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Farmers & Merchants Bancorp, Inc. Reports 2024 Third-Quarter and Year-to-Date Financial Results
المصدر: Nasdaq GlobeNewswire / 30 أكتوبر 2024 17:25:01 America/Chicago
ARCHBOLD, Ohio, Oct. 30, 2024 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2024 third quarter and year-to-date ended September 30, 2024.
2024 Third Quarter Financial and Operating Highlights (on a year-over-year basis unless noted):
- 86 consecutive quarters of profitability
- Net income increased 36.4% to $6.5 million, or $0.48 per basic and diluted share, from $4.8 million, or $0.35 per basic and diluted share, and net income expanded 14.7% from the 2024 second quarter
- Net interest margin increased 12 basis points to 2.71%
- Efficiency ratio improved to 67.98%, compared to 73.07% for the same period a year ago, and 69.03% for the 2024 second quarter
- Total net loans remain stable at $2.54 billion at September 30, 2024
- Total assets increased 4.8% to a record $3.39 billion
- Deposits increased 4.3% to a record $2.68 billion
- Stockholders’ equity increased 10.6% to a record $335.4 million
- Asset quality remains at historically strong levels with nonperforming loans of only $2.9 million at September 30, 2024, compared to $22.4 million at September 30, 2023
- Allowance for credit losses was 879.37% of nonperforming loans
- F&M ended the quarter with excellent liquidity levels, and over $635 million in contingent funding sources, and a cash-to-assets ratio of 7.2%
- According to the FDIC, F&M continued to have the third largest share of deposits out of the 58 financial institutions that are also operating within its local markets
Lars B. Eller, President and Chief Executive Officer, stated, “F&M produced excellent earnings growth on a year-over-year and sequential basis, driven by higher net interest income, historically strong asset quality, and prudent expense management. Most importantly, our third quarter results reflect the talent of our associates, as we continue to work hard to drive operating improvements at F&M, serve our local Ohio, Indiana, and Michigan communities, and position F&M for long-term success. In addition, I am pleased to report that F&M was the third largest bank out of 58 financial institutions within the markets we compete, according to the FDIC, reflecting the leading value we provide to our local communities. In fact, F&M is the number one bank, based on deposits, in almost half of the communities in which we operate.”
Income Statement
Net income for the 2024 third quarter ended September 30, 2024, was $6.5 million, compared to $4.8 million for the same period last year. Net income per basic and diluted share for the 2024 third quarter was $0.48, compared to $0.35 for the same period last year. Net income for the 2024 nine months ended September 30, 2024, was $17.6 million, compared to $17.2 million for the same period last year. Net income per basic and diluted share for the 2024 nine months was $1.28, compared to $1.26 for the same period last year.Mr. Eller continued, “Our 2024 third quarter and year-to-date performance demonstrate the success of the near-term strategies we are pursuing to navigate a complex operating environment and improve earnings. Most importantly, while the demand for loans is high across our markets, our approach to risk and pricing remains conservative. This near-term strategy has contributed to excellent asset quality. In addition, we continue to focus on strategies aimed at optimizing our deposit base and growing low-cost checking (DDA) deposits. Since the beginning of 2024, we have added over 5,600 new checking accounts, and benefited from new and expanded relationships at offices that were opened in 2023. As a result, we ended the quarter with a loan-to-deposit ratio of 93.6%, compared to 97.2% at September 30, 2023, and 96.0% at June 30, 2024. Our third quarter of 2024 loan-to-deposit ratio was the lowest quarterly value in two years. The final near-term strategy we are pursuing is focused on controlling expenses, and I am encouraged by the continued year-over-year and sequential improvement in our efficiency ratio. This reflects the opportunities we are pursuing to manage operating costs and expand productivity.”
Deposits
At September 30, 2024, total deposits were $2.68 billion, an increase of 4.3% from September 30, 2023. The Company’s cost of interest-bearing liabilities was 3.2% for the quarter ended September 30, 2024, compared to 2.82% for the quarter ended September 30, 2023, and 3.02% for the 2023 fourth quarter ended December 31, 2023.Loan Portfolio and Asset Quality
“F&M’s teams continue to do an excellent job managing our cost of funds, loan pricing, deposit growth and overall net interest margin. Since the quarter ended December 31, 2023, our yield on earning assets has increased by 34 basis points, compared to a 19 basis point increase in our cost of interest bearing liabilities – representing the third consecutive quarter our yield on earning assets has outpaced our cost of interest bearing liabilities. We expect this trend will continue as more of our loan portfolio reprices in 2024,” continued Mr. Eller.Total loans, net at September 30, 2024, increased 0.3%, or by $8.7 million to $2.54 billion, compared to $2.53 billion at September 30, 2023. The year-over-year growth was driven by higher consumer real estate, commercial and industrial, and agricultural loans, partially offset by lower commercial real estate, agricultural real estate, and consumer loans.
F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $2.9 million, or 0.11% of total loans at September 30, 2024, compared to $22.4 million, or 0.89% of total loans at September 30, 2023, and $22.4 million, or 0.87% at December 31, 2023.
F&M maintains a well-balanced, diverse and high performing CRE portfolio. CRE loans represented 51.3% of the Company’s total loan portfolio at September 30, 2024. In addition, F&M’s commercial real estate office credit exposure represented 5.3% of the Company's total loan portfolio at September 30, 2024, with a weighted average loan-to-value of approximately 64% and an average loan of approximately $880,000.
F&M’s CRE portfolio included the following categories at September 30, 2024:
CRE Category Dollar
BalancePercent of CRE Portfolio(*) Percent of Total Loan Portfolio(*) Industrial $ 274,953 21.1 % 10.8 % Retail $ 237,622 18.2 % 9.4 % Multi-family $ 223,926 17.2 % 8.8 % Hotels $ 141,642 10.9 % 5.6 % Office $ 134,973 10.4 % 5.3 % Gas Stations $ 62,028 4.8 % 2.5 % Food Service $ 46,526 3.6 % 1.8 % Development $ 30,999 2.4 % 1.2 % Senior Living $ 29,866 2.3 % 1.2 % Auto Dealers $ 25,068 1.9 % 1.0 % Other $ 93,557 7.2 % 3.7 % Total CRE $ 1,301,160 100.0 % 51.3 % * Numbers have been rounded
At September 30, 2024, the Company’s allowance for credit losses to nonperforming loans was 879.37%, compared to 112.61% at September 30, 2023, and 111.95% at December 31, 2023. The allowance to total loans was 1.01% at September 30, 2024, compared to 1.00% at September 30, 2023. Including accretable yield adjustments, associated with the Company’s recent acquisitions, F&M’s allowance for credit losses to total loans was 1.10% at September 30, 2024, compared to 1.18% at September 30, 2023.
Mr. Eller concluded, “With two months remaining in 2024, I am encouraged by F&M’s strong financial and operating performance to date. F&M ended the quarter with record stockholders’ equity, historically strong asset quality, record deposits, and excellent liquidity levels with over $635 million in contingent funding sources, and a cash-to-assets ratio of 7.2%. We remain focused on continual improvements, managing the items under our control, and providing our customers and communities with outstanding, and local financial services. As a result, F&M’s financial and operating performance continues to strengthen and I believe the Company is well positioned to create lasting value for our communities, customers, team members, and shareholders.”
Stockholders’ Equity and Dividends
Total stockholders’ equity increased 10.6% to $335.4 million, or $24.48 per share at September 30, 2024, from $303.2 million, or $22.19 per share at September 30, 2023. The Company’s Tier 1 leverage ratio of 8.04%, remained stable compared to September 30, 2023.Tangible stockholders’ equity increased to $242.8 million at September 30, 2024, compared to $208.8 million at September 30, 2023. On a per share basis, tangible stockholders’ equity at September 30, 2024, was $17.72 per share, compared to $15.28 per share at September 30, 2023.
For the nine months ended September 30, 2024, the Company has declared cash dividends of $0.66125 per share, which is a 5.0% increase over the same period last year. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 30 consecutive years. For the nine months ended September 30, 2024, the dividend payout ratio was 50.99% compared to 49.50% for the same period last year.
About Farmers & Merchants State Bank:
Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) is the holding company of F&M Bank, a local independent community bank that has been serving its communities since 1897. F&M Bank provides commercial banking, retail banking and other financial services. Our locations are in Butler, Champaign, Fulton, Defiance, Hancock, Henry, Lucas, Shelby, Williams, and Wood counties in Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, Steuben and Wells counties. The Michigan footprint includes Oakland County, and we have Loan Production Offices in West Bloomfield, Michigan; Muncie, Indiana; and Perrysburg and Bryan, 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 Nine Months Ended September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 September 30, 2024 September 30, 2023 Interest Income Loans, including fees $ 36,873 $ 36,593 $ 35,200 $ 34,493 $ 33,783 $ 108,666 $ 94,851 Debt securities: U.S. Treasury and government agencies 1,467 1,148 1,045 987 1,005 3,660 3,103 Municipalities 387 389 394 397 392 1,170 1,201 Dividends 334 327 333 365 246 994 517 Federal funds sold 7 7 7 8 6 21 36 Other 2,833 2,702 1,675 2,020 927 7,210 1,830 Total interest income 41,901 41,166 38,654 38,270 36,359 121,721 101,538 Interest Expense Deposits 16,947 16,488 15,279 15,015 13,323 48,714 31,908 Federal funds purchased and securities sold under agreements to repurchase 277 276 284 293 349 837 1,181 Borrowed funds 2,804 2,742 2,689 2,742 2,741 8,235 6,134 Subordinated notes 284 285 284 285 284 853 853 Total interest expense 20,312 19,791 18,536 18,335 16,697 58,639 40,076 Net Interest Income - Before Provision for Credit Losses 21,589 21,375 20,118 19,935 19,662 63,082 61,462 Provision for Credit Losses - Loans 282 605 (289 ) 278 460 598 1,420 Provision for Credit Losses - Off Balance Sheet Credit Exposures (267 ) (18 ) (266 ) 189 (76 ) (551 ) (143 ) Net Interest Income After Provision for Credit Losses 21,574 20,788 20,673 19,468 19,278 63,035 60,185 Noninterest Income Customer service fees 300 189 598 415 248 1,087 917 Other service charges and fees 1,155 1,085 1,057 1,090 1,133 3,297 3,253 Interchange income 1,315 1,330 1,429 1,310 1,266 4,074 4,008 Loan servicing income 710 513 539 666 502 1,762 3,739 Net gain on sale of loans 215 314 107 230 294 636 469 Increase in cash surrender value of bank owned life insurance 265 236 216 216 221 717 618 Net loss on sale of available-for-sale securities - - - - - - (891 ) Total noninterest income 3,960 3,667 3,946 3,927 3,664 11,573 12,113 Noninterest Expense Salaries and wages 7,713 7,589 7,846 6,981 6,777 23,148 19,934 Employee benefits 2,112 2,112 2,171 1,218 2,066 6,395 6,302 Net occupancy expense 1,054 999 1,027 1,187 950 3,080 2,646 Furniture and equipment 1,472 1,407 1,353 1,370 1,189 4,232 3,652 Data processing 339 448 500 785 840 1,287 2,362 Franchise taxes 410 265 555 308 434 1,230 1,179 ATM expense 472 397 473 665 640 1,342 1,946 Advertising 597 519 530 397 865 1,646 2,209 Net (gain) loss on sale of other assets owned - (49 ) - 86 49 (49 ) 49 FDIC assessment 516 507 580 594 586 1,603 1,388 Servicing rights amortization - net 219 187 168 182 106 574 429 Loan expense 244 251 229 246 241 724 809 Consulting fees 251 198 186 192 179 635 640 Professional fees 453 527 445 331 358 1,425 1,099 Intangible asset amortization 445 444 445 446 445 1,334 1,334 Other general and administrative 1,128 1,495 1,333 1,532 1,319 3,956 4,841 Total noninterest expense 17,425 17,296 17,841 16,520 17,044 52,562 50,819 Income Before Income Taxes 8,109 7,159 6,778 6,875 5,898 22,046 21,479 Income Taxes 1,593 1,477 1,419 1,332 1,121 4,489 4,235 Net Income 6,516 5,682 5,359 5,543 4,777 17,557 17,244 Other Comprehensive Income (Loss) (Net of Tax): Net unrealized gain (loss) on available-for-sale securities 11,664 2,531 (1,995 ) 13,261 (4,514 ) 12,200 (2,480 ) Reclassification adjustment for realized loss on sale of available-for-sale securities - - - - - - 891 Net unrealized gain (loss) on available-for-sale securities 11,664 2,531 (1,995 ) 13,261 (4,514 ) 12,200 (1,589 ) Tax expense (benefit) 2,449 531 (418 ) 2,784 (947 ) 2,562 (333 ) Other comprehensive income (loss) 9,215 2,000 (1,577 ) 10,477 (3,567 ) 9,638 (1,256 ) Comprehensive Income $ 15,731 $ 7,682 $ 3,782 $ 16,020 $ 1,210 $ 27,195 $ 15,988 Basic Earnings Per Share $ 0.48 $ 0.42 $ 0.39 $ 0.41 $ 0.35 $ 1.28 $ 1.26 Diluted Earnings Per Share $ 0.48 $ 0.42 $ 0.39 $ 0.41 $ 0.35 $ 1.28 $ 1.26 Dividends Declared $ 0.22125 $ 0.22 $ 0.22 $ 0.22 $ 0.21 $ 0.66125 $ 0.63 FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (in thousands of dollars, except per share data)September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Assets Cash and due from banks $ 244,572 $ 191,785 $ 186,541 $ 140,917 $ 151,711 Federal funds sold 932 1,283 1,241 1,284 1,471 Total cash and cash equivalents 245,504 193,068 187,782 142,201 153,182 Interest-bearing time deposits 2,727 3,221 2,735 2,740 2,989 Securities - available-for-sale 404,881 365,209 347,516 358,478 348,255 Other securities, at cost 15,028 14,721 14,744 17,138 16,995 Loans held for sale 1,706 1,628 2,410 1,576 1,039 Loans, net of allowance for credit losses of $25,484 9/30/24 and $25,024 12/31/23 2,512,852 2,534,468 2,516,687 2,556,167 2,504,329 Premises and equipment 33,779 34,507 35,007 35,790 31,723 Construction in progress 35 38 9 8 3,044 Goodwill 86,358 86,358 86,358 86,358 86,358 Loan servicing rights 5,644 5,504 5,555 5,648 5,687 Bank owned life insurance 34,624 34,359 34,123 33,907 33,691 Other assets 46,047 49,552 54,628 43,218 47,388 Total Assets $ 3,389,185 $ 3,322,633 $ 3,287,554 $ 3,283,229 $ 3,234,680 Liabilities and Stockholders' Equity Liabilities Deposits Noninterest-bearing $ 481,444 $ 479,069 $ 510,731 $ 528,465 $ 505,358 Interest-bearing NOW accounts 865,617 821,145 829,236 816,790 778,133 Savings 661,565 673,284 635,430 599,191 591,344 Time 676,187 667,592 645,985 663,017 700,445 Total deposits 2,684,813 2,641,090 2,621,382 2,607,463 2,575,280 Federal funds purchased and securities sold under agreements to repurchase 27,292 27,218 28,218 28,218 30,527 Federal Home Loan Bank (FHLB) advances 263,081 266,102 256,628 265,750 266,286 Subordinated notes, net of unamortized issuance costs 34,789 34,759 34,731 34,702 34,673 Dividend payable 2,998 2,975 2,975 2,974 2,838 Accrued expenses and other liabilities 40,832 27,825 25,930 27,579 21,892 Total liabilities 3,053,805 2,999,969 2,969,864 2,966,686 2,931,496 Commitments and Contingencies Stockholders' Equity Common stock - No par value 20,000,000 shares authorized; issued 14,564,425 shares 9/30/24 and 12/31/23; outstanding 13,702,593 135,193 135,829 135,482 135,515 135,171 shares 9/30/24 and 13,664,641 shares 12/31/23 Treasury stock - 861,832 shares 9/30/24 and 899,784 shares 12/31/23 (10,904 ) (11,006 ) (10,851 ) (11,040 ) (11,008 ) Retained earnings 230,465 226,430 223,648 221,080 218,510 Accumulated other comprehensive loss (19,374 ) (28,589 ) (30,589 ) (29,012 ) (39,489 ) Total stockholders' equity 335,380 322,664 317,690 316,543 303,184 Total Liabilities and Stockholders' Equity $ 3,389,185 $ 3,322,633 $ 3,287,554 $ 3,283,229 $ 3,234,680 FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
SELECT FINANCIAL DATAFor the Three Months Ended For the Nine Months Ended Selected financial data September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 September 30, 2024 September 30, 2023 Return on average assets 0.78 % 0.69 % 0.66 % 0.67 % 0.59 % 0.71 % 0.73 % Return on average equity 7.93 % 7.13 % 6.76 % 7.27 % 6.26 % 7.28 % 7.52 % Yield on earning assets 5.27 % 5.22 % 5.00 % 4.93 % 4.79 % 5.17 % 4.57 % Cost of interest bearing liabilities 3.21 % 3.18 % 3.06 % 3.02 % 2.82 % 3.16 % 2.35 % Net interest spread 2.06 % 2.04 % 1.94 % 1.91 % 1.97 % 2.01 % 2.22 % Net interest margin 2.71 % 2.71 % 2.60 % 2.57 % 2.59 % 2.68 % 2.77 % Efficiency 67.98 % 69.03 % 74.08 % 69.23 % 73.07 % 70.36 % 68.24 % Dividend payout ratio 45.99 % 52.35 % 55.52 % 54.23 % 60.07 % 50.99 % 49.50 % Tangible book value per share $ 17.72 $ 16.79 $ 16.39 $ 16.29 $ 15.28 Tier 1 leverage ratio 8.04 % 8.02 % 8.40 % 8.20 % 8.02 % Average shares outstanding 13,687,119 13,681,501 13,671,166 13,665,773 13,650,823 13,679,955 13,633,101 Loans September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 (Dollar amounts in thousands) Commercial real estate $ 1,301,160 $ 1,303,598 $ 1,304,400 $ 1,337,766 $ 1,304,118 Agricultural real estate 220,328 222,558 227,455 223,791 225,672 Consumer real estate 524,055 525,902 525,178 521,895 512,973 Commercial and industrial 260,732 268,426 256,051 254,935 250,891 Agricultural 137,252 142,909 127,670 132,560 123,735 Consumer 67,394 70,918 74,819 79,591 83,024 Other 25,916 26,449 26,776 30,136 31,083 Less: Net deferred loan fees, costs and other (1) 1,499 (1,022 ) (982 ) 517 (1,890 ) Total loans, net $ 2,538,336 $ 2,559,738 $ 2,541,367 $ 2,581,191 $ 2,529,606 Asset quality data September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 (Dollar amounts in thousands) Nonaccrual loans $ 2,898 $ 2,487 $ 19,391 $ 22,353 $ 22,447 90 day past due and accruing $ - $ - $ - $ - $ - Nonperforming loans $ 2,898 $ 2,487 $ 19,391 $ 22,353 $ 22,447 Other real estate owned $ - $ - $ - $ - $ - Nonperforming assets $ 2,898 $ 2,487 $ 19,391 $ 22,353 $ 22,447 Allowance for credit losses $ 25,484 $ 25,270 $ 24,680 $ 25,024 $ 25,277 Allowance for unfunded 1,661 1,928 1,946 2,212 2,023 Total Allowance for Credit Losses $ 27,145 $ 27,198 $ 26,626 $ 27,236 $ 27,300 Allowance for credit losses/total loans 1.01 % 0.99 % 0.97 % 0.97 % 1.00 % Adjusted credit losses with accretable yield/total loans 1.10 % 1.10 % 1.11 % 1.13 % 1.18 % Net charge-offs: Quarter-to-date $ 68 $ 15 $ 55 $ 531 $ 93 Year-to-date $ 138 $ 70 $ 55 $ 551 $ 20 Net charge-offs to average loans Quarter-to-date 0.00 % 0.00 % 0.00 % 0.02 % 0.00 % Year-to-date 0.01 % 0.00 % 0.00 % 0.02 % 0.00 % Nonperforming loans/total loans 0.11 % 0.10 % 0.76 % 0.87 % 0.89 % Allowance for credit losses/nonperforming loans 879.37 % 1016.08 % 127.28 % 111.95 % 112.61 % NPA coverage ratio 879.37 % 1016.08 % 127.28 % 111.95 % 112.61 % (1) Includes carrying value adjustments of $3.0 million as of September 30, 2024, $612 thousand as of June 30, 2024, $969 thousand as of March 31, 2024 and $2.7 million as of December 31, 2023 related to interest rate swaps associated with fixed rate loans 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, 2024 September 30, 2023 Interest Earning Assets: Average Balance Interest/Dividends Annualized Yield/Rate Average Balance Interest/Dividends Annualized Yield/Rate Loans $ 2,551,899 $ 36,873 5.78 % $ 2,536,885 $ 33,783 5.33 % Taxable investment securities 415,943 2,107 2.03 % 393,910 1,559 1.58 % Tax-exempt investment securities 19,661 81 2.09 % 23,986 84 1.77 % Fed funds sold & other 197,258 2,840 5.76 % 85,515 933 4.36 % Total Interest Earning Assets 3,184,761 $ 41,901 5.27 % 3,040,296 $ 36,359 4.79 % Nonearning Assets 168,055 180,193 Total Assets $ 3,352,816 $ 3,220,489 Interest Bearing Liabilities: Savings deposits $ 1,538,387 $ 10,691 2.78 % $ 1,367,168 $ 7,673 2.24 % Other time deposits 667,224 6,256 3.75 % 667,880 5,650 3.38 % Other borrowed money 264,539 2,804 4.24 % 266,467 2,741 4.11 % Fed funds purchased & securities sold under agreement to repurchase 27,481 277 4.03 % 34,128 349 4.09 % Subordinated notes 34,769 284 3.27 % 34,654 284 3.28 % Total Interest Bearing Liabilities $ 2,532,400 $ 20,312 3.21 % $ 2,370,297 $ 16,697 2.82 % Noninterest Bearing Liabilities 491,851 544,801 Stockholders' Equity $ 328,565 $ 305,391 Net Interest Income and Interest Rate Spread $ 21,589 2.06 % $ 19,662 1.97 % Net Interest Margin 2.71 % 2.59 % 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, 2024 September 30, 2023 Interest Earning Assets: Average Balance Interest/Dividends Annualized Yield/Rate Average Balance Interest/Dividends Annualized Yield/Rate Loans $ 2,561,774 $ 108,666 5.66 % $ 2,470,770 $ 94,851 5.12 % Taxable investment securities 397,466 5,575 1.87 % 396,917 4,544 1.53 % Tax-exempt investment securities 20,684 249 2.03 % 24,865 277 1.88 % Fed funds sold & other 165,227 7,231 5.84 % 67,869 1,866 3.67 % Total Interest Earning Assets 3,145,151 $ 121,721 5.17 % 2,960,421 $ 101,538 4.57 % Nonearning Assets 161,113 176,568 Total Assets $ 3,306,264 $ 3,136,989 Interest Bearing Liabilities: Savings deposits $ 1,487,809 $ 30,291 2.71 % $ 1,373,110 $ 18,854 1.83 % Other time deposits 662,129 18,423 3.71 % 620,071 13,054 2.81 % Other borrowed money 264,310 8,235 4.15 % 204,927 6,134 3.99 % Fed funds purchased & securities sold under agreement to repurchase 27,887 837 4.00 % 37,649 1,181 4.18 % Subordinated notes 34,741 853 3.27 % 34,625 853 3.28 % Total Interest Bearing Liabilities $ 2,476,876 $ 58,639 3.16 % $ 2,270,382 $ 40,076 2.35 % Noninterest Bearing Liabilities 507,843 561,001 Stockholders' Equity $ 321,545 $ 305,606 Net Interest Income and Interest Rate Spread $ 63,082 2.01 % $ 61,462 2.22 % Net Interest Margin 2.68 % 2.77 % 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
AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES
(in thousands of dollars, except percentages)For the Three Months Ended September 30, 2024 For the Three Months Ended September 30, 2023 As Reported Excluding Acc/Amort Difference As Reported Excluding Acc/Amort Difference $ Yield $ Yield $ Yield $ Yield $ Yield $ Yield Interest Earning Assets: Loans $ 36,873 5.78 % $ 36,149 5.67 % $ 724 0.11 % $ 33,783 5.33 % $ 32,631 5.15 % $ 1,152 0.18 % Taxable investment securities 2,107 2.03 % 2,107 2.03 % - 0.00 % 1,559 1.58 % 1,559 1.58 % - 0.00 % Tax-exempt investment securities 81 2.09 % 81 2.09 % - 0.00 % 84 1.77 % 84 1.77 % - 0.00 % Fed funds sold & other 2,840 5.76 % 2,840 5.76 % - 0.00 % 933 4.36 % 933 4.36 % - 0.00 % Total Interest Earning Assets 41,901 5.27 % 41,177 5.17 % 724 0.10 % 36,359 4.79 % 35,207 4.64 % 1,152 0.15 % Interest Bearing Liabilities: Savings deposits $ 10,691 2.78 % $ 10,691 2.78 % $ - 0.00 % $ 7,673 2.24 % $ 7,673 2.24 % $ - 0.00 % Other time deposits 6,256 3.75 % 6,256 3.75 % - 0.00 % 5,650 3.38 % 5,500 3.29 % 150 0.09 % Other borrowed money 2,804 4.24 % 2,800 4.23 % 4 0.01 % 2,741 4.11 % 2,759 4.14 % (18 ) -0.03 % Federal funds purchased and securities sold under agreement to repurchase 277 4.03 % 277 4.03 % - 0.00 % 349 4.09 % 349 4.09 % - 0.00 % Subordinated notes 284 3.27 % 284 3.27 % - 0.00 % 284 3.28 % 284 3.28 % - 0.00 % Total Interest Bearing Liabilities 20,312 3.21 % 20,308 3.21 % 4 0.00 % 16,697 2.82 % 16,565 2.80 % 132 0.02 % Interest/Dividend income/yield 41,901 5.27 % 41,177 5.17 % 724 0.10 % 36,359 4.79 % 35,207 4.64 % 1,152 0.15 % Interest Expense / yield 20,312 3.21 % 20,308 3.21 % 4 0.00 % 16,697 2.82 % 16,565 2.80 % 132 0.02 % Net Interest Spread 21,589 2.06 % 20,869 1.96 % 720 0.10 % 19,662 1.97 % 18,642 1.84 % 1,020 0.13 % Net Interest Margin 2.71 % 2.62 % 0.09 % 2.59 % 2.46 % 0.13 % For the Nine Months Ended September 30, 2024 For the Nine Months Ended September 30, 2023 As Reported Excluding Acc/Amort Difference As Reported Excluding Acc/Amort Difference $ Yield $ Yield $ Yield $ Yield $ Yield $ Yield Interest Earning Assets: Loans $ 108,666 5.66 % $ 106,588 5.55 % $ 2,078 0.11 % $ 94,851 5.12 % $ 92,364 4.99 % $ 2,487 0.13 % Taxable investment securities 5,575 1.87 % 5,575 1.87 % - 0.00 % 4,544 1.53 % 4,544 1.53 % - 0.00 % Tax-exempt investment securities 249 2.03 % 249 2.03 % - 0.00 % 277 1.88 % 277 1.88 % - 0.00 % Fed funds sold & other 7,231 5.84 % 7,231 5.84 % - 0.00 % 1,866 3.67 % 1,866 3.67 % - 0.00 % Total Interest Earning Assets 121,721 5.17 % 119,643 5.08 % 2,078 0.09 % 101,538 4.57 % 99,051 4.47 % 2,487 0.10 % Interest Bearing Liabilities: Savings deposits $ 30,291 2.71 % $ 30,291 2.71 % $ - 0.00 % $ 18,854 1.83 % $ 18,854 1.83 % $ - 0.00 % Other time deposits 18,423 3.71 % 18,423 3.71 % - 0.00 % 13,054 2.81 % 13,458 2.89 % (404 ) -0.08 % Other borrowed money 8,235 4.15 % 8,254 4.16 % (19 ) -0.01 % 6,134 3.99 % 6,187 4.03 % (53 ) -0.04 % Federal funds purchased and securities sold under agreement to repurchase 837 4.00 % 837 4.00 % - 0.00 % 1,181 4.18 % 1,181 4.18 % - 0.00 % Subordinated notes 853 3.27 % 853 3.27 % - 0.00 % 853 3.28 % 853 3.28 % - 0.00 % Total Interest Bearing Liabilities 58,639 3.16 % 58,658 3.16 % (19 ) 0.00 % 40,076 2.35 % 40,533 2.38 % (457 ) -0.03 % Interest/Dividend income/yield 121,721 5.17 % 119,643 5.08 % 2,078 0.09 % 101,538 4.57 % 99,051 4.47 % 2,487 0.10 % Interest Expense / yield 58,639 3.16 % 58,658 3.16 % (19 ) 0.00 % 40,076 2.35 % 40,533 2.38 % (457 ) -0.03 % Net Interest Spread 63,082 2.01 % 60,985 1.92 % 2,097 0.09 % 61,462 2.22 % 58,518 2.09 % 2,944 0.13 % Net Interest Margin 2.68 % 2.59 % 0.09 % 2.77 % 2.64 % 0.13 % 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