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Farmers & Merchants Bancorp, Inc. Reports 2021 Third-Quarter and Year-to-Date Financial Results

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  • FMAO

ARCHBOLD, Ohio, Oct. 20, 2021 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2021 third quarter and year-to-date September 30, 2021.

2021 Third Quarter Financial Highlights Include
(compared to the 2020 third quarter period unless noted):

  • Net income increased 34.2% to $5.9 million

  • Earnings increased 32.5% to $0.53 per basic and diluted share

  • Adjusted net income, excluding one-time tax adjusted acquisition expenses, increased 60.8% to $7.1 million

  • Adjusted earnings increased 57.5% to $0.63 per basic and diluted share

  • Net interest income, after provision for loan losses, increased by 36.5% to a quarterly record of $17.8 million

  • Net interest margin increased slightly to 3.53%, from 3.51% for the same period last year

  • Third quarter after-tax income benefited from $1.98 million of accelerated fees associated with the Paycheck Protection Program (“PPP”) compared to $329.4 thousand in same quarter 2020.

  • Loans have increased 13.6% organically year-to-date, not including recent acquisitions or PPP loans

  • Third quarter net charge-offs to average loans were 0.00% for the second consecutive quarter

  • Adjusted return on average tangible equity increased to 10.94% from 9.68% on a year over year basis

  • Increased the regular quarterly cash dividend payment by 5.9% to $0.18 per share, representing the 27th consecutive annual dividend increase

  • Completed a $35.0 million subordinated note offering, increasing F&M’s Total Risk Based Capital Ratio to 15.57%

  • Added two new strong Board members to Farmers & Merchants’ Board of Directors representing our expansion into the Detroit and Urbana markets

  • F&M’s fourth annual Charity Golf Classic raised over $32,000 in support for its local communities

“2021 is shaping up to be a transformative year as we focus on bringing our individualized, local, and comprehensive financial products and services to more customers across Ohio, Indiana, and Michigan,” stated Lars B. Eller, President and Chief Executive Officer. “We are well on our way to becoming a $3.0 billion asset bank, and when including Perpetual’s assets, we will have almost $2.6 billion in total assets. Our success is a testament to our strategic growth plan, the value we provide our local communities, and the commitment of F&M’s team members.”

On October 1, 2021, F&M successfully closed the acquisition of Perpetual Federal Savings Bank, Inc. (“PFSB”). PFSB is F&M’s third acquisition within the last twelve months and immediately enhances the Company’s growing franchise within compelling Ohio markets including Urbana, Columbus, Dayton, Springfield, Piqua, Tipp City, Troy, and Sidney. The integration and system conversions were completed on October 18, 2021, and PFSB’s financial metrics will be included in F&M’s fourth-quarter results.

Mr. Eller continued, “These three acquisitions, combined with our Michigan LPO and expansion plans have increased our presence in Indiana, Michigan, and Ohio, while diversifying our revenue streams and immediately contributing to earnings. I am proud of our team’s ability to quickly complete and successfully integrate these acquisitions. In addition, we have simultaneously been growing organically and I am encouraged by the 8.3% organic loan growth F&M produced during the quarter which is evidence of our talented local lenders, and the success of our recently opened offices and LPOs.”

Income Statement
Net income for the 2021 third quarter ended September 30, 2021, was $5.9 million, compared to $4.4 million for the same period last year. Net income per basic and diluted share for the 2021 third quarter was $0.53, compared to $0.40 for the same period last year. Net income for the 2021 nine months ended September 30, 2021, was $15.8 million, compared to $13.3 million for the same period last year. Net income per basic and diluted share for the 2021 nine months was $1.41, compared to $1.20 for the same period last year.

Adjusted net income, excluding one-time tax adjusted acquisition expenses, was $7.1 million, or $0.63 per share for the 2021 third quarter, compared to $4.4 million, or $0.40 per share for the 2020 third quarter. Adjusted net income was $18.2 million, or $1.62 per share for the 2021 nine months, compared to $13.3 million, or $1.20 per share for the 2020 nine months. Included in the financial table section of this press release is a non-GAAP reconciliation.

Mr. Eller continued, “We ended the quarter with record quarterly net income and earnings per share, when adjusted for one-time acquisition expenses. Adjusted ROACE was 9.78%, compared to 7.28% for the same period last year, while adjusted ROA was 1.17% during the 2021 third quarter, and 1.11% year-to-date. In addition, the Bank has had 16 consecutive months with an operating efficiency ratio in the 50% range when removing affiliate and acquisition expenses. Our strong third-quarter financial results and profitability reflect the benefits of our larger scale, diverse revenue streams, strong asset quality, and prudent expense management, and we believe earnings growth will accelerate in the coming quarters.”

Deposits
At September 30, 2021, total deposits were $1.87 billion, an increase of 22.9% from September 30, 2020, and an increase of 16.9% from December 31, 2020. The significant organic deposit growth being experienced is a result of continued strength in expanding relationships with new and existing customers, and the completion of the Ossian Financial Services, Inc. acquisition. In addition, we continue to see growing customer preferences to more stable and secure saving instruments as deposits have increased since the COVID-19 crisis began.

Loan Portfolio and Asset Quality
Total net loans, at September 30, 2021, increased 48.2%, or by $656.8 million to $2.02 billion, compared to $1.36 billion at September 30, 2020, and up 55.1% from $1.30 billion at December 31, 2020. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth and the completion of the Ossian Financial Services, Inc. acquisition. Not including the Ossian acquisition and PPP, loans increased 12.6% organically from the same period a year ago. In addition, during the 2021 third quarter, the Company processed $37.3 million of PPP loan forgiveness and principal payments received, resulting in a total of $9.8 million of PPP loans within F&M’s loan portfolio at September 30, 2021.

Mr. Eller continued, “At September 30, 2021, there were only two loans totaling $3.4 million of COVID-related payment modifications, all of which are interest-only modifications and secured by real estate. This compares to 190 loans representing a balance of $165 million in deferrals at the peak last year. Overall asset quality continues to improve. We ended the third quarter with no charge-offs, and the lowest level of nonperforming assets in five quarters. As economic activity stabilizes, and F&M’s loan performance improves better than pre-pandemic levels, we expect contributions to our allowance for loan losses will also stabilize and align with loan growth in future periods.”

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $6.2 million, or 0.42% of total loans at September 30, 2021, compared to $7.9 million, or 0.58% at September 30, 2020.

“We remain focused on operational excellence, investments in technology, supporting our communities, and ensuring a best-in-class experience for our customers. I am pleased with the Board’s decision to increase our quarterly dividend because of our strong year-to-date financial results and positive outlook. Across F&M, we are working hard to execute our strategic growth plan, and create lasting value for our customers, employees, and shareholders,” concluded Mr. Eller.

Stockholders’ Equity and Dividends
Total stockholders’ equity increased 4.7% to $254.7 million at September 30, 2021, from $243.4 million at September 30, 2020. At September 30, 2021, the Company had a Tier 1 leverage ratio of 9.45%, compared to 10.65% at September 30, 2020.

In August 2021, F&M completed a $35.0 million private placement of 3.25% fixed-to-floating rate subordinated notes due July 30, 2031 (the “Notes”) to various accredited investors (the “Offering”). The Notes are intended to qualify as Tier 2 capital for regulatory purposes. The Company intends to use the net proceeds from the Offering for general corporate purposes, including financing acquisitions and organic growth.

Tangible stockholders’ equity increased to $194.6 million at September 30, 2021, compared to $187.2 million at September 30, 2020. On a per share basis, tangible stockholders’ equity at September 30, 2021, was $17.33 per share, compared to $16.78 per share at September 30, 2020.

For the nine months ended September 30, 2021, the Company has declared cash dividends of $0.52 per share, which is a 6.1% increase over the 2020 nine-month declared dividend payment. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for over 27 consecutive years. For the three months ended September 30, 2021, the dividend payout ratio was 33.81% compared to 42.66% 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, 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 Office in West Bloomfield, Michigan.

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

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


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME

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

Three Months Ended

Nine Months Ended

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

September 30, 2021

September 30, 2020

Interest Income

Loans, including fees

$

18,766

$

16,259

$

15,612

$

17,061

$

16,181

$

50,637

$

48,256

Debt securities:

U.S. Treasury and government agencies

924

857

751

695

761

2,532

2,674

Municipalities

284

289

308

295

279

881

784

Dividends

44

31

50

35

36

125

107

Federal funds sold

10

6

5

5

4

21

15

Other.

94

88

39

48

32

221

194

Total interest income

20,122

17,530

16,765

18,139

17,293

54,417

52,030

Interest Expense

Deposits

1,221

1,276

1,340

1,619

1,864

3,837

7,019

Federal funds purchased and securities sold under agreements to repurchase

165

163

166

170

174

494

605

Borrowed funds

87

115

222

226

231

424

754

Subordinated notes

199

-

-

-

-

199

-

Total interest expense

1,672

1,554

1,728

2,015

2,269

4,954

8,378

Net Interest Income - Before Provision for Loan Losses

18,450

15,976

15,037

16,124

15,024

49,463

43,652

Provision for Loan Losses

659

641

1,700

1,995

1,987

3,000

4,986

Net Interest Income After Provision For Loan Losses

17,791

15,335

13,337

14,129

13,037

46,463

38,666

Noninterest Income

Customer service fees

2,242

2,198

2,814

2,750

2,299

7,254

6,143

Other service charges and fees

1,010

874

838

980

879

2,722

2,622

Net gain on sale of loans

822

955

1,046

1,894

1,537

2,823

2,128

Net gain on sale of available-for-sale securities

-

-

293

-

-

293

270

Total noninterest income

4,074

4,027

4,991

5,624

4,715

13,092

11,163

Noninterest Expense

Salaries and wages

5,442

4,591

4,390

5,068

5,102

14,423

13,420

Employee benefits

1,621

1,915

1,994

1,140

1,566

5,530

4,461

Net occupancy expense

529

546

577

585

558

1,652

1,686

Furniture and equipment

903

848

791

760

875

2,542

2,383

Data processing

1,548

428

505

428

490

2,481

1,340

Franchise taxes

372

294

446

241

368

1,112

1,105

ATM expense

460

459

449

456

444

1,368

1,234

Advertising

439

331

235

353

411

1,005

979

Net (gain) loss on sale of other assets owned

219

227

(25

)

20

(7

)

421

(13

)

FDIC assessment

296

276

236

223

194

808

410

Mortgage servicing rights amortization

285

524

505

247

296

1,314

784

Consulting fees

256

394

223

407

205

873

561

Other general and administrative

1,951

2,227

2,033

1,358

1,553

6,211

4,740

Total noninterest expense

14,321

13,060

12,359

11,286

12,055

39,740

33,090

Income Before Income Taxes

7,544

6,302

5,969

8,467

5,697

19,815

16,739

Income Taxes

1,624

1,319

1,060

1,691

1,287

4,003

3,420

Net Income

5,920

4,983

4,909

6,776

4,410

15,812

13,319

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

Net unrealized gain (loss) on available-for-sale securities

173

786

(6,737

)

(207

)

639

(5,778

)

6,298

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

-

-

(293

)

-

-

(293

)

(270

)

Net unrealized gain (loss) on available-for-sale securities

173

786

(7,030

)

(207

)

639

(6,071

)

6,028

Tax expense (benefit)

36

165

(1,476

)

(44

)

134

(1,275

)

1,266

Other comprehensive income (loss)

137

621

(5,554

)

(163

)

505

(4,796

)

4,762

Comprehensive Income (Loss)

$

6,057

$

5,604

$

(645

)

$

6,613

$

4,915

$

11,016

$

18,081

Basic and Diluted Earnings Per Share

$

0.53

$

0.44

$

0.44

$

0.60

$

0.40

$

1.41

$

1.20

Dividends Declared

$

0.18

$

0.17

$

0.17

$

0.17

$

0.17

$

0.52

$

0.49


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Assets

Cash and due from banks

$

112,875

$

93,636

$

118,139

$

98,279

$

46,395

Federal funds sold

45,203

57,483

57,361

77,427

41,358

Total cash and cash equivalents

158,078

151,119

175,500

175,706

87,753

Interest-bearing time deposits

14,622

18,597

4,405

4,653

4,657

Securities - available-for-sale

426,717

407,500

352,974

307,812

259,041

Other securities, at cost

4,905

6,419

5,939

5,939

5,827

Loans held for sale

3,735

8,041

7,511

8,391

7,621

Loans, net

1,479,864

1,443,336

1,327,254

1,288,667

1,351,979

Premises and equipment

26,476

26,915

26,703

27,063

26,776

Goodwill

55,214

56,066

47,340

47,340

47,340

Mortgage servicing rights

3,097

3,146

3,444

3,320

3,027

Other real estate owned

167

198

148

71

206

Bank owned life insurance

27,397

27,218

25,347

25,208

15,501

Other assets

18,711

18,310

16,720

15,374

16,872

Total Assets

$

2,218,983

$

2,166,865

$

1,993,285

$

1,909,544

$

1,826,600

Liabilities and Stockholders' Equity

Liabilities

Deposits

Noninterest-bearing

$

438,076

$

443,863

$

384,558

$

351,147

$

330,845

Interest-bearing

NOW accounts

646,237

652,078

605,533

542,317

534,792

Savings

529,532

501,687

451,043

455,145

392,059

Time

252,383

256,445

242,717

247,553

261,177

Total deposits

1,866,228

1,854,073

1,683,851

1,596,162

1,518,873

Federal funds purchased and securities sold under agreements to repurchase

29,601

29,882

30,072

30,239

29,859

Federal Home Loan Bank (FHLB) advances

17,868

17,868

17,840

17,861

17,724

Subordinated notes, net of unamortized issuance costs

34,441

-

-

-

-

Dividend payable

2,002

1,888

1,889

1,889

1,882

Accrued expenses and other liabilities

14,097

12,569

12,805

14,233

14,841

Total liabilities

1,964,237

1,916,280

1,746,457

1,660,384

1,583,179

Commitments and Contingencies

Stockholders' Equity

Common stock - No par value 20,000,000 shares authorized; issued and outstanding 12,230,000 shares 9/30/21 and 12/31/20

81,382

82,259

82,030

81,804

81,577

Treasury stock - 997,680 shares 9/30/21, 1,032,456 shares 12/31/20

(11,718

)

(12,172

)

(11,962

)

(11,932

)

(12,397

)

Retained earnings

184,181

179,734

176,617

173,591

168,381

Accumulated other comprehensive income

901

764

143

5,697

5,860

Total stockholders' equity

254,746

250,585

246,828

249,160

243,421

Total Liabilities and Stockholders' Equity

$

2,218,983

$

2,166,865

$

1,993,285

$

1,909,544

$

1,826,600


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

SELECT FINANCIAL DATA

For the Three Months Ended

For the Nine Months Ended

Selected financial data

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

September 30, 2021

September 30, 2020

Return on average assets

1.12

%

0.90

%

1.01

%

1.43

%

0.98

%

1.00

%

1.03

%

Return on average equity

9.32

%

8.00

%

7.87

%

11.04

%

7.28

%

8.40

%

7.45

%

Yield on earning assets

3.85

%

3.53

%

3.71

%

4.09

%

4.04

%

3.70

%

4.30

%

Cost of interest bearing liabilities

0.45

%

0.44

%

0.53

%

0.64

%

0.74

%

0.47

%

0.95

%

Net interest spread

3.40

%

3.09

%

3.18

%

3.45

%

3.30

%

3.23

%

3.35

%

Net interest margin

3.53

%

3.21

%

3.33

%

3.63

%

3.51

%

3.36

%

3.61

%

Efficiency

63.50

%

64.98

%

62.57

%

52.20

%

62.11

%

63.70

%

61.05

%

Dividend payout ratio

33.81

%

37.89

%

38.48

%

27.77

%

42.66

%

36.55

%

40.68

%

Tangible book value per share (1)

$

17.33

$

16.94

$

17.50

$

17.19

$

16.78

Tier 1 capital to average assets

9.45

%

8.78

%

10.39

%

10.46

%

10.65

%

Average Shares Outstanding

11,209,732

11,191,043

11,197,012

11,177,765

11,142,797

11,199,309

11,135,695

Loans

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

(Dollar amounts in thousands)

Commercial real estate

$

728,852

$

691,122

$

618,754

$

588,825

$

595,146

Agricultural real estate

170,374

189,742

179,945

189,159

192,883

Consumer real estate

202,454

194,715

175,675

175,588

175,963

Commercial and industrial

728,852

216,609

202,958

189,246

238,175

Agricultural

105,580

100,756

100,022

94,358

103,330

Consumer

55,521

56,427

54,445

52,540

53,320

Other

31,096

13,549

14,088

15,757

9,030

Less: Net deferred loan fees and costs

(2,082

)

(4,497

)

(4,208

)

(2,483

)

(3,985

)

Total loans, net

$

2,020,647

$

1,458,423

$

1,341,679

$

1,302,990

$

1,363,862

Asset quality data

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

(Dollar amounts in thousands)

Nonaccrual loans

$

6,248

$

7,031

$

8,139

$

9,404

$

7,870

Troubled debt restructuring

$

6,035

$

5,492

$

5,774

$

6,514

$

7,028

90 day past due and accruing

$

-

$

-

$

-

$

-

$

-

Nonperforming loans

$

6,248

$

7,031

$

8,139

$

9,404

$

7,870

Other real estate owned

$

167

$

198

$

148

$

71

$

206

Nonperforming assets

$

6,415

$

7,229

$

8,287

$

9,475

$

8,076

(Dollar amounts in thousands)

Allowance for loan and lease losses

$

15,698

$

15,087

$

14,425

$

13,672

$

11,883

Allowance for loan and lease losses/total loans

1.05

%

1.03

%

1.08

%

1.05

%

0.87

%

Net charge-offs (recoveries):

Quarter-to-date

$

48

$

(21

)

$

947

$

205

$

37

Year-to-date

$

974

$

926

$

947

$

537

$

331

Net charge-offs to average loans

Quarter-to-date

0.00

%

0.00

%

0.07

%

0.02

%

0.00

%

Year-to-date

0.07

%

0.07

%

0.07

%

0.04

%

0.03

%

Nonperforming loans/total loans

0.42

%

0.48

%

0.61

%

0.72

%

0.58

%

Allowance for loan and lease losses/nonperforming loans

251.26

%

214.58

%

177.24

%

177.96

%

151.01

%

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


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES

(in thousands of dollars, except percentages)

For the Three Months Ended

For the Three Months Ended

September 30, 2021

September 30, 2020

Interest Earning Assets:

Average Balance

Interest/Dividends

Annualized Yield/Rate

Average Balance

Interest/Dividends

Annualized Yield/Rate

Loans

$

1,490,988

$

18,766

5.04

%

$

1,359,156

$

16,181

4.76

%

Taxable investment securities

398,060

1,177

1.18

%

245,274

968

1.58

%

Tax-exempt investment securities

17,293

75

2.20

%

26,032

108

2.10

%

Fed funds sold & other

187,398

104

0.22

%

83,760

36

0.17

%

Total Interest Earning Assets

2,093,739

$

20,122

3.85

%

1,714,222

$

17,293

4.04

%

Nonearning Assets

126,157

93,778

Total Assets

$

2,219,896

$

1,808,000

Interest Bearing Liabilities:

Savings deposits

$

1,181,103

$

560

0.19

%

$

915,367

$

798

0.35

%

Other time deposits

252,966

661

1.05

%

258,809

1,066

1.65

%

Other borrowed money

17,868

87

1.95

%

18,920

231

4.88

%

Fed funds purchased & securities sold under agreement to repurchase

29,729

165

2.22

%

30,100

174

2.31

%

Subordinated notes

23,807

199

3.34

%

-

-

0.00

%

Total Interest Bearing Liabilities

$

1,505,473

$

1,672

0.45

%

$

1,223,196

$

2,269

0.74

%

Noninterest bearing Liabilities

460,249

342,388

Stockholders Equity

$

254,174

$

242,416

Net Interest Income and Interest Rate Spread

$

18,450

3.40

%

$

15,024

3.30

%

Net Interest Margin

3.53

%

3.51

%

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, 2021

September 30, 2020

Interest Earning Assets:

Average Balance

Interest/Dividends

Annualized Yield/Rate

Average Balance

Interest/Dividends

Annualized Yield/Rate

Loans

$

1,413,625

$

50,637

4.78

%

$

1,305,998

$

48,256

4.93

%

Taxable investment securities

363,284

3,286

1.21

%

208,499

3,220

2.06

%

Tax-exempt investment securities

18,387

252

2.31

%

25,564

345

2.28

%

Fed funds sold & other

171,015

242

0.19

%

75,917

209

0.37

%

Total Interest Earning Assets

1,966,311

$

54,417

3.70

%

1,615,978

$

52,030

4.30

%

Nonearning Assets

134,108

109,564

Total Assets

$

2,100,419

$

1,725,542

Interest Bearing Liabilities:

Savings deposits

$

1,106,674

$

1,700

0.20

%

$

849,748

$

3,237

0.51

%

Other time deposits

248,426

2,137

1.15

%

268,762

3,782

1.88

%

Other borrowed money

17,859

424

3.17

%

22,401

754

4.49

%

Fed funds purchased & securities sold under agreement to repurchase

29,973

494

2.20

%

33,118

605

2.44

%

Subordinated notes

8,023

199

3.31

%

-

-

0.00

%

Total Interest Bearing Liabilities

$

1,410,955

$

4,954

0.47

%

$

1,174,029

$

8,378

0.95

%

Noninterest bearing Liabilities

438,518

313,224

Stockholders Equity

$

250,946

$

238,289

Net Interest Income and Interest Rate Spread

$

49,463

3.23

%

$

43,652

3.35

%

Net Interest Margin

3.36

%

3.61

%

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

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

Non-GAAP Allowance for Loan Losses, excluding PPP Loans

(in thousands of dollars, except percentages)

September 30, 2021

Allowance for Loan Losses

$

15,698

Credit Mark

2,348

Total Credit Mark and Allowance for Loan Losses

18,046

Loans

$

1,495,562

Adjustments

PPP Loans

(9,806

)

Loans excluding PPP Loans

$

1,485,756

Allowance for Loan Losses

1.05

%

Effect of Credit Mark

0.15

%

Effect of PPP Loans

0.01

%

Allowance for Loan Losses, excluding PPP Loans

1.21

%


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATION OF NET INCOME

(in thousands of dollars)

(in thousands of dollars)

Three Months Ended

Nine Months Ended

Non-GAAP Reconciliation of Net Income

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

(Unaudited)

(Unaudited)

Net income as reported

$

5,920

$

4,410

$

15,812

$

13,319

Net income from Ossian State Bank prior to acquisition

-

-

269

-

Acquisition expenses from F&M and Ossian

1,441

-

2,689

-

Tax effect on net income and acquisition expenses

(268

)

-

(563

)

-

Net income excluding acquisition expenses

$

7,093

$

4,410

$

18,207

$

13,319


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


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