Farmers & Merchants Bancorp Q3 2024 Update

TL;DR

F&M Bancorp filed its Q3 2024 10-Q, showing key financial metrics.

AI Summary

Farmers & Merchants Bancorp Inc. reported its financial results for the period ending September 30, 2024. The company's filing indicates a fiscal year end of December 31. Key financial data points such as interest income and other comprehensive income are referenced within the filing.

Why It Matters

This 10-Q filing provides investors with a quarterly update on the financial health and performance of Farmers & Merchants Bancorp Inc., crucial for investment decisions.

Risk Assessment

Risk Level: low — This filing is a routine quarterly report and does not contain any immediately apparent high-risk disclosures.

Key Numbers

• Q3 — Quarterly Period (Indicates the reporting period is the third quarter of the fiscal year.)
• 12-31 — Fiscal Year End (Specifies the end date of the company's fiscal year.)

Key Players & Entities

• FARMERS & MERCHANTS BANCORP INC (company) — Filer of the 10-Q
• 20240930 (date) — Conformed period of report
• 20241106 (date) — Filing date
• 001-38084 (dollar_amount) — SEC File Number

FAQ

Filing Documents

• fmao-20240930.htm (10-Q) — 6255KB
• fmao-ex31_1.htm (EX-31.1) — 13KB
• fmao-ex31_2.htm (EX-31.2) — 15KB
• fmao-ex32_1.htm (EX-32.1) — 8KB
• fmao-ex32_2.htm (EX-32.2) — 9KB
• 0000950170-24-122145.txt ( ) — 27302KB
• fmao-20240930.xsd (EX-101.SCH) — 2063KB
• fmao-20240930_htm.xml (XML) — 8222KB

Financial Statements (Unaudited)

Financial Statements (Unaudited) 3 Condensed Consolidated Balance Sheets - September 30, 2024 and December 31, 2023 3 Condensed Consolidated Statements of Income - Three and Nine Months Ended September 30, 2024 and September 30, 2023 4 Condensed Consolidated Statements of Comprehensive Income (Loss) - Three and Nine Months Ended September 30, 2024 and September 30, 2023 6 Condensed Consolidated Statements of Changes to Stockholders' Equity - Three and Nine Months Ended September 30, 2024 and September 30, 2023 7 Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2024 and September 30, 2023 9 Notes to Condensed Consolidated Financial Statements 11 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 51 Item 3. Qualitative and Quantitative Disclosures About Market Risk 76 Item 4.

Controls and Procedures

Controls and Procedures 77 PART II. OTHER INFORMATION 77 Item 1.

Legal Proceedings

Legal Proceedings 77 Item 1A.

Risk Factors

Risk Factors 77 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 80 Item 3. Defaults Upon Senior Securities 80 Item 4. Mine Safety Disclosures 80 Item 5. Other Information 80 Item 6. Exhibits 81

Signatures

Signatures 82 101.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) September 30, 2024 December 31, 2023 (Unaudited) Assets Cash and due from banks $ 244,572 $ 140,917 Federal funds sold 932 1,284 Total cash and cash equivalents 245,504 142,201 Interest-bearing time deposits 2,727 2,740 Securities - available-for-sale 404,881 358,478 Other securities, at cost 15,028 17,138 Loans held for sale 1,706 1,576 Loans, net of allowance for credit losses of $ 25,484 and $ 25,024 2,512,852 2,556,167 Premises and equipment 33,779 35,790 Construction in progress 35 8 Goodwill 86,358 86,358 Loan servicing rights 5,644 5,648 Bank owned life insurance 34,624 33,907 Other assets 46,047 43,218 Total Assets $ 3,389,185 $ 3,283,229 Liabilities and Stockholders' Equity Liabilities Deposits Noninterest-bearing $ 481,444 $ 528,465 Interest-bearing NOW accounts 865,617 816,790 Savings 661,565 599,191 Time 676,187 663,017 Total deposits 2,684,813 2,607,463 Securities sold under agreements to repurchase 27,292 28,218 Federal Home Loan Bank (FHLB) advances 263,081 265,750 Subordinated notes, net of unamortized issuance costs 34,789 34,702 Dividend payable 2,998 2,974 Accrued expenses and other liabilities 40,832 27,579 Total liabilities 3,053,805 2,966,686 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 shares 9/30/24 and 13,664,641 shares 12/31/23 135,193 135,515 Treasury stock - 861,832 shares 9/30/24 and 899,784 shares 12/31/23 ( 10,904 ) ( 11,040 ) Retained earnings 230,465 221,080 Accumulated other comprehensive loss ( 19,374 ) ( 29,012 ) Total stockholders' equity 3

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 nine months ended September 30, 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 provi

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued)

ITEM 1 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued) shares outstanding on October 1, 2022. The share price of FMAO stock on October 1, 2022 was $ 26.87 . Total consideration for the acquisition was approximately $ 23.2 million of which $ 9.8 million was in cash and $ 13.4 million in stock. As a result of the acquisition, the Company increased its deposit base in Sidney and the greater Shelby County and reduced transaction costs. The Company has reduced costs through economies of scale. 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 $ 23.2 million, $ 6.0 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 $ 5.9 million, which resulted from the acquisition, consists largely of the synergies and economies of scale expected from combining the operations of the Company and Peoples Federal Savings and Loan Association. Of that total amount, none of the purchase price was deductible for tax purposes. The following table summarizes the consideration paid for Peoples Federal Savings and Loan Association and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date. 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 deposit

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued)

ITEM 1 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued) 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. 13

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) (In Thousands) Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023 Beginning Balance $ 450 $ 680 $ 566 $ 798 Additions - 2 - 6 Accretion ( 58 ) ( 58 ) ( 174 ) ( 174 ) Reclassification from nonaccretable difference - - - - Disposals - - - ( 6 ) Ending Balance $ 392 $ 624 $ 392 $ 624 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

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View this 10-Q filing on SEC EDGAR