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Farmers & Merchants Bancorp, Inc. Reports Record 2022 Second-Quarter and Year-to-Date Financial Results

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Farmers & Merchants Bancorp, Inc.
Farmers & Merchants Bancorp, Inc.

ARCHBOLD, Ohio, July 21, 2022 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2022 second quarter and year-to-date June 30, 2022.

2022 Second Quarter Financial and Operating Highlights (on a year-over-year basis unless noted):

  • Net income increased 66.0% to a quarterly record of $8.3 million, from $5.0 million

  • Earnings increased 43.2% to $0.63 per basic and diluted share, from $0.44 per basic and diluted share

  • Average shares outstanding increased 16.8% as a result of the Perpetual Federal Savings Bank Acquisition

  • Efficiency rate improved to 50.17%

  • Organic loan growth of 19.9%, excluding PPP loans and loan balances at time of acquisitions

  • Total loans were a record of $2.035 billion and increased 9.6% from $1.857 billion at December 31, 2021

  • Total assets increased 23.4% to $2.675 billion

  • Deposits increased 20.0% to $2.224 billion

  • Strong asset quality continues as nonperforming loans declined 25.4% to $5.2 million, or 0.26% of total loans

  • Net charge-offs to average loans were 0.00%, the fifth consecutive quarter at or below 0.00%

  • Return on average equity, increased to 11.66% from 8.00%

  • Return on average tangible equity, based on regulatory calculations, increased to 14.72% from 10.26% on a year-over-year basis

Lars B. Eller, President and Chief Executive Officer, stated, “Our record second quarter financial and operating performance reflects the benefits of our organic and acquisition growth strategies, excellent asset quality, and focus on controlling expenses and driving efficiencies. The growth we are experiencing across our Ohio, Indiana and Michigan markets is encouraging, which we believe is a result of our desire to help our retail, commercial and agricultural customers realize their best lives. Loans increased organically by $237.1 million, or 19.9% on a year-over-year basis and are up 9.6% from December 31, 2021.”

Mr. Eller continued, “In April 2022, we formally honored F&M’s 125th anniversary, which included activities that recognized the efforts and support of our communities, customers, employees, and shareholders. We are looking forward to building a sustainable business for the next 125 years by investing in our team, innovating our organization, providing our local communities with best-in-class service, and expanding our franchise to new markets. In June 2022, we restructured our leadership team, and added new capabilities and functions that will help us manage and lead a larger organization. We also continue to pursue opportunities for de novo growth. Expansion plans underway include new full-service offices that are expected to open over the next 12 months in Fort Wayne, Indiana, and Toledo, Ohio as well as an office relocation in Auburn, Indiana.”

Income Statement
Net income for the 2022 second quarter ended June 30, 2022, was $8.3 million, compared to $5.0 million for the same period last year. Net income per basic and diluted share for the 2022 second quarter was $0.63, compared to $0.44 for the same period last year. Net income for the 2022 first half ended June 30, 2022, was $16.4 million, compared to $9.9 million for the same period last year. Net income per basic and diluted share for the 2022 first half was $1.25, compared to $0.88 for the same period last year.

Profitability is benefitting from F&M’s larger scale, strong asset quality, and prudent expense management. The Company’s efficiency ratio improved to 50.17% during the 2022 second quarter. Strong profitability also drove higher returns, and ROAA, ROAE, and ROATCE all expanded on a year-over-year basis.

Deposits
At June 30, 2022, total deposits were $2.22 billion, an increase of 20.0% from June 30, 2021, and an increase of 1.4% from December 31, 2021. F&M continues to see growing customer preferences to more stable and secure saving instruments as deposits have increased since the COVID-19 crisis began. The Company’s cost of interest-bearing liabilities was 0.45% for the quarter ended June 30, 2022, compared to 0.44% for the quarter ended June 30, 2021, and 0.51% for the quarter ended December 31, 2021.

Loan Portfolio and Asset Quality
Total loans, net at June 30, 2022, increased 39.5%, or by $576.4 million to $2.03 billion, compared to $1.46 billion at June 30, 2021, and up from $1.84 billion at December 31, 2021. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth and the completion of both the Perpetual Federal Savings Bank, Inc. and Ossian Financial Services, Inc. acquisitions.

Loans increased 19.9% organically from the same period a year ago when not including the Perpetual acquisition, and the impact of PPP loans. During the 2022 second quarter, the Company processed $455,000 of PPP loan forgiveness and principal payments received. At June 30, 2022, there were only $8,000 of PPP loans within F&M’s loan portfolio.

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $5.2 million, or 0.26% of total loans at June 30, 2022, compared to $7.0 million, or 0.48% at June 30, 2021. Due to loan growth, F&M continues to prudently fund its allowance for loan and lease losses which has increased 22.1% on a year-over-year basis. At June 30, 2022, the Company’s allowance for loan and lease losses to nonperforming loans was 351.44%, compared to 214.58% at June 30, 2021.

Mr. Eller concluded, “While economic uncertainty has increased throughout 2022, we are committed to pursuing our long-term strategic growth initiatives, helping our customers and communities, and returning additional capital to our shareholders. We are also focused on successfully closing and integrating the Peoples-Sidney Financial Corporation acquisition, which will add $132.7 million in total assets to F&M and expand F&M’s community banking franchise into compelling markets throughout Shelby County Ohio. As a result, we believe 2022 will be another record year of earnings and growth for F&M.”

Stockholders’ Equity and Dividends
Total stockholders’ equity increased 12.1% to $280.9 million at June 30, 2022, from $250.6 million at June 30, 2021. At June 30, 2022, the Company had a Tier 1 leverage ratio of 11.1%, compared to 8.78% at June 30, 2021.

Tangible stockholders’ equity on a regulatory basis increased to $227.7 million at June 30, 2022, compared to $189.6 million at June 30, 2021. On a per share basis, tangible stockholders’ equity at June 30, 2022, was $17.43 per share, compared to $16.94 per share at June 30, 2021.

For the six months ended June 30, 2022, the Company has declared cash dividends of $0.3925 per share, which is a 15.4% increase over the 2021 six-month declared dividend payment. Dividends declared for the 2022 six months included a special one-time cash dividend of $0.0125 to honor F&M’s 125th anniversary.   F&M is committed to returning capital to shareholders and has increased the annual cash dividend for over 27 consecutive years. For the six months ended June 30, 2022, the dividend payout ratio was 30.08% compared to 38.18% 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 Loan Production Offices in West Bloomfield, Michigan; Muncie, Indiana; and Bryan and Oxford, Ohio.

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

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

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME

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

 

 

Three Months Ended

 

Six Months Ended

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

June 30,
2022

 

June 30,
2021

Interest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

$

22,388

 

 

$

20,455

 

 

$

21,008

 

 

$

18,766

 

$

16,259

 

$

42,843

 

 

$

31,871

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and government agencies

 

1,035

 

 

 

1,023

 

 

 

964

 

 

 

924

 

 

857

 

 

2,058

 

 

 

1,608

 

Municipalities

 

322

 

 

 

300

 

 

 

289

 

 

 

284

 

 

289

 

 

622

 

 

 

597

 

Dividends

 

57

 

 

 

42

 

 

 

49

 

 

 

44

 

 

31

 

 

99

 

 

 

81

 

Federal funds sold

 

9

 

 

 

10

 

 

 

10

 

 

 

10

 

 

6

 

 

19

 

 

 

11

 

Other.

 

100

 

 

 

69

 

 

 

103

 

 

 

94

 

 

88

 

 

169

 

 

 

127

 

Total interest income

 

23,911

 

 

 

21,899

 

 

 

22,423

 

 

 

20,122

 

 

17,530

 

 

45,810

 

 

 

34,295

 

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

1,379

 

 

 

1,360

 

 

 

1,581

 

 

 

1,221

 

 

1,276

 

 

2,739

 

 

 

2,616

 

Federal funds purchased and securities sold under agreements to repurchase

 

166

 

 

 

152

 

 

 

155

 

 

 

165

 

 

163

 

 

318

 

 

 

329

 

Borrowed funds

 

218

 

 

 

335

 

 

 

361

 

 

 

87

 

 

115

 

 

553

 

 

 

337

 

Subordinated notes

 

284

 

 

 

269

 

 

 

291

 

 

 

199

 

 

-

 

 

553

 

 

 

-

 

Total interest expense

 

2,047

 

 

 

2,116

 

 

 

2,388

 

 

 

1,672

 

 

1,554

 

 

4,163

 

 

 

3,282

 

Net Interest Income - Before Provision for Loan Losses

 

21,864

 

 

 

19,783

 

 

 

20,035

 

 

 

18,450

 

 

15,976

 

 

41,647

 

 

 

31,013

 

Provision for Loan Losses

 

1,628

 

 

 

580

 

 

 

444

 

 

 

659

 

 

641

 

 

2,208

 

 

 

2,341

 

Net Interest Income After Provision For Loan Losses

 

20,236

 

 

 

19,203

 

 

 

19,591

 

 

 

17,791

 

 

15,335

 

 

39,439

 

 

 

28,672

 

Noninterest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer service fees

 

2,148

 

 

 

2,648

 

 

 

2,417

 

 

 

2,242

 

 

2,198

 

 

4,796

 

 

 

5,012

 

Other service charges and fees

 

1,008

 

 

 

998

 

 

 

1,026

 

 

 

1,010

 

 

874

 

 

2,006

 

 

 

1,712

 

Net gain on sale of loans

 

164

 

 

 

697

 

 

 

1,074

 

 

 

822

 

 

955

 

 

861

 

 

 

2,001

 

Net gain on sale of available-for-sale securities

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

-

 

 

-

 

 

 

293

 

Total noninterest income

 

3,320

 

 

 

4,343

 

 

 

4,517

 

 

 

4,074

 

 

4,027

 

 

7,663

 

 

 

9,018

 

Noninterest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and wages

 

5,366

 

 

 

5,502

 

 

 

5,761

 

 

 

5,442

 

 

4,591

 

 

10,868

 

 

 

8,981

 

Employee benefits

 

1,546

 

 

 

2,054

 

 

 

1,792

 

 

 

1,621

 

 

1,915

 

 

3,600

 

 

 

3,909

 

Net occupancy expense

 

522

 

 

 

598

 

 

 

532

 

 

 

529

 

 

546

 

 

1,120

 

 

 

1,123

 

Furniture and equipment

 

1,008

 

 

 

1,056

 

 

 

782

 

 

 

903

 

 

848

 

 

2,064

 

 

 

1,639

 

Data processing

 

654

 

 

 

604

 

 

 

1,020

 

 

 

1,548

 

 

428

 

 

1,258

 

 

 

933

 

Franchise taxes

 

757

 

 

 

418

 

 

 

361

 

 

 

372

 

 

294

 

 

1,175

 

 

 

740

 

ATM expense

 

544

 

 

 

532

 

 

 

478

 

 

 

460

 

 

459

 

 

1,076

 

 

 

908

 

Advertising

 

300

 

 

 

237

 

 

 

431

 

 

 

439

 

 

331

 

 

537

 

 

 

566

 

Net (gain) loss on sale of other assets owned

 

(266

)

 

 

(5

)

 

 

13

 

 

 

219

 

 

227

 

 

(271

)

 

 

202

 

FDIC assessment

 

270

 

 

 

114

 

 

 

265

 

 

 

296

 

 

276

 

 

384

 

 

 

512

 

Mortgage servicing rights amortization

 

59

 

 

 

26

 

 

 

266

 

 

 

285

 

 

524

 

 

85

 

 

 

1,029

 

Consulting fees

 

233

 

 

 

178

 

 

 

761

 

 

 

256

 

 

394

 

 

411

 

 

 

617

 

Other general and administrative

 

2,242

 

 

 

2,179

 

 

 

1,964

 

 

 

1,951

 

 

2,227

 

 

4,421

 

 

 

4,260

 

Total noninterest expense

 

13,235

 

 

 

13,493

 

 

 

14,426

 

 

 

14,321

 

 

13,060

 

 

26,728

 

 

 

25,419

 

Income Before Income Taxes

 

10,321

 

 

 

10,053

 

 

 

9,682

 

 

 

7,544

 

 

6,302

 

 

20,374

 

 

 

12,271

 

Income Taxes

 

2,050

 

 

 

1,951

 

 

 

1,999

 

 

 

1,624

 

 

1,319

 

 

4,001

 

 

 

2,379

 

Net Income

 

8,271

 

 

 

8,102

 

 

 

7,683

 

 

 

5,920

 

 

4,983

 

 

16,373

 

 

 

9,892

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

(14,602

)

 

 

(20,939

)

 

 

(5,170

)

 

 

173

 

 

786

 

 

(35,541

)

 

 

(5,951

)

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

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

-

 

 

-

 

 

 

(293

)

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

 

(14,602

)

 

 

(20,939

)

 

 

(5,170

)

 

 

173

 

 

786

 

 

(35,541

)

 

 

(6,244

)

Tax expense (benefit)

 

(3,067

)

 

 

(4,397

)

 

 

(1,085

)

 

 

36

 

 

165

 

 

(7,464

)

 

 

(1,311

)

Other comprehensive income (loss)

 

(11,535

)

 

 

(16,542

)

 

 

(4,085

)

 

 

137

 

 

621

 

 

(28,077

)

 

 

(4,933

)

Comprehensive Income (Loss)

$

(3,264

)

 

$

(8,440

)

 

$

3,598

 

 

$

6,057

 

$

5,604

 

$

(11,704

)

 

$

4,959

 

Basic and Diluted Earnings Per Share

$

0.63

 

 

$

0.62

 

 

$

0.59

 

 

$

0.53

 

$

0.44

 

$

1.25

 

 

$

0.88

 

Dividends Declared

$

0.2025

 

 

$

0.1900

 

 

$

0.1900

 

 

$

0.1800

 

$

0.1700

 

$

0.3925

 

 

$

0.3400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

 

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

(Unaudited)

 

(Unaudited)

 

 

 

(Unaudited)

 

(Unaudited)

Assets

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

69,955

 

 

$

94,118

 

 

$

135,485

 

 

$

112,875

 

 

$

93,636

 

Federal funds sold

 

1,484

 

 

 

45,404

 

 

 

45,338

 

 

 

45,203

 

 

 

57,483

 

Total cash and cash equivalents

 

71,439

 

 

 

139,522

 

 

 

180,823

 

 

 

158,078

 

 

 

151,119

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing time deposits

 

6,684

 

 

 

8,677

 

 

 

10,913

 

 

 

14,622

 

 

 

18,597

 

Securities - available-for-sale

 

399,687

 

 

 

413,996

 

 

 

429,931

 

 

 

426,717

 

 

 

407,500

 

Other securities, at cost

 

8,735

 

 

 

8,568

 

 

 

8,162

 

 

 

4,905

 

 

 

6,419

 

Loans held for sale

 

4,230

 

 

 

6,060

 

 

 

7,714

 

 

 

3,735

 

 

 

8,041

 

Loans, net

 

2,016,394

 

 

 

1,945,449

 

 

 

1,841,177

 

 

 

1,479,864

 

 

 

1,443,336

 

Premises and equipment

 

26,492

 

 

 

26,653

 

 

 

26,913

 

 

 

26,476

 

 

 

26,915

 

Goodwill

 

80,434

 

 

 

80,434

 

 

 

80,434

 

 

 

55,214

 

 

 

56,066

 

Mortgage servicing rights

 

3,426

 

 

 

3,336

 

 

 

3,157

 

 

 

3,097

 

 

 

3,146

 

Other real estate owned

 

-

 

 

 

-

 

 

 

159

 

 

 

167

 

 

 

198

 

Bank owned life insurance

 

27,874

 

 

 

27,715

 

 

 

27,558

 

 

 

27,397

 

 

 

27,218

 

Other assets

 

29,321

 

 

 

25,735

 

 

 

21,359

 

 

 

18,711

 

 

 

18,310

 

 

 

 

 

 

 

 

 

 

 

Total Assets

$

2,674,716

 

 

$

2,686,145

 

 

$

2,638,300

 

 

$

2,218,983

 

 

$

2,166,865

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

Noninterest-bearing

$

503,395

 

 

$

497,249

 

 

$

473,689

 

 

$

438,076

 

 

$

443,863

 

Interest-bearing

 

 

 

 

 

 

 

 

 

NOW accounts

 

678,552

 

 

 

681,975

 

 

 

650,466

 

 

 

646,237

 

 

 

652,078

 

Savings

 

617,850

 

 

 

626,787

 

 

 

597,828

 

 

 

529,532

 

 

 

501,687

 

Time

 

424,249

 

 

 

447,586

 

 

 

471,479

 

 

 

252,383

 

 

 

256,445

 

Total deposits

 

2,224,046

 

 

 

2,253,597

 

 

 

2,193,462

 

 

 

1,866,228

 

 

 

1,854,073

 

 

 

 

 

 

 

 

 

 

 

Federal funds purchased and

 

 

 

 

 

 

 

 

 

securities sold under agreements to repurchase

 

71,944

 

 

 

31,680

 

 

 

29,268

 

 

 

29,601

 

 

 

29,882

 

Federal Home Loan Bank (FHLB) advances

 

42,635

 

 

 

22,656

 

 

 

24,065

 

 

 

17,868

 

 

 

17,868

 

Other borrowings

 

-

 

 

 

40,000

 

 

 

40,000

 

 

 

-

 

 

 

-

 

Subordinated notes, net of unamortized issuance costs

 

34,528

 

 

 

34,499

 

 

 

34,471

 

 

 

34,441

 

 

 

-

 

Dividend payable

 

2,626

 

 

 

2,462

 

 

 

2,461

 

 

 

2,002

 

 

 

1,888

 

Accrued expenses and other liabilities

 

18,064

 

 

 

14,773

 

 

 

17,406

 

 

 

14,097

 

 

 

12,569

 

Total liabilities

 

2,393,843

 

 

 

2,399,667

 

 

 

2,341,133

 

 

 

1,964,237

 

 

 

1,916,280

 

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

 

Common stock - No par value 20,000,000 shares authorized; issued and

 

 

 

 

 

 

 

 

outstanding 14,063,999 shares 6/30/22 and 12/31/21

 

123,145

 

 

 

122,886

 

 

 

122,674

 

 

 

81,382

 

 

 

82,259

 

Treasury stock - 998,174 shares 6/30/22, 997,766 shares 12/31/21

 

(11,822

)

 

 

(11,739

)

 

 

(11,724

)

 

 

(11,718

)

 

 

(12,172

)

Retained earnings

 

200,811

 

 

 

195,057

 

 

 

189,401

 

 

 

184,181

 

 

 

179,734

 

Accumulated other comprehensive income (loss)

 

(31,261

)

 

 

(19,726

)

 

 

(3,184

)

 

 

901

 

 

 

764

 

Total stockholders' equity

 

280,873

 

 

 

286,478

 

 

 

297,167

 

 

 

254,746

 

 

 

250,585

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

$

2,674,716

 

 

$

2,686,145

 

 

$

2,638,300

 

 

$

2,218,983

 

 

$

2,166,865

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

SELECT FINANCIAL DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Six Months Ended

Selected financial data

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

June 30,
2022

 

June 30,
2021

Return on average assets

 

 

1.23

%

 

 

1.21

%

 

 

1.17

%

 

 

1.12

%

 

 

0.90

%

 

1.22

%

 

0.98

%

Return on average equity

 

 

11.66

%

 

 

11.00

%

 

 

10.94

%

 

 

9.32

%

 

 

8.00

%

 

11.32

%

 

7.94

%

Yield on earning assets

 

 

3.47

%

 

 

3.47

%

 

 

3.59

%

 

 

3.85

%

 

 

3.53

%

 

3.79

%

 

3.61

%

Cost of interest bearing liabilities

 

 

0.45

%

 

 

0.45

%

 

 

0.51

%

 

 

0.45

%

 

 

0.44

%

 

0.44

%

 

0.48

%

Net interest spread

 

 

3.02

%

 

 

3.02

%

 

 

3.08

%

 

 

3.40

%

 

 

3.09

%

 

3.35

%

 

3.13

%

Net interest margin

 

 

3.14

%

 

 

3.14

%

 

 

3.21

%

 

 

3.53

%

 

 

3.21

%

 

3.47

%

 

3.27

%

Efficiency

 

 

50.17

%

 

 

55.44

%

 

 

58.76

%

 

 

63.50

%

 

 

64.98

%

 

57.90

%

 

63.72

%

Dividend payout ratio

 

 

30.02

%

 

 

30.64

%

 

 

32.03

%

 

 

33.81

%

 

 

37.89

%

 

30.08

%

 

38.18

%

Tangible book value per share (1)

 

$

17.43

 

 

$

16.96

 

 

$

16.49

 

 

$

17.33

 

 

$

16.94

 

 

 

 

 

Tier 1 capital to average assets

 

 

8.75

%

 

 

8.51

%

 

 

8.47

%

 

 

9.45

%

 

 

8.78

%

 

 

 

 

Average Shares Outstanding

 

 

13,065,975

 

 

 

13,066,272

 

 

 

13,046,299

 

 

 

11,209,732

 

 

 

11,191,043

 

 

13,066,123

 

 

11,194,011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

 

 

 

(Dollar amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

979,176

 

 

$

910,839

 

 

$

848,477

 

 

$

728,852

 

 

$

691,122

 

 

 

 

 

Agricultural real estate

 

 

199,972

 

 

 

196,223

 

 

 

198,343

 

 

 

179,374

 

 

 

189,742

 

 

 

 

 

Consumer real estate

 

 

410,450

 

 

 

410,120

 

 

 

395,873

 

 

 

202,454

 

 

 

194,715

 

 

 

 

 

Commercial and industrial

 

 

232,975

 

 

 

216,918

 

 

 

208,270

 

 

 

194,767

 

 

 

216,609

 

 

 

 

 

Agricultural

 

 

127,143

 

 

 

140,709

 

 

 

118,368

 

 

 

105,580

 

 

 

100,756

 

 

 

 

 

Consumer

 

 

55,411

 

 

 

57,521

 

 

 

57,737

 

 

 

55,521

 

 

 

56,427

 

 

 

 

 

Other

 

 

31,243

 

 

 

31,573

 

 

 

32,089

 

 

 

31,096

 

 

 

13,549

 

 

 

 

 

Less: Net deferred loan fees and costs

 

 

(1,552

)

 

 

(1,683

)

 

 

(1,738

)

 

 

(2,082

)

 

 

(4,497

)

 

 

 

 

Total loans,net

 

$

2,034,818

 

 

$

1,962,220

 

 

$

1,857,419

 

 

$

1,495,562

 

 

$

1,458,423

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset quality data

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

 

 

 

(Dollar amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

5,247

 

 

$

8,581

 

 

$

8,076

 

 

$

6,248

 

 

$

7,031

 

 

 

 

 

Troubled debt restructuring

 

$

2,748

 

 

$

7,268

 

 

$

7,614

 

 

$

6,035

 

 

$

5,492

 

 

 

 

 

90 day past due and accruing

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

 

 

 

Nonperforming loans

 

$

5,247

 

 

$

8,581

 

 

$

8,076

 

 

$

6,248

 

 

$

7,031

 

 

 

 

 

Other real estate owned

 

$

-

 

 

$

-

 

 

$

159

 

 

$

167

 

 

$

198

 

 

 

 

 

Nonperforming assets

 

$

5,247

 

 

$

8,581

 

 

$

8,235

 

 

$

6,415

 

 

$

7,229

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollar amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan and lease losses

 

$

18,424

 

 

$

16,771

 

 

$

16,242

 

 

$

15,698

 

 

$

15,087

 

 

 

 

 

Allowance for loan and lease losses/total loans

 

 

0.91

%

 

 

0.85

%

 

 

0.87

%

 

 

1.05

%

 

 

1.03

%

 

 

 

 

Net charge-offs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter-to-date

 

$

(25

)

 

$

51

 

 

$

(101

)

 

$

48

 

 

$

(21

)

 

 

 

 

Year-to-date

 

$

26

 

 

$

51

 

 

$

874

 

 

$

974

 

 

$

926

 

 

 

 

 

Net charge-offs to average loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter-to-date

 

 

0.00

%

 

 

0.00

%

 

 

-0.01

%

 

 

0.00

%

 

 

0.00

%

 

 

 

 

Year-to-date

 

 

0.00

%

 

 

0.00

%

 

 

0.06

%

 

 

0.07

%

 

 

0.07

%

 

 

 

 

Nonperforming loans/total loans

 

 

0.26

%

 

 

0.44

%

 

 

0.43

%

 

 

0.42

%

 

 

0.48

%

 

 

 

 

Allowance for loan and lease losses/nonperforming loans

 

 

351.44

%

 

 

198.29

%

 

 

201.11

%

 

 

251.26

%

 

 

214.58

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

June 30, 2022

 

June 30, 2021

Interest Earning Assets:

Average Balance

 

Interest/Dividends

 

Annualized
Yield/Rate

 

Average Balance

 

Interest/Dividends

 

Annualized
Yield/Rate

Loans

$

1,999,357

 

$

22,388

 

4.48

%

 

$

1,419,531

 

$

16,259

 

4.58

%

Taxable investment securities

 

422,482

 

 

1,344

 

1.27

%

 

 

367,249

 

 

1,100

 

1.20

%

Tax-exempt investment securities

 

21,649

 

 

70

 

1.64

%

 

 

17,497

 

 

77

 

2.23

%

Fed funds sold & other

 

81,091

 

 

109

 

0.54

%

 

 

187,583

 

 

94

 

0.20

%

Total Interest Earning Assets

 

2,524,579

 

$

23,911

 

3.79

%

 

 

1,991,860

 

$

17,530

 

3.53

%

 

 

 

 

 

 

 

 

 

 

 

 

Nonearning Assets

 

161,031

 

 

 

 

 

 

228,036

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

$

2,685,610

 

 

 

 

 

$

2,219,896

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Savings deposits

$

1,312,444

 

$

777

 

0.24

%

 

$

1,123,157

 

$

566

 

0.20

%

Other time deposits

 

435,091

 

 

602

 

0.55

%

 

 

250,277

 

 

710

 

1.13

%

Other borrowed money

 

39,172

 

 

218

 

2.23

%

 

 

17,859

 

 

115

 

2.58

%

Fed funds purchased & securities

 

 

 

 

 

 

 

 

 

 

 

sold under agreement to repurch.

 

35,260

 

 

166

 

1.88

%

 

 

29,980

 

 

163

 

2.17

%

Subordinated notes

 

34,509

 

 

284

 

3.29

%

 

 

-

 

 

-

 

0.00

%

Total Interest Bearing Liabilities

$

1,856,476

 

$

2,047

 

0.44

%

 

$

1,421,273

 

$

1,554

 

0.44

%

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Liabilities

 

545,439

 

 

 

 

 

 

549,610

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

$

283,695

 

 

 

 

 

$

249,013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income and Interest Rate Spread

 

 

$

21,864

 

3.35

%

 

 

 

$

15,976

 

3.09

%

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Margin

 

 

 

 

3.47

%

 

 

 

 

 

3.21

%

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended

 

For the Six Months Ended

 

June 30, 2022

 

June 30, 2021

Interest Earning Assets:

Average Balance

 

Interest/Dividends

 

Annualized
Yield/Rate

 

Average Balance

 

Interest/Dividends

 

Annualized
Yield/Rate

Loans

$

1,953,671

 

$

42,843

 

4.39

%

 

$

1,374,302

 

$

31,871

 

4.64

%

Taxable investment securities

 

426,189

 

 

2,639

 

1.24

%

 

 

345,893

 

 

2,109

 

1.22

%

Tax-exempt investment securities

 

20,119

 

 

140

 

1.76

%

 

 

18,936

 

 

177

 

2.37

%

Fed funds sold & other

 

124,050

 

 

188

 

0.30

%

 

 

162,646

 

 

138

 

0.17

%

Total Interest Earning Assets

 

2,524,029

 

$

45,810

 

3.63

%

 

 

1,901,777

 

$

34,295

 

3.61

%

 

 

 

 

 

 

 

 

 

 

 

 

Nonearning Assets

 

162,949

 

 

 

 

 

 

126,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

$

2,686,978

 

 

 

 

 

$

2,028,310

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Savings deposits

$

1,302,005

 

$

1,365

 

0.21

%

 

$

1,069,179

 

$

1,140

 

0.21

%

Other time deposits

 

447,471

 

 

1,374

 

0.61

%

 

 

246,155

 

 

1,476

 

1.20

%

Other borrowed money

 

51,180

 

 

553

 

2.16

%

 

 

17,854

 

 

337

 

3.78

%

Fed funds purchased & securities

 

 

 

 

 

 

 

 

 

 

 

sold under agreement to repurch.

 

32,182

 

 

318

 

1.98

%

 

 

30,095

 

 

329

 

2.19

%

Subordinated notes

 

34,495

 

 

553

 

3.12

%

 

 

-

 

 

-

 

0.00

%

Total Interest Bearing Liabilities

$

1,867,333

 

$

4,163

 

0.44

%

 

$

1,363,283

 

$

3,282

 

0.48

%

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Liabilities

 

530,478

 

 

 

 

 

 

415,722

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

$

289,167

 

 

 

 

 

$

249,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income and Interest Rate Spread

 

 

$

41,647

 

3.19

%

 

 

 

$

31,013

 

3.13

%

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Margin

 

 

 

 

3.30

%

 

 

 

 

 

3.27

%

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATION OF 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, 2022

 

June 30, 2021

 

June 30, 2022

 

June 30, 2021

 

 

 

 

 

 

 

 

 

Shares Outstanding

 

 

13,065,825

 

 

 

11,189,052

 

 

 

13,065,825

 

 

 

11,189,052

 

 

 

 

 

 

 

 

 

 

Tangible Equity

 

 

 

 

 

 

 

 

Equity

 

$

280,872

 

 

$

250,585

 

 

$

280,872

 

 

$

250,585

 

Goodwill

 

 

80,434

 

 

 

56,066

 

 

 

80,434

 

 

 

56,066

 

Other Intangible

 

 

3,974

 

 

 

4,200

 

 

 

3,974

 

 

 

4,200

 

Comprehensive Adjustment*

 

 

-

 

 

 

-

 

 

 

31,261

 

 

 

(764

)

Tangible Equity

 

$

196,464

 

 

$

190,319

 

 

$

227,725

 

 

$

189,555

 

Shares Outstanding

 

 

13,066

 

 

 

11,189

 

 

 

13,066

 

 

 

11,189

 

Tangible Book Equity per Share

 

$

15.04

 

 

$

17.01

 

 

$

17.43

 

 

$

16.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual Average

 

Regulatory Average

 

 

Year to Date

 

Year to Date

 

 

June 30, 2022

 

June 30, 2021

 

June 30, 2022

 

June 30, 2021

 

 

 

 

 

 

 

 

 

Net Income

 

$

16,373

 

 

$

9,892

 

 

$

16,373

 

 

$

9,892

 

Acquisition Costs - Tax Adjusted

 

 

115

 

 

 

982

 

 

 

115

 

 

 

982

 

 

 

 

 

 

 

 

 

 

Average Shares Outstanding

 

 

13,066,123

 

 

 

11,194,011

 

 

 

13,066,123

 

 

 

11,194,011

 

 

 

 

 

 

 

 

 

 

Average Tangible Equity

 

 

 

 

 

 

 

 

Average Equity

 

$

289,167

 

 

$

249,305

 

 

$

289,167

 

 

$

249,305

 

Average Goodwill

 

 

80,434

 

 

 

50,191

 

 

 

80,434

 

 

 

50,191

 

Average Other Intangible

 

 

4,235

 

 

 

3,764

 

 

 

4,235

 

 

 

3,764

 

Average Comprehensive Adjustment*

 

 

-

 

 

 

-

 

 

 

16,893

 

 

 

(2,548

)

Average Tangible Equity

 

$

204,498

 

 

$

195,350

 

 

$

221,391

 

 

$

192,803

 

Average Shares Outstanding

 

 

13,066

 

 

 

11,194

 

 

 

13,066

 

 

 

11,194

 

Average Tangible Book Equity per Share

 

$

15.65

 

 

$

17.45

 

 

$

16.94

 

 

$

17.22

 

 

 

 

 

 

 

 

 

 

Return on Average Tangible Equity

 

 

16.01

%

 

 

10.13

%

 

 

14.79

%

 

 

10.26

%

Return on Average Tangible Equity w/o Acquisition

 

16.12

%

 

 

11.13

%

 

 

14.89

%

 

 

11.28

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*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.


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