FMAO Farmers and Merchants Bancorp Inc

Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2024 third quarter and year-to-date ended September 30, 2024.

2024 Third Quarter Financial and Operating Highlights (on a year-over-year basis unless noted):

• 86 consecutive quarters of profitability
• Net income increased 36.4% to $6.5 million, or $0.48 per basic and diluted share, from $4.8 million, or $0.35 per basic and diluted share, and net income expanded 14.7% from the 2024 second quarter
• Net interest margin increased 12 basis points to 2.71%
• Efficiency ratio improved to 67.98%, compared to 73.07% for the same period a year ago, and 69.03% for the 2024 second quarter
• Total net loans remain stable at $2.54 billion at September 30, 2024
• Total assets increased 4.8% to a record $3.39 billion
• Deposits increased 4.3% to a record $2.68 billion
• Stockholders’ equity increased 10.6% to a record $335.4 million
• Asset quality remains at historically strong levels with nonperforming loans of only $2.9 million at September 30, 2024, compared to $22.4 million at September 30, 2023
• Allowance for credit losses was 879.37% of nonperforming loans
• F&M ended the quarter with excellent liquidity levels, and over $635 million in contingent funding sources, and a cash-to-assets ratio of 7.2%
• According to the FDIC, F&M continued to have the third largest share of deposits out of the 58 financial institutions that are also operating within its local markets

Lars B. Eller, President and Chief Executive Officer, stated, “F&M produced excellent earnings growth on a year-over-year and sequential basis, driven by higher net interest income, historically strong asset quality, and prudent expense management. Most importantly, our third quarter results reflect the talent of our associates, as we continue to work hard to drive operating improvements at F&M, serve our local Ohio, Indiana, and Michigan communities, and position F&M for long-term success. In addition, I am pleased to report that F&M was the third largest bank out of 58 financial institutions within the markets we compete, according to the FDIC, reflecting the leading value we provide to our local communities. In fact, F&M is the number one bank, based on deposits, in almost half of the communities in which we operate.”  

Income StatementNet income for the 2024 third quarter ended September 30, 2024, was $6.5 million, compared to $4.8 million for the same period last year. Net income per basic and diluted share for the 2024 third quarter was $0.48, compared to $0.35 for the same period last year. Net income for the 2024 nine months ended September 30, 2024, was $17.6 million, compared to $17.2 million for the same period last year. Net income per basic and diluted share for the 2024 nine months was $1.28, compared to $1.26 for the same period last year.

Mr. Eller continued, “Our 2024 third quarter and year-to-date performance demonstrate the success of the near-term strategies we are pursuing to navigate a complex operating environment and improve earnings. Most importantly, while the demand for loans is high across our markets, our approach to risk and pricing remains conservative. This near-term strategy has contributed to excellent asset quality. In addition, we continue to focus on strategies aimed at optimizing our deposit base and growing low-cost checking (DDA) deposits. Since the beginning of 2024, we have added over 5,600 new checking accounts, and benefited from new and expanded relationships at offices that were opened in 2023. As a result, we ended the quarter with a loan-to-deposit ratio of 93.6%, compared to 97.2% at September 30, 2023, and 96.0% at June 30, 2024. Our third quarter of 2024 loan-to-deposit ratio was the lowest quarterly value in two years. The final near-term strategy we are pursuing is focused on controlling expenses, and I am encouraged by the continued year-over-year and sequential improvement in our efficiency ratio. This reflects the opportunities we are pursuing to manage operating costs and expand productivity.”

DepositsAt September 30, 2024, total deposits were $2.68 billion, an increase of 4.3% from September 30, 2023. The Company’s cost of interest-bearing liabilities was 3.2% for the quarter ended September 30, 2024, compared to 2.82% for the quarter ended September 30, 2023, and 3.02% for the 2023 fourth quarter ended December 31, 2023.

Loan Portfolio and Asset Quality“F&M’s teams continue to do an excellent job managing our cost of funds, loan pricing, deposit growth and overall net interest margin. Since the quarter ended December 31, 2023, our yield on earning assets has increased by 34 basis points, compared to a 19 basis point increase in our cost of interest bearing liabilities – representing the third consecutive quarter our yield on earning assets has outpaced our cost of interest bearing liabilities. We expect this trend will continue as more of our loan portfolio reprices in 2024,” continued Mr. Eller.

Total loans, net at September 30, 2024, increased 0.3%, or by $8.7 million to $2.54 billion, compared to $2.53 billion at September 30, 2023. The year-over-year growth was driven by higher consumer real estate, commercial and industrial, and agricultural loans, partially offset by lower commercial real estate, agricultural real estate, and consumer loans.

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $2.9 million, or 0.11% of total loans at September 30, 2024, compared to $22.4 million, or 0.89% of total loans at September 30, 2023, and $22.4 million, or 0.87% at December 31, 2023.

F&M maintains a well-balanced, diverse and high performing CRE portfolio. CRE loans represented 51.3% of the Company’s total loan portfolio at September 30, 2024. In addition, F&M’s commercial real estate office credit exposure represented 5.3% of the Company's total loan portfolio at September 30, 2024, with a weighted average loan-to-value of approximately 64% and an average loan of approximately $880,000.

F&M’s CRE portfolio included the following categories at September 30, 2024:

CRE Category		Dollar Balance			Percent of CRE Portfolio(*)			Percent of Total Loan Portfolio(*)
Industrial		$	274,953		21.1	%		10.8	%
Retail		$	237,622		18.2	%		9.4	%
Multi-family		$	223,926		17.2	%		8.8	%
Hotels		$	141,642		10.9	%		5.6	%
Office		$	134,973		10.4	%		5.3	%
Gas Stations		$	62,028		4.8	%		2.5	%
Food Service		$	46,526		3.6	%		1.8	%
Development		$	30,999		2.4	%		1.2	%
Senior Living		$	29,866		2.3	%		1.2	%
Auto Dealers		$	25,068		1.9	%		1.0	%
Other		$	93,557		7.2	%		3.7	%
Total CRE		$	1,301,160		100.0	%		51.3	%

         * Numbers have been rounded

At September 30, 2024, the Company’s allowance for credit losses to nonperforming loans was 879.37%, compared to 112.61% at September 30, 2023, and 111.95% at December 31, 2023. The allowance to total loans was 1.01% at September 30, 2024, compared to 1.00% at September 30, 2023. Including accretable yield adjustments, associated with the Company’s recent acquisitions, F&M’s allowance for credit losses to total loans was 1.10% at September 30, 2024, compared to 1.18% at September 30, 2023.

Mr. Eller concluded, “With two months remaining in 2024, I am encouraged by F&M’s strong financial and operating performance to date. F&M ended the quarter with record stockholders’ equity, historically strong asset quality, record deposits, and excellent liquidity levels with over $635 million in contingent funding sources, and a cash-to-assets ratio of 7.2%. We remain focused on continual improvements, managing the items under our control, and providing our customers and communities with outstanding, and local financial services. As a result, F&M’s financial and operating performance continues to strengthen and I believe the Company is well positioned to create lasting value for our communities, customers, team members, and shareholders.”

Stockholders’ Equity and DividendsTotal stockholders’ equity increased 10.6% to $335.4 million, or $24.48 per share at September 30, 2024, from $303.2 million, or $22.19 per share at September 30, 2023. The Company’s Tier 1 leverage ratio of 8.04%, remained stable compared to September 30, 2023.

Tangible stockholders’ equity increased to $242.8 million at September 30, 2024, compared to $208.8 million at September 30, 2023. On a per share basis, tangible stockholders’ equity at September 30, 2024, was $17.72 per share, compared to $15.28 per share at September 30, 2023.

For the nine months ended September 30, 2024, the Company has declared cash dividends of $0.66125 per share, which is a 5.0% increase over the same period last year. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 30 consecutive years. For the nine months ended September 30, 2024, the dividend payout ratio was 50.99% compared to 49.50% for the same period last year.

About Farmers & Merchants State Bank: Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) is the holding company of F&M Bank, a local independent community bank that has been serving its communities since 1897. F&M Bank provides commercial banking, retail banking and other financial services. Our locations are in Butler, Champaign, Fulton, Defiance, Hancock, Henry, Lucas, Shelby, Williams, and Wood counties in Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, Steuben and Wells counties. The Michigan footprint includes Oakland County, and we have Loan Production Offices in West Bloomfield, Michigan; Muncie, Indiana; and Perrysburg 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 SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME (Unaudited) (in thousands of dollars, except per share data)
			Three Months Ended																			Nine Months Ended
			September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023			September 30, 2023				September 30, 2024				September 30, 2023
Interest Income
Loans, including fees			$	36,873			$	36,593			$	35,200			$	34,493		$	33,783			$	108,666			$	94,851
Debt securities:
U.S. Treasury and government agencies				1,467				1,148				1,045				987			1,005				3,660				3,103
Municipalities				387				389				394				397			392				1,170				1,201
Dividends				334				327				333				365			246				994				517
Federal funds sold				7				7				7				8			6				21				36
Other				2,833				2,702				1,675				2,020			927				7,210				1,830
Total interest income				41,901				41,166				38,654				38,270			36,359				121,721				101,538
Interest Expense
Deposits				16,947				16,488				15,279				15,015			13,323				48,714				31,908
Federal funds purchased and securities sold under agreements to repurchase				277				276				284				293			349				837				1,181
Borrowed funds				2,804				2,742				2,689				2,742			2,741				8,235				6,134
Subordinated notes				284				285				284				285			284				853				853
Total interest expense				20,312				19,791				18,536				18,335			16,697				58,639				40,076
Net Interest Income - Before Provision for Credit Losses				21,589				21,375				20,118				19,935			19,662				63,082				61,462
Provision for Credit Losses - Loans				282				605				(289	)			278			460				598				1,420
Provision for Credit Losses - Off Balance Sheet Credit Exposures				(267	)			(18	)			(266	)			189			(76	)			(551	)			(143	)
Net Interest Income After Provision for Credit Losses				21,574				20,788				20,673				19,468			19,278				63,035				60,185
Noninterest Income
Customer service fees				300				189				598				415			248				1,087				917
Other service charges and fees				1,155				1,085				1,057				1,090			1,133				3,297				3,253
Interchange income				1,315				1,330				1,429				1,310			1,266				4,074				4,008
Loan servicing income				710				513				539				666			502				1,762				3,739
Net gain on sale of loans				215				314				107				230			294				636				469
Increase in cash surrender value of bank owned life insurance				265				236				216				216			221				717				618
Net loss on sale of available-for-sale securities				-				-				-				-			-				-				(891	)
Total noninterest income				3,960				3,667				3,946				3,927			3,664				11,573				12,113
Noninterest Expense
Salaries and wages				7,713				7,589				7,846				6,981			6,777				23,148				19,934
Employee benefits				2,112				2,112				2,171				1,218			2,066				6,395				6,302
Net occupancy expense				1,054				999				1,027				1,187			950				3,080				2,646
Furniture and equipment				1,472				1,407				1,353				1,370			1,189				4,232				3,652
Data processing				339				448				500				785			840				1,287				2,362
Franchise taxes				410				265				555				308			434				1,230				1,179
ATM expense				472				397				473				665			640				1,342				1,946
Advertising				597				519				530				397			865				1,646				2,209
Net (gain) loss on sale of other assets owned				-				(49	)			-				86			49				(49	)			49
FDIC assessment				516				507				580				594			586				1,603				1,388
Servicing rights amortization - net				219				187				168				182			106				574				429
Loan expense				244				251				229				246			241				724				809
Consulting fees				251				198				186				192			179				635				640
Professional fees				453				527				445				331			358				1,425				1,099
Intangible asset amortization				445				444				445				446			445				1,334				1,334
Other general and administrative				1,128				1,495				1,333				1,532			1,319				3,956				4,841
Total noninterest expense				17,425				17,296				17,841				16,520			17,044				52,562				50,819
Income Before Income Taxes				8,109				7,159				6,778				6,875			5,898				22,046				21,479
Income Taxes				1,593				1,477				1,419				1,332			1,121				4,489				4,235
Net Income				6,516				5,682				5,359				5,543			4,777				17,557				17,244
Other Comprehensive Income (Loss) (Net of Tax):
Net unrealized gain (loss) on available-for-sale securities				11,664				2,531				(1,995	)			13,261			(4,514	)			12,200				(2,480	)
Reclassification adjustment for realized loss on sale of available-for-sale securities				-				-				-				-			-				-				891
Net unrealized gain (loss) on available-for-sale securities				11,664				2,531				(1,995	)			13,261			(4,514	)			12,200				(1,589	)
Tax expense (benefit)				2,449				531				(418	)			2,784			(947	)			2,562				(333	)
Other comprehensive income (loss)				9,215				2,000				(1,577	)			10,477			(3,567	)			9,638				(1,256	)
Comprehensive Income			$	15,731			$	7,682			$	3,782			$	16,020		$	1,210			$	27,195			$	15,988
Basic Earnings Per Share			$	0.48			$	0.42			$	0.39			$	0.41		$	0.35			$	1.28			$	1.26
Diluted Earnings Per Share			$	0.48			$	0.42			$	0.39			$	0.41		$	0.35			$	1.28			$	1.26
Dividends Declared			$	0.22125			$	0.22			$	0.22			$	0.22		$	0.21			$	0.66125			$	0.63

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands of dollars, except per share data)
			September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
			(Unaudited)				(Unaudited)				(Unaudited)								(Unaudited)
Assets
Cash and due from banks			$	244,572			$	191,785			$	186,541			$	140,917			$	151,711
Federal funds sold				932				1,283				1,241				1,284				1,471
	Total cash and cash equivalents			245,504				193,068				187,782				142,201				153,182
Interest-bearing time deposits				2,727				3,221				2,735				2,740				2,989
Securities - available-for-sale				404,881				365,209				347,516				358,478				348,255
Other securities, at cost				15,028				14,721				14,744				17,138				16,995
Loans held for sale				1,706				1,628				2,410				1,576				1,039
Loans, net of allowance for credit losses of $25,484 9/30/24 and $25,024 12/31/23				2,512,852				2,534,468				2,516,687				2,556,167				2,504,329
Premises and equipment				33,779				34,507				35,007				35,790				31,723
Construction in progress				35				38				9				8				3,044
Goodwill				86,358				86,358				86,358				86,358				86,358
Loan servicing rights				5,644				5,504				5,555				5,648				5,687
Bank owned life insurance				34,624				34,359				34,123				33,907				33,691
Other assets				46,047				49,552				54,628				43,218				47,388
Total Assets			$	3,389,185			$	3,322,633			$	3,287,554			$	3,283,229			$	3,234,680
	Liabilities and Stockholders' Equity
Liabilities
Deposits
	Noninterest-bearing		$	481,444			$	479,069			$	510,731			$	528,465			$	505,358
	Interest-bearing
	NOW accounts			865,617				821,145				829,236				816,790				778,133
	Savings			661,565				673,284				635,430				599,191				591,344
	Time			676,187				667,592				645,985				663,017				700,445
	Total deposits			2,684,813				2,641,090				2,621,382				2,607,463				2,575,280
Federal funds purchased and securities sold under agreements to repurchase				27,292				27,218				28,218				28,218				30,527
Federal Home Loan Bank (FHLB) advances				263,081				266,102				256,628				265,750				266,286
Subordinated notes, net of unamortized issuance costs				34,789				34,759				34,731				34,702				34,673
Dividend payable				2,998				2,975				2,975				2,974				2,838
Accrued expenses and other liabilities				40,832				27,825				25,930				27,579				21,892
	Total liabilities			3,053,805				2,999,969				2,969,864				2,966,686				2,931,496
Commitments and Contingencies
Stockholders' Equity
Common stock - No par value 20,000,000 shares authorized; issued
14,564,425 shares 9/30/24 and 12/31/23; outstanding 13,702,593				135,193				135,829				135,482				135,515				135,171
shares 9/30/24 and 13,664,641 shares 12/31/23
Treasury stock - 861,832 shares 9/30/24 and 899,784 shares 12/31/23				(10,904	)			(11,006	)			(10,851	)			(11,040	)			(11,008	)
Retained earnings				230,465				226,430				223,648				221,080				218,510
Accumulated other comprehensive loss				(19,374	)			(28,589	)			(30,589	)			(29,012	)			(39,489	)
	Total stockholders' equity			335,380				322,664				317,690				316,543				303,184
Total Liabilities and Stockholders' Equity			$	3,389,185			$	3,322,633			$	3,287,554			$	3,283,229			$	3,234,680

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIESSELECT FINANCIAL DATA
		For the Three Months Ended																				For the Nine Months Ended
Selected financial data		September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				September 30, 2024				September 30, 2023
Return on average assets			0.78	%			0.69	%			0.66	%			0.67	%			0.59	%			0.71	%			0.73	%
Return on average equity			7.93	%			7.13	%			6.76	%			7.27	%			6.26	%			7.28	%			7.52	%
Yield on earning assets			5.27	%			5.22	%			5.00	%			4.93	%			4.79	%			5.17	%			4.57	%
Cost of interest bearing liabilities			3.21	%			3.18	%			3.06	%			3.02	%			2.82	%			3.16	%			2.35	%
Net interest spread			2.06	%			2.04	%			1.94	%			1.91	%			1.97	%			2.01	%			2.22	%
Net interest margin			2.71	%			2.71	%			2.60	%			2.57	%			2.59	%			2.68	%			2.77	%
Efficiency			67.98	%			69.03	%			74.08	%			69.23	%			73.07	%			70.36	%			68.24	%
Dividend payout ratio			45.99	%			52.35	%			55.52	%			54.23	%			60.07	%			50.99	%			49.50	%
Tangible book value per share		$	17.72			$	16.79			$	16.39			$	16.29			$	15.28
Tier 1 leverage ratio			8.04	%			8.02	%			8.40	%			8.20	%			8.02	%
Average shares outstanding			13,687,119				13,681,501				13,671,166				13,665,773				13,650,823				13,679,955				13,633,101
Loans		September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
(Dollar amounts in thousands)
Commercial real estate		$	1,301,160			$	1,303,598			$	1,304,400			$	1,337,766			$	1,304,118
Agricultural real estate			220,328				222,558				227,455				223,791				225,672
Consumer real estate			524,055				525,902				525,178				521,895				512,973
Commercial and industrial			260,732				268,426				256,051				254,935				250,891
Agricultural			137,252				142,909				127,670				132,560				123,735
Consumer			67,394				70,918				74,819				79,591				83,024
Other			25,916				26,449				26,776				30,136				31,083
Less: Net deferred loan fees, costs and other (1)			1,499				(1,022	)			(982	)			517				(1,890	)
Total loans, net		$	2,538,336			$	2,559,738			$	2,541,367			$	2,581,191			$	2,529,606
Asset quality data		September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
(Dollar amounts in thousands)
Nonaccrual loans		$	2,898			$	2,487			$	19,391			$	22,353			$	22,447
90 day past due and accruing		$	-			$	-			$	-			$	-			$	-
Nonperforming loans		$	2,898			$	2,487			$	19,391			$	22,353			$	22,447
Other real estate owned		$	-			$	-			$	-			$	-			$	-
Nonperforming assets		$	2,898			$	2,487			$	19,391			$	22,353			$	22,447
Allowance for credit losses		$	25,484			$	25,270			$	24,680			$	25,024			$	25,277
Allowance for unfunded			1,661				1,928				1,946				2,212				2,023
Total Allowance for Credit Losses		$	27,145			$	27,198			$	26,626			$	27,236			$	27,300
Allowance for credit losses/total loans			1.01	%			0.99	%			0.97	%			0.97	%			1.00	%
Adjusted credit losses with accretable yield/total loans			1.10	%			1.10	%			1.11	%			1.13	%			1.18	%
Net charge-offs:
Quarter-to-date		$	68			$	15			$	55			$	531			$	93
Year-to-date		$	138			$	70			$	55			$	551			$	20
Net charge-offs to average loans
Quarter-to-date			0.00	%			0.00	%			0.00	%			0.02	%			0.00	%
Year-to-date			0.01	%			0.00	%			0.00	%			0.02	%			0.00	%
Nonperforming loans/total loans			0.11	%			0.10	%			0.76	%			0.87	%			0.89	%
Allowance for credit losses/nonperforming loans			879.37	%			1016.08	%			127.28	%			111.95	%			112.61	%
NPA coverage ratio			879.37	%			1016.08	%			127.28	%			111.95	%			112.61	%
(1) Includes carrying value adjustments of $3.0 million as of September 30, 2024, $612 thousand as of June 30, 2024, $969 thousand as of March 31, 2024 and $2.7 million as of December 31, 2023 related to interest rate swaps associated with fixed rate loans

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIESAVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES (in thousands of dollars, except percentages)
		For the Three Months Ended									For the Three Months Ended
		September 30, 2024									September 30, 2023
Interest Earning Assets:		Average Balance			Interest/Dividends			Annualized Yield/Rate			Average Balance			Interest/Dividends			Annualized Yield/Rate
Loans		$	2,551,899		$	36,873		5.78	%		$	2,536,885		$	33,783		5.33	%
Taxable investment securities			415,943			2,107		2.03	%			393,910			1,559		1.58	%
Tax-exempt investment securities			19,661			81		2.09	%			23,986			84		1.77	%
Fed funds sold & other			197,258			2,840		5.76	%			85,515			933		4.36	%
Total Interest Earning Assets			3,184,761		$	41,901		5.27	%			3,040,296		$	36,359		4.79	%
Nonearning Assets			168,055									180,193
Total Assets		$	3,352,816								$	3,220,489
Interest Bearing Liabilities:
Savings deposits		$	1,538,387		$	10,691		2.78	%		$	1,367,168		$	7,673		2.24	%
Other time deposits			667,224			6,256		3.75	%			667,880			5,650		3.38	%
Other borrowed money			264,539			2,804		4.24	%			266,467			2,741		4.11	%
Fed funds purchased & securities sold under agreement to repurchase			27,481			277		4.03	%			34,128			349		4.09	%
Subordinated notes			34,769			284		3.27	%			34,654			284		3.28	%
Total Interest Bearing Liabilities		$	2,532,400		$	20,312		3.21	%		$	2,370,297		$	16,697		2.82	%
Noninterest Bearing Liabilities			491,851									544,801
Stockholders' Equity		$	328,565								$	305,391
Net Interest Income and Interest Rate Spread					$	21,589		2.06	%					$	19,662		1.97	%
Net Interest Margin								2.71	%								2.59	%
Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts
		For the Nine Months Ended									For the Nine Months Ended
		September 30, 2024									September 30, 2023
Interest Earning Assets:		Average Balance			Interest/Dividends			Annualized Yield/Rate			Average Balance			Interest/Dividends			Annualized Yield/Rate
Loans		$	2,561,774		$	108,666		5.66	%		$	2,470,770		$	94,851		5.12	%
Taxable investment securities			397,466			5,575		1.87	%			396,917			4,544		1.53	%
Tax-exempt investment securities			20,684			249		2.03	%			24,865			277		1.88	%
Fed funds sold & other			165,227			7,231		5.84	%			67,869			1,866		3.67	%
Total Interest Earning Assets			3,145,151		$	121,721		5.17	%			2,960,421		$	101,538		4.57	%
Nonearning Assets			161,113									176,568
Total Assets		$	3,306,264								$	3,136,989
Interest Bearing Liabilities:
Savings deposits		$	1,487,809		$	30,291		2.71	%		$	1,373,110		$	18,854		1.83	%
Other time deposits			662,129			18,423		3.71	%			620,071			13,054		2.81	%
Other borrowed money			264,310			8,235		4.15	%			204,927			6,134		3.99	%
Fed funds purchased & securities sold under agreement to repurchase			27,887			837		4.00	%			37,649			1,181		4.18	%
Subordinated notes			34,741			853		3.27	%			34,625			853		3.28	%
Total Interest Bearing Liabilities		$	2,476,876		$	58,639		3.16	%		$	2,270,382		$	40,076		2.35	%
Noninterest Bearing Liabilities			507,843									561,001
Stockholders' Equity		$	321,545								$	305,606
Net Interest Income and Interest Rate Spread					$	63,082		2.01	%					$	61,462		2.22	%
Net Interest Margin								2.68	%								2.77	%
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 SUBSIDIARIESAVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES (in thousands of dollars, except percentages)
	For the Three Months Ended September 30, 2024																For the Three Months Ended September 30, 2023
	As Reported					Excluding Acc/Amort					Difference						As Reported					Excluding Acc/Amort					Difference
	$		Yield			$		Yield			$			Yield			$		Yield			$		Yield			$			Yield
Interest Earning Assets:
Loans	$	36,873	5.78	%		$	36,149	5.67	%		$	724		0.11	%		$	33,783	5.33	%		$	32,631	5.15	%		$	1,152		0.18	%
Taxable investment securities		2,107	2.03	%			2,107	2.03	%			-		0.00	%			1,559	1.58	%			1,559	1.58	%			-		0.00	%
Tax-exempt investment securities		81	2.09	%			81	2.09	%			-		0.00	%			84	1.77	%			84	1.77	%			-		0.00	%
Fed funds sold & other		2,840	5.76	%			2,840	5.76	%			-		0.00	%			933	4.36	%			933	4.36	%			-		0.00	%
Total Interest Earning Assets		41,901	5.27	%			41,177	5.17	%			724		0.10	%			36,359	4.79	%			35,207	4.64	%			1,152		0.15	%
Interest Bearing Liabilities:
Savings deposits	$	10,691	2.78	%		$	10,691	2.78	%		$	-		0.00	%		$	7,673	2.24	%		$	7,673	2.24	%		$	-		0.00	%
Other time deposits		6,256	3.75	%			6,256	3.75	%			-		0.00	%			5,650	3.38	%			5,500	3.29	%			150		0.09	%
Other borrowed money		2,804	4.24	%			2,800	4.23	%			4		0.01	%			2,741	4.11	%			2,759	4.14	%			(18	)	-0.03	%
Federal funds purchased and securities sold under agreement to repurchase		277	4.03	%			277	4.03	%			-		0.00	%			349	4.09	%			349	4.09	%			-		0.00	%
Subordinated notes		284	3.27	%			284	3.27	%			-		0.00	%			284	3.28	%			284	3.28	%			-		0.00	%
Total Interest Bearing Liabilities		20,312	3.21	%			20,308	3.21	%			4		0.00	%			16,697	2.82	%			16,565	2.80	%			132		0.02	%
Interest/Dividend income/yield		41,901	5.27	%			41,177	5.17	%			724		0.10	%			36,359	4.79	%			35,207	4.64	%			1,152		0.15	%
Interest Expense / yield		20,312	3.21	%			20,308	3.21	%			4		0.00	%			16,697	2.82	%			16,565	2.80	%			132		0.02	%
Net Interest Spread		21,589	2.06	%			20,869	1.96	%			720		0.10	%			19,662	1.97	%			18,642	1.84	%			1,020		0.13	%
Net Interest Margin			2.71	%				2.62	%					0.09	%				2.59	%				2.46	%					0.13	%
	For the Nine Months Ended September 30, 2024																For the Nine Months Ended September 30, 2023
	As Reported					Excluding Acc/Amort					Difference						As Reported					Excluding Acc/Amort					Difference
	$		Yield			$		Yield			$			Yield			$		Yield			$		Yield			$			Yield
Interest Earning Assets:
Loans	$	108,666	5.66	%		$	106,588	5.55	%		$	2,078		0.11	%		$	94,851	5.12	%		$	92,364	4.99	%		$	2,487		0.13	%
Taxable investment securities		5,575	1.87	%			5,575	1.87	%			-		0.00	%			4,544	1.53	%			4,544	1.53	%			-		0.00	%
Tax-exempt investment securities		249	2.03	%			249	2.03	%			-		0.00	%			277	1.88	%			277	1.88	%			-		0.00	%
Fed funds sold & other		7,231	5.84	%			7,231	5.84	%			-		0.00	%			1,866	3.67	%			1,866	3.67	%			-		0.00	%
Total Interest Earning Assets		121,721	5.17	%			119,643	5.08	%			2,078		0.09	%			101,538	4.57	%			99,051	4.47	%			2,487		0.10	%
Interest Bearing Liabilities:
Savings deposits	$	30,291	2.71	%		$	30,291	2.71	%		$	-		0.00	%		$	18,854	1.83	%		$	18,854	1.83	%		$	-		0.00	%
Other time deposits		18,423	3.71	%			18,423	3.71	%			-		0.00	%			13,054	2.81	%			13,458	2.89	%			(404	)	-0.08	%
Other borrowed money		8,235	4.15	%			8,254	4.16	%			(19	)	-0.01	%			6,134	3.99	%			6,187	4.03	%			(53	)	-0.04	%
Federal funds purchased and securities sold under agreement to repurchase		837	4.00	%			837	4.00	%			-		0.00	%			1,181	4.18	%			1,181	4.18	%			-		0.00	%
Subordinated notes		853	3.27	%			853	3.27	%			-		0.00	%			853	3.28	%			853	3.28	%			-		0.00	%
Total Interest Bearing Liabilities		58,639	3.16	%			58,658	3.16	%			(19	)	0.00	%			40,076	2.35	%			40,533	2.38	%			(457	)	-0.03	%
Interest/Dividend income/yield		121,721	5.17	%			119,643	5.08	%			2,078		0.09	%			101,538	4.57	%			99,051	4.47	%			2,487		0.10	%
Interest Expense / yield		58,639	3.16	%			58,658	3.16	%			(19	)	0.00	%			40,076	2.35	%			40,533	2.38	%			(457	)	-0.03	%
Net Interest Spread		63,082	2.01	%			60,985	1.92	%			2,097		0.09	%			61,462	2.22	%			58,518	2.09	%			2,944		0.13	%
Net Interest Margin			2.68	%				2.59	%					0.09	%				2.77	%				2.64	%					0.13	%

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