Farmers & Merchants Bancorp Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Farmers & Merchants Bancorp Inc. filed its quarterly report (10-Q) for the period ending March 31, 2024.</b>

AI Summary

FARMERS & MERCHANTS BANCORP INC (FMAO) filed a Quarterly Report (10-Q) with the SEC on May 8, 2024. Filing is a 10-Q for Farmers & Merchants Bancorp Inc. for the period ending March 31, 2024. The company's SIC code is 6035 (Savings Institution, Federally Chartered). Incorporated in Ohio, with fiscal year end on December 31. Business and mailing address is 307-11 N Defiance St, Archbold, OH 43502. Phone number is 419-446-2501.

Why It Matters

For investors and stakeholders tracking FARMERS & MERCHANTS BANCORP INC, this filing contains several important signals. This filing provides an update on the company's financial performance and position for the first quarter of 2024. Investors and analysts can use this report to assess the bank's health, loan portfolio, and overall market standing.

Risk Assessment

Risk Level: low — FARMERS & MERCHANTS BANCORP INC shows low risk based on this filing. The filing is a standard quarterly report (10-Q) with no immediate red flags, indicating routine financial disclosure.

Analyst Insight

Monitor future filings for trends in loan performance, deposit growth, and net interest margin.

Key Numbers

• 2024-03-31 — Period of Report (Conformed Period of Report)
• 2024-05-08 — Filing Date (Filed as of date)
• 6035 — SIC Code (Standard Industrial Classification)
• OH — State of Incorporation (State of Incorporation)
• 1231 — Fiscal Year End (Fiscal year end)

Key Players & Entities

• FARMERS & MERCHANTS BANCORP INC (company) — Filer name
• 0000792966 (company) — Central Index Key
• OH (company) — State of incorporation
• 307-11 N DEFIANCE ST (company) — Business address street 1
• ARCHBOLD (company) — Business address city
• 43502 (company) — Business address zip
• 4194462501 (company) — Business phone
• 2024-03-31 (date) — Conformed period of report

FAQ

Industry Context

Farmers & Merchants Bancorp Inc. operates within the savings institution sector, providing financial services to its customers.

Regulatory Implications

The filing adheres to SEC regulations for quarterly reporting by public companies, specifically Form 10-Q.

What Investors Should Do

1. Review the full 10-Q filing for detailed financial statements and management discussion.
2. Compare key financial metrics to previous quarters and industry benchmarks.
3. Analyze any disclosed risk factors or legal proceedings for potential impacts.

Key Dates

• 2024-03-31: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-05-08: Filing Date — Date the 10-Q was officially filed with the SEC.

Year-Over-Year Comparison

This is the initial filing provided for analysis, so no comparison to a previous filing is available.

Filing Documents

• fmao-20240331.htm (10-Q) — 4842KB
• fmao-ex31_1.htm (EX-31.1) — 12KB
• fmao-ex31_2.htm (EX-31.2) — 14KB
• fmao-ex32_1.htm (EX-32.1) — 7KB
• fmao-ex32_2.htm (EX-32.2) — 9KB
• 0000950170-24-055094.txt (&nbsp;) — 23155KB
• fmao-20240331.xsd (EX-101.SCH) — 2139KB
• fmao-20240331_htm.xml (XML) — 6737KB

Financial Statements (Unaudited)

Financial Statements (Unaudited) 3 Condensed Consolidated Balance Sheets - March 31, 2024 and December 31, 2023 3 Condensed Consolidated Statements of Income - Three Months Ended March 31, 2024 and March 31, 2023 4 Condensed Consolidated Statements of Comprehensive Income (Loss) - Three Months Ended March 31, 2024 and March 31, 2023 5 Condensed Consolidated Statements of Changes to Stockholders' Equity - Three Months Ended March 31, 2024 and March 31, 2023 6-7 Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2024 and March 31, 2023 8-9 Notes to Condensed Consolidated Financial Statements 10 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 46-65 Item 3. Qualitative and Quantitative Disclosures About Market Risk 66 Item 4.

Controls and Procedures

Controls and Procedures 67 PART II. OTHER INFORMATION 67 Item 1.

Legal Proceedings

Legal Proceedings 67 Item 1A.

Risk Factors

Risk Factors 67-68 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 69 Item 3. Defaults Upon Senior Securities 69 Item 4. Mine Safety Disclosures 69 Item 5. Other Information 69 Item 6. Exhibits 70

Signatures

Signatures 71 101.INS Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. (1) 101.SCH Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents. (1) (1) Pursuant to Rule 406T of Regulation S-T, the interactive Data Files in Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. 2 PART 1 - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1 FINANCIAL STATEMENTS FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDA TED BALANCE SHEETS (In Thousands) March 31, 2024 December 31, 2023 (Unaudited) Assets Cash and due from banks $ 186,541 $ 140,917 Federal funds sold 1,241 1,284 Total cash and cash equivalents 187,782 142,201 Interest-bearing time deposits 2,735 2,740 Securities - available-for-sale 347,516 358,478 Other securities, at cost 14,744 17,138 Loans held for sale 2,410 1,576 Loans, net of allowance for credit losses of $ 24,680 and $ 25,024 2,516,687 2,556,167 Premises and equipment 35,007 35,790 Construction in progress 9 8 Goodwill 86,358 86,358 Loan servicing rights 5,555 5,648 Bank owned life insurance 34,123 33,907 Other assets 54,628 43,218 Total Assets $ 3,287,554 $ 3,283,229 Liabilities and Stockholders' Equity Liabilities Deposits Noninterest-bearing $ 510,731 $ 528,465 Interest-bearing NOW accounts 829,236 816,790 Savings 635,430 599,191 Time 645,985 663,017 Total deposits 2,621,382 2,607,463 Securities sold under agreements to repurchase 28,218 28,218 Federal Home Loan Bank (FHLB) advances 256,628 265,750 Subordinated notes, net of unamortized issuance costs 34,731 34,702 Dividend payable 2,975 2,974 Accrued expenses and other liabilities 25,930 27,579 Total liabilities 2,969,864 2,966,686 Commitments and Contingencies Stockholders' Equity Common stock - No par value 20,000,000 shares authorized; issued and outstanding 14,564,425 shares 3/31/24 and 12/31/23 135,482 135,515 Treasury stock - 881,155 shares 3/31/24, 899,784 shares 12/31/23 ( 10,851 ) ( 11,040 ) Retained earnings 223,648 221,080 Accumulated other comprehensive loss ( 30,589 ) ( 29,012 ) Total stockholders' equity 317,690 316,543 Total Liabilities and Stockholders' Equity

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

ITEM 1 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS NOTE 1 BASIS OF PRESENTAT ION AND OTHER The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X; accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that are expected for the year ended December 31, 2024. The condensed consolidated balance sheet of the Company as of December 31, 2023, has been derived from the audited consolidated balance sheet of the Company as of that date. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Farmers & Merchants Bancorp, Inc. (the "Company")'s Annual Report on Form 10-K for the year ended December 31, 2023. The Company recognizes revenues as they are earned based on contractual terms, as transactions occur, or as services are provided and collectability is reasonably assured. The Company's principal source of revenue is interest income from loans and investment securities. The Company also earns noninterest income from various banking and financial services offered primarily through Farmers & Merchants State Bank (the "Bank"). Interest income is primarily recognized on an accrual basis according to nondiscretionary formulas written in contracts, such as loan agreements or investment security contracts. The Company also earns noninterest income from various banking and financial services provided

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued)

ITEM 1 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued) Fair Value of Consideration Transferred (In Thousands) Cash $ 9,806 Common Shares 13,446 Treasury stock repurchased ( 125 shares) ( 3 ) Total $ 23,249 Recognized amounts of identifiable assets acquired and liabilities assumed Assets Cash and cash equivalents $ 18,881 Other securities, at cost 1,271 Loans, net 101,755 Premises and equipment 1,906 Goodwill 5,924 Other assets 12,081 Total Assets Purchased $ 141,818 Liabilities Deposits Noninterest bearing $ 7,139 Interest bearing 104,719 Total deposits 111,858 Federal Home Loan Bank (FHLB) advances 896 Accrued expenses and other liabilities 5,815 Total Liabilities Assumed $ 118,569 The fair value of the assets acquired included loans with a fair value of $ 101.8 million. The gross principal and contractual interest due under the contracts was $ 116.1 million of which none was expected to be uncollectible. The loans have a weighted average life of 44.4 months. The fair value of buildings and land included in premises and equipment was written up $ 581 thousand with $ 597 thousand attributable to the buildings and is being amortized over the remaining life of each building. The combined average remaining life of the buildings is 12.8 years. The fair value for certificates of deposit incorporated a valuation amount of $ 662 thousand which was amortized over 1.1 years. The fair value of Federal Home Loan Bank (FHLB) advances included a valuation amount of $ 69 thousand which is being amortized over 5.2 years. 11

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued)

ITEM 1 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued) Changes in accretable yield, or income expected to be collected, are as follows: (In Thousands) Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Beginning Balance $ 566 $ 798 Additions - 1 Accretion ( 58 ) ( 58 ) Reclassification from nonaccretable difference - - Disposals - - Ending Balance $ 508 $ 741 On October 1, 2021, the Company acquired Perpetual Federal Savings Bank, (PFSB), a community bank with one full-service office in Urbana, Ohio. Shareholders of PFSB elected to receive either 1.7766 shares of FMAO stock or $ 41.20 per share in cash for each PFSB share owned, subject to adjustment based upon 1,833,999 shares of FMAO to be issued in the merger. PFSB had 2,470,032 shares outstanding on October 1, 2021. The share price of Farmers & Merchants Bancorp, Inc. (FMAO) stock on October 1, 2021 was $ 22.40 . Total consideration for the acquisition was approximately $ 100.3 million consisting of $ 59.2 million in cash and $ 41.1 million in stock. Under the acquisition method of accounting, the total purchase was allocated to net tangible and intangible assets based on their current estimated fair values on the date of acquisition. Of the total purchase price of $ 100.3 million, $ 668 thousand has been allocated to core deposit intangible included in other assets and is being amortized over seven years on a straight line basis. Goodwill of $ 25.2 million, which resulted from the acquisition, consists largely of the synergies and economies of scale expected from combining the operations of the Company and Perpetual Federal Savings Bank. Of that total amount, none of the purchase price was deductible for tax purposes. Changes in accretable yield, or income expected to be collected, are as follows: (In Thousands) Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Beginning Balance

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued)

ITEM 1 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued) Changes in accretable yield, or income expected to be collected, are as follows: (In Thousands) Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Beginning Balance $ 294 $ 470 Additions - - Accretion ( 44 ) ( 44 ) Reclassification from nonaccretable difference - - Disposals - - Ending Balance $ 250 $ 426 On January 1, 2019, the Company acquired Limberlost Bancshares, Inc. ("Limberlost"), the bank holding company for Bank of Geneva, a community bank based in Geneva, Indiana. Bank of Geneva operated six full-service offices in the northeast Indiana communities of Geneva, Berne, Decatur, Monroe, Portland and Monroeville. Shareholders of Limberlost received 1,830 shares of FMAO common stock and $ 8,465.00 in cash for each share. Limberlost had 1,000 shares outstanding on January 1, 2019. The share price of FMAO stock on January 1, 2019 was $ 38.49 . Total consideration for the acquisition was approximately $ 78.9 million consisting of $ 8.5 million in cash and $ 70.4 million in stock. Under the acquisition method of accounting, the total purchase was allocated to net tangible and intangible assets based on their current estimated fair values on the date of acquisition. Of the total purchase price of $ 78.9 million, $ 3.9 million has been allocated to core deposit intangible included in other assets and is being amortized over seven years on a straight line basis. Goodwill of $ 43.3 million, which resulted from the acquisition, consists largely of the synergies and economies of scale expected from combining the operations of the Company and Bank of Geneva. Of that total amount, none of the purchase price was deductible for tax purposes. Changes in accretable yield, or income expected to be collected, are as follows: (In Thousands) Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Begi

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued)

ITEM 1 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued) (In Thousands) Geneva Ossian Perpetual Peoples Total 2024 $ 560 $ 140 $ 95 $ 861 $ 1,656 2025 560 140 95 861 1,656 2026 - 140 95 861 1,096 2027 - 140 95 861 1,096 2028 - 47 73 861 981 Thereafter - - - 646 646 $ 1,120 $ 607 $ 453 $ 4,951 7,131 On November 16, 2020, FM Investment Services, a division of the Bank, purchased the assets and clients of Adams County Financial Resources (ACFR), a full-service registered investment advisory firm located in Geneva, Indiana. As of November 30, 2020, ACFR had approximately $ 83 million of assets under management and over 450 clients. Total consideration for the purchase was $ 825 thousand which consisted of 40,049 shares of stock. Under the acquisition method of accounting, the total purchase was allocated to net tangible and intangible assets based on their current estimated fair values on the date of acquisition. Of the total purchase price of $ 825 thousand, $ 800 thousand has been allocated to customer list intangible, included in other assets, to be amortized over 6.5 years on a straight line basis. The amortization expense of the customer list

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