Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported
financial results for the 2023 fourth quarter and twelve months
ended December 31, 2023.
2023 Fourth Quarter Financial and
Operating Highlights (on a year-over-year basis unless
noted):
- 83 consecutive quarters of
profitability
- Net income was $5.5 million, or
$0.41 per basic and diluted share
- Asset quality remains strong as
nonperforming loans were 0.87% of total loans
- Net charge-offs to average loans
were 0.03%
- Allowance for credit losses was
111.95% of nonperforming loans
- Tier 1 leverage ratio was
8.20%
- Opened first bank office in
Michigan and new regional headquarters in Fort Wayne, Indiana
- Added Ian D. Boyce to the Board of
Directors of both the Company and the Bank
- Realigned organizational structure
to support future growth and drive profitability
- Dividend raised 4.8%
year-over-year, representing the 29th consecutive annual increase
in the Company’s regular dividend payment since 1994
2023 Full-Year Financial Highlights
Include (on a year-over-year basis unless noted):
- Total loans were a record of $2.58
billion and increased 9.5% from $2.36 billion at December 31,
2022
- Total assets increased 8.9% to a
record $3.28 billion
- Deposits increased to 5.6% to a
record $2.61 billion
- Stockholders’ equity increased 6.2%
to a record $316.5 million
- Net interest income after provision
for credit losses decreased 3.1% to $79.7 million
- Net income was $22.8 million, or
$1.67 per basic and diluted share
- Return on average tangible equity was 12.17%
- Opened a total of four new bank
offices including new offices in Ohio, Indiana and Michigan
- Successfully launched new
forward-looking logo and brand-name
- Provided a record $802,000 of
charitable donations to support organizations throughout Ohio and
Indiana
Lars B. Eller, President and Chief Executive
Officer, stated, “I am extremely proud of how F&M’s team
responded to the challenging operating environment in 2023 as
unprecedented rate increases caused significant competition for
deposits and elevated our costs of funds. While these trends
impacted earnings growth in 2023, we ended the year with record
total assets, loans, net, and total deposits, as well as
stockholders’ equity. Our ability to grow our balance sheet
throughout the year is a testament to the value we provide to our
Ohio, Indiana and Michigan communities and the successful execution
of our growth-oriented strategic plan.”
Mr. Eller continued, “As we successfully
navigated the challenging macro-landscape in 2023, we
simultaneously invested in our business to make sure we had the
right platform in place to support F&M’s current and future
needs. As a result, throughout 2023 we made calculated investments
to expand our office network, enhance our products, add new IT
capabilities, refine our corporate organization, and redesign our
brand strategy. Highlights include adding offices in new markets
including Oxford, OH and Birmingham MI, as well as expanding our
local presence by adding a new office in Fort Wayne and a new
regional office in downtown Toledo. In addition, our brand refresh
to F&M has helped differentiate the Bank in our non-legacy
markets, while doubling down on the strength of the F&M brand
in our existing markets. During 2023, we also made several
organizational changes to our leadership structure and added new
back-office capabilities that we believe can support a bank with $4
billion in assets.”
Income StatementNet income for
the 2023 fourth quarter ended December 31, 2023, was $5.5 million,
compared to $7.2 million for the same period last year. Net income
per basic and diluted share for the 2023 fourth quarter was $0.41,
compared to $0.53 for the same period last year. Net income for the
2023 twelve months ended December 31, 2023, was $22.8 million,
compared to $32.5 million for the same period last year. Net income
per basic and diluted share for the 2023 twelve months was $1.67,
compared to $2.46 for the same period last year.
“Throughout 2023, the rapid rise in the Federal
Funds Rate impacted our cost of funds and increased the competition
for deposits. As a result, our cost of interest-bearing liabilities
increased to 2.53% for the year ended December 31, 2023, from 0.74%
last year. Our loan portfolio has also lagged in capturing
sufficient yield to match the higher cost of funds mainly due to
the timing to reprice our commercial real estate adjustable-rate
mortgages. Approximately 25% of our loan portfolio will be subject
to repricing in 2024. A challenging rate environment impacted
overall profitability, as net interest income declined
year-over-year by 10.7% for the fourth quarter, and by 3.1% for the
full year. We are optimistic that the Federal Funds Rate has peaked
and with a more stable rate environment expected in 2024, we
believe we are well positioned for improved profitability this
year,” continued Mr. Eller.
DepositsAt December 31, 2023,
total deposits were $2.61 billion, an increase of 5.6% from
December 31, 2022. The Company’s cost of interest-bearing
liabilities was 3.02% for the quarter ended December 31, 2023,
compared to 1.32% for the quarter ended December 31, 2022 and for
the 2023 twelve months ended December 31, 2023 was 2.53% compared
to 0.74% in the prior year.
Loan Portfolio and Asset
QualityTotal loans, net at December 31, 2023, increased
9.5%, or by $224.8 million to $2.58 billion, compared to $2.36
billion at December 31, 2022. 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 $22.4 million, or 0.87% of total loans at
December 31, 2023, compared to $4.7 million, or 0.20% at December
31, 2022, and $22.4 million, or 0.89% at September 30, 2023. The
year-over-year increase in nonperforming loans was primarily due to
two agricultural relationships, representing a combined balance of
$19.4 million. F&M does not foresee a loss on either loan and
expects to receive settlements during the 2024 first and second
quarters.
F&M maintains a well-balanced, diverse and
high performing CRE portfolio. CRE loans represented 51.8% of the
Company’s total loan portfolio at December 31, 2023. In addition,
F&M’s commercial real estate office credit exposure represented
5.3% of the Company's total loan portfolio at December 31, 2023,
with a weighted average loan-to-value of approximately 63% and an
average loan of $888,000.
F&M’s CRE portfolio included the following
categories at December 31, 2023:
CRE Category |
|
Dollar Balance |
|
Percent of CRE Portfolio(*) |
|
Percent of Total Loan
Portfolio(*) |
|
|
|
|
|
|
|
Industrial |
|
$ |
253,683 |
|
19.0% |
|
9.8% |
Multi-family |
|
$ |
232,776 |
|
17.4% |
|
9.0% |
Retail |
|
$ |
218,580 |
|
16.3% |
|
8.5% |
Office |
|
$ |
137,573 |
|
10.3% |
|
5.3% |
Hotels |
|
$ |
127,646 |
|
9.6% |
|
4.9% |
Gas Stations |
|
$ |
63,151 |
|
4.7% |
|
2.4% |
Food Service |
|
$ |
50,990 |
|
3.8% |
|
2.0% |
Senior Living |
|
$ |
32,290 |
|
2.4% |
|
1.3% |
Auto Dealers |
|
$ |
29,714 |
|
2.2% |
|
1.2% |
Development |
|
$ |
28,045 |
|
2.1% |
|
1.1% |
Other |
|
$ |
163,318 |
|
12.2% |
|
6.3% |
Total CRE |
|
$ |
1,337,766 |
|
100.0% |
|
51.8% |
* Numbers have been rounded |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2023, the Company’s allowance
for credit losses to nonperforming loans was 111.95%, compared to
273.67% at December 31, 2022. The allowance to total loans was
0.97% at December 31, 2023, compared to 0.86% at December 31, 2022.
As a result of F&M’s recent acquisitions, the Company had an
accretable yield adjustment of $4.0 million at December 31, 2023,
which further enhances F&M’s allowance, compared to $6.4
million at December 31, 2022. Including the accretable yield
adjustment, F&M’s allowance for credit losses to total loans
was 1.13% at December 31, 2023, compared to 1.13% at December 31,
2022.
Mr. Eller concluded, “Looking to 2024 and
beyond, we believe we are well positioned to support a larger and
more profitable bank in the future as a result of the investments
we made over the past 12 months. With strong asset quality and a
more stable rate environment expected in 2024, we are focused on
supporting customers across our Ohio, Indiana and Michigan
communities and reaccelerating earnings growth.”
Stockholders’ Equity and
DividendsTotal stockholders’ equity increased 6.2% to
$316.5 million at December 31, 2023, from $298.1 million at
December 31, 2022. At December 31, 2023, the Company had a Tier 1
leverage ratio of 8.20%, compared to 8.39% at December 31,
2022.
Based on a regulatory basis, tangible
stockholders’ equity increased to $253.8 million at December 31,
2023, compared to $240.7 million at December 31, 2022. On a per
share basis, tangible stockholders’ equity at December 31, 2023,
was $18.60 per share, compared to $17.69 per share at December 31,
2022.
For the twelve months ended December 31, 2023,
the Company has declared cash dividends of $0.85 per share, which
is a 4.6% 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 twelve
months ended December 31, 2023, the dividend payout ratio was
50.65% compared to 33.06% 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 StatementFarmers
& 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.
Company Contact: |
Investor and Media Contact: |
Lars B. EllerPresident and Chief
Executive Officer Farmers & Merchants Bancorp, Inc.(419)
446-2501 leller@fm.bank |
Andrew M. BergerManaging
DirectorSM Berger & Company, Inc. (216)
464-6400andrew@smberger.com |
FARMERS &
MERCHANTS BANCORP, INC. AND SUBSIDIARIES |
CONSOLIDATED
STATEMENTS OF INCOME & COMPREHENSIVE INCOME |
(Unaudited) (in
thousands of dollars, except per share data) |
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
$ |
34,493 |
|
$ |
33,783 |
|
|
$ |
31,365 |
|
|
$ |
29,703 |
|
|
$ |
27,302 |
|
|
$ |
129,344 |
|
|
$ |
94,264 |
|
Debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury and government agencies |
|
987 |
|
|
1,005 |
|
|
|
1,030 |
|
|
|
1,068 |
|
|
|
1,118 |
|
|
|
4,090 |
|
|
|
4,225 |
|
Municipalities |
|
397 |
|
|
392 |
|
|
|
401 |
|
|
|
408 |
|
|
|
420 |
|
|
|
1,598 |
|
|
|
1,415 |
|
Dividends |
|
365 |
|
|
246 |
|
|
|
148 |
|
|
|
123 |
|
|
|
126 |
|
|
|
882 |
|
|
|
318 |
|
Federal funds sold |
|
8 |
|
|
6 |
|
|
|
9 |
|
|
|
21 |
|
|
|
2 |
|
|
|
44 |
|
|
|
21 |
|
Other |
|
2,020 |
|
|
927 |
|
|
|
424 |
|
|
|
479 |
|
|
|
524 |
|
|
|
3,850 |
|
|
|
906 |
|
Total interest income |
|
38,270 |
|
|
36,359 |
|
|
|
33,377 |
|
|
|
31,802 |
|
|
|
29,492 |
|
|
|
139,808 |
|
|
|
101,149 |
|
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
15,015 |
|
|
13,323 |
|
|
|
10,434 |
|
|
|
8,151 |
|
|
|
4,978 |
|
|
|
46,923 |
|
|
|
9,883 |
|
Federal funds purchased and securities sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
under agreements to repurchase |
|
293 |
|
|
349 |
|
|
|
427 |
|
|
|
405 |
|
|
|
463 |
|
|
|
1,474 |
|
|
|
1,197 |
|
Borrowed funds |
|
2,742 |
|
|
2,741 |
|
|
|
2,113 |
|
|
|
1,280 |
|
|
|
1,209 |
|
|
|
8,876 |
|
|
|
2,160 |
|
Subordinated notes |
|
285 |
|
|
284 |
|
|
|
285 |
|
|
|
284 |
|
|
|
285 |
|
|
|
1,138 |
|
|
|
1,122 |
|
Total interest expense |
|
18,335 |
|
|
16,697 |
|
|
|
13,259 |
|
|
|
10,120 |
|
|
|
6,935 |
|
|
|
58,411 |
|
|
|
14,362 |
|
Net
Interest Income - Before Provision for Credit Losses* |
|
19,935 |
|
|
19,662 |
|
|
|
20,118 |
|
|
|
21,682 |
|
|
|
22,557 |
|
|
|
81,397 |
|
|
|
86,787 |
|
Provision for Credit Losses - Loans* |
|
278 |
|
|
460 |
|
|
|
143 |
|
|
|
817 |
|
|
|
755 |
|
|
|
1,698 |
|
|
|
4,600 |
|
Provision for Credit Losses - Off Balance Sheet Credit
Exposures* |
|
189 |
|
|
(76 |
) |
|
|
(129 |
) |
|
|
62 |
|
|
|
- |
|
|
|
46 |
|
|
|
- |
|
Net
Interest Income After Provision for Credit Losses* |
|
19,468 |
|
|
19,278 |
|
|
|
20,104 |
|
|
|
20,803 |
|
|
|
21,802 |
|
|
|
79,653 |
|
|
|
82,187 |
|
Noninterest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer service fees |
|
2,576 |
|
|
2,208 |
|
|
|
2,361 |
|
|
|
2,447 |
|
|
|
2,862 |
|
|
|
9,592 |
|
|
|
9,958 |
|
Other service charges and fees |
|
1,121 |
|
|
1,162 |
|
|
|
1,803 |
|
|
|
2,554 |
|
|
|
1,115 |
|
|
|
6,640 |
|
|
|
4,226 |
|
Net gain on sale of loans |
|
230 |
|
|
294 |
|
|
|
108 |
|
|
|
67 |
|
|
|
165 |
|
|
|
699 |
|
|
|
1,353 |
|
Net loss on sale of available-for-sale securities |
|
- |
|
|
- |
|
|
|
- |
|
|
|
(891 |
) |
|
|
- |
|
|
|
(891 |
) |
|
|
- |
|
Total noninterest income |
|
3,927 |
|
|
3,664 |
|
|
|
4,272 |
|
|
|
4,177 |
|
|
|
4,142 |
|
|
|
16,040 |
|
|
|
15,537 |
|
Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and wages |
|
6,981 |
|
|
6,777 |
|
|
|
6,500 |
|
|
|
6,657 |
|
|
|
6,353 |
|
|
|
26,915 |
|
|
|
22,700 |
|
Employee benefits |
|
1,218 |
|
|
2,066 |
|
|
|
2,071 |
|
|
|
2,165 |
|
|
|
1,911 |
|
|
|
7,520 |
|
|
|
6,903 |
|
Net occupancy expense |
|
1,187 |
|
|
950 |
|
|
|
840 |
|
|
|
856 |
|
|
|
753 |
|
|
|
3,833 |
|
|
|
2,566 |
|
Furniture and equipment |
|
1,370 |
|
|
1,189 |
|
|
|
1,211 |
|
|
|
1,252 |
|
|
|
1,096 |
|
|
|
5,022 |
|
|
|
4,207 |
|
Data processing |
|
785 |
|
|
840 |
|
|
|
796 |
|
|
|
726 |
|
|
|
1,917 |
|
|
|
3,147 |
|
|
|
3,956 |
|
Franchise taxes |
|
308 |
|
|
434 |
|
|
|
379 |
|
|
|
366 |
|
|
|
(45 |
) |
|
|
1,487 |
|
|
|
1,384 |
|
ATM expense |
|
665 |
|
|
640 |
|
|
|
683 |
|
|
|
623 |
|
|
|
561 |
|
|
|
2,611 |
|
|
|
2,217 |
|
Advertising |
|
397 |
|
|
865 |
|
|
|
830 |
|
|
|
514 |
|
|
|
531 |
|
|
|
2,606 |
|
|
|
1,646 |
|
Net (gain) loss on sale of other assets owned |
|
86 |
|
|
49 |
|
|
|
- |
|
|
|
- |
|
|
|
12 |
|
|
|
135 |
|
|
|
(259 |
) |
FDIC assessment |
|
594 |
|
|
586 |
|
|
|
496 |
|
|
|
306 |
|
|
|
250 |
|
|
|
1,982 |
|
|
|
905 |
|
Servicing rights amortization - net |
|
182 |
|
|
106 |
|
|
|
164 |
|
|
|
159 |
|
|
|
110 |
|
|
|
611 |
|
|
|
145 |
|
Consulting fees |
|
192 |
|
|
179 |
|
|
|
231 |
|
|
|
230 |
|
|
|
637 |
|
|
|
832 |
|
|
|
1,302 |
|
Other general and administrative |
|
2,555 |
|
|
2,363 |
|
|
|
2,643 |
|
|
|
3,077 |
|
|
|
2,964 |
|
|
|
10,638 |
|
|
|
9,577 |
|
Total noninterest expense |
|
16,520 |
|
|
17,044 |
|
|
|
16,844 |
|
|
|
16,931 |
|
|
|
17,050 |
|
|
|
67,339 |
|
|
|
57,249 |
|
Income Before Income Taxes |
|
6,875 |
|
|
5,898 |
|
|
|
7,532 |
|
|
|
8,049 |
|
|
|
8,894 |
|
|
|
28,354 |
|
|
|
40,475 |
|
Income Taxes |
|
1,332 |
|
|
1,121 |
|
|
|
1,531 |
|
|
|
1,583 |
|
|
|
1,706 |
|
|
|
5,567 |
|
|
|
7,960 |
|
Net
Income |
|
5,543 |
|
|
4,777 |
|
|
|
6,001 |
|
|
|
6,466 |
|
|
|
7,188 |
|
|
|
22,787 |
|
|
|
32,515 |
|
Other Comprehensive Income (Loss) (Net of
Tax): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gain (loss) on available-for-sale securities |
|
13,261 |
|
|
(4,514 |
) |
|
|
(5,996 |
) |
|
|
8,030 |
|
|
|
(628 |
) |
|
|
10,781 |
|
|
|
(44,366 |
) |
Reclassification adjustment for realized loss on sale of
available-for-sale securities |
|
- |
|
|
- |
|
|
|
- |
|
|
|
891 |
|
|
|
- |
|
|
|
891 |
|
|
|
- |
|
Net unrealized gain (loss) on available-for-sale securities |
|
13,261 |
|
|
(4,514 |
) |
|
|
(5,996 |
) |
|
|
8,921 |
|
|
|
(628 |
) |
|
|
11,672 |
|
|
|
(44,366 |
) |
Tax expense (benefit) |
|
2,784 |
|
|
(947 |
) |
|
|
(1,260 |
) |
|
|
1,874 |
|
|
|
(132 |
) |
|
|
2,451 |
|
|
|
(9,317 |
) |
Other comprehensive income (loss) |
|
10,477 |
|
|
(3,567 |
) |
|
|
(4,736 |
) |
|
|
7,047 |
|
|
|
(496 |
) |
|
|
9,221 |
|
|
|
(35,049 |
) |
Comprehensive Income (Loss) |
$ |
16,020 |
|
$ |
1,210 |
|
|
$ |
1,265 |
|
|
$ |
13,513 |
|
|
$ |
6,692 |
|
|
$ |
32,008 |
|
|
$ |
(2,534 |
) |
Basic Earnings Per Share |
$ |
0.41 |
|
$ |
0.35 |
|
|
$ |
0.44 |
|
|
$ |
0.47 |
|
|
$ |
0.53 |
|
|
$ |
1.67 |
|
|
$ |
2.46 |
|
Diluted Earnings Per Share |
$ |
0.41 |
|
$ |
0.35 |
|
|
$ |
0.44 |
|
|
$ |
0.47 |
|
|
$ |
0.53 |
|
|
$ |
1.67 |
|
|
$ |
2.46 |
|
Dividends Declared |
$ |
0.2200 |
|
$ |
0.2100 |
|
|
$ |
0.2100 |
|
|
$ |
0.2100 |
|
|
$ |
0.2100 |
|
|
$ |
0.8500 |
|
|
$ |
0.8125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*ASU 2016-13 adopted
during the first quarter of 2023; therefore, prior period's
provision amount reflects the incurred loss
method. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FARMERS &
MERCHANTS BANCORP, INC. AND SUBSIDIARIES |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
(Unaudited) (in
thousands of dollars, except share data) |
|
|
|
December 31, 2023 |
|
September 30, 2023 |
|
June30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
140,917 |
|
|
$ |
151,711 |
|
|
$ |
69,760 |
|
|
$ |
62,780 |
|
|
$ |
83,085 |
|
Federal funds sold |
|
|
1,284 |
|
|
|
1,471 |
|
|
|
1,433 |
|
|
|
1,545 |
|
|
|
1,324 |
|
Total cash and cash equivalents |
|
|
142,201 |
|
|
|
153,182 |
|
|
|
71,193 |
|
|
|
64,325 |
|
|
|
84,409 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing time deposits |
|
|
2,740 |
|
|
|
2,989 |
|
|
|
3,485 |
|
|
|
4,435 |
|
|
|
4,442 |
|
Securities - available-for-sale |
|
|
358,478 |
|
|
|
348,255 |
|
|
|
363,225 |
|
|
|
372,975 |
|
|
|
390,789 |
|
Other securities, at cost |
|
|
17,138 |
|
|
|
16,995 |
|
|
|
17,535 |
|
|
|
11,543 |
|
|
|
9,799 |
|
Loans held for sale |
|
|
1,576 |
|
|
|
1,039 |
|
|
|
1,459 |
|
|
|
951 |
|
|
|
827 |
|
Loans, net |
|
|
2,556,167 |
|
|
|
2,504,329 |
|
|
|
2,490,883 |
|
|
|
2,422,018 |
|
|
|
2,336,074 |
|
Premises and equipment |
|
|
35,790 |
|
|
|
31,723 |
|
|
|
30,398 |
|
|
|
28,679 |
|
|
|
28,381 |
|
Construction in progress |
|
|
8 |
|
|
|
3,044 |
|
|
|
2,290 |
|
|
|
1,565 |
|
|
|
278 |
|
Goodwill |
|
|
86,358 |
|
|
|
86,358 |
|
|
|
86,358 |
|
|
|
86,358 |
|
|
|
86,358 |
|
Loan servicing rights |
|
|
5,648 |
|
|
|
5,687 |
|
|
|
5,635 |
|
|
|
4,985 |
|
|
|
3,549 |
|
Bank owned life insurance |
|
|
33,907 |
|
|
|
33,691 |
|
|
|
33,470 |
|
|
|
33,269 |
|
|
|
33,073 |
|
Other assets |
|
|
43,218 |
|
|
|
47,388 |
|
|
|
41,512 |
|
|
|
38,972 |
|
|
|
37,372 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
3,283,229 |
|
|
$ |
3,234,680 |
|
|
$ |
3,147,443 |
|
|
$ |
3,070,075 |
|
|
$ |
3,015,351 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
$ |
528,465 |
|
|
$ |
505,358 |
|
|
$ |
488,678 |
|
|
$ |
520,145 |
|
|
$ |
532,794 |
|
Interest-bearing |
|
|
|
|
|
|
|
|
|
|
NOW accounts |
|
|
816,790 |
|
|
|
778,133 |
|
|
|
770,113 |
|
|
|
800,230 |
|
|
|
750,887 |
|
Savings |
|
|
599,191 |
|
|
|
591,344 |
|
|
|
581,192 |
|
|
|
590,854 |
|
|
|
627,203 |
|
Time |
|
|
663,017 |
|
|
|
700,445 |
|
|
|
628,757 |
|
|
|
601,939 |
|
|
|
557,980 |
|
Total deposits |
|
|
2,607,463 |
|
|
|
2,575,280 |
|
|
|
2,468,740 |
|
|
|
2,513,168 |
|
|
|
2,468,864 |
|
|
|
|
|
|
|
|
|
|
|
|
Federal funds purchased and securities |
|
|
|
|
|
|
|
|
|
|
sold under agreements to repurchase |
|
|
28,218 |
|
|
|
30,527 |
|
|
|
51,567 |
|
|
|
30,496 |
|
|
|
54,206 |
|
Federal Home Loan Bank (FHLB) advances |
|
|
265,750 |
|
|
|
266,286 |
|
|
|
266,818 |
|
|
|
164,327 |
|
|
|
127,485 |
|
Other borrowings |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
10,000 |
|
Subordinated notes, net of unamortized issuance costs |
|
|
34,702 |
|
|
|
34,673 |
|
|
|
34,644 |
|
|
|
34,615 |
|
|
|
34,586 |
|
Dividend payable |
|
|
2,974 |
|
|
|
2,838 |
|
|
|
2,834 |
|
|
|
2,831 |
|
|
|
2,832 |
|
Accrued expenses and other liabilities |
|
|
27,579 |
|
|
|
21,892 |
|
|
|
18,177 |
|
|
|
18,881 |
|
|
|
19,238 |
|
Total liabilities |
|
|
2,966,686 |
|
|
|
2,931,496 |
|
|
|
2,842,780 |
|
|
|
2,764,318 |
|
|
|
2,717,211 |
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
Common stock - No par value 20,000,000 shares authorized; issued
and |
|
|
|
|
|
|
|
|
outstanding 14,564,425 shares 12/31/23 and 12/31/22 |
|
|
135,515 |
|
|
|
135,171 |
|
|
|
135,647 |
|
|
|
135,241 |
|
|
|
135,497 |
|
Treasury stock - 899,784 shares 12/31/23 and 956,003 shares
12/31/22 |
|
(11,040 |
) |
|
|
(11,008 |
) |
|
|
(11,298 |
) |
|
|
(11,310 |
) |
|
|
(11,573 |
) |
Retained earnings |
|
|
221,080 |
|
|
|
218,510 |
|
|
|
216,236 |
|
|
|
213,012 |
|
|
|
212,449 |
|
Accumulated other comprehensive loss |
|
|
(29,012 |
) |
|
|
(39,489 |
) |
|
|
(35,922 |
) |
|
|
(31,186 |
) |
|
|
(38,233 |
) |
Total stockholders' equity |
|
|
316,543 |
|
|
|
303,184 |
|
|
|
304,663 |
|
|
|
305,757 |
|
|
|
298,140 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity |
|
$ |
3,283,229 |
|
|
$ |
3,234,680 |
|
|
$ |
3,147,443 |
|
|
$ |
3,070,075 |
|
|
$ |
3,015,351 |
|
|
|
|
|
|
|
|
|
|
|
|
FARMERS &
MERCHANTS BANCORP, INC. AND SUBSIDIARIES |
SELECT FINANCIAL
DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Twelve Months Ended |
Selected financial data |
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Return on average assets |
|
|
0.67 |
% |
|
|
0.59 |
% |
|
|
0.77 |
% |
|
|
0.84 |
% |
|
|
0.96 |
% |
|
0.71 |
% |
|
1.17 |
% |
Return on
average equity |
|
|
7.27 |
% |
|
|
6.26 |
% |
|
|
7.84 |
% |
|
|
8.59 |
% |
|
|
10.00 |
% |
|
7.46 |
% |
|
11.30 |
% |
Yield on
earning assets |
|
|
4.93 |
% |
|
|
4.79 |
% |
|
|
4.53 |
% |
|
|
4.41 |
% |
|
|
4.18 |
% |
|
4.67 |
% |
|
3.87 |
% |
Cost of
interest bearing liabilities |
|
|
3.02 |
% |
|
|
2.82 |
% |
|
|
2.35 |
% |
|
|
1.85 |
% |
|
|
1.32 |
% |
|
2.53 |
% |
|
0.74 |
% |
Net interest
spread |
|
|
1.91 |
% |
|
|
1.97 |
% |
|
|
2.18 |
% |
|
|
2.56 |
% |
|
|
2.86 |
% |
|
2.14 |
% |
|
3.13 |
% |
Net interest
margin |
|
|
2.57 |
% |
|
|
2.59 |
% |
|
|
2.73 |
% |
|
|
3.01 |
% |
|
|
3.20 |
% |
|
2.72 |
% |
|
3.32 |
% |
Efficiency |
|
|
69.23 |
% |
|
|
73.07 |
% |
|
|
69.06 |
% |
|
|
63.53 |
% |
|
|
50.46 |
% |
|
68.48 |
% |
|
55.95 |
% |
Dividend
payout ratio |
|
|
54.23 |
% |
|
|
60.07 |
% |
|
|
47.22 |
% |
|
|
43.79 |
% |
|
|
39.39 |
% |
|
50.65 |
% |
|
33.06 |
% |
Tangible
book value per share (1) |
|
$ |
18.60 |
|
|
$ |
18.36 |
|
|
$ |
18.21 |
|
|
$ |
17.92 |
|
|
$ |
17.69 |
|
|
|
|
|
Tier 1
leverage ratio |
|
|
8.20 |
% |
|
|
8.02 |
% |
|
|
9.85 |
% |
|
|
8.36 |
% |
|
|
8.39 |
% |
|
|
|
|
Average
shares outstanding |
|
|
13,665,773 |
|
|
|
13,650,823 |
|
|
|
13,632,440 |
|
|
|
13,615,655 |
|
|
|
13,606,876 |
|
|
13,641,336 |
|
|
13,206,713 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
|
|
|
(Dollar amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
real estate |
|
$ |
1,337,766 |
|
|
$ |
1,304,118 |
|
|
$ |
1,280,902 |
|
|
$ |
1,225,315 |
|
|
$ |
1,152,603 |
|
|
|
|
|
Agricultural
real estate |
|
|
223,791 |
|
|
|
225,672 |
|
|
|
230,837 |
|
|
|
227,897 |
|
|
|
220,819 |
|
|
|
|
|
Consumer
real estate |
|
|
521,895 |
|
|
|
512,973 |
|
|
|
506,866 |
|
|
|
502,974 |
|
|
|
494,423 |
|
|
|
|
|
Commercial
and industrial |
|
|
254,935 |
|
|
|
250,891 |
|
|
|
253,444 |
|
|
|
241,598 |
|
|
|
242,360 |
|
|
|
|
|
Agricultural |
|
|
132,560 |
|
|
|
123,735 |
|
|
|
128,344 |
|
|
|
131,467 |
|
|
|
128,733 |
|
|
|
|
|
Consumer |
|
|
79,591 |
|
|
|
83,024 |
|
|
|
88,312 |
|
|
|
89,588 |
|
|
|
89,147 |
|
|
|
|
|
Other |
|
|
30,136 |
|
|
|
31,083 |
|
|
|
28,996 |
|
|
|
29,316 |
|
|
|
29,818 |
|
|
|
|
|
Less: Net
deferred loan fees, costs and other (2) |
|
|
517 |
|
|
|
(1,890 |
) |
|
|
(1,908 |
) |
|
|
(1,503 |
) |
|
|
(1,516 |
) |
|
|
|
|
Total
loans,net |
|
$ |
2,581,191 |
|
|
$ |
2,529,606 |
|
|
$ |
2,515,793 |
|
|
$ |
2,446,652 |
|
|
$ |
2,356,387 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality data |
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
|
|
|
(Dollar amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans |
|
$ |
22,353 |
|
|
$ |
22,447 |
|
|
$ |
6,295 |
|
|
$ |
7,717 |
|
|
$ |
4,689 |
|
|
|
|
|
90 day past
due and accruing |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
Nonperforming loans |
|
$ |
22,353 |
|
|
$ |
22,447 |
|
|
$ |
6,295 |
|
|
$ |
7,717 |
|
|
$ |
4,689 |
|
|
|
|
|
Other real
estate owned |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
Nonperforming assets |
|
$ |
22,353 |
|
|
$ |
22,447 |
|
|
$ |
6,295 |
|
|
$ |
7,717 |
|
|
$ |
4,689 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for credit losses (3) |
|
$ |
25,024 |
|
|
$ |
25,277 |
|
|
$ |
24,910 |
|
|
$ |
24,507 |
|
|
$ |
20,313 |
|
|
|
|
|
Accretable yield adjustment |
|
|
4,018 |
|
|
|
4,565 |
|
|
|
5,209 |
|
|
|
5,754 |
|
|
|
6,427 |
|
|
|
|
|
Adjusted
credit losses with accretable yield included (3) |
|
$ |
29,042 |
|
|
$ |
29,842 |
|
|
$ |
30,119 |
|
|
$ |
30,261 |
|
|
$ |
26,740 |
|
|
|
|
|
Allowance
for credit losses/total loans (3) |
|
|
0.97 |
% |
|
|
1.00 |
% |
|
|
0.99 |
% |
|
|
1.00 |
% |
|
|
0.86 |
% |
|
|
|
|
Adjusted credit losses with accretable yield/total loans (3) |
|
1.13 |
% |
|
|
1.18 |
% |
|
|
1.20 |
% |
|
|
1.24 |
% |
|
|
1.13 |
% |
|
|
|
|
Net
charge-offs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter-to-date |
|
$ |
893 |
|
|
$ |
93 |
|
|
$ |
(133 |
) |
|
$ |
60 |
|
|
$ |
431 |
|
|
|
|
|
Year-to-date |
|
$ |
990 |
|
|
$ |
97 |
|
|
$ |
(73 |
) |
|
$ |
60 |
|
|
$ |
529 |
|
|
|
|
|
Net
charge-offs to average loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter-to-date |
|
|
0.03 |
% |
|
|
0.00 |
% |
|
|
-0.01 |
% |
|
|
0.00 |
% |
|
|
0.02 |
% |
|
|
|
|
Year-to-date |
|
|
0.04 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.03 |
% |
|
|
|
|
Nonperforming loans/total loans |
|
|
0.87 |
% |
|
|
0.89 |
% |
|
|
0.25 |
% |
|
|
0.32 |
% |
|
|
0.20 |
% |
|
|
|
|
Allowance
for credit losses/nonperforming loans (3) |
|
|
111.95 |
% |
|
|
112.61 |
% |
|
|
395.71 |
% |
|
|
319.22 |
% |
|
|
273.67 |
% |
|
|
|
|
NPA coverage
ratio |
|
|
129.92 |
% |
|
|
132.94 |
% |
|
|
478.46 |
% |
|
|
392.13 |
% |
|
|
570.27 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $2.7 million as of December 31, 2023 related
to interest rate swaps associated with fixed rate
loans |
(3) ASU 2016-13
adopted during the first quarter of 2023; therefore, prior period's
provision amount reflects the incurred loss
method. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
December 31, 2023 |
|
December 31, 2022 |
Interest
Earning Assets: |
|
Average Balance |
|
Interest/Dividends |
|
Annualized Yield/Rate |
|
Average Balance |
|
Interest/Dividends |
|
Annualized Yield/Rate |
Loans |
|
$ |
2,553,023 |
|
$ |
34,493 |
|
5.41 |
% |
|
$ |
2,301,204 |
|
$ |
27,302 |
|
4.75 |
% |
Taxable
investment securities |
|
|
386,931 |
|
|
1,660 |
|
1.72 |
% |
|
|
422,247 |
|
|
1,556 |
|
1.47 |
% |
Tax-exempt
investment securities |
|
|
24,145 |
|
|
89 |
|
1.87 |
% |
|
|
28,522 |
|
|
108 |
|
1.92 |
% |
Fed funds
sold & other |
|
|
142,642 |
|
|
2,028 |
|
5.69 |
% |
|
|
74,876 |
|
|
526 |
|
2.81 |
% |
Total
Interest Earning Assets |
|
|
3,106,741 |
|
$ |
38,270 |
|
4.93 |
% |
|
|
2,826,849 |
|
$ |
29,492 |
|
4.18 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonearning
Assets |
|
|
189,202 |
|
|
|
|
|
|
173,048 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets |
|
$ |
3,295,943 |
|
|
|
|
|
$ |
2,999,897 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Savings
deposits |
|
$ |
1,392,304 |
|
$ |
8,570 |
|
2.46 |
% |
|
$ |
1,394,663 |
|
$ |
3,427 |
|
0.98 |
% |
Other time
deposits |
|
|
701,347 |
|
|
6,445 |
|
3.68 |
% |
|
|
485,461 |
|
|
1,551 |
|
1.28 |
% |
Other
borrowed money |
|
|
265,948 |
|
|
2,742 |
|
4.12 |
% |
|
|
135,013 |
|
|
1,209 |
|
3.58 |
% |
Fed funds
purchased & securities |
|
|
|
|
|
|
|
|
|
|
|
|
sold under agreement to repurch. |
|
|
28,739 |
|
|
293 |
|
4.08 |
% |
|
|
53,506 |
|
|
463 |
|
3.46 |
% |
Subordinated
notes |
|
|
34,683 |
|
|
285 |
|
3.29 |
% |
|
|
34,567 |
|
|
285 |
|
3.30 |
% |
Total
Interest Bearing Liabilities |
|
$ |
2,423,021 |
|
$ |
18,335 |
|
3.02 |
% |
|
$ |
2,103,210 |
|
$ |
6,935 |
|
1.32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
Bearing Liabilities |
|
|
567,813 |
|
|
|
|
|
|
609,253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
$ |
305,109 |
|
|
|
|
|
$ |
287,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Income and Interest Rate Spread |
|
|
|
$ |
19,935 |
|
1.91 |
% |
|
|
|
$ |
22,557 |
|
2.86 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Margin |
|
|
|
|
|
2.57 |
% |
|
|
|
|
|
3.20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Twelve Months Ended |
|
For the Twelve Months Ended |
|
|
December 31, 2023 |
|
December 31, 2022 |
Interest
Earning Assets: |
|
Average Balance |
|
Interest/Dividends |
|
Annualized Yield/Rate |
|
Average Balance |
|
Interest/Dividends |
|
Annualized Yield/Rate |
Loans |
|
$ |
2,491,502 |
|
$ |
129,344 |
|
5.19 |
% |
|
$ |
2,073,737 |
|
$ |
94,264 |
|
4.55 |
% |
Taxable
investment securities |
|
|
394,424 |
|
|
6,204 |
|
1.57 |
% |
|
|
424,229 |
|
|
5,621 |
|
1.32 |
% |
Tax-exempt
investment securities |
|
|
24,686 |
|
|
366 |
|
1.88 |
% |
|
|
23,472 |
|
|
337 |
|
1.82 |
% |
Fed funds
sold & other |
|
|
85,018 |
|
|
3,894 |
|
4.58 |
% |
|
|
95,301 |
|
|
927 |
|
0.97 |
% |
Total
Interest Earning Assets |
|
|
2,995,630 |
|
$ |
139,808 |
|
4.67 |
% |
|
|
2,616,739 |
|
$ |
101,149 |
|
3.87 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonearning
Assets |
|
|
197,726 |
|
|
|
|
|
|
158,361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets |
|
$ |
3,193,356 |
|
|
|
|
|
$ |
2,775,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Savings
deposits |
|
$ |
1,376,318 |
|
$ |
27,424 |
|
1.99 |
% |
|
$ |
1,335,271 |
|
$ |
6,378 |
|
0.48 |
% |
Other time
deposits |
|
|
640,390 |
|
|
19,499 |
|
3.04 |
% |
|
|
451,013 |
|
|
3,505 |
|
0.78 |
% |
Other
borrowed money |
|
|
220,175 |
|
|
8,876 |
|
4.03 |
% |
|
|
74,379 |
|
|
2,160 |
|
2.90 |
% |
Fed funds
purchased & securities |
|
|
|
|
|
|
|
|
|
|
|
|
sold under agreement to repurch. |
|
|
35,421 |
|
|
1,474 |
|
4.16 |
% |
|
|
45,314 |
|
|
1,197 |
|
2.64 |
% |
Subordinated
notes |
|
|
34,640 |
|
|
1,138 |
|
3.29 |
% |
|
|
34,524 |
|
|
1,122 |
|
3.25 |
% |
Total
Interest Bearing Liabilities |
|
$ |
2,306,944 |
|
$ |
58,411 |
|
2.53 |
% |
|
$ |
1,940,501 |
|
$ |
14,362 |
|
0.74 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
Bearing Liabilities |
|
|
580,931 |
|
|
|
|
|
|
546,731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
$ |
305,481 |
|
|
|
|
|
$ |
287,868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Income and Interest Rate Spread |
|
|
|
$ |
81,397 |
|
2.14 |
% |
|
|
|
$ |
86,787 |
|
3.13 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Margin |
|
|
|
|
|
2.72 |
% |
|
|
|
|
|
3.32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 December 31, 2023 |
|
For the Three Months Ended December 31, 2022 |
|
As Reported |
|
Excluding
Acc/Amort |
|
Difference |
|
As Reported |
|
Excluding
Acc/Amort |
|
Difference |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
Interest
Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
$ |
34,493 |
5.41 |
% |
|
$ |
33,769 |
5.29 |
% |
|
$ |
724 |
|
0.12 |
% |
|
27,302 |
4.75 |
% |
|
26,628 |
4.63 |
% |
|
$ |
674 |
|
0.12 |
% |
Taxable investment securities |
|
1,660 |
1.72 |
% |
|
|
1,660 |
1.72 |
% |
|
|
- |
|
0.00 |
% |
|
1,556 |
1.47 |
% |
|
1,556 |
1.47 |
% |
|
|
- |
|
0.00 |
% |
Tax-exempt investment securities |
|
89 |
1.87 |
% |
|
|
89 |
1.87 |
% |
|
|
- |
|
0.00 |
% |
|
108 |
1.92 |
% |
|
108 |
1.92 |
% |
|
|
- |
|
0.00 |
% |
Fed funds sold & other |
|
2,028 |
5.69 |
% |
|
|
2,028 |
5.69 |
% |
|
|
- |
|
0.00 |
% |
|
526 |
2.81 |
% |
|
526 |
2.81 |
% |
|
|
- |
|
0.00 |
% |
Total Interest Earning
Assets |
|
38,270 |
4.93 |
% |
|
|
37,546 |
4.84 |
% |
|
|
724 |
|
0.09 |
% |
|
29,492 |
4.18 |
% |
|
28,818 |
4.08 |
% |
|
|
674 |
|
0.10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings deposits |
$ |
8,570 |
2.46 |
% |
|
$ |
8,570 |
2.46 |
% |
|
$ |
- |
|
0.00 |
% |
|
3,427 |
0.98 |
% |
|
3,427 |
0.98 |
% |
|
$ |
- |
|
0.00 |
% |
Other time deposits |
|
6,445 |
3.68 |
% |
|
|
6,381 |
3.64 |
% |
|
|
64 |
|
0.04 |
% |
|
1,551 |
1.28 |
% |
|
2,010 |
1.66 |
% |
|
|
(459 |
) |
-0.38 |
% |
Other borrowed money |
|
2,742 |
4.12 |
% |
|
|
2,760 |
4.15 |
% |
|
|
(18 |
) |
-0.03 |
% |
|
1,209 |
3.58 |
% |
|
1,227 |
3.64 |
% |
|
|
(18 |
) |
-0.06 |
% |
Federal funds purchased and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
securities sold under agreement to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
repurchase |
|
293 |
4.08 |
% |
|
|
293 |
4.08 |
% |
|
|
- |
|
0.00 |
% |
|
463 |
3.46 |
% |
|
463 |
3.46 |
% |
|
|
- |
|
0.00 |
% |
Subordinated notes |
|
285 |
3.29 |
% |
|
|
285 |
3.29 |
% |
|
|
- |
|
0.00 |
% |
|
285 |
3.30 |
% |
|
285 |
3.30 |
% |
|
|
- |
|
0.00 |
% |
Total Interest Bearing
Liabilities |
|
18,335 |
3.02 |
% |
|
|
18,289 |
3.02 |
% |
|
|
46 |
|
0.00 |
% |
|
6,935 |
1.32 |
% |
|
7,412 |
1.41 |
% |
|
|
(477 |
) |
-0.09 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest/Dividend income/yield |
|
38,270 |
4.93 |
% |
|
|
37,546 |
4.84 |
% |
|
|
724 |
|
0.09 |
% |
|
29,492 |
4.18 |
% |
|
28,818 |
4.08 |
% |
|
|
674 |
|
0.10 |
% |
Interest
Expense / yield |
|
18,335 |
3.02 |
% |
|
|
18,289 |
3.02 |
% |
|
|
46 |
|
0.00 |
% |
|
6,935 |
1.32 |
% |
|
7,412 |
1.41 |
% |
|
|
(477 |
) |
-0.09 |
% |
Net Interest
Spread |
|
19,935 |
1.91 |
% |
|
|
19,257 |
1.82 |
% |
|
|
678 |
|
0.09 |
% |
|
22,557 |
2.86 |
% |
|
21,406 |
2.67 |
% |
|
|
1,151 |
|
0.19 |
% |
Net Interest
Margin |
|
2.57 |
% |
|
|
2.48 |
% |
|
|
0.09 |
% |
|
|
3.20 |
% |
|
|
3.03 |
% |
|
|
0.17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve Months Ended December 31, 2023 |
|
For the Twelve Months Ended December 31, 2022 |
|
As Reported |
|
Excluding
Acc/Amort |
|
Difference |
|
As Reported |
|
Excluding
Acc/Amort |
|
Difference |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
|
$ |
Yield |
Interest
Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
$ |
129,344 |
5.19 |
% |
|
$ |
126,133 |
5.06 |
% |
|
$ |
3,211 |
|
0.13 |
% |
|
94,264 |
4.55 |
% |
|
92,132 |
4.45 |
% |
|
$ |
2,132 |
|
0.10 |
% |
Taxable investment securities |
|
6,204 |
1.57 |
% |
|
|
6,204 |
1.57 |
% |
|
|
- |
|
0.00 |
% |
|
5,621 |
1.32 |
% |
|
5,621 |
1.32 |
% |
|
|
- |
|
0.00 |
% |
Tax-exempt investment securities |
|
366 |
1.88 |
% |
|
|
366 |
1.88 |
% |
|
|
- |
|
0.00 |
% |
|
337 |
1.82 |
% |
|
337 |
1.82 |
% |
|
|
- |
|
0.00 |
% |
Fed funds sold & other |
|
3,894 |
4.58 |
% |
|
|
3,894 |
4.58 |
% |
|
|
- |
|
0.00 |
% |
|
927 |
0.97 |
% |
|
927 |
0.97 |
% |
|
|
- |
|
0.00 |
% |
Total Interest Earning
Assets |
|
139,808 |
4.67 |
% |
|
|
136,597 |
4.57 |
% |
|
|
3,211 |
|
0.10 |
% |
|
101,149 |
3.87 |
% |
|
99,017 |
3.79 |
% |
|
|
2,132 |
|
0.08 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings deposits |
$ |
27,424 |
1.99 |
% |
|
$ |
27,424 |
1.99 |
% |
|
$ |
- |
|
0.00 |
% |
|
6,378 |
0.48 |
% |
|
6,378 |
0.48 |
% |
|
$ |
- |
|
0.00 |
% |
Other time deposits |
|
19,499 |
3.04 |
% |
|
|
19,839 |
3.10 |
% |
|
|
(340 |
) |
-0.06 |
% |
|
3,505 |
0.78 |
% |
|
5,822 |
1.29 |
% |
|
|
(2,317 |
) |
-0.51 |
% |
Other borrowed money |
|
8,876 |
4.03 |
% |
|
|
8,947 |
4.06 |
% |
|
|
(71 |
) |
-0.03 |
% |
|
2,160 |
2.90 |
% |
|
2,241 |
3.01 |
% |
|
|
(81 |
) |
-0.11 |
% |
Federal funds purchased and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
securities sold under agreement to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
repurchase |
|
1,474 |
4.16 |
% |
|
|
1,474 |
4.16 |
% |
|
|
- |
|
0.00 |
% |
|
1,197 |
2.64 |
% |
|
1,197 |
2.64 |
% |
|
|
- |
|
0.00 |
% |
Subordinated notes |
|
1,138 |
3.29 |
% |
|
|
1,138 |
3.29 |
% |
|
|
- |
|
0.00 |
% |
|
1,122 |
3.25 |
% |
|
1,122 |
3.25 |
% |
|
|
- |
|
0.00 |
% |
Total Interest Bearing
Liabilities |
|
58,411 |
2.53 |
% |
|
|
58,822 |
2.55 |
% |
|
|
(411 |
) |
-0.02 |
% |
|
14,362 |
0.74 |
% |
|
16,760 |
0.86 |
% |
|
|
(2,398 |
) |
-0.12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest/Dividend income/yield |
|
139,808 |
4.67 |
% |
|
|
136,597 |
4.57 |
% |
|
|
3,211 |
|
0.10 |
% |
|
101,149 |
3.87 |
% |
|
99,017 |
3.79 |
% |
|
|
2,132 |
|
0.08 |
% |
Interest
Expense / yield |
|
58,411 |
2.53 |
% |
|
|
58,822 |
2.55 |
% |
|
|
(411 |
) |
-0.02 |
% |
|
14,362 |
0.74 |
% |
|
16,760 |
0.86 |
% |
|
|
(2,398 |
) |
-0.12 |
% |
Net Interest
Spread |
|
81,397 |
2.14 |
% |
|
|
77,775 |
2.02 |
% |
|
|
3,622 |
|
0.12 |
% |
|
86,787 |
3.13 |
% |
|
82,257 |
2.93 |
% |
|
|
4,530 |
|
0.20 |
% |
Net Interest
Margin |
|
2.72 |
% |
|
|
2.60 |
% |
|
|
0.12 |
% |
|
|
3.32 |
% |
|
|
3.15 |
% |
|
|
0.17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FARMERS &
MERCHANTS BANCORP, INC. AND SUBSIDIARIES |
NON-GAAP
RECONCILIATION OF NET INCOME |
(in thousands of
dollars, except share data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
Non-GAAP Reconciliation of Net Income |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
|
|
(Unaudited) |
|
(Unaudited) |
Net income as reported |
|
$ |
5,543 |
|
|
$ |
7,188 |
|
|
$ |
22,787 |
|
|
$ |
32,515 |
|
Acquisition
expenses |
|
|
24 |
|
|
|
2,019 |
|
|
|
208 |
|
|
|
2,511 |
|
Tax effect
on acquisition expenses |
|
|
(5 |
) |
|
|
(386 |
) |
|
|
(42 |
) |
|
|
(455 |
) |
Net income
excluding acquisition expenses and tax effect |
|
$ |
5,562 |
|
|
$ |
8,821 |
|
|
$ |
22,953 |
|
|
$ |
34,571 |
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding including participating
securities |
|
|
13,665,773 |
|
|
|
13,606,876 |
|
|
|
13,641,336 |
|
|
|
13,206,713 |
|
|
|
|
|
|
|
|
|
|
Basic and
diluted earnings per share |
|
$ |
0.41 |
|
|
$ |
0.65 |
|
|
$ |
1.68 |
|
|
$ |
2.62 |
|
|
|
|
|
|
|
|
|
|
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 |
|
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
|
|
|
|
|
|
|
|
|
Shares Outstanding |
|
|
13,664,641 |
|
|
|
13,608,422 |
|
|
|
13,664,641 |
|
|
|
13,608,422 |
|
|
|
|
|
|
|
|
|
|
Tangible
Equity |
|
|
|
|
|
|
|
|
Equity |
|
$ |
316,543 |
|
|
$ |
298,140 |
|
|
$ |
316,543 |
|
|
$ |
298,140 |
|
Goodwill |
|
|
86,358 |
|
|
|
86,358 |
|
|
|
86,358 |
|
|
|
86,358 |
|
Other Intangible |
|
|
7,548 |
|
|
|
9,327 |
|
|
|
7,548 |
|
|
|
9,327 |
|
Comprehensive Loss Adjustment* |
|
|
- |
|
|
|
- |
|
|
|
29,012 |
|
|
|
38,233 |
|
CECL
Adjustment** |
|
|
- |
|
|
|
- |
|
|
|
2,528 |
|
|
|
- |
|
Tangible
Equity |
|
$ |
222,637 |
|
|
$ |
202,455 |
|
|
$ |
254,177 |
|
|
$ |
240,688 |
|
Shares
Outstanding |
|
|
13,665 |
|
|
|
13,608 |
|
|
|
13,665 |
|
|
|
13,608 |
|
Tangible
Book Equity per Share |
|
$ |
16.29 |
|
|
$ |
14.88 |
|
|
$ |
18.60 |
|
|
$ |
17.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual Average |
|
Regulatory
Average |
|
|
Year to Date |
|
Year to Date |
|
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
|
|
|
|
|
|
|
|
|
Net
Income |
|
$ |
22,787 |
|
|
$ |
32,515 |
|
|
$ |
22,787 |
|
|
$ |
32,515 |
|
Acquisition
Costs - Tax Adjusted |
|
|
166 |
|
|
|
2,066 |
|
|
|
166 |
|
|
|
2,066 |
|
|
|
|
|
|
|
|
|
|
Average
Shares Outstanding |
|
|
13,641,336 |
|
|
|
13,206,713 |
|
|
|
13,641,336 |
|
|
|
13,206,713 |
|
|
|
|
|
|
|
|
|
|
Average
Tangible Equity |
|
|
|
|
|
|
|
|
Average Equity |
|
$ |
305,481 |
|
|
$ |
287,868 |
|
|
$ |
305,481 |
|
|
$ |
287,868 |
|
Average Goodwill |
|
|
86,358 |
|
|
|
80,164 |
|
|
|
86,358 |
|
|
|
80,164 |
|
Average Other Intangible |
|
|
8,494 |
|
|
|
4,997 |
|
|
|
8,494 |
|
|
|
4,997 |
|
Average
Comprehensive Loss Adjustment* |
|
|
- |
|
|
|
- |
|
|
|
36,443 |
|
|
|
26,393 |
|
Average CECL
Adjustment** |
|
|
- |
|
|
|
- |
|
|
|
2,528 |
|
|
|
- |
|
Average
Tangible Equity |
|
$ |
210,629 |
|
|
$ |
202,707 |
|
|
$ |
249,600 |
|
|
$ |
229,100 |
|
Average
Shares Outstanding |
|
|
13,641 |
|
|
|
13,207 |
|
|
|
13,641 |
|
|
|
13,207 |
|
Average
Tangible Book Equity per Share |
|
$ |
15.44 |
|
|
$ |
15.35 |
|
|
$ |
18.30 |
|
|
$ |
17.35 |
|
|
|
|
|
|
|
|
|
|
Return on
Average Tangible Equity |
|
|
10.82 |
% |
|
|
16.04 |
% |
|
|
9.13 |
% |
|
|
14.19 |
% |
Return on Average Tangible Equity w/o Acquisition |
|
10.90 |
% |
|
|
17.06 |
% |
|
|
9.20 |
% |
|
|
15.09 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*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; therefore, prior period's
provision amount reflects the incurred loss method and the Bank has
elected to spread the Capital adjustment over three years. The
first year permits 75% of the capital adjustment to be
removed from the calculation of tangible equity for regulatory
purposes. |
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