Farmers & Merchants Bancorp, Inc. Reports 2021 Third-Quarter and Year-to-Date Financial Results


ARCHBOLD, Ohio, Oct. 20, 2021 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2021 third quarter and year-to-date September 30, 2021.

2021 Third Quarter Financial Highlights Include
(compared to the 2020 third quarter period unless noted):

  • Net income increased 34.2% to $5.9 million
  • Earnings increased 32.5% to $0.53 per basic and diluted share
  • Adjusted net income, excluding one-time tax adjusted acquisition expenses, increased 60.8% to $7.1 million
  • Adjusted earnings increased 57.5% to $0.63 per basic and diluted share
  • Net interest income, after provision for loan losses, increased by 36.5% to a quarterly record of $17.8 million
  • Net interest margin increased slightly to 3.53%, from 3.51% for the same period last year
  • Third quarter after-tax income benefited from $1.98 million of accelerated fees associated with the Paycheck Protection Program (“PPP”) compared to $329.4 thousand in same quarter 2020.
  • Loans have increased 13.6% organically year-to-date, not including recent acquisitions or PPP loans
  • Third quarter net charge-offs to average loans were 0.00% for the second consecutive quarter
  • Adjusted return on average tangible equity increased to 10.94% from 9.68% on a year over year basis
  • Increased the regular quarterly cash dividend payment by 5.9% to $0.18 per share, representing the 27th consecutive annual dividend increase
  • Completed a $35.0 million subordinated note offering, increasing F&M’s Total Risk Based Capital Ratio to 15.57%
  • Added two new strong Board members to Farmers & Merchants’ Board of Directors representing our expansion into the Detroit and Urbana markets
  • F&M’s fourth annual Charity Golf Classic raised over $32,000 in support for its local communities

“2021 is shaping up to be a transformative year as we focus on bringing our individualized, local, and comprehensive financial products and services to more customers across Ohio, Indiana, and Michigan,” stated Lars B. Eller, President and Chief Executive Officer. “We are well on our way to becoming a $3.0 billion asset bank, and when including Perpetual’s assets, we will have almost $2.6 billion in total assets. Our success is a testament to our strategic growth plan, the value we provide our local communities, and the commitment of F&M’s team members.”

On October 1, 2021, F&M successfully closed the acquisition of Perpetual Federal Savings Bank, Inc. (“PFSB”). PFSB is F&M’s third acquisition within the last twelve months and immediately enhances the Company’s growing franchise within compelling Ohio markets including Urbana, Columbus, Dayton, Springfield, Piqua, Tipp City, Troy, and Sidney. The integration and system conversions were completed on October 18, 2021, and PFSB’s financial metrics will be included in F&M’s fourth-quarter results.

Mr. Eller continued, “These three acquisitions, combined with our Michigan LPO and expansion plans have increased our presence in Indiana, Michigan, and Ohio, while diversifying our revenue streams and immediately contributing to earnings. I am proud of our team’s ability to quickly complete and successfully integrate these acquisitions. In addition, we have simultaneously been growing organically and I am encouraged by the 8.3% organic loan growth F&M produced during the quarter which is evidence of our talented local lenders, and the success of our recently opened offices and LPOs.”

Income Statement
Net income for the 2021 third quarter ended September 30, 2021, was $5.9 million, compared to $4.4 million for the same period last year. Net income per basic and diluted share for the 2021 third quarter was $0.53, compared to $0.40 for the same period last year. Net income for the 2021 nine months ended September 30, 2021, was $15.8 million, compared to $13.3 million for the same period last year. Net income per basic and diluted share for the 2021 nine months was $1.41, compared to $1.20 for the same period last year.

Adjusted net income, excluding one-time tax adjusted acquisition expenses, was $7.1 million, or $0.63 per share for the 2021 third quarter, compared to $4.4 million, or $0.40 per share for the 2020 third quarter. Adjusted net income was $18.2 million, or $1.62 per share for the 2021 nine months, compared to $13.3 million, or $1.20 per share for the 2020 nine months. Included in the financial table section of this press release is a non-GAAP reconciliation.

Mr. Eller continued, “We ended the quarter with record quarterly net income and earnings per share, when adjusted for one-time acquisition expenses. Adjusted ROACE was 9.78%, compared to 7.28% for the same period last year, while adjusted ROA was 1.17% during the 2021 third quarter, and 1.11% year-to-date. In addition, the Bank has had 16 consecutive months with an operating efficiency ratio in the 50% range when removing affiliate and acquisition expenses. Our strong third-quarter financial results and profitability reflect the benefits of our larger scale, diverse revenue streams, strong asset quality, and prudent expense management, and we believe earnings growth will accelerate in the coming quarters.”

Deposits
At September 30, 2021, total deposits were $1.87 billion, an increase of 22.9% from September 30, 2020, and an increase of 16.9% from December 31, 2020. The significant organic deposit growth being experienced is a result of continued strength in expanding relationships with new and existing customers, and the completion of the Ossian Financial Services, Inc. acquisition. In addition, we continue to see growing customer preferences to more stable and secure saving instruments as deposits have increased since the COVID-19 crisis began.

Loan Portfolio and Asset Quality
Total net loans, at September 30, 2021, increased 48.2%, or by $656.8 million to $2.02 billion, compared to $1.36 billion at September 30, 2020, and up 55.1% from $1.30 billion at December 31, 2020. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth and the completion of the Ossian Financial Services, Inc. acquisition. Not including the Ossian acquisition and PPP, loans increased 12.6% organically from the same period a year ago. In addition, during the 2021 third quarter, the Company processed $37.3 million of PPP loan forgiveness and principal payments received, resulting in a total of $9.8 million of PPP loans within F&M’s loan portfolio at September 30, 2021.

Mr. Eller continued, “At September 30, 2021, there were only two loans totaling $3.4 million of COVID-related payment modifications, all of which are interest-only modifications and secured by real estate. This compares to 190 loans representing a balance of $165 million in deferrals at the peak last year. Overall asset quality continues to improve. We ended the third quarter with no charge-offs, and the lowest level of nonperforming assets in five quarters. As economic activity stabilizes, and F&M’s loan performance improves better than pre-pandemic levels, we expect contributions to our allowance for loan losses will also stabilize and align with loan growth in future periods.”

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $6.2 million, or 0.42% of total loans at September 30, 2021, compared to $7.9 million, or 0.58% at September 30, 2020.

“We remain focused on operational excellence, investments in technology, supporting our communities, and ensuring a best-in-class experience for our customers. I am pleased with the Board’s decision to increase our quarterly dividend because of our strong year-to-date financial results and positive outlook. Across F&M, we are working hard to execute our strategic growth plan, and create lasting value for our customers, employees, and shareholders,” concluded Mr. Eller.

Stockholders’ Equity and Dividends
Total stockholders’ equity increased 4.7% to $254.7 million at September 30, 2021, from $243.4 million at September 30, 2020. At September 30, 2021, the Company had a Tier 1 leverage ratio of 9.45%, compared to 10.65% at September 30, 2020.

In August 2021, F&M completed a $35.0 million private placement of 3.25% fixed-to-floating rate subordinated notes due July 30, 2031 (the “Notes”) to various accredited investors (the “Offering”). The Notes are intended to qualify as Tier 2 capital for regulatory purposes. The Company intends to use the net proceeds from the Offering for general corporate purposes, including financing acquisitions and organic growth.

Tangible stockholders’ equity increased to $194.6 million at September 30, 2021, compared to $187.2 million at September 30, 2020. On a per share basis, tangible stockholders’ equity at September 30, 2021, was $17.33 per share, compared to $16.78 per share at September 30, 2020.

For the nine months ended September 30, 2021, the Company has declared cash dividends of $0.52 per share, which is a 6.1% increase over the 2020 nine-month declared dividend payment. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for over 27 consecutive years. For the three months ended September 30, 2021, the dividend payout ratio was 33.81% compared to 42.66% 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 a Loan Production Office in West Bloomfield, Michigan.

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, 2021 June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 September 30, 2021 September 30, 2020
Interest Income              
Loans, including fees $18,766  $16,259  $15,612  $17,061  $16,181  $50,637  $48,256 
Debt securities:              
U.S. Treasury and government agencies  924   857   751   695   761   2,532   2,674 
Municipalities  284   289   308   295   279   881   784 
Dividends  44   31   50   35   36   125   107 
Federal funds sold  10   6   5   5   4   21   15 
Other.  94   88   39   48   32   221   194 
Total interest income  20,122   17,530   16,765   18,139   17,293   54,417   52,030 
Interest Expense              
Deposits  1,221   1,276   1,340   1,619   1,864   3,837   7,019 
Federal funds purchased and securities sold under agreements to repurchase  165   163   166   170   174   494   605 
Borrowed funds  87   115   222   226   231   424   754 
Subordinated notes  199   -   -   -   -   199   - 
Total interest expense  1,672   1,554   1,728   2,015   2,269   4,954   8,378 
Net Interest Income - Before Provision for Loan Losses  18,450   15,976   15,037   16,124   15,024   49,463   43,652 
Provision for Loan Losses   659   641   1,700   1,995   1,987   3,000   4,986 
Net Interest Income After Provision For Loan Losses  17,791   15,335   13,337   14,129   13,037   46,463   38,666 
Noninterest Income              
Customer service fees  2,242   2,198   2,814   2,750   2,299   7,254   6,143 
Other service charges and fees  1,010   874   838   980   879   2,722   2,622 
Net gain on sale of loans  822   955   1,046   1,894   1,537   2,823   2,128 
Net gain on sale of available-for-sale securities  -   -   293   -   -   293   270 
Total noninterest income  4,074   4,027   4,991   5,624   4,715   13,092   11,163 
Noninterest Expense              
Salaries and wages  5,442   4,591   4,390   5,068   5,102   14,423   13,420 
Employee benefits  1,621   1,915   1,994   1,140   1,566   5,530   4,461 
Net occupancy expense  529   546   577   585   558   1,652   1,686 
Furniture and equipment  903   848   791   760   875   2,542   2,383 
Data processing  1,548   428   505   428   490   2,481   1,340 
Franchise taxes  372   294   446   241   368   1,112   1,105 
ATM expense  460   459   449   456   444   1,368   1,234 
Advertising  439   331   235   353   411   1,005   979 
Net (gain) loss on sale of other assets owned  219   227   (25)  20   (7)  421   (13)
FDIC assessment  296   276   236   223   194   808   410 
Mortgage servicing rights amortization  285   524   505   247   296   1,314   784 
Consulting fees  256   394   223   407   205   873   561 
Other general and administrative  1,951   2,227   2,033   1,358   1,553   6,211   4,740 
Total noninterest expense  14,321   13,060   12,359   11,286   12,055   39,740   33,090 
Income Before Income Taxes  7,544   6,302   5,969   8,467   5,697   19,815   16,739 
Income Taxes  1,624   1,319   1,060   1,691   1,287   4,003   3,420 
Net Income  5,920   4,983   4,909   6,776   4,410   15,812   13,319 
Other Comprehensive Income (Loss) (Net of Tax):              
Net unrealized gain (loss) on available-for-sale securities  173   786   (6,737)  (207)  639   (5,778)  6,298 
Reclassification adjustment for realized gain on sale of available-for-sale securities  -   -   (293)  -   -   (293)  (270)
Net unrealized gain (loss) on available-for-sale securities  173   786   (7,030)  (207)  639   (6,071)  6,028 
Tax expense (benefit)  36   165   (1,476)  (44)  134   (1,275)  1,266 
Other comprehensive income (loss)  137   621   (5,554)  (163)  505   (4,796)  4,762 
Comprehensive Income (Loss) $6,057  $5,604  $(645) $6,613  $4,915  $11,016  $18,081 
Basic and Diluted Earnings Per Share $0.53  $0.44  $0.44  $0.60  $0.40  $1.41  $1.20 
Dividends Declared $0.18  $0.17  $0.17  $0.17  $0.17  $0.52  $0.49 
               


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (in thousands of dollars, except share data)
 
  September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020
  (Unaudited) (Unaudited) (Unaudited)   (Unaudited)
Assets           
Cash and due from banks $112,875  $93,636  $118,139  $98,279  $46,395 
Federal funds sold  45,203   57,483   57,361   77,427   41,358 
Total cash and cash equivalents  158,078   151,119   175,500   175,706   87,753 
           
Interest-bearing time deposits  14,622   18,597   4,405   4,653   4,657 
Securities - available-for-sale  426,717   407,500   352,974   307,812   259,041 
Other securities, at cost  4,905   6,419   5,939   5,939   5,827 
Loans held for sale  3,735   8,041   7,511   8,391   7,621 
Loans, net  1,479,864   1,443,336   1,327,254   1,288,667   1,351,979 
Premises and equipment  26,476   26,915   26,703   27,063   26,776 
Goodwill  55,214   56,066   47,340   47,340   47,340 
Mortgage servicing rights  3,097   3,146   3,444   3,320   3,027 
Other real estate owned  167   198   148   71   206 
Bank owned life insurance  27,397   27,218   25,347   25,208   15,501 
Other assets  18,711   18,310   16,720   15,374   16,872 
           
Total Assets $2,218,983  $2,166,865  $1,993,285  $1,909,544  $1,826,600 
Liabilities and Stockholders' Equity          
Liabilities          
Deposits          
Noninterest-bearing $438,076  $443,863  $384,558  $351,147  $330,845 
Interest-bearing          
NOW accounts  646,237   652,078   605,533   542,317   534,792 
Savings  529,532   501,687   451,043   455,145   392,059 
Time  252,383   256,445   242,717   247,553   261,177 
    Total deposits  1,866,228   1,854,073   1,683,851   1,596,162   1,518,873 
           
Federal funds purchased and securities sold under agreements to repurchase  29,601   29,882   30,072   30,239   29,859 
Federal Home Loan Bank (FHLB) advances  17,868   17,868   17,840   17,861   17,724 
Subordinated notes, net of unamortized issuance costs  34,441   -   -   -   - 
Dividend payable  2,002   1,888   1,889   1,889   1,882 
Accrued expenses and other liabilities  14,097   12,569   12,805   14,233   14,841 
    Total liabilities  1,964,237   1,916,280   1,746,457   1,660,384   1,583,179 
           
Commitments and Contingencies          
           
Stockholders' Equity          
Common stock - No par value 20,000,000 shares authorized; issued and outstanding 12,230,000 shares 9/30/21 and 12/31/20  81,382   82,259   82,030   81,804   81,577 
Treasury stock - 997,680 shares 9/30/21, 1,032,456 shares 12/31/20  (11,718)  (12,172)  (11,962)  (11,932)  (12,397)
Retained earnings  184,181   179,734   176,617   173,591   168,381 
Accumulated other comprehensive income  901   764   143   5,697   5,860 
    Total stockholders' equity  254,746   250,585   246,828   249,160   243,421 
           
Total Liabilities and Stockholders' Equity $2,218,983  $2,166,865  $1,993,285  $1,909,544  $1,826,600 
           


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
SELECT FINANCIAL DATA
                    
   For the Three Months Ended For the Nine Months Ended
Selected financial data September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 September 30, 2021 September 30, 2020
Return on average assets  1.12%  0.90%  1.01%  1.43%  0.98% 1.00% 1.03%
Return on average equity  9.32%  8.00%  7.87%  11.04%  7.28% 8.40% 7.45%
Yield on earning assets  3.85%  3.53%  3.71%  4.09%  4.04% 3.70% 4.30%
Cost of interest bearing liabilities  0.45%  0.44%  0.53%  0.64%  0.74% 0.47% 0.95%
Net interest spread  3.40%  3.09%  3.18%  3.45%  3.30% 3.23% 3.35%
Net interest margin  3.53%  3.21%  3.33%  3.63%  3.51% 3.36% 3.61%
Efficiency  63.50%  64.98%  62.57%  52.20%  62.11% 63.70% 61.05%
Dividend payout ratio  33.81%  37.89%  38.48%  27.77%  42.66% 36.55% 40.68%
Tangible book value per share (1) $17.33  $16.94  $17.50  $17.19  $16.78     
Tier 1 capital to average assets  9.45%  8.78%  10.39%  10.46%  10.65%    
Average Shares Outstanding  11,209,732   11,191,043   11,197,012   11,177,765   11,142,797  11,199,309  11,135,695 
              
Loans September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020    
(Dollar amounts in thousands)                   
Commercial real estate $728,852  $691,122  $618,754  $588,825  $595,146     
Agricultural real estate  170,374   189,742   179,945   189,159   192,883     
Consumer real estate  202,454   194,715   175,675   175,588   175,963     
Commercial and industrial  728,852   216,609   202,958   189,246   238,175     
Agricultural  105,580   100,756   100,022   94,358   103,330     
Consumer  55,521   56,427   54,445   52,540   53,320     
Other  31,096   13,549   14,088   15,757   9,030     
Less: Net deferred loan fees and costs  (2,082)  (4,497)  (4,208)  (2,483)  (3,985)    
Total loans, net $2,020,647  $1,458,423  $1,341,679  $1,302,990  $1,363,862     
                    
              
Asset quality data September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020    
(Dollar amounts in thousands)                   
Nonaccrual loans $6,248  $7,031  $8,139  $9,404  $7,870     
Troubled debt restructuring $6,035  $5,492  $5,774  $6,514  $7,028     
90 day past due and accruing $-  $-  $-  $-  $-     
Nonperforming loans $6,248  $7,031  $8,139  $9,404  $7,870     
Other real estate owned $167  $198  $148  $71  $206     
Nonperforming assets $6,415  $7,229  $8,287  $9,475  $8,076     
                    
(Dollar amounts in thousands)                   
Allowance for loan and lease losses $15,698  $15,087  $14,425  $13,672  $11,883     
Allowance for loan and lease losses/total loans  1.05%  1.03%  1.08%  1.05%  0.87%    
Net charge-offs (recoveries):                   
Quarter-to-date $48  $(21) $947  $205  $37     
Year-to-date $974  $926  $947  $537  $331     
Net charge-offs to average loans                   
Quarter-to-date  0.00%  0.00%  0.07%  0.02%  0.00%    
Year-to-date  0.07%  0.07%  0.07%  0.04%  0.03%    
Nonperforming loans/total loans  0.42%  0.48%  0.61%  0.72%  0.58%    
Allowance for loan and lease losses/nonperforming loans  251.26%  214.58%  177.24%  177.96%  151.01%    
                    
(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, 2021 September 30, 2020
Interest Earning Assets: Average Balance Interest/Dividends Annualized Yield/Rate Average Balance Interest/Dividends Annualized Yield/Rate
Loans $1,490,988 $18,766 5.04% $1,359,156 $16,181 4.76%
Taxable investment securities  398,060  1,177 1.18%  245,274  968 1.58%
Tax-exempt investment securities  17,293  75 2.20%  26,032  108 2.10%
Fed funds sold & other  187,398  104 0.22%  83,760  36 0.17%
Total Interest Earning Assets  2,093,739 $20,122 3.85%  1,714,222 $17,293 4.04%
             
Nonearning Assets  126,157      93,778    
             
Total Assets $2,219,896     $1,808,000    
             
Interest Bearing Liabilities:            
Savings deposits $1,181,103 $560 0.19% $915,367 $798 0.35%
Other time deposits  252,966  661 1.05%  258,809  1,066 1.65%
Other borrowed money  17,868  87 1.95%  18,920  231 4.88%
Fed funds purchased & securities sold under agreement to repurchase  29,729  165 2.22%  30,100  174 2.31%
Subordinated notes  23,807  199 3.34%  -  - 0.00%
Total Interest Bearing Liabilities $1,505,473 $1,672 0.45% $1,223,196 $2,269 0.74%
             
Noninterest bearing Liabilities  460,249      342,388    
             
Stockholders Equity $254,174     $242,416    
             
Net Interest Income and Interest Rate Spread   $18,450 3.40%   $15,024 3.30%
             
Net Interest Margin     3.53%     3.51%
             
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, 2021 September 30, 2020
Interest Earning Assets: Average Balance Interest/Dividends Annualized Yield/Rate Average Balance Interest/Dividends Annualized Yield/Rate
Loans $1,413,625 $50,637 4.78% $1,305,998 $48,256 4.93%
Taxable investment securities  363,284  3,286 1.21%  208,499  3,220 2.06%
Tax-exempt investment securities  18,387  252 2.31%  25,564  345 2.28%
Fed funds sold & other  171,015  242 0.19%  75,917  209 0.37%
Total Interest Earning Assets  1,966,311 $54,417 3.70%  1,615,978 $52,030 4.30%
             
Nonearning Assets  134,108      109,564    
             
Total Assets $2,100,419     $1,725,542    
             
Interest Bearing Liabilities:            
Savings deposits $1,106,674 $1,700 0.20% $849,748 $3,237 0.51%
Other time deposits  248,426  2,137 1.15%  268,762  3,782 1.88%
Other borrowed money  17,859  424 3.17%  22,401  754 4.49%
Fed funds purchased & securities sold under agreement to repurchase  29,973  494 2.20%  33,118  605 2.44%
Subordinated notes  8,023  199 3.31%  -  - 0.00%
Total Interest Bearing Liabilities $1,410,955 $4,954 0.47% $1,174,029 $8,378 0.95%
             
Noninterest bearing Liabilities  438,518      313,224    
             
Stockholders Equity $250,946     $238,289    
             
Net Interest Income and Interest Rate Spread   $49,463 3.23%   $43,652 3.35%
             
Net Interest Margin     3.36%     3.61%
             
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 Allowance for Loan Losses, excluding PPP Loans  
(in thousands of dollars, except percentages)  
   
  September 30, 2021
   
Allowance for Loan Losses $15,698 
Credit Mark  2,348 
Total Credit Mark and Allowance for Loan Losses  18,046 
   
Loans $1,495,562 
Adjustments  
PPP Loans  (9,806)
Loans excluding PPP Loans $1,485,756 
   
Allowance for Loan Losses  1.05%
Effect of Credit Mark  0.15%
Effect of PPP Loans  0.01%
Allowance for Loan Losses, excluding PPP Loans  1.21%
   


FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION OF NET INCOME
         
         
  (in thousands of dollars) (in thousands of dollars)
  Three Months Ended Nine Months Ended
Non-GAAP Reconciliation of Net Income September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
  (Unaudited) (Unaudited)
Net income as reported $5,920  $4,410  $15,812  $13,319 
Net income from Ossian State Bank prior to acquisition  -   -   269   - 
Acquisition expenses from F&M and Ossian  1,441   -   2,689   - 
Tax effect on net income and acquisition expenses  (268)  -   (563)  - 
Net income excluding acquisition expenses $7,093  $4,410  $18,207  $13,319 
         


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