ARCHBOLD, Ohio, July 21, 2022 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2022 second quarter and year-to-date June 30, 2022.
2022 Second Quarter Financial and Operating Highlights (on a year-over-year basis unless noted):
- Net income increased 66.0% to a quarterly record of $8.3 million, from $5.0 million
- Earnings increased 43.2% to $0.63 per basic and diluted share, from $0.44 per basic and diluted share
- Average shares outstanding increased 16.8% as a result of the Perpetual Federal Savings Bank Acquisition
- Efficiency rate improved to 50.17%
- Organic loan growth of 19.9%, excluding PPP loans and loan balances at time of acquisitions
- Total loans were a record of $2.035 billion and increased 9.6% from $1.857 billion at December 31, 2021
- Total assets increased 23.4% to $2.675 billion
- Deposits increased 20.0% to $2.224 billion
- Strong asset quality continues as nonperforming loans declined 25.4% to $5.2 million, or 0.26% of total loans
- Net charge-offs to average loans were 0.00%, the fifth consecutive quarter at or below 0.00%
- Return on average equity, increased to 11.66% from 8.00%
- Return on average tangible equity, based on regulatory calculations, increased to 14.72% from 10.26% on a year-over-year basis
Lars B. Eller, President and Chief Executive Officer, stated, “Our record second quarter financial and operating performance reflects the benefits of our organic and acquisition growth strategies, excellent asset quality, and focus on controlling expenses and driving efficiencies. The growth we are experiencing across our Ohio, Indiana and Michigan markets is encouraging, which we believe is a result of our desire to help our retail, commercial and agricultural customers realize their best lives. Loans increased organically by $237.1 million, or 19.9% on a year-over-year basis and are up 9.6% from December 31, 2021.”
Mr. Eller continued, “In April 2022, we formally honored F&M’s 125th anniversary, which included activities that recognized the efforts and support of our communities, customers, employees, and shareholders. We are looking forward to building a sustainable business for the next 125 years by investing in our team, innovating our organization, providing our local communities with best-in-class service, and expanding our franchise to new markets. In June 2022, we restructured our leadership team, and added new capabilities and functions that will help us manage and lead a larger organization. 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 Fort Wayne, Indiana, and Toledo, Ohio as well as an office relocation in Auburn, Indiana.”
Income Statement
Net income for the 2022 second quarter ended June 30, 2022, was $8.3 million, compared to $5.0 million for the same period last year. Net income per basic and diluted share for the 2022 second quarter was $0.63, compared to $0.44 for the same period last year. Net income for the 2022 first half ended June 30, 2022, was $16.4 million, compared to $9.9 million for the same period last year. Net income per basic and diluted share for the 2022 first half was $1.25, compared to $0.88 for the same period last year.
Profitability is benefitting from F&M’s larger scale, strong asset quality, and prudent expense management. The Company’s efficiency ratio improved to 50.17% during the 2022 second quarter. Strong profitability also drove higher returns, and ROAA, ROAE, and ROATCE all expanded on a year-over-year basis.
Deposits
At June 30, 2022, total deposits were $2.22 billion, an increase of 20.0% from June 30, 2021, and an increase of 1.4% 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 0.45% for the quarter ended June 30, 2022, compared to 0.44% for the quarter ended June 30, 2021, and 0.51% for the quarter ended December 31, 2021.
Loan Portfolio and Asset Quality
Total loans, net at June 30, 2022, increased 39.5%, or by $576.4 million to $2.03 billion, compared to $1.46 billion at June 30, 2021, and up from $1.84 billion at December 31, 2021. 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 19.9% organically from the same period a year ago when not including the Perpetual acquisition, and the impact of PPP loans. During the 2022 second quarter, the Company processed $455,000 of PPP loan forgiveness and principal payments received. At June 30, 2022, there were only $8,000 of PPP loans within F&M’s loan portfolio.
F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $5.2 million, or 0.26% of total loans at June 30, 2022, compared to $7.0 million, or 0.48% at June 30, 2021. Due to loan growth, F&M continues to prudently fund its allowance for loan and lease losses which has increased 22.1% on a year-over-year basis. At June 30, 2022, the Company’s allowance for loan and lease losses to nonperforming loans was 351.44%, compared to 214.58% at June 30, 2021.
Mr. Eller concluded, “While economic uncertainty has increased throughout 2022, we are committed to pursuing our long-term strategic growth initiatives, helping our customers and communities, and returning additional capital to our shareholders. We are also focused on successfully closing and integrating the Peoples-Sidney Financial Corporation acquisition, which will add $132.7 million in total assets to F&M and expand F&M’s community banking franchise into compelling markets throughout Shelby County Ohio. As a result, we believe 2022 will be another record year of earnings and growth for F&M.”
Stockholders’ Equity and Dividends
Total stockholders’ equity increased 12.1% to $280.9 million at June 30, 2022, from $250.6 million at June 30, 2021. At June 30, 2022, the Company had a Tier 1 leverage ratio of 11.1%, compared to 8.78% at June 30, 2021.
Tangible stockholders’ equity on a regulatory basis increased to $227.7 million at June 30, 2022, compared to $189.6 million at June 30, 2021. On a per share basis, tangible stockholders’ equity at June 30, 2022, was $17.43 per share, compared to $16.94 per share at June 30, 2021.
For the six months ended June 30, 2022, the Company has declared cash dividends of $0.3925 per share, which is a 15.4% increase over the 2021 six-month declared dividend payment. Dividends declared for the 2022 six months included a special one-time cash dividend of $0.0125 to honor F&M’s 125th anniversary. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for over 27 consecutive years. For the six months ended June 30, 2022, the dividend payout ratio was 30.08% compared to 38.18% 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 Bryan and Oxford, Ohio.
Safe Harbor Statement
Farmers & Merchants Bancorp, Inc. (“F&M”) wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995. Statements by F&M, including management’s expectations and comments, may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21B of the Securities Exchange Act of 1934, as amended. Actual results could vary materially depending on risks and uncertainties inherent in general and local banking conditions, competitive factors specific to markets in which F&M and its subsidiaries operate, future interest rate levels, legislative and regulatory decisions, capital market conditions, or the effects of the COVID-19 pandemic, and its impacts on our credit quality and business operations, as well as its impact on general economic and financial market conditions. F&M assumes no responsibility to update this information. For more details, please refer to F&M’s SEC filing, including its most recent Annual Report on Form 10-K and quarterly reports on Form 10-Q. Such filings can be viewed at the SEC’s website, www.sec.gov or through F&M’s website www.fm.bank.
Non-GAAP Financial Measures
This press release includes disclosure of financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers & Merchants Bancorp, Inc. believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers & Merchants Bancorp, Inc.’s marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. A reconciliation of GAAP to non-GAAP financial measures is included within this press release.
| FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME | |||||||||||||||||||||||||
| (Unaudited) (in thousands of dollars, except per share data) | |||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| June 30, 2022 | March 31, 2022 | December 31, 2021 | September 30, 2021 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||||||||
| Interest Income | |||||||||||||||||||||||||
| Loans, including fees | $ | 22,388 | $ | 20,455 | $ | 21,008 | $ | 18,766 | $ | 16,259 | $ | 42,843 | $ | 31,871 | |||||||||||
| Debt securities: | |||||||||||||||||||||||||
| U.S. Treasury and government agencies | 1,035 | 1,023 | 964 | 924 | 857 | 2,058 | 1,608 | ||||||||||||||||||
| Municipalities | 322 | 300 | 289 | 284 | 289 | 622 | 597 | ||||||||||||||||||
| Dividends | 57 | 42 | 49 | 44 | 31 | 99 | 81 | ||||||||||||||||||
| Federal funds sold | 9 | 10 | 10 | 10 | 6 | 19 | 11 | ||||||||||||||||||
| Other. | 100 | 69 | 103 | 94 | 88 | 169 | 127 | ||||||||||||||||||
| Total interest income | 23,911 | 21,899 | 22,423 | 20,122 | 17,530 | 45,810 | 34,295 | ||||||||||||||||||
| Interest Expense | |||||||||||||||||||||||||
| Deposits | 1,379 | 1,360 | 1,581 | 1,221 | 1,276 | 2,739 | 2,616 | ||||||||||||||||||
| Federal funds purchased and securities sold under agreements to repurchase | 166 | 152 | 155 | 165 | 163 | 318 | 329 | ||||||||||||||||||
| Borrowed funds | 218 | 335 | 361 | 87 | 115 | 553 | 337 | ||||||||||||||||||
| Subordinated notes | 284 | 269 | 291 | 199 | - | 553 | - | ||||||||||||||||||
| Total interest expense | 2,047 | 2,116 | 2,388 | 1,672 | 1,554 | 4,163 | 3,282 | ||||||||||||||||||
| Net Interest Income - Before Provision for Loan Losses | 21,864 | 19,783 | 20,035 | 18,450 | 15,976 | 41,647 | 31,013 | ||||||||||||||||||
| Provision for Loan Losses | 1,628 | 580 | 444 | 659 | 641 | 2,208 | 2,341 | ||||||||||||||||||
| Net Interest Income After Provision For Loan Losses | 20,236 | 19,203 | 19,591 | 17,791 | 15,335 | 39,439 | 28,672 | ||||||||||||||||||
| Noninterest Income | |||||||||||||||||||||||||
| Customer service fees | 2,148 | 2,648 | 2,417 | 2,242 | 2,198 | 4,796 | 5,012 | ||||||||||||||||||
| Other service charges and fees | 1,008 | 998 | 1,026 | 1,010 | 874 | 2,006 | 1,712 | ||||||||||||||||||
| Net gain on sale of loans | 164 | 697 | 1,074 | 822 | 955 | 861 | 2,001 | ||||||||||||||||||
| Net gain on sale of available-for-sale securities | - | - | - | - | - | - | 293 | ||||||||||||||||||
| Total noninterest income | 3,320 | 4,343 | 4,517 | 4,074 | 4,027 | 7,663 | 9,018 | ||||||||||||||||||
| Noninterest Expense | |||||||||||||||||||||||||
| Salaries and wages | 5,366 | 5,502 | 5,761 | 5,442 | 4,591 | 10,868 | 8,981 | ||||||||||||||||||
| Employee benefits | 1,546 | 2,054 | 1,792 | 1,621 | 1,915 | 3,600 | 3,909 | ||||||||||||||||||
| Net occupancy expense | 522 | 598 | 532 | 529 | 546 | 1,120 | 1,123 | ||||||||||||||||||
| Furniture and equipment | 1,008 | 1,056 | 782 | 903 | 848 | 2,064 | 1,639 | ||||||||||||||||||
| Data processing | 654 | 604 | 1,020 | 1,548 | 428 | 1,258 | 933 | ||||||||||||||||||
| Franchise taxes | 757 | 418 | 361 | 372 | 294 | 1,175 | 740 | ||||||||||||||||||
| ATM expense | 544 | 532 | 478 | 460 | 459 | 1,076 | 908 | ||||||||||||||||||
| Advertising | 300 | 237 | 431 | 439 | 331 | 537 | 566 | ||||||||||||||||||
| Net (gain) loss on sale of other assets owned | (266 | ) | (5 | ) | 13 | 219 | 227 | (271 | ) | 202 | |||||||||||||||
| FDIC assessment | 270 | 114 | 265 | 296 | 276 | 384 | 512 | ||||||||||||||||||
| Mortgage servicing rights amortization | 59 | 26 | 266 | 285 | 524 | 85 | 1,029 | ||||||||||||||||||
| Consulting fees | 233 | 178 | 761 | 256 | 394 | 411 | 617 | ||||||||||||||||||
| Other general and administrative | 2,242 | 2,179 | 1,964 | 1,951 | 2,227 | 4,421 | 4,260 | ||||||||||||||||||
| Total noninterest expense | 13,235 | 13,493 | 14,426 | 14,321 | 13,060 | 26,728 | 25,419 | ||||||||||||||||||
| Income Before Income Taxes | 10,321 | 10,053 | 9,682 | 7,544 | 6,302 | 20,374 | 12,271 | ||||||||||||||||||
| Income Taxes | 2,050 | 1,951 | 1,999 | 1,624 | 1,319 | 4,001 | 2,379 | ||||||||||||||||||
| Net Income | 8,271 | 8,102 | 7,683 | 5,920 | 4,983 | 16,373 | 9,892 | ||||||||||||||||||
| Other Comprehensive Income (Loss) (Net of Tax): | |||||||||||||||||||||||||
| Net unrealized gain (loss) on available-for-sale securities | (14,602 | ) | (20,939 | ) | (5,170 | ) | 173 | 786 | (35,541 | ) | (5,951 | ) | |||||||||||||
| Reclassification adjustment for realized gain on sale of available-for-sale securities | - | - | - | - | - | - | (293 | ) | |||||||||||||||||
| Net unrealized gain (loss) on available-for-sale securities | (14,602 | ) | (20,939 | ) | (5,170 | ) | 173 | 786 | (35,541 | ) | (6,244 | ) | |||||||||||||
| Tax expense (benefit) | (3,067 | ) | (4,397 | ) | (1,085 | ) | 36 | 165 | (7,464 | ) | (1,311 | ) | |||||||||||||
| Other comprehensive income (loss) | (11,535 | ) | (16,542 | ) | (4,085 | ) | 137 | 621 | (28,077 | ) | (4,933 | ) | |||||||||||||
| Comprehensive Income (Loss) | $ | (3,264 | ) | $ | (8,440 | ) | $ | 3,598 | $ | 6,057 | $ | 5,604 | $ | (11,704 | ) | $ | 4,959 | ||||||||
| Basic and Diluted Earnings Per Share | $ | 0.63 | $ | 0.62 | $ | 0.59 | $ | 0.53 | $ | 0.44 | $ | 1.25 | $ | 0.88 | |||||||||||
| Dividends Declared | $ | 0.2025 | $ | 0.1900 | $ | 0.1900 | $ | 0.1800 | $ | 0.1700 | $ | 0.3925 | $ | 0.3400 | |||||||||||
| FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES | |||||||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||
| (Unaudited) (in thousands of dollars, except share data) | |||||||||||||||||||
| June 30, 2022 | March 31, 2022 | December 31, 2021 | September 30, 2021 | June 30, 2021 | |||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
| Assets | |||||||||||||||||||
| Cash and due from banks | $ | 69,955 | $ | 94,118 | $ | 135,485 | $ | 112,875 | $ | 93,636 | |||||||||
| Federal funds sold | 1,484 | 45,404 | 45,338 | 45,203 | 57,483 | ||||||||||||||
| Total cash and cash equivalents | 71,439 | 139,522 | 180,823 | 158,078 | 151,119 | ||||||||||||||
| Interest-bearing time deposits | 6,684 | 8,677 | 10,913 | 14,622 | 18,597 | ||||||||||||||
| Securities - available-for-sale | 399,687 | 413,996 | 429,931 | 426,717 | 407,500 | ||||||||||||||
| Other securities, at cost | 8,735 | 8,568 | 8,162 | 4,905 | 6,419 | ||||||||||||||
| Loans held for sale | 4,230 | 6,060 | 7,714 | 3,735 | 8,041 | ||||||||||||||
| Loans, net | 2,016,394 | 1,945,449 | 1,841,177 | 1,479,864 | 1,443,336 | ||||||||||||||
| Premises and equipment | 26,492 | 26,653 | 26,913 | 26,476 | 26,915 | ||||||||||||||
| Goodwill | 80,434 | 80,434 | 80,434 | 55,214 | 56,066 | ||||||||||||||
| Mortgage servicing rights | 3,426 | 3,336 | 3,157 | 3,097 | 3,146 | ||||||||||||||
| Other real estate owned | - | - | 159 | 167 | 198 | ||||||||||||||
| Bank owned life insurance | 27,874 | 27,715 | 27,558 | 27,397 | 27,218 | ||||||||||||||
| Other assets | 29,321 | 25,735 | 21,359 | 18,711 | 18,310 | ||||||||||||||
| Total Assets | $ | 2,674,716 | $ | 2,686,145 | $ | 2,638,300 | $ | 2,218,983 | $ | 2,166,865 | |||||||||
| Liabilities and Stockholders' Equity | |||||||||||||||||||
| Liabilities | |||||||||||||||||||
| Deposits | |||||||||||||||||||
| Noninterest-bearing | $ | 503,395 | $ | 497,249 | $ | 473,689 | $ | 438,076 | $ | 443,863 | |||||||||
| Interest-bearing | |||||||||||||||||||
| NOW accounts | 678,552 | 681,975 | 650,466 | 646,237 | 652,078 | ||||||||||||||
| Savings | 617,850 | 626,787 | 597,828 | 529,532 | 501,687 | ||||||||||||||
| Time | 424,249 | 447,586 | 471,479 | 252,383 | 256,445 | ||||||||||||||
| Total deposits | 2,224,046 | 2,253,597 | 2,193,462 | 1,866,228 | 1,854,073 | ||||||||||||||
| Federal funds purchased and | |||||||||||||||||||
| securities sold under agreements to repurchase | 71,944 | 31,680 | 29,268 | 29,601 | 29,882 | ||||||||||||||
| Federal Home Loan Bank (FHLB) advances | 42,635 | 22,656 | 24,065 | 17,868 | 17,868 | ||||||||||||||
| Other borrowings | - | 40,000 | 40,000 | - | - | ||||||||||||||
| Subordinated notes, net of unamortized issuance costs | 34,528 | 34,499 | 34,471 | 34,441 | - | ||||||||||||||
| Dividend payable | 2,626 | 2,462 | 2,461 | 2,002 | 1,888 | ||||||||||||||
| Accrued expenses and other liabilities | 18,064 | 14,773 | 17,406 | 14,097 | 12,569 | ||||||||||||||
| Total liabilities | 2,393,843 | 2,399,667 | 2,341,133 | 1,964,237 | 1,916,280 | ||||||||||||||
| Commitments and Contingencies | |||||||||||||||||||
| Stockholders' Equity | |||||||||||||||||||
| Common stock - No par value 20,000,000 shares authorized; issued and | |||||||||||||||||||
| outstanding 14,063,999 shares 6/30/22 and 12/31/21 | 123,145 | 122,886 | 122,674 | 81,382 | 82,259 | ||||||||||||||
| Treasury stock - 998,174 shares 6/30/22, 997,766 shares 12/31/21 | (11,822 | ) | (11,739 | ) | (11,724 | ) | (11,718 | ) | (12,172 | ) | |||||||||
| Retained earnings | 200,811 | 195,057 | 189,401 | 184,181 | 179,734 | ||||||||||||||
| Accumulated other comprehensive income (loss) | (31,261 | ) | (19,726 | ) | (3,184 | ) | 901 | 764 | |||||||||||
| Total stockholders' equity | 280,873 | 286,478 | 297,167 | 254,746 | 250,585 | ||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 2,674,716 | $ | 2,686,145 | $ | 2,638,300 | $ | 2,218,983 | $ | 2,166,865 | |||||||||
| FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||
| SELECT FINANCIAL DATA | ||||||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||
| Selected financial data | June 30, 2022 | March 31, 2022 | December 31, 2021 | September 30, 2021 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||||||||
| Return on average assets | 1.23 | % | 1.21 | % | 1.17 | % | 1.12 | % | 0.90 | % | 1.22 | % | 0.98 | % | ||||||||||||
| Return on average equity | 11.66 | % | 11.00 | % | 10.94 | % | 9.32 | % | 8.00 | % | 11.32 | % | 7.94 | % | ||||||||||||
| Yield on earning assets | 3.47 | % | 3.47 | % | 3.59 | % | 3.85 | % | 3.53 | % | 3.79 | % | 3.61 | % | ||||||||||||
| Cost of interest bearing liabilities | 0.45 | % | 0.45 | % | 0.51 | % | 0.45 | % | 0.44 | % | 0.44 | % | 0.48 | % | ||||||||||||
| Net interest spread | 3.02 | % | 3.02 | % | 3.08 | % | 3.40 | % | 3.09 | % | 3.35 | % | 3.13 | % | ||||||||||||
| Net interest margin | 3.14 | % | 3.14 | % | 3.21 | % | 3.53 | % | 3.21 | % | 3.47 | % | 3.27 | % | ||||||||||||
| Efficiency | 50.17 | % | 55.44 | % | 58.76 | % | 63.50 | % | 64.98 | % | 57.90 | % | 63.72 | % | ||||||||||||
| Dividend payout ratio | 30.02 | % | 30.64 | % | 32.03 | % | 33.81 | % | 37.89 | % | 30.08 | % | 38.18 | % | ||||||||||||
| Tangible book value per share (1) | $ | 17.43 | $ | 16.96 | $ | 16.49 | $ | 17.33 | $ | 16.94 | ||||||||||||||||
| Tier 1 capital to average assets | 8.75 | % | 8.51 | % | 8.47 | % | 9.45 | % | 8.78 | % | ||||||||||||||||
| Average Shares Outstanding | 13,065,975 | 13,066,272 | 13,046,299 | 11,209,732 | 11,191,043 | 13,066,123 | 11,194,011 | |||||||||||||||||||
| Loans | June 30, 2022 | March 31, 2022 | December 31, 2021 | September 30, 2021 | June 30, 2021 | |||||||||||||||||||||
| (Dollar amounts in thousands) | ||||||||||||||||||||||||||
| Commercial real estate | $ | 979,176 | $ | 910,839 | $ | 848,477 | $ | 728,852 | $ | 691,122 | ||||||||||||||||
| Agricultural real estate | 199,972 | 196,223 | 198,343 | 179,374 | 189,742 | |||||||||||||||||||||
| Consumer real estate | 410,450 | 410,120 | 395,873 | 202,454 | 194,715 | |||||||||||||||||||||
| Commercial and industrial | 232,975 | 216,918 | 208,270 | 194,767 | 216,609 | |||||||||||||||||||||
| Agricultural | 127,143 | 140,709 | 118,368 | 105,580 | 100,756 | |||||||||||||||||||||
| Consumer | 55,411 | 57,521 | 57,737 | 55,521 | 56,427 | |||||||||||||||||||||
| Other | 31,243 | 31,573 | 32,089 | 31,096 | 13,549 | |||||||||||||||||||||
| Less: Net deferred loan fees and costs | (1,552 | ) | (1,683 | ) | (1,738 | ) | (2,082 | ) | (4,497 | ) | ||||||||||||||||
| Total loans,net | $ | 2,034,818 | $ | 1,962,220 | $ | 1,857,419 | $ | 1,495,562 | $ | 1,458,423 | ||||||||||||||||
| Asset quality data | June 30, 2022 | March 31, 2022 | December 31, 2021 | September 30, 2021 | June 30, 2021 | |||||||||||||||||||||
| (Dollar amounts in thousands) | ||||||||||||||||||||||||||
| Nonaccrual loans | $ | 5,247 | $ | 8,581 | $ | 8,076 | $ | 6,248 | $ | 7,031 | ||||||||||||||||
| Troubled debt restructuring | $ | 2,748 | $ | 7,268 | $ | 7,614 | $ | 6,035 | $ | 5,492 | ||||||||||||||||
| 90 day past due and accruing | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
| Nonperforming loans | $ | 5,247 | $ | 8,581 | $ | 8,076 | $ | 6,248 | $ | 7,031 | ||||||||||||||||
| Other real estate owned | $ | - | $ | - | $ | 159 | $ | 167 | $ | 198 | ||||||||||||||||
| Nonperforming assets | $ | 5,247 | $ | 8,581 | $ | 8,235 | $ | 6,415 | $ | 7,229 | ||||||||||||||||
| (Dollar amounts in thousands) | ||||||||||||||||||||||||||
| Allowance for loan and lease losses | $ | 18,424 | $ | 16,771 | $ | 16,242 | $ | 15,698 | $ | 15,087 | ||||||||||||||||
| Allowance for loan and lease losses/total loans | 0.91 | % | 0.85 | % | 0.87 | % | 1.05 | % | 1.03 | % | ||||||||||||||||
| Net charge-offs: | ||||||||||||||||||||||||||
| Quarter-to-date | $ | (25 | ) | $ | 51 | $ | (101 | ) | $ | 48 | $ | (21 | ) | |||||||||||||
| Year-to-date | $ | 26 | $ | 51 | $ | 874 | $ | 974 | $ | 926 | ||||||||||||||||
| Net charge-offs to average loans | ||||||||||||||||||||||||||
| Quarter-to-date | 0.00 | % | 0.00 | % | -0.01 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
| Year-to-date | 0.00 | % | 0.00 | % | 0.06 | % | 0.07 | % | 0.07 | % | ||||||||||||||||
| Nonperforming loans/total loans | 0.26 | % | 0.44 | % | 0.43 | % | 0.42 | % | 0.48 | % | ||||||||||||||||
| Allowance for loan and lease losses/nonperforming loans | 351.44 | % | 198.29 | % | 201.11 | % | 251.26 | % | 214.58 | % | ||||||||||||||||
| (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 | ||||||||||||||||
| June 30, 2022 | June 30, 2021 | ||||||||||||||||
| Interest Earning Assets: | Average Balance | Interest/Dividends | Annualized Yield/Rate | Average Balance | Interest/Dividends | Annualized Yield/Rate | |||||||||||
| Loans | $ | 1,999,357 | $ | 22,388 | 4.48 | % | $ | 1,419,531 | $ | 16,259 | 4.58 | % | |||||
| Taxable investment securities | 422,482 | 1,344 | 1.27 | % | 367,249 | 1,100 | 1.20 | % | |||||||||
| Tax-exempt investment securities | 21,649 | 70 | 1.64 | % | 17,497 | 77 | 2.23 | % | |||||||||
| Fed funds sold & other | 81,091 | 109 | 0.54 | % | 187,583 | 94 | 0.20 | % | |||||||||
| Total Interest Earning Assets | 2,524,579 | $ | 23,911 | 3.79 | % | 1,991,860 | $ | 17,530 | 3.53 | % | |||||||
| Nonearning Assets | 161,031 | 228,036 | |||||||||||||||
| Total Assets | $ | 2,685,610 | $ | 2,219,896 | |||||||||||||
| Interest Bearing Liabilities: | |||||||||||||||||
| Savings deposits | $ | 1,312,444 | $ | 777 | 0.24 | % | $ | 1,123,157 | $ | 566 | 0.20 | % | |||||
| Other time deposits | 435,091 | 602 | 0.55 | % | 250,277 | 710 | 1.13 | % | |||||||||
| Other borrowed money | 39,172 | 218 | 2.23 | % | 17,859 | 115 | 2.58 | % | |||||||||
| Fed funds purchased & securities | |||||||||||||||||
| sold under agreement to repurch. | 35,260 | 166 | 1.88 | % | 29,980 | 163 | 2.17 | % | |||||||||
| Subordinated notes | 34,509 | 284 | 3.29 | % | - | - | 0.00 | % | |||||||||
| Total Interest Bearing Liabilities | $ | 1,856,476 | $ | 2,047 | 0.44 | % | $ | 1,421,273 | $ | 1,554 | 0.44 | % | |||||
| Noninterest Bearing Liabilities | 545,439 | 549,610 | |||||||||||||||
| Stockholders' Equity | $ | 283,695 | $ | 249,013 | |||||||||||||
| Net Interest Income and Interest Rate Spread | $ | 21,864 | 3.35 | % | $ | 15,976 | 3.09 | % | |||||||||
| Net Interest Margin | 3.47 | % | 3.21 | % | |||||||||||||
| 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 Six Months Ended | For the Six Months Ended | ||||||||||||||||
| June 30, 2022 | June 30, 2021 | ||||||||||||||||
| Interest Earning Assets: | Average Balance | Interest/Dividends | Annualized Yield/Rate | Average Balance | Interest/Dividends | Annualized Yield/Rate | |||||||||||
| Loans | $ | 1,953,671 | $ | 42,843 | 4.39 | % | $ | 1,374,302 | $ | 31,871 | 4.64 | % | |||||
| Taxable investment securities | 426,189 | 2,639 | 1.24 | % | 345,893 | 2,109 | 1.22 | % | |||||||||
| Tax-exempt investment securities | 20,119 | 140 | 1.76 | % | 18,936 | 177 | 2.37 | % | |||||||||
| Fed funds sold & other | 124,050 | 188 | 0.30 | % | 162,646 | 138 | 0.17 | % | |||||||||
| Total Interest Earning Assets | 2,524,029 | $ | 45,810 | 3.63 | % | 1,901,777 | $ | 34,295 | 3.61 | % | |||||||
| Nonearning Assets | 162,949 | 126,533 | |||||||||||||||
| Total Assets | $ | 2,686,978 | $ | 2,028,310 | |||||||||||||
| Interest Bearing Liabilities: | |||||||||||||||||
| Savings deposits | $ | 1,302,005 | $ | 1,365 | 0.21 | % | $ | 1,069,179 | $ | 1,140 | 0.21 | % | |||||
| Other time deposits | 447,471 | 1,374 | 0.61 | % | 246,155 | 1,476 | 1.20 | % | |||||||||
| Other borrowed money | 51,180 | 553 | 2.16 | % | 17,854 | 337 | 3.78 | % | |||||||||
| Fed funds purchased & securities | |||||||||||||||||
| sold under agreement to repurch. | 32,182 | 318 | 1.98 | % | 30,095 | 329 | 2.19 | % | |||||||||
| Subordinated notes | 34,495 | 553 | 3.12 | % | - | - | 0.00 | % | |||||||||
| Total Interest Bearing Liabilities | $ | 1,867,333 | $ | 4,163 | 0.44 | % | $ | 1,363,283 | $ | 3,282 | 0.48 | % | |||||
| Noninterest Bearing Liabilities | 530,478 | 415,722 | |||||||||||||||
| Stockholders' Equity | $ | 289,167 | $ | 249,305 | |||||||||||||
| Net Interest Income and Interest Rate Spread | $ | 41,647 | 3.19 | % | $ | 31,013 | 3.13 | % | |||||||||
| Net Interest Margin | 3.30 | % | 3.27 | % | |||||||||||||
| 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 | ||||||||||||||
| June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||
| Shares Outstanding | 13,065,825 | 11,189,052 | 13,065,825 | 11,189,052 | ||||||||||||
| Tangible Equity | ||||||||||||||||
| Equity | $ | 280,872 | $ | 250,585 | $ | 280,872 | $ | 250,585 | ||||||||
| Goodwill | 80,434 | 56,066 | 80,434 | 56,066 | ||||||||||||
| Other Intangible | 3,974 | 4,200 | 3,974 | 4,200 | ||||||||||||
| Comprehensive Adjustment* | - | - | 31,261 | (764 | ) | |||||||||||
| Tangible Equity | $ | 196,464 | $ | 190,319 | $ | 227,725 | $ | 189,555 | ||||||||
| Shares Outstanding | 13,066 | 11,189 | 13,066 | 11,189 | ||||||||||||
| Tangible Book Equity per Share | $ | 15.04 | $ | 17.01 | $ | 17.43 | $ | 16.94 | ||||||||
| Actual Average | Regulatory Average | |||||||||||||||
| Year to Date | Year to Date | |||||||||||||||
| June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||
| Net Income | $ | 16,373 | $ | 9,892 | $ | 16,373 | $ | 9,892 | ||||||||
| Acquisition Costs - Tax Adjusted | 115 | 982 | 115 | 982 | ||||||||||||
| Average Shares Outstanding | 13,066,123 | 11,194,011 | 13,066,123 | 11,194,011 | ||||||||||||
| Average Tangible Equity | ||||||||||||||||
| Average Equity | $ | 289,167 | $ | 249,305 | $ | 289,167 | $ | 249,305 | ||||||||
| Average Goodwill | 80,434 | 50,191 | 80,434 | 50,191 | ||||||||||||
| Average Other Intangible | 4,235 | 3,764 | 4,235 | 3,764 | ||||||||||||
| Average Comprehensive Adjustment* | - | - | 16,893 | (2,548 | ) | |||||||||||
| Average Tangible Equity | $ | 204,498 | $ | 195,350 | $ | 221,391 | $ | 192,803 | ||||||||
| Average Shares Outstanding | 13,066 | 11,194 | 13,066 | 11,194 | ||||||||||||
| Average Tangible Book Equity per Share | $ | 15.65 | $ | 17.45 | $ | 16.94 | $ | 17.22 | ||||||||
| Return on Average Tangible Equity | 16.01 | % | 10.13 | % | 14.79 | % | 10.26 | % | ||||||||
| Return on Average Tangible Equity w/o Acquisition | 16.12 | % | 11.13 | % | 14.89 | % | 11.28 | % | ||||||||
| *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.bank | Andrew M. Berger Managing Director SM Berger & Company, Inc. (216) 464-6400 andrew@smberger.com |
