Farmers & Merchants Bancorp, Inc. Reports 2024 First-Quarter Financial Results

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Farmers & Merchants Bancorp's reported quarterly financials indicate a mixed bag, with a solid 84 consecutive quarters of profitability but a decline in net income year-over-year from $6.5 million to $5.4 million, which is something that could concern investors focused on growth. The reported 6.2% increase in net interest income showcases the company's ability to manage its interest margins in a challenging rate environment. Considering the banking sector's current context of fluctuating interest rates, this increase in interest income is indicative of a well-managed asset and liability structure. The 3.9% growth in total loans and 4.3% increase in deposits suggest modest organic growth, albeit slower than some investors might desire. The strategic expansion through new offices contributing $78.6 million to total deposits reflects positively on local market penetration efforts. A critical figure for investors is the dividend payout ratio, which has increased to 55.52% from 43.79% last year. An increasing ratio can signal confidence in the company's earnings stability, but also raises questions about long-term reinvestment prospects for further growth. The commitment to 29 consecutive years of dividend increases demonstrates a shareholder-friendly policy. From a risk standpoint, the allowance for credit losses at 127.28% of nonperforming loans has decreased compared to last year's 319.38%, which may suggest a closer alignment with industry norms or a change in risk assessment.

Farmers & Merchants Bancorp's asset quality remains a focal point, with net charge-offs to average loans at 0.00% and a stable allowance for credit losses. Their cautious approach to managing their loan portfolio, especially given the increase in nonperforming loans primarily attributed to one agricultural relationship, indicates a diligent credit risk protocol. The diversified and apparently high-performing CRE portfolio makes up 51.3% of the total loan portfolio, which could be viewed as a strength provided the real estate market remains robust, or a potential concentration risk if the sector faces headwinds. Investors will appreciate the detail provided on the CRE composition; however, the emphasis on higher risk sectors deserves close monitoring given the shifts in the economic landscape. Steady loan growth coupled with the expansion of local market presence could be seen as laying the groundwork for future revenue streams. However, the increase in nonperforming loans year-over-year from 0.32% to 0.76% warrants attention, as it may indicate possible emerging credit issues within their portfolio.

05/01/2024 - 04:30 PM

ARCHBOLD, Ohio, May 01, 2024 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2024 first quarter ended March 31, 2024.

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

84 consecutive quarters of profitability
Net income was $5.4 million, or $0.39 per basic and diluted share
Net interest income after provision for credit losses increased 6.2% from December 31, 2023, primarily due to a stabilizing net interest margin and solid asset quality
Total loans increased 3.9% to $2.54 billion at March 31, 2024
Total cash and cash equivalents increased by $123.5 million, or 191.9% to $187.8 million
Total assets increased 7.1% to a record $3.29 billion
Deposits increased to 4.3% to a record $2.62 billion
Stockholders’ equity increased 3.9% to a record $317.7 million
Asset quality remains solid as net charge-offs to average loans were 0.00%
Allowance for credit losses was 127.28% of nonperforming loans

Lars B. Eller, President and Chief Executive Officer, stated, “Our first quarter financial results demonstrate the strategies we are pursuing to enhance profitability, leverage the operating investments we made last year, and further strengthen our balance sheet. The progress we made, especially from the 2023 fourth quarter is encouraging and is a testament to the hard work of our team members, as well as the local value we provide our Ohio, Indiana and Michigan communities.”

Mr. Eller continued, “We are cautiously optimistic that our net interest margin has stabilized, even as we continue to navigate high levels of deposit competition and overall interest rate uncertainty. Over the past three months, F&M experienced a slight increase in its net interest margin, which combined with stable asset quality, drove a 6.2% increase in net interest income during this period. We expect to benefit from higher productivity of the four offices we opened during 2023 as our local market presence expands. In fact, total deposits at March 31, 2024, included $78.6 million of deposits from these new offices. In addition, we expect our efficiency ratio to improve throughout 2024 as we benefit from the investments we made last year to support a bank with over $4 billion in assets.”

Income Statement
Net income for the 2024 first quarter ended March 31, 2024, was $5.4 million, compared to $6.5 million for the same period last year. Net income per basic and diluted share for the 2024 first quarter was $0.39, compared to $0.47 for the same period last year.

“Core profitability has improved from fourth quarter levels due to higher net interest and noninterest income. We continue to believe that approximately 25% of our loan portfolio will be subject to repricing in 2024, which will benefit the yield on earnings assets and profitability in the coming quarters. Loan growth on a year-over-year basis is expected to be more limited compared to prior years as we focus on the spread between loans and deposits, pursue opportunities to pay down higher cost of funds, and increase our cash position. The progress we are making is encouraging and since the 2023 fourth quarter our cash position has increased by 32.1%, while our Federal Home Loan Bank advances has decreased by 3.4%. We also continue to make progress growing deposits with a prudent focus on managing the interest rates on deposit accounts. On a year-over-year basis, total deposits increased 4.3% and we continue to experience net, new demand deposit account (DDA) growth, which increased 1.4% over the past 12 months,” continued Mr. Eller.

Deposits
At March 31, 2024, total deposits were $2.62 billion, an increase of 4.3% from March 31, 2023. The Company’s cost of interest-bearing liabilities was 3.06% for the quarter ended March 31, 2024, compared to 1.85% for the quarter ended March 31, 2023, and 3.02% for the 2023 fourth quarter ended December 31, 2023.

Loan Portfolio and Asset Quality
Total loans, net at March 31, 2024, increased 3.9%, or by $94.7 million to $2.52 billion, compared to $2.42 billion at March 31, 2023. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth.

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $19.4 million, or 0.76% of total loans at March 31, 2024, compared to $7.7 million, or 0.32% at March 31, 2023, and $22.4 million, or 0.87% at December 31, 2023. The year-over-year increase in nonperforming loans was primarily due to one agricultural relationship, representing a balance of $16.5 million. F&M expects to receive a paydown on this lending relationship in the second quarter this year.

F&M maintains a well-balanced, diverse and high performing CRE portfolio. CRE loans represented 51.3% of the Company’s total loan portfolio at March 31, 2024. In addition, F&M’s commercial real estate office credit exposure represented 5.5% of the Company's total loan portfolio at March 31, 2024, with a weighted average loan-to-value of approximately 63% and an average loan of approximately $921,000.

F&M’s CRE portfolio included the following categories at March 31, 2024:

CRE Category	Dollar Balance		Percent of CRE Portfolio^(*)			Percent of Total Loan Portfolio^(*)

Industrial	$	259,191		19.9	%		10.2	%
Multi-family	$	221,884		17.0	%		8.7	%
Retail	$	220,755		16.9	%		8.7	%
Office	$	139,021		10.7	%		5.5	%
Hotels	$	128,313		9.8	%		5.0	%
Gas Stations	$	63,202		4.9	%		2.5	%
Food Service	$	47,304		3.6	%		1.9	%
Senior Living	$	34,534		2.7	%		1.4	%
Development	$	33,961		2.6	%		1.3	%
Auto Dealers	$	31,856		2.4	%		1.2	%
Other	$	124,379		9.5	%		4.9	%
Total CRE	$	1,304,400		100.0	%		51.3	%
* Numbers have been rounded

At March 31, 2024, the Company’s allowance for credit losses to nonperforming loans was 127.28%, compared to 319.38% at March 31, 2023, and 111.95% at December 31, 2023. The allowance to total loans was 0.97% at March 31, 2024, compared to 1.01% at March 31, 2023. Including accretable yield adjustments, associated with the Company’s recent acquisitions, F&M’s allowance for credit losses to total loans was 1.11% at March 31, 2024, compared to 1.24% at March 31, 2023.

Mr. Eller concluded, “Our asset quality remains strong, and I am pleased to report that during the first quarter one of two larger nonperforming credits paid off in full. In addition, net charge-offs to average outstanding loans remains at historically low levels, we remain well reserved, and we continue to proactively monitor our loan portfolio for any signs of stress. While the macro-economic environment is expected to remain fluid, we believe we are well positioned to navigate this period by maintaining solid asset quality, optimizing our balance sheet, and improving earnings.”

Stockholders’ Equity and Dividends
Total stockholders’ equity increased 3.9% to $317.7 million at March 31, 2024, from $305.8 million at March 31, 2023. At March 31, 2024, the Company had a Tier 1 leverage ratio of 8.40%, compared to 8.36% at March 31, 2023.

Based on a regulatory basis, tangible stockholders’ equity increased to $256.5 million at March 31, 2024, compared to $244.2 million at March 31, 2023. On a per share basis, tangible stockholders’ equity at March 31, 2024, was $18.75 per share, compared to $17.92 per share at March 31, 2023.

For the three months ended March 31, 2024, the Company has declared cash dividends of $0.22 per share, which is a 4.8% increase over the same period last year. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 29 consecutive years. For the three months ended March 31, 2024, the dividend payout ratio was 55.52% compared to 43.79% for the same period last year.

About Farmers & Merchants State Bank:
Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) is the holding company of F&M Bank, a local independent community bank that has been serving its communities since 1897. F&M Bank provides commercial banking, retail banking and other financial services. Our locations are in Butler, Champaign, Fulton, Defiance, Hancock, Henry, Lucas, Shelby, Williams, and Wood counties in Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, Steuben and Wells counties. The Michigan footprint includes Oakland County, and 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.

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
	March 31, 2024			December 31, 2023		September 30, 2023			June 30, 2023			March 31, 2023
Interest Income
Loans, including fees	$	35,200		$	34,493	$	33,783		$	31,365		$	29,703
Debt securities:
U.S. Treasury and government agencies		1,045			987		1,005			1,030			1,068
Municipalities		394			397		392			401			408
Dividends		333			365		246			148			123
Federal funds sold		7			8		6			9			21
Other		1,675			2,020		927			424			479
Total interest income		38,654			38,270		36,359			33,377			31,802
Interest Expense
Deposits		15,279			15,015		13,323			10,434			8,151
Federal funds purchased and securities sold under agreements to repurchase		284			293		349			427			405
Borrowed funds		2,689			2,742		2,741			2,113			1,280
Subordinated notes		284			285		284			285			284
Total interest expense		18,536			18,335		16,697			13,259			10,120
Net Interest Income - Before Provision for Credit Losses		20,118			19,935		19,662			20,118			21,682
Provision for Credit Losses - Loans		(289	)		278		460			143			817
Provision for Credit Losses - Off Balance Sheet Credit Exposures		(266	)		189		(76	)		(129	)		62
Net Interest Income After Provision for Credit Losses		20,673			19,468		19,278			20,104			20,803
Noninterest Income
Customer service fees		2,782			2,576		2,208			2,361			2,447
Other service charges and fees		1,057			1,121		1,162			1,803			2,554
Net gain on sale of loans		107			230		294			108			67
Net loss on sale of available-for-sale securities		-			-		-			-			(891	)
Total noninterest income		3,946			3,927		3,664			4,272			4,177
Noninterest Expense
Salaries and wages		7,846			6,981		6,777			6,500			6,657
Employee benefits		2,171			1,218		2,066			2,071			2,165
Net occupancy expense		1,027			1,187		950			840			856
Furniture and equipment		1,353			1,370		1,189			1,211			1,252
Data processing		500			785		840			796			726
Franchise taxes		555			308		434			379			366
ATM expense		473			665		640			683			623
Advertising		530			397		865			830			514
Net loss on sale of other assets owned		-			86		49			-			-
FDIC assessment		580			594		586			496			306
Servicing rights amortization - net		168			182		106			164			159
Consulting fees		186			192		179			231			230
Other general and administrative		2,452			2,555		2,363			2,643			3,077
Total noninterest expense		17,841			16,520		17,044			16,844			16,931
Income Before Income Taxes		6,778			6,875		5,898			7,532			8,049
Income Taxes		1,419			1,332		1,121			1,531			1,583
Net Income		5,359			5,543		4,777			6,001			6,466
Other Comprehensive Income (Loss) (Net of Tax):
Net unrealized gain (loss) on available-for-sale securities		(1,995	)		13,261		(4,514	)		(5,996	)		8,030
Reclassification adjustment for realized loss on sale of available-for-sale securities		-			-		-			-			891
Net unrealized gain (loss) on available-for-sale securities		(1,995	)		13,261		(4,514	)		(5,996	)		8,921
Tax expense (benefit)		(418	)		2,784		(947	)		(1,260	)		1,874
Other comprehensive income (loss)		(1,577	)		10,477		(3,567	)		(4,736	)		7,047
Comprehensive Income	$	3,782		$	16,020	$	1,210		$	1,265		$	13,513
Basic Earnings Per Share	$	0.39		$	0.41	$	0.35		$	0.44		$	0.47
Diluted Earnings Per Share	$	0.39		$	0.41	$	0.35		$	0.44		$	0.47
Dividends Declared	$	0.22		$	0.22	$	0.21		$	0.21		$	0.21

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (in thousands of dollars, except per share data)

	March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023
	(Unaudited)						(Unaudited)			(Unaudited)			(Unaudited)
Assets
Cash and due from banks	$	186,541		$	140,917		$	151,711		$	69,760		$	62,780
Federal funds sold		1,241			1,284			1,471			1,433			1,545
Total cash and cash equivalents		187,782			142,201			153,182			71,193			64,325

Interest-bearing time deposits		2,735			2,740			2,989			3,485			4,435
Securities - available-for-sale		347,516			358,478			348,255			363,225			372,975
Other securities, at cost		14,744			17,138			16,995			17,535			11,543
Loans held for sale		2,410			1,576			1,039			1,459			951
Loans, net of allowance for credit losses of $24,680 3/31/24 and $25,024 12/31/23		2,516,687			2,556,167			2,504,329			2,490,883			2,422,018
Premises and equipment		35,007			35,790			31,723			30,398			28,679
Construction in progress		9			8			3,044			2,290			1,565
Goodwill		86,358			86,358			86,358			86,358			86,358
Loan servicing rights		5,555			5,648			5,687			5,635			4,985
Bank owned life insurance		34,123			33,907			33,691			33,470			33,269
Other assets		54,628			43,218			47,388			41,512			38,972

Total Assets	$	3,287,554		$	3,283,229		$	3,234,680		$	3,147,443		$	3,070,075

Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing	$	510,731		$	528,465		$	505,358		$	488,678		$	520,145
Interest-bearing
NOW accounts		829,236			816,790			778,133			770,113			800,230
Savings		635,430			599,191			591,344			581,192			590,854
Time		645,985			663,017			700,445			628,757			601,939
Total deposits		2,621,382			2,607,463			2,575,280			2,468,740			2,513,168

Federal funds purchased and securities sold under agreements to repurchase		28,218			28,218			30,527			51,567			30,496
Federal Home Loan Bank (FHLB) advances		256,628			265,750			266,286			266,818			164,327
Subordinated notes, net of unamortized issuance costs		34,731			34,702			34,673			34,644			34,615
Dividend payable		2,975			2,974			2,838			2,834			2,831
Accrued expenses and other liabilities		25,930			27,579			21,892			18,177			18,881
Total liabilities		2,969,864			2,966,686			2,931,496			2,842,780			2,764,318

Commitments and Contingencies

Stockholders' Equity
Common stock - No par value 20,000,000 shares authorized; issued and outstanding 14,564,425 shares 3/31/24 and 12/31/23		135,482			135,515			135,171			135,647			135,241
Treasury stock - 881,155 shares 3/31/24 and 899,784 shares 12/31/23		(10,851	)		(11,040	)		(11,008	)		(11,298	)		(11,310	)
Retained earnings		223,648			221,080			218,510			216,236			213,012
Accumulated other comprehensive loss		(30,589	)		(29,012	)		(39,489	)		(35,922	)		(31,186	)
Total stockholders' equity		317,690			316,543			303,184			304,663			305,757

Total Liabilities and Stockholders' Equity	$	3,287,554		$	3,283,229		$	3,234,680		$	3,147,443		$	3,070,075

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
SELECT FINANCIAL DATA

		For the Three Months Ended
Selected financial data	March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023
Return on average assets		0.66	%		0.67	%		0.59	%		0.77	%		0.84	%
Return on average equity		6.76	%		7.27	%		6.26	%		7.84	%		8.59	%
Yield on earning assets		5.00	%		4.93	%		4.79	%		4.53	%		4.41	%
Cost of interest bearing liabilities		3.06	%		3.02	%		2.82	%		2.35	%		1.85	%
Net interest spread		1.94	%		1.91	%		1.97	%		2.18	%		2.56	%
Net interest margin		2.60	%		2.57	%		2.59	%		2.73	%		3.01	%
Efficiency		74.08	%		69.23	%		73.07	%		69.06	%		63.53	%
Dividend payout ratio		55.52	%		54.23	%		60.07	%		47.22	%		43.79	%
Tangible book value per share ⁽¹⁾	$	18.75		$	18.60		$	18.36		$	18.21		$	17.92
Tier 1 leverage ratio		8.40	%		8.20	%		8.02	%		9.85	%		8.36	%
Average shares outstanding		13,671,166			13,665,773			13,650,823			13,632,440			13,615,655

Loans	March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023
(Dollar amounts in thousands)
Commercial real estate	$	1,304,400		$	1,337,766		$	1,304,118		$	1,280,902		$	1,225,315
Agricultural real estate		227,455			223,791			225,672			230,837			227,897
Consumer real estate		525,178			521,895			512,973			506,866			502,974
Commercial and industrial		256,051			254,935			250,891			253,444			241,598
Agricultural		127,670			132,560			123,735			128,344			131,467
Consumer		74,819			79,591			83,024			88,312			89,588
Other		26,776			30,136			31,083			28,996			29,316
Less: Net deferred loan fees, costs and other ⁽²⁾		(982	)		517			(1,890	)		(1,908	)		(1,503	)
Total loans,net	$	2,541,367		$	2,581,191		$	2,529,606		$	2,515,793		$	2,446,652


Asset quality data	March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023
(Dollar amounts in thousands)
Nonaccrual loans	$	19,391		$	22,353		$	22,447		$	6,295		$	7,717
90 day past due and accruing	$	-		$	-		$	-		$	-		$	-
Nonperforming loans	$	19,391		$	22,353		$	22,447		$	6,295		$	7,717
Other real estate owned	$	-		$	-		$	-		$	-		$	-
Nonperforming assets	$	19,391		$	22,353		$	22,447		$	6,295		$	7,717


Allowance for credit losses	$	24,680		$	25,024		$	25,277		$	24,910		$	24,634
Allowance for unfunded		1,946			2,212			2,023			2,099			2,228
Total Allowance for Credit Losses	$	26,626		$	27,236		$	27,300		$	27,009		$	26,862
Allowance for credit losses/total loans		0.97	%		0.97	%		1.00	%		0.99	%		1.01	%
Adjusted credit losses with accretable yield/total loans		1.11	%		1.13	%		1.18	%		1.20	%		1.24	%
Net charge-offs:
Quarter-to-date	$	55		$	454		$	93		$	(133	)	$	60
Year-to-date	$	55		$	551		$	97		$	(73	)	$	60
Net charge-offs to average loans
Quarter-to-date		0.00	%		0.02	%		0.00	%		-0.01	%		0.00	%
Year-to-date		0.00	%		0.02	%		0.00	%		0.00	%		0.00	%
Nonperforming loans/total loans		0.76	%		0.87	%		0.89	%		0.25	%		0.32	%
Allowance for credit losses/nonperforming loans		127.28	%		111.95	%		112.61	%		395.71	%		319.38	%
NPA coverage ratio		127.28	%		111.95	%		112.61	%		395.71	%		319.38	%

⁽¹⁾ Tangible Equity = Stockholder Equity less goodwill, other intangibles (core deposit intangible, mortgage servicing rights and unrealized gain/loss on securities) plus CECL adjustment
⁽²⁾ Includes carrying value adjustments of $969 thousand as of March 31, 2024 and $2.7 million as of December 31, 2023 related to interest rate swaps associated with fixed rate loans

FARMERS & MERCHANTS BANCORP, INC. AND 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
	March 31, 2024							March 31, 2023
Interest Earning Assets:	Average Balance		Interest/ Dividends		Annualized Yield/Rate			Average Balance		Interest/ Dividends		Annualized Yield/Rate
Loans	$	2,577,114	$	35,200		5.46	%	$	2,397,061	$	29,703		4.96	%
Taxable investment securities		384,928		1,686		1.75	%		397,480		1,499		1.51	%
Tax-exempt investment securities		21,109		86		2.06	%		26,352		100		1.92	%
Fed funds sold & other		110,388		1,682		6.09	%		68,557		500		2.92	%
Total Interest Earning Assets		3,093,539	$	38,654		5.00	%		2,889,450	$	31,802		4.41	%

Nonearning Assets		159,240							180,259

Total Assets	$	3,252,779						$	3,069,709

Interest Bearing Liabilities:
Savings deposits	$	1,443,530	$	9,407		2.61	%	$	1,400,769	$	4,943		1.41	%
Other time deposits		650,580		5,872		3.61	%		579,409		3,208		2.21	%
Other borrowed money		263,280		2,689		4.09	%		132,494		1,280		3.86	%
Fed funds purchased & securities sold under agreement to repurch.		28,458		284		3.99	%		38,853		405		4.17	%
Subordinated notes		34,712		284		3.27	%		34,596		284		3.28	%
Total Interest Bearing Liabilities	$	2,420,560	$	18,536		3.06	%	$	2,186,121	$	10,120		1.85	%

Noninterest Bearing Liabilities		514,986							582,345

Stockholders' Equity	$	317,233						$	301,243

Net Interest Income and Interest Rate Spread			$	20,118		1.94	%			$	21,682		2.56	%

Net Interest Margin						2.60	%						3.01	%

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
AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES
(in thousands of dollars, except percentages)

	For the Three Months Ended March 31, 2024													For the Three Months Ended March 31, 2023
	As Reported				Excluding Acc/Amort				Difference					As Reported				Excluding Acc/Amort				Difference
	$		Yield		$		Yield		$			Yield		$		Yield		$		Yield		$			Yield
Interest Earning Assets:
Loans	$	35,200	5.46	%	$	34,525	5.36	%	$	675		0.10	%	$	29,703	4.96	%	$	29,036	4.85	%	$	667		0.11	%
Taxable investment securities		1,686	1.75	%		1,686	1.75	%		-		0.00	%		1,499	1.51	%		1,499	1.51	%		-		0.00	%
Tax-exempt investment securities		86	2.06	%		86	2.06	%		-		0.00	%		100	1.92	%		100	1.92	%		-		0.00	%
Fed funds sold & other		1,682	6.09	%		1,682	6.09	%		-		0.00	%		500	2.92	%		500	2.92	%		-		0.00	%
Total Interest Earning Assets		38,654	5.00	%		37,979	4.92	%		675		0.08	%		31,802	4.41	%		31,135	4.31	%		667		0.10	%

Interest Bearing Liabilities:
Savings deposits	$	9,407	2.61	%	$	9,407	2.61	%	$	-		0.00	%	$	4,943	1.41	%	$	4,943	1.41	%	$	-		0.00	%
Other time deposits		5,872	3.61	%		5,872	3.61	%		-		0.00	%		3,208	2.21	%		3,667	2.53	%		(459	)	-0.32	%
Other borrowed money		2,689	4.09	%		2,707	4.11	%		(18	)	-0.02	%		1,280	3.86	%		1,298	3.92	%		(18	)	-0.06	%
Federal funds purchased and securities sold under agreement to repurchase		284	3.99	%		284	3.99	%		-		0.00	%		405	4.17	%		405	4.17	%		-		0.00	%
Subordinated notes		284	3.27	%		284	3.27	%		-		0.00	%		284	3.28	%		284	3.28	%		-		0.00	%
Total Interest Bearing Liabilities		18,536	3.06	%		18,554	3.07	%		(18	)	-0.01	%		10,120	1.85	%		10,597	1.94	%		(477	)	-0.09	%

Interest/Dividend income/yield		38,654	5.00	%		37,979	4.92	%		675		0.08	%		31,802	4.41	%		31,135	4.31	%		667		0.10	%
Interest Expense / yield		18,536	3.06	%		18,554	3.07	%		(18	)	-0.01	%		10,120	1.85	%		10,597	1.94	%		(477	)	-0.09	%
Net Interest Spread		20,118	1.94	%		19,425	1.85	%		693		0.09	%		21,682	2.56	%		20,538	2.37	%		1,144		0.19	%
Net Interest Margin			2.60	%			2.52	%				0.08	%			3.01	%			2.85	%				0.16	%

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
	March 31, 2024			March 31, 2023			March 31, 2024			March 31, 2023

Shares Outstanding		13,683,270			13,630,122			13,683,270			13,630,122

Tangible Equity
Equity	$	317,690		$	305,757		$	317,690		$	305,757
Goodwill		86,358			86,358			86,358			86,358
Other Intangible		7,103			8,882			7,103			8,882
Comprehensive Loss Adjustment*		-			-			30,589			31,186
CECL Adjustment**		-			-			1,685			2,528
Tangible Equity	$	224,229		$	210,517		$	256,503		$	244,231
Shares Outstanding		13,683			13,630			13,683			13,630
Tangible Book Equity per Share	$	16.39		$	15.44		$	18.75		$	17.92


	Actual Average						Regulatory Average
	Year to Date						Year to Date
	March 31, 2024			March 31, 2023			March 31, 2024			March 31, 2023

Net Income	$	5,359		$	6,466		$	5,359		$	6,466
Acquisition Costs - Tax Adjusted		-			77			-			77

Average Shares Outstanding		13,671,166			13,615,655			13,671,166			13,615,655

Average Tangible Equity
Average Equity	$	317,233		$	301,243		$	317,233		$	301,243
Average Goodwill		86,358			86,358			86,358			86,358
Average Other Intangible	$	7,388			9,167		$	7,388			9,167
Average Comprehensive Loss Adjustment*		-			-			30,700			36,764
Average CECL Adjustment**		-			-			1,685			2,528
Average Tangible Equity	$	223,487		$	205,718		$	255,872		$	245,010
Average Shares Outstanding		13,671			13,616			13,671			13,616
Average Tangible Book Equity per Share	$	16.35		$	15.11		$	18.72		$	17.99

Return on Average Tangible Equity		9.59	%		12.57	%		8.38	%		10.56	%
Return on Average Tangible Equity w/o Acquisition		9.59	%		12.72	%		8.38	%		10.68	%

*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.
**ASU 2016-13 adopted during the first quarter of 2023. The Bank has elected to spread the capital adjustment over three years. The first year permits 75% of the capital adjustment and the second year permits 50% of the capital adjustment to be removed from the calculation of tangible equity for regulatory purposes.

Company Contact: Lars B. Eller President and Chief Executive Officer Farmers & Merchants Bancorp, Inc. (419) 446-2501 leller@fm.bank		Investor and Media Contact: Andrew M. Berger Managing Director SM Berger & Company, Inc. (216) 464-6400 andrew@smberger.com

FAQ

What was Farmers & Merchants Bancorp, Inc.'s net income for the 2024 first quarter?

Farmers & Merchants Bancorp, Inc. reported a net income of $5.4 million for the 2024 first quarter.

How much did total loans increase by at the end of March 31, 2024?

Total loans increased by 3.9% to $2.54 billion at the end of March 31, 2024.

What was the percentage increase in stockholders' equity at the end of March 31, 2024?

Stockholders' equity increased by 3.9% to $317.7 million at the end of March 31, 2024.

What was the dividend payout ratio for the three months ended March 31, 2024?

The dividend payout ratio for the three months ended March 31, 2024, was 55.52%.

Farmers & Merchants Bancorp, Inc. Reports 2024 First-Quarter Financial Results

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Farmers & Merchants Bancorp, Inc. Reports 2024 First-Quarter Financial Results

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What was Farmers & Merchants Bancorp, Inc.'s net income for the 2024 first quarter?

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