Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) the holding
company of F&M Bank, today reported financial results for the
2023 second quarter and year-to-date June 30, 2023.
2023 Second Quarter Financial and
Operating Highlights (on a year-over-year basis unless
noted):
- 81 consecutive quarters of
profitability
- Net income was $6.0 million, or
$0.44 per basic and diluted share
- Stockholders’ equity increased 8.5%
to $304.7 million
- Regulatory tangible book value per
share increased 4.5% to $18.21 per share
- Organic loan growth of 18.5%,
excluding PPP loans and the Peoples-Sidney Financial Corporation
acquisition
- Total loans were a record of $2.52
billion and increased 6.8% from $2.36 billion at December 31,
2022
- Total assets increased 17.7% to a
record $3.15 billion
- Deposits increased 11.0% to $2.50
billion
- Uninsured deposits to total
deposits of approximately 18% at June 30, 2023
- Strong asset quality continues as
nonperforming loans were 0.25% of total loans
- Net charge-offs to average loans
were -0.01%
- Allowance for credit losses was
395.71% of nonperforming loans
- Tier 1 leverage ratio increased to
9.85% from 8.75% last year
- Strategic investments to support
long-term growth continue as F&M has unveiled new branding and
logo, opened two new offices, launched new deposit products, and
started construction on a new regional headquarters in Fort Wayne,
Indiana and the first full-service office in Michigan
Lars B. Eller, President and Chief Executive
Officer, stated, “Our second quarter results demonstrate the power
of F&M’s operating platform as we ended the quarter with strong
capital levels, robust asset quality, and record loans and assets.
These trends provide us with the flexibility to navigate a
challenging banking landscape, while supporting our communities,
investing in our multi-year strategic growth plan, and returning
capital back to our shareholders. Most importantly, our
longstanding financial success and operating growth reflects the
continued commitment, experience, and hard work of our team members
across our Ohio, Indiana, and Michigan markets.”
“I am pleased to report that we continue to make
meaningful progress investing in our business to support our
growth, enhance our operations, and execute against our recently
developed three-year strategic growth plan. During the second
quarter we unveiled our new branding and forward-looking logo,
which was the culmination of a multi-year brand exploration
process. All updates to office signage are expected to be completed
by September 2023. In addition, we relocated our Auburn, Indiana
office and opened new offices in downtown Toledo, Ohio, and Oxford,
Ohio. Construction began on our new regional facility in Fort
Wayne, and we added a highly experienced lending team in our Fort
Wayne region, which will greatly expand our commitment to Eastern
Indiana. We also broke ground on our first full-service office in
Birmingham, Michigan following our hugely successful loan
production office in Southeast Michigan. Finally, we launched new
deposit products to enhance our offerings to current and
prospective customers,” continued Mr. Eller.
Income StatementNet income for
the 2023 second quarter ended June 30, 2023, was $6.0 million,
compared to $8.3 million for the same period last year. Net income
per basic and diluted share for the 2023 second quarter was $0.44,
compared to $0.63 for the same period last year. Net income for the
2023 first half ended June 30, 2023, was $12.5 million, compared to
$16.4 million for the same period last year. Net income per basic
and diluted share for the 2023 first half was $0.92, compared to
$1.25 for the same period last year.
Mr. Eller commented: “F&M is not immune from
the rapid rise in the Federal Funds Rate and the impact this has
had on cost of funds and the competition for deposits it has
created over the past 12 months. As a result, our cost of
interest-bearing liabilities has increased by over 430% to 2.35% at
June 30, 2023. In addition, year-to-date profitability has been
impacted by several strategic one-time expenses including the
conversion of our credit card platform, an opportunistic sale of
investments, and the investments we are making in our
infrastructure. Despite these near-term impacts, we believe we are
well positioned for net income growth to re-accelerate in 2024 and
beyond, as we benefit from continued strong asset quality, the
contribution of our growth initiatives, and controlled operating
expenses,” continued Mr. Eller.
DepositsAt June 30, 2023, total
deposits were $2.47 billion, an increase of 11.0% from June 30,
2022. The Company’s cost of interest-bearing liabilities was 2.35%
for the quarter ended June 30, 2023, compared to 0.44% for the
quarter ended June 30, 2022, and 1.32% for the quarter ended
December 31, 2022.
At June 30, 2023, F&M’s average deposit
account had an average balance of $25,009. In addition, uninsured
deposits to total deposits were approximately 18% for the quarter
ended June 30, 2023, compared to approximately 21% at December 31,
2022.
Loan Portfolio and Asset
QualityTotal loans, net at June 30, 2023, increased 23.6%,
or by $481.0 million to a record $2.52 billion, compared to $2.03
billion at June 30, 2022, and up from $2.36 billion at December 31,
2022. The year-over-year improvement resulted primarily from the
contribution of continued organic loan growth and the completion of
the Peoples acquisition. Not including the Peoples acquisition,
total net loans increased 18.5% organically, or by $376.3 million
from the same period a year ago.
F&M continues to closely monitor its loan
portfolio with a particular emphasis on higher risk sectors.
Nonperforming loans were $6.3 million, or 0.25% of total loans at
June 30, 2023, compared to $5.2 million, or 0.26% of total loans at
June 30, 2022. During the second quarter, one large farm loan that
was paid off and another loan that was refinanced through another
bank, and second quarter 2023 nonperforming loans improved by $1.4
million, or 18.4% over the past three months.
F&M maintains a well-balanced, diverse and
high performing CRE portfolio. CRE loans represented 50.9% of the
Company’s total loan portfolio at June 30, 2023. In addition,
F&M’s commercial real estate office credit exposure represented
5.0% of the Company's total loan portfolio at June 30, 2023, with a
weighted average loan-to-value of approximately 64% and an average
loan of $845,000.
F&M’s CRE portfolio included the following
categories at June 30, 2023:
CRE Category |
|
Dollar Balance |
|
Percent of CRE Portfolio(*) |
|
Percent of Total Loan
Portfolio(*) |
Multi Family |
|
$244,883 |
|
19.1% |
|
9.7% |
Retail |
|
$218,624 |
|
17.1% |
|
8.7% |
Industrial |
|
$216,605 |
|
16.9% |
|
8.6% |
Hotels |
|
$135,511 |
|
10.6% |
|
5.4% |
Office |
|
$125,039 |
|
9.8% |
|
5.0% |
Gas Stations |
|
$59,922 |
|
4.7% |
|
2.4% |
Food Service |
|
$43,585 |
|
3.4% |
|
1.7% |
Mixed Use |
|
$42,425 |
|
3.3% |
|
1.7% |
Senior Living |
|
$36,238 |
|
2.8% |
|
1.4% |
Other |
|
$158,069 |
|
12.3% |
|
6.3% |
Total CRE |
|
$1,225,315 |
|
100.0% |
|
50.1% |
* Numbers have been rounded |
At June 30, 2023, the Company’s allowance for
credit losses to nonperforming loans was 395.71%, compared to
351.44% at June 30, 2022. The allowance to total loans was 0.99% at
June 30, 2023, compared to 0.91% at June 30, 2022. As a result of
F&M’s recent acquisitions, the Company had an accretable yield
adjustment of $5.2 million at June 30, 2023, which further enhances
F&M’s allowance, compared to $6.7 million at June 30, 2022.
Including the accretable yield adjustment, F&M’s allowance for
credit losses to total loans was 1.20% at June 30, 2023, compared
to 1.24% at June 30, 2022.
Mr. Eller concluded, “I am proud of our team’s
performance throughout the first half of 2023. The progress we are
making serving our communities, and investing in our growth
initiatives is encouraging. While 2023 is expected to be a
transitional year, we believe we are well positioned to emerge from
this period with increased market share and higher profitability.
We also continue to focus on returning capital back to shareholders
through our longstanding cash dividend program, which has increased
on an annual basis for 28 consecutive years.”
Stockholders’ Equity and
DividendsTotal stockholders’ equity increased 8.5% to
$304.7 million at June 30, 2023, from $280.9 million at June 30,
2022. At June 30, 2023, the Company had a Tier 1 leverage ratio of
9.85%, compared to 8.75% at June 30, 2022.
Based on a regulatory basis, tangible
stockholders’ equity increased to $248.3 million at June 30, 2023,
compared to $227.7 million at June 30, 2022. On a per share basis,
regulatory tangible stockholders’ equity at June 30, 2023, was
$18.21 per share, compared to $17.43 per share at June 30,
2022.
For the six months ended June 30, 2023, the
Company has declared cash dividends of $0.42 per share, which is a
7.0% increase over the 2022 six-month declared dividend payment.
F&M is committed to returning capital to shareholders and has
increased the annual cash dividend for over 28 consecutive years
and has grown its dividend by over 160% since 2007. For the six
months ended June 30, 2023, the dividend payout ratio was 45.44%
compared to 30.08% for the same period last year.
About Farmers & Merchants Bancorp,
Inc.: Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO)
is the holding company of F&M Bank, a local independent
community bank that has been serving its communities since 1897.
F&M Bank provides commercial banking, retail banking and other
financial services. Our locations are in Butler, Champaign, Fulton,
Defiance, Hancock, Henry, Lucas, Shelby, Williams, and Wood
counties in Ohio. In Northeast Indiana, we have offices located in
Adams, Allen, DeKalb, Jay, Steuben and Wells counties, and we have
Loan Production Offices in West Bloomfield, Michigan; Muncie,
Indiana; and Bryan, Ohio.
Safe Harbor StatementFarmers
& 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 |
|
Six Months Ended |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
$ |
31,365 |
|
|
$ |
29,703 |
|
|
$ |
27,302 |
|
|
$ |
24,119 |
|
|
$ |
22,388 |
|
|
$ |
61,068 |
|
|
$ |
42,843 |
|
Debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury and government agencies |
|
1,030 |
|
|
|
1,068 |
|
|
|
1,118 |
|
|
|
1,049 |
|
|
|
1,035 |
|
|
|
2,098 |
|
|
|
2,058 |
|
Municipalities |
|
401 |
|
|
|
408 |
|
|
|
420 |
|
|
|
373 |
|
|
|
322 |
|
|
|
809 |
|
|
|
622 |
|
Dividends |
|
148 |
|
|
|
123 |
|
|
|
126 |
|
|
|
93 |
|
|
|
57 |
|
|
|
271 |
|
|
|
99 |
|
Federal funds sold |
|
9 |
|
|
|
21 |
|
|
|
2 |
|
|
|
- |
|
|
|
9 |
|
|
|
30 |
|
|
|
19 |
|
Other |
|
424 |
|
|
|
479 |
|
|
|
524 |
|
|
|
213 |
|
|
|
100 |
|
|
|
903 |
|
|
|
169 |
|
Total interest income |
|
33,377 |
|
|
|
31,802 |
|
|
|
29,492 |
|
|
|
25,847 |
|
|
|
23,911 |
|
|
|
65,179 |
|
|
|
45,810 |
|
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
10,434 |
|
|
|
8,151 |
|
|
|
4,978 |
|
|
|
2,166 |
|
|
|
1,379 |
|
|
|
18,585 |
|
|
|
2,739 |
|
Federal funds purchased and securities sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
under agreements to repurchase |
|
427 |
|
|
|
405 |
|
|
|
463 |
|
|
|
416 |
|
|
|
166 |
|
|
|
832 |
|
|
|
318 |
|
Borrowed funds |
|
2,113 |
|
|
|
1,280 |
|
|
|
1,209 |
|
|
|
398 |
|
|
|
218 |
|
|
|
3,393 |
|
|
|
553 |
|
Subordinated notes |
|
285 |
|
|
|
284 |
|
|
|
285 |
|
|
|
284 |
|
|
|
284 |
|
|
|
569 |
|
|
|
553 |
|
Total interest expense |
|
13,259 |
|
|
|
10,120 |
|
|
|
6,935 |
|
|
|
3,264 |
|
|
|
2,047 |
|
|
|
23,379 |
|
|
|
4,163 |
|
Net
Interest Income - Before Provision for Credit Losses* |
|
20,118 |
|
|
|
21,682 |
|
|
|
22,557 |
|
|
|
22,583 |
|
|
|
21,864 |
|
|
|
41,800 |
|
|
|
41,647 |
|
Provision for Credit Losses - Loans* |
|
143 |
|
|
|
817 |
|
|
|
755 |
|
|
|
1,637 |
|
|
|
1,628 |
|
|
|
960 |
|
|
|
2,208 |
|
Provision for Credit Losses - Off Balance Sheet Credit
Exposures* |
|
(129 |
) |
|
|
62 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(67 |
) |
|
|
- |
|
Net
Interest Income After Provision for Credit Losses* |
|
20,104 |
|
|
|
20,803 |
|
|
|
21,802 |
|
|
|
20,946 |
|
|
|
20,236 |
|
|
|
40,907 |
|
|
|
39,439 |
|
Noninterest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer service fees |
|
2,361 |
|
|
|
2,447 |
|
|
|
2,862 |
|
|
|
2,300 |
|
|
|
2,148 |
|
|
|
4,808 |
|
|
|
4,796 |
|
Other service charges and fees |
|
1,803 |
|
|
|
2,554 |
|
|
|
1,115 |
|
|
|
1,105 |
|
|
|
1,008 |
|
|
|
4,357 |
|
|
|
2,006 |
|
Net gain on sale of loans |
|
108 |
|
|
|
67 |
|
|
|
165 |
|
|
|
327 |
|
|
|
164 |
|
|
|
175 |
|
|
|
861 |
|
Net loss on sale of available-for-sale securities |
|
- |
|
|
|
(891 |
) |
|
|
- |
|
|
|
- |
|
- |
|
(891 |
) |
|
|
- |
|
Total noninterest income |
|
4,272 |
|
|
|
4,177 |
|
|
|
4,142 |
|
|
|
3,732 |
|
|
|
3,320 |
|
|
|
8,449 |
|
|
|
7,663 |
|
Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and wages |
|
6,500 |
|
|
|
6,657 |
|
|
|
6,353 |
|
|
|
5,479 |
|
|
|
5,366 |
|
|
|
13,157 |
|
|
|
10,868 |
|
Employee benefits |
|
2,071 |
|
|
|
2,165 |
|
|
|
1,911 |
|
|
|
1,392 |
|
|
|
1,546 |
|
|
|
4,236 |
|
|
|
3,600 |
|
Net occupancy expense |
|
840 |
|
|
|
856 |
|
|
|
753 |
|
|
|
693 |
|
|
|
522 |
|
|
|
1,696 |
|
|
|
1,120 |
|
Furniture and equipment |
|
1,211 |
|
|
|
1,252 |
|
|
|
1,096 |
|
|
|
1,047 |
|
|
|
1,008 |
|
|
|
2,463 |
|
|
|
2,064 |
|
Data processing |
|
796 |
|
|
|
726 |
|
|
|
1,917 |
|
|
|
781 |
|
|
|
654 |
|
|
|
1,522 |
|
|
|
1,258 |
|
Franchise taxes |
|
379 |
|
|
|
366 |
|
|
|
(45 |
) |
|
|
254 |
|
|
|
757 |
|
|
|
745 |
|
|
|
1,175 |
|
ATM expense |
|
683 |
|
|
|
623 |
|
|
|
561 |
|
|
|
580 |
|
|
|
544 |
|
|
|
1,306 |
|
|
|
1,076 |
|
Advertising |
|
830 |
|
|
|
514 |
|
|
|
531 |
|
|
|
578 |
|
|
|
300 |
|
|
|
1,344 |
|
|
|
537 |
|
Net (gain) loss on sale of other assets owned |
|
- |
|
|
|
- |
|
|
|
12 |
|
|
|
- |
|
(266 |
) |
|
|
- |
|
|
|
(271 |
) |
FDIC assessment |
|
496 |
|
|
|
306 |
|
|
|
250 |
|
|
|
271 |
|
|
|
270 |
|
|
|
802 |
|
|
|
384 |
|
Mortgage servicing rights amortization - net |
|
164 |
|
|
|
159 |
|
|
|
110 |
|
|
|
(50 |
) |
|
|
59 |
|
|
|
323 |
|
|
|
85 |
|
Consulting fees |
|
231 |
|
|
|
230 |
|
|
|
637 |
|
|
|
254 |
|
|
|
233 |
|
|
|
461 |
|
|
|
411 |
|
Other general and administrative |
|
2,643 |
|
|
|
3,077 |
|
|
|
2,964 |
|
|
|
2,192 |
|
|
|
2,242 |
|
|
|
5,720 |
|
|
|
4,421 |
|
Total noninterest expense |
|
16,844 |
|
|
|
16,931 |
|
|
|
17,050 |
|
|
|
13,471 |
|
|
|
13,235 |
|
|
|
33,775 |
|
|
|
26,728 |
|
Income Before Income Taxes |
|
7,532 |
|
|
|
8,049 |
|
|
|
8,894 |
|
|
|
11,207 |
|
|
|
10,321 |
|
|
|
15,581 |
|
|
|
20,374 |
|
Income Taxes |
|
1,531 |
|
|
|
1,583 |
|
|
|
1,706 |
|
|
|
2,253 |
|
|
|
2,050 |
|
|
|
3,114 |
|
|
|
4,001 |
|
Net
Income |
|
6,001 |
|
|
|
6,466 |
|
|
|
7,188 |
|
|
|
8,954 |
|
|
|
8,271 |
|
|
|
12,467 |
|
|
|
16,373 |
|
Other Comprehensive Income (Loss) (Net of
Tax): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gain (loss) on available-for-sale securities |
|
(5,996 |
) |
|
|
8,030 |
|
|
|
(628 |
) |
|
|
(8,197 |
) |
|
|
(14,602 |
) |
|
|
2,034 |
|
|
|
(35,541 |
) |
Reclassification adjustment for realized loss on sale of
available-for-sale securities |
|
- |
|
|
|
891 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
891 |
|
|
|
- |
|
Net unrealized gain (loss) on available-for-sale securities |
|
(5,996 |
) |
|
|
8,921 |
|
|
|
(628 |
) |
|
|
(8,197 |
) |
|
|
(14,602 |
) |
|
|
2,925 |
|
|
|
(35,541 |
) |
Tax expense (benefit) |
|
(1,260 |
) |
|
|
1,874 |
|
|
|
(132 |
) |
|
|
(1,721 |
) |
|
|
(3,067 |
) |
|
|
614 |
|
|
|
(7,464 |
) |
Other comprehensive income (loss) |
|
(4,736 |
) |
|
|
7,047 |
|
|
|
(496 |
) |
|
|
(6,476 |
) |
|
|
(11,535 |
) |
|
|
2,311 |
|
|
|
(28,077 |
) |
Comprehensive Income (Loss) |
$ |
1,265 |
|
|
$ |
13,513 |
|
|
$ |
6,692 |
|
|
$ |
2,478 |
|
|
$ |
(3,264 |
) |
|
$ |
14,778 |
|
|
$ |
(11,704 |
) |
Basic Earnings Per Share |
$ |
0.44 |
|
|
$ |
0.47 |
|
|
$ |
0.53 |
|
|
$ |
0.68 |
|
|
$ |
0.63 |
|
|
$ |
0.92 |
|
|
$ |
1.25 |
|
Diluted Earnings Per Share |
$ |
0.44 |
|
|
$ |
0.47 |
|
|
$ |
0.53 |
|
|
$ |
0.68 |
|
|
$ |
0.63 |
|
|
$ |
0.92 |
|
|
$ |
1.25 |
|
Dividends Declared |
$ |
0.2100 |
|
|
$ |
0.2100 |
|
|
$ |
0.2100 |
|
|
$ |
0.2100 |
|
|
$ |
0.2025 |
|
|
$ |
0.4200 |
|
|
$ |
0.3925 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*ASU 2016-13 adopted
during the first quarter of 2023; therefore, prior period's
provision amount reflects the incurred loss method. |
|
|
|
|
|
|
|
|
FARMERS &
MERCHANTS BANCORP, INC. AND SUBSIDIARIES |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
(Unaudited) (in
thousands of dollars, except share data) |
|
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
(Unaudited) |
|
(Unaudited) |
Assets |
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
69,760 |
|
|
$ |
62,780 |
|
|
$ |
83,085 |
|
|
$ |
69,680 |
|
|
$ |
69,955 |
|
Federal funds sold |
|
1,433 |
|
|
|
1,545 |
|
|
|
1,324 |
|
|
|
990 |
|
|
|
1,484 |
|
Total cash and cash equivalents |
|
71,193 |
|
|
|
64,325 |
|
|
|
84,409 |
|
|
|
70,670 |
|
|
|
71,439 |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing time deposits |
|
3,485 |
|
|
|
4,435 |
|
|
|
4,442 |
|
|
|
5,187 |
|
|
|
6,684 |
|
Securities - available-for-sale |
|
363,225 |
|
|
|
372,975 |
|
|
|
390,789 |
|
|
|
395,485 |
|
|
|
399,687 |
|
Other securities, at cost |
|
17,535 |
|
|
|
11,543 |
|
|
|
9,799 |
|
|
|
8,227 |
|
|
|
8,735 |
|
Loans held for sale |
|
1,459 |
|
|
|
951 |
|
|
|
827 |
|
|
|
2,182 |
|
|
|
4,230 |
|
Loans, net |
|
2,490,883 |
|
|
|
2,422,018 |
|
|
|
2,336,074 |
|
|
|
2,122,626 |
|
|
|
2,016,394 |
|
Premises and equipment |
|
30,398 |
|
|
|
28,679 |
|
|
|
28,381 |
|
|
|
26,484 |
|
|
|
26,492 |
|
Construction in progress |
|
2,290 |
|
|
|
1,565 |
|
|
|
278 |
|
|
|
- |
|
- |
Goodwill |
|
86,358 |
|
|
|
86,358 |
|
|
|
86,358 |
|
|
|
80,434 |
|
|
|
80,434 |
|
Loan servicing rights |
|
5,635 |
|
|
|
4,985 |
|
|
|
3,549 |
|
|
|
3,583 |
|
|
|
3,426 |
|
Bank owned life insurance |
|
33,470 |
|
|
|
33,269 |
|
|
|
33,073 |
|
|
|
28,051 |
|
|
|
27,874 |
|
Other assets |
|
41,512 |
|
|
|
38,972 |
|
|
|
37,372 |
|
|
|
40,831 |
|
|
|
29,321 |
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
$ |
3,147,443 |
|
|
$ |
3,070,075 |
|
|
$ |
3,015,351 |
|
|
$ |
2,783,760 |
|
|
$ |
2,674,716 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
$ |
488,678 |
|
|
$ |
520,145 |
|
|
$ |
532,794 |
|
|
$ |
506,928 |
|
|
$ |
503,395 |
|
Interest-bearing |
|
|
|
|
|
|
|
|
|
NOW accounts |
|
770,113 |
|
|
|
800,230 |
|
|
|
750,887 |
|
|
|
705,888 |
|
|
|
678,552 |
|
Savings |
|
581,192 |
|
|
|
590,854 |
|
|
|
627,203 |
|
|
|
607,375 |
|
|
|
617,850 |
|
Time |
|
628,757 |
|
|
|
601,939 |
|
|
|
557,980 |
|
|
|
462,845 |
|
|
|
424,249 |
|
Total
deposits |
|
2,468,740 |
|
|
|
2,513,168 |
|
|
|
2,468,864 |
|
|
|
2,283,036 |
|
|
|
2,224,046 |
|
|
|
|
|
|
|
|
|
|
|
Federal funds purchased and securities |
|
|
|
|
|
|
|
|
|
sold under agreements to repurchase |
|
51,567 |
|
|
|
30,496 |
|
|
|
54,206 |
|
|
|
55,802 |
|
|
|
71,944 |
|
Federal Home Loan Bank (FHLB) advances |
|
266,818 |
|
|
|
164,327 |
|
|
|
127,485 |
|
|
|
102,147 |
|
|
|
42,635 |
|
Other borrowings |
|
- |
|
|
|
- |
|
|
|
10,000 |
|
|
|
10,000 |
|
|
|
- |
Subordinated notes, net of unamortized issuance costs |
|
34,644 |
|
|
|
34,615 |
|
|
|
34,586 |
|
|
|
34,557 |
|
|
|
34,528 |
|
Dividend payable |
|
2,834 |
|
|
|
2,831 |
|
|
|
2,832 |
|
|
|
2,727 |
|
|
|
2,626 |
|
Accrued expenses and other liabilities |
|
18,177 |
|
|
|
18,881 |
|
|
|
19,238 |
|
|
|
14,913 |
|
|
|
18,064 |
|
Total
liabilities |
|
2,842,780 |
|
|
|
2,764,318 |
|
|
|
2,717,211 |
|
|
|
2,503,182 |
|
|
|
2,393,843 |
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
Common stock - No par value 20,000,000 shares authorized; issued
and |
|
|
|
|
|
|
|
|
outstanding 14,564,425 shares 6/30/23 and 12/31/22 |
|
135,647 |
|
|
|
135,241 |
|
|
|
135,497 |
|
|
|
121,811 |
|
|
|
123,145 |
|
Treasury stock - 929,513 shares 6/30/23 and 956,003 shares
12/31/22 |
|
(11,298 |
) |
|
|
(11,310 |
) |
|
|
(11,573 |
) |
|
|
(11,547 |
) |
|
|
(11,822 |
) |
Retained earnings |
|
216,236 |
|
|
|
213,012 |
|
|
|
212,449 |
|
|
|
208,051 |
|
|
|
200,811 |
|
Accumulated other comprehensive loss |
|
(35,922 |
) |
|
|
(31,186 |
) |
|
|
(38,233 |
) |
|
|
(37,737 |
) |
|
|
(31,261 |
) |
Total stockholders' equity |
|
304,663 |
|
|
|
305,757 |
|
|
|
298,140 |
|
|
|
280,578 |
|
|
|
280,873 |
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity |
$ |
3,147,443 |
|
|
$ |
3,070,075 |
|
|
$ |
3,015,351 |
|
|
$ |
2,783,760 |
|
|
$ |
2,674,716 |
|
FARMERS &
MERCHANTS BANCORP, INC. AND SUBSIDIARIES |
SELECT FINANCIAL
DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
For the Six Months Ended |
Selected financial data |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
Return on average assets |
|
|
0.77 |
% |
|
|
0.84 |
% |
|
|
0.96 |
% |
|
|
1.31 |
% |
|
|
1.23 |
% |
|
|
0.81 |
% |
|
|
1.22 |
% |
Return on
average equity |
|
|
7.84 |
% |
|
|
8.59 |
% |
|
|
10.00 |
% |
|
|
12.53 |
% |
|
|
11.66 |
% |
|
|
8.21 |
% |
|
|
11.32 |
% |
Yield on
earning assets |
|
|
4.53 |
% |
|
|
4.41 |
% |
|
|
4.18 |
% |
|
|
4.00 |
% |
|
|
3.79 |
% |
|
|
4.47 |
% |
|
|
3.63 |
% |
Cost of
interest bearing liabilities |
|
|
2.35 |
% |
|
|
1.85 |
% |
|
|
1.32 |
% |
|
|
0.68 |
% |
|
|
0.44 |
% |
|
|
2.10 |
% |
|
|
0.44 |
% |
Net interest
spread |
|
|
2.18 |
% |
|
|
2.56 |
% |
|
|
2.86 |
% |
|
|
3.32 |
% |
|
|
3.35 |
% |
|
|
2.37 |
% |
|
|
3.19 |
% |
Net interest
margin |
|
|
2.73 |
% |
|
|
3.01 |
% |
|
|
3.20 |
% |
|
|
3.49 |
% |
|
|
3.47 |
% |
|
|
2.87 |
% |
|
|
3.30 |
% |
Efficiency |
|
|
69.06 |
% |
|
|
63.53 |
% |
|
|
50.46 |
% |
|
|
51.19 |
% |
|
|
50.17 |
% |
|
|
66.04 |
% |
|
|
57.90 |
% |
Dividend
payout ratio |
|
|
47.22 |
% |
|
|
43.79 |
% |
|
|
39.39 |
% |
|
|
30.45 |
% |
|
|
30.02 |
% |
|
|
45.44 |
% |
|
|
30.08 |
% |
Tangible
book value per share (1) |
|
$ |
18.21 |
|
|
$ |
17.92 |
|
|
$ |
17.69 |
|
|
$ |
17.86 |
|
|
$ |
17.43 |
|
|
|
|
|
|
Tier 1
leverage ratio |
|
|
9.85 |
% |
|
|
8.36 |
% |
|
|
8.39 |
% |
|
|
9.11 |
% |
|
|
8.75 |
% |
|
|
|
|
|
Average
shares outstanding |
|
|
13,632,440 |
|
|
|
13,615,655 |
|
|
|
13,606,876 |
|
|
|
13,083,145 |
|
|
|
13,065,975 |
|
|
|
13,624,094 |
|
|
|
13,066,123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
|
|
|
(Dollar amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
real estate |
|
$ |
1,280,902 |
|
|
$ |
1,225,315 |
|
|
$ |
1,152,603 |
|
|
$ |
1,063,661 |
|
|
$ |
979,176 |
|
|
|
|
|
|
Agricultural
real estate |
|
|
230,837 |
|
|
|
227,897 |
|
|
|
220,819 |
|
|
|
205,089 |
|
|
|
199,972 |
|
|
|
|
|
|
Consumer
real estate |
|
|
506,866 |
|
|
|
502,974 |
|
|
|
494,423 |
|
|
|
416,001 |
|
|
|
410,450 |
|
|
|
|
|
|
Commercial
and industrial |
|
|
253,444 |
|
|
|
241,598 |
|
|
|
242,360 |
|
|
|
229,388 |
|
|
|
232,975 |
|
|
|
|
|
|
Agricultural |
|
|
128,344 |
|
|
|
131,467 |
|
|
|
128,733 |
|
|
|
128,615 |
|
|
|
127,143 |
|
|
|
|
|
|
Consumer |
|
|
88,312 |
|
|
|
89,588 |
|
|
|
89,147 |
|
|
|
70,602 |
|
|
|
55,411 |
|
|
|
|
|
|
Other |
|
|
28,996 |
|
|
|
29,316 |
|
|
|
29,818 |
|
|
|
30,662 |
|
|
|
31,243 |
|
|
|
|
|
|
Less: Net
deferred loan fees and costs |
|
|
(1,908 |
) |
|
|
(1,503 |
) |
|
|
(1,516 |
) |
|
|
(1,402 |
) |
|
|
(1,552 |
) |
|
|
|
|
|
Total
loans,net |
|
$ |
2,515,793 |
|
|
$ |
2,446,652 |
|
|
$ |
2,356,387 |
|
|
$ |
2,142,616 |
|
|
$ |
2,034,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality data |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
|
|
|
|
(Dollar amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans |
|
$ |
6,295 |
|
|
$ |
7,717 |
|
|
$ |
4,689 |
|
|
$ |
5,470 |
|
|
$ |
5,247 |
|
|
|
|
|
|
Troubled
debt restructuring |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
3,645 |
|
|
$ |
3,978 |
|
|
$ |
2,748 |
|
|
|
|
|
|
90 day past
due and accruing |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
Nonperforming loans |
|
$ |
6,295 |
|
|
$ |
7,717 |
|
|
$ |
4,689 |
|
|
$ |
5,470 |
|
|
$ |
5,247 |
|
|
|
|
|
|
Other real
estate owned |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
Nonperforming assets |
|
$ |
6,295 |
|
|
$ |
7,717 |
|
|
$ |
4,689 |
|
|
$ |
5,470 |
|
|
$ |
5,247 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for credit losses(2) |
|
$ |
24,910 |
|
|
$ |
24,507 |
|
|
$ |
20,313 |
|
|
$ |
19,990 |
|
|
$ |
18,424 |
|
|
|
|
|
|
Accretable yield adjustment |
|
|
5,209 |
|
|
|
5,754 |
|
|
|
6,427 |
|
|
|
5,959 |
|
|
|
6,724 |
|
|
|
|
|
|
Adjusted
credit losses with accretable yield included(2) |
|
$ |
30,119 |
|
|
$ |
30,261 |
|
|
$ |
26,740 |
|
|
$ |
25,949 |
|
|
$ |
25,148 |
|
|
|
|
|
|
Allowance
for credit losses/total loans(2) |
|
|
0.99 |
% |
|
|
1.00 |
% |
|
|
0.86 |
% |
|
|
0.93 |
% |
|
|
0.91 |
% |
|
|
|
|
|
Adjusted
credit losses with accretable yield/total loans(2) |
|
|
1.20 |
% |
|
|
1.24 |
% |
|
|
1.13 |
% |
|
|
1.21 |
% |
|
|
1.24 |
% |
|
|
|
|
|
Net
charge-offs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter-to-date |
|
$ |
(133 |
) |
|
$ |
60 |
|
|
$ |
431 |
|
|
$ |
71 |
|
|
$ |
(25 |
) |
|
|
|
|
|
Year-to-date |
|
$ |
(73 |
) |
|
$ |
60 |
|
|
$ |
529 |
|
|
$ |
97 |
|
|
$ |
26 |
|
|
|
|
|
|
Net
charge-offs to average loans |
|
|
|
0.28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter-to-date |
|
|
-0.01 |
% |
|
|
0.00 |
% |
|
|
0.02 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
|
|
|
Year-to-date |
|
|
-0.00 |
% |
|
|
0.00 |
% |
|
|
0.03 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
|
|
|
Nonperforming loans/total loans |
|
|
0.25 |
% |
|
|
0.32 |
% |
|
|
0.20 |
% |
|
|
0.26 |
% |
|
|
0.26 |
% |
|
|
|
|
|
Allowance
for credit losses/nonperforming loans(2) |
|
|
395.71 |
% |
|
|
319.22 |
% |
|
|
273.67 |
% |
|
|
365.44 |
% |
|
|
351.44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tangible Equity =
Stockholder Equity less goodwill, other intangibles (core deposit
intangible, mortgage servicing rights and unrealized gain/loss on
securities) plus CECL adjustment |
|
|
|
(2) ASU 2016-13
adopted during the first quarter of 2023; therefore, prior period's
provision amount reflects the incurred loss method. |
|
|
|
|
|
|
|
|
|
FARMERS &
MERCHANTS BANCORP, INC. AND SUBSIDIARIES |
AVERAGE BALANCE
SHEETS AND RELATED YIELDS AND RATES |
(in thousands of
dollars, except percentages) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Three Months Ended |
|
June 30, 2023 |
|
June 30, 2022 |
Interest
Earning Assets: |
Average Balance |
|
Interest/Dividends |
|
Annualized Yield/Rate |
|
Average Balance |
|
Interest/Dividends |
|
Annualized Yield/Rate |
Loans |
$ |
2,476,795 |
|
|
$ |
31,365 |
|
|
|
5.07 |
% |
|
$ |
1,999,357 |
|
|
$ |
22,388 |
|
|
|
4.48 |
% |
Taxable
investment securities |
|
399,257 |
|
|
|
1,486 |
|
|
|
1.49 |
% |
|
|
422,482 |
|
|
|
1,344 |
|
|
|
1.27 |
% |
Tax-exempt
investment securities |
|
24,259 |
|
|
|
93 |
|
|
|
1.94 |
% |
|
|
21,649 |
|
|
|
70 |
|
|
|
1.64 |
% |
Fed funds
sold & other |
|
49,160 |
|
|
|
433 |
|
|
|
3.52 |
% |
|
|
81,091 |
|
|
|
109 |
|
|
|
0.54 |
% |
Total
Interest Earning Assets |
|
2,949,471 |
|
|
$ |
33,377 |
|
|
|
4.53 |
% |
|
|
2,524,579 |
|
|
$ |
23,911 |
|
|
|
3.79 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Nonearning
Assets |
|
169,599 |
|
|
|
|
|
|
|
161,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets |
$ |
3,119,070 |
|
|
|
|
|
|
$ |
2,685,610 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Savings
deposits |
$ |
1,356,798 |
|
|
$ |
6,238 |
|
|
|
1.84 |
% |
|
$ |
1,312,444 |
|
|
$ |
777 |
|
|
|
0.24 |
% |
Other time
deposits |
|
612,929 |
|
|
|
4,196 |
|
|
|
2.74 |
% |
|
|
435,091 |
|
|
|
602 |
|
|
|
0.55 |
% |
Other
borrowed money |
|
215,884 |
|
|
|
2,113 |
|
|
|
3.92 |
% |
|
|
39,172 |
|
|
|
218 |
|
|
|
2.23 |
% |
Fed funds
purchased & securities |
|
|
|
|
|
|
|
|
|
|
|
sold under agreement to repurch. |
|
39,966 |
|
|
|
427 |
|
|
|
4.27 |
% |
|
|
35,260 |
|
|
|
166 |
|
|
|
1.88 |
% |
Subordinated
notes |
|
34,625 |
|
|
|
285 |
|
|
|
3.29 |
% |
|
|
34,509 |
|
|
|
284 |
|
|
|
3.29 |
% |
Total
Interest Bearing Liabilities |
$ |
2,260,202 |
|
|
$ |
13,259 |
|
|
|
2.35 |
% |
|
$ |
1,856,476 |
|
|
$ |
2,047 |
|
|
|
0.44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
Bearing Liabilities |
|
552,867 |
|
|
|
|
|
|
|
545,439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
$ |
306,001 |
|
|
|
|
|
|
$ |
283,695 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Income and Interest Rate Spread |
|
|
$ |
20,118 |
|
|
|
2.18 |
% |
|
|
|
$ |
21,864 |
|
|
|
3.35 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Margin |
|
|
|
|
|
2.73 |
% |
|
|
|
|
|
|
3.47 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
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 Six Months Ended |
|
For the Six Months Ended |
|
June 30, 2023 |
|
June 30, 2022 |
Interest
Earning Assets: |
Average Balance |
|
Interest/Dividends |
|
Annualized Yield/Rate |
|
Average Balance |
|
Interest/Dividends |
|
Annualized Yield/Rate |
Loans |
$ |
2,437,148 |
|
|
$ |
61,068 |
|
|
|
5.01 |
% |
|
$ |
1,953,671 |
|
|
$ |
42,843 |
|
|
|
4.39 |
% |
Taxable
investment securities |
|
398,383 |
|
|
|
2,985 |
|
|
|
1.50 |
% |
|
|
426,189 |
|
|
|
2,639 |
|
|
|
1.24 |
% |
Tax-exempt
investment securities |
|
25,303 |
|
|
|
193 |
|
|
|
1.93 |
% |
|
|
20,119 |
|
|
|
140 |
|
|
|
1.76 |
% |
Fed funds
sold & other |
|
58,853 |
|
|
|
933 |
|
|
|
3.17 |
% |
|
|
124,050 |
|
|
|
188 |
|
|
|
0.30 |
% |
Total
Interest Earning Assets |
|
2,919,687 |
|
|
$ |
65,179 |
|
|
|
4.47 |
% |
|
|
2,524,029 |
|
|
$ |
45,810 |
|
|
|
3.63 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Nonearning
Assets |
|
174,702 |
|
|
|
|
|
|
|
162,949 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets |
$ |
3,094,389 |
|
|
|
|
|
|
$ |
2,686,978 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Savings
deposits |
$ |
1,378,518 |
|
|
$ |
11,181 |
|
|
|
1.62 |
% |
|
$ |
1,302,005 |
|
|
$ |
1,365 |
|
|
|
0.21 |
% |
Other time
deposits |
|
596,168 |
|
|
|
7,404 |
|
|
|
2.48 |
% |
|
|
447,471 |
|
|
|
1,374 |
|
|
|
0.61 |
% |
Other
borrowed money |
|
174,171 |
|
|
|
3,393 |
|
|
|
3.90 |
% |
|
|
51,180 |
|
|
|
553 |
|
|
|
2.16 |
% |
Fed funds
purchased & securities |
|
|
|
|
|
|
|
|
|
|
|
sold under agreement to repurch. |
|
39,409 |
|
|
|
832 |
|
|
|
4.22 |
% |
|
|
32,182 |
|
|
|
318 |
|
|
|
1.98 |
% |
Subordinated
notes |
|
34,610 |
|
|
|
569 |
|
|
|
3.29 |
% |
|
|
34,495 |
|
|
|
553 |
|
|
|
3.21 |
% |
Total
Interest Bearing Liabilities |
$ |
2,222,876 |
|
|
$ |
23,379 |
|
|
|
2.10 |
% |
|
$ |
1,867,333 |
|
|
$ |
4,163 |
|
|
|
0.44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
Bearing Liabilities |
|
567,878 |
|
|
|
|
|
|
|
530,478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
$ |
303,635 |
|
|
|
|
|
|
$ |
289,167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Income and Interest Rate Spread |
|
|
$ |
41,800 |
|
|
|
2.37 |
% |
|
|
|
$ |
41,647 |
|
|
|
3.19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Margin |
|
|
|
|
|
2.87 |
% |
|
|
|
|
|
|
3.30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Yields on Tax exempt
securities and the portion of the tax-exempt IDB loans included in
loans have been tax adjusted based on a 21% tax rate in the
charts |
|
|
FARMERS &
MERCHANTS BANCORP, INC. AND SUBSIDIARIES |
AVERAGE BALANCE
SHEETS AND RELATED YIELDS AND RATES |
(in thousands of
dollars, except percentages) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30, 2023 |
|
For the Three Months Ended June 30, 2022 |
|
As Reported |
|
Excluding
Acc/Amort |
Difference |
|
As Reported |
|
Excluding
Acc/Amort |
Difference |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
Interest
Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
$ |
31,365 |
5.07 |
% |
|
$ |
30,697 |
4.96 |
% |
|
$ |
668 |
|
0.11 |
% |
|
$ |
22,388 |
4.48 |
% |
|
$ |
21,986 |
4.40 |
% |
|
$ |
402 |
|
0.08 |
% |
Taxable investment securities |
|
1,486 |
1.49 |
% |
|
|
1,486 |
1.49 |
% |
|
|
- |
|
0.00 |
% |
|
|
1,344 |
1.27 |
% |
|
|
1,344 |
1.27 |
% |
|
|
- |
|
0.00 |
% |
Tax-exempt investment securities |
|
93 |
1.94 |
% |
|
|
93 |
1.94 |
% |
|
|
- |
|
0.00 |
% |
|
|
70 |
1.64 |
% |
|
|
70 |
1.64 |
% |
|
|
- |
|
0.00 |
% |
Fed funds sold & other |
|
433 |
3.52 |
% |
|
|
433 |
3.52 |
% |
|
|
- |
|
0.00 |
% |
|
|
109 |
0.54 |
% |
|
|
109 |
0.54 |
% |
|
|
- |
|
0.00 |
% |
Total Interest Earning Assets |
|
33,377 |
4.53 |
% |
|
|
32,709 |
4.44 |
% |
|
|
668 |
|
0.09 |
% |
|
|
23,911 |
3.79 |
% |
|
|
23,509 |
3.73 |
% |
|
|
402 |
|
0.06 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings deposits |
$ |
6,238 |
1.84 |
% |
|
$ |
6,238 |
1.84 |
% |
|
$ |
- |
|
0.00 |
% |
|
$ |
777 |
0.24 |
% |
|
$ |
777 |
0.24 |
% |
|
$ |
- |
|
0.00 |
% |
Other time deposits |
|
4,196 |
2.74 |
% |
|
|
4,291 |
2.80 |
% |
|
|
(95 |
) |
-0.06 |
% |
|
|
602 |
0.55 |
% |
|
|
1,222 |
1.12 |
% |
|
|
(620 |
) |
-0.57 |
% |
Other borrowed money |
|
2,113 |
3.92 |
% |
|
|
2,130 |
3.95 |
% |
|
|
(17 |
) |
-0.03 |
% |
|
|
218 |
2.23 |
% |
|
|
239 |
2.44 |
% |
|
|
(21 |
) |
-0.21 |
% |
Federal funds purchased and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
securties sold under agreement to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
repurchase |
|
427 |
4.27 |
% |
|
|
427 |
4.27 |
% |
|
|
- |
|
0.00 |
% |
|
|
166 |
1.88 |
% |
|
|
166 |
1.88 |
% |
|
|
- |
|
0.00 |
% |
Subordinated notes |
|
285 |
3.29 |
% |
|
|
285 |
3.29 |
% |
|
|
- |
|
0.00 |
% |
|
|
284 |
3.29 |
% |
|
|
284 |
3.29 |
% |
|
|
- |
|
0.00 |
% |
Total Interest Bearing Liabilities |
|
13,259 |
2.35 |
% |
|
|
13,371 |
2.37 |
% |
|
|
(112 |
) |
-0.02 |
% |
|
|
2,047 |
0.44 |
% |
|
|
2,688 |
0.58 |
% |
|
|
(641 |
) |
-0.14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest/Dividend income/yield |
|
33,377 |
4.53 |
% |
|
|
32,709 |
4.44 |
% |
|
|
668 |
|
0.09 |
% |
|
|
23,911 |
3.79 |
% |
|
|
23,509 |
3.73 |
% |
|
|
402 |
|
0.06 |
% |
Interest
Expense / yield |
|
13,259 |
2.35 |
% |
|
|
13,371 |
2.37 |
% |
|
|
(112 |
) |
-0.02 |
% |
|
|
2,047 |
0.44 |
% |
|
|
2,688 |
0.58 |
% |
|
|
(641 |
) |
-0.14 |
% |
Net Interest
Spread |
|
20,118 |
2.18 |
% |
|
|
19,338 |
2.07 |
% |
|
|
780 |
|
0.11 |
% |
|
|
21,864 |
3.35 |
% |
|
|
20,821 |
3.15 |
% |
|
|
1,043 |
|
0.20 |
% |
Net Interest
Margin |
|
2.73 |
% |
|
|
2.63 |
% |
|
|
0.10 |
% |
|
|
3.47 |
% |
|
|
3.30 |
% |
|
|
0.17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, 2023 |
|
For the Six Months Ended June 30, 2022 |
|
As Reported |
|
Excluding Acc/Amort |
Difference |
|
As Reported |
|
Excluding
Acc/Amort |
Difference |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
Interest
Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
$ |
61,068 |
5.01 |
% |
|
$ |
59,733 |
4.90 |
% |
|
$ |
1,335 |
|
0.11 |
% |
|
$ |
42,843 |
4.39 |
% |
|
$ |
42,067 |
4.31 |
% |
|
$ |
776 |
|
0.08 |
% |
Taxable investment securities |
|
2,985 |
1.50 |
% |
|
|
2,985 |
1.50 |
% |
|
|
- |
|
0.00 |
% |
|
|
2,639 |
1.24 |
% |
|
|
2,639 |
1.24 |
% |
|
|
- |
|
0.00 |
% |
Tax-exempt investment securities |
|
193 |
1.93 |
% |
|
|
193 |
1.93 |
% |
|
|
- |
|
0.00 |
% |
|
|
140 |
1.76 |
% |
|
|
140 |
1.76 |
% |
|
|
- |
|
0.00 |
% |
Fed funds sold & other |
|
933 |
3.17 |
% |
|
|
933 |
3.17 |
% |
|
|
- |
|
0.00 |
% |
|
|
188 |
0.30 |
% |
|
|
188 |
0.30 |
% |
|
|
- |
|
0.00 |
% |
Total Interest Earning Assets |
|
65,179 |
4.47 |
% |
|
|
63,844 |
4.38 |
% |
|
|
1,335 |
|
0.09 |
% |
|
|
45,810 |
3.63 |
% |
|
|
45,034 |
3.57 |
% |
|
|
776 |
|
0.06 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings deposits |
$ |
11,181 |
1.62 |
% |
|
$ |
11,181 |
1.62 |
% |
|
$ |
- |
|
0.00 |
% |
|
$ |
1,365 |
0.21 |
% |
|
$ |
1,365 |
0.21 |
% |
|
$ |
- |
|
0.00 |
% |
Other time deposits |
|
7,404 |
2.48 |
% |
|
|
7,958 |
2.67 |
% |
|
|
(554 |
) |
-0.19 |
% |
|
|
1,374 |
0.61 |
% |
|
|
2,613 |
1.17 |
% |
|
|
(1,239 |
) |
-0.56 |
% |
Other borrowed money |
|
3,393 |
3.90 |
% |
|
|
3,428 |
3.94 |
% |
|
|
(35 |
) |
-0.04 |
% |
|
|
553 |
2.16 |
% |
|
|
595 |
2.33 |
% |
|
|
(42 |
) |
-0.17 |
% |
Federal funds purchased and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
securties sold under agreement to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
repurchase |
|
832 |
4.22 |
% |
|
|
832 |
4.22 |
% |
|
|
- |
|
0.00 |
% |
|
|
318 |
1.98 |
% |
|
|
318 |
1.98 |
% |
|
|
- |
|
0.00 |
% |
Subordinated notes |
|
569 |
3.29 |
% |
|
|
569 |
3.29 |
% |
|
|
- |
|
0.00 |
% |
|
|
553 |
3.21 |
% |
|
|
553 |
3.21 |
% |
|
|
- |
|
0.00 |
% |
Total Interest Bearing Liabilities |
|
23,379 |
2.10 |
% |
|
|
23,968 |
2.16 |
% |
|
|
(589 |
) |
-0.06 |
% |
|
|
4,163 |
0.44 |
% |
|
|
5,444 |
0.58 |
% |
|
|
(1,281 |
) |
-0.14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest/Dividend income/yield |
|
65,179 |
4.47 |
% |
|
|
63,844 |
4.38 |
% |
|
|
1,335 |
|
0.09 |
% |
|
|
45,810 |
3.63 |
% |
|
|
45,034 |
3.57 |
% |
|
|
776 |
|
0.06 |
% |
Interest
Expense / yield |
|
23,379 |
2.10 |
% |
|
|
23,968 |
2.16 |
% |
|
|
(589 |
) |
-0.06 |
% |
|
|
4,163 |
0.44 |
% |
|
|
5,444 |
0.58 |
% |
|
|
(1,281 |
) |
-0.14 |
% |
Net Interest
Spread |
|
41,800 |
2.37 |
% |
|
|
39,876 |
2.22 |
% |
|
|
1,924 |
|
0.15 |
% |
|
|
41,647 |
3.19 |
% |
|
|
39,590 |
2.99 |
% |
|
|
2,057 |
|
0.20 |
% |
Net Interest
Margin |
|
2.87 |
% |
|
|
2.74 |
% |
|
|
0.13 |
% |
|
|
3.30 |
% |
|
|
3.14 |
% |
|
|
0.16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FARMERS &
MERCHANTS BANCORP, INC. AND SUBSIDIARIES |
NON-GAAP
RECONCILIATION OF NET INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of
dollars) |
|
(in thousands of
dollars) |
|
|
Three Months Ended |
|
Six Months Ended |
Non-GAAP Reconciliation of Net Income |
|
June 30, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
|
|
(Unaudited) |
|
(Unaudited) |
Net income as reported |
|
$ |
6,001 |
|
|
$ |
8,271 |
|
|
$ |
12,467 |
|
|
$ |
16,373 |
|
Acquisition
expenses |
|
|
88 |
|
|
|
- |
|
|
|
184 |
|
|
|
145 |
|
Tax effect
on acquisition expenses |
|
|
(18 |
) |
|
|
- |
|
|
|
(37 |
) |
|
|
(30 |
) |
Net income
excluding acquisition expenses and tax effect |
|
$ |
6,071 |
|
|
$ |
8,271 |
|
|
$ |
12,614 |
|
|
$ |
16,488 |
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding including participating
securities |
|
|
13,632,440 |
|
|
|
13,065,975 |
|
|
|
13,624,094 |
|
|
|
13,066,123 |
|
|
|
|
|
|
|
|
|
|
Basic and
diluted earnings per share |
|
$ |
0.45 |
|
|
$ |
0.63 |
|
|
$ |
0.93 |
|
|
$ |
1.26 |
|
|
|
|
|
|
|
|
|
|
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 |
|
June 30, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
|
|
|
|
|
|
|
|
Shares Outstanding |
|
13,634,912 |
|
|
|
13,065,825 |
|
|
|
13,634,912 |
|
|
|
13,065,825 |
|
|
|
|
|
|
|
|
|
Tangible
Equity |
|
|
|
|
|
|
|
Equity |
$ |
304,663 |
|
|
$ |
280,872 |
|
|
$ |
304,663 |
|
|
$ |
280,872 |
|
Goodwill |
|
86,358 |
|
|
|
80,434 |
|
|
|
86,358 |
|
|
|
80,434 |
|
Other Intangible |
|
8,437 |
|
|
|
3,974 |
|
|
|
8,437 |
|
|
|
3,974 |
|
Comprehensive Loss Adjustment* |
|
- |
|
|
|
- |
|
|
|
35,922 |
|
|
|
31,261 |
|
CECL
Adjustment** |
|
- |
|
|
|
- |
|
|
|
2,528 |
|
|
|
- |
|
Tangible
Equity |
$ |
209,868 |
|
|
$ |
196,464 |
|
|
$ |
248,318 |
|
|
$ |
227,725 |
|
Shares
Outstanding |
|
13,635 |
|
|
|
13,066 |
|
|
|
13,635 |
|
|
|
13,066 |
|
Tangible
Book Equity per Share |
$ |
15.39 |
|
|
$ |
15.04 |
|
|
$ |
18.21 |
|
|
$ |
17.43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual Average |
|
Regulatory
Average |
|
Year to Date |
|
Year to Date |
|
June 30, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
|
|
|
|
|
|
|
|
Net
Income |
$ |
12,467 |
|
|
$ |
16,373 |
|
|
$ |
12,467 |
|
|
$ |
16,373 |
|
Acquisition
Costs - Tax Adjusted |
|
147 |
|
|
|
115 |
|
|
|
147 |
|
|
|
115 |
|
|
|
|
|
|
|
|
|
Average
Shares Outstanding |
|
13,624,094 |
|
|
|
13,066,123 |
|
|
|
13,624,094 |
|
|
|
13,066,123 |
|
|
|
|
|
|
|
|
|
Average
Tangible Equity |
|
|
|
|
|
|
|
Average Equity |
$ |
303,635 |
|
|
$ |
289,167 |
|
|
$ |
303,635 |
|
|
$ |
289,167 |
|
Average Goodwill |
|
86,358 |
|
|
|
80,434 |
|
|
|
86,358 |
|
|
|
80,434 |
|
Average Other Intangible |
|
8,942 |
|
|
|
4,235 |
|
|
|
8,942 |
|
|
|
4,235 |
|
Average
Comprehensive Loss Adjustment* |
|
- |
|
|
|
- |
|
|
|
34,921 |
|
|
|
16,893 |
|
Average CECL
Adjustment** |
|
- |
|
|
|
- |
|
|
|
2,528 |
|
|
|
Average
Tangible Equity |
$ |
208,336 |
|
|
$ |
204,498 |
|
|
$ |
245,784 |
|
|
$ |
221,391 |
|
Average
Shares Outstanding |
|
13,624 |
|
|
|
13,066 |
|
|
|
13,624 |
|
|
|
13,066 |
|
Average
Tangible Book Equity per Share |
$ |
15.29 |
|
|
$ |
15.65 |
|
|
$ |
18.04 |
|
|
$ |
16.94 |
|
|
|
|
|
|
|
|
|
Return on
Average Tangible Equity |
|
11.97 |
% |
|
|
16.01 |
% |
|
|
10.14 |
% |
|
|
14.79 |
% |
Return on
Average Tangible Equity w/o Acquisition |
|
12.11 |
% |
|
|
16.12 |
% |
|
|
10.26 |
% |
|
|
14.89 |
% |
|
|
|
|
|
|
|
|
*The Bank has adopted
the Accumulated Other Comprehensive Income (AOCI) opt out election
which removed AOCI |
from the calculation of tangible equity for regulatory
purposes. |
|
|
|
|
|
|
**ASU 2016-13 adopted
during the first quarter of 2023; therefore, prior period's
provision amount reflects the incurred loss method and |
the Bank has elected
to spread the Capital adjustment over three years. The first year
permits 75% of the capital adjustment to be removed |
from the calculation of tangible equity for regulatory
purposes. |
|
|
|
|
|
|
|
|
Company Contact: |
Investor and Media Contact: |
Lars B. EllerPresident and Chief Executive Officer Farmers &
Merchants Bancorp, Inc.(419) 446-2501 leller@fm.bank |
Andrew M. BergerManaging DirectorSM Berger & Company, Inc.
(216) 464-6400andrew@smberger.com |
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