 2022 fourth quarter
Strong asset quality continues as nonperforming loans declined 41.9% to $4.7 million, or 0.20% of total loans
Net charge-offs to average loans were 0.02%
Allowance for loan and lease losses, adjusted for credit marks from recent acquisitions, of 570.3% of nonperforming loans

 

2022 Full-Year Financial Highlights Include (on a year-over-year basis unless noted):

Total loans increased 26.9% to a record $2.36 billion
Organic loan growth of 21.4%, excluding PPP loans and loan balances at time of the Peoples-Sidney Financial Corporation acquisition
Total assets increased 39.2% to a record $3.02 billion
Deposits increased to 12.6% to $2.47 billion
Net interest income after provision for loan losses increased 24.4% to $82.2 million
Net income increased 38.4% to an annual record of $32.5 million
Earnings increased 22.4% to an annual record of $2.46 per basic and diluted share
Adjusted net income, excluding one-time tax adjusted acquisition expenses, increased 29.9% to $34.6 million
Adjusted earnings, excluding one-time tax adjusted acquisition expenses, increased 14.9% to $2.62 per basic and diluted share
Efficiency rate improved to 55.95% for the 2022 full year
Adjusted return on average tangible equity, excluding one-time tax adjusted acquisition expenses, increased to 17.06% from 13.01% on a year-over-year basis
Annual dividend payment increased 14.4% to $0.8125 per share, which included a $0.0125 special dividend in honor of the Company’s 125th year anniversary
Provided a record $642,000 of charitable donations to support organizations throughout Indiana and Ohio

 


Lars B. Eller, President and Chief Executive Officer, stated, “2022 was a historic year for F&M as we celebrated our 125th year anniversary, achieved record financial results, completed the fifth acquisition in the past three years, and continued to invest in our community banking platform. We experienced strong organic loan growth across our Ohio, Indiana and Michigan markets during 2022 as loans increased organically by $397.0 million, or 21.4% on a year-over-year basis. Robust loan growth, combined with our recent acquisitions, excellent asset quality, and stable net interest margin, drove a 24.4% increase in annual net interest income after the provision for loan losses. These outstanding trends and our focus on prudently controlling operating expenses offset a $2.1 million decline in annual noninterest income and helped F&M achieve another year of record net income and earnings per share. I am proud of our record financial results for 2022, which enabled us to increase our annual cash dividend by 14.4%. This reflects the 28th consecutive year F&M has increased its annual cash dividend and our long-standing commitment to create value for our shareholders.”

 

Mr. Eller continued, “I am also pleased to announce that F&M ended the year with total assets of over $3.0 billion for the first time in our history as we successfully achieved the goals of our previous multi-year strategic growth plan. In fact, since 2019 total assets have increased 87.6%, while GAAP net income has increased 76.7%. This performance is a direct result of the financial services we provide our Ohio, Indiana, and Michigan communities, the successful acquisitions we have completed and the hard work of our committed and experienced team members. During 2022, we continued to expand our team by promoting over 45 employees and hiring over 150 new employees. We also added capabilities by adding a new Regional Vice President to lead our Northern Indiana region and hiring F&M’s first ever Chief Risk Officer. Our 2022 financial and operating results reflect the success of our growth initiatives and the powerful franchise we are creating.”

 

Income Statement

Net income for the 2022 fourth quarter ended December 31, 2022, was $7.2 million, compared to $7.7 million for the same period last year. Net income per basic and diluted share for the 2022 fourth quarter was $0.53, compared to $0.59 for the same period last year. Net income for the 2022 twelve-month period ended December 31, 2022, was $32.5 million, compared to $23.5 million for the same period last year. Net income per basic and diluted share for the 2022 twelve months was $2.46, compared to $2.01 for the same period last year.

 

Adjusted net income for the 2022 fourth quarter was $8.8 million, or $0.65 per diluted share, compared to $8.7 million, or $0.66 per diluted share in the prior year quarter. Adjusted net income accounts for the impact of one-time acquisition expenses. Adjusted net income for the year ended December 31, 2022, was $34.6 million, or $2.62 per diluted share, compared to $26.6 million, or $2.28 per diluted share in the prior year.

 

Profitability for the 2022 fourth quarter and full year benefitted from F&M’s larger scale, strong asset quality, and prudent expense management. The Company’s efficiency ratio improved to 50.46% during the 2022 fourth quarter, and 55.95% for the 2022 twelve-month period. Strong profitability also drove higher annual returns, and ROAA, ROAE, and ROATCE all expanded on a year-over-year basis when adjusted for one-time, tax adjusted acquisition expenses.

 

Deposits

At December 31, 2022, total deposits were $2.47 billion, an increase of 12.6% from December 31, 2021. In addition, 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 1.32% for the quarter ended December 31, 2022, compared to 0.51% for the quarter ended December 31, 2021. For the 2022 twelve-month period, F&M’s cost of interest-bearing liabilities was 0.74%, compared to 0.48% for the 2021 twelve-month period.

 

Loan Portfolio and Asset Quality

Total net loans, at December 31, 2022, increased 26.9% to $2.356 billion, compared to $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 Peoples acquisitions. Not including the Peoples acquisition and PPP loans, total net loans increased 21.4% organically, or by $397.0 million from the same period a year ago. Additionally, there were only $7,000 of PPP loans within F&M’s loan portfolio at December 31, 2022.

 

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $4.7 million, or 0.20% of total loans at December 31, 2022, compared to $8.1 million, or 0.43% at December


31, 2021. Due to loan growth, F&M continues to prudently fund its allowance for loan and lease losses which has increased 25.1% on a year-over-year basis.

 

At December 31, 2022, the Company’s allowance for loan and lease losses to nonperforming loans was 273.67%, compared to 201.11% at December 31, 2021. As a result of F&M’s recent acquisitions, the Company has a total gross credit mark of $6.4 million, which further enhances F&M’s allowance at December 31, 2022. Including the total gross credit mark, F&M’s allowance for loan and lease losses to total loans was 1.13% at December 31, 2022.

 

Mr. Eller concluded, “We believe F&M remains well positioned for an increasingly challenging economic cycle as our asset quality is strong, and we continue to be well capitalized. This will allow us to continue to focus on serving our local communities, while investing in our infrastructure and pursuing long-term expansion opportunities under the new three-year strategic growth plan we finalized in the fourth quarter of 2022. As a result, we plan to make approximately $7 million of strategic investments during 2023 across our business. This includes new offices in Ohio, Indiana, and Michigan, and additions to our team, as well as investments in our IT infrastructure, loan operations, and credit and payments group. While we expect investments to temporarily impact the level of profitability we are accustomed to, these investments are necessary to support our long-term growth initiatives and maintain F&M’s high level of services as we drive sustainable growth and value creation. I look forward to updating shareholders on the progress we are making throughout 2023.”

 

Stockholders’ Equity and Dividends

Total stockholders’ equity increased to $298.1 million at December 31, 2022, from $297.2 million at December 31, 2021. At December 31, 2022, the Company had a Tier 1 leverage ratio of 8.39%, compared to 8.47% at December 31, 2021.

 

Based on a regulatory basis, tangible stockholders’ equity increased to $240.7 million at December 31, 2022, compared to $215.5 million at December 31, 2021. On a per share basis, tangible stockholders’ equity at December 31, 2022, was $17.69 per share, compared to $16.49 per share at December 31, 2021. A non-GAAP reconciliation is provided as a table in this press release.

 

For the twelve months ended December 31, 2022, the Company declared cash dividends of $0.8125 per share, which is a 14.4% increase over the 2021 twelve-month declared cash dividend payment of $0.71 per share. Dividends declared for the 2022 twelve months included a special one-time cash dividend of $0.0125 to honor F&M’s 125thanniversary, and a 10.5% year-over-year increase for the 2022 fourth 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 28 consecutive years. For the twelve months ended December 31, 2022, the dividend payout ratio was 33.06% compared to 35.08% 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 a Loan Production Offices in West Bloomfield, Michigan; Muncie, Indiana; and Bryan and Oxford, Ohio.

 

Safe Harbor Statement

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

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


recent Annual Report on Form 10-K and quarterly reports on Form 10-Q. Such filings can be viewed at the SEC’s website, www.sec.gov or through F&M’s website www.fm.bank.

 

Non-GAAP Financial Measures

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

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME

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

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

December
 31, 2022

 

 

September
 30, 2022

 

 

June
30, 2022

 

 

March
31, 2022

 

 

December
31, 2021

 

 

December
 31, 2022

 

 

December
31, 2021

 

Interest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

27,302

 

 

$

24,119

 

 

$

22,388

 

 

$

20,455

 

 

$

21,008

 

 

$

94,264

 

 

$

71,645

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and
   government
   agencies

 

 

1,118

 

 

 

1,049

 

 

 

1,035

 

 

 

1,023

 

 

 

964

 

 

 

4,225

 

 

 

3,496

 

Municipalities

 

 

420

 

 

 

373

 

 

 

322

 

 

 

300

 

 

 

289

 

 

 

1,415

 

 

 

1,170

 

Dividends

 

 

126

 

 

 

93

 

 

 

57

 

 

 

42

 

 

 

49

 

 

 

318

 

 

 

174

 

Federal funds sold

 

 

2

 

 

 

-

 

 

 

9

 

 

 

10

 

 

 

10

 

 

 

21

 

 

 

31

 

Other

 

 

524

 

 

 

213

 

 

 

100

 

 

 

69

 

 

 

103

 

 

 

906

 

 

 

324

 

Total interest income

 

 

29,492

 

 

 

25,847

 

 

 

23,911

 

 

 

21,899

 

 

 

22,423

 

 

 

101,149

 

 

 

76,840

 

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

4,978

 

 

 

2,166

 

 

 

1,379

 

 

 

1,360

 

 

 

1,581

 

 

 

9,883

 

 

 

5,418

 

Federal funds purchased
   and securities sold
   under agreement to
   repurchase

 

 

463

 

 

 

416

 

 

 

166

 

 

 

152

 

 

 

155

 

 

 

1,197

 

 

 

649

 

Borrowed funds

 

 

1,209

 

 

 

398

 

 

 

218

 

 

 

335

 

 

 

361

 

 

 

2,160

 

 

 

785

 

Subordinated notes

 

 

285

 

 

 

284

 

 

 

284

 

 

 

269

 

 

 

291

 

 

 

1,122

 

 

 

490

 

Total interest
   expense

 

 

6,935

 

 

 

3,264

 

 

 

2,047

 

 

 

2,116

 

 

 

2,388

 

 

 

14,362

 

 

 

7,342

 

Net Interest Income -
   Before Provision for
   Loan Losses

 

 

22,557

 

 

 

22,583

 

 

 

21,864

 

 

 

19,783

 

 

 

20,035

 

 

 

86,787

 

 

 

69,498

 

Provision for Loan
   Losses

 

 

755

 

 

 

1,637

 

 

 

1,628

 

 

 

580

 

 

 

444

 

 

 

4,600

 

 

 

3,444

 

Net Interest Income
   After Provision for
   Loan Losses

 

 

21,802

 

 

 

20,946

 

 

 

20,236

 

 

 

19,203

 

 

 

19,591

 

 

 

82,187

 

 

 

66,054

 

Noninterest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer service fees

 

 

2,862

 

 

 

2,300

 

 

 

2,148

 

 

 

2,648

 

 

 

2,417

 

 

 

9,958

 

 

 

9,671

 

Other service charges
   and fees

 

 

1,115

 

 

 

1,105

 

 

 

1,008

 

 

 

998

 

 

 

1,026

 

 

 

4,226

 

 

 

3,748

 

Net gain on sale of loans

 

 

165

 

 

 

327

 

 

 

164

 

 

 

697

 

 

 

1,074

 

 

 

1,353

 

 

 

3,897

 

Net gain on sale of
   available-for-sale
   securities

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

293

 

Total noninterest
   income

 

 

4,142

 

 

 

3,732

 

 

 

3,320

 

 

 

4,343

 

 

 

4,517

 

 

 

15,537

 

 

 

17,609

 

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME (continued)

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

 

Noninterest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and wages

 

 

6,353

 

 

 

5,479

 

 

 

5,366

 

 

 

5,502

 

 

 

5,761

 

 

 

22,700

 

 

 

20,184

 

Employee benefits

 

 

1,911

 

 

 

1,392

 

 

 

1,546

 

 

 

2,054

 

 

 

1,792

 

 

 

6,903

 

 

 

7,322

 

Net occupancy expense

 

 

753

 

 

 

693

 

 

 

522

 

 

 

598

 

 

 

532

 

 

 

2,566

 

 

 

2,184

 

Furniture and equipment

 

 

1,096

 

 

 

1,047

 

 

 

1,008

 

 

 

1,056

 

 

 

782

 

 

 

4,207

 

 

 

3,324

 

Data processing

 

 

1,917

 

 

 

781

 

 

 

654

 

 

 

604

 

 

 

1,020

 

 

 

3,956

 

 

 

3,501

 

Franchise taxes

 

 

(45

)

 

 

254

 

 

 

757

 

 

 

418

 

 

 

361

 

 

 

1,384

 

 

 

1,473

 

ATM expense

 

 

561

 

 

 

580

 

 

 

544

 

 

 

532

 

 

 

478

 

 

 

2,217

 

 

 

1,846

 

Advertising

 

 

531

 

 

 

578

 

 

 

300

 

 

 

237

 

 

 

431

 

 

 

1,646

 

 

 

1,436

 

Net (gain) loss on sale
   of other assets owned

 

 

12

 

 

 

-

 

 

 

(266

)

 

 

(5

)

 

 

13

 

 

 

(259

)

 

 

434

 

FDIC assessment

 

 

250

 

 

 

271

 

 

 

270

 

 

 

114

 

 

 

265

 

 

 

905

 

 

 

1,073

 

Mortgage servicing
   rights amortization

 

 

110

 

 

 

(50

)

 

 

59

 

 

 

26

 

 

 

266

 

 

 

145

 

 

 

1,580

 

Consulting fees

 

 

637

 

 

 

254

 

 

 

233

 

 

 

178

 

 

 

761

 

 

 

1,302

 

 

 

1,634

 

Other general and
   administrative

 

 

2,964

 

 

 

2,192

 

 

 

2,242

 

 

 

2,179

 

 

 

1,964

 

 

 

9,577

 

 

 

8,175

 

Total noninterest
   expense

 

 

17,050

 

 

 

13,471

 

 

 

13,235

 

 

 

13,493

 

 

 

14,426

 

 

 

57,249

 

 

 

54,166

 

Income Before Income
   Taxes

 

 

8,894

 

 

 

11,207

 

 

 

10,321

 

 

 

10,053

 

 

 

9,682

 

 

 

40,475

 

 

 

29,497

 

Income Taxes

 

 

1,706

 

 

 

2,253

 

 

 

2,050

 

 

 

1,951

 

 

 

1,999

 

 

 

7,960

 

 

 

6,002

 

Net Income

 

 

7,188

 

 

 

8,954

 

 

 

8,271

 

 

 

8,102

 

 

 

7,683

 

 

 

32,515

 

 

 

23,495

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized loss on
   available-for-sale
   securities

 

 

(628

)

 

 

(8,197

)

 

 

(14,602

)

 

 

(20,939

)

 

 

(5,170

)

 

 

(44,366

)

 

 

(10,948

)

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

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(293

)

Net unrealized loss on
   available-for-sale
   for-sale securities

 

 

(628

)

 

 

(8,197

)

 

 

(14,602

)

 

 

(20,939

)

 

 

(5,170

)

 

 

(44,366

)

 

 

(11,241

)

Tax benefit

 

 

(132

)

 

 

(1,721

)

 

 

(3,067

)

 

 

(4,397

)

 

 

(1,085

)

 

 

(9,317

)

 

 

(2,360

)

Other comprehensive
   loss

 

 

(496

)

 

 

(6,476

)

 

 

(11,535

)

 

 

(16,542

)

 

 

(4,085

)

 

 

(35,049

)

 

 

(8,881

)

Comprehensive Income
   (Loss)

 

$

6,692

 

 

$

2,478

 

 

$

(3,264

)

 

$

(8,440

)

 

$

3,598

 

 

$

(2,534

)

 

$

14,614

 

Basic Earnings
   Per Share

 

$

0.53

 

 

$

0.68

 

 

$

0.63

 

 

$

0.62

 

 

$

0.59

 

 

$

2.46

 

 

$

2.01

 

Diluted Earnings
   Per Share

 

$

0.53

 

 

$

0.68

 

 

$

0.63

 

 

$

0.62

 

 

$

0.59

 

 

$

2.46

 

 

$

2.01

 

Dividends Declared

 

$

0.2100

 

 

$

0.2100

 

 

$

0.2025

 

 

$

0.1900

 

 

$

0.1900

 

 

$

0.8125

 

 

$

0.7100

 

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

 


 

 

December
 31, 2022

 

 

September
 30, 2022

 

 

June
30, 2022

 

 

March
31, 2022

 

 

December
31, 2021

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

83,085

 

 

$

69,680

 

 

$

69,955

 

 

$

94,118

 

 

$

135,485

 

Federal funds sold

 

 

1,324

 

 

 

990

 

 

 

1,484

 

 

 

45,404

 

 

 

45,338

 

Total cash and cash equivalents

 

 

84,409

 

 

 

70,670

 

 

 

71,439

 

 

 

139,522

 

 

 

180,823

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing time deposits

 

 

4,442

 

 

 

5,187

 

 

 

6,684

 

 

 

8,677

 

 

 

10,913

 

Securities - available-for-sale

 

 

390,789

 

 

 

395,485

 

 

 

399,687

 

 

 

413,996

 

 

 

429,931

 

Other securities, at cost

 

 

9,799

 

 

 

8,227

 

 

 

8,735

 

 

 

8,568

 

 

 

8,162

 

Loans held for sale

 

 

827

 

 

 

2,182

 

 

 

4,230

 

 

 

6,060

 

 

 

7,714

 

Loans, net

 

 

2,336,074

 

 

 

2,122,626

 

 

 

2,016,394

 

 

 

1,945,449

 

 

 

1,841,177

 

Premises and equipment

 

 

28,381

 

 

 

26,484

 

 

 

26,492

 

 

 

26,653

 

 

 

26,913

 

Construction in progress

 

 

278

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Goodwill

 

 

86,358

 

 

 

80,434

 

 

 

80,434

 

 

 

80,434

 

 

 

80,434

 

Mortgage servicing rights

 

 

3,549

 

 

 

3,583

 

 

 

3,426

 

 

 

3,336

 

 

 

3,157

 

Other real estate owned

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

159

 

Bank owned life insurance

 

 

33,073

 

 

 

28,051

 

 

 

27,874

 

 

 

27,715

 

 

 

27,558

 

Other assets

 

 

37,372

 

 

 

40,831

 

 

 

29,321

 

 

 

25,735

 

 

 

21,359

 

Total Assets

 

$

3,015,351

 

 

$

2,783,760

 

 

$

2,674,716

 

 

$

2,686,145

 

 

$

2,638,300

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

532,794

 

 

$

506,928

 

 

$

503,395

 

 

$

497,249

 

 

$

473,689

 

Interest-bearing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW accounts

 

 

750,887

 

 

 

705,888

 

 

 

678,552

 

 

 

681,975

 

 

 

650,466

 

Savings

 

 

627,203

 

 

 

607,375

 

 

 

617,850

 

 

 

626,787

 

 

 

597,828

 

Time

 

 

557,980

 

 

 

462,845

 

 

 

424,249

 

 

 

447,586

 

 

 

471,479

 

Total deposits

 

 

2,468,864

 

 

 

2,283,036

 

 

 

2,224,046

 

 

 

2,253,597

 

 

 

2,193,462

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds purchased and securities
   sold under agreements to repurchase

 

 

54,206

 

 

 

55,802

 

 

 

71,944

 

 

 

31,680

 

 

 

29,268

 

Federal Home Loan Bank (FHLB)
   advances

 

 

127,485

 

 

 

102,147

 

 

 

42,635

 

 

 

22,656

 

 

 

24,065

 

Other borrowings

 

 

10,000

 

 

 

10,000

 

 

 

-

 

 

 

40,000

 

 

 

40,000

 

Subordinated notes, net of unamortized
   issuance costs

 

 

34,586

 

 

 

34,557

 

 

 

34,528

 

 

 

34,499

 

 

 

34,471

 

Dividend payable

 

 

2,832

 

 

 

2,727

 

 

 

2,626

 

 

 

2,462

 

 

 

2,461

 

Accrued expenses and other liabilities

 

 

19,238

 

 

 

14,913

 

 

 

18,064

 

 

 

14,773

 

 

 

17,406

 

Total liabilities

 

 

2,717,211

 

 

 

2,503,182

 

 

 

2,393,843

 

 

 

2,399,667

 

 

 

2,341,133

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock - No par value 20,000,000
   shares authorized; issued and outstanding
   14,564,425 shares 12/31/22 and 14,063,999
   shares 12/31/21

 

 

135,497

 

 

 

121,811

 

 

 

123,145

 

 

 

122,886

 

 

 

122,674

 

Treasury stock - 956,003 shares 12/31/22
   and 997,766 shares 12/31/21

 

 

(11,573

)

 

 

(11,547

)

 

 

(11,822

)

 

 

(11,739

)

 

 

(11,724

)

Retained earnings

 

 

212,449

 

 

 

208,051

 

 

 

200,811

 

 

 

195,057

 

 

 

189,401

 

Accumulated other comprehensive
   loss

 

 

(38,233

)

 

 

(37,737

)

 

 

(31,261

)

 

 

(19,726

)

 

 

(3,184

)

Total stockholders' equity

 

 

298,140

 

 

 

280,578

 

 

 

280,873

 

 

 

286,478

 

 

 

297,167

 

Total Liabilities and Stockholders' Equity

 

$

3,015,351

 

 

$

2,783,760

 

 

$

2,674,716

 

 

$

2,686,145

 

 

$

2,638,300

 

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

SELECT FINANCIAL DATA

 

 

 

For the Three Months Ended

 

 

For the Twelve Months Ended

 

Selected financial data

 

December
31, 2022

 

 

September
 30, 2022

 

 

June
30, 2022

 

 

March
31, 2022

 

 

December
31, 2021

 

 

December
31, 2022

December
31, 2021

 

Return on average assets

 

 

 

0.96

%

 

 

 

1.31

%

 

 

 

1.23

%

 

 

 

1.21

%

 

 

 

1.17

%

 

 

1.17

%

 

 

1.05

%

Return on average equity

 

 

 

10.00

%

 

 

 

12.53

%

 

 

 

11.66

%

 

 

 

11.00

%

 

 

 

10.94

%

 

 

11.30

%

 

 

9.09

%

Yield on earning assets

 

 

 

4.18

%

 

 

 

4.00

%

 

 

 

3.79

%

 

 

 

3.47

%

 

 

 

3.59

%

 

 

3.87

%

 

 

3.66

%

Cost of interest bearing
  liabilities

 

 

 

1.32

%

 

 

 

0.68

%

 

 

 

0.44

%

 

 

 

0.45

%

 

 

 

0.51

%

 

 

0.74

%

 

 

0.48

%

Net interest spread

 

 

 

2.86

%

 

 

 

3.32

%

 

 

 

3.35

%

 

 

 

3.02

%

 

 

 

3.08

%

 

 

3.13

%

 

 

3.18

%

Net interest margin

 

 

 

3.20

%

 

 

 

3.49

%

 

 

 

3.47

%

 

 

 

3.14

%

 

 

 

3.21

%

 

 

3.32

%

 

 

3.31

%

Efficiency

 

 

 

50.46

%

 

 

 

51.19

%

 

 

 

50.17

%

 

 

 

55.44

%

 

 

 

58.76

%

 

 

55.95

%

 

 

62.39

%

Dividend payout ratio

 

 

 

39.39

%

 

 

 

30.45

%

 

 

 

30.02

%

 

 

 

30.64

%

 

 

 

32.03

%

 

 

33.06

%

 

 

35.08

%

Tangible book value
   per share (1)

 

$

 

17.69

 

 

$

 

17.86

 

 

$

 

17.43

 

 

$

 

16.96

 

 

$

 

16.49

 

 

 

 

 

 

 

Tier 1 capital to
   average assets

 

 

 

8.39

%

 

 

 

9.11

%

 

 

 

8.75

%

 

 

 

8.51

%

 

 

 

8.47

%

 

 

 

 

 

 

Average Shares Outstanding

 

 

 

13,606,876

 

 

 

 

13,083,145

 

 

 

 

13,065,975

 

 

 

 

13,066,272

 

 

 

 

13,046,299

 

 

 

13,206,713

 

 

 

11,664,852

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

Loans

 

December
 31, 2022

 

 

September
 30, 2022

 

 

June
30, 2022

 

 

March
31, 2022

 

 

December
31, 2021

 

(Dollar amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

 

1,152,603

 

 

$

 

1,063,661

 

 

$

 

979,176

 

 

$

 

910,839

 

 

$

 

848,477

 

Agricultural real estate

 

 

 

220,819

 

 

 

 

205,089

 

 

 

 

199,972

 

 

 

 

196,223

 

 

 

 

198,343

 

Consumer real estate

 

 

 

494,423

 

 

 

 

416,001

 

 

 

 

410,450

 

 

 

 

410,120

 

 

 

 

395,873

 

Commercial and industrial

 

 

 

242,360

 

 

 

 

229,388

 

 

 

 

232,975

 

 

 

 

216,918

 

 

 

 

208,270

 

Agricultural

 

 

 

128,733

 

 

 

 

128,615

 

 

 

 

127,143

 

 

 

 

140,709

 

 

 

 

118,368

 

Consumer

 

 

 

89,147

 

 

 

 

70,602

 

 

 

 

55,411

 

 

 

 

57,521

 

 

 

 

57,737

 

Other

 

 

 

29,818

 

 

 

 

30,662

 

 

 

 

31,243

 

 

 

 

31,573

 

 

 

 

32,089

 

Less: Net deferred loan fees
      and costs

 

 

 

(1,516

)

 

 

 

(1,402

)

 

 

 

(1,552

)

 

 

 

(1,683

)

 

 

 

(1,738

)

Total loans, net

 

$

 

2,356,387

 

 

$

 

2,142,616

 

 

$

 

2,034,818

 

 

$

 

1,962,220

 

 

$

 

1,857,419

 

 

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

SELECT FINANCIAL DATA (continued)

 

Asset quality data

 

December
31, 2022

 

 

September
 30, 2022

 

 

June
30, 2022

 

 

March
31, 2022

 

 

December
31, 2021

 

(Dollar amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

 

4,689

 

 

$

 

5,470

 

 

$

 

5,247

 

 

$

 

8,581

 

 

$

 

8,076

 

Troubled debt restructuring

 

$

 

3,645

 

 

$

 

3,978

 

 

$

 

2,748

 

 

$

 

7,268

 

 

$

 

7,614

 

90 day past due and accruing

 

$

 

-

 

 

$

 

-

 

 

$

 

-

 

 

$

 

-

 

 

$

 

-

 

Nonperforming loans

 

$

 

4,689

 

 

$

 

5,470

 

 

$

 

5,247

 

 

$

 

8,581

 

 

$

 

8,076

 

Other real estate owned

 

$

 

-

 

 

$

 

-

 

 

$

 

-

 

 

$

 

-

 

 

$

 

159

 

Nonperforming assets

 

$

 

4,689

 

 

$

 

5,470

 

 

$

 

5,247

 

 

$

 

8,581

 

 

$

 

8,235

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan and lease losses
   (ALLL)

 

$

 

20,313

 

 

$

 

19,990

 

 

$

 

18,424

 

 

$

 

16,771

 

 

$

 

16,242

 

Total credit mark

 

 

 

6,427

 

 

 

 

5,959

 

 

 

 

6,724

 

 

 

 

7,201

 

 

 

 

7,616

 

Adjusted ALLL with credit mark
   included

 

$

 

26,740

 

 

$

 

25,949

 

 

$

 

25,148

 

 

$

 

23,972

 

 

$

 

23,858

 

Allowance for loan and lease
   losses/total loans

 

 

 

0.86

%

 

 

 

0.93

%

 

 

 

0.91

%

 

 

 

0.85

%

 

 

 

0.87

%

Adjusted ALLL with credit mark/total
   loans

 

 

 

1.13

%

 

 

 

1.21

%

 

 

 

1.24

%

 

 

 

1.22

%

 

 

 

1.28

%

Net charge-offs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter-to-date

 

$

 

431

 

 

$

 

71

 

 

$

 

(25

)

 

$

 

51

 

 

$

 

(101

)

Year-to-date

 

$

 

529

 

 

$

 

97

 

 

$

 

26

 

 

$

 

51

 

 

$

 

874

 

Net charge-offs to average loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter-to-date

 

 

 

0.02

%

 

 

 

0.00

%

 

 

 

0.00

%

 

 

 

0.00

%

 

 

 

-0.01

%

Year-to-date

 

 

 

0.03

%

 

 

 

0.00

%

 

 

 

0.00

%

 

 

 

0.00

%

 

 

 

0.06

%

Nonperforming loans/total loans

 

 

 

0.20

%

 

 

 

0.26

%

 

 

 

0.26

%

 

 

 

0.44

%

 

 

 

0.43

%

Allowance for loan and lease
   losses/nonperforming loans

 

 

 

273.67

%

 

 

 

365.44

%

 

 

 

351.44

%

 

 

 

198.29

%

 

 

 

201.11

%

 

 


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, 2022

 

 

December 31, 2021

 

Interest Earning Assets:

 

Average
Balance

 

 

Interest/
Dividends

 

 

Annualized
Yield/Rate

 

 

Average
Balance

 

 

Interest/
Dividends

 

 

Annualized
Yield/Rate

 

Loans

 

$

2,301,204

 

 

$

27,302

 

 

 

4.75

%

 

$

1,843,942

 

 

$

21,008

 

 

 

4.56

%

Taxable investment securities

 

 

422,247

 

 

 

1,556

 

 

 

1.47

%

 

 

421,676

 

 

 

1,228

 

 

 

1.16

%

Tax-exempt investment securities

 

 

28,522

 

 

 

108

 

 

 

1.92

%

 

 

18,303

 

 

 

74

 

 

 

2.05

%

Fed funds sold & other

 

 

74,876

 

 

 

526

 

 

 

2.81

%

 

 

218,481

 

 

 

113

 

 

 

0.21

%

Total Interest Earning Assets

 

 

2,826,849

 

 

$

29,492

 

 

 

4.18

%

 

 

2,502,402

 

 

$

22,423

 

 

 

3.59

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonearning Assets

 

 

173,048

 

 

 

 

 

 

 

 

 

125,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

2,999,897

 

 

 

 

 

 

 

 

$

2,628,332

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings deposits

 

$

1,394,663

 

 

$

3,427

 

 

 

0.98

%

 

$

1,262,214

 

 

$

767

 

 

 

0.24

%

Other time deposits

 

 

485,461

 

 

 

1,551

 

 

 

1.28

%

 

 

481,119

 

 

 

814

 

 

 

0.68

%

Other borrowed money

 

 

135,013

 

 

 

1,209

 

 

 

3.58

%

 

 

64,008

 

 

 

361

 

 

 

2.26

%

Fed funds purchased & securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

sold under agreement to repurchase

 

 

53,506

 

 

 

463

 

 

 

3.46

%

 

 

29,403

 

 

 

155

 

 

 

2.11

%

Subordinated notes

 

 

34,567

 

 

 

285

 

 

 

3.30

%

 

 

34,451

 

 

 

291

 

 

 

3.38

%

Total Interest Bearing Liabilities

 

$

2,103,210

 

 

$

6,935

 

 

 

1.32

%

 

$

1,871,195

 

 

$

2,388

 

 

 

0.51

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Liabilities

 

 

609,253

 

 

 

 

 

 

 

 

 

476,122

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

$

287,434

 

 

 

 

 

 

 

 

$

281,015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income and
   Interest Rate Spread

 

 

 

 

$

22,557

 

 

 

2.86

%

 

 

 

 

$

20,035

 

 

 

3.08

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Margin

 

 

 

 

 

 

 

 

3.20

%

 

 

 

 

 

 

 

 

3.21

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts

 

 

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES (continued)

(in thousands of dollars, except percentages)

 

 

 

For the Twelve Months Ended

 

 

For the Twelve Months Ended

 

 

 

December 31, 2022

 

 

December 31, 2021

 

Interest Earning Assets:

 

Average
Balance

 

 

Interest/
Dividends

 

 

Annualized
Yield/Rate

 

 

Average
Balance

 

 

Interest/
Dividends

 

 

Annualized
Yield/Rate

 

Loans

 

$

2,073,737

 

 

$

94,264

 

 

 

4.55

%

 

$

1,522,088

 

 

$

71,645

 

 

 

4.71

%

Taxable investment securities

 

 

424,229

 

 

 

5,621

 

 

 

1.32

%

 

 

377,887

 

 

 

4,514

 

 

 

1.19

%

Tax-exempt investment securities

 

 

23,472

 

 

 

337

 

 

 

1.82

%

 

 

18,365

 

 

 

326

 

 

 

2.25

%

Fed funds sold & other

 

 

95,301

 

 

 

927

 

 

 

0.97

%

 

 

187,003

 

 

 

355

 

 

 

0.19

%

Total Interest Earning Assets

 

 

2,616,739

 

 

$

101,149

 

 

 

3.87

%

 

 

2,105,343

 

 

$

76,840

 

 

 

3.66

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonearning Assets

 

 

158,361

 

 

 

 

 

 

 

 

 

124,649

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

2,775,100

 

 

 

 

 

 

 

 

$

2,229,992

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings deposits

 

$

1,335,271

 

 

$

6,378

 

 

 

0.48

%

 

$

1,145,636

 

 

$

2,467

 

 

 

0.22

%

Other time deposits

 

 

451,013

 

 

 

3,505

 

 

 

0.78

%

 

 

306,600

 

 

 

2,951

 

 

 

0.96

%

Other borrowed money

 

 

74,379

 

 

 

2,160

 

 

 

2.90

%

 

 

29,479

 

 

 

785

 

 

 

2.66

%

Fed funds purchased & securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

sold under agreement to repurchase

 

 

45,314

 

 

 

1,197

 

 

 

2.64

%

 

 

29,831

 

 

 

649

 

 

 

2.18

%

Subordinated notes

 

 

34,524

 

 

 

1,122

 

 

 

3.25

%

 

 

14,777

 

 

 

490

 

 

 

3.32

%

Total Interest Bearing Liabilities

 

$

1,940,501

 

 

$

14,362

 

 

 

0.74

%

 

$

1,526,323

 

 

$

7,342

 

 

 

0.48

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Liabilities

 

 

546,731

 

 

 

 

 

 

 

 

 

445,144

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

$

287,868

 

 

 

 

 

 

 

 

$

258,525

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income and
   Interest Rate Spread

 

 

 

 

$

86,787

 

 

 

3.13

%

 

 

 

 

$

69,498

 

 

 

3.18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Margin

 

 

 

 

 

 

 

 

3.32

%

 

 

 

 

 

 

 

 

3.31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts

 

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES (continued)

(in thousands of dollars, except percentages)

 

 

 

For the Three Months Ended

 

 

For the Three Months Ended

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 

 

As Reported

 

Excluding Accretion/Amortization

Difference

 

 

As Reported

 

Excluding Accretion/Amortization

Difference

 

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

Interest Earning Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

27,302

 

 

 

4.75

%

 

 

26,628

 

 

 

4.63

%

 

 

674

 

 

 

0.12

%

 

$

21,008

 

 

 

4.56

%

 

$

20,585

 

 

 

4.47

%

 

 

423

 

 

 

0.09

%

Taxable investment securities

 

 

1,556

 

 

 

1.47

%

 

 

1,556

 

 

 

1.47

%

 

 

-

 

 

 

0.00

%

 

 

1,228

 

 

 

1.16

%

 

 

1,228

 

 

 

1.16

%

 

 

-

 

 

 

0.00

%

Tax-exempt investment securities

 

 

108

 

 

 

1.92

%

 

 

108

 

 

 

1.92

%

 

 

-

 

 

 

0.00

%

 

 

74

 

 

 

2.05

%

 

 

74

 

 

 

2.05

%

 

 

-

 

 

 

0.00

%

Fed funds sold & other

 

 

526

 

 

 

2.81

%

 

 

526

 

 

 

2.81

%

 

 

-

 

 

 

0.00

%

 

 

113

 

 

 

0.21

%

 

 

113

 

 

 

0.21

%

 

 

-

 

 

 

0.00

%

Total Interest Earning Assets

 

 

29,492

 

 

 

4.18

%

 

 

28,818

 

 

 

4.08

%

 

 

674

 

 

 

0.10

%

 

 

22,423

 

 

 

3.59

%

 

 

22,000

 

 

 

3.52

%

 

 

423

 

 

 

0.07

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings deposits

 

$

3,427

 

 

 

0.98

%

 

$

3,427

 

 

 

0.98

%

 

 

-

 

 

 

0.00

%

 

$

767

 

 

 

0.24

%

 

$

767

 

 

 

0.24

%

 

 

-

 

 

 

0.00

%

Other time deposits

 

 

1,551

 

 

 

1.28

%

 

 

2,010

 

 

 

1.66

%

 

 

(459

)

 

 

-0.38

%

 

 

814

 

 

 

0.68

%

 

 

1,431

 

 

 

0.68

%

 

 

(617

)

 

 

0.00

%

Other borrowed money

 

 

1,209

 

 

 

3.58

%

 

 

1,227

 

 

 

3.64

%

 

 

(18

)

 

 

-0.06

%

 

 

361

 

 

 

2.26

%

 

 

381

 

 

 

2.26

%

 

 

(20

)

 

 

0.00

%

Fed funds purchased & securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

sold under agreement to repurchase

 

 

463

 

 

 

3.46

%

 

 

463

 

 

 

3.46

%

 

 

-

 

 

 

0.00

%

 

 

155

 

 

 

2.11

%

 

 

155

 

 

 

2.11

%

 

 

-

 

 

 

0.00

%

Subordinated notes

 

 

285

 

 

 

3.30

%

 

 

285

 

 

 

3.30

%

 

 

-

 

 

 

0.00

%

 

 

291

 

 

 

3.38

%

 

 

291

 

 

 

3.38

%

 

 

-

 

 

 

0.00

%

Total Interest Bearing Liabilities

 

 

6,935

 

 

 

1.32

%

 

 

7,412

 

 

 

1.41

%

 

 

(477

)

 

 

-0.09

%

 

 

2,388

 

 

 

0.51

%

 

 

3,025

 

 

 

0.65

%

 

 

(637

)

 

 

-0.14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest/Dividend income/yield

 

 

29,492

 

 

 

4.18

%

 

 

28,818

 

 

 

4.08

%

 

 

674

 

 

 

0.10

%

 

 

22,423

 

 

 

3.59

%

 

 

22,000

 

 

 

3.52

%

 

 

423

 

 

 

0.07

%

Interest Expense / yield

 

 

6,935

 

 

 

1.32

%

 

 

7,412

 

 

 

1.41

%

 

 

(477

)

 

 

-0.09

%

 

 

2,388

 

 

 

0.51

%

 

 

3,025

 

 

 

0.65

%

 

 

(637

)

 

 

-0.14

%

Net Interest Spread

 

 

22,557

 

 

 

2.86

%

 

 

21,406

 

 

 

2.67

%

 

 

1,151

 

 

 

0.19

%

 

 

20,035

 

 

 

3.08

%

 

 

18,975

 

 

 

2.87

%

 

 

1,060

 

 

 

0.21

%

Net Interest Margin

 

 

 

 

 

3.20

%

 

 

 

 

 

3.03

%

 

 

 

 

 

0.17

%

 

 

 

 

 

3.21

%

 

 

 

 

 

3.04

%

 

 

 

 

 

0.17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts

 

 

 

 

 

 

 

 

 

 

 

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES (continued)

(in thousands of dollars, except percentages)

 

 

 

For the Twelve Months Ended

 

 

For the Twelve Months Ended

 

 

 

December 31, 2022

 

 

December 31, 2022

 

 

 

As Reported

 

Excluding Accretion/Amortization

Difference

 

 

As Reported

 

Excluding Accretion/Amortization

Difference

 

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

 

$

 

 

Yield

 

Interest Earning Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

94,264

 

 

 

4.55

%

 

$

92,132

 

 

 

4.45

%

 

 

2,132

 

 

 

0.10

%

 

$

71,645

 

 

 

4.71

%

 

$

70,986

 

 

 

4.67

%

 

 

659

 

 

 

0.04

%

Taxable investment securities

 

 

5,621

 

 

 

1.32

%

 

 

5,621

 

 

 

1.32

%

 

 

-

 

 

 

0.00

%

 

 

4,514

 

 

 

1.19

%

 

 

4,514

 

 

 

1.19

%

 

 

-

 

 

 

0.00

%

Tax-exempt investment securities

 

 

337

 

 

 

1.82

%

 

 

337

 

 

 

1.82

%

 

 

-

 

 

 

0.00

%

 

 

326

 

 

 

2.25

%

 

 

326

 

 

 

2.25

%

 

 

-

 

 

 

0.00

%

Fed funds sold & other

 

 

927

 

 

 

0.97

%

 

 

927

 

 

 

0.97

%

 

 

-

 

 

 

0.00

%

 

 

355

 

 

 

0.19

%

 

 

355

 

 

 

0.19

%

 

 

-

 

 

 

0.00

%

Total Interest Earning Assets

 

 

101,149

 

 

 

3.87

%

 

 

99,017

 

 

 

3.79

%

 

 

2,132

 

 

 

0.08

%

 

 

76,840

 

 

 

3.66

%

 

 

76,181

 

 

 

3.63

%

 

 

659

 

 

 

0.03

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings deposits

 

$

6,378

 

 

 

0.48

%

 

$

6,378

 

 

 

0.48

%

 

 

-

 

 

 

0.00

%

 

$

2,467

 

 

 

0.22

%

 

$

2,467

 

 

 

0.22

%

 

 

-

 

 

 

0.00

%

Other time deposits

 

 

3,505

 

 

 

0.78

%

 

 

5,822

 

 

 

1.29

%

 

 

(2,317

)

 

 

-0.51

%

 

 

2,951

 

 

 

0.96

%

 

 

3,588

 

 

 

1.17

%

 

 

(637

)

 

 

-0.21

%

Other borrowed money

 

 

2,160

 

 

 

2.90

%

 

 

2,241

 

 

 

3.01

%

 

 

(81

)

 

 

-0.11

%

 

 

785

 

 

 

2.66

%

 

 

641

 

 

 

2.17

%

 

 

144

 

 

 

0.49

%

Fed funds purchased & securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

sold under agreement to repurchase

 

 

1,197

 

 

 

2.64

%

 

 

1,197

 

 

 

2.64

%

 

 

-

 

 

 

0.00

%

 

 

649

 

 

 

2.18

%

 

 

649

 

 

 

2.18

%

 

 

-

 

 

 

0.00

%

Subordinated notes

 

 

1,122

 

 

 

3.25

%

 

 

1,122

 

 

 

3.25

%

 

 

-

 

 

 

0.00

%

 

 

490

 

 

 

3.32

%

 

 

490

 

 

 

3.32

%

 

 

-

 

 

 

0.00

%

Total Interest Bearing Liabilities

 

 

14,362

 

 

 

0.74

%

 

 

16,760

 

 

 

0.86

%

 

 

(2,398

)

 

 

-0.12

%

 

 

7,342

 

 

 

0.48

%

 

 

7,835

 

 

 

0.51

%

 

 

(493

)

 

 

-0.03

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest/Dividend income/yield

 

 

101,149

 

 

 

3.87

%

 

 

99,017

 

 

 

3.79

%

 

 

2,132

 

 

 

0.08

%

 

 

76,840

 

 

 

3.66

%

 

 

76,181

 

 

 

3.63

%

 

 

659

 

 

 

0.03

%

Interest Expense / yield

 

 

14,362

 

 

 

0.74

%

 

 

16,760

 

 

 

0.86

%

 

 

(2,398

)

 

 

-0.12

%

 

 

7,342

 

 

 

0.48

%

 

 

7,835

 

 

 

0.51

%

 

 

(493

)

 

 

-0.03

%

Net Interest Spread

 

 

86,787

 

 

 

3.13

%

 

 

82,257

 

 

 

2.93

%

 

 

4,530

 

 

 

0.20

%

 

 

69,498

 

 

 

3.18

%

 

 

68,346

 

 

 

3.12

%

 

 

1,152

 

 

 

0.06

%

Net Interest Margin

 

 

 

 

 

3.32

%

 

 

 

 

 

3.15

%

 

 

 

 

 

0.17

%

 

 

 

 

 

3.31

%

 

 

 

 

 

3.25

%

 

 

 

 

 

0.06

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts

 

 

 

 

 

 

 

 

 

 

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATION OF NET INCOME

 

 

 

(in thousands of dollars)

 

 

 

(in thousands of dollars)

 

Non-GAAP Reconciliation of Net Income

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 

 

(Unaudited)

 

 

 

(Unaudited)

 

Net income as reported

 

$

7,188

 

 

$

7,683

 

 

 

$

32,515

 

 

$

23,495

 

Acquisition expenses

 

 

2,019

 

 

 

1,192

 

 

 

 

2,511

 

 

 

3,859

 

Tax effect on acquisition expenses

 

 

(386

)

 

 

(216

)

 

 

 

(445

)

 

 

(728

)

Net income excluding acquisition expenses and tax effect

 

 

8,821

 

 

 

8,659

 

 

 

 

34,581

 

 

 

26,626

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding
   including participating securities

 

 

13,606,876

 

 

 

13,046,299

 

 

 

 

13,206,713

 

 

 

11,664,852

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share

 

$

0.65

 

 

$

0.66

 

 

 

$

2.62

 

 

$

2.28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 

 

 

 

 

 

 

 

Shares Outstanding

 

 

13,608,422

 

 

 

13,066,233

 

 

 

 

13,608,422

 

 

 

13,066,233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

$

298,140

 

 

$

297,167

 

 

 

$

298,140

 

 

$

297,167

 

Goodwill

 

 

86,358

 

 

 

80,434

 

 

 

 

86,358

 

 

 

80,434

 

Other Intangible

 

 

9,327

 

 

 

4,433

 

 

 

 

9,327

 

 

 

4,433

 

Comprehensive Adjustment*

 

 

-

 

 

 

-

 

 

 

 

38,233

 

 

 

3,184

 

Tangible Equity

 

$

202,455

 

 

$

212,300

 

 

 

$

240,689

 

 

$

215,484

 

Shares Outstanding

 

 

13,608

 

 

 

13,066

 

 

 

 

13,608

 

 

 

13,066

 

Tangible Book Equity per Share

 

$

14.88

 

 

$

16.25

 

 

 

$

17.69

 

 

$

16.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual Average

 

 

 

Regulatory Average

 

 

 

Year to Date

 

 

 

Year to Date

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

32,515

 

 

$

23,495

 

 

 

$

32,515

 

 

$

23,495

 

Acquisition Costs - Tax Adjusted

 

 

2,066

 

 

 

3,131

 

 

 

 

2,066

 

 

 

3,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shares Outstanding

 

 

13,206,713

 

 

 

11,664,852

 

 

 

 

13,206,713

 

 

 

11,664,852

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Tangible Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Equity

 

$

287,868

 

 

$

258,525

 

 

 

$

287,868

 

 

$

258,525

 

Average Goodwill

 

 

80,164

 

 

 

49,790

 

 

 

 

80,164

 

 

 

49,790

 

Average Other Intangible

 

 

4,997

 

 

 

4,005

 

 

 

 

4,997

 

 

 

4,005

 

Average Comprehensive Adjustment*

 

 

-

 

 

 

-

 

 

 

 

26,393

 

 

 

(1,280

)

Average Tangible Equity

 

$

202,707

 

 

$

204,730

 

 

 

$

229,100

 

 

$

203,450

 

Average Shares Outstanding

 

 

13,207

 

 

 

11,665

 

 

 

 

13,207

 

 

 

11,665

 

Average Tangible Book Equity per Share

 

$

15.35

 

 

$

17.55

 

 

 

$

17.35

 

 

$

17.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Tangible Equity

 

 

16.04

%

 

 

11.48

%

 

 

 

14.19

%

 

 

11.55

%

Return on Average Tangible Equity w/o Acquisition

 

 

17.06

%

 

 

13.01

%

 

 

 

15.09

%

 

 

13.09

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*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.