Farmers & Merchants Bancorp, Inc. Raises the 2023 Fourth Quarter Cash Dividend by 4.8% Year-over-Year to $0.22 per share

Rhea-AI Summary

Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) has announced a 4.8% year-over-year increase in its quarterly cash dividend, raising it to $0.22 per share from the previous $0.21. This marks the 29th consecutive annual increase in the company’s regular dividend payment since 1994. The fourth-quarter dividend is payable on January 20, 2024, to shareholders of record as of December 29, 2023. President and CEO Lars B. Eller emphasized the company's commitment to returning capital to shareholders and its strong financial performance.

Insights

Financial Analyst

The announcement of Farmers & Merchants Bancorp, Inc.'s increased quarterly cash dividend is a significant indicator of the company's financial health and a positive signal to shareholders. The increment from $0.21 to $0.22 per share, although seemingly modest, is a reflection of the company's consistent performance and its ability to generate sufficient cash flow to reward its investors. This decision is particularly noteworthy as it marks the 29th consecutive year of dividend growth, which is an exceptional achievement in the banking industry.

For investors, the longevity of dividend increases can be interpreted as a sign of stability and a commitment to shareholder returns. It also implies that the company has a disciplined approach to capital allocation and a robust business model capable of withstanding economic fluctuations. However, it is important for stakeholders to assess the dividend yield in the context of the current interest rate environment and market conditions, as these factors can influence the attractiveness of dividend-paying stocks.

In the longer term, consistent dividend growth can attract a loyal shareholder base and potentially support the stock price. Nonetheless, investors should also consider the payout ratio to ensure that the company maintains a balance between distributing profits and reinvesting in the business for future growth. Overemphasis on dividends could constrain necessary capital expenditures or debt reduction, which are also critical for the company's sustainability and competitiveness.

Industry Analyst

Within the banking sector, a track record of consecutive dividend increases is relatively rare and often seen as an indicator of a bank's resilience and prudent financial management. Farmers & Merchants Bancorp's announcement places it among a select group of banks that have managed to increase dividends annually over an extended period. This could enhance its reputation and brand value among consumers and investors alike, potentially leading to increased customer loyalty and investor interest.

However, it is essential to analyze this in the context of the bank's overall financial strategy and market position. A comparison with peer institutions could provide additional insights into the bank's performance. For instance, if Farmers & Merchants Bancorp is outpacing its competitors in terms of dividend growth, it could indicate a competitive advantage. Conversely, if its dividend growth is in line with broader industry trends, it may reflect sector-wide financial stability rather than company-specific strengths.

Furthermore, the bank's community-centric approach, as highlighted by its CEO, suggests a business model focused on local market penetration and customer service, which can be a differentiating factor in a highly competitive industry.

ARCHBOLD, Ohio, Dec. 19, 2023 (GLOBE NEWSWIRE) -- The Board of Directors of Farmers & Merchants Bancorp, Inc., (Nasdaq: FMAO) the holding company of F&M Bank, with total assets of $3.235 billion at September 30, 2023, today announced that it has approved a 4.8% year-over-year increase in the Company’s quarterly cash dividend.

The new cash dividend has been raised to $0.22 per share from the previous dividend of $0.21 per share for the same period last year. This represents the 29^th consecutive annual increase in the Company’s regular dividend payment since 1994. The fourth-quarter dividend is payable on January 20, 2024, to shareholders of record as of December 29, 2023.

Lars B. Eller, President and Chief Executive Officer stated, “F&M is committed to returning capital back to shareholders through its long-standing dividend program, which is a testament to our strong financial results and the value we provide our communities. With 29 consecutive years of annual dividend increases, I am proud that F&M has established one of the longest track records of consecutive dividend increases for publicly traded banks.”

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 F&M has Loan Production Offices in West Bloomfield, Michigan; Muncie, Indiana; and Bryan, 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.

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

FAQ

What is the latest dividend increase announced by Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO)?

Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) has announced a 4.8% year-over-year increase in its quarterly cash dividend, raising it to $0.22 per share from the previous $0.21.

When is the fourth-quarter dividend payable to shareholders of Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO)?

The fourth-quarter dividend is payable on January 20, 2024, to shareholders of record as of December 29, 2023.

How many consecutive annual dividend increases has Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) achieved?

Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) has achieved 29 consecutive annual dividend increases since 1994.

Who is the President and CEO of Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO)?

Lars B. Eller is the President and Chief Executive Officer of Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO).

What is the total assets of Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) as of September 30, 2023?

Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) had total assets of $3.235 billion as of September 30, 2023.