-
Farmers & Merchants Bancorp, Inc. Reports Record 2021 Fourth-Quarter and Full-Year Financial Results
ソース: Nasdaq GlobeNewswire / 14 2 2022 16:30:01 America/New_York
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 27th 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 11th 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,
2021September 30,
2021June 30,
2021March 31,
2021December 31,
2020December 31,
2021December 31,
2020Interest 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/RateAverage Balance Interest/Dividends Annualized
Yield/RateLoans $ 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/RateAverage Balance Interest/Dividends Annualized
Yield/RateLoans $ 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.bankAndrew M. Berger
Managing Director
SM Berger & Company, Inc.
(216) 464-6400
andrew@smberger.com