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Farmers & Merchants Bancorp, Inc. Reports Record 2020 Fourth-Quarter and Full-Year Financial Results
Источник: Nasdaq GlobeNewswire / 10 фев 2021 16:30:01 America/New_York
ARCHBOLD, Ohio, Feb. 10, 2021 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2020 fourth quarter and twelve months ended December 31, 2020.
2020 Fourth Quarter Financial Highlights Include (on a year-over-year basis unless noted):
- Net income increased 43.5% to a quarterly record of $6.8 million
- Earnings increased 39.5% to a quarterly record of $0.60 per basic and diluted share
- Net interest income after provision for loan losses increased 12.1% to $14.1 million, which included a $1.3 million increase in the provision for loan losses as a result of the COVID-19 crisis
- Noninterest income increased 88.5% to $5.6 million, primarily due to strong residential mortgage demand
- A gain on the settlement of a bank-owned life insurance contract (“BOLI”) and interest and fees associated with the Paycheck Protection Program (“PPP”) benefited 2020 fourth quarter after-tax income by $0.4 million and $1.0 million, respectively
- Efficiency ratio, adjusted for BOLI and PPP benefits, was 56.49%, compared to 63.67%
- Return on average assets adjusted for BOLI and PPP benefits, was 1.14%, compared to 1.18%
- Loans 30 days past due to total loans, excluding COVID related loans, was only 0.29%
- Net charge-offs to average loans were 0.02%, compared to 0.03%
2020 Full-Year Financial Highlights Include (on a year-over-year basis unless noted):
- Total loans increased 6.9% to $1.303 billion, and included $36.2 million of PPP loans
- Total assets increased 18.8% to a record $1.910 billion
- Total assets managed increased to a record $2.6 billion
- Deposits increased 23.9% to a record $1.596 billion
- Net interest income after provision for loan losses increased 0.7% to $52.8 million, which included a $5.8 million increase in the provision for loan losses as a result of the COVID-19 crisis
- Net income increased 9.2% to an annual record of $20.1 million
- Earnings increased 8.4% to an annual record of $1.80 per basic and diluted share
- Book value per share increased 7.6% to $22.25 per share
- Tangible book value per share increased 7.4% to $17.19 per share
- 2020 cash dividend increased 8.2% to $0.66 per share
2020 Operating Highlights Include:
- Created operation hubs to protect the health and safety of the Company’s employees, customers, and communities throughout the COVID-19 pandemic
- Approved $87.8 million in PPP loans, helping nearly 950 small businesses protect over 12,400 jobs
- Donated over $167,000 to local organizations during 2020, a nearly 20% increase from 2019
- Opened new loan production offices in Muncie, IN, Oxford, OH and West Bloomfield, MI
- Completed construction on a new full-service office in FT. Wayne, IN, which is expected to open in Q1 2021
- Announced the acquisition of Ossian Financial Services, Inc., which operates two full-service bank offices in Northeast Indiana and had approximately $122.0 million in assets at September 30, 2020
- Purchased the assets and clients of Adams County Financial Resources, a registered investment advisory firm located in Geneva, IN, with approximately $83.0 million of assets under management at November 30, 2020
- Announced an office realignment program that will consolidate three offices in Ohio and one office in Indiana
- Added talent to both the Company’s senior leadership team and Board of Directors
- Continued to invest in expanding the Company’s digital resources and infrastructure
“Across the board 2020 was a record year for F&M, despite the challenges associated with the COVID-19 pandemic. Our record results speak to the dedication of our 354 associates throughout our Ohio, Indiana, and Michigan markets and our daily commitment to provide our communities with superior and individual financial services,” stated Lars B. Eller, President and Chief Executive Officer. “In addition, our record performance demonstrates the success of our 2019 strategic plan that is focused on growing earnings and creating long-term value for our shareholders.”
“As we look forward to 2021, I am excited to complete the Ossian acquisition, which we believe will be completed during the second quarter. In addition, we plan to finish integrating Adams County Financial Resources during the first quarter, as well as implementing our office realignment strategy, investing in new offices in compelling markets, and expanding our digital offerings throughout 2021. We expect to incur an estimated $2.5 million of one-time expenses associated with these initiatives in 2021. Once fully integrated, we believe the combination of reduced operating expenses and the contribution of additional sources of revenue will provide an approximately $2.1 million benefit to income in 2022 and beyond as we further increase our scale, diversify our revenues, improve our cost structure, and better serve our customers. Over the past two years, we have gained valuable experience integrating prior acquisitions, while we have focused on expanding our leadership team and investing in our infrastructure to support our rapid growth. I look forward to updating our shareholders on the progress we are making throughout 2021,” continued Mr. Eller.
Income Statement
Net income for the 2020 fourth quarter ended December 31, 2020, was $6.8 million, compared to $4.7 million for the same period last year. Net income per basic and diluted share for the 2020 fourth quarter was $0.60, compared to $0.43 for the same period last year. Net income for the 2020 twelve-month period ended December 31, 2020, was $20.1 million, compared to $18.4 million for the same period last year. Net income per basic and diluted share for the 2020 twelve months was $1.80, compared to $1.66 for the same period last year.Mr. Eller continued, “Our provision for loan losses increased from $1.1 million for the twelve months ended December 31, 2019, to $7.0 million for the twelve months ended December 31, 2020, as we prudently increased our allowance of loan losses primarily associated with the expected economic impacts caused by the COVID-19 crisis. The increase in our provision for loans losses was successfully offset by higher interest income, successful reductions in our cost of funds, interest and fees earned from the Paycheck Protection Program, a gain on the settlement of a BOLI contract, a 42.0% or $5.0 million year-over-year increase in noninterest income, and controlled noninterest expenses. 2020 was our sixth consecutive year of record earnings, while achieving our lowest efficiency ratio in 16 years.”
Deposits
At December 31, 2020, total deposits were $1.596 billion, an increase of 23.9% from December 31, 2019, and an increase of 5.1% from September 30, 2020. The significant organic deposit growth being experienced is a result of continued strength in expanding relationships with new and existing customers, and the benefits of PPP activity. 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 loans, net at December 31, 2020, increased 6.9% to $1.303 billion, compared to $1.219 billion at December 31, 2019. The year-over-year improvement resulted primarily from the contribution of strong organic loan growth. During 2020, the Company processed $51.6 million of PPP loan forgiveness and principal payments received and at December 31, 2020, there were $36.2 million of PPP loans included in F&M’s loan portfolio.Mr. Eller continued, “Despite the challenges created by the COVID-19 crisis, we continue to grow our loan portfolio with high quality customers, reflecting the personal financial services and value we provide our local communities and the recent contribution of our newly opened loan production offices in Muncie, IN, Oxford, OH, and West Bloomfield, MI.”
Mr. Eller continued: “Our loan portfolio remains resilient as loans 30 days past due to total loans, excluding COVID related loans, was only 0.29% as of December 31, 2020. In addition, at year-end there were only five loans totaling $3.6 million of interest only and full deferrals out of 190 loans that had modification of terms due to the COVID-19 crisis during the year. These 190 loans had an overall loan outstanding at year-end of $120 million. Given the uncertainty surrounding the COVID-19 crisis and the continued impacts the pandemic is having on the global economy, we are proactively monitoring our portfolio’s performance and our approach to risk remains prudent. As a result, we have increased our allowance for loan and lease losses by 89.2% over the past 12 months. Our allowance for loan and lease losses to total loans, adjusted for our PPP balances, is now over 1.20% and includes the $1.7 million credit mark associated with the 2019 Bank of Geneva acquisition.”
F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $9.4 million or 0.72% of total loans at December 31, 2020, compared to $3.4 million, or 0.28% at December 31, 2019. The year-over-year increase in nonperforming loans is primarily due to the impacts of the COVID-19 crisis, as well as the accounting treatment for nonaccrual loans associated with a $5.2 million real-estate secured relationship.
The Bank had 190 loans that received either deferment payments or interest only payments due to the COVID-19 crisis. As of December 31, 2020, there were only five modifications left representing a total of $3.6 million. Of those remaining there were no outstanding full payment deferment loans. Three loans are interest only in the entertainment sector with $1.2 million in total balances with all scheduled for original repayment terms to begin by early April 2021. One office building with a $2.3 million balance with interest only payments will return to payments in May 2021. One restaurant with a $13,000 balance received an interest only modification in December 2020 with payments to resume in March 2021.
F&M’s agriculture portfolio continues to perform well, with a 0.59% past due balance at December 31, 2020. F&M is optimistic trends will remain positive as a result of strong global demand for agricultural products and a favorable commodity price environment expected during 2021. At December 31, 2020, F&M’s $94.4 million agriculture portfolio consisted primarily of row crop and livestock production, with almost no dairy exposure. Agriculture customers are proven farmers with strong balance sheets and 95% of row crop producers utilize crop insurance to mitigate weather and production risks. At December 31, 2020, approximately 24% of F&M’s agriculture portfolio was within the livestock sector, and approximately 69% of this exposure is to customers that support production but do not have direct livestock ownership. In addition, approximately 40% of F&M’s livestock exposure is for loans with balances under $750,000 and of the borrowers with direct livestock ownership, approximately 55% are not dependent on the income from livestock to manage their debt payments. Of the $71.5 million of agricultural real estate loans originated in 2020, F&M sold approximately 45% in the secondary market at a premium of $1.2 million, while servicing and maintaining the relationship of these accounts.
Mr. Eller concluded: “As our record financial and operating results demonstrate, we successfully responded to the unprecedented challenges of the COVID-19 crisis, while remaining focused on executing our growth-oriented strategic plan. I am very proud of our performance during 2020 and the hard work of all F&M’s associates. Although F&M’s scale has increased, we remain committed to nurturing lasting and personal relationships within our communities throughout the near-term economic challenges and future periods of prosperity.”
Stockholders’ Equity and Dividends
Total stockholders’ equity increased 8.2% to $249.2 million at December 31, 2020, from $230.3 million at December 31, 2019. At December 31, 2020, the Company had a Tier 1 leverage ratio of 10.46%, compared to 11.52% at September 30, 2019.Tangible stockholders’ equity increased to $192.5 million at December 31, 2020, compared to $178.3 million at December 31, 2019. The largest change to intangible stockholders’ equity was an increase in accumulated comprehensive income, which increased from $1.098 million as of December 31, 2019, to $5.697 million as of December 31, 2020. On a per share basis, tangible stockholders’ equity at December 31, 2020, was $17.19 per share, compared to $16.01 per share at December 31, 2019.
For the twelve months ended December 31, 2020, the Company has declared cash dividends of $0.66 per share, which is an 8.2% increase over the 2019 twelve-month declared dividend payment. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 26 consecutive years. For the twelve months ended December 31, 2020, the dividend payout ratio was 35.76% compared to 36.59% for the same period last year.
Company Contact: Investor and Media Contact: Lars B. Eller Andrew M. Berger President and Chief Executive Officer Managing Director Farmers & Merchants Bancorp, Inc. SM Berger & Company, Inc. (419) 446-2501 (216) 464-6400 leller@fm.bank andrew@smberger.com 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 through its 30 offices. Our locations are in Fulton, Defiance, Hancock, Henry, Lucas, Williams, and Wood counties in Northwest Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, and Steuben counties.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 Twelve Months Ended December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Interest Income Loans, including fees $ 17,061 $ 16,181 $ 16,192 $ 15,883 $ 15,608 $ 65,317 $ 62,213 Debt securities: U.S. Treasury and government agencies 695 761 767 1,146 840 3,369 3,341 Municipalities 295 279 243 262 225 1,079 837 Dividends 35 36 26 45 60 142 293 Federal funds sold 5 4 5 6 97 20 416 Other. 48 32 40 122 319 242 1,206 Total interest income 18,139 17,293 17,273 17,464 17,149 70,169 68,306 Interest Expense Deposits 1,619 1,864 2,254 2,901 3,336 8,638 12,942 Federal funds purchased and securities sold under agreements to repurchase 170 174 187 244 207 775 734 Borrowed funds 226 231 257 266 270 980 1,083 Total interest expense 2,015 2,269 2,698 3,411 3,813 10,393 14,759 Net Interest Income - Before Provision for Loan Losses 16,124 15,024 14,575 14,053 13,336 59,776 53,547 Provision for Loan Losses 1,995 1,987 1,569 1,430 728 6,981 1,138 Net Interest Income After Provision For Loan Losses 14,129 13,037 13,006 12,623 12,608 52,795 52,409 Noninterest Income Customer service fees 2,750 2,299 2,258 1,586 1,732 8,893 6,726 Other service charges and fees 980 879 704 1,039 1,132 3,602 4,443 Net gain on sale of loans 1,894 1,537 364 227 119 4,022 677 Net gain (loss) on sale of available-for-sale securities - - - 270 - 270 (26 ) Total noninterest income 5,624 4,715 3,326 3,122 2,983 16,787 11,820 Noninterest Expense Salaries and wages 5,068 5,102 4,095 4,223 4,029 18,488 16,329 Employee benefits 1,140 1,566 1,218 1,677 1,410 5,601 5,558 Net occupancy expense 585 558 564 564 406 2,271 2,317 Furniture and equipment 760 875 750 758 596 3,143 2,775 Data processing 428 490 408 442 396 1,768 2,553 Franchise taxes 241 368 369 368 246 1,346 981 ATM expense 456 444 376 414 434 1,690 1,715 Advertising 353 411 265 303 340 1,332 1,569 Net (gain) loss on sale of other assets owned 20 (7 ) (7 ) 1 16 7 81 FDIC assessment 223 194 144 72 (11 ) 633 183 Mortgage servicing rights amortization 247 296 356 132 158 1,031 487 Consulting fees 407 205 217 139 264 968 668 Other general and administrative 1,358 1,553 1,612 1,575 1,455 6,098 6,251 Total noninterest expense 11,286 12,055 10,367 10,668 9,739 44,376 41,467 Income Before Income Taxes 8,467 5,697 5,965 5,077 5,852 25,206 22,762 Income Taxes 1,691 1,287 1,161 972 1,129 5,111 4,360 Net Income 6,776 4,410 4,804 4,105 4,723 20,095 18,402 Other Comprehensive Income (Loss) (Net of Tax): Net unrealized gain (loss) on available-for-sale securities (207 ) 639 661 4,998 (472 ) 6,091 5,179 Reclassification adjustment for realized (gain) loss on sale of available-for-sale securities - - - (270 ) - (270 ) 26 Net unrealized gain (loss) on available-for-sale securities (207 ) 639 661 4,728 (472 ) 5,821 5,205 Tax expense (benefit) (44 ) 134 139 993 (99 ) 1,222 1,093 Other comprehensive income (loss) (163 ) 505 522 3,735 (373 ) 4,599 4,112 Comprehensive Income $ 6,613 $ 4,915 $ 5,326 $ 7,840 $ 4,350 $ 24,694 $ 22,514 Basic and Diluted Earnings Per Share $ 0.60 $ 0.40 $ 0.43 $ 0.37 $ 0.43 $ 1.80 $ 1.66 Dividends Declared $ 0.17 $ 0.17 $ 0.16 $ 0.16 $ 0.16 $ 0.66 $ 0.61 FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands of dollars, except share data) December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 (Unaudited) (Unaudited) (Unaudited) Assets Cash and due from banks $ 98,279 $ 46,395 $ 54,336 $ 49,844 $ 50,137 Federal funds sold 77,427 41,358 31,105 40,993 1,159 Total cash and cash equivalents 175,706 87,753 85,441 90,837 51,296 Interest-bearing time deposits 4,653 4,657 4,636 4,869 4,309 Securities - available-for-sale 307,812 259,041 236,292 204,121 222,293 Other securities, at cost 5,939 5,827 5,810 5,810 5,810 Loans held for sale 7,740 7,621 11,445 2,153 4,248 Loans, net 1,289,318 1,351,979 1,334,790 1,239,108 1,211,771 Premises and equipment 27,063 26,776 26,049 26,120 26,351 Goodwill 47,340 47,340 47,340 47,340 47,340 Mortgage servicing rights 3,320 3,027 2,740 2,672 2,629 Other real estate owned 71 206 135 185 214 Bank owned life insurance 25,208 15,501 15,399 15,313 15,235 Other assets 15,374 16,872 14,370 16,597 15,834 Total Assets $ 1,909,544 $ 1,826,600 $ 1,784,447 $ 1,655,125 $ 1,607,330 Liabilities and Stockholders' Equity Liabilities Deposits Noninterest-bearing $ 351,147 $ 330,845 $ 336,027 $ 261,786 $ 265,156 Interest-bearing NOW accounts 542,317 534,792 504,846 463,734 423,655 Savings 455,145 392,059 374,871 341,256 322,973 Time 247,553 261,177 261,631 281,931 276,563 Total deposits 1,596,162 1,518,873 1,477,375 1,348,707 1,288,347 Federal Funds Purchased and securities sold under agreements to repurchase 30,239 29,859 30,949 30,585 48,073 Federal Home Loan Bank (FHLB) advances 17,861 17,724 19,087 24,788 24,806 Dividend payable 1,889 1,882 1,768 1,768 1,768 Accrued expenses and other liabilities 14,233 14,841 14,971 12,820 14,078 Total liabilities 1,660,384 1,583,179 1,544,150 1,418,668 1,377,072 Commitments and Contingencies Stockholders' Equity Common stock - No par value 20,000,000 shares authorized; issued and outstanding 12,230,000 shares 12/31/20 and 12/31/19 81,804 81,577 82,134 81,844 81,535 Treasury stock - 1,032,456 shares 12/31/20, 1,093,065 shares 12/31/19 (11,932 ) (12,397 ) (12,668 ) (12,636 ) (12,456 ) Retained earnings 173,591 168,381 165,476 162,416 160,081 Accumulated other comprehensive income 5,697 5,860 5,355 4,833 1,098 Total stockholders' equity 249,160 243,421 240,297 236,457 230,258 Total Liabilities and Stockholders' Equity $ 1,909,544 $ 1,826,600 $ 1,784,447 $ 1,655,125 $ 1,607,330 FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES SELECT FINANCIAL DATA For the Three Months Ended For the Twelve Months Ended Selected financial data December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Return on average assets 1.43 % 0.98 % 1.10 % 1.02 % 1.18 % 1.14 % 1.23 % Return on average equity 11.04 % 7.28 % 8.07 % 7.06 % 8.26 % 8.38 % 8.26 % Yield on earning assets 4.09 % 4.04 % 4.25 % 4.66 % 4.63 % 4.25 % 4.85 % Cost of interest bearing liabilities 0.64 % 0.74 % 0.91 % 1.22 % 1.40 % 0.87 % 1.42 % Net interest spread 3.45 % 3.30 % 3.34 % 3.44 % 3.23 % 3.38 % 3.43 % Net interest margin 3.63 % 3.51 % 3.59 % 3.75 % 3.60 % 3.62 % 3.80 % Efficiency 52.20 % 62.11 % 57.91 % 63.09 % 63.67 % 58.17 % 63.42 % Dividend payout ratio 27.77 % 42.66 % 36.80 % 43.07 % 43.34 % 35.76 % 36.59 % Tangible book value per share (1) $ 17.19 $ 16.78 $ 16.33 $ 16.26 $ 16.01 Tier 1 capital to average assets 10.46 % 10.65 % 10.70 % 11.56 % 11.52 % Average Shares Outstanding 11,177,765 11,142,797 11,129,341 11,134,870 11,137,004 11,146,270 11,113,810 Loans December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 (Dollar amounts in thousands) Commercial real estate $ 588,825 $ 595,146 $ 589,382 $ 570,217 $ 551,309 Agricultural real estate 189,159 192,883 194,606 194,383 199,105 Consumer real estate 175,588 175,963 174,069 174,731 165,349 Commercial and industrial 189,246 238,175 223,842 143,261 135,631 Agricultural 94,358 103,330 107,458 109,584 111,820 Consumer 52,540 53,320 50,108 49,022 49,237 Other 15,757 9,030 9,714 8,336 8,314 Less: Net deferred loan fees and costs (2,483 ) (3,985 ) (4,456 ) (1,893 ) (1,766 ) Total loans,net $ 1,302,990 $ 1,363,862 $ 1,344,723 $ 1,247,641 $ 1,218,999 Asset quality data December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 (Dollar amounts in thousands) Nonaccrual loans $ 9,404 $ 7,870 $ 8,473 $ 3,344 $ 3,400 Troubled debt restructuring $ 6,514 $ 7,028 $ 7,034 $ 1,934 $ 956 90 day past due and accruing $ - $ - $ - $ - $ - Nonperforming loans $ 9,404 $ 7,870 $ 8,473 $ 3,344 $ 3,400 Other real estate owned $ 71 $ 206 $ 135 $ 185 $ 214 Nonperforming assets $ 9,475 $ 8,076 $ 8,608 $ 3,529 $ 3,614 (Dollar amounts in thousands) Allowance for loan and lease losses $ 13,672 $ 11,883 $ 10,538 $ 8,533 $ 7,228 Allowance for loan and lease losses/total loans 1.05 % 0.87 % 0.78 % 0.68 % 0.59 % Net charge-offs: Quarter-to-date $ 205 $ 37 $ 169 $ 125 $ 295 Year-to-date $ 537 $ 331 $ 294 $ 125 $ 685 Net charge-offs to average loans Quarter-to-date 0.02 % 0.00 % 0.01 % 0.01 % 0.03 % Year-to-date 0.04 % 0.03 % 0.02 % 0.01 % 0.06 % Nonperforming loans/total loans 0.72 % 0.58 % 0.63 % 0.27 % 0.28 % Allowance for loan and lease losses/nonperforming loans 177.96 % 151.01 % 117.24 % 256.66 % 187.17 % (1) Tangible Equity = Stockholder Equity less goodwill and other intangibles (core deposit intangible, mortgage servicing rights and unrealized gain/loss on securities) FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES (in thousands of dollars, except percentages) For the Three Months Ended For the Three Months Ended December 31, 2020 December 31, 2019 Interest Earning Assets: Average Balance Interest/Dividends Annualized
Yield/RateAverage Balance Interest/Dividends Annualized
Yield/RateLoans $ 1,336,538 $ 17,061 5.11 % $ 1,174,748 $ 15,608 5.32 % Taxable Investment Securities 250,601 916 1.46 % 165,745 975 2.35 % Tax-exempt Investment Securities 23,216 109 2.38 % 31,831 150 2.39 % Fed Funds Sold & Other 169,116 53 0.13 % 114,278 416 1.46 % Total Interest Earning Assets 1,779,471 $ 18,139 4.09 % 1,486,602 $ 17,149 4.63 % Nonearning Assets 112,177 111,367 Total Assets $ 1,891,648 $ 1,597,969 Interest Bearing Liabilities: Savings Deposits $ 967,355 $ 705 0.29 % 758,594 1,746 0.92 % Other Time Deposits 253,023 914 1.44 % 275,406 1,590 2.31 % Other Borrowed Money 17,775 226 5.09 % 24,715 270 4.37 % Fed Funds Purchased & Securities Sold under Agreement to Repurch. 30,100 170 2.26 % 30,464 207 2.72 % Total Interest Bearing Liabilities $ 1,268,253 $ 2,015 0.64 % $ 1,089,179 $ 3,813 1.40 % Noninterest bearing Liabilities 377,791 280,027 Stockholders Equity $ 245,604 $ 228,763 Net Interest Income and interest rate spread $ 16,124 3.45 % $ 13,336 3.23 % Net Interest Margin 3.63 % 3.60 % Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts For the Twelve Months Ended For the Twelve Months Ended December 31, 2020 December 31, 2019 Interest Earning Assets: Average Balance Interest/Dividends Annualized
Yield/RateAverage Balance Interest/Dividends Annualized
Yield/RateLoans $ 1,313,675 $ 65,317 4.98 % $ 1,129,231 $ 62,213 5.51 % Taxable Investment Securities 219,044 4,136 1.89 % 163,777 3,832 2.34 % Tax-exempt Investment Securities 24,958 454 2.30 % 33,112 639 2.44 % Fed Funds Sold & Other 99,304 262 0.26 % 86,971 1,622 1.86 % Total Interest Earning Assets 1,656,981 $ 70,169 4.25 % 1,413,091 $ 68,306 4.85 % Nonearning Assets 113,303 86,119 Total Assets $ 1,770,284 $ 1,499,210 Interest Bearing Liabilities: Savings Deposits $ 879,669 $ 3,942 0.45 % $ 720,879 $ 7,323 1.02 % Other Time Deposits 264,827 4,696 1.77 % 265,046 5,619 2.12 % Other Borrowed Money 21,245 980 4.61 % 25,538 1,083 4.24 % Fed Funds Purchased & Securities Sold under Agreement to Repurch. 32,363 775 2.39 % 29,859 734 2.46 % Total Interest Bearing Liabilities $ 1,198,104 $ 10,393 0.87 % $ 1,041,322 $ 14,759 1.42 % Noninterest bearing Liabilities 332,482 235,010 Stockholders Equity $ 239,698 $ 222,878 Net Interest Income and interest rate spread $ 59,776 3.38 % $ 53,547 3.43 % Net Interest Margin 3.62 % 3.80 % 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. NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS Non-GAAP Earnings Per Share (in thousands of dollars, expect per share data) Non-GAAP Three Months Ended Non-GAAP Twelve Months Ended December 31, September 30, June 30, March 31, December 31, December 31, December 31, 2020 2020 2020 2020 2019 2020 2019 Net income $ 6,776 $ 4,410 $ 4,804 $ 4,105 $ 4,723 $ 20,095 $ 18,402 Less: Accelerated net fee income for forgiveness of PPP loans (1,211 ) - - - - (1,211 ) - Less: Gain on settlement of bank owned life insurance (430 ) - - - - (430 ) - Tax effect 254 - - - - 254 - Adjusted net income 5,389 4,410 4,804 4,105 4,723 18,708 18,402 Less: distributed earnings allocated to participating securities (16 ) (15 ) (13 ) (13 ) (14 ) (57 ) (51 ) Less: undistributed earnings allocated to participating securities (37 ) (19 ) (22 ) (18 ) (24 ) (96 ) (87 ) Net earnings available to common shareholders $ 5,389 $ 4,376 $ 4,769 $ 4,074 $ 4,685 $ 18,555 $ 18,264 Weighted average common shares outstanding including participating securities 11,177,765 11,142,797 11,129,341 11,134,870 11,137,004 11,146,270 11,113,810 Less: average unvested restricted shares (89,150 ) (83,257 ) (80,062 ) (84,732 ) (88,711 ) (84,879 ) (83,369 ) Weighted average common shares outstanding 11,088,615 11,059,540 11,049,279 11,050,138 11,048,293 11,061,391 11,030,441 Basic earnings and diluted per share $ 0.48 $ 0.40 $ 0.43 $ 0.37 $ 0.43 $ 1.68 $ 1.66 Three Months Twelve Months December 31, December 31, December 31, December 31, Reconciliation of Efficiency Ratio 2020 2020 2020 2020 Non-GAAP Actual Non-GAAP Actual Net interest income (+) 14,785 15,996 58,565 59,776 Noninterest Income (+) 5,194 5,624 16,357 16,787 Gain on Security Sale (-) - - 270 270 Operating Expenses (/) 11,286 11,286 44,376 44,376 Efficiency Ratio 56.49 % 52.20 % 59.44 % 58.17 % Three Months Twelve Months December 31, December 31, December 31, December 31, 2020 2020 2020 2020 Reconciliation of Return on Average Assets Non-GAAP Actual Non-GAAP Actual Net income $ 6,776 $ 6,776 $ 20,095 $ 20,095 Less: Accelerated net fee income for forgiveness of PPP loans (1,211 ) - (1,211 ) - Less: Gain on settlement of bank owned life insurance (430 ) - (430 ) - Tax effect 254 - 254 - Adjusted net income 5,389 6,776 18,708 20,095 Average Assets 1,891,648 1,891,648 1,770,284 1,770,284 ROA 1.14 % 1.43 % 1.06 % 1.14 %