• Farmers & Merchants Bancorp, Inc. Reports Record 2022 Full-Year Financial Results

    Источник: Nasdaq GlobeNewswire / 08 фев 2023 07:00:02   America/Chicago

    ARCHBOLD, Ohio, Feb. 08, 2023 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2022 fourth quarter and twelve months ended December 31, 2022.

    2022 Fourth Quarter Financial Highlights Include (on a year-over-year basis unless noted):

    • Net income was $7.2 million compared to $7.7 million for the same period last year
    • Earnings were $0.53 per basic and diluted share, compared to $0.59 per basic and diluted share
    • Adjusted net income, excluding one-time tax adjusted acquisition expenses, was $8.8 million, compared to $8.7 million
    • Adjusted earnings, excluding one-time tax adjusted acquisition expenses, were $0.65 per basic and diluted share, compared to $0.66 per basic and diluted share
    • Efficiency rate improved to 50.46% for the 2022 fourth quarter
    • Strong asset quality continues as nonperforming loans declined 41.9% to $4.7 million, or 0.20% of total loans
    • Net charge-offs to average loans were 0.02%
    • Allowance for loan and lease losses, adjusted for credit marks from recent acquisitions, of 570.3% of nonperforming loans

    2022 Full-Year Financial Highlights Include (on a year-over-year basis unless noted):

    • Total loans increased 26.9% to a record $2.36 billion
    • Organic loan growth of 21.4%, excluding PPP loans and loan balances at time of the Peoples-Sidney Financial Corporation acquisition
    • Total assets increased 39.2% to a record $3.02 billion
    • Deposits increased to 12.6% to $2.47 billion
    • Net interest income after provision for loan losses increased 24.4% to $82.2 million
    • Net income increased 38.4% to an annual record of $32.5 million
    • Earnings increased 22.4% to an annual record of $2.46 per basic and diluted share
    • Adjusted net income, excluding one-time tax adjusted acquisition expenses, increased 29.9% to $34.6 million
    • Adjusted earnings, excluding one-time tax adjusted acquisition expenses, increased 14.9% to $2.62 per basic and diluted share
    • Efficiency rate improved to 55.95% for the 2022 full year
    • Adjusted return on average tangible equity, excluding one-time tax adjusted acquisition expenses, increased to 17.06% from 13.01% on a year-over-year basis
    • Annual dividend payment increased 14.4% to $0.8125 per share, which included a $0.0125 special dividend in honor of the Company’s 125th year anniversary
    • Provided a record $642,000 of charitable donations to support organizations throughout Indiana and Ohio

    Lars B. Eller, President and Chief Executive Officer, stated, “2022 was a historic year for F&M as we celebrated our 125th year anniversary, achieved record financial results, completed the fifth acquisition in the past three years, and continued to invest in our community banking platform. We experienced strong organic loan growth across our Ohio, Indiana and Michigan markets during 2022 as loans increased organically by $397.0 million, or 21.4% on a year-over-year basis. Robust loan growth, combined with our recent acquisitions, excellent asset quality, and stable net interest margin, drove a 24.4% increase in annual net interest income after the provision for loan losses. These outstanding trends and our focus on prudently controlling operating expenses offset a $2.1 million decline in annual noninterest income and helped F&M achieve another year of record net income and earnings per share. I am proud of our record financial results for 2022, which enabled us to increase our annual cash dividend by 14.4%. This reflects the 28th consecutive year F&M has increased its annual cash dividend and our long-standing commitment to create value for our shareholders.”

    Mr. Eller continued, “I am also pleased to announce that F&M ended the year with total assets of over $3.0 billion for the first time in our history as we successfully achieved the goals of our previous multi-year strategic growth plan. In fact, since 2019 total assets have increased 87.6%, while GAAP net income has increased 76.7%. This performance is a direct result of the financial services we provide our Ohio, Indiana, and Michigan communities, the successful acquisitions we have completed and the hard work of our committed and experienced team members. During 2022, we continued to expand our team by promoting over 45 employees and hiring over 150 new employees. We also added capabilities by adding a new Regional Vice President to lead our Northern Indiana region and hiring F&M’s first ever Chief Risk Officer. Our 2022 financial and operating results reflect the success of our growth initiatives and the powerful franchise we are creating.”

    Income Statement
    Net income for the 2022 fourth quarter ended December 31, 2022, was $7.2 million, compared to $7.7 million for the same period last year. Net income per basic and diluted share for the 2022 fourth quarter was $0.53, compared to $0.59 for the same period last year. Net income for the 2022 twelve-month period ended December 31, 2022, was $32.5 million, compared to $23.5 million for the same period last year. Net income per basic and diluted share for the 2022 twelve months was $2.46, compared to $2.01 for the same period last year.

    Adjusted net income for the 2022 fourth quarter was $8.8 million, or $0.65 per diluted share, compared to $8.7 million, or $0.66 per diluted share in the prior year quarter. Adjusted net income accounts for the impact of one-time acquisition expenses. Adjusted net income for the year ended December 31, 2022, was $34.6 million, or $2.62 per diluted share, compared to $26.6 million, or $2.28 per diluted share in the prior year.

    Profitability for the 2022 fourth quarter and full year benefitted from F&M’s larger scale, strong asset quality, and prudent expense management. The Company’s efficiency ratio improved to 50.46% during the 2022 fourth quarter, and 55.95% for the 2022 twelve-month period. Strong profitability also drove higher annual returns, and ROAA, ROAE, and ROATCE all expanded on a year-over-year basis when adjusted for one-time, tax adjusted acquisition expenses.

    Deposits
    At December 31, 2022, total deposits were $2.47 billion, an increase of 12.6% from December 31, 2021. In addition, 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 1.32% for the quarter ended December 31, 2022, compared to 0.51% for the quarter ended December 31, 2021. For the 2022 twelve-month period, F&M’s cost of interest-bearing liabilities was 0.74%, compared to 0.48% for the 2021 twelve-month period.

    Loan Portfolio and Asset Quality
    Total net loans, at December 31, 2022, increased 26.9% to $2.356 billion, compared to $1.857 billion at December 31, 2021. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth and the completion of the Peoples acquisitions. Not including the Peoples acquisition and PPP loans, total net loans increased 21.4% organically, or by $397.0 million from the same period a year ago. Additionally, there were only $7,000 of PPP loans within F&M’s loan portfolio at December 31, 2022.

    F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $4.7 million, or 0.20% of total loans at December 31, 2022, compared to $8.1 million, or 0.43% at December 31, 2021. Due to loan growth, F&M continues to prudently fund its allowance for loan and lease losses which has increased 25.1% on a year-over-year basis.

    At December 31, 2022, the Company’s allowance for loan and lease losses to nonperforming loans was 273.67%, compared to 201.11% at December 31, 2021. As a result of F&M’s recent acquisitions, the Company has a total gross credit mark of $6.4 million, which further enhances F&M’s allowance at December 31, 2022. Including the total gross credit mark, F&M’s allowance for loan and lease losses to total loans was 1.13% at December 31, 2022.

    Mr. Eller concluded, “We believe F&M remains well positioned for an increasingly challenging economic cycle as our asset quality is strong, and we continue to be well capitalized. This will allow us to continue to focus on serving our local communities, while investing in our infrastructure and pursuing long-term expansion opportunities under the new three-year strategic growth plan we finalized in the fourth quarter of 2022. As a result, we plan to make approximately $7 million of strategic investments during 2023 across our business. This includes new offices in Ohio, Indiana, and Michigan, and additions to our team, as well as investments in our IT infrastructure, loan operations, and credit and payments group. While we expect investments to temporarily impact the level of profitability we are accustomed to, these investments are necessary to support our long-term growth initiatives and maintain F&M’s high level of services as we drive sustainable growth and value creation. I look forward to updating shareholders on the progress we are making throughout 2023.”

    Stockholders’ Equity and Dividends

    Total stockholders’ equity increased to $298.1 million at December 31, 2022, from $297.2 million at December 31, 2021. At December 31, 2022, the Company had a Tier 1 leverage ratio of 8.39%, compared to 8.47% at December 31, 2021.

    Based on a regulatory basis, tangible stockholders’ equity increased to $240.7 million at December 31, 2022, compared to $215.5 million at December 31, 2021. On a per share basis, tangible stockholders’ equity at December 31, 2022, was $17.69 per share, compared to $16.49 per share at December 31, 2021. A non-GAAP reconciliation is provided as a table in this press release.

    For the twelve months ended December 31, 2022, the Company declared cash dividends of $0.8125 per share, which is a 14.4% increase over the 2021 twelve-month declared cash dividend payment of $0.71 per share. Dividends declared for the 2022 twelve months included a special one-time cash dividend of $0.0125 to honor F&M’s 125th anniversary, and a 10.5% year-over-year increase for the 2022 fourth quarter dividend payment to $0.21 per share. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 28 consecutive years. For the twelve months ended December 31, 2022, the dividend payout ratio was 33.06% compared to 35.08% for the same period last year.

    About Farmers & Merchants State Bank:
    The Farmers & Merchants State Bank is a local independent community bank that has been serving Northwest Ohio and Northeast Indiana since 1897. The Farmers & Merchants State Bank provides commercial banking, retail banking and other financial services. Our locations are in Champaign, Fulton, Defiance, Hancock, Henry, Lucas, Shelby, Williams, and Wood counties in Western Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, Steuben and Wells counties, and we have a 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 Twelve Months Ended
      December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021
    Interest Income              
    Loans, including fees $27,302  $24,119  $22,388  $20,455  $21,008  $94,264  $71,645 
    Debt securities:              
    U.S. Treasury and government agencies  1,118   1,049   1,035   1,023   964   4,225   3,496 
    Municipalities  420   373   322   300   289   1,415   1,170 
    Dividends  126   93   57   42   49   318   174 
    Federal funds sold  2   -   9   10   10   21   31 
    Other.  524   213   100   69   103   906   324 
    Total interest income  29,492   25,847   23,911   21,899   22,423   101,149   76,840 
    Interest Expense              
    Deposits  4,978   2,166   1,379   1,360   1,581   9,883   5,418 
    Federal funds purchased and securities sold under agreements to repurchase  463   416   166   152   155   1,197   649 
    Borrowed funds  1,209   398   218   335   361   2,160   785 
    Subordinated notes  285   284   284   269   291   1,122   490 
    Total interest expense  6,935   3,264   2,047   2,116   2,388   14,362   7,342 
    Net Interest Income - Before Provision for Loan Losses  22,557   22,583   21,864   19,783   20,035   86,787   69,498 
    Provision for Loan Losses  755   1,637   1,628   580   444   4,600   3,444 
    Net Interest Income After Provision for Loan Losses  21,802   20,946   20,236   19,203   19,591   82,187   66,054 
    Noninterest Income              
    Customer service fees  2,862   2,300   2,148   2,648   2,417   9,958   9,671 
    Other service charges and fees  1,115   1,105   1,008   998   1,026   4,226   3,748 
    Net gain on sale of loans  165   327   164   697   1,074   1,353   3,897 
    Net gain on sale of available-for-sale securities  -   -   -   -   -   -   293 
    Total noninterest income  4,142   3,732   3,320   4,343   4,517   15,537   17,609 
    Noninterest Expense              
    Salaries and wages  6,353   5,479   5,366   5,502   5,761   22,700   20,184 
    Employee benefits  1,911   1,392   1,546   2,054   1,792   6,903   7,322 
    Net occupancy expense  753   693   522   598   532   2,566   2,184 
    Furniture and equipment  1,096   1,047   1,008   1,056   782   4,207   3,324 
    Data processing  1,917   781   654   604   1,020   3,956   3,501 
    Franchise taxes  (45)  254   757   418   361   1,384   1,473 
    ATM expense  561   580   544   532   478   2,217   1,846 
    Advertising  531   578   300   237   431   1,646   1,436 
    Net (gain) loss on sale of other assets owned  12   -   (266)  (5)  13   (259)  434 
    FDIC assessment  250   271   270   114   265   905   1,073 
    Mortgage servicing rights amortization  110   (50)  59   26   266   145   1,580 
    Consulting fees  637   254   233   178   761   1,302   1,634 
    Other general and administrative  2,964   2,192   2,242   2,179   1,964   9,577   8,175 
    Total noninterest expense  17,050   13,471   13,235   13,493   14,426   57,249   54,166 
    Income Before Income Taxes  8,894   11,207   10,321   10,053   9,682   40,475   29,497 
    Income Taxes  1,706   2,253   2,050   1,951   1,999   7,960   6,002 
    Net Income  7,188   8,954   8,271   8,102   7,683   32,515   23,495 
    Other Comprehensive Income (Loss) (Net of Tax):              
    Net unrealized loss on available-for-sale securities  (628)  (8,197)  (14,602)  (20,939)  (5,170)  (44,366)  (10,948)
    Reclassification adjustment for realized gain on sale of available-for-sale securities  -   -   -   -   -   -   (293)
    Net unrealized loss on available-for-sale securities  (628)  (8,197)  (14,602)  (20,939)  (5,170)  (44,366)  (11,241)
    Tax benefit  (132)  (1,721)  (3,067)  (4,397)  (1,085)  (9,317)  (2,360)
    Other comprehensive loss  (496)  (6,476)  (11,535)  (16,542)  (4,085)  (35,049)  (8,881)
    Comprehensive Income (Loss) $6,692  $2,478  $(3,264) $(8,440) $3,598  $(2,534) $14,614 
    Basic Earnings Per Share $0.53  $0.68  $0.63  $0.62  $0.59  $2.46  $2.01 
    Diluted Earnings Per Share $0.53  $0.68  $0.63  $0.62  $0.59  $2.46  $2.01 
    Dividends Declared $0.2100  $0.2100  $0.2025  $0.1900  $0.1900  $0.8125  $0.7100 


    FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Unaudited) (in thousands of dollars, except share data)
     
      December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021
      (Unaudited) (Unaudited) (Unaudited) (Unaudited)  
    Assets          
    Cash and due from banks $83,085  $69,680  $69,955  $94,118  $135,485 
    Federal funds sold  1,324   990   1,484   45,404   45,338 
    Total cash and cash equivalents  84,409   70,670   71,439   139,522   180,823 
               
    Interest-bearing time deposits  4,442   5,187   6,684   8,677   10,913 
    Securities - available-for-sale  390,789   395,485   399,687   413,996   429,931 
    Other securities, at cost  9,799   8,227   8,735   8,568   8,162 
    Loans held for sale  827   2,182   4,230   6,060   7,714 
    Loans, net  2,336,074   2,122,626   2,016,394   1,945,449   1,841,177 
    Premises and equipment  28,381   26,484   26,492   26,653   26,913 
    Construction in progress  278   -   -   -   - 
    Goodwill  86,358   80,434   80,434   80,434   80,434 
    Mortgage servicing rights  3,549   3,583   3,426   3,336   3,157 
    Other real estate owned  -   -   -   -   159 
    Bank owned life insurance  33,073   28,051   27,874   27,715   27,558 
    Other assets  37,372   40,831   29,321   25,735   21,359 
               
    Total Assets $3,015,351  $2,783,760  $2,674,716  $2,686,145  $2,638,300 
    Liabilities and Stockholders' Equity          
    Liabilities          
    Deposits          
    Noninterest-bearing $532,794  $506,928  $503,395  $497,249  $473,689 
    Interest-bearing          
    NOW accounts  750,887   705,888   678,552   681,975   650,466 
    Savings  627,203   607,375   617,850   626,787   597,828 
    Time  557,980   462,845   424,249   447,586   471,479 
        Total deposits  2,468,864   2,283,036   2,224,046   2,253,597   2,193,462 
               
    Federal funds purchased and securities sold under agreements to repurchase  54,206   55,802   71,944   31,680   29,268 
    Federal Home Loan Bank (FHLB) advances  127,485   102,147   42,635   22,656   24,065 
    Other borrowings  10,000   10,000   -   40,000   40,000 
    Subordinated notes, net of unamortized issuance costs  34,586   34,557   34,528   34,499   34,471 
    Dividend payable  2,832   2,727   2,626   2,462   2,461 
    Accrued expenses and other liabilities  19,238   14,913   18,064   14,773   17,406 
        Total liabilities  2,717,211   2,503,182   2,393,843   2,399,667   2,341,133 
               
    Commitments and Contingencies          
               
    Stockholders' Equity          
    Common stock - No par value 20,000,000 shares authorized; issued and outstanding 14,564,425 shares 12/31/22 and 14,063,999 shares 12/31/21  135,497   121,811   123,145   122,886   122,674 
    Treasury stock - 956,003 shares 12/31/22, 997,766 shares 12/31/21  (11,573)  (11,547)  (11,822)  (11,739)  (11,724)
    Retained earnings  212,449   208,051   200,811   195,057   189,401 
    Accumulated other comprehensive loss  (38,233)  (37,737)  (31,261)  (19,726)  (3,184)
        Total stockholders' equity  298,140   280,578   280,873   286,478   297,167 
               
    Total Liabilities and Stockholders' Equity $3,015,351  $2,783,760  $2,674,716  $2,686,145  $2,638,300 


    FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
    SELECT FINANCIAL DATA
                        
         
      For the Three Months Ended For the Twelve Months Ended
         
    Selected financial data December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021
    Return on average assets  0.96%  1.31%  1.23%  1.21%  1.17% 1.17% 1.05%
    Return on average equity  10.00%  12.53%  11.66%  11.00%  10.94% 11.30% 9.09%
    Yield on earning assets  4.18%  4.00%  3.79%  3.47%  3.59% 3.87% 3.66%
    Cost of interest bearing liabilities  1.32%  0.68%  0.44%  0.45%  0.51% 0.74% 0.48%
    Net interest spread  2.86%  3.32%  3.35%  3.02%  3.08% 3.13% 3.18%
    Net interest margin  3.20%  3.49%  3.47%  3.14%  3.21% 3.32% 3.31%
    Efficiency  50.46%  51.19%  50.17%  55.44%  58.76% 55.95% 62.39%
    Dividend payout ratio  39.39%  30.45%  30.02%  30.64%  32.03% 33.06% 35.08%
    Tangible book value per share (1) $17.69  $17.86  $17.43  $16.96  $16.49     
    Tier 1 capital to average assets  8.39%  9.11%  8.75%  8.51%  8.47%    
    Average Shares Outstanding  13,606,876   13,083,145   13,065,975   13,066,272   13,046,299  13,206,713  11,664,852 
                  
    Loans December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021    
    (Dollar amounts in thousands)                   
    Commercial real estate $1,152,603  $1,063,661  $979,176  $910,839  $848,477     
    Agricultural real estate  220,819   205,089   199,972   196,223   198,343     
    Consumer real estate  494,423   416,001   410,450   410,120   395,873     
    Commercial and industrial  242,360   229,388   232,975   216,918   208,270     
    Agricultural  128,733   128,615   127,143   140,709   118,368     
    Consumer  89,147   70,602   55,411   57,521   57,737     
    Other  29,818   30,662   31,243   31,573   32,089     
    Less: Net deferred loan fees and costs  (1,516)  (1,402)  (1,552)  (1,683)  (1,738)    
    Total loans,net $2,356,387  $2,142,616  $2,034,818  $1,962,220  $1,857,419     
                        
    Asset quality data December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021    
    (Dollar amounts in thousands)                   
    Nonaccrual loans $4,689  $5,470  $5,247  $8,581  $8,076     
    Troubled debt restructuring $3,645  $3,978  $2,748  $7,268  $7,614     
    90 day past due and accruing $-  $-  $-  $-  $-     
    Nonperforming loans $4,689  $5,470  $5,247  $8,581  $8,076     
    Other real estate owned $-  $-  $-  $-  $159     
    Nonperforming assets $4,689  $5,470  $5,247  $8,581  $8,235     
                        
                        
    Allowance for loan and lease losses (ALLL) $20,313  $19,990  $18,424  $16,771  $16,242     
    Total Credit Mark  6,427   5,959   6,724   7,201   7,616     
    Adjusted ALLL with credit mark included $26,740  $25,949  $25,148  $23,972  $23,858     
    Allowance for loan and lease losses/total loans  0.86%  0.93%  0.91%  0.85%  0.87%    
    Adjusted ALLL with credit mark/total loans  1.13%  1.21%  1.24%  1.22%  1.28%    
    Net charge-offs:                   
    Quarter-to-date $431  $71  $(25) $51  $(101)    
    Year-to-date $529  $97  $26  $51  $874     
    Net charge-offs to average loans                   
    Quarter-to-date  0.02%  0.00%  0.00%  0.00%  -0.01%    
    Year-to-date  0.03%  0.00%  0.00%  0.00%  0.06%    
    Nonperforming loans/total loans  0.20%  0.26%  0.26%  0.44%  0.43%    
    Allowance for loan and lease losses/nonperforming loans  273.67%  365.44%  351.44%  198.29%  201.11%    
                        
    (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, 2022 December 31, 2021
    Interest Earning Assets: Average Balance Interest/Dividends Annualized Yield/Rate Average Balance Interest/Dividends Annualized Yield/Rate
    Loans $2,301,204  $27,302  4.75% $1,843,942  $21,008  4.56%
    Taxable investment securities  422,247   1,556  1.47%  421,676   1,228  1.16%
    Tax-exempt investment securities  28,522   108  1.92%  18,303   74  2.05%
    Fed funds sold & other  74,876   526  2.81%  218,481   113  0.21%
    Total Interest Earning Assets  2,826,849  $29,492  4.18%  2,502,402  $22,423  3.59%
                 
    Nonearning Assets  173,048       125,930     
                 
    Total Assets $2,999,897      $2,628,332     
                 
    Interest Bearing Liabilities:            
    Savings deposits $1,394,663  $3,427  0.98% $1,262,214  $767  0.24%
    Other time deposits  485,461   1,551  1.28%  481,119   814  0.68%
    Other borrowed money  135,013   1,209  3.58%  64,008   361  2.26%
    Fed funds purchased & securities sold under agreement to repurch.  53,506   463  3.46%  29,403   155  2.11%
    Subordinated notes  34,567   285  3.30%  34,451   291  3.38%
    Total Interest Bearing Liabilities $2,103,210  $6,935  1.32% $1,871,195  $2,388  0.51%
                 
    Noninterest Bearing Liabilities  609,253       476,122     
                 
    Stockholders' Equity $287,434      $281,015     
                 
    Net Interest Income and Interest Rate Spread   $22,557  2.86%   $20,035  3.08%
                 
    Net Interest Margin     3.20%     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 Twelve Months Ended For the Twelve Months Ended
      December 31, 2022 December 31, 2021
    Interest Earning Assets: Average Balance Interest/Dividends Annualized Yield/Rate Average Balance Interest/Dividends Annualized Yield/Rate
    Loans $2,073,737  $94,264  4.55% $1,522,088  $71,645  4.71%
    Taxable investment securities  424,229   5,621  1.32%  377,887   4,514  1.19%
    Tax-exempt investment securities  23,472   337  1.82%  18,365   326  2.25%
    Fed funds sold & other  95,301   927  0.97%  187,003   355  0.19%
    Total Interest Earning Assets  2,616,739  $101,149  3.87%  2,105,343  $76,840  3.66%
                 
    Nonearning Assets  158,361       124,649     
                 
    Total Assets $2,775,100      $2,229,992     
                 
    Interest Bearing Liabilities:            
    Savings deposits $1,335,271  $6,378  0.48% $1,145,636  $2,467  0.22%
    Other time deposits  451,013   3,505  0.78%  306,600   2,951  0.96%
    Other borrowed money  74,379   2,160  2.90%  29,479   785  2.66%
    Fed funds purchased & securities sold under agreement to repurch.  45,314   1,197  2.64%  29,831   649  2.18%
    Subordinated notes  34,524   1,122  3.25%  14,777   490  3.32%
    Total Interest Bearing Liabilities $1,940,501  $14,362  0.74% $1,526,323  $7,342  0.48%
                 
    Noninterest Bearing Liabilities  546,731       445,144     
                 
    Stockholders' Equity $287,868      $258,525     
                 
    Net Interest Income and Interest Rate Spread   $86,787  3.13%   $69,498  3.18%
                 
    Net Interest Margin     3.32%     3.31%
                 
    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)
                           
      QTD December 2022 QTD December 2021
      As Reported Excluding Acc/Amort Difference As Reported Excluding Acc/Amort Difference
      $ Yield $ Yield $Yield $ Yield $ Yield $Yield
    Loans 27,302 4.75% 26,628 4.63% 674 0.12% 21,008 4.56% 20,585 4.47% 423 0.09%
    Taxable investment securities 1,556 1.47% 1,556 1.47% - 0.00% 1,228 1.16% 1,228 1.16% - 0.00%
    Tax-exempt investment securities 108 1.92% 108 1.92% - 0.00% 74 2.05% 74 2.05% - 0.00%
    Fed funds sold & other 526 2.81% 526 2.81% - 0.00% 113 0.21% 113 0.21% - 0.00%
    Total Interest Earning Assets 29,492 4.18% 28,818 4.08% 674 0.10% 22,423 3.59% 22,000 3.52% 423 0.07%
                           
    Savings deposits 3,427 0.98% 3,427 0.98% - 0.00% 767 0.24% 767 0.24% - 0.00%
    Other time deposits 1,551 1.28% 2,010 1.66% (459)-0.38% 814 0.68% 1,431 0.68% (617)0.00%
    Other borrowed money 1,209 3.58% 1,227 3.64% (18)-0.06% 361 2.26% 381 2.26% (20)0.00%
    Federal funds purchased and securities sold under agreement to repurchase 463 3.46% 463 3.46% - 0.00% 155 2.11% 155 2.11% - 0.00%
    Subordinated notes 285 3.30% 285 3.30% - 0.00% 291 3.38% 291 3.38% - 0.00%
    Total Interest Bearing Liabilities 6,935 1.32% 7,412 1.41% (477)-0.09% 2,388 0.51% 3,025 0.65% (637)-0.14%
                           
    Interest/Dividend income/yield 29,492 4.18% 28,818 4.08% 674 0.10% 22,423 3.59% 22,000 3.52% 423 0.07%
    Interest Expense / yield 6,935 1.32% 7,412 1.41% (477)-0.09% 2,388 0.51% 3,025 0.65% (637)-0.14%
    Net Interest Spread 22,557 2.86% 21,406 2.67% 1,151 0.19% 20,035 3.08% 18,975 2.87% 1,060 0.21%
    Net Interest Margin   3.20%   3.03%  0.17%   3.21%   3.04%  0.17%
                           
      YTD December 2022 YTD December 2021
      As Reported Excluding Acc/Amort Difference As Reported Excluding Acc/Amort Difference
      $ Yield $ Yield $Yield $ Yield $ Yield $Yield
    Loans 94,264 4.55% 92,132 4.45% 2,132 0.10% 71,645 4.71% 70,986 4.67% 659 0.04%
    Taxable investment securities 5,621 1.32% 5,621 1.32% - 0.00% 4,514 1.19% 4,514 1.19% - 0.00%
    Tax-exempt investment securities 337 1.82% 337 1.82% - 0.00% 326 2.25% 326 2.25% - 0.00%
    Fed funds sold & other 927 0.97% 927 0.97% - 0.00% 355 0.19% 355 0.19% - 0.00%
    Total Interest Earning Assets 101,149 3.87% 99,017 3.79% 2,132 0.08% 76,840 3.66% 76,181 3.63% 659 0.03%
                           
    Savings deposits 6,378 0.48% 6,378 0.48% - 0.00% 2,467 0.22% 2,467 0.22% - 0.00%
    Other time deposits 3,505 0.78% 5,822 1.29% (2,317)-0.51% 2,951 0.96% 3,588 1.17% (637)-0.21%
    Other borrowed money 2,160 2.90% 2,241 3.01% (81)-0.11% 785 2.66% 641 2.17% 144 0.49%
    Federal funds purchased and securities sold under agreement to repurchase 1,197 2.64% 1,197 2.64% - 0.00% 649 2.18% 649 2.18% - 0.00%
    Subordinated notes 1,122 3.25% 1,122 3.25% - 0.00% 490 3.32% 490 3.32% - 0.00%
    Total Interest Bearing Liabilities 14,362 0.74% 16,760 0.86% (2,398)-0.12% 7,342 0.48% 7,835 0.51% (493)-0.03%
                           
    Interest/Dividend income/yield 101,149 3.87% 99,017 3.79% 2,132 0.08% 76,840 3.66% 76,181 3.63% 659 0.03%
    Interest Expense / yield 14,362 0.74% 16,760 0.86% (2,398)-0.12% 7,342 0.48% 7,835 0.51% (493)-0.03%
    Net Interest Spread 86,787 3.13% 82,257 2.93% 4,530 0.20% 69,498 3.18% 68,346 3.12% 1,152 0.06%
    Net Interest Margin   3.32%   3.15%  0.17%   3.31%   3.25%  0.06%


    FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
    NON-GAAP RECONCILIATION OF NET INCOME
             
      (in thousands of dollars) (in thousands of dollars)
      Three Months Ended Twelve Months Ended
    Non-GAAP Reconciliation of Net Income December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021
      (Unaudited) (Unaudited)
    Net income as reported $7,188  $7,683  $32,515  $23,495 
    Acquisition expenses  2,019   1,192   2,511   3,859 
    Tax effect on acquisition expenses  (386)  (216)  (445)  (728)
    Net income excluding acquisition expenses and tax effect $8,821  $8,659  $34,581  $26,626 
             
    Weighted average common shares outstanding including participating securities  13,606,876   13,046,299   13,206,713   11,664,852 
             
    Basic and diluted earnings per share $0.65  $0.66  $2.62  $2.28 


    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 ValueYear to Date Year to Date
      December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021
             
    Shares Outstanding  13,608,422   13,066,233   13,608,422   13,066,233 
             
    Tangible Equity        
    Equity $298,140  $297,167  $298,140  $297,167 
    Goodwill  86,358   80,434   86,358   80,434 
    Other Intangible  9,327   4,433   9,327   4,433 
    Comprehensive Adjustment*  -   -   38,233   3,184 
    Tangible Equity $202,455  $212,300  $240,688  $215,484 
    Shares Outstanding  13,608   13,066   13,608   13,066 
    Tangible Book Equity per Share $14.88  $16.25  $17.69  $16.49 
             
      Actual Average Regulatory Average
      Year to Date Year to Date
      December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021
             
    Net Income $32,515  $23,495  $32,515  $23,495 
    Acquisition Costs - Tax Adjusted  2,066   3,131   2,066   3,131 
             
    Average Shares Outstanding  13,206,713   11,664,852   13,206,713   11,664,852 
             
    Average Tangible Equity        
    Average Equity $287,868  $258,525  $287,868  $258,525 
    Average Goodwill  80,164   49,790   80,164   49,790 
    Average Other Intangible  4,997   4,005   4,997   4,005 
    Average Comprehensive Adjustment*  -   -   26,393   (1,280)
    Average Tangible Equity $202,707  $204,730  $229,100  $203,450 
    Average Shares Outstanding  13,207   11,665   13,207   11,665 
    Average Tangible Book Equity per Share $15.35  $17.55  $17.35  $17.44 
             
    Return on Average Tangible Equity  16.04%  11.48%  14.19%  11.55%
    Return on Average Tangible Equity w/o Acquisition 17.06%  13.01%  15.09%  13.09%
             
    *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:
    Lars B. Eller
    President and Chief Executive Officer
    Farmers & Merchants Bancorp, Inc.
    (419) 446-2501
    leller@fm.bank    		Investor and Media Contact:
    Andrew M. Berger
    Managing Director
    SM Berger & Company, Inc.
    (216) 464-6400
    andrew@smberger.com

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