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Farmers & Merchants Bancorp, Inc. Reports 2022 Third-Quarter and Year-to-Date Financial Results
ソース: Nasdaq GlobeNewswire / 19 10 2022 17:00:01 America/New_York
ARCHBOLD, Ohio, Oct. 19, 2022 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2022 third quarter and year-to-date September 30, 2022.
2022 Third Quarter Financial Highlights Include
(Compared to the 2021 third quarter period unless noted):- Net income increased 51.3% to a quarterly record of $9.0 million, from $5.9 million
- Earnings increased 28.3% to $0.68 per basic and diluted share, from $0.53 per basic and diluted share
- Average shares outstanding increased 16.7% as a result of the Perpetual Federal Savings Bank Acquisition
- Efficiency rate improved to 51.19% for the 2022 third quarter, and 53.16% for the 2022 nine months
- Organic loan growth of 21.3%, excluding PPP loans and loan balances at time of acquisitions
- Total loans were a record of $2.143 billion and increased 15.4% from $1.857 billion at December 31, 2021
- Total assets increased 25.5% to a record $2.784 billion
- Deposits increased 22.3% to $2.283 billion
- Strong asset quality continues as nonperforming loans declined 12.5% to $5.5 million, or 0.26% of total loans
- Net charge-offs to average loans were 0.00%, the sixth consecutive quarter at or below 0.00%
- Return on average equity, increased to 12.53% from 9.32%
- Return on average tangible equity, based on regulatory calculations, increased to 15.50% from 12.23% on a year-over-year basis
- 2022 third quarter cash dividend increased by 16.7% year-over-year to $0.21 per share
- Eric Faust named Senior Vice President and Chief Risk Officer of Farmers & Merchants State Bank
- Benét Rupp, Chief Administrative Officer, promoted to Executive Vice President
- Completed the Peoples-Sidney Financial Corporation acquisition on October 1, 2022
Lars B. Eller, President and Chief Executive Officer, stated, “Record third quarter results demonstrate the continued success of our strategic growth plan, the value we provide our local communities, and the power of our financial model. Throughout 2022, we have experienced strong organic loan growth across our Ohio, Indiana and Michigan markets as loans increased organically by $301.4 million, or 21.3% on a year-over-year basis. Robust loan growth, combined with our recent acquisitions, excellent asset quality, and stable net interest margin, have driven a 30.0% increase in net interest income after the provision for loan losses. These outstanding trends and our focus on prudently controlling operating expenses are supporting a powerful financial model as we achieved record quarterly and year-to-date net income and earnings per share.”
Mr. Eller continued, “As we enter the fourth quarter, positive momentum across many areas of our business remains strong and we started the quarter with a robust pipeline of news loans expected to close over the next three months. On October 1, 2022, we completed the Peoples-Sidney Financial Corporation acquisition. Peoples adds slightly over $130 million in total assets to F&M, expands F&M’s community banking franchise into compelling markets throughout Shelby County Ohio, and excluding one-time transaction costs, is expected to be accretive to 2023 earnings by approximately 2.5%. We also continue to pursue opportunities for de novo growth. Expansion plans underway include new full-service offices that are expected to open over the next 12 months in Toledo, Ohio, Fort Wayne, Indiana, and Birmingham, Michigan as well as an office relocation in Auburn, Indiana.”
Income Statement
Net income for the 2022 third quarter ended September 30, 2022, was $9.0 million, compared to $5.9 million for the same period last year. Net income per basic and diluted share for the 2022 third quarter was $0.68, compared to $0.53 for the same period last year. Net income for the 2022 nine months ended September 30, 2022, was $25.3 million, compared to $15.8 million for the same period last year. Net income per basic and diluted share for the 2022 nine months was $1.94, compared to $1.41 for the same period last year.Noninterest expense for the 2022 third quarter and nine months included approximately $0.5 million and approximately $0.5 million, respectively of one-time expenses associated with the Company’s recent acquisitions. Noninterest expense for the 2021 third quarter and nine months included $1.4 million and $2.7 million, respectively of one-time expenses associated with the Company’s recent acquisitions.
Profitability is benefitting from F&M’s larger scale, strong asset quality, and prudent expense management. The Company’s efficiency ratio improved to 51.19% during the 2022 third quarter, and 53.16% for the 2022 nine-month period. Strong profitability also drove higher returns, and ROAA, ROAE, and ROATCE all expanded on a year-over-year basis.
Deposits
At September 30, 2022, total deposits were $2.283 billion, an increase of 22.3% from September 30, 2021, and an increase of 4.1% from December 31, 2021. 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 was 0.68% for the quarter ended September 30, 2022, compared to 0.45% for the quarter ended September 30, 2021, and 0.51% for the quarter ended December 31, 2021.Loan Portfolio and Asset Quality
Total net loans, at September 30, 2022, increased 43.3%, or by $647.1 million to $2.143 billion, compared to $1.496 billion at September 30, 2021, and up 15.4% from $1.857 billion at December 31, 2021. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth and the completion of the Perpetual Federal Savings Bank and Ossian Financial Services acquisitions.Not including the Ossian acquisition and PPP, loans increased 21.3% organically or by $301.4 million from the same period a year ago. Additionally, there were only $7,000 of PPP loans within F&M’s loan portfolio at September 30, 2022.
F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $5.5 million, or 0.26% of total loans at September 30, 2022, compared to $6.2 million, or 0.42% at September 30, 2021. Due to loan growth, F&M continues to prudently fund its allowance for loan and lease losses which has increased 27.3% on a year-over-year basis.
At September 30, 2022, the Company’s allowance for loan and lease losses to nonperforming loans was 365.44%, compared to 251.26% at September 30, 2021. As a result of F&M’s recent acquisitions, the Company has a total gross credit mark of nearly $6.0 million, which further enhances F&M’s allowance at September 30, 2022. Including the total gross credit mark, F&M’s allowance for loan and lease losses to total loans improved to 1.21% at September 30, 2022.
Mr. Eller concluded, “Economic uncertainty continues to increase as a result of more restrictive monetary policies and rapid inflation. We are watching our markets closely and working with our business, retail, and agricultural customers to help them navigate a more fluid economic environment. Overall, F&M is well positioned for changes in the economic cycle as our asset quality remains strong, and we remain well capitalized. In addition, while we anticipate inflation to impact noninterest expenses and competition for deposits to increase our cost of funds in the coming quarters, our efficiency ratio is strong, and our larger scale continues to benefit profitability. As you can see, trends in our business are at record levels, and we believe 2022 will be another record year of earnings and growth for F&M.”
Stockholders’ Equity and Dividends
Total stockholders’ equity increased 10.1% to $280.6 million at September 30, 2022, from $254.7 million at September 30, 2021. At September 30, 2022, the Company had a Tier 1 leverage ratio of 9.11%, compared to 9.45% at September 30, 2021.Tangible stockholders’ equity on a regulatory basis increased to $234.1 million at September 30, 2022, compared to $194.6 million at September 30, 2021. On a per share basis, tangible stockholders’ equity at September 30, 2022, was $17.86 per share, compared to $17.33 per share at September 30, 2021.
For the nine months ended September 30, 2022, the Company has declared cash dividends of $0.6025 per share, which is a 15.9% increase over the same period last year. Dividends declared for the 2022 nine months included a special one-time cash dividend of $0.0125 to honor F&M’s 125th anniversary, and a 16.7% year-over-year increase for the 2022 third quarter dividend payment to $0.21 per share. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for over 28 consecutive years. For the nine months ended September 30, 2022, the dividend payout ratio was 40.58% compared to 36.55% 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, Shelby, 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 Bryan 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 Nine Months Ended September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 September 30, 2022 September 30, 2021 Interest Income Loans, including fees $ 24,119 $ 22,388 $ 20,455 $ 21,008 $ 18,766 $ 66,962 $ 50,637 Debt securities: U.S. Treasury and government agencies 1,049 1,035 1,023 964 924 3,107 2,532 Municipalities 373 322 300 289 284 995 881 Dividends 93 57 42 49 44 192 125 Federal funds sold - 9 10 10 10 19 21 Other. 213 100 69 103 94 382 221 Total interest income 25,847 23,911 21,899 22,423 20,122 71,657 54,417 Interest Expense Deposits 2,166 1,379 1,360 1,581 1,221 4,905 3,837 Federal funds purchased and securities sold under agreements to repurchase 416 166 152 155 165 734 494 Borrowed funds 398 218 335 361 87 951 424 Subordinated notes 284 284 269 291 199 837 199 Total interest expense 3,264 2,047 2,116 2,388 1,672 7,427 4,954 Net Interest Income - Before Provision for Loan Losses 22,583 21,864 19,783 20,035 18,450 64,230 49,463 Provision for Loan Losses 1,637 1,628 580 444 659 3,845 3,000 Net Interest Income After Provision for Loan Losses 20,946 20,236 19,203 19,591 17,791 60,385 46,463 Noninterest Income Customer service fees 2,300 2,148 2,648 2,417 2,242 7,096 7,254 Other service charges and fees 1,105 1,008 998 1,026 1,010 3,111 2,722 Net gain on sale of loans 327 164 697 1,074 822 1,188 2,823 Net gain on sale of available-for-sale securities - - - - - - 293 Total noninterest income 3,732 3,320 4,343 4,517 4,074 11,395 13,092 Noninterest Expense Salaries and wages 5,479 5,366 5,502 5,761 5,442 16,347 14,423 Employee benefits 1,392 1,546 2,054 1,792 1,621 4,992 5,530 Net occupancy expense 693 522 598 532 529 1,813 1,652 Furniture and equipment 1,047 1,008 1,056 782 903 3,111 2,542 Data processing 781 654 604 1,020 1,548 2,039 2,481 Franchise taxes 254 757 418 361 372 1,429 1,112 ATM expense 580 544 532 478 460 1,656 1,368 Advertising 578 300 237 431 439 1,115 1,005 Net (gain) loss on sale of other assets owned - (266 ) (5 ) 13 219 (271 ) 421 FDIC assessment 271 270 114 265 296 655 808 Mortgage servicing rights amortization (50 ) 59 26 266 285 35 1,314 Consulting fees 254 233 178 761 256 665 873 Other general and administrative 2,192 2,242 2,179 1,964 1,951 6,613 6,211 Total noninterest expense 13,471 13,235 13,493 14,426 14,321 40,199 39,740 Income Before Income Taxes 11,207 10,321 10,053 9,682 7,544 31,581 19,815 Income Taxes 2,253 2,050 1,951 1,999 1,624 6,254 4,003 Net Income 8,954 8,271 8,102 7,683 5,920 25,327 15,812 Other Comprehensive Income (Loss) (Net of Tax): Net unrealized gain (loss) on available-for-sale securities (8,197 ) (14,602 ) (20,939 ) (5,170 ) 173 (43,738 ) (5,778 ) Reclassification adjustment for realized gain on sale of available-for-sale securities - - - - - - (293 ) Net unrealized gain (loss) on available-for-sale securities (8,197 ) (14,602 ) (20,939 ) (5,170 ) 173 (43,738 ) (6,071 ) Tax expense (benefit) (1,721 ) (3,067 ) (4,397 ) (1,085 ) 36 (9,185 ) (1,275 ) Other comprehensive income (loss) (6,476 ) (11,535 ) (16,542 ) (4,085 ) 137 (34,553 ) (4,796 ) Comprehensive Income (Loss) $ 2,478 $ (3,264 ) $ (8,440 ) $ 3,598 $ 6,057 $ (9,226 ) $ 11,016 Basic and Diluted Earnings Per Share $ 0.68 $ 0.63 $ 0.62 $ 0.59 $ 0.53 $ 1.94 $ 1.41 Dividends Declared $ 0.2100 $ 0.2025 $ 0.1900 $ 0.1900 $ 0.1800 $ 0.6025 $ 0.5200
FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands of dollars, except share data) September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Assets Cash and due from banks $ 69,680 $ 69,955 $ 94,118 $ 135,485 $ 112,875 Federal funds sold 990 1,484 45,404 45,338 45,203 Total cash and cash equivalents 70,670 71,439 139,522 180,823 158,078 Interest-bearing time deposits 5,187 6,684 8,677 10,913 14,622 Securities - available-for-sale 395,485 399,687 413,996 429,931 426,717 Other securities, at cost 8,227 8,735 8,568 8,162 4,905 Loans held for sale 2,182 4,230 6,060 7,714 3,735 Loans, net 2,122,626 2,016,394 1,945,449 1,841,177 1,479,864 Premises and equipment 26,484 26,492 26,653 26,913 26,476 Goodwill 80,434 80,434 80,434 80,434 55,214 Mortgage servicing rights 3,583 3,426 3,336 3,157 3,097 Other real estate owned - - - 159 167 Bank owned life insurance 28,051 27,874 27,715 27,558 27,397 Other assets 40,831 29,321 25,735 21,359 18,711 Total Assets $ 2,783,760 $ 2,674,716 $ 2,686,145 $ 2,638,300 $ 2,218,983 Liabilities and Stockholders' Equity Liabilities Deposits Noninterest-bearing $ 506,928 $ 503,395 $ 497,249 $ 473,689 $ 438,076 Interest-bearing NOW accounts 705,888 678,552 681,975 650,466 646,237 Savings 607,375 617,850 626,787 597,828 529,532 Time 462,845 424,249 447,586 471,479 252,383 Total deposits 2,283,036 2,224,046 2,253,597 2,193,462 1,866,228 Federal funds purchased and securities sold under agreements to repurchase 55,802 71,944 31,680 29,268 29,601 Federal Home Loan Bank (FHLB) advances 102,147 42,635 22,656 24,065 17,868 Other borrowings 10,000 - 40,000 40,000 - Subordinated notes, net of unamortized issuance costs 34,557 34,528 34,499 34,471 34,441 Dividend payable 2,727 2,626 2,462 2,461 2,002 Accrued expenses and other liabilities 14,913 18,064 14,773 17,406 14,097 Total liabilities 2,503,182 2,393,843 2,399,667 2,341,133 1,964,237 Commitments and Contingencies Stockholders' Equity Common stock - No par value 20,000,000 shares authorized; issued and outstanding 14,063,999 shares 9/30/22 and 12/31/21 121,811 123,145 122,886 122,674 81,382 Treasury stock - 956,499 shares 9/30/22, 997,766 shares 12/31/21 (11,547 ) (11,822 ) (11,739 ) (11,724 ) (11,718 ) Retained earnings 208,051 200,811 195,057 189,401 184,181 Accumulated other comprehensive income (loss) (37,737 ) (31,261 ) (19,726 ) (3,184 ) 901 Total stockholders' equity 280,578 280,873 286,478 297,167 254,746 Total Liabilities and Stockholders' Equity $ 2,783,760 $ 2,674,716 $ 2,686,145 $ 2,638,300 $ 2,218,983
FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES SELECT FINANCIAL DATA For the Three Months Ended For the Nine Months Ended Selected financial data September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 September 30, 2022 September 30, 2021 Return on average assets 1.31 % 1.23 % 1.21 % 1.17 % 1.07 % 1.25 % 1.01 % Return on average equity 12.53 % 11.66 % 11.00 % 10.94 % 9.32 % 11.72 % 8.40 % Yield on earning assets 4.00 % 3.79 % 3.47 % 3.59 % 3.85 % 3.76 % 3.70 % Cost of interest bearing liabilities 0.68 % 0.44 % 0.45 % 0.51 % 0.45 % 0.53 % 0.47 % Net interest spread 3.32 % 3.35 % 3.02 % 3.08 % 3.40 % 3.23 % 3.23 % Net interest margin 3.49 % 3.47 % 3.14 % 3.21 % 3.53 % 3.37 % 3.36 % Efficiency 51.19 % 50.17 % 55.44 % 58.76 % 63.50 % 53.16 % 63.70 % Dividend payout ratio 30.45 % 30.02 % 30.64 % 32.03 % 33.81 % 40.58 % 36.55 % Tangible book value per share (1) $ 17.86 $ 17.43 $ 16.96 $ 16.49 $ 17.33 Tier 1 capital to average assets 9.11 % 8.75 % 8.51 % 8.47 % 9.45 % Average Shares Outstanding 13,083,145 13,065,975 13,066,272 13,046,299 11,209,732 13,071,859 11,199,309 Loans September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 (Dollar amounts in thousands) Commercial real estate $ 1,063,661 $ 979,176 $ 910,839 $ 848,477 $ 728,852 Agricultural real estate 205,089 199,972 196,223 198,343 179,374 Consumer real estate 416,001 410,450 410,120 395,873 202,454 Commercial and industrial 229,388 232,975 216,918 208,270 194,767 Agricultural 128,615 127,143 140,709 118,368 105,580 Consumer 70,602 55,411 57,521 57,737 55,521 Other 30,662 31,243 31,573 32,089 31,096 Less: Net deferred loan fees and costs (1,402 ) (1,552 ) (1,683 ) (1,738 ) (2,082 ) Total loans,net $ 2,142,616 $ 2,034,818 $ 1,962,220 $ 1,857,419 $ 1,495,562 Asset quality data September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 (Dollar amounts in thousands) Nonaccrual loans $ 5,470 $ 5,247 $ 8,581 $ 8,076 $ 6,248 Troubled debt restructuring $ 3,978 $ 2,748 $ 7,268 $ 7,614 $ 6,035 90 day past due and accruing $ - $ - $ - $ - $ - Nonperforming loans $ 5,470 $ 5,247 $ 8,581 $ 8,076 $ 6,248 Other real estate owned $ - $ - $ - $ 159 $ 167 Nonperforming assets $ 5,470 $ 5,247 $ 8,581 $ 8,235 $ 6,415 Allowance for loan and lease losses (ALLL) $ 19,990 $ 18,424 $ 16,771 $ 16,242 $ 15,698 Total Credit Mark 5,959 6,724 7,201 7,616 2,348 Adjusted ALLL with credit mark included $ 25,949 $ 25,148 $ 23,972 $ 23,858 $ 18,046 Allowance for loan and lease losses/total loans 0.93 % 0.91 % 0.85 % 0.87 % 1.05 % Adjusted ALLL with credit mark/total loans 1.21 % 1.24 % 1.22 % 1.28 % 1.21 % Net charge-offs: Quarter-to-date $ 71 $ (25 ) $ 51 $ (101 ) $ 48 Year-to-date $ 97 $ 26 $ 51 $ 874 $ 974 Net charge-offs to average loans Quarter-to-date 0.00 % 0.00 % 0.00 % -0.01 % 0.00 % Year-to-date 0.00 % 0.00 % 0.00 % 0.06 % 0.07 % Nonperforming loans/total loans 0.26 % 0.26 % 0.44 % 0.43 % 0.42 % Allowance for loan and lease losses/nonperforming loans 365.44 % 351.44 % 198.29 % 201.11 % 251.26 % (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 September 30, 2022 September 30, 2021 Interest Earning Assets: Average Balance Interest/Dividends Annualized Yield/Rate Average Balance Interest/Dividends Annualized Yield/Rate Loans $ 2,082,486 $ 24,119 4.63 % $ 1,490,988 $ 18,766 5.04 % Taxable investment securities 422,250 1,426 1.35 % 398,060 1,177 1.18 % Tax-exempt investment securities 25,169 89 1.79 % 17,293 75 2.20 % Fed funds sold & other 58,266 213 1.46 % 187,398 104 0.22 % Total Interest Earning Assets 2,588,171 $ 25,847 4.00 % 2,093,739 $ 20,122 3.85 % Nonearning Assets 150,044 127,160 Total Assets $ 2,738,215 $ 2,220,899 Interest Bearing Liabilities: Savings deposits $ 1,328,344 $ 1,586 0.48 % $ 1,181,103 $ 560 0.19 % Other time deposits 423,668 580 0.55 % 252,966 661 1.05 % Other borrowed money 60,455 398 2.63 % 17,868 87 1.95 % Fed funds purchased & securities sold under agreement to repurch. 63,388 416 2.63 % 29,729 165 2.22 % Subordinated notes 34,538 284 3.29 % 23,807 199 3.34 % Total Interest Bearing Liabilities $ 1,910,393 $ 3,264 0.68 % $ 1,505,473 $ 1,672 0.45 % Noninterest Bearing Liabilities 542,077 461,252 Stockholders' Equity $ 285,745 $ 254,174 Net Interest Income and Interest Rate Spread $ 22,583 3.32 % $ 18,450 3.40 % Net Interest Margin 3.49 % 3.53 % 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 Nine Months Ended For the Nine Months Ended September 30, 2022 September 30, 2021 Interest Earning Assets: Average Balance Interest/Dividends Annualized Yield/Rate Average Balance Interest/Dividends Annualized Yield/Rate Loans $ 1,997,081 $ 66,962 4.47 % $ 1,413,625 $ 50,637 4.78 % Taxable investment securities 424,882 4,065 1.28 % 363,284 3,286 1.21 % Tax-exempt investment securities 21,794 229 1.77 % 18,387 252 2.31 % Fed funds sold & other 101,922 401 0.52 % 171,015 242 0.19 % Total Interest Earning Assets 2,545,679 $ 71,657 3.76 % 1,966,311 $ 54,417 3.70 % Nonearning Assets 158,378 134,108 Total Assets $ 2,704,057 $ 2,100,419 Interest Bearing Liabilities: Savings deposits $ 1,315,793 $ 2,951 0.30 % $ 1,106,674 $ 1,700 0.20 % Other time deposits 439,534 1,954 0.59 % 248,426 2,137 1.15 % Other borrowed money 54,184 951 2.34 % 17,859 424 3.17 % Fed funds purchased & securities sold under agreement to repurch. 42,584 734 2.30 % 29,973 494 2.20 % Subordinated notes 34,509 837 3.23 % 8,023 199 3.31 % Total Interest Bearing Liabilities $ 1,886,604 $ 7,427 0.53 % $ 1,410,955 $ 4,954 0.47 % Noninterest Bearing Liabilities 529,439 438,518 Stockholders' Equity $ 288,014 $ 250,946 Net Interest Income and Interest Rate Spread $ 64,230 3.23 % $ 49,463 3.23 % Net Interest Margin 3.37 % 3.36 % 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 NON-GAAP RECONCILIATION OF TANGIBLE BOOK VALUE Actual End of Period Regulatory End of Period Non-GAAP Reconciliation of Tangible Book Value Year to Date Year to Date September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Shares Outstanding 13,107,500 11,232,320 13,107,500 11,232,320 Tangible Equity Equity $ 280,578 $ 254,746 $ 280,578 $ 254,746 Goodwill 80,434 55,214 80,434 55,214 Other Intangible 3,744 3,994 3,744 3,994 Comprehensive Adjustment* - - 37,737 (901 ) Tangible Equity $ 196,400 $ 195,538 $ 234,137 $ 194,637 Shares Outstanding 13,108 11,232 13,108 11,232 Tangible Book Equity per Share $ 14.98 $ 17.41 $ 17.86 $ 17.33 Actual Average Regulatory Average Year to Date Year to Date September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Net Income $ 25,327 $ 15,812 $ 25,327 $ 15,812 Acquisition Costs - Tax Adjusted 463 2,155 463 2,155 Average Shares Outstanding 13,071,859 11,199,309 13,071,859 11,199,309 Average Tangible Equity Average Equity $ 288,014 $ 250,946 $ 288,014 $ 250,946 Average Goodwill 80,434 51,884 80,434 51,884 Average Other Intangible 4,119 3,887 4,119 3,887 Average Comprehensive Adjustment* - - 21,181 (2,442 ) Average Tangible Equity $ 203,461 $ 195,175 $ 224,642 $ 192,733 Average Shares Outstanding 13,072 11,199 13,072 11,199 Average Tangible Book Equity per Share $ 15.56 $ 17.43 $ 17.19 $ 17.21 Return on Average Tangible Equity 16.60 % 10.80 % 15.03 % 10.94 % Return on Average Tangible Equity w/o Acquisition 16.90 % 12.27 % 15.31 % 12.43 % *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. 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