• Farmers & Merchants Bancorp, Inc. Reports 2024 Second-Quarter and Year-to-Date Financial Results

    Source: Nasdaq GlobeNewswire / 01 Aug 2024 16:30:01   America/New_York

    ARCHBOLD, Ohio, Aug. 01, 2024 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2024 second quarter and year-to-date ended June 30, 2024.

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

    • 85 consecutive quarters of profitability
    • Net income was $5.7 million, or $0.42 per basic and diluted share
    • Proceeds from collateral sales of $6.4 million were received from an agricultural based relationship. The proceeds enabled paydowns and payoffs on nonaccrual loans during the second quarter that included $5.3 million in principal paydown, and $1.0+ million pre-tax benefit to interest and fee income
    • Net interest income after provision for credit losses increased 6.8% from December 31, 2023, primarily due to a stabilizing net interest margin, solid asset quality and the collection of a nonaccrual loan
    • Net interest margin, adjusted for the collection of a nonaccrual loan, improved 2 basis points from the 2024 first quarter
    • Total loans increased 1.75% to $2.56 billion at June 30, 2024
    • Total cash and cash equivalents increased by $121.9 million, or 171% to $193.1 million
    • Total assets increased 5.6% to a record $3.32 billion
    • Deposits increased 7.0% to a record $2.64 billion
    • F&M joins OHIO HOMEBUYER PLUS Saver program, helping perspective Ohio home buyers save for a home purchase over the next five years by offering a higher than market interest rate to qualified depositors
    • Stockholders’ equity increased 5.9% to a record $322.7 million
    • Asset quality at historically strong levels with nonperforming loans of only $2.5 million at June 30, 2024, compared to $19.4 million at March 31, 2024 and $6.3 million at June 30, 2023
    • Allowance for credit losses was 1,016% of nonperforming loans

    Lars B. Eller, President and Chief Executive Officer, stated, “Our second quarter results reflect the talent of our associates, as we continue to work hard to drive operating improvements at F&M, serve our local Ohio, Indiana, and Michigan communities, and position F&M for long-term success. As a result, F&M produced its 85th consecutive quarter of profitability, ended the quarter with a historically low level of nonperforming loans, and we are on pace to pay a record amount of dividends per share in 2024.”

    Mr. Eller continued, “As expected, profitability and asset quality benefited during the second quarter from a refinance and paydown on a $16.2 million agricultural based relationship that was in nonaccrual status. Even without this added benefit, core levels of profitability, including our net interest margin, improved over the past three months as we remain focused on maintaining excellent underwriting standards, managing our cost of funds, and controlling operating expenses. In addition, I am encouraged by the year-over-year and sequential improvement in our efficiency ratio as we continue to pursue opportunities that manage operating costs and expand productivity.”

    Income Statement
    Net income for the 2024 second quarter ended June 30, 2024, was $5.7 million, compared to $6.0 million for the same period last year. Net income per basic and diluted share for the 2024 second quarter was $0.42, compared to $0.44 for the same period last year. Net income for the 2024 first half ended June 30, 2024, was $11.0 million, compared to $12.5 million for the same period last year. Net income per basic and diluted share for the 2024 first half was $0.81, compared to $0.92 for the same period last year.

    “I am pleased with the progress we are making in a difficult operating environment managing our cost of funds, loan pricing, deposit growth and overall net interest margin. Since the December 31, 2023 quarter, our yield on earning assets has increased by 29 basis points, compared to a 16 basis point increase in our cost of interest bearing liabilities. In fact, over the past three consecutive quarters, our yield on earning assets has outpaced our cost of interest bearing liabilities. We expect this trend will continue as more of our loan portfolio reprices in 2024. In addition, with expected flat loan growth in 2024, we continue to enhance liquidity levels and at June 30, 2024, we had $193.1 million in cash and cash equivalents, compared to $71.2 million at June 30, 2023. 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 7.0% to a record $2.64 billion,” continued Mr. Eller.

    Deposits
    At June 30, 2024, total deposits were $2.64 billion, an increase of 7.0% from June 30, 2023. The Company’s cost of interest-bearing liabilities was 3.18% for the quarter ended June 30, 2024, compared to 2.35% for the quarter ended June 30, 2023, and 3.02% for the 2023 fourth quarter ended December 31, 2023.

    Loan Portfolio and Asset Quality
    Mr. Eller concluded, “Our asset quality remains at historically strong levels, with only $2.5 million of nonperforming assets, compared to total assets of $3.32 billion at June 30, 2024. With nonperforming assets at unprecedented low levels, we expect trends to normalize in the coming quarters, especially as economic uncertainty remains elevated. In addition, we are starting to see some early signs of stress within our consumer lending and home loan portfolios, as higher insurance premiums and larger property taxes compound inflationary trends that have impacted consumers over the past several years. We continue to proactively monitor our loan portfolio for any signs of stress, including engaging independent third parties to review our loan portfolio. Overall, F&M is in a strong financial and operating position that we believe is well positioned to create lasting value for our communities, customers, team members, and shareholders.”

    Total loans, net at June 30, 2024, increased 1.75%, or by $43.9 million to $2.56 billion, compared to $2.52 billion at June 30, 2023. The year-over-year improvement resulted 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 $2.5 million, or 0.10% of total loans at June 30, 2024, compared to $6.3 million, or 0.25% of total loans at June 30, 2023, and $22.4 million, or 0.87% at December 31, 2023. As expected, one large relationship in nonaccrual status last quarter was made current in the second quarter, resulting in a $5.3 million paydown in principal on the relationship, with another $3.8 million in principal balances expected to be retired in the third quarter.

    F&M maintains a well-balanced, diverse and high performing CRE portfolio. CRE loans represented 50.9% of the Company’s total loan portfolio at June 30, 2024. In addition, F&M’s commercial real estate office credit exposure represented 5.3% of the Company's total loan portfolio at June 30, 2024, with a weighted average loan-to-value of approximately 63.1% and an average loan of approximately $900,000.

    F&M’s CRE portfolio included the following categories at June 30, 2024:

    CRE Category Dollar
    Balance    		 Percent of CRE Portfolio(*) Percent of Total Loan Portfolio(*)
           
    Industrial $261,436 20.1% 10.2%
    Multi-family $225,638 17.3% 8.8%
    Retail $221,011 17.0% 8.6%
    Hotels $144,548 11.1% 5.6%
    Office $135,607 10.4% 5.3%
    Gas Stations $63,077 4.8% 2.5%
    Food Service $45,976 3.5% 1.8%
    Development $34,757 2.7% 1.4%
    Senior Living $30,050 2.3% 1.2%
    Auto Dealers $25,025 1.9% 1.0%
    Other $116,473 8.9% 4.5%
    Total CRE $1,303,598 100.0% 50.9%

    * Numbers have been rounded

    At June 30, 2024, the Company’s allowance for credit losses to nonperforming loans was 1,016%, compared to 395.71% at June 30, 2023, and 111.95% at December 31, 2023. The allowance to total loans was 0.99% at June 30, 2024, compared to 0.99% at June 30, 2023. Including accretable yield adjustments, associated with the Company’s recent acquisitions, F&M’s allowance for credit losses to total loans was 1.10% at June 30, 2024, compared to 1.20% at June 30, 2023.

    Stockholders’ Equity and Dividends
    Total stockholders’ equity increased 5.9% to $322.7 million at June 30, 2024, from $304.7 million at June 30, 2023. At June 30, 2024, the Company had a Tier 1 leverage ratio of 8.02%, compared to 9.85% at June 30, 2023.

    Based on a regulatory basis, tangible stockholders’ equity increased to $259.9 million at June 30, 2024, compared to $248.3 million at June 30, 2023. On a per share basis, tangible stockholders’ equity at June 30, 2024, was $19.00 per share, compared to $18.21 per share at June 30, 2023.

    For the six months ended June 30, 2024, the Company has declared cash dividends of $0.44 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 six months ended June 30, 2024, the dividend payout ratio was 53.89% compared to 45.44% 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 we have Loan Production Offices in West Bloomfield, Michigan; Muncie, Indiana; and Perrysburg 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  Six Months Ended
        June 30, 2024   March 31, 2024   December 31, 2023   September 30, 2023   June 30, 2023   June 30, 2024   June 30, 2023 
    Interest Income           
    Loans, including fees  $36,593  $35,200  $34,493  $33,783  $31,365  $71,793  $61,068 
    Debt securities:           
    U.S. Treasury and government agencies   1,148   1,045   987   1,005   1,030   2,193   2,098 
    Municipalities   389   394   397   392   401   783   809 
    Dividends   327   333   365   246   148   660   271 
    Federal funds sold   7   7   8   6   9   14   30 
    Other   2,702   1,675   2,020   927   424   4,377   903 
    Total interest income   41,166   38,654   38,270   36,359   33,377   79,820   65,179 
    Interest Expense           
    Deposits   16,488   15,279   15,015   13,323   10,434   31,767   18,585 
    Federal funds purchased and securities sold under agreements to repurchase   276   284   293   349   427   560   832 
    Borrowed funds   2,742   2,689   2,742   2,741   2,113   5,431   3,393 
    Subordinated notes   285   284   285   284   285   569   569 
    Total interest expense   19,791   18,536   18,335   16,697   13,259   38,327   23,379 
    Net Interest Income - Before Provision for Credit Losses  21,375   20,118   19,935   19,662   20,118   41,493   41,800 
    Provision for Credit Losses - Loans   605   (289)  278   460   143   316   960 
    Provision for Credit Losses - Off Balance Sheet Credit Exposures (18)  (266)  189   (76)  (129)  (284)  (67)
    Net Interest Income After Provision for Credit Losses   20,788   20,673   19,468   19,278   20,104   41,461   40,907 
    Noninterest Income           
    Customer service fees   189   598   415   248   369   787   669 
    Other service charges and fees   1,085   1,057   1,090   1,133   1,092   2,142   2,120 
    Interchange income   1,330   1,429   1,310   1,266   1,323   2,759   2,742 
    Loan servicing income   513   539   666   502   1,179   1,052   3,237 
    Net gain on sale of loans   314   107   230   294   108   421   175 
    Increase in cash surrender value of bank owned life insurance   236   216   216   221   201   452   397 
    Net loss on sale of available-for-sale securities   -   -   -   -   -   -   (891)
    Total noninterest income   3,667   3,946   3,927   3,664   4,272   7,613   8,449 
    Noninterest Expense           
    Salaries and wages   7,589   7,846   6,981   6,777   6,500   15,435   13,157 
    Employee benefits   2,112   2,171   1,218   2,066   2,071   4,283   4,236 
    Net occupancy expense   999   1,027   1,187   950   840   2,026   1,696 
    Furniture and equipment   1,407   1,353   1,370   1,189   1,211   2,760   2,463 
    Data processing   448   500   785   840   796   948   1,522 
    Franchise taxes   265   555   308   434   379   820   745 
    ATM expense   397   473   665   640   683   870   1,306 
    Advertising   519   530   397   865   830   1,049   1,344 
    Net (gain) loss on sale of other assets owned   (49)  -   86   49   -   (49)  - 
    FDIC assessment   507   580   594   586   496   1,087   802 
    Servicing rights amortization - net   187   168   182   106   164   355   323 
    Loan expense   251   229   246   241   233   480   568 
    Consulting fees   198   186   192   179   231   384   461 
    Professional fees   527   445   331   358   325   972   741 
    Intangible asset amortization   444   445   446   445   444   889   889 
    Other general and administrative   1,495   1,333   1,532   1,319   1,641   2,828   3,522 
    Total noninterest expense   17,296   17,841   16,520   17,044   16,844   35,137   33,775 
    Income Before Income Taxes   7,159   6,778   6,875   5,898   7,532   13,937   15,581 
    Income Taxes   1,477   1,419   1,332   1,121   1,531   2,896   3,114 
    Net Income   5,682   5,359   5,543   4,777   6,001   11,041   12,467 
    Other Comprehensive Income (Loss) (Net of Tax):           
    Net unrealized gain (loss) on available-for-sale securities  2,531   (1,995)  13,261   (4,514)  (5,996)  536   2,034 
    Reclassification adjustment for realized loss on sale of available-for-sale securities   -   -   -   -   -   -   891 
    Net unrealized gain (loss) on available-for-sale securities  2,531   (1,995)  13,261   (4,514)  (5,996)  536   2,925 
    Tax expense (benefit)   531   (418)  2,784   (947)  (1,260)  113   614 
    Other comprehensive income (loss)   2,000   (1,577)  10,477   (3,567)  (4,736)  423   2,311 
    Comprehensive Income  $7,682  $3,782  $16,020  $1,210  $1,265  $11,464  $14,778 
    Basic Earnings Per Share  $0.42  $0.39  $0.41  $0.35  $0.44  $0.81  $0.92 
    Diluted Earnings Per Share  $0.42  $0.39  $0.41  $0.35  $0.44  $0.81  $0.92 
    Dividends Declared  $0.22  $0.22  $0.22  $0.21  $0.21  $0.44  $0.42 
                


    FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Unaudited) (in thousands of dollars, except share data)
     
       June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023
       (Unaudited) (Unaudited)   (Unaudited) (Unaudited)
    Assets           
    Cash and due from banks $191,785  $186,541  $140,917  $151,711  $69,760 
    Federal funds sold  1,283   1,241   1,284   1,471   1,433 
     Total cash and cash equivalents  193,068   187,782   142,201   153,182   71,193 
                
    Interest-bearing time deposits  3,221   2,735   2,740   2,989   3,485 
    Securities - available-for-sale  365,209   347,516   358,478   348,255   363,225 
    Other securities, at cost  14,721   14,744   17,138   16,995   17,535 
    Loans held for sale  1,628   2,410   1,576   1,039   1,459 
    Loans, net of allowance for credit losses of $25,270 6/30/24 and $25,024 12/31/23  2,534,468   2,516,687   2,556,167   2,504,329   2,490,883 
    Premises and equipment  34,507   35,007   35,790   31,723   30,398 
    Construction in progress  38   9   8   3,044   2,290 
    Goodwill  86,358   86,358   86,358   86,358   86,358 
    Loan servicing rights  5,504   5,555   5,648   5,687   5,635 
    Bank owned life insurance  34,359   34,123   33,907   33,691   33,470 
    Other assets  49,552   54,628   43,218   47,388   41,512 
                
    Total Assets $3,322,633  $3,287,554  $3,283,229  $3,234,680  $3,147,443 
                
     Liabilities and Stockholders' Equity          
    Liabilities          
    Deposits          
     Noninterest-bearing $479,069  $510,731  $528,465  $505,358  $488,678 
     Interest-bearing          
     NOW accounts  821,145   829,236   816,790   778,133   770,113 
     Savings  673,284   635,430   599,191   591,344   581,192 
     Time  667,592   645,985   663,017   700,445   628,757 
     Total deposits  2,641,090   2,621,382   2,607,463   2,575,280   2,468,740 
                
    Federal funds purchased and securities          
    sold under agreements to repurchase  27,218   28,218   28,218   30,527   51,567 
    Federal Home Loan Bank (FHLB) advances  266,102   256,628   265,750   266,286   266,818 
    Subordinated notes, net of unamortized issuance costs  34,759   34,731   34,702   34,673   34,644 
    Dividend payable  2,975   2,975   2,974   2,838   2,834 
    Accrued expenses and other liabilities  27,825   25,930   27,579   21,892   18,177 
     Total liabilities  2,999,969   2,969,864   2,966,686   2,931,496   2,842,780 
                
    Commitments and Contingencies          
                
    Stockholders' Equity          
    Common stock - No par value 20,000,000 shares authorized; issued and          
    outstanding 14,564,425 shares 6/30/24 and 12/31/23  135,829   135,482   135,515   135,171   135,647 
    Treasury stock - 884,481 shares 6/30/24 and 899,784 shares 12/31/23  (11,006)  (10,851)  (11,040)  (11,008)  (11,298)
    Retained earnings  226,430   223,648   221,080   218,510   216,236 
    Accumulated other comprehensive loss  (28,589)  (30,589)  (29,012)  (39,489)  (35,922)
     Total stockholders' equity  322,664   317,690   316,543   303,184   304,663 
                
    Total Liabilities and Stockholders' Equity $3,322,633  $3,287,554  $3,283,229  $3,234,680  $3,147,443 
                


    FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
    SELECT FINANCIAL DATA
                         
       For the Three Months Ended For the Six Months Ended
    Selected financial data June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 June 30, 2024  June 30, 2023
    Return on average assets  0.69%  0.66%  0.67%  0.59%  0.77% 0.67%  0.81%
    Return on average equity  7.13%  6.76%  7.27%  6.26%  7.84% 6.94%  8.21%
    Yield on earning assets  5.22%  5.00%  4.93%  4.79%  4.53% 5.11%  4.47%
    Cost of interest bearing liabilities  3.18%  3.06%  3.02%  2.82%  2.35% 3.12%  2.10%
    Net interest spread  2.04%  1.94%  1.91%  1.97%  2.18% 1.99%  2.37%
    Net interest margin  2.71%  2.60%  2.57%  2.59%  2.73% 2.66%  2.87%
    Efficiency  69.03%  74.08%  69.23%  73.07%  69.06% 71.50%  66.04%
    Dividend payout ratio  52.35%  55.52%  54.23%  60.07%  47.22% 53.89%  45.44%
    Tangible book value per share (1) $19.00  $18.75  $18.60  $18.36  $18.21      
    Tier 1 leverage ratio  8.02%  8.40%  8.20%  8.02%  9.85%     
    Average shares outstanding  13,681,501   13,671,166   13,665,773   13,650,823   13,632,440  13,676,333   13,624,094 
                         
    Loans June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023     
    (Dollar amounts in thousands)                    
    Commercial real estate $1,303,598  $1,304,400  $1,337,766  $1,304,118  $1,280,902      
    Agricultural real estate  222,558   227,455   223,791   225,672   230,837      
    Consumer real estate  525,902   525,178   521,895   512,973   506,866      
    Commercial and industrial  268,426   256,051   254,935   250,891   253,444      
    Agricultural  142,909   127,670   132,560   123,735   128,344      
    Consumer  70,918   74,819   79,591   83,024   88,312      
    Other  26,449   26,776   30,136   31,083   28,996      
    Less: Net deferred loan fees, costs and other (2)  (1,022)  (982)  517   (1,890)  (1,908)     
    Total loans,net $2,559,738  $2,541,367  $2,581,191  $2,529,606  $2,515,793      
                         
                         
    Asset quality data June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023     
    (Dollar amounts in thousands)                    
    Nonaccrual loans $2,487  $19,391  $22,353  $22,447  $6,295      
    90 day past due and accruing $-  $-  $-  $-  $-      
    Nonperforming loans $2,487  $19,391  $22,353  $22,447  $6,295      
    Other real estate owned $-  $-  $-  $-  $-      
    Nonperforming assets $2,487  $19,391  $22,353  $22,447  $6,295      
                         
                         
    Allowance for credit losses $25,270  $24,680  $25,024  $25,277  $24,910      
    Allowance for unfunded  1,928   1,946   2,212   2,023   2,099      
    Total Allowance for Credit Losses $27,198  $26,626  $27,236  $27,300  $27,009      
    Allowance for credit losses/total loans  0.99%  0.97%  0.97%  1.00%  0.99%     
    Adjusted credit losses with accretable yield/total loans  1.10%  1.11%  1.13%  1.18%  1.20%     
    Net charge-offs:                    
    Quarter-to-date $15  $55  $454  $93  $(133)     
    Year-to-date $70  $55  $551  $97  $(73)     
    Net charge-offs to average loans                    
    Quarter-to-date  0.00%  0.00%  0.02%  0.00%  -0.01%     
    Year-to-date  0.00%  0.00%  0.02%  0.00%  -0.00%     
    Nonperforming loans/total loans  0.10%  0.76%  0.87%  0.89%  0.25%     
    Allowance for credit losses/nonperforming loans  1016.08%  127.28%  111.95%  112.61%  395.71%     
    NPA coverage ratio  1016.08%  127.28%  111.95%  112.61%  395.71%     
                         
    (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 $612 thousand as of June 30, 2024, $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
      June 30, 2024 June 30, 2023
    Interest Earning Assets: Average Balance Interest/Dividends Annualized Yield/Rate Average Balance Interest/Dividends Annualized Yield/Rate
    Loans $2,556,417  $36,593  5.73% $2,476,795  $31,365  5.07%
    Taxable investment securities  391,439   1,782  1.82%  399,257   1,486  1.49%
    Tax-exempt investment securities  20,907   82  1.99%  24,259   93  1.94%
    Fed funds sold & other  187,682   2,709  5.77%  49,160   433  3.52%
    Total Interest Earning Assets  3,156,445  $41,166  5.22%  2,949,471  $33,377  4.53%
                 
    Nonearning Assets  156,239       169,599     
                 
    Total Assets $3,312,684      $3,119,070     
                 
    Interest Bearing Liabilities:            
    Savings deposits $1,492,831  $10,193  2.73% $1,356,798  $6,238  1.84%
    Other time deposits  668,583   6,295  3.77%  612,929   4,196  2.74%
    Other borrowed money  265,229   2,742  4.14%  215,884   2,113  3.92%
    Fed funds purchased & securities            
    sold under agreement to repurch.  27,721   276  3.98%  39,966   427  4.27%
    Subordinated notes  34,740   285  3.28%  34,625   285  3.29%
    Total Interest Bearing Liabilities $2,489,104  $19,791  3.18% $2,260,202  $13,259  2.35%
                 
    Noninterest Bearing Liabilities  504,821       552,867     
                 
    Stockholders' Equity $318,759      $306,001     
                 
    Net Interest Income and Interest Rate Spread   $21,375  2.04%   $20,118  2.18%
                 
    Net Interest Margin     2.71%     2.73%
                 
    Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts  
                 
                 
      For the Six Months Ended For the Six Months Ended
      June 30, 2024 June 30, 2023
    Interest Earning Assets: Average Balance Interest/Dividends Annualized Yield/Rate Average Balance Interest/Dividends Annualized Yield/Rate
    Loans $2,566,765  $71,793  5.60% $2,437,148  $61,068  5.01%
    Taxable investment securities  388,225   3,468  1.79%  398,383   2,985  1.50%
    Tax-exempt investment securities  21,196   168  2.01%  25,303   193  1.93%
    Fed funds sold & other  149,035   4,391  5.89%  58,853   933  3.17%
    Total Interest Earning Assets  3,125,221  $79,820  5.11%  2,919,687  $65,179  4.47%
                 
    Nonearning Assets  157,510       174,702     
                 
    Total Assets $3,282,731      $3,094,389     
                 
    Interest Bearing Liabilities:            
    Savings deposits $1,467,669  $19,600  2.67% $1,378,518  $11,181  1.62%
    Other time deposits  659,581   12,167  3.69%  596,168   7,404  2.48%
    Other borrowed money  264,217   5,431  4.11%  174,171   3,393  3.90%
    Fed funds purchased & securities            
    sold under agreement to repurch.  28,089   560  3.99%  39,409   832  4.22%
    Subordinated notes  34,726   569  3.28%  34,610   569  3.29%
    Total Interest Bearing Liabilities $2,454,282  $38,327  3.12% $2,222,876  $23,379  2.10%
                 
    Noninterest Bearing Liabilities  510,453       567,878     
                 
    Stockholders' Equity $317,996      $303,635     
                 
    Net Interest Income and Interest Rate Spread   $41,493  1.99%   $41,800  2.37%
                 
    Net Interest Margin     2.66%     2.87%
                 
    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 June 30, 2024 For the Three Months Ended June 30, 2023
     As Reported Excluding Acc/AmortDifference As Reported Excluding Acc/AmortDifference
     $Yield $Yield $Yield $Yield $Yield $Yield
    Interest Earning Assets:                 
    Loans$36,593 5.73% $35,914 5.62% $679 0.11% $31,365 5.07% $30,697 4.96% $668 0.11%
    Taxable investment securities 1,782 1.82%  1,782 1.82%  - 0.00%  1,486 1.49%  1,486 1.49%  - 0.00%
    Tax-exempt investment securities 82 1.99%  82 1.99%  - 0.00%  93 1.94%  93 1.94%  - 0.00%
    Fed funds sold & other 2,709 5.77%  2,709 5.77%  - 0.00%  433 3.52%  433 3.52%  - 0.00%
    Total Interest Earning Assets 41,166 5.22%  40,487 5.13%  679 0.09%  33,377 4.53%  32,709 4.44%  668 0.09%
                      
    Interest Bearing Liabilities:                 
    Savings deposits$10,193 2.73% $10,193 2.73% $- 0.00% $6,238 1.84% $6,238 1.84% $- 0.00%
    Other time deposits 6,295 3.77%  6,295 3.77%  - 0.00%  4,196 2.74%  4,291 2.80%  (95)-0.06%
    Other borrowed money 2,742 4.14%  2,747 4.14%  (5)0.00%  2,113 3.92%  2,130 3.95%  (17)-0.03%
    Federal funds purchased and                 
    securities sold under agreement to                 
    repurchase 276 3.98%  276 3.98%  - 0.00%  427 4.27%  427 4.27%  - 0.00%
    Subordinated notes 285 3.28%  285 3.28%  - 0.00%  285 3.29%  285 3.29%  - 0.00%
    Total Interest Bearing Liabilities 19,791 3.18%  19,796 3.18%  (5)0.00%  13,259 2.35%  13,371 2.37%  (112)-0.02%
                      
    Interest/Dividend income/yield 41,166 5.22%  40,487 5.13%  679 0.09%  33,377 4.53%  32,709 4.44%  668 0.09%
    Interest Expense / yield 19,791 3.18%  19,796 3.18%  (5)0.00%  13,259 2.35%  13,371 2.37%  (112)-0.02%
    Net Interest Spread 21,375 2.04%  20,691 1.95%  684 0.09%  20,118 2.18%  19,338 2.07%  780 0.11%
    Net Interest Margin 2.71%  2.62%  0.09%  2.73%  2.63%  0.10%
                      
                      
     For the Six Months Ended June 30, 2024 For the Six Months Ended June 30, 2023
     As Reported Excluding Acc/AmortDifference As Reported Excluding Acc/AmortDifference
     $Yield $Yield $Yield $Yield $Yield $Yield
    Interest Earning Assets:                 
    Loans$71,793 5.60% $70,439 5.49% $1,354 0.11% $61,068 5.01% $59,733 4.90% $1,335 0.11%
    Taxable investment securities 3,468 1.79%  3,468 1.79%  - 0.00%  2,985 1.50%  2,985 1.50%  - 0.00%
    Tax-exempt investment securities 168 2.01%  168 2.01%  - 0.00%  193 1.93%  193 1.93%  - 0.00%
    Fed funds sold & other 4,391 5.89%  4,391 5.89%  - 0.00%  933 3.17%  933 3.17%  - 0.00%
    Total Interest Earning Assets 79,820 5.11%  78,466 5.03%  1,354 0.08%  65,179 4.47%  63,844 4.38%  1,335 0.09%
                      
    Interest Bearing Liabilities:                 
    Savings deposits$19,600 2.67% $19,600 2.67% $- 0.00% $11,181 1.62% $11,181 1.62% $- 0.00%
    Other time deposits 12,167 3.69%  12,167 3.69%  - 0.00%  7,404 2.48%  7,958 2.67%  (554)-0.19%
    Other borrowed money 5,431 4.11%  5,454 4.13%  (23)-0.02%  3,393 3.90%  3,428 3.94%  (35)-0.04%
    Federal funds purchased and                 
    securities sold under agreement to                 
    repurchase 560 3.99%  560 3.99%  - 0.00%  832 4.22%  832 4.22%  - 0.00%
    Subordinated notes 569 3.28%  569 3.28%  - 0.00%  569 3.29%  569 3.29%  - 0.00%
    Total Interest Bearing Liabilities 38,327 3.12%  38,350 3.13%  (23)-0.01%  23,379 2.10%  23,968 2.16%  (589)-0.06%
                      
    Interest/Dividend income/yield 79,820 5.11%  78,466 5.03%  1,354 0.08%  65,179 4.47%  63,844 4.38%  1,335 0.09%
    Interest Expense / yield 38,327 3.12%  38,350 3.13%  (23)-0.01%  23,379 2.10%  23,968 2.16%  (589)-0.06%
    Net Interest Spread 41,493 1.99%  40,116 1.90%  1,377 0.09%  41,800 2.37%  39,876 2.22%  1,924 0.15%
    Net Interest Margin 2.66%  2.57%  0.09%  2.87%  2.74%  0.13%
                      


    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 ValueYear to Date Year to Date
      June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
             
    Shares Outstanding  13,679,944   13,634,912   13,679,944   13,634,912 
             
    Tangible Equity        
    Equity $322,664  $304,663  $322,664  $304,663 
    Goodwill  86,358   86,358   86,358   86,358 
    Other Intangible  6,658   8,437   6,658   8,437 
    Comprehensive Loss Adjustment*  -   -   28,589   35,922 
    CECL Adjustment**  -   -   1,685   2,528 
    Tangible Equity $229,648  $209,868  $259,922  $248,318 
    Shares Outstanding  13,680   13,635   13,680   13,635 
    Tangible Book Equity per Share $ 16.79  $ 15.39  $ 19.00  $ 18.21 
             
             
      Actual Average Regulatory Average
      Year to Date Year to Date
      June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
             
    Net Income $11,041  $12,467  $11,041  $12,467 
    Acquisition Costs - Tax Adjusted  -   147   -   147 
             
    Average Shares Outstanding  13,676,333   13,624,094   13,676,333   13,624,094 
             
    Average Tangible Equity        
    Average Equity $317,996  $303,635  $317,996  $303,635 
    Average Goodwill  86,358   86,358   86,358   86,358 
    Average Other Intangible  7,167   8,942   7,167   8,942 
    Average Comprehensive Loss Adjustment*  -   -   31,346   34,921 
    Average CECL Adjustment**  -   -   1,685   2,528 
    Average Tangible Equity $224,471  $208,335  $257,502  $245,784 
    Average Shares Outstanding  13,676   13,624   13,676   13,624 
    Average Tangible Book Equity per Share $ 16.41  $ 15.29  $ 18.83  $ 18.04 
             
    Return on Average Tangible Equity  9.84%  11.97%  8.58%  10.14%
    Return on Average Tangible Equity w/o Acquisition 9.84%  12.11%  8.58%  10.26%
             
             
    *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: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


















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