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Farmers & Merchants Bancorp, Inc. Reports 2024 First-Quarter Financial Results
ソース: Nasdaq GlobeNewswire / 01 5 2024 15:30:01 America/Chicago
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
BalancePercent 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 DATAFor 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 loansFARMERS & 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
BalanceInterest/
DividendsAnnualized
Yield/RateAverage
BalanceInterest/
DividendsAnnualized
Yield/RateLoans $ 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 VALUEActual 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.bankInvestor and Media Contact:
Andrew M. Berger
Managing Director
SM Berger & Company, Inc.
(216) 464-6400
andrew@smberger.com
