Farmers & Merchants Bancorp, Inc. Reports Record 2021 Fourth-Quarter and Full-Year Financial Results

ARCHBOLD, Ohio, Feb. 14, 2022 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2021 fourth quarter and twelve months ended December 31, 2021.

2021 Fourth Quarter Financial Highlights Include (on a year-over-year basis unless noted):

• Net income increased 13.4% to a quarterly record of $7.7 million, or $0.59 per basic and diluted share
• Average shares outstanding increased 16.7% as a result of the Perpetual Federal Savings Bank Acquisition
• Adjusted net income, excluding one-time tax adjusted acquisition expenses, increased 27.8% to $8.7 million
• Adjusted earnings, excluding one-time tax adjusted acquisition expenses, increased 10.0% to $0.66 per basic and diluted share
• Net interest income after provision for loan losses increased 38.7% to a quarterly record of $19.6 million
• Fourth quarter after-tax income benefited from $0.3 million of accelerated fees associated with the Paycheck Protection Program (“PPP”) compared to $1.2 million in the 2020 fourth quarter
• Net charge-offs to average loans were -0.01%, the third consecutive quarter at or below 0.00%
• Adjusted return on average tangible equity, excluding one-time tax adjusted acquisition expenses, increased to 13.09% from 10.89% on a year-over-year basis
• Increased the regular quarterly cash dividend payment by 11.8% to $0.19 per share
  

2021 Full-Year Financial Highlights Include (on a year-over-year basis unless noted):

• Total loans increased 42.8% to $1.842 billion, and included $2.9 million of PPP loans
• Total loans increased by 15.9% organically and without PPP loans
• Total assets increased 38.2% to a record $2.638 billion
• Deposits increased 37.4% to a record $2.193 billion
• Net interest income after provision for loan losses increased 25.1% to $66.1 million
• Net income increased 16.9% to an annual record of $23.5 million
• Earnings increased 11.7% to an annual record of $2.01 per basic and diluted share
• Adjusted net income, excluding one-time tax adjusted acquisition expenses, increased 32.5% to $26.6 million
• Adjusted earnings, excluding one-time tax adjusted acquisition expenses, increased 26.7% to $2.28 per basic and diluted share
• F&M raised its quarterly dividend payment two times during 2021, and the 2021 annual cash dividend increased 7.6% to $0.71 per share, representing the 27^th consecutive annual dividend increase
• Provided a record $435,000 of charitable donations to support organizations throughout Indiana and Ohio
  

“2021 is the seventh consecutive year F&M has produced record financial results, including record annual net income, earnings per share, loans, and dividends. I am proud of our track record of earnings growth, strong asset quality, and returns to shareholders, which reflects the successful execution of our strategic growth plan, the dedication and hard work of our 387 team members, and the valuable financial services we provide our local communities. Despite our recent success, we remain focused on becoming a $3.0 billion asset bank. We believe 2022 will be a transformative year for F&M as we benefit from the three acquisitions we completed over the past 12 months, our 2021 office realignment initiative, and our recently opened offices and LPOs,” stated Lars B. Eller, President and Chief Executive Officer.

Mr. Eller continued, “As we execute against our strategic growth plan, we remain rooted in our communities and continue to focus on creating value for our shareholders, associates, and the markets in which we operate. During 2021, F&M’s Board of Directors approved two increases to our regular quarterly dividend payment, which was up 7.6% over the prior year. In fact, according to data from S&P Global Market Intelligence, of the nearly 800 publicly traded banks, F&M has the 11^th longest track record of consecutive dividend increases. For the year, we also increased wages demonstrating our commitment to our associates, and ensuring we continue to attract and retain fantastic team members. Finally, I am extremely proud of our continued commitment to our local communities. For 2021, our support to organizations within our markets increased 23.9% to a record $435,000.”

Income Statement
Net income for the 2021 fourth quarter ended December 31, 2021, was $7.7 million, compared to $6.8 million for the same period last year. Net income per basic and diluted share for the 2021 fourth quarter was $0.59, compared to $0.60 for the same period last year. The $0.01 decline in net income per basic and diluted share was due to a 16.7% year-over-year increase in the average shares outstanding as a result of the Perpetual Federal Savings Bank acquisition. Net income for the 2021 twelve-month period ended December 31, 2021, was $23.5 million, compared to $20.1 million for the same period last year. Net income per basic and diluted share for the 2021 twelve months was $2.01, compared to $1.80 for the same period last year.

Adjusted net income for the 2021 fourth quarter was $8.7 million, or $0.66 per diluted share, compared to $6.8 million, or $0.60 per diluted share in the prior year quarter. Adjusted net income accounts for the impact of one-time acquisition expenses. Adjusted net income for the year ended December 31, 2021, was $26.6 million, or $2.28 per diluted share, compared to $20.1 million, or $1.80 per diluted share in the prior year.

Mr. Eller continued, “The Bank has had 19 consecutive months with an operating efficiency ratio in the 50% range when removing affiliate and acquisition expenses. We believe earnings growth will accelerate throughout 2022 as our strong financial results benefit from our larger scale, strong asset quality, and prudent expense management.”

Deposits
At December 31, 2021, total deposits were $2.193 billion, an increase of 37.4% from December 31, 2020, and an increase of 17.5% from September 30, 2021. In addition, F&M continues to see growing customer preferences to more stable and secure saving instruments as deposits have increased since the COVID-19 crisis began. The Company’s cost of interest-bearing liabilities improved to 0.48% for the year ended December 31, 2021, compared to 0.87% for the year ended December 31, 2020.

Loan Portfolio and Asset Quality
Total loans, net at December 31, 2021, increased 42.6% to $1.857 billion, compared to $1.303 billion at December 31, 2020. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth and the completion of both the Perpetual Federal Savings Bank, Inc. and Ossian Financial Services, Inc. acquisitions. Loans increased 15.9% organically from the same period a year ago when not including the Perpetual and Ossian acquisitions, and the impact of PPP loans. During the 2021 fourth quarter and full year, the Company processed $6.9 million and $84.5 million, respectively, of PPP loan forgiveness and principal payments received, resulting in a total of $2.9 million of PPP loans within F&M’s loan portfolio at December 31, 2021. Under the second round of PPP, F&M funded $51.2 million of PPP loans, protecting over 18,000 jobs.

Mr. Eller continued, “Our organic loan growth of 15.9% reflects the value of our community oriented financial services. In addition, loan growth is benefitting from our recently opened office in Fort Wayne, Indiana, and new LPOs in Ohio, Indiana, and Michigan, as well as the contributions of our highly talented loan officers. I believe our nimble, local and supportive lending culture is well positioned to serve commercial and retail customers throughout our growing footprint and I’m excited by our growth opportunities in 2022 and beyond.”

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $8.1 million or 0.43% of total loans at December 31, 2021, compared to $9.4 million, or 0.72% at December 31, 2020. The year-over-year decrease in nonperforming loans occurred despite the addition of $385.1 million of loans associated with the Perpetual and Ossian acquisitions, reflecting strong asset quality at F&M as well as its recently acquired banks.

At December 31, 2021, there were no COVID-related payment modifications outstanding compared to 190 loans representing a balance of $165 million in deferrals at the peak in 2020.

“As we look to 2022, I am encouraged by the positive momentum underway across our business. Our 2022 financial results are expected to reflect the full benefits of the Perpetual Federal Savings Bank, Inc., and Ossian Financial Services, Inc. acquisitions, the Adams County Financial Resources asset purchase, our new Fort Wayne office, our three new LPOs, and the completion of our office realignment program. I am extremely proud of our record financial and operating results in 2021, and I am excited by the opportunities we have in 2022 and beyond to create additional value for our shareholders, customers, employees, and communities,” concluded Mr. Eller.

Stockholders’ Equity and Dividends
Total stockholders’ equity increased 19.3% to $297.2 million at December 31, 2021, from $249.2 million at December 31, 2020. At December 31, 2021, the Company had a Tier 1 leverage ratio of 10.05%, compared to 11.20% at December 31, 2020.

Tangible stockholders’ equity increased to $215.5 million at December 31, 2021, compared to $192.5 million at December 31, 2020. On a per share basis, tangible stockholders’ equity at December 31, 2021, was $16.49 per share, compared to $17.19 per share at December 31, 2020.

For the twelve months ended December 31, 2021, the Company declared cash dividends of $0.71 per share, which is a 7.6% increase over the 2020 twelve-month declared dividend payment. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 27 consecutive years. For the twelve months ended December 31, 2021, the dividend payout ratio was 35.08% compared to 36.36% for the same period last year.  

About Farmers & Merchants State Bank:
The Farmers & Merchants State Bank is a local independent community bank that has been serving Northwest Ohio and Northeast Indiana since 1897. The Farmers & Merchants State Bank provides commercial banking, retail banking and other financial services. Our locations are in Champaign, Fulton, Defiance, Hancock, Henry, Lucas, Williams, and Wood counties in Western Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, Steuben and Wells counties, and we have Loan Production Offices in West Bloomfield, Michigan; Muncie, Indiana; and Oxford, Ohio.

Safe harbor statement
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																		Twelve Months Ended
	December 31, 2021				September 30, 2021			June 30, 2021			March 31, 2021				December 31, 2020					December 31, 2021				December 31, 2020
Interest Income
Loans, including fees	$	21,008			$	18,766		$	16,259		$	15,612			$	17,061				$	71,645			$	65,317
Debt securities:
U.S. Treasury and government agencies	964				924			857			751				695					3,496				3,369
Municipalities	289				284			289			308				295					1,170				1,079
Dividends	49				44			31			50				35					174				142
Federal funds sold	10				10			6			5				5					31				20
Other.	103				94			88			39				48					324				242
Total interest income	22,423				20,122			17,530			16,765				18,139					76,840				70,169
Interest Expense
Deposits	1,581				1,221			1,276			1,340				1,619					5,418				8,638
Federal funds purchased and securities sold
under agreements to repurchase	155				165			163			166				170					649				775
Borrowed funds	361				87			115			222				226					785				980
Subordinated notes	291				199			-			-				-					490				-
Total interest expense	2,388				1,672			1,554			1,728				2,015					7,342				10,393
Net Interest Income - Before Provision for Loan Losses	20,035				18,450			15,976			15,037				16,124					69,498				59,776
Provision for Loan Losses	444				659			641			1,700				1,995					3,444				6,981
Net Interest Income After Provision For Loan Losses	19,591				17,791			15,335			13,337				14,129					66,054				52,795
Noninterest Income
Customer service fees	2,417				2,242			2,198			2,814				2,750					9,671				8,893
Other service charges and fees	1,026				1,010			874			838				980					3,748				3,602
Net gain on sale of loans	1,074				822			955			1,046				1,894					3,897				4,022
Net gain on sale of available-for-sale securities	-				-			-			293				-					293				270
Total noninterest income	4,517				4,074			4,027			4,991				5,624					17,609				16,787
Noninterest Expense
Salaries and wages	5,761				5,442			4,591			4,390				5,068					20,184				18,488
Employee benefits	1,792				1,621			1,915			1,994				1,140					7,322				5,601
Net occupancy expense	532				529			546			577				585					2,184				2,271
Furniture and equipment	782				903			848			791				760					3,324				3,143
Data processing	1,020				1,548			428			505				428					3,501				1,768
Franchise taxes	361				372			294			446				241					1,473				1,346
ATM expense	478				460			459			449				456					1,846				1,690
Advertising	431				439			331			235				353					1,436				1,332
Net (gain) loss on sale of other assets owned	13				219			227			(25		)		20					434				7
FDIC assessment	265				296			276			236				223					1,073				633
Mortgage servicing rights amortization	266				285			524			505				247					1,580				1,031
Consulting fees	761				256			394			223				407					1,634				968
Other general and administrative	1,964				1,951			2,227			2,033				1,358					8,175				6,098
Total noninterest expense	14,426				14,321			13,060			12,359				11,286					54,166				44,376
Income Before Income Taxes	9,682				7,544			6,302			5,969				8,467					29,497				25,206
Income Taxes	1,999				1,624			1,319			1,060				1,691					6,002				5,111
Net Income	7,683				5,920			4,983			4,909				6,776					23,495				20,095
Other Comprehensive Income (Loss) (Net of Tax):
Net unrealized gain (loss) on available-for-sale securities	(5,170		)		173			786			(6,737		)		(207		)			(10,948		)		6,091
Reclassification adjustment for realized gain on sale of available-for-sale securities	-				-			-			(293		)		-					(293		)		(270		)
Net unrealized gain (loss) on available-for-sale securities	(5,170		)		173			786			(7,030		)		(207		)			(11,241		)		5,821
Tax expense (benefit)	(1,085		)		36			165			(1,476		)		(44		)			(2,360		)		1,222
Other comprehensive income (loss)	(4,085		)		137			621			(5,554		)		(163		)			(8,881		)		4,599
Comprehensive Income	$	3,598			$	6,057		$	5,604		$	(645	)		$	6,613				$	14,614			$	24,694
Basic and Diluted Earnings Per Share	$	0.59			$	0.53		$	0.44		$	0.44			$	0.60				$	2.01			$	1.80
Dividends Declared	$	0.19			$	0.18		$	0.17		$	0.17			$	0.17				$	0.71			$	0.66

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (in thousands of dollars, except share data)
	December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
					(Unaudited)				(Unaudited)				(Unaudited)
Assets
Cash and due from banks	$	135,485			$	112,875			$	93,636			$	118,139			$	98,279
Federal funds sold	45,338				45,203				57,483				57,361				77,427
Total cash and cash equivalents	180,823				158,078				151,119				175,500				175,706
Interest-bearing time deposits	10,913				14,622				18,597				4,405				4,653
Securities - available-for-sale	429,931				426,717				407,500				352,974				307,812
Other securities, at cost	8,162				4,905				6,419				5,939				5,939
Loans held for sale	7,714				3,735				8,041				7,511				7,740
Loans, net	1,841,177				1,479,864				1,443,336				1,327,254				1,289,318
Premises and equipment	26,913				26,476				26,915				26,703				27,063
Goodwill	80,434				55,214				56,066				47,340				47,340
Mortgage servicing rights	3,157				3,097				3,146				3,444				3,320
Other real estate owned	159				167				198				148				71
Bank owned life insurance	27,558				27,397				27,218				25,347				25,208
Other assets	21,359				18,711				18,310				16,720				15,374
Total Assets	$	2,638,300			$	2,218,983			$	2,166,865			$	1,993,285			$	1,909,544
Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing	$	473,689			$	438,076			$	443,863			$	384,558			$	351,147
Interest-bearing
NOW accounts	650,466				646,237				652,078				605,533				542,317
Savings	597,828				529,532				501,687				451,043				455,145
Time	471,479				252,383				256,445				242,717				247,553
Total deposits	2,193,462				1,866,228				1,854,073				1,683,851				1,596,162
Federal funds purchased and
securities sold under agreements to repurchase	29,268				29,601				29,882				30,072				30,239
Federal Home Loan Bank (FHLB) advances	24,065				17,868				17,868				17,840				17,861
Other borrowings	40,000				-				-				-				-
Subordinated notes, net of unamortized issuance costs	34,471				34,441				-				-				-
Dividend payable	2,461				2,002				1,888				1,889				1,889
Accrued expenses and other liabilities	17,406				14,097				12,569				12,805				14,233
Total liabilities	2,341,133				1,964,237				1,916,280				1,746,457				1,660,384
Commitments and Contingencies
Stockholders' Equity
Common stock - No par value 20,000,000 shares authorized; issued and
outstanding 14,063,999 shares 12/31/21 and 12,230,000 shares 12/31/20	122,674				81,382				82,259				82,030				81,804
Treasury stock - 997,766 shares 12/31/21, 1,032,456 shares 12/31/20	(11,724		)		(11,718		)		(12,172		)		(11,962		)		(11,932		)
Retained earnings	189,401				184,181				179,734				176,617				173,591
Accumulated other comprehensive income (loss)	(3,184		)		901				764				143				5,697
Total stockholders' equity	297,167				254,746				250,585				246,828				249,160
Total Liabilities and Stockholders' Equity	$	2,638,300			$	2,218,983			$	2,166,865			$	1,993,285			$	1,909,544

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
SELECT FINANCIAL DATA
		For the Three Months Ended																				For the Three Months Ended
Selected financial data		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020					December 31, 2021				December 31, 2020
Return on average assets			1.17	%			1.12	%			0.90	%			1.01	%			1.43	%			1.05	%			1.14	%
Return on average equity			10.94	%			9.32	%			8.00	%			7.87	%			11.04	%			9.09	%			8.38	%
Yield on earning assets			3.59	%			3.85	%			3.53	%			3.71	%			4.09	%			3.66	%			4.25	%
Cost of interest bearing liabilities			0.51	%			0.45	%			0.44	%			0.53	%			0.64	%			0.48	%			0.87	%
Net interest spread			3.08	%			3.40	%			3.09	%			3.18	%			3.45	%			3.18	%			3.38	%
Net interest margin			3.21	%			3.53	%			3.21	%			3.33	%			3.63	%			3.31	%			3.62	%
Efficiency			58.76	%			63.50	%			64.98	%			62.57	%			52.20	%			62.39	%			58.17	%
Dividend payout ratio			32.03	%			33.81	%			37.89	%			38.48	%			27.77	%			35.08	%			36.36	%
Tangible book value per share (1)		$	16.49			$	17.33			$	16.94			$	17.50			$	17.19
Tier 1 capital to average assets			8.47	%			9.45	%			8.78	%			10.39	%			10.46	%			10.05	%			11.20	%
Average Shares Outstanding			13,046,299				11,209,732				11,191,043				11,197,012				11,177,765				11,664,852				11,146,270
Loans		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
(Dollar amounts in thousands)
Commercial real estate		$	848,477			$	728,852			$	691,122			$	618,754			$	588,825
Agricultural real estate			198,343				179,374				189,742				179,945				189,159
Consumer real estate			395,873				202,454				194,715				175,675				175,588
Commercial and industrial			208,270				194,767				216,609				202,958				189,246
Agricultural			118,368				105,580				100,756				100,022				94,358
Consumer			57,737				55,521				56,427				54,445				52,540
Other			32,089				31,096				13,549				14,088				15,757
Less: Net deferred loan fees and costs			(1,738	)			(2,082	)			(4,497	)			(4,208	)			(2,483	)
Total loans,net		$	1,857,419			$	1,495,562			$	1,458,423			$	1,341,679			$	1,302,990
Asset quality data		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
(Dollar amounts in thousands)
Nonaccrual loans		$	8,076			$	6,248			$	7,031			$	8,139			$	9,404
Troubled debt restructuring		$	7,614			$	6,035			$	5,492			$	5,774			$	6,514
90 day past due and accruing		$	-			$	-			$	-			$	-			$	-
Nonperforming loans		$	8,076			$	6,248			$	7,031			$	8,139			$	9,404
Other real estate owned		$	159			$	167			$	198			$	148			$	71
Nonperforming assets		$	8,235			$	6,415			$	7,229			$	8,287			$	9,475
(Dollar amounts in thousands)
Allowance for loan and lease losses		$	16,242			$	15,698			$	15,087			$	14,425			$	13,672
Allowance for loan and lease losses/total loans			0.87	%			1.05	%			1.03	%			1.08	%			1.05	%
Net charge-offs:
Quarter-to-date		$	(101	)		$	48			$	(21	)		$	947			$	205
Year-to-date		$	874			$	974			$	926			$	947			$	537
Net charge-offs to average loans
Quarter-to-date			-0.01	%			0.00	%			0.00	%			0.07	%			0.02	%
Year-to-date			0.06	%			0.07	%			0.07	%			0.07	%			0.04	%
Nonperforming loans/total loans			0.43	%			0.42	%			0.48	%			0.61	%			0.72	%
Allowance for loan and lease losses/nonperforming loans			201.11	%			251.26	%			214.58	%			177.24	%			145.47	%
(1)  Tangible Equity = Stockholder Equity less goodwill and other intangibles (core deposit intangible, mortgage servicing rights and unrealized gain/loss on securities)

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES
(in thousands of dollars, except percentages)
	For the Three Months Ended									For the Three Months Ended
	December 31, 2021									December 31, 2020
Interest Earning Assets:	Average Balance			Interest/Dividends			Annualized Yield/Rate			Average Balance			Interest/Dividends			Annualized Yield/Rate
Loans	$	1,843,942		$	21,008		4.56	%		$	1,336,538		$	17,061		5.11	%
Taxable investment securities	421,676			1,228			1.16	%		250,601			916			1.46	%
Tax-exempt investment securities	18,303			74			2.05	%		23,216			109			2.38	%
Fed funds sold & other	218,481			113			0.21	%		169,116			53			0.13	%
Total Interest Earning Assets	2,502,402			$	22,423		3.59	%		1,779,471			$	18,139		4.09	%
Nonearning Assets	125,930									112,177
Total Assets	$	2,628,332								$	1,891,648
Interest Bearing Liabilities:
Savings deposits	$	1,262,214		$	767		0.24	%		$	967,355		$	705		0.29	%
Other time deposits	481,119			814			0.68	%		253,023			914			1.44	%
Other borrowed money	64,008			361			2.26	%		17,775			226			5.09	%
Fed funds purchased & securities
sold under agreement to repurch.	29,403			155			2.11	%		30,100			170			2.26	%
Subordinated notes	34,451			291			3.38	%		-			-			0.00	%
Total Interest Bearing Liabilities	$	1,871,195		$	2,388		0.51	%		$	1,268,253		$	2,015		0.64	%
Noninterest Bearing Liabilities	476,122									377,791
Stockholders' Equity	$	281,015								$	245,604
Net Interest Income and Interest Rate Spread				$	20,035		3.08	%					$	16,124		3.45	%
Net Interest Margin							3.21	%								3.63	%
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, 2021									December 31, 2020
Interest Earning Assets:	Average Balance			Interest/Dividends			Annualized Yield/Rate			Average Balance			Interest/Dividends			Annualized Yield/Rate
Loans	$	1,522,088		$	71,645		4.71	%		$	1,313,675		$	65,317		4.98	%
Taxable investment securities	377,887			4,514			1.19	%		219,044			4,136			1.89	%
Tax-exempt investment securities	18,365			326			2.25	%		24,958			454			2.30	%
Fed funds sold & other	187,003			355			0.19	%		99,304			262			0.26	%
Total Interest Earning Assets	2,105,343			$	76,840		3.66	%		1,656,981			$	70,169		4.25	%
Nonearning Assets	124,649									113,303
Total Assets	$	2,229,992								$	1,770,284
Interest Bearing Liabilities:
Savings deposits	$	1,145,636		$	2,467		0.22	%		$	879,669		$	3,942		0.45	%
Other time deposits	306,600			2,951			0.96	%		264,827			4,696			1.77	%
Other borrowed money	29,479			785			2.66	%		21,245			980			4.61	%
Fed funds purchased & securities
sold under agreement to repurch.	29,831			649			2.18	%		32,363			775			2.39	%
Subordinated notes	14,777			490			3.32	%		-			-			0.00	%
Total Interest Bearing Liabilities	$	1,526,323		$	7,342		0.48	%		$	1,198,104		$	10,393		0.87	%
Noninterest Bearing Liabilities	445,144									332,482
Stockholders' Equity	$	258,525								$	239,698
Net Interest Income and Interest Rate Spread				$	69,498		3.18	%					$	59,776		3.38	%
Net Interest Margin							3.31	%								3.62	%
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
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
Non-GAAP Earnings Per Share
(in thousands of dollars, expect per share data)		Three Months				Twelve. Months
		December 31,				December 31,
		2021				2021
Net income as reported		$	7,683			$	23,495
Acquisition expenses		1,192				3,859
Tax effect		(216		)		(728		)
Adjusted net income		$	8,659			$	26,626
Less: distributed earnings allocated to participating securities		(20		)		(70		)
Less: undistributed earnings allocated to participating securities		(54		)		(146		)
Net earnings available to common shareholders		$	8,585			$	26,410
Weighted average common shares outstanding including participating securities		13,046,299				11,664,852
Less: average unvested restricted shares		(111,131		)		(94,634		)
Weighted average common shares outstanding		12,935,168				11,570,218
Basic earnings and diluted per share		$	0.66			$	2.28
		Twelve Months
		December 31,				December 31,
		2021				2021
Reconciliation of Efficiency Ratio		Non-GAAP				Actual
Net interest income (+)		65,757				69,498
Noninterest income (+)		17,609				17,609
Gain on security sale (-)		293				293
Operating expenses (/)		50,307				54,166
Efficiency Ratio		60.56		%		62.39		%
		Twelve Months
		December 31,				December 31,
		2021				2021
Reconciliation of Return on Average Assets		Non-GAAP				Actual
Net income		$	23,495			$	23,495
Less: accelerated net fee income for forgiveness of PPP loans		(3,741		)		-
Acquisition expenses		3,859				-
Tax effect		58				-
Adjusted net income		$	23,671			$	23,495
Average Assets		$	2,229,992			$	2,229,992
Return on Average Assets		1.06		%		1.05		%
		Twelve Months
		December 31,				December 31,
		2021				2021
Reconciliation of Return on Average Tangible Equity		Non-GAAP				Actual
Net income		$	23,495			$	23,495
Acquisition expenses		3,859				-
Tax effect		(728		)		-
Adjusted net income		$	26,626			$	23,495
Average Tangible Equity		$	203,450			$	203,450
Return on Average Tangible Equity		13.09		%		11.55		%

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