Farmers & Merchants Bancorp, Inc. Reports 2020 Third-Quarter and Year-to-Date Financial Results

Rhea-AI Summary

Farmers & Merchants Bancorp (FMAO) reported strong third-quarter 2020 results, with a 5.3% increase in earnings per diluted share to $0.40. Net interest income rose 3.0% to $13.0 million, despite a $1.7 million increase in provisions for loan losses due to COVID-19. Noninterest income saw a significant 49.2% increase, totaling $4.7 million. Total deposits grew 18.8% year-over-year to $1.519 billion. The company remains well-capitalized with a Tier 1 capital ratio of 10.65% and declared a 13.3% increase in quarterly cash dividends to $0.17 per share.

Positive

• Earnings per diluted share increased 5.3% to $0.40.
• Net interest income rose 3.0% to $13.0 million.
• Noninterest income increased 49.2% to $4.7 million.
• Total deposits grew 18.8% to $1.519 billion.
• Tier 1 capital ratio stands at 10.65%.

Negative

• Provision for loan losses increased to $5.0 million, up from $410,000 the previous year.

Positive Momentum Continues as Third Quarter 2020 Earnings Per Diluted Share Increase 5.3% Despite Higher Provision for Loan Losses due to the COVID-19 Crisis

ARCHBOLD, Ohio, Oct. 21, 2020 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2020 third quarter and year-to-date September 30, 2020.

2020 Third Quarter Financial Highlights Include (on a year-over-year basis unless noted):

• Net interest income after provision for loan losses increased 3.0% to $13.0 million, which included a $1.7 million increase in the provision for loan losses as a result of the COVID-19 crisis
• Noninterest income increased 49.2% to $4.7 million, primarily due to strong residential mortgage demand
• Efficiency ratio improved 375 basis points to 62.11%
• Strong organic growth drove a 17.7% increase in net total loans and an 18.8% increase in total deposits
• Asset quality remains strong and nonperforming loans to total loans was 0.58% compared to 0.28%
• Year-to-date, net charge-offs to average loans was 0.03%, compared to 0.04% for the same period last year
• The balance of interest only and full deferrals was $8.5 million at September 30, 2020, a 94.6% decline from $156.6 million at June 30, 2020
• F&M remains well capitalized under regulatory guidelines with a Tier 1 capital to average assets of 10.65%
• Quarterly cash dividend increased 13.3% to $0.17 per share, reflecting F&M’s commitment to create long-term value for shareholders
• F&M donated over $36,000 to local organizations during the third quarter, a 100% increase from the same quarter last year
• New loan production offices in Muncie, IN and Oxford, OH contributing to loan growth
• New loan production office in West Bloomfield, MI and new full-service office in Fort Wayne expected to open in fourth quarter

“Momentum in our business remains strong and I am extremely proud of the high level of service and dedication our employees continue to provide our customers and communities,” stated Lars B. Eller, President and Chief Executive Officer. “We entered the COVID-19 crisis from a position of strength through our commitment to community-oriented and prudent banking values. F&M’s continued success throughout this challenging period is encouraging and we have been able to offset an increased level of provision for loan losses by reducing our cost of funds, driving strong noninterest income, and improving our efficiency ratio. As a result, third quarter net income increased 3.2%, and earnings per diluted share are up 5.3% over the prior year period.”  

Mr. Eller continued: “Our loan portfolio continues to be resilient. Loans 30 days past due to total loans, excluding PPP loan balance, is comparable to pre-COVID levels and was 0.26% at September 30, 2020, compared to 0.18% at December 31, 2019. In addition, we ended the third quarter with only $8.5 million of interest only and full deferrals, compared to $156.6 million at the end of the second quarter. Given this favorable performance, we believe interest only and full deferrals, as well as second deferrals, will continue to decline throughout the remainder of 2020. However, given the uncertainty surrounding the COVID-19 crisis and the continued impacts the pandemic is having on the global economy, we are proactively monitoring our portfolio’s performance and our approach to risk remains prudent. As a result, we have increased our allowance for loan and lease losses by nearly 76.0% over the past 12 months, and our allowance for loan and lease losses to total loans, adjusted for our PPP balances, are now over 1.0%.”

Income Statement
Net income for the 2020 third quarter ended September 30, 2020, was $4.4 million, compared to $4.3 million for the same period last year. Net income per basic and diluted share for the 2020 third quarter was $0.40, compared to $0.38 for the same period last year. Net income for the 2020 nine-month period ended September 30, 2020, was $13.3 million, compared to $13.7 million for the same period last year. Net income per basic and diluted share for the 2020 nine months was $1.20, compared to $1.23 for the same period last year.

Mr. Eller continued, “Our provision for loan losses has increased from $410,000 for the nine months ended September 30, 2019 to $5.0 million for the nine months ended September 30, 2020. Helping offset this year-to-date increase, has been a slight increase in total interest income, a 23.5% improvement in total interest expense, and a 26.3% increase in noninterest income. In addition, noninterest expenses have increased only 4.9% year-to-date, primarily due to a one-time $0.5 million increase in salary and wages during the third quarter to support our employees’ annual incentive program. Despite higher operating expenses, our efficiency ratio for the nine months ended September 30, 2020 was 62.11%, compared to 65.86% for the same period last year and at the bank only level, excluding the parent or any affiliate, our efficiency ratio at September 30, 2020, was 59.89% compared to 62.45% for the same period last year.”

Deposits
At September 30, 2020, total deposits were $1.519 billion, an increase of 18.8% from September 30, 2019, and an increase of 2.8% from June 30, 2020. The significant organic deposit growth being experienced is a result of continued strength in expanding relationships with new and existing customers, and the benefits of PPP activity. 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 loans, net at September 30, 2020, increased 17.7% or by $205.2 million to $1.364 billion, compared to $1.159 billion at September 30, 2019, and up 1.4% from $1.345 billion at June 30, 2020. The year-over-year improvement resulted primarily from the contribution of strong organic loan growth and $87.0 million of PPP loans originated during the 2020 second quarter.

Mr. Eller continued, “Despite the challenges created by the COVID-19 crisis, we continue to grow our loan portfolio with high quality customers, reflecting the personal financial services and value we provide our local communities and the recent contribution of our newly opened loan production offices in Muncie, IN and Oxford, OH.”

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. The Bank initially had loans of $28 million in deferment and loans of $137 million making interest only payments. As of September 30, 2020, there is a total of $8.5 million outstanding between deferrals and interest only payments within the Company’s commercial and agriculture portfolios. The $8.5 million balance comprised $1.4 million with one full month of deferment, $641,000 with three full months of deferment, $5.5 million with three months interest only payments, and $900,000 with six months interest only. Second deferrals were negligible at September 30, 2020 and at this point in time, existing loans outstanding in deferral or interest only payments are expected to be current as of December 31, 2020.

The Company’s management team has evaluated its exposure to increased loan losses related to the COVID-19 pandemic and has identified the following industry segments most impacted by the pandemic as of September 30, 2020:

Industry Segments (Dollars in Thousands)		Outstanding Loan Balance				Percent of Total Loan Portfolio				Payment Deferment				Percent of Total Loans Adjusted with Deferment				Interest Only Modifications				Percent of Total Loans Adjusted with Interest Only
Hospitality (Hotels)		$	74,426				5.44	%		$	-				0.00	%		$	1,679				26.19	%
Restaurants			21,726				1.59	%			-				0.00	%			2,000				31.20	%
Retail Commercial Real Estate *			101,783				7.44	%			-				0.00	%			-				0.00	%
Entertainment			24,568				1.80	%			641				31.10	%			1,302				20.32	%
Car Dealers			32,094				2.35	%			-				0.00	%			-				0.00	%
Gas Stations			17,586				1.29	%			-				0.00	%			-				0.00	%
Other			770,197				56.31	%			1,420				68.90	%			1,429				22.29	%
Total		$	1,042,380				76.22	%		$	2,061				100.00	%		$	6,410				100.00	%
# of Customers										4								5
*Includes Owner Occupied
Report on Adjusted Loans as of September 30, 2020

The other category in payment deferment at September 30, 2020, is a loan for a livestock production facility. The other category for interest modifications as of September 30, 2020, is for construction of an agricultural implement facility and a manufacturer.

F&M’s agriculture portfolio continues to perform well, as a result of the Company’s experienced lenders, diversified market exposure, and geographic focus within strong agricultural markets. At September 30, 2020, F&M’s $103.3 million agriculture portfolio consisted primarily of row crop and livestock production, with almost no dairy exposure. Agriculture customers are proven farmers with strong balance sheets and 95% of row crop producers utilize crop insurance to mitigate weather and production risks. Approximately, 25% of F&M’s agriculture portfolio at September 30, 2020, was within the livestock sector, and approximately 70% of this exposure is to customers that support production but do not have direct livestock ownership. In addition, approximately 80% of F&M’s livestock exposure is for loans with balances under $750,000 and of the borrowers with direct livestock ownership, approximately 50% are not dependent on the income from livestock to manage their debt payments.   Overall, F&M believes agricultural performance will be similar to 2019.

Focusing on Operational Excellence and Executing Long-Term Strategic Plan
Mr. Eller stated: “Based on the lessons we have learned throughout the COVID-19 pandemic, we are making strategic investments across our organization that support the future needs of our operations as well as adapt to changing customer preferences. We are reviewing our office modification strategy. As a part of this, we are exploring the opportunity for offices in compelling markets with a high concentration of our core customer demographic. During the fourth quarter, we are expanding our physical presence into the state of Michigan with a new loan production office in West Bloomfield, MI. Our new full-service office in Fort Wayne, IN is also expected to open in fourth quarter.”  

“We have recently split our back-end operations team into four separate locations to mitigate risk of operating one facility and promote social distancing within our facilities, in addition to supporting our employees’ efforts to work from home. We also remain focused on attracting and retaining employees to support our current and future growth, and during the third quarter we expanded our employee 401(k) offerings, and upgraded our HR system. Investments in our digital infrastructure continue and in the coming months we will go live with an upgrade to F&M’s website, improve our customer’s ability to automatically open accounts online, and open a new call center to support our growing digital strategies.”

Mr. Eller concluded: “Despite the unprecedented impacts of the COVID-19 pandemic, 2020 is shaping up to be a strong year demonstrating the resiliency of our employees, customers, and communities. We are all in this together and F&M remains focused on providing support for you and us, throughout the near-term challenges and future prosperity.”

Stockholders’ Equity and Dividends
Total stockholders’ equity increased 7.0% to $243.4 million at September 30, 2020, from $227.4 million at September 30, 2019. At September 30, 2020, the Company had a Tier 1 leverage ratio of 10.65%, compared to 11.60% at September 30, 2019.

Tangible stockholders’ equity increased to $187.2 million at September 30, 2020, compared to $174.6 million at September 30, 2019. The largest change to intangible stockholders’ equity was an increase in accumulated comprehensive income, which increased from $1.471 million as of September 30, 2019 to $5.860 million as of September 30, 2020. On a per share basis, tangible stockholders’ equity at September 30, 2020, was $16.78 per share, compared to $15.68 per share at September 30, 2019.

For the nine months ended September 30, 2020, the Company has declared cash dividends of $0.49 per share, which is an 8.9% increase over the 2019 nine month declared dividend payment. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 26 consecutive years. For the nine months ended September 30, 2020, the dividend payout ratio was 42.66% compared to 38.67% 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 through its 30 offices. Our locations are in Fulton, Defiance, Hancock, Henry, Lucas, Williams, and Wood counties in Northwest Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, and Steuben counties.

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.

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, 2020				June 30, 2020				March 31, 2020				December 31, 2019				September 30, 2019				September 30, 2020				September 30, 2019
Interest Income
Loans, including fees			$	16,181			$	16,192			$	15,883			$	15,608			$	15,202			$	48,256			$	46,605
Debt securities:
U.S. Treasury and government agencies				761				767				1,146				840				972				2,674				2,501
Municipalities				279				243				262				225				190				784				612
Dividends				36				26				45				60				69				107				233
Federal funds sold				4				5				6				97				120				15				319
Other.				32				40				122				319				459				194				887
Total interest income				17,293				17,273				17,464				17,149				17,012				52,030				51,157
Interest Expense
Deposits				1,864				2,254				2,901				3,336				3,654				7,019				9,606
Federal funds purchased and securities sold under agreements to repurchase				174				187				244				207				201				605				527
Borrowed funds				231				257				266				270				257				754				813
Total interest expense				2,269				2,698				3,411				3,813				4,112				8,378				10,946
Net Interest Income - Before Provision for Loan Losses				15,024				14,575				14,053				13,336				12,900				43,652				40,211
Provision for Loan Losses				1,987				1,569				1,430				728				247				4,986				410
Net Interest Income After Provision For Loan Losses				13,037				13,006				12,623				12,608				12,653				38,666				39,801
Noninterest Income
Customer service fees				2,299				2,258				1,586				1,732				1,722				6,143				4,994
Other service charges and fees				879				704				1,039				1,132				1,179				2,622				3,311
Net gain on sale of loans				1,537				364				227				119				260				2,128				558
Net gain (loss) on sale of available-for-sale securities				-				-				270				-				-				270				(26	)
Total noninterest income				4,715				3,326				3,122				2,983				3,161				11,163				8,837
Noninterest Expense
Salaries and wages				5,102				4,043				4,223				4,029				4,158				13,420				12,300
Employee benefits				1,566				1,218				1,677				1,410				1,331				4,461				4,148
Net occupancy expense				558				564				564				406				630				1,686				1,911
Furniture and equipment				875				750				758				596				720				2,383				2,179
Data processing				490				408				442				396				482				1,340				2,157
Franchise taxes				368				369				368				246				248				1,105				735
ATM expense				444				376				414				434				416				1,234				1,281
Advertising				411				265				303				340				587				979				1,229
Net (gain) loss on sale of other assets owned				(7	)			(7	)			1				16				22				(13	)			65
FDIC assessment				194				144				72				(11	)			-				410				194
Mortgage servicing rights amortization				296				356				132				158				149				784				329
Consulting fees				205				217				139				264				196				561				404
Other general and administrative				1,786				1,691				1,602				1,482				1,667				5,027				4,897
Total noninterest expense				12,288				10,394				10,695				9,766				10,606				33,377				31,829
Income Before Income Taxes				5,464				5,938				5,050				5,825				5,208				16,452				16,809
Income Taxes				1,054				1,134				945				1,102				933				3,133				3,130
Net Income				4,410				4,804				4,105				4,723				4,275				13,319				13,679
Other Comprehensive Income (Loss) (Net of Tax):
Net unrealized gain (loss) on available-for-sale securities				639				661				4,998				(472	)			841				6,298				5,651
Reclassification adjustment for realized (gain) loss on sale of available-for-sale securities				-				-				(270	)			-				-				(270	)			26
Net unrealized gain (loss) on available-for-sale securities				639				661				4,728				(472	)			841				6,028				5,677
Tax expense (benefit)				134				139				993				(99	)			176				1,266				1,192
Other comprehensive income (loss)				505				522				3,735				(373	)			665				4,762				4,485
Comprehensive Income			$	4,915			$	5,326			$	7,840			$	4,350			$	4,940			$	18,081			$	18,164
Basic and Diluted Earnings Per Share			$	0.40			$	0.43			$	0.37			$	0.43			$	0.38			$	1.20			$	1.23
Dividends Declared			$	0.17			$	0.16			$	0.16			$	0.16			$	0.15			$	0.49			$	0.45

 

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (in thousands of dollars, except share data)
			September 30, 2020				June 30, 2020				March 31, 2020				December 31, 2019				September 30, 2019
			(Unaudited)				(Unaudited)				(Unaudited)								(Unaudited)
Assets
Cash and due from banks			$	46,395			$	54,336			$	49,844			$	50,137			$	103,188
Federal funds sold				41,358				31,105				40,993				1,159				11,404
	Total cash and cash equivalents			87,753				85,441				90,837				51,296				114,592
Interest-bearing time deposits				4,657				4,636				4,869				4,309				4,554
Securities - available-for-sale				259,041				236,292				204,121				222,293				190,465
Other securities, at cost				5,827				5,810				5,810				5,810				5,789
Loans held for sale				7,621				11,445				2,153				4,248				606
Loans, net				1,351,979				1,334,790				1,239,108				1,211,771				1,151,937
Premises and equipment				26,776				26,049				26,120				26,351				25,990
Goodwill				47,340				47,340				47,340				47,340				47,340
Mortgage servicing rights				3,027				2,740				2,672				2,629				2,556
Other real estate owned				206				135				185				214				351
Bank owned life insurance				15,501				15,399				15,313				15,235				15,151
Other assets				16,872				14,370				16,597				15,834				15,549
Total Assets			$	1,826,600			$	1,784,447			$	1,655,125			$	1,607,330			$	1,574,880
	Liabilities and Stockholders' Equity
Liabilities
Deposits
	Noninterest-bearing		$	330,845			$	336,027			$	261,786			$	265,156			$	261,719
	Interest-bearing
	NOW accounts			534,792				504,846				463,734				423,655				430,646
	Savings			392,059				374,871				341,256				322,973				310,667
	Time			261,177				261,631				281,931				276,563				274,996
	Total deposits			1,518,873				1,477,375				1,348,707				1,288,347				1,278,028
Federal Funds Purchased and securities sold under agreements to repurchase				29,859				30,949				30,585				48,073				30,056
Federal Home Loan Bank (FHLB) advances				17,724				19,087				24,788				24,806				24,669
Dividend payable				1,882				1,768				1,768				1,768				1,657
Accrued expenses and other liabilities				14,841				14,971				12,820				14,078				13,062
	Total liabilities			1,583,179				1,544,150				1,418,668				1,377,072				1,347,472
Commitments and Contingencies
Stockholders' Equity
Common stock - No par value 20,000,000 shares authorized; issued and outstanding 12,230,000 shares 9/30/20 and 12/31/19				81,577				82,134				81,844				81,535				81,264
Treasury stock - 1,071,299 shares 9/30/20, 1,093,065 shares 12/31/19				(12,397	)			(12,668	)			(12,636	)			(12,456	)			(12,453	)
Retained earnings				168,381				165,476				162,416				160,081				157,126
Accumulated other comprehensive income				5,860				5,355				4,833				1,098				1,471
	Total stockholders' equity			243,421				240,297				236,457				230,258				227,408
Total Liabilities and Stockholders' Equity			$	1,826,600			$	1,784,447			$	1,655,125			$	1,607,330			$	1,574,880

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
SELECT FINANCIAL DATA
						For the Three Months Ended																	For the Nine Months Ended
Selected financial data		September 30, 2020				June 30, 2020				March 31, 2020				December 31, 2019				September 30, 2019					September 30, 2020				September 30, 2019
Return on average assets			0.98	%			1.10	%			1.02	%			1.18	%			1.10	%			1.03	%			1.24	%
Return on average equity			7.28	%			8.07	%			7.06	%			8.26	%			7.40	%			7.45	%			8.26	%
Yield on earning assets			4.04	%			4.25	%			4.66	%			4.63	%			4.74	%			4.30	%			4.93	%
Cost of interest bearing liabilities			0.74	%			0.91	%			1.22	%			1.40	%			1.55	%			0.95	%			1.42	%
Net interest spread			3.30	%			3.34	%			3.44	%			3.23	%			3.19	%			3.35	%			3.51	%
Net interest margin			3.51	%			3.59	%			3.75	%			3.60	%			3.60	%			3.61	%			3.88	%
Efficiency			62.11	%			57.91	%			63.09	%			63.67	%			65.86	%			61.05	%			64.67	%
Dividend payout ratio			42.66	%			36.80	%			43.07	%			43.34	%			38.67	%			40.68	%			34.26	%
Tangible book value per share (1)		$	16.78			$	16.33			$	16.26			$	16.01			$	15.68
Tier 1 capital to average assets			10.65	%			10.70	%			11.56	%			11.52	%			11.60	%
Average Shares Outstanding			11,142,797				11,129,341				11,134,870				11,137,004				11,121,426				11,135,695				11,105,993
Loans		September 30, 2020				June 30, 2020				March 31, 2020				December 31, 2019				September 30, 2019
(Dollar amounts in thousands)
Commercial real estate		$	595,146			$	589,382			$	570,217			$	551,309			$	502,137
Agricultural real estate			192,883				194,606				194,383				199,105				200,791
Consumer real estate			175,963				174,069				174,731				165,349				159,074
Commercial and industrial			238,175				223,842				143,261				135,631				130,150
Agricultural			103,330				107,458				109,584				111,820				110,270
Consumer			53,320				50,108				49,022				49,237				49,552
Other			9,030				9,714				8,336				8,314				8,167
Less: Net deferred loan fees and costs			(3,985	)			(4,456	)			(1,893	)			(1,766	)			(1,445	)
Total loans,net		$	1,363,862			$	1,344,723			$	1,247,641			$	1,218,999			$	1,158,696
Asset quality data		September 30, 2020				June 30, 2020				March 31, 2020				December 31, 2019				September 30, 2019
(Dollar amounts in thousands)
Nonaccrual loans		$	7,870			$	8,473			$	3,344			$	3,400			$	3,275
Troubled debt restructuring		$	7,028			$	7,034			$	1,934			$	956			$	1,051
90 day past due and accruing		$	-			$	-			$	-			$	-			$	-
Nonperforming loans		$	7,870			$	8,473			$	3,344			$	3,400			$	3,275
Other real estate owned		$	206			$	135			$	185			$	214			$	351
Nonperforming assets		$	8,076			$	8,608			$	3,529			$	3,614			$	3,626
(Dollar amounts in thousands)
Allowance for loan and lease losses		$	11,883			$	10,538			$	8,533			$	7,228			$	6,759
Allowance for loan and lease losses/total loans			0.87	%			0.78	%			0.68	%			0.59	%			0.58	%
Net charge-offs:
Quarter-to-date		$	37			$	169			$	125			$	295			$	171
Year-to-date		$	331			$	294			$	125			$	685			$	426
Net charge-offs to average loans
Quarter-to-date			0.00	%			0.01	%			0.01	%			0.03	%			0.02	%
Year-to-date			0.03	%			0.02	%			0.01	%			0.06	%			0.04	%
Nonperforming loans/total loans			0.58	%			0.63	%			0.27	%			0.28	%			0.28	%
Allowance for loan and lease losses/nonperforming loans			151.01	%			117.24	%			256.66	%			187.17	%			173.25	%
(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, 2020									September 30, 2019
Interest Earning Assets:		Average Balance			Interest/Dividends			Annualized Yield/Rate			Average Balance			Interest/Dividends			Annualized Yield/Rate
Loans		$	1,359,156		$	16,181		4.76	%		$	1,126,173		$	15,202		5.40	%
Taxable Investment Securities			245,274			968		1.58	%			167,654			1,082		2.58	%
Tax-exempt Investment Securities			26,032			108		2.10	%			32,530			149		2.32	%
Fed Funds Sold & Other			83,760			36		0.17	%			112,961			579		2.05	%
Total Interest Earning Assets			1,714,222		$	17,293		4.04	%			1,439,318		$	17,012		4.74	%
Nonearning Assets			93,778									116,191
Total Assets		$	1,808,000								$	1,555,509
Interest Bearing Liabilities:
Savings Deposits		$	915,367		$	798		0.35	%			734,075			2,044		1.11	%
Other Time Deposits			258,809			1,066		1.65	%			276,793			1,610		2.33	%
Other Borrowed Money			18,920			231		4.88	%			24,582			257		4.18	%
Fed Funds Purchased & Securities
Sold under Agreement to Repurch.			30,100			174		2.31	%			28,947			201		2.78	%
Total Interest Bearing Liabilities		$	1,223,196		$	2,269		0.74	%		$	1,064,397		$	4,112		1.55	%
Noninterest bearing Liabilities			342,388									264,183
Stockholders Equity		$	242,416								$	226,929
Net Interest Income and interest rate spread					$	15,024		3.30	%					$	12,900		3.19	%
Net Interest Margin								3.51	%								3.60	%
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, 2020									September 30, 2019
Interest Earning Assets:		Average Balance			Interest/Dividends			Annualized Yield/Rate			Average Balance			Interest/Dividends			Annualized Yield/Rate
Loans		$	1,305,998		$	48,256		4.93	%		$	1,113,892		$	46,605		5.58	%
Taxable Investment Securities			208,499			3,220		2.06	%			163,106			2,857		2.34	%
Tax-exempt Investment Securities			25,564			345		2.28	%			33,554			489		2.46	%
Fed Funds Sold & Other			75,917			209		0.37	%			77,296			1,206		2.08	%
Total Interest Earning Assets			1,615,978		$	52,030		4.30	%			1,387,848		$	51,157		4.93	%
Nonearning Assets			109,564									78,442
Total Assets		$	1,725,542								$	1,466,290
Interest Bearing Liabilities:
Savings Deposits		$	849,748		$	3,237		0.51	%			708,280			5,577		1.05	%
Other Time Deposits			268,762			3,782		1.88	%			261,592			4,029		2.05	%
Other Borrowed Money			22,401			754		4.49	%			25,811			813		4.20	%
Fed Funds Purchased & Securities
Sold under Agreement to Repurch.			33,118			605		2.44	%			29,657			527		2.37	%
Total Interest Bearing Liabilities		$	1,174,029		$	8,378		0.95	%		$	1,025,340			10,946		1.42	%
Noninterest bearing Liabilities			313,224									220,034
Stockholders Equity		$	238,289								$	220,916
Net Interest Income and interest rate spread					$	43,652		3.35	%					$	40,211		3.51	%
Net Interest Margin								3.61	%								3.88	%
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

 

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 were Farmers & Merchants Bancorp's earnings per share for Q3 2020?

Earnings per diluted share for Q3 2020 were $0.40, marking a 5.3% increase from the previous year.

How much did noninterest income increase in Q3 2020 for FMAO?

Noninterest income increased by 49.2% to $4.7 million in Q3 2020.

What is the total deposits amount for Farmers & Merchants Bancorp as of September 30, 2020?

Total deposits reached $1.519 billion, reflecting an 18.8% year-over-year increase.

How did the provision for loan losses change for FMAO in 2020?

The provision for loan losses increased to $5.0 million for the first nine months of 2020, compared to $410,000 for the same period in 2019.

What is FMAO's Tier 1 capital ratio as of September 30, 2020?

FMAO's Tier 1 capital ratio is 10.65% as of September 30, 2020.